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« Smartphone Stats: Full Year 2017 Top 10, OS Installed Base and Everything Else You Ever Wanted | Main | The Helsinki Hostage Summit, Putin’s Puppet Trump, and my Working Theory of How the White House was Sold (and joke songs at end) »

May 23, 2018

Comments

BennyDover

@Teemu
So now they have 5 people working and they make 2$ of revenue.
Russia as a market is smaller than Spain. We know what happens to these projects that is forced from the government. They die slowly put surely.

Jim Glu

Saw this on twitter from Nokia: "Now with Notch!". lol! They have an iPhoneX clone-a-phone and are actually advertising "Now with Notch!". Not "now almost all screen" or "now a large screen in a small phone" -- but "Now with Notch!".

Go Nokia. You make us so proud with your innovative Bothie camera and "Now with Notch!" clone design.

Jim Glu

What a disappointing off season for the anti-Apple crowd. We are on the verge of the latest new iPhones and all the much deserved hype that will accompany them. Long lines around the world as excited customers, trusting Apple to come through as they always do, line up to be the first. Sales through the roof....nothing like it in the Android world.

But while that happens ever year....we are supposed to have the prior two quarters of gloating....pretending we don't know that there's an annual cycle and predicting doom from the qtr/qtr decline. But iPhones did will in the off season this year. Heck, the iPhone X remained the best selling iPhone the whole time. The latter part of the cycle is when all the bargain hunters are supposed to be shopping...those buying the older models.

There's no massive growth ala the iPhone 6 to be had. For sure. But iPhone's holding steady while Android declines...means iPhones gained share. I'm sure that has nothing to do with whatever is taking Tomi's attention away from publishing numbers.

Per "wertigon" Ekström

@Jim:

If you think Apple is immune to overall smartphone market share dropping then you are sadly mistaken. :)

But yes, Apple managed to hold steady. Good for them.

Meanwhile, there's still an army of Uruk'hai Orcs camping outside their gates, and they still have a huge trebuchet that, admittedly, had some technical problems - but we all know that that trebuchet will fire, and soon.

Apple might hold out for years given all the supplies and money they have amassed inside those walls - but it is clear that they will never reach 250M units, and most probably won't ever tangent 230M units.

Apple isn't doomed - but neither are they particularly relevant to mobile either. And the sooner the rest of the Android makers realise they should stop blindly copying Apple, the better.

Jim Glu

Immune? No. Very well positioned? You bet. Best and most fierce competitor in the market? Absolutely. As for 250Million...what does that matter? This is a market share blog. The market is always 100%. You grow or fall not based on how many units the market sells or Apple sells...but how many Apple sales compared to everyone else.

Two things should be abundantly clear. The market is there for Apple to take should they ever want it. They need only put out much cheaper iPhones and they'll grab the majority of any market they try to take. And Apple has no intention of doing that. Because they don't care to sell low margin commodity devices.

Take a look at the Homepod. It's not put out by Apple to take the "home lady in a can" market. It's a way to make money from their Apple Music service. From those same 600M installed base of customers that Apple will keep coming up with OTHER products and services to server their wants needs, and do so profitably.

Just as the Apple Watch was and is a money making peripheral to the iPhone, not some "wearable computing" device.

And let's not forget the runaway hit, the Airpods. One of my most loved Apple products.

Meanwhile Google and Samsung keep at it, trying to take market away from Apple with the Pixel and Galaxy brands. Samsung is getting bitch slapped time and again, and Google has made such little progress despite decent products. Andy Rubin, father of Android, tried to make lightning strike twice by going toe to toe with Apple in the premium phone space...didn't even last long enough for a second phone. Jeff Bezos tried...and failed.

It's not that folks aren't trying to unseat Apple...they are simply trying and failing.

Per "wertigon" Ekström

@Jim:

Sorry, correct observation but wrong conclusion.

Apple has created an impenetrable fortress. This is true. But increasingly, unless a customer is already heavily invested in Apple, that customer is not very keen on moving to Apple.

Meanwhile, the pressure to escape the wonderful Apple garden will slowly mount. This is inevitable. Apple simply has too tight controls on the ship - sooner or later the users will desire something that Apple cannot provide, and they will jump ship. This is already happening in India and Asia.

Therefore, if Apple stops growing and keeps with their current policies, the iPhone will start a slow, accelerated decline sometime in the near future. I thought this would have already happened by now, clearly, I was wrong. But just because someone is dying of cancer does not mean they will not die of cancer simply because they have not died yet. Same thing here.

And if history has shown us anything at all, it is that cheap Apple phones would doom the iPhone for real. Again remember the nineties and the cheap macs!

Jim Glue

You keep saying things like "this is happening"...it's not. Most Mac and iPad sales in China and India are going to new, first time buyers. The more Apple products you have, the HAPPIER you get because they work so well together. No other ecosystem comes close. Nobody gets tired of "just works" and "just works together".

Oh sure, if you only have an iPhone, or only have a Mac...if you have a bad experience it's much easier to decide to give the other side a try.

Take the phone Watch combo. Having an Apple Watch enhances the experience of owning an iPhone. If you come across something unpleasant about your iPhone...you are much more likely to stick with then iPhone and work it out than if you didn't also have an Apple Watch.

The AirPods are wonderful, magical. They work with Android's but the magic is only there with iPhones, iPads and Macs.

Jim Glu

The Android fun never stops. Epic Games went around Google's App Store with Fortnight...and made it a short term Samsung exclusive. And right out of the gate their self made app distribution had a huge security leak that would let any body do anything to your Android phone.

Google did find the glaring security hole and Epic games did patch it quickly. It just goes to show you why Apple's way really is more secure. Epic games should have known better....but clearly they just didn’t care all that much..,as their expertise is in creating games.

And isn’t it just wonderful for Samsung..,,I love it when good things happen to that good company.

Cygnus

From time to time the discussion here reaches the rock bottom and starts to dig.
So Apple is "not particularly relevant to mobile" if they don't sell 250 million or 230 million? It's just funny:
1. Pick an arbitrary number.
2. Demand that Apple must sell that number.
3.???
4. Profit.

While we're at it:
It has been made clear that Apple unit sales in this blog can only be compared calendar year vs. calendar year, with the rare exception of 12 month moving average that needs too much work to be consistently used.
I get it.
Apple unit sales have been very literally flat 215 million in 2016 and 2017, with the 12 month moving average indicating the same 215 million flat sales will continue this year.
After selecting an arbitrary number, you now insist a market of 215 sales per year is not relevant?
Would you care to name some other market where third party participation is needed (like games for gaming consoles, apps for smart TVs or movies for Blu-ray boxes). Please also make sure that market is:
1. selling around 215 million products annually.
2. selling products in $300+ price range.
3. not particularly relevant for the third party to participate (or customers to buy the products).

If you want to add a challenge into it, keep in mind Tomi has said the average iPhone has a lifetime that exceeds the current smartphone lifetime of over 2 years. So active user base is some 500-600 users.
(Feel free to try the examples above. They're all way below the size of iPhone, some by an order of magnitude.)

Hydra

@Cygnus

You got it wrong.
Tomi & us talking about the sales number based on economic understanding of product.
While some arguing that Apple is a special product that defy gravity.

Why Apple iPhone doomed to failed?
When the total number of smartphone going up, iPhone going down a bit / flat

So, when the market start to shrink
Prediction say, Apple will got hit the most.

This is based on speculation on how's things work.

Teemu

There were indeed more switchers Anroid->iOS than the other way round.
And also we know the reasons to switch:
https://9to5mac.com/2018/08/23/iphone-android-switching-survey/

Lawrence Strong

@Teemu

"According to a survey of 2,500 U.S. consumers, some 29 percent had switched mobile operating systems. 11 percent of those switchers went from iOS to Android, while the other 18 percent went from Android to iOS."

(1) It's US-centric number. So, it doesn't reflect the whole world.

(2) Out of those who switch to iOS, 47% think iOS is better experience, while only 30% think Android is better experience than iOS.
Meaning: cheap android user upgrade to iOS and think iOS is better. But when the iOS user upgrade to premium android, they think Android is better

(3) Only 4% cites as the reason of their switching to iOS because iOS have faster software updates. Meaning faster software update is NOT as important as it ought to be.

(4) From those switcher, 5% think android have better customer service, while 3% think Apple have better customer service. Therefore, the statement that Apple have the best customer service is NOT true.

(5) From the Better feature, it's almost a tie. Meaning, the notion that: (a) Android is almost as good as iPhone, (b) Android is good enough. Simply not true.... Android is AS GOOD AS iPhone. and if those cheap android / crappy android device don't exist, maybe android could have better score here.

Lawrence Strong


"There were indeed more switchers Anroid->iOS than the other way round."

(1) It's US-centric number. So, it doesn't reflect the whole world.
* more switcher ONLY in USA, not the whole world.

Per "wertigon" Ekström

The reason Apple is not very relevant anymore is simple - their market is orthogonal to the rest of the smartphone market. The elves were not particularly relevant to the rest of the Middle Earth in Lord of the Rings either, but sometimes they did have some impact, yes.

Apple will pewter at 215-220M units for a while, but unless they have another iPhone 6 home run of home runs, they will not break that ceiling, and even that will not be enough to break the 250M units.

Worse, their unique market will start shrinking. Maybe not this year. Maybe not next. But certainly, before 2025 we will see Apple fall below 200M units a year.

Apple will never take India and will gradually be pushed out of Asia, with the exception of Urban China, Singapore, South Korea and Japan. Same thing with Africa and South America. Some countries will succeed, but most simply won't.

As for the US and EU, Apple can be quite big in quite a few countries still, due to legacy effects. Their decline there will be much slower than elsewhere - until Android gets the next big thing. And it will be too late to turn the ship around for Apple.

So, we have a minority smartphone player not playing ball with the rest of the market. What options does this give Apple?

- Cheaper iPhones would dilute the luxury brand, and make the magic disappear. Apple is a god among men, and thus making them mortal will take away one of the biggest reasons they are popular in the first place.
- (Re)introducing features at this point such as a 3.5mm Audio jack (which most phones at this stage have reverted back to) will make them less special and again make them appear mortal.
- Business as usual is their best bet right now, but it will be a gradually slow decline, as outlined above.

Apple can only succeed as long as they are seen as this gold standard - but increasingly they are losing the grip of that. Shame, but c'est la vie.

Meanwhile, Apple will be raking in $$$$$$$$$. So it's not a bad spot to be in, to be sure. Apple currently has so much money, they could get zero revenue and still keep up operations for decades. What I do not understand is why they do not buy back their shares with that money but oh well.

I think that as Tesla stumbles and falls, either Apple or Alphabet will buy them and the electric car will be the next huge thing. It could also be that patents expire and that starts the race for the electric car. Apple is gearing up for that, but let's see who else joins.

Regardless, I have a hard time seeing Apple find a product that drives their other products the way the iPhone does - but that's what is necessary to keep the company afloat in the computing business. Macs on their own are simply not attractive enough, and neither will iPhones in a few years.

Lawrence Strong

@Per "wertigon" Ekström

"Apple will pewter at 215-220M units for a while, but unless they have another iPhone 6 home run of home runs, they will not break that ceiling, and even that will not be enough to break the 250M units."

I dissagree...
First, Smartphone market is shrinking. So, staying at 215-220 will be difficult. Unless they create super cycle.
Second, The trade war between china. If escalated, By banning Huawei & ZTE product in USA, Apple might have disadvantage in China.
Third, Android is already went from "good enough" to be "as good as".

Lawrence Strong

@Per "wertigon" Ekström

About the Apple number
Seeing how Apple have 230M/year before staying at 215-220M.
My bet is without super cycle Apple will down to 190M-200M.
If Apple change their strategy (device lineup) this year, perhaps it can stay at 215M-220M.
But it won't bounce back to 250M.

Per "wertigon" Ekström

@Lawrence: I base my numbers on previous sales patterns. If what you are saying is true, then we should have seen a bad second quarter (or Apple Q3). Instead, we have seen a great quarter especially with regards to the current market.

I do agree with your analysis as a whole, there simply isn't enough customers left for Apple to grow in any meaningful way, and if they start introducing cheap iPhones people will start saying Apple is crap, diluting the brand and so on. So the only way forward is down.

At the current rate, Apple will end at around 215M and the world numbers would be at 1497M for the year. That gives a grand total of 14.4% market share for the year, so that's what I expect the numbers will end up at. Next year might be 213M units or so, year after that will be 212 perhaps, in a worst case Apple scenario.

I just don't see Apple units going anywhere meaningful right now, neither up nor down. Instead, it will be a gradual decline so that by 2025 they are back at perhaps 190M units.

Lawrence Strong

@Per "wertigon" Ekström

You forget last year iPhone X is a super cycle.
Thus, Q1 - Q3 this year is "good" and looks like it will end up at 215M
But, if this year not super cycle, the Q4 will down, and will end up bellow 215M

If this year iphone introduction not supercycle, next year Q1-Q3 will be bad, and next year might end up bellow 200M.

Lawrence Strong

My point is..
as of now, apple need super cycle to retain sales number. otherwise, sales number will go down.

Per "wertigon" Ekström

@lawrence:

Yeah possibly. It is also possible that the lack of new tech in the non-X phones made many people postpone their purchases one extra year. So we are not out of the woods yet.

Otoh, a lot of would be upgraders cannot justify the cost of $1000 every year. So, we shall see what happens.

At the end of the day, what I think or you think about the iPhone is irrelevant. It is what any potential customers may think about it.

Personally I think this year will be a 215M snoozefest for Apple but could be wrong ...

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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 Helsinki 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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