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« I Dream. No I Still Dream the iDream. Shouldn’t Apple Give Us the iCamera Now? | Main | iPhone X: Now the pain »

September 06, 2017

Comments

shortapplgo

@longaapl

"My iPhone is completaly ad free (Microsoft and Google free too). I throw away every single app that tries to serve me adds. If the app is usefull I buy the ad free version of it. There is nothing worse than some idiot app throwing loud video on to your face in the middle of something important. Same is with the websites. Effing autoplay videos should burn in hell. (Yes I have remedies agaings those in with my Apple devices, but sometimes when you are using some other devices they can get you.)"

My Galaxy S8+ is same. ad free (microsoft and apple free too). so stop make bullshit about android = ad. it make you look foolish.

Tomi T Ahonen

Hi gang

Today is the iDay. I will be commenting on the breaking iNews first via Twitter, then come here to put my thoughts onto a blog later. If you want to engage in real time, I am of course @tomiahonen on Twitter so we can also chat there.

Tomi Ahonen :-)

Tomi T Ahonen

Hi Piot

I have heard ALL those rumors, but they ARE rumors and often the mix of Apple expectation rumors have most that is correct and some that turns out not true. That is why I keep pointing out, that there are rumors and until confirmed by whichever company it is, we don't know for sure. Shortly we will know what the next iPhones will be like

Tomi Ahonen :-)

E.Casais

The discussion is again flaring up with lots of invective. Anyway.

"It's solely because there is no profit in those phones to pay for the effort of ongoing support."

Which is exactly why I argue that Android will largely give way to some kind of new generation "feature phones" -- Web-orientated and without the need for constant OS updates.

"what is the point of going to the trouble of making a smartphone, if you're going to struggle to make any money out of it, or indeed value added services such as app stores, cloud storage, media sales, etc."

Which is exactly why Android devices will largely give way to a new bred of "feature phones", Web-orientated, without the whole baggage of a complex OS, cloud services and associated apps to be constantly updated.

"I think the error is lumping things together into one market that are not the same."

We are not talking about aeroplanes vs. bicycles, but different _segments_ of the mobile phone market -- as people can and do migrate from one to the other, since the products are functionally the same, with an extremely high degree of substitutability.

Otherwise, the entire arguments about "leakage" from/to iPhone, iPhones as "aspirational" devices that people using entry-level phones want to acquire, or Apple gobbling the "entire profits" in the phone market just do not make any sense whatsoever -- since these arguments precisely rely upon considering mobile phones as a _single_ market.

Consistency in argumentation is paramount.

"Already developers are more reluctant to develop for iOS."

Any documented evidence on this? A handful of personal anecdotes do not count.

"the iPhone is a failure as a mass market device"

Given the absolute numbers in installed base and yearly sales, the iPhones _are_ mass-market products -- in the upper price range, yes, but not some exclusive luxury (like Vertu was).

Regarding market share, we should not forget an important aspect of the Apple model. Apple wants to control the ecosystem entirely, and hence must develop the associated infrastructure alone: the cloud backup/storage/synch/restore services, the user accounts, the app store, the iTunes store, the maps, the advertisement platform, the TV platform, the OS, the home automation platform, etc.

As the number of services increase, additional resources (volume and type) must be allocated into the development, management and maintenance of that extending infrastructure.

As a contrast, Google does not develop and manufacture devices (except a couple of Pixels), a substantial part of the Android software is contributed by others, and compatible home automation offerings are provided by others.

Apple does not offload any development to others; thus, cost reductions accruing to similar tactics do not come into play.

Which implies that Apple must:

a) grow its customer base;
b) or grow sales per customer.

As soon as the market segment in which Apple operates saturates, (a) is gone, leaving Apple facing Google/Android with a 6x/7x higher market share and a correspondingly larger base to distribute its infrastructure costs, _even_ if the ARPU is lower.

If Apple does not go downmarket, then this leaves approach (b).

And, if I understood correctly, these were two of the four points that Tomi was putting forward in his post.

And with this, we are back to the original discussion.

Tomi T Ahonen

On the $1,000 price

I totally believe that there is PLENTY of room for smartphones to cost well above $1,000 and soon we may see phones in the $1,500 range at the top. There were $1,000 phones back in the mid-2000s decade as someone pointed out, the Nokia Communicator series was priced in that type of price range (and obviously not sold in the USA, so Americans were never exposed to this level of premium price smartphones). I was not suggesting it is a bad or ruined strategy to increase iPhone price points.

I DID mean that it is unfortunate TIMING. The best time for a big jump in iPhone pricing was when I said it was... haha... when the phablet-screens came. THAT was the right timing and Apple would have been wise to go to it then. THEN today they'd have no problem with a 'regular' tweak at the top-price-end, adding another $100 to the prices on the top, and we'd today be at or near $1,500. But if the iPhone X relaesed today has nothing earthshattering to justify the huge jump in price - THAT is bad MARKETING. That is bad PRICING. And I am afraid this may be poorly-timed price jump, which will have a lot of down-side while yes, of course, it will also produce more sales. Once again, a company awefully cautious, may be leaving TONS of money and market share on the table, that it will later regret...

I don't think a $1,000 dollar iPhone is in any way a bad thing - it is good for Apple and good for the industry. That type of price level brings plenty of TECHNICAL ability that we can see also in rival phones, and some of the loss-making rivals can bump their prices to return to profitability too.... And I don't think a $1,000 level is the limit. I am pretty confident the prices will climb and even around year 2020 we may be near the $1,500 price point for top-end flagships. That is not a bad thing. I DO think that the best TIMING to do such a jump in prices, is when a 'significantly' better phone is released, and THAT seems to me, by current rumors, to be not good enough in the X series, that it is primarily looks over any real performance. And then we may see reluctance by many even iFans to dish out that much... which could be a good thing for rivals starting with Samsung, Sony, Huawei, Lenovo, LG etc - and their top-end flagships, that may offer something more concrete why a customer might pay say $999 or even $899 for the Android equivalent and suddenly THAT offer seems 'reasonable' above what may be say $699 or $799 today.

Tomi Ahonen :-)

Tomi T Ahonen

Hi VT

I welcome open discussion. Don't feed utter bullshit propaganda without any proof here. You sound like someone we've tossed off the blog. I don't mean that you are. But stick to your point and if you have some contrarian claim to what I have said, then offer some proof. If you just write pure propaganda here, I will delete it all...

Feel free to repost with facts and your comments are very welcome

Cheers

Tomi :-)

Tomi T Ahonen

To all eager to jump on my old blogs..

YES there is a THIRD Apple Watch. YES I was WRONG (once again) when I said it won't survive more than 2 editions. Boo-hoo. Did the Apple Watch create the next big thing for Apple? No. Is there a massive global market for smart watches? No. Is Apple proud of the level of sales they get out of the Apple Watch? No! If Apple was proud of their sales numbers they would be yelling it from the roof tops. The LEVEL of sales of Apple Watches is SO BAD that Apple is EMBARRASSED to admit the number. Hence they REFUSE to disclose the number and they hide behind anybody else's numbers, to maintain an illusion that the sales are somehow better than they were in reality.

But was I wrong? Yes. I thought Apple would end the failed experiment by now. Is the Apple Watch adding to Apple bottom line, yes. Is it a stand-alone viable product range? No. Is it an accessory to iPhones? Yes. So ok, I was wrong... I'll do a full comment on it in the blog when I review the iDay but for all you active readers eager to comment - once again I was wrong... enjoy :-)

Tomi Ahonen :-)

Tomi T Ahonen

The big Apple Event today? In a word?

Underwhelmed

Tomi Ahonen :-)

Tomi T Ahonen

Jim

When you have numbers that you can quote, feel free to post. Don't post bullshit unproven propaganda on this blog.

Tomi Ahonen :-)

Tomi T Ahonen

My first vibes

X will not set the world on fire, is too expensive for that. The 8 series won't either, and Apple will feel a slight erosion in the 'undecided' consumers. The sales to loyal iSheep will remain forever, of course, but that is not enough to maintain share, expect modest decline in market share for the next cycle.

The competition can now BOOST the prices of their top models and gain some profits. As Samsung was already doing remarkably well with Note 8, and Huawei on the ascendancy as well as hungry rivals in the pack, this gift-giving season (Q4 Oct-Dec, and Q1 Jan-Mar) will see mildly disappointing iPhone sales (vs past history) and stronger performance by those makers who now get exciting phones to the market (looks like Samsung & Xiaomi are at least well poised).

So what was supposed to be the big end-of-year boost to iPhone sluggish sales levels (units) will not arrive. Sales will be essentially flat for calendar 2017 vs calendar 2016. Apple REVENUES & profits will be boosted by the great jumps in prices.

I'll do the full analysis in a blog posting later. But this is my initial gut feeling. Haha, dancing emojis? At least Japanese teenager girls will have loved seeing that. Not so sure how well that converts 'corporate' business buyers who 'might' have been part of the initial target market for the iPhone X. And wireless charging? As I keep saying, to see what will come on the next iPhone flagship, look at a 3 year old Nokia.

Tomi Ahonen :-)

Tomi T Ahonen

that was another 5..

wanna try for all the remaining marbles next?

Tomi Ahonen :-)

Tomi T Ahonen

Tomifan

Your wish is my command. All your comments have been deleted and you will no longer have the right to comment here. Bye bye

Tomi Ahonen :-)

Jim Glue

You were wrong...you said so. I get it. I admire that you did what you said you'd do...admit you were wrong if Apple came out with a 3rd version.

What we are wondering is why you hadn't softened your stance between your first proclamation and now. Surely you read even more marketing reports than I do. I don't ready any "for pay" ones and you subscribe.

So this couldn't have come as a surprise...but you've recently written about the watch as a flop. That's what I find puzzling.

According to StaticsBrain.com (http://www.statisticbrain.com/wrist-watch-industry-statistics) Rolex's revenue for 2016 was $4.5 billion. So we can peg the Apple Watch at greater annual revenues than that. Call it $5 billion for a nice round number - as a minimum.

If we believe Cook's proclamations about iPhone unit sales, we should believe his "more than Rolex".

This isn't the first time we've gotten a number north of $5b....last May Cook said the Apple Watch would be well into the Fortune 500. This article by the Verge (https://www.theverge.com/2017/5/2/15523162/apple-watch-sales-revenue-earnings-call-wearable-other-devices) puts that at $5.1 billion. As a minimum.

Call the ASP $350 and you get 14 million or so Apple Watches sold in a year.

Not bad, and these numbers are all very similar to other estimates one can find on the interwebs.

Tomi T Ahonen

Hi Jim

First, going by ANY other numbers than official Apple published numbers on Apple Watch sales, confirms my point - that Apple is embarrassed by how badly their watch unit is doing. They are resorting to propaganda bullshit 'facts' that make no sense. But are pushing their 'excitement' about a unit that should have been closed by now. It is like Windows was/is on mobile phones, a dead unit walking.

To your numbers. Seriously Jim. Did you READ that page? Who is biggest? Not Rolex - not even by YOUR source. Even by Swiss watch industry (of which Rolex is part) that source YOU used, had a larger player at twice the size - Swatch/Omega. Duh. Case closed. The propaganda pitch by Tim Cook is not audited numbers, it is not delivered under oath, he can spew whatever lies he wants, about how they are bigger than somebody else. But Rolex is a brand that 'everybody' (rich) knows. So it sounds great, that Apple perhaps outsells Rolex (by revenues).

That does not make Apple the biggest watchmaker by ANY definition. And the MAIN measure is not revenues, it is UNITS sold. Like cars, like phones, like PCs, etc. by UNITS sold, out of 1.2B wristwatches sold annually, the TOTAL Swiss watch sector is 3%. Chinese low-cost watches sell over HALF of the total industry. There are probably fifty Chinese watchmakers bigger than Apple (by units sold, the PRIMARY measure of how any industry is measured) and another at least 25 more in Hong Kong.

Bullshit is what I call on those claims. But yeah, I fully understand that Tim Cook is afraid to admit, that is a total flop, so they hide behind numbers from other sources and refuse to give us the truth. Because the numbers are embarassingly bad.

The more the ANALYSTS notice that Apple won't come with numbers - the more the ANALYSTS also know, they had guessed too high, and gradually they will ALSO lower their numbers. Those numbers are bullshit.

Tomi Ahonen :-)

Tomi T Ahonen

ok gang

Just posted my comments about iX and the future. Enjoy

Tomi Ahonen :-)

chithanh

@Michael
> A user who is willing to buy an expensive phone surely must be more willing to buy an app.

Problem is that outside games, selling apps is an utterly non-viable business model for most. See Tomi's blog posts on the app economy.

john F.

Well, as expected, apple did not shift its strategy, why would they? Apple has never been in the cheap/units market and never will, the prices UP again as predicted by every single person who understands apple.

For way too long Apple shares have been judged by one metric on Wall Street: iPhone unit sales.

Apple has best business model in the world to generating cash and they are in a financial league of its own
Apple doesn't view scale as a requirement to achieve success
Apple’s traditional model — selling hardware differentiated by software at a premium has ben enhanced, services and new businesses ,services, AR, wearables (yes, wait and see)

How to understand it?

Apple 220 billion
Amazon 135 billion
IBM 80 billion
Microsoft 85 billion
Alphabet 95 billion.

Coca Cola 40 billion in global sales - Apple net profits 45,7 billion in 2016
Read that again...

If that number alone does not make you think, then you really don't understand Apple, its strategy and why they position their products the way they do.

chithanh

@john F.
If you are an Apple investor that is all great.

But if you are looking at the future of mobile (like Tomi's blog does), you will notice that Apple's role is diminishing more and more. Gone are the days of "iOS first", or when Apple wowed everyone with their latest iPhone and set the mobile trends.

Maybe Apple will be able to play a big role in wearables, AR, services - but as it seems now even those are confined to high-price niches in the developed world.

Lullz

@chithanh

When was the last time Apple really "wowed" everyone with their latest iPhone? I can remember how the new phone was a disappointment pretty much every time Apple launched one. So, what was that wow phone you are talking about?

b

wawww

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Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    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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