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« Certain Road to Death and Definition of Insanity (updated) | Main | Who Wants Numbers? Lumia on T-Mobile? Lumia 800 vs Lumia 710? How Many Nokia N9? »

April 25, 2012



The fear of the iPhone "fragmentation" apparently came from Jobs himself, which is a nonsense theory, since the mac/iPod lines always offered different price points and form factors.

Its really shooting themselves in the foot insisting on just one form factor.

Jobs in all his genius, could be very wrong, like he was on the third party app issue.


However, except in the iPod market, Apple has always positioned itself as a premium brand, and mobile is no exception, so it does not care about the market share as long as it keeps getting 80% of the industry profits. They may lag behind HP in laptop sales, but they make 7 time more profit on each sold computer than HP does.

No one at BMW/Mercedes cares about Fiat selling more cars, and GM outselling them 6:1.

Also interesting was a continuation of the major increase of Apples R&D budget over the last year or so, where they've traditionally been on the cheap, which is pointing to the Apple TV thing getting some major traction.


@Baron95, its just that tomi is viewing Apple through a mass market manufacturer lens, which its not... They don't care about the market share numbers as long as they get most of the industry profits and the app store brings the most money thus drawing in the best developers and apps.

They don't care about making non-premium products just so they gain market share they cant massively capitalize on. In short, they dont care about the poor peoples, their demographic is the upper middle class and the upper class, and its the distinctively elitist values they are promoting in their products.

They could make a 300$ laptop like HP does, but the cheapest macbook is 999$.


@Baron95 I'm assuming Tomi is saying it's unusually meek vs his expectation that the numbers could have been better. As with any analytical forecast, you measure against expectation, even if the result appears great, if it doesn't meet expectation, then it can still be considered disappointing. However, people hold different expectations and this seems to be the area of disagreement.

Tomi T Ahonen

Hi all

I removed a couple of comments by people who did not read the blog (or pay attention to what I wrote). But because the 'China iPhone sales meek' statement attracted some silly heat, I added a clarifying paragraph into the original. Lets hope it keeps the stupid comments away from here and we can stick to the point about whats happenin' to the iPhone (not whats going on with Apple overall).

Tomi Ahonen :-)


Apple depends on Qualcomm. Because they cannot support CDMA and TD-SCDMA from different company. Samsung, they can work with many chipset company. CDMA - via telecom, TD-SCDMA - spreadtrum. And they have in-house Lte-only chip which is CMC221. Samsung's HW chipset chain is so flexibe but apple and nokia is not flexibe in their HW chipset chain.



The decline of Apple maybe because samsung succeeded in promoting Samsung Galaxy Nexus, Samsung Galaxy S II & Samsung Galaxy Note as a more premium brand than iphone 4S.


Yes you have added ' clarifying para' but it makes no difference. Your "meek China iPhone sales" thing is completely wrong.

Wall Street Journal reports: "On a conference call, Chief Financial Officer Peter Oppenheimer said iPhone sales in greater China were five times the level of the year-ago quarter."

Is that on- topic enough for you Tomi?



regardless China, iphone still ship less iphone than last quarter...
is this a sign that Apple were starting to see the cliff too?


This is total tanking. Their best Q1 ever, a 5x increase in China too. 35m+ iPhones shipped. Tim Cook must be removed so Apple can ship Symbian in bulk.


Apple is Marketleader in Profits, thats all thats matters. We have a two Horse-Race, Tommi forget Nokia, they are obsolete now. Realize that!



World's biggest handset maker is a question of which number that you are looking at - handsets sold or revenues & profits. Apple makes 5x that of Samsung in terms of profit. Selling a bunch of $80 Android phones in India & China doesn't mean anything relative to Apple. Nokia sells many more phones than Apple.

Revenues & profits matter the most. Apple isn't slowing down any, and when the next iPhone comes out...they'll start roping in Samsung


"@Baron95, its just that tomi is viewing Apple through a mass market manufacturer lens, which its not..."

Um, 60% of all phones sold by AT&T were iPhones. Without a pink model for girls. That looks mass market to me, unless you define mass market as "not Apple". Note that is Apple can reach similar numbers on other carriers in the same number of years, the growth potential is huge.


Tommi you bet on the wrong horse.....



Because, Tomi, Unlike you, were using statistic to predict the future, and Tomi spot that Apple starting to lose...

You, on the other hand, have unproven theory, that make me puke!!!


@Louis, your speaking about the US market, I'm talking globally, where standards of living and income are much lower. You wont see street kids in Philippines and Ecuador with iPhones, but you will see them with Samsung's, because they have a smartphone for every demographic.

There are 7 billion people in the world, and while you and I can can easily spend 100$ a day, the vast majority lives under 2$. These people cant pay for fat data-plans that subsidize iPhones, and they especially cant pay for the unsubsidized iPhone.

Also in the developed world, Samsung managed to plug itself into market holes Apple left for them (the demand for a larger screen size), they are not competing directly with iPhone (in the 3,3 inch screen size market), but have differentiated themselves.

Tomi T Ahonen

Thanks guys. My bad. I hadn't seen the Cook comment. I will correct the blog article. Yes, 5x growth of specifically iPhone in specifically China, is magnificent. It then makes me wonder why the big fall in sales?? That does not compute. I will explain in the blog.

Tomi Ahonen :-)


Louis, Apple has great growth potential in the USA where 3 factors reinforce each other: well developed, sizable upper middle class, carrier setup that successfully extracts ranges of $100 and above per month from majority of customers and hyperactive vc funded mobile software companies market that serves US market exceptionally with innovative apps using vast and complete databases covering various aspects of live in the US. Any countries that reproduce those 3 factors can deliver similar growth potential to the IOS ecosystem.
What are those countries?
No doubt this means countries with big wealth levels and that somehow validates Apple decision to leave lower price tiers for competitors. The synergy that rewards them now is not t

Tomi T Ahonen

Ok, posted correction to the blog, left the original text so it can be seen.

But now I truly am puzzled (what else is new, haha). If the world market only grew 60% in one year, and iPhone grew 5-fold in the past year in the China Region, and overall iPhone lost 5% - there is a lot of declines to explain, in the rest of the world? Where are the drops. They can be in the scale of 20% or 30% drops in some regions. Gotta go snooping around to see what I can find. Any discoveries you readers can find, given carrier/operator data and national data for Q1 that show iPhone declines will help find where the many million missing iPhones were lost, that were compensated by the huge jump in China sales.

Time to turn into a detective again. Apple always does this to me, haha, messing up my cleanly organized world plan for mobile handsets haha

Thanks guys for pointing out the mistake. You don't have to yell and be that mean about it, but yes, obviously, the original blog posting text was purely my mistake and a mistaken jump to a conclusion.

Tomi Ahonen :-)


Tomi, its simple, iPhone filled in the higher price brackets in the markets where it wasn't previously available (or at least its 4S incarnation), while android continued proliferating in the cheap smartphone segment for the global masses.

iOS still dominates Andorid in mobile usage, which illustrates this point, globally most Androids don't come with fat data-plans that finance carrier subsidies.


From Tomi's post I take that there are actually _two_ "mysteries" to clear up:

1) The drop in iPhone sales/market share that everybody is discussing. Fair enough, it is a significant point.

2) The 5-fold increase of sales in China -- have we ever seen such a growth of iPhone sales in the past in any other country? What are the reasons?


Apple's Q1 2012 (CY2011 Q4) had 14 weeks, while this past quarter only had 13 weeks. So, in Q1 they sold on average 2.64M iPhones per week, while in Q2, they sold 2.70M per week. Seen this way, sales are actually up.


Tomi, you're move to not to completely remove the mistakes regarding iPhone sales in China was a good move. You sometimes introduce your theory as a fact and that's likely to bother some people. Thanks for introducing the Finn in you, in form of integrity and honesty. Having said that, I still disagree on how Nokia/MS/WP will succeed. ;-)

Now, having those volume declines published for Verizon and AT&T - maybe expecting something similar for Sprint - how do you see the golden opportunity given to WP players now? You have surely heard the statements from both AT&T and Verizon, not only opening the door for third ecosystem, but clearly handing this over to WP. Heavy subsidies (400 USD quoted) is... Yes, what is it? Outrageous?


@ds, @tcb The same argument you make was made 5 years ago about the US. The pieces didn't fall into place in one day there either. In the large scale, Apple's market share strategy is actually a lot like Sammy's: exploit Moore's law and increasing manufacturing capacity to move down in price points by selling last year's/two years ago's model.

The other thing I don't really buy is that, internally, people at Apple are dogmatic about fragmentation. Steve Jobs never was that big on intellectual consistency (he of the 2-color iPhone put out a "flower power" iMac), and I doubt that the people he worked with are overly rigid either.

What is really going on, I think, is that *right now* they sell everything they can make in two colors/one size, and this makes the App ecosystem better/stickier. When it becomes convenient to have more models or give up a little on margins, presumably Apple will pivot, like they did with the iPod.


iPhone sales of 35 million topped the "whisper number" of 32 million. How could Tomi be disappointed? Earlier in the day analysts were all skittish because AT&T and Verizon reported lower sales than expected (though iPhone still comprised more than half of those carriers' smartphone sales), and had even started ratcheting down estimates to the 28-30 million range.

Listening to Tim Cook on the analyst call, I'm guessing that he's getting to the point of letting bygones be bygones with Samsung. I think he's content to split the market with them, particularly since they are an important supplier. He doesn't have Jobs' personal vendetta, and he's made his point about IP. I wouldn't be surprised to see some type of settlement and cross licensing agreement, particularly as Google/Motorola Mobility is fast becoming a common enemy. An Apple/Samsung duopoly, with the two companies splitting virtually all of the profits and about 40% of the volume, is probably far more stable than the "one company at the top" model that dominated for the past 15 years or so.

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