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August 23, 2017

Comments

paul

Smartphone Maker HTC Explores Strategic Options

https://www.bloomberg.com/news/articles/2017-08-24/smartphone-maker-htc-is-said-to-explore-strategic-options

Jim Glue

The death watch on HTC continues. Not even sure who would want to buy it at this point. Perhaps one of the Chinese will buy the brand.

Per "wertigon" Ekström

@Jim:

The last three years I've made the assumption Samsung engineers are not total hacks. Yet, every year something happens, be it exploding batteries or just a general phone dud (like Samsung removing all the competitive edges it had for the S6).

So, this year I am going to assume Samsung is incompetent and will screw things up again, which will give Apple a nice Christmas boost. Historicly, it's now permanent. :P

My own projections are at 212.8M units, but I expect these to be slightly above projections, maybe 215M, 220M if Samsung screws up things again.

Also, let's not forget the #3 spot which is starting to release better and better phones as of late...

Jim Glue

Hi Per,

I just don't think Samsung's sales affect Apple all that much. If so, you'd have seen a huge spike in iPhone sales...instead the iPhone sold more, but just a bit more than the year before (better than both the 6s and 6 Christmas quarters, but only by a bit).

I don't believe Apple has the capacity to respond to unexpected stumbles on the part of the competition. Surely not in the opening full quarter after the release of the iPhone.

So far, and for a long time anyway, Apple tends to plan on the conservative side. There has never been a glut of unsold iPhones in any of the past 10 years. If you want an iPhone, you'll wait for an iPhone. I do expect a re-awakening of the Chinese iPhone black market. When the iPhone was first released and a couple years after (if my memory serves)...the Chinese paid good money for iPhones because they were not available quickly in China. People would fly into NYC and other American cities just to buy iPhones to take back and sell in China. With the Super iPhone....and the expected short supply....that may happen again.

chithanh

@LongAAPL1997
If it weren't already evident from your user name, one could get the impression that your posts are thinly veiled attempts to push Apple stock.

> "“Apple. Huawei. Samsung,” Jonny Evans writes for Apple Must. “These three firms are the only ones making any money from smartphone sales, according to the latest Gartner data

That is a very uninformed statement. Did those writers not read the Android fragmentation reports? There are thousands of Android manufacturers, many of them small Chinese white-box vendors. They may live on extremely slim profit, but will not operate at a loss.

> It is also amazing that the Apple can resist the Osborne effect...

No, they can't. The Osborne effect just happens the same time every year, so it will not be apparent when you compare quarters YoY.

LongAAP1997

Breaking news. Samsung just introduced the Samsung Galaxy Note 8 with old operating system (Nougat). The new Android OS Oreo (thanks Nabisco) was released at the same time. We will see if and when the Note 8 gets this upgrade. Any bets how many months it will take?

LongAAP1997

"But now Samsung is "safely the largest smartphone maker into the foreseeable future""

2018 seems to be fàr away.

john F.

@Per.

You talk "predictions" while referring to apple? Is this some kind of a joke? I don't get it.

Apple supplies extremely accurate guidance and numbers, there is absolutely nothing to predict except a rounding error in percentage points, in fact in this particular case apple is boring not predictable as they give out the numbers.

Per "wertigon" Ekström

@John F. I have my own model designed to keep track of Apple market share, but it's more of a hobby projection than anything else. It's based on moving average, e.g. take the last four quarters, add all of Apple units vs entire smartphone market units, then look at Apple percentage.

Still, it's been around 7% off so far on moving market share, since Q1 2014. That's something. :) Here are the statistics in case you are wondering:

https://docs.google.com/spreadsheets/d/1hIbcjggIqiYF9lS2LbLWMcOypA6NoqTs-7EawsAEyfw/edit?usp=sharing

Also, Apple did cheat quite a bit with those numbers, like adding a week of sales to the Q4 last year. And yes, I go by calendar year like Tomi, while Apple go by Fiscal Year. But yeah...

LongAAP1997

"while Apple go by Fiscal Year."

What are you trying to imply? Of course Apple follows it's fiscal year and it has nothing to do with the annual stats.

LongAAP1997

"Also, Apple did cheat quite a bit with those numbers, like adding a week of sales to the Q4"

WTF? Everybody else except you knows that we use Gregorian calendar and time to time we have to adjust that. Apple reminded people about it several times. Apple cheated? FU.

Per "wertigon" Ekström

@Long:

Since Apple use fiscal year, their Q1 reports is the calendar Q4. That's all there is to it.

And yes, it was awfully convenient that they added a week last christmas quarter, since it allowed them to avoid reporting their first down YoY christmas quarter. Had the same weeks compared to the previous, it would've been 2-3M less. :) So yes, "cheat". That same trick will not work this time however, and will even give a worse result this year (but a slightly better Mars quarterly report...) but maybe they will stuff their channels again, to keep that magical growth.

Apple is still playing some trickery at some levels, but yes, I still use their reported numbers, as does Tomi, because every mobile company does it at some level. This year might get iPhone 6 owners to upgrade to the next iPhone in mass droves, but there is still very little to entice an Android premium user to switch, at this stage. :)

James Glu

Hi Per,

I wish someone besides Tim Cook were reporting the Android switcher rate which has been 2 to 1 in Apple's favor the last couple year...if you believe Tim Cook. I agree with you with respect to Android premium users not going over to the iPhone. Of course, I'm one who believe the two camps are mostly "their own markets" by this time.

But...there is some amount of Android users that switch to iPhone and it's been a large enough force that Cook has highlighted that story to the investor community. I would think that most of those switching are coming UP from cheap Android. How so? These are people that couldn't afford an iPhone and have had crappy phone after crappy phone. Not because Android is crappy, but because cheap phones are crappy phones.

So,when they can finally afford a decent phone, they buy an iPhone. We have had years of experience to know that once people buy an iPhone they keep buying iPhones from then on.

Meanwhile the used iPhone market remains robust. You cannot find "a deal" on a used iPhone.

As to the "adding a week to this or that quarter". Long is right. The iPhone business is a juggernaut...not some sham needing to play fast and loose with the numbers. 1.2 BILLION iPhones sold. Half of those in active use. Apple released a $399 iPhone and STILL the average selling price is growing. The iPhone ASP is just shy of 3x that of Android. The Christmas quarter sales are only about "how many can Apple make".

10 years in and STILL Apple can never make enough to satisfy demand for 3 or 4 months after releasing a new model.

Per "wertigon" Ekström

@Jim:

Oh come on, you have to atleast agree the last christmas quarter was very convenient for Apple, with that extra week, since it allowed them to tell the world the iPhone still grew YoY for christmas.

Be that whether it's a fluke, or careful planning on Cook's part, we can agree to disagree on. But it *was* rather convenient, since without that extra week of sales the Christmas quarter would've looked significantly worse... :)

As for the incentive of switching away, I think you might be in for a rude awakening pretty soon. That must-have feeling of iPhone is gone for many, and for every user iPhone lose, it will be more and more dire.

Once iPhone is no longer "trendy" and "cool" anymore, that's when we shall see what happens for real. :)

Jim Glue

You keep saying things like the popularity of the iPhone is going away....but haven't you ALWAYS said that? And for the same set of reasons?

And no, I don't think Cook worried about that extra week nor was that decision made at the last minute in order to cover from some short fall. Putting that week in q4 (q1 for Apple) just takes it away from the next quarter...where Apple again grew sales.

It should be clear by now, even for you...that the iPhone 6s sales decline was solely a function of the pull forward of upgrades for the first large screen iPhones, the 6 and 6+. The iPhone 6 40% leap in sales did not represent some dramatic shift in the market, nor did the 6s signify a "top" for the iPhone. If you take out the 6, you have the steadily growing iPhone. You could plot the 6 on that graph and have decent, yet modest, growth for the 6, and then the same for the 6s and the 7's growth wouldn't be "a return to growth" but the ongoing trend.

And in light of the reviews here of the 7 being a boring phone, with no reason for people to upgrade...not even a change in the body (except color)...it should be ASTOUNDING that the iPhone 7 "returned to growth" in every quarter of it's run. Also in the last quarter in the face of HUGE attention on the forthcoming 10th Anniversary Jesus phone...one would expect a pull back of sales in anticipation.

While I thought the dual camera/portrait mode was a huge leap in phone photography (it was and is)...the folks here are under the impression that iPhone cameras have been leap frogged by Android. So the one new marquee feature shouldn't have driven sales...if your perspective was correct.

I would think the Galaxy Note 8 has the rougher road ahead. They have last year's debacle exploding phone and this year's marquee features aren't new. The infinity screen isn't new, and the dual cameras with one wide, one long isn't new. On spec, the new camera should be better than LAST YEAR's iPhone, but we'll see when the new iPhones are released. And while folks are in sticker shock over the rumored price of the iPhone, the Note 8 is a $1000 phone (minus a sawbuck or two).

Will it matter to the iPhone sales? I really don't think so. I'm sticking with my "Apple will sell as many iPhones as they can make"...so it's not going to matter how good the Note 8 is. Or how bad. Apple is already going to sell more than they can make....if Samsung blows up again....it won't matter...AGAIN.

There is one really interesting open question and that is China. If the new iPhones don't return China sales back to growth, and significant growth at that...then I will admit to being wrong about the "why" of the iPhone sales decline in China. I will acknowledge that the low cost "mid range, premium" Android phone sales in China are indeed eating Apple's market, that the values and taste of the Chinese have indeed changed.

Now, I'll make a wager. Not one of you on "the other side" will change your opinion when the new iPhones have blockbuster China sales (as they will).

Abdul Muis

@jim

"I will acknowledge that the low cost "mid range, premium" Android phone sales in China are indeed eating Apple's market, that the values and taste of the Chinese have indeed changed."

No.
The value and taste of cina buyer hasn't change. What changed is the perspective if Chinese buyer that iPhone is not sexy anymore. iPhone is not status symbol anymore

E.Casais

"the Note 8 is a $1000 phone (minus a sawbuck or two)."

In Switzerland, the cheapest Galaxy Note 8 you can buy (64GB duos) is priced at CHF 998.90. Add 5% to get the price in USD, subtract 10% for the price in EUR.

My personal criterion is that a mobile phone (new, unlocked) should not cost more than CHF 350.

A more expensive one comes into play only for strict, no-alternative-available kind of reasons (e.g.: professional: it is the only device fit for purpose in a business setting; personal: you are disabled, and only that device supports some software / peripheral indispensable for coping). But, as is commonly said, to each its own, your mileage may vary, de gustibus non est disputandum.

Per "wertigon" Ekström

@Jim:

I do not know which numbers you go by, but by Apples own numbers:

Q1 2015 61.17
Q2 2015 47.53
Q3 2015 48.05
Q4 2015 74.78
Q1 2016 51.19
Q2 2016 40.4
Q3 2016 45.51
Q4 2016 78.29 <-- Here extra week, would've been around 75M without it
Q1 2017 50.76
Q2 2017 41.03

Last 2 Q1s iPhone declined YoY, Q2 was decline last year, slight incline this year. Q3 looks like increase, Q4 looks like decrease for now. This model does not account for the iPhone 6 generation, however...

James Glu

Hi Abdul, we shall see. What will be your stance when the new iPhone sales take off like a rocket in China?

Abdul Muis

@james.

The new iPhone will increase the sale of iPhone if the size is bigger. Chinese love big size phone. But for one year moving average in china, apple won't beat its own record.

If apple manage to sell more in one year moving average. Then, Im wrong, you were right. That iPhone brand is still powerfull in china... Please nite that I use 'still'. Because no brand is 100% powerful. 15 years ago, BB brand also powerfull. Their second hand product sold in africa, south east asia at a high price just like iphone today.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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