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« Smartphone Bloodbath: Report Card at Half Point of Year 2010 for all major brands | Main | 5 - 4 - 3 - 2 - 1, as in Billions. What do these gigantic numbers mean? »

August 05, 2010

Comments

vvaz

Great post. I agree with most of point but one. Crucial one. Apple is fighting another war. It isn't about marketshare but about profits. IMO Jobs doesn't care about 13-17%. Just make it above 10% of smartphones (as initially targeted) and profits, profits, profits from whole ecosystem.

Nano iPhone is highly probably and it will have its impact; iOS will be licensed together with OS X ;)

kevin

Tomi,
Thanks again for thinking about this and I look forward to your future installments. When it comes your discussing Apple, I’ve always felt this dichotomy starting way back in 2006. On the one hand, you grasp the many differences about Apple; you’re clearly not an Apple-hater who speaks mostly out of ignorance. But at the same time, you seem to miss some things about Apple, and I’m not sure if you just haven’t had the time to research Apple enough, or if you do understand but have a reason to discount it. (Yes, I know you worked for an Apple reseller years ago.)

So my response is in two parts – first I respond to some of your “facts”, then I discuss your iPhone nano proposal. My thoughts are shaped by my experience watching and listening to Apple management since early 90s. I have no inside knowledge of Apple’s strategy for the future or the multiple factors that play a role in their decisions.

PART I.
A. First, looking at the facts. iPhone market share per IDC numbers (in percent):
Year: Q1, Q2, Q3, Q4
2008: 5.4, 2.1, 16.6, 11.2
2009: 10.9, 13.7. 17.1, 16.0
2010: 16.1, 14.0 est.
(Canalys, Gartner, Strategy Analytics numbers are similar. See http://macdailynews.com/index.php/weblog/comments/26229/ for Reuters/Strategy Analytics chart that shows Apple as only one of big three to grow market share yoy this past quarter.)

3G announced Jun 9, 2008; available Jul 11 in 21 countries, Aug 22 in 22 more countries, Sep 26 in 4 more countries (qtr ended Sep 27)
3GS announced Jun 8, 2009; available Jun 19 in 14 countries (qtr ended Jun 27); 70 more countries in Jul/Aug of Q3
iPhone 4 announced Jun 7, 2010; available Jun 24 in 5 countries (qtr ended Jun 26)

Patterns:
1. 3Q of every year is highest market share due to new product launch in many countries.
2. Year-over-year, Apple has grown market share every single quarter (using data from any of the counters).
3. All 8 non-3Q quarters show decline except for 2: 2Q09, which was a launch quarter with 11 “waiting” days and 9 selling days in 14 countries, and 1Q10 (marginally), which was the first New Years qtr in China with official iPhone availability. (“Waiting” days are days between announcement and availability when almost nobody buys the older products)
4. All 3 launch quarters show increase except for 2Q10, which had 17 “waiting” days and 3 selling days in 5 countries (and sold out). Apple said thru Jun 8, growth rate yoy was 90% (compared to 43% market rate), and units in channel inventory was reduced by 250k. Apple also said units sold could be harmed by Apr 19 leak of iPhone 4 design; note 1Q10 units were up 131% yoy.

Other facts:
B. You wrote “By Canalys numbers, Apple has lost almost one quarter of its market share - in nine months!”
True but, by Canalys numbers, Apple had 17.3% share in 3Q08 and 13.4% share in 2Q09. It also almost lost ¼ of market share in nine months the previous year when the smartphone market was also growing.

C. You wrote “Just in the past 3 months, the market grew 12%. All of Apple's big smartphone rivals grew unit sales and maintained or grew market share.”
Per Canalys numbers, Nokia (38.8 to 38) and RIM (19.2 to 18) also lost market share, though they both grew unit sales so your “or” makes your sentence technically true. Yes, they grew unit sales, but Apple might've as well if they weren't transitioning models and reducing channel inventory.

D. You wrote “Why is Apple actually seeing a decline in unit sales - the only one of the big 6 smartphone makers to see a decline in unit sales in any of the past four quarters?”
Nokia had a decline of .5M unit sales from 2Q09 to 3Q09 when market grew about 14%; RIM had decline of .1M from 4Q09 to 1Q10. Apple’s .4M decline this quarter includes channel inventory reduction of 250K. All are small declines.

MAJOR POINT 1: As I've said previously, I still don't understand how the data supports your premise that iPhone is in decline. (Yes, we’ll know by Jan 2011.) You claim to see this via many other variables in your model, if so, it would be great if you could share some of that to convince several of us on this blog that it is true. I'm just not getting it.

E. You wrote “How many Apple loyalists can still remember all those years in the 1990s that Apple made losses …”
Despite horrible management for 10 years, “all those years” in fact was just 2 years (1996 and 1997).

F. You wrote “Because the Apple management failed to see many 'obvious' trends in the PC industry that abandoned massive market segments to its rivals, most obviously the whole laptop era. Again modern young tech analysts might not remember that Apple stubbornly refused to release a laptop version of the Mac until long after all its PC maker rivals had carved up that new high-priced and faster-growing (and more profitable) laptop market segment.”

I don’t think Apple lost because of laptops. When the 6.8 lb 2.5” thick Powerbook 100/140/170 was launched in 1991, Toshiba and Compaq were the leaders with 8 lb 2.75” thick machines. Powerbook was soon the leader. Fast forward to Jobs: Apple began selling more laptops than desktops back in May 2004, while that didn’t happen in the broader PC market until 2007.

From 1993-1998, Apple sucked at everything, desktops and laptops, the result of almost 10 years of lack of market vision and lack of tech innovation, especially in the Mac OS, while Windows 3.1 became okay and Windows 95 became good enough, just as the corporate PC market exploded. Microsoft heavily courted developers with its programming tools and training, and soon there was Windows (but not Mac) software for mainstream, corporate, and every niche. The growing sales volume of PCs drove down component costs for PCs, not for Macs since Macs used different CPU, bus, etc. PCs soon cost half of what Macs did, which was a big deal when a consumer could spend up to 10% of his after-tax income on a new Mac. Third-party Mac software development dried up or became second-rate. Data format incompatibilities with PC software/documents (excepting media/publishing) drove businesses and new consumers away.

Lacking vision of what being successful meant, Apple mgmt chased after PC business models and realized far too late that what truly created value in their product was software (including data/content formats) and product design/system integration, not commoditized hardware.

Recognizing that, Jobs’ first big step on his return was to commit Microsoft to deliver Office for 5 years, and then embark on 1) delivering Mac OS X with annual updates (moving to 18-24 months as OS X matured), 2) establishing key standardized content formats (Quicktime, AAC, H.264, Web-HTML, PDF), and 3) delivering key software applications (iLife, Safari, iWork, and Pro line) that most of his customers (consumers and media/publishing businesses) would want. Jobs also had Apple secretly keep OS X continually ready for Intel chips (example of hardware, as commodity). Jobs first new-from-scratch products, iMac and iBook, were highly integrated, unconventional designs.

G. You wrote “So what is it that we do show? Its the pictures!”
Maybe, but not in my experience. All the people I know who bought the original iPhone (of which half was likely sold in the US) bought because of its usable browser and Internet access. Verizon banned wifi from almost all its phones; and if it had data, it was WAP or hard-to-see and use browsers. So yes the screen was important. And yes, owners were glad to show them to others. But pictures???

MAJOR POINT 2: You wrote “Remember, Apple cannot win by being 'the best' in this race, after the rivals become 'good enough'. That was the lesson of the Mac”

Well, it depends on what “win” means, doesn’t it? If your definition is wrong, you see the wrong businesses as winners.

Mac did “lose” in the 90s, that's for sure, but Apple changed its goal and strategy, and Apple is now “WINNING” in PCs; highly profitable Mac sales have grown faster than the PC market in every quarter but one for almost 5 years. Not just any sales, but highly profitable sales despite a mature, non-hypergrowth market. Look at the competition in PC sales: HP and Dell may sell the most PC units but they earn little profit on PCs; they make money on selling business IT services. IBM sold out; Lenovo struggles on. Sony sells a few laptops. Asus, Toshiba, and Acer (having bought up the dead, i.e., eMachines/Packard Bell/Gateway), have lately had growing unit sales due to tiny-margin netbooks but little profit. Windows PCs compete mostly on price like commodities; they struggle to differentiate as they all run Windows. In the PC ecosystem, I’d say ONLY MICROSOFT “WINS”, as it provides the value. Other than Chinese manufacturers, do you know anyone who wants to get into the hardware PC business? What market value do investors assign to these vendors for their PC business?

The new lesson of the Mac is that Apple can win with a different highly-focused strategy. Apple sells enough Macs to keep enough software developers selling applications (Mac owners buy more software!). Apple earned (and still earns) enough profit on Macs to start a market-leading chain of retail stores, to fund R&D for OS, software, and hardware enhancements to keep it as “best” or competitive in PCs, AND even to also fund expansion into iPods, AppleTVs, iPhones, and iPads.

Apple learned and now knows exactly what “winning” means, and they know how to do it.
Winning is not having the most market share. Winning is gaining enough profitable sales to keep making more great innovative products that garner the highest satisfaction rates from consumers. How many sales does it take to do that? I don’t know in dollars but it has to be enough sales (to a group of ready-to-buy not freetard consumers) to create a platform that developers and accessory makers are interested in. And it has to be enough sales to create cash flow to fund internal technology R&D and business investments (Stores, acquisitions) so that its strategy continues.

How does Apple keep making great innovative products? By looking ahead, recognizing what most people value (including simplicity and beauty), properly forecasting technology performance & costs, and then designing and supporting the product. You can’t beat Apple by just doing what Apple did; you have to do something else that people really value, while being good enough in enough other things.

How can Apple have such highly profitable sales? Because their component costs are as low or lower than most of their competitors for the same components, yet they can charge more because their devices are more highly valued by consumers. That value comes through software, which is very high margin, especially when you can leverage it across almost all your devices.

Winning doesn’t have to occur quickly or now – Apple is NOT after short-term profit; Apple learned patience. It’s not the 100-yard dash, it’s a marathon; the business model has to deliver profit in a sustainable or evolvable (so that it is sustainable) way. Apple’s strategy has been to “slowly” build by leveraging all its pieces (even beyond the cell phone market) – thus creating a multi-faceted ecosystem that becomes difficult for competitors to beat from with one or two directions. Apple’s “platform” is extensive – it’s not just iOS devices, iTunes and App Store; it includes Mac, HTML5, Retail Stores, MobileMe, AppleTV. I bet the next piece to come is the home, the TV screen. Apple will soon tie your computer screens, your mobile screens, and your home (TV and personal-pad) screens together with content (apps and media and cloud).

I. You wrote “Google has just today announced it is activating 200,000 Android phones every day”
Are Android phones/devices in China, such as OPhone included in that number? (In some quotes, Google says devices.) If so, then a good chunk of those devices aren’t really part of the Android Market platform.

PART II.
You propose the iPhone nano mainly because of two reasons: the top of the pyramid is brutally competitive now and the nano would provide an entry-level path into the iPhone world.

We disagree about how the brutal competition is “hurting” Apple today. (See A in Part I.) Most believe, including me, that Apple could rectify its US Android issues by making iPhone models for the other US carriers. I’m surprised they haven’t but they might be constrained by the AT&T exclusive (which most believe will end by Jan if not sooner). Same for Japan. I do think Apple may have been surprised by the direction and good-enoughness of Android 1.5 and later, which began to provide the other US carriers with competitive devices in Winter 2009.

(You raised cost of developing more models as an issue in your response to Charles, but I think the cost of breaking lengthy contracts with AT&T and Softbank is likely the bigger issue.)

Another possibility is that Apple has another industry-changing surprise in its plan for 4G/LTE following end of AT&T contract, so no rush right now.

So onto the 2nd reason, you wrote “What Apple should be doing right now, is to get every conceivable customer on the planet to 'try' an iPhone”…

Agree and I think Apple would agree where it makes sense, because if the other phones aren’t sticky, or don’t garner high satisfaction and loyalty rates, Apple can convert them later.
In any case, I think Apple sees the issue as mainly the price of the data plan. So first, Apple offers a similar product with no data plan at all: Apple sells iPod touch (and less so, iPad) to those who don’t want to spend dollars for always-connected data, or to parents to give to kids/teens. (Even the basic iPods bring users into the iTunes and Apple Retail Store experiences.) When the next iPod touch and iPad with Facetime arrives in a month, the drug becomes even better.

Second, an iPhone nano (whether subsidized or not) will be most satisfying only if it has a data plan. As I’ve written before, in the US, most people decide how much they’re willing to pay for data and messaging, then pick a qualifying phone. Thus, an iPhone nano would be in the same plan bracket with iPhone 4, Android, and Blackberry phones. (Before AT&T went to tiered limited data rates, this was $30 or $35/mo across US carriers.) Do you have any sales data for iPhone 3G after 3GS launched, or iPhone 3GS in the last 40 days? I don’t think they’ve sold well, given that iPhone ASP hasn’t declined much over the last year (Note that Apple now gets little or no monthly fees from AT&T for the original iPhone; these fees had been included in iPhone revenue, so ASP should've been expected to decline.) Along those lines, I think the $15 AT&T rate has increased demand and sales, though I have no data, only AT&T conference call comment.

I also don’t think Apple will go for a 3.2” screen on a full function device, as it would make touchscreen buttons and keys even smaller, and battery life would go down unless it was also thicker. But yes, there would be a fashion perspective difference between new iPhone nano vs old iPhone 3GS.

In non-subsidized countries, I think a difference of $300 upfront would matter for those who are already willing to pay monthly for data. Like you said, the value seems out of whack at $500/$550 for old 3GS. Do you have any sales data from other phones that show the price sensitivity?

To conclude, I believe Apple will someday add iPhone products so I don’t reject your proposal outright; I just don’t see obvious handset market segments right now that work to extend Apple’s strategy around Internet, apps, and media (esp. video) content. I also don’t see in the data that iPhone is in decline and I think the US Android issue is addressable, thus no need to rush to additional segments before other pieces of Apple’s ecosystem get into place.

kevin

@Manu:
My earlier comment included a joke based on Tomi's characteristic "Haha" and what Tomi wrote at the end of his long article about people who respond without reading the whole thing. (I had, of course, already read the whole thing, and already knew it would take some time for me to think about it before responding for real.)

Tomi's response indicated he understood my attempt at humor. Sorry if it came off poorly.

Tomi T Ahonen

Hi Matt

(I posted a reply to you but for some reason it didn't show.. shame, it was long and considered, haha.. its frustrating when you have to try to recreate a longer reply.. but here we go)

Ok, sorry about the 'poor logic'. Lets deal directly with your specifics

I do not understand what your argument is about the App Store. You say its there for Apple to break even (I think you mean iTunes to break even, the App Store seems to take a healthy 30% cut for Apple, more than breaking even, but whose counting) and that the 'market' failed to bring something like that to the Mac? I do recall a ton of Mac apps way back when, even Microsoft's famed Word and Excel were first launched on the Mac long before we had any Windows versions of them. So I don't think thats a valid point, but it has no bearing on the Nano that I argue for, or Apple's current decline in market share.

You say Apple doesn't have to have a dominant market share to - using your explicit way to write it, with the quotation marks - 'win'. Maybe that is true, if you mean that its not 'real' winning, it is something other than winning. To really win, without the quotation marks, you DO have to take the winning share of market share. Symbian took on Palm - and won. Symbian took on Microsoft Windows Mobile - and won. Microsoft took on the Mac - and won.

Now, it is true that the Mac survived as a niche specialist PC for the creative arts like graphical design and advertising, but the Mac has 4% market share of all personal computers sold today. That has been its level of PC market share - for 10 years. It did not win the PC race, by ANY measure. The Mac was so badly unprofitable before the iPod, iTunes, iPhone and iPad came along, that many thought Apple would go bankrupt in the 1990s. Making losses for years. That is not winning. Now that Apple branched out to other businesses where it could establish a leadership position, it has returned to high profits.

Then you suggest Apple is 2 years ahead of Android. That is patently false. Please look at latest data from the major industry analysts who report on actual Q2 unit sales of smartphones and their market shares. Already two of them have reported - Canalys and IDC - both have Android already ahead of the iPhone. Globally, selling more than the iPhone. There is no lead for the iPhone to exploit for 2 years. They have already fallen behind - and today's level of Android sales - 200,000 units per day, vs Apple at 92,000 units per day - means Android is running away with its lead.

We do agree about Nokia level prices. That would be suicidal for Apple and it could not win that race for the cheap phones. Also that was not what I suggested in my blog. Obviously I said the typical mid-range smartphone - according to Morgan Stanley - costs 350 dollars. That is roughly the level - a bit under the mid point at 300 dollars - where I argue Apple comes in, not at the 61 dollars of Nokia basic dumbphones. (incidentially, Nokia's smartphones average about 200 dollars per handset)

You claim Apple 'have hurt RIM' and you site some bizarre UK government and school statistics. Wow. What has that got to do with anything? For every SINGLE quarter than the iPhone has existed, RIM has GROWN smartphone unit sales globally. Every single quarter. Most of those quarters, RIM has grown market share. Since the iPhone launched, it has seen three 'cycles' of growth - AND decline. So RIM grows when Apple grows, and RIM grows when Apple declines. There is no linkage. If there was, then RIM should decline when Apple grows, and grow when Apple declines. No, no linkage whatsover.

But the absolute concrete proof is the past 12 months. Since Apple's iPhone peak in Q3 of last year, the iPhone has seen unit sales stall, and turn into decline. Apple's market share has declined every single quarter. RIM's unit sales have kept growing while their market share has been level. So again, there is no proof Apple took share from RIM - if Apple declined over the past 12 months and RIM grew - every quarter - then the truth is the opposite - RIM has taken smartphone sales FROM Apple !n This inspite of what the UK universities might be doing now, haha.

Then you say the battle for the iPhone via the iOs 'is not about market share, its all about the carriers'. You Matt seem to think that Apple can win a war against the carriers/mobile operators. You may think so, but that is a naive view of mobile telecoms. The carriers have a license - a license - to use the rare natural resource of radio spectrum, within a given country or region - and make a business out of it. That spectrum utilization license is governed by 20 year contracts. The carriers pay dearly for those licenses, in effect subsidising our taxes with them. There is no technical way to get around them and no legal way to terminate the carriers before the license runs out, barring criminal behavior by the carriers. Apple has no chance whatsoever of bypassing the carriers. Look at Google with Nexus One or Nokia with the N97 in the USA (or Microsoft's Kin for that matter). Once the carrier decides not to carry your phone (Nexus One, N97) or not to support it with marketing (Kin pricing) - you as the handset maker are out of the game. Out of it.

If you think that Apple can bypass the carriers, feel free to believe in that. I did literally 'write the book' about the mobile telecoms business (M-Profits the second of my 9 books published so far) and I do lecture at Oxford University on the business of 3G mobile teleocms - in fact, I created the world's first university course on the matter. I know what I am talking about. So Matt, if you think that Apple is racing in some 'lets bypass the carriers' race rather than handset market share - and expect one 'rebel' company earning 60 Billion dollars per year, can defeat not only the 3 dozen handset makers who make 150 Billion dollars per year, but also defeat the 600 carriers who earn 900 Billion dollars per year - and who all pay massive taxes to their domestic governments and have 20 year licenses to do mobile business, then yes, please go ahead and believe that. Come back here in five years, lets see how your expectations are met haha. There were all those who promised WiFi would kill the operators, and that Skype would eat their cakes etc. They were not experts in the business of mobile telecoms and didn't understand this market. I said then that it won't happen and I say now it won't. The only ones who can take business from a mobile phone / cellular carrier (mobile operator) is another carrier.. NOT a handset maker.

Lastly you suggest an iPod Touch with Skype and Fring will replace a mobile phone. Clearly you have not understood the insights into this industry. That part of McGuire's Law which says utility of any activity increases with its mobility (which applies to all industries, a portable PC ie a laptop gives us more utility out of its mobility than a desktop), is further refined in mobile telecoms with what is called my 'Ringing in the pocket test'. The iPod Touch cannot ring in our pocket, unless we are within a hotspot.. Most places are not WiFi hotspots. Even if you are at a hotspot, most WiFi hotspots are encrypted and closed, you have to be accepted into THAT hotspot. Then if you are, there are issues with congestion. And even if you are connected - your own device needs to be turned on and have its WiFi feature turned on (which drains the battery, which is why most turn it off). And even then, it does not work past a certain pedstrian walking speed, so if you're in a moving car or train or bus, your hotspot won't offer hand-over to the next WiFi hotspot to let you carry on your connection etc..

An iPod Touch with WiFi and Skype and Fring - will act as a replacement for a fixed landline phone yes. It won't replce the mobile phone service. Totally pointless argument. A Touch cannot be the Nano.

Ok, that was not as elegant a reply as I wrote the first time but its about the same of what I intended to say. Please do come back, lets see how you respond to these points.

Thank you for the comment

Tomi Ahonen :-)

Tomi T Ahonen

Hi Sachendra, Mark, Magnus, Fernando, Manu, vvaz and kevin

Sachendra - first, note that I am arguing NOT to lower the price of the 'flagship' iPhone 4, but to introduce a lower cost model alongside it.

About Apps and screen. The difference on 3.5 inch vs 3.2 inch is visible, but not in any way impractical for apps. We have smaller touch screens out there. the critical point is not to cause unnecessary fragmentation, so the smaller 3.2 inch screen needs the same resolution as 3GS..

Mark - we agree yeah, the peak has now passed and the Nano model is urgently needed to re-ignite market share growth

Magnus - I agree with you, and for all of 'my wisdom' haha, I do admire Apple in particular for going their own way in everything - even when at times it annoys some of the experts, but at least they are not the lemmings doing the same as everybody else. If they hit a home run like the Mac or iPod or iPhone or iPad, they change the world. If they stumble like the Newton or Lisa or now with Antennagate, no biggie, at least they tried.

Fernando - haha, thanks!

Manu - thanks. But on kevin's comment to me "Tomi you are an Anti-Apple idiot" - he really was joking, as he added the 'haha' after the comment. kevin is here often, he's a really nice guy and his comments are very valid. He had picked up the 'set up' in my blog, where I almost asked for someone to call me an idiot, and he obliged. I got a big laugh out of it. He really did mean it as a joke, so thanks, Manu, for standing up for me, but in this case, that was not rudeness, it was kindness and a great joke. So obviously, kevin, no harm done, I loved it, and Manu, thanks for the kind gesture of stepping in.

PS Manu - me too, I truly love the discussions on this blog (I learn so much more about 'my' industry), and I try my best to give everybody an honest and fair, often lengthy, reply. The only problem is, obviously, as we get quite a lot of traffic here, my replies are often delayed... But I try :-)

vvaz - yes, its kind of true, Apple is trying to shift the game. But the war is for both, not one or the other. You can't have just market share without profits, and you cannot have just profits but no market share. You need a balance. And currently Apple's balance is out of whack. If they lose market share at huge profits, they will eventually vanish as a company..

kevin - obviously I fully understood your joke and loved it. I really laughed out loud. And no problem, I am sure Manu really appreciates it that you came back to respond to him. But kevin, your long posting, its very detailed. I will respond to it separately, ok. So hold on, I will be back.

Thank you everybody for hte comments. I will return to address kevin's longer detailed response

Tomi Ahonen :-)

Sachendra

Kevin,

In the unsubsidized market in india we get a 2.5gb data package on edge for $2. There are already htc and samsung Android models selling around $300, so an iPhone around that price would really help for people who love to carry around the shiny little things from apple but can't afford them right now

Manu

@Kevin :

Thanks #Kevin for clarification. So it's confirmed that it came off good enough for Tomi, perhaps I failed to comprehend humour part.

Sorry for the trouble thus caused, never meant to be personal though.

PS :- Thanks for the trademark @Kevin comment. I really appreciate it.

cycnus

It seems that this particular post by Tomi post lead to a rumors about iphone5. First jesus phone term, then iphone5 rumors.... wow.

:)


Tomi T Ahonen

Hi kevin

On Part 1 - your points A, B, C and D - I appreciate the effort to copy the numbers and obviously these are the same numbers that I have also had access to. Nothing wrong there. Now, let me try to summarize where we are today in terms of the trend. From full year 2008, to full year 2009, we saw a growth of annual calendar year market share of smartphones from 9% to 15% - a huge jump. Now we know we have 2010 first half market share of about 14%-15%. The for Apple to grow as much as it did in the previous years, it should hit approximately 20% market share for the full calendar year 2010. Because of the first two quarters of this year being so weak, Apple would have to do something like 25% average for these last 2 quarters. That is totally absolutely completely beyond any reason. Apple may grow its market share in Q3 to 17% or even 20%. But it won't average 25% over the remaining 2 quarters of this year.

I think you'll grant me, that by all previous patterns and current sales and current level of competitors, you kevin are not expecting Apple to average 25% market share in the next two quarters of this year?

With that - the numbers today, at half-point of the year, suggest at the VERY LEAST a slowing down of Apple's growth. It grew strongly from 2007 to 2008 to 2009. All signs were good up until Q3 of 2009. As I reported on Twitter and on this site when Q4 numbers came in for Apple in January of 2010, the Q4 numebers were 'severely disappointing' in terms of market share growth pattern (obviously Apple made tons of profits in Q4 of 2010). Since then, all signs - to me and my projecting model for the short term - have said Apple is in trouble. Long before Q2 of 2010. I said so in January, that the Apple Christmas sales was very disappointing (you may recall, I think we had this discussion back then too with you).

Like you know, we won't know for sure until January 2011. I am certain, as are you, that this current Q3 will be the best quarter of unit sales Apple has ever had for the iPhone. It will break all previous records and should easily break the 10 million unit sales, probably pass 11 million.

But even as I allocate this Q3 for record-breaking unit sales and market share re-gain, the damage the past 3 quarters has been too severe, that I am very certain that Apple cannot grow (annual) market share from the 15% annual market share it achieved in 2009. I may be wrong, but so far the math favors my conclusion. We wont' know for sure until 2011. But consider the math. In Q3 Apple would have to hit 17% (exceed 12 million iPhone sales) and in Q4 still hold onto 14% (another 12 million unit sales of iPhone) for Apple to match 15% market sharef or the year. This level - a huge surge in end-of-year 2010 would not give Apple a 'gain' of even one percent in market share for the year, it would only give a plateau. The numbers, kevin, the numbers now are severely stacked against the iPhone.

For the past 5 quarters, since Q2 of 2009, the USA sales of the iPhone have been very steady, at +/- 15% of 2.8 million. As there is no change to the AT&T contract, and now increasingly AT&T sales are repeat customers not new customers, its very likely that USA AT&T sales of iPhones in Q3 and Q4 will not be dramatically above the levels they were the past 5 quarters. If we get to 3.5 million, that would be a record for AT&T activations of iPhones. But for AT&T - one third of the total iPhone market - to 'carry its load' from Q2 of 2010, AT&T would have to grow to 4.8 million - per quarter! AT&T peak sales of iPhones has been 3.2 million twice.

The rest of the world, similar story. When we remove the China surprise 1 million sales in Q1 of 2010, the past four quarters have held a steady sales of 5.1 million at +/- 10%. The peak was Q4 of last year at 5.6 million (when USA sales turned into decline due to Androids, but Androids had not launched internationally in most markets yet). Last Q2 the international iPhone sales were 5.2 million. For Apple to achieve the level sales that I showed in the above, the world has to now jump to 7.8 million units. Europe only sells 3 million iPhones. China only does under 300,000 per quarter except for Q1 gift-giving. Where is that 2.6 million sudden surge worldwide. Its not in India or Indonesia or South Africa etc.

I do agree with you that iPhone Q3 sales will break records, but its really difficult for Apple now to achieve the kind of explosive growth it did in 2008 and early 2009. Partly that is competition. Partly that is price. Partly that is lack of availability on all networks. Part of that is that the novelty is gone.

If I am wrong, you know I will be here to say so. But to me, all the numbers are now looking very strongly to prove my thesis the iPhone market share had peaked in Q3 of 2009 and the overall annual market share is now inn decline.

On your 'MAJOR POINT' you say you dont' see the numbers. I hear you. My model with my consultancy is not an Apple model. Its not a 'smartphones' market share model. Its not a 'mobile phone unit sales/market share model' It is far more complex than that, it is the total market growth model, starts from subscribers and subscriptions, through unique phone ownerships, multiple phones and replacement cycles - from there it then drills down to handsets regionally, and then finally smartphones by major brands and the operating systems.

I couldn't hope to post the logic and reasoning in my model, I'm sorry, without writing a half-a-million word trilogy of books about mobile phone segmentation today, to do a reasonable bit of justice in explaining how my model works.. You'll remember I was Nokia's first segmentation manager and before that I built segmentation models for my employers at Elisa/Radiolinja/Helsinki Telephone/Finnet/DNA - so this is the evolution of nearly two decades of telecoms analysis and thinking in segmentation. If you want to see a small sample of that thinking, read the segmentation chapter of my third book, 3G Marketing. Many segmentation experts who read it, end up with a headache, on first reading haha.. And that was 2004 thinking. My model is far more evolved today.

So yes, kevin, I appreciate it, that you don't see the evidence enough in what I have blogged about. You do know that I have deep analytical models behind my forecasts and I have been uncannily accurate in the past. Even when I'm wrong - like in Q1 iPhone of this year - I was one of the experts with the smallest error haha, the average error of my peers was more than twice the error I made.

But I cannot list here every factor that comes into the model that causes me to spot a break in the trend. It was clear to me in Q4 of last year, that something was seriously wrong at Apple (turned out the Android invasion had started, stalling the USA growth). Then I saw that inspite of the bizarre global growth of Q1 (China syndrome) the overall iPhone pattern was worse in Q1 - witnessed by USA etc - and now Q2 has all but nailed the coffin shut. We do have to wait until Q4 numbers for 2010 out in January 2011, but I am very convinced the numbers today are consistent with a peak having passed, not with continued market share growth for the iPhone.

I can't really give you more than that, kevin. Sorry (unless you want to buy a couple of days of consulting time from me on segmentation haha).

Now to your other points - years of Apple making losses - I remember it was years, I was not in the PC industry anymore at the time, I thought its more than 2 years, but if you say it was only 2 years, 1996 and 1997, I have no reason to doubt you. It still is two consecutive years, but my categorization of 'all those years' is clearly excessive.

F on laptops - well, Toshiba invented the laptop in 1985, so that was six years wasted and allowing the rivals to take a huge lead. I am not sure if I understood you correctly "Powerbook was soon the leader" - are you suggesting Apple branded laptops have once been the world leader in market share (something I missed and find hard to believe now, thinking back to how dominant IBM, HP, Toshiba and Compaq used to be in laptop computers.)

You say from 1993 to 1998 Apple sucked at everything. I do again recall - but this was at the time I left the PC industry to join telecoms (in 1995) - that 'always' the Mac was the best desktop publishing PC, the best graphical design PC, the best multimedia PC - and that the Mac would regularly introduce innovations in that area which was far ahead of Windows compatible PCs. But as I said, I lost interest in the PC industry about the mid-point of that period you describe. I did see still in 1997 etc, that the advertising industries were fully hooked on their Macs so it didn't seem to me that they lost their core supporters in this period.

G - you mention the reason 'why' people bought the iPhones - I do not disagree, that is true, they bought iPhones NOT because of the camera, definitely not, but because of the wonderful internet browsing ability (and eventually also the apps etc). I never claimed this was the reason they bought an iPhone. And most who would appreciate the camera function would go for a top Nokia N-Series or SonyEricsson Cybershot or Samsung premium cameraphone. I said what people 'did' when they had their phones.

Roughly from 2007, it became common for people - with any kind of phone - to start to accept taking pictures with their cameraphones, quite often, quite regularly. So the situation I describe - the birthday party of the families - someone has a 'real' camera and many have a cameraphone. And then as the parents sit at the 'adults' table' they start to pass the phones around the table, and suddenly everybody admires the ease of the iPhone in enjoying the pictures - far far more easy to use and bigger screen - than the most expensive stand-alone cameras or other brand cameraphones.

I never said this was 'why' they wanted an iPhone. I was reporting on the usage of the mobile phone owners overall. As I show in the stats I wrote on Friday, today 9 out of 10 actual cameras in use, is not a stand-alone digital camera or film based camera, 9 out of 10 cameras in use worldwide is a cameraphone. And if five families are together at that party (in the US or Europe), at least one of the parents will have an iPhone.. and suddenly the remaining 9 parents will all be 'advertised to' about the greatness of how easy photographs are on an iPhone, compared to any stand-alone camera or any brand cameraphone they may have for themselves.

That was my point. This was not in any way intended by Apple, and if they had felt the camera would be so important, they would have put that 5 megapixel camera into the iPhone 3 with the LED flash haha. But it is a clear change in behavior and Apple benefitted from it. Even though, I totally agree - nobody buys an iPhone for its camera haha..

On your Major Point 2 - yes when I say 'win' I only mean market share. Yes, you can be successful in profits too - but then you don't own the market. And all of Apple's hype around its app store and eco-system becomes meaningless if the iPhone market share stagnates at Mac levels (4%) or below of all mobile phones, even with its iOS devices. So yes, when I say win, I mean platform, market share. As you know very well, even Apple is able to go years without any profits, so having best profit is not in any way guaranteed to be sustainable over the long run.

But then you talk about Apple's innovation - and here we have the other point where I totally agree with you and I think we've had this discussion before as well. Apple's exceptional ability is to discover new 'market spaces'. It did so with the iPod definitely, and is doing so with the iPad. It could have done so with the Mac but failed. And not all innovative Apple products succeed in this, witness Newton, Lisa etc. A new market space is an area of a potential market, adjacent to an existing real market, where nobody competes. So, with the iPod, using the iTunes store, they created a dramatic new market of a different kind of music experience - carry 'all your music' with you. No other previous music player had dared to attempt this. The user controls for the iPod were brilliant to allow this new type of music experience and the ecosystem around iTunes helped it even more.

Similarly now with the iPad, after years, almost decades of tablet PCs of trivial unit sales, Apple comes with its own take on the market, and makes a new media/PC device which is more than a Kindle but less than a netbook, and yet as easy as an iPod. A whole new class of devices.

With these (iPod, iPad) Apple has initially 100% of the new market space. The rivals sell old-fashioned concepts which don't work and even the new rivals they release, will initially be based on the old formats and styles.

Where this fails in Macs and iPhones - is that Apple never had 100% of those markets - in both cases, because they made them too expensive, staying at the ultra-premium price products. Short-term vision vs long term control. While the iPod was a 'very' expensive MP3 player, it did what nothing else could do - load your whole music library to your phone... But the iPhone and the original Mac were the 'most user friendly' devices on the market - yes - but they never established a new market space for themselves. They could have, if they had been priced for a mass market adoption level (like the iPod was).

But yes, I expect Apple to do this time and again, to try it often (its TV venture was also a brave attempt but not the success they had hoped). It is part of Apple's DNA. But in those new market space ideas - they will inevitably control relatively small global markets in total revenue volume - due to Apple's limited ability to mass-produce in scale. That skill - if merged with a mass-production juggernaut like say Samsug or Nokia - would be devastating in the new markets that Apple discovers from time to time.

Now on Part 2 - Nano. You say you don't see the current iPhone hurt as severely by the competition. I do think the evidence is staggering. Android passed iPhone in the US market in Q1 but still lagging iPhone sales globally. Then passed iPhone in Q2. Today - still early in Q3, Android shipping twice the level of the iPhone. That is astounding competition. And if it was that Android hit everybody, then we should see unit sales declines on Blackberry and Nokia, but no, both of those grew unit sales. So Android's impact is particularly hitting the iPhone.

With that, there is no doubt, that Blackberry's Torch and Nokia's N8 are going to be seen by Blackberry users and Nokia users as their 'iPhone clones'. So for any loyal Blackberry or Nokia user today, when they compare to Torch of N8, there is now - for the first time - a 'real' iPhone rival. Think about this - the Android did not damage Nokia or RIM sales, BEFORE there was an iPhone clone. Android is increasingly hitting the iPhone in every market (South Korea Samsung Galaxy sells half a million in one month etc) but now we get the only two manufacturers who sell more than iPhone to begin with - adding their own iPhone killers into the mix. This autumn the direct rivals to the iPhone will be a far more powerful army - than they were in the first two quarters of 2010.

You say Apple could expand its reach by abandoning the exclusive deals. I do agree, this would help. But here Apple struggles with the technology. It is already on the best possible technology. For the USA, going from AT&T to add T-Mobile is not the optimal move in terms of size. They should release a CDMA version - but considering the hassles with Antennagate, it is not easy to do radio for mobile and it is very costly. The big handset makers long ago decided which technologies to support and many quit making CDMA versions or limited their offerings. And even doing CDMA would not give Apple the biggest operator, China Mobile which requires yet another technology (but one supported by Nokia, Samsung, HTC etc).

In most of the big markets of the world, like France, Australia, UK etc - the iPhone is already on all networks so there would be no gain in all those markets.. By expanding the carriers would not give Apple a 50% gain in global market share, but yes, it would probably give it 50% more of the US market haha, if it launched on Verizon. PS, I'd say the likely period for exclusivity is full years, so counted from June to June, so January to me is not the most likely time when AT&T's contract would end. But I'm not an attorney haha..

On the data plan, I agree. Its a very important in the decision. I would expect the Nano to be bundled with a lower cost price plan too, with a smaller limit on the data allowed per month etc.

But yes, we actually agree very much overall. I do see the urgency now, you see the benefits of expansion of the model range, but don't see the need now. I think thats a fair disagreement of examining the same situation. I am clearly quite market share obsessed haha..

Thank you for writing kevin, as always.

Tomi Ahonen :-)

cycnus

Hi Tomi,

I was very interested if you could shed a light on CDMA/Wimax and why the big corporation giving their back at CDMA/Qualcom.

I know once upon a time Nokia almost had Symbian CDMA but ditch it. And nokia also have a quarrel with Qualcom. Is the reason of nokia ditching CDMA because of the lawsuit with Qualcom? or there were any other reason?

In Indonesia, and I also hear from a friend in China, that CDMA user were not the same as GSM user. Unlike GSM user that change the handset on average 18 month. The CDMA user change their handset when it's broken. Same user will be happy to buy US$500 GSM handset, but will only buy cheapest CDMA handset. So, what's wrong with CDMA?

And I also wondering about Wimax too. Because I know that Nokia deemed Wimax as failure. I read that nokia said N810 wimax is not as successful as the wifi version. Some wrote that Wimax is the next CDMA (doom/failure), but some wrote that Wimax is on the rise.

Is the CDMA/Wimax market is too small, that's not worthed in statistic?

Thanks... My question is seems too much that I hope you don't need to write a book to answer it :)....

Kevin Noel

I'm a new comer to your blog, but it seems to me that Apple does not have to release a totally new iPhone "nano" when they already have there 3GS model subsidized to the lower $99 price point that seems to be the holy grail for smartphone handset prices that consumers focus on. Those "potential" consumers that they are missing out on, because of the iPhones extremely high no contract pricing, will always end up taking the 2yr contract with whichever carrier has the iPhone, even if it were Metro PCS for heaven's sake. I can vouch for that, having worked with various clients in the mobile industry. I believe they are losing market share because people are finally realizing that the iPhone fad has come to an end. Seriously flawed internal capabilities within the phone, as well as Android being open sourced, has shed some light into the average consumer. The only way I think Apple could circumvent a huge disaster with their prized iPhone, would inevitably be to expand its carrier availability in its number one fan nation, the good old US of A. They do not need to be spending frivolous amount of money on R&D and marketing. But hey I'm just a 21 year old with a love for tech, what do I know ;p ?

Keep up your excellent work Tomi.

Judtin

Great article but the response from kevin was brilliant. Thank you.

HCE

I'm not sure if anyone is reading this anymore but if they are, let me make one suggestion. Instead of long analysis, let's try and make guesses/predictions about what Apple's smartphone market share is going to be in Q3 and Q4 2010 as opposed to Q3 and Q4 2009. We don't even need to put a specific number on it - just put our predictions in one of the following categories

1. Up significantly (which means market share up more then 2 percent).
2. Up slightly (which means market share up from, say 0.5 percent to 2 percent).
3. Essentially flat (which means within plus or minus 0.5 percent).
4. Down slightly (which means down 0.5 percent to 2 percent)
5. Down significantly (down more than 2 percent).

My prediction will be that Apple's share will be up slightly in both Q3 as well as Q4 this year.

- HCE

Ville Suomi

Tomi, you have a point there "reading this article you must definitely be deeply interested in the subject" because that's what you want your readers to be like.

But.

In my opinion these articles would really be more usable (for the reader) if they were a bit more in shape! And (you said it: you also promote yourself - and this would help you to do that) you might want to add a short summary of the key points you have in the article as journalists often do... ;)

P.S. I for one would definitely consider buying the iPhone Nano and I do think I'm not the only one... On the other hand I won't buy iPhone 4G or the Samsung Galaxy S because of their screen size!

David

I like similarity in early distribution strategy of Microsoft with current Google Android deployment. The competitive traction will drive Android smartphones below 100 EUR and I believe that majority of customers will stick with Android environment once get used to it - its not only good enough but also convenient, you have applications that you are used to operate or you already bought licences you do not want to throw away. It will naturally shrink a pool where Apple baits for new users and put higher pressure on existence of "nano" enabler device.

kevin

Tomi,

So I'm back. Your answers to my comment and other comments did clarify a great deal. I better understand where we agree and disagree, though I still have some questions. I don’t think I need you to divulge any more info about your model.

A few more comments:
1. So you are looking at full year smartphone totals – as you wrote, Apple had 9% in full calendar year 2008, and 15% in 2009. But if so, why not look at rolling full years (i.e., last 12 months) every quarter, like I did in a previous article? Using a rolling year (and Nokia’s converged device estimates), Apple and RIM each have had 13 straight quarters of yoy growth (RIM results offset by a month); Apple from 0.3% in 2Q07 to 15.8% in 2Q10; RIM from 8.3% to 19%. Nokia has had 3 quarters of yoy growth, after 10 straight quarters of decreases, falling from 51.2% to 39.2% in 2Q10. In this view, Apple and RIM are growing but slowing, and Nokia has turned it around.

2. I agree Apple won’t get to 25% over the 2nd half. But why does Apple have to grow as much as it did in previous years? Even though Nokia and RIM sold more units, they aren’t going to grow share at all. And HTC and Samsung are still smaller; we’ll see if they can keep the pace if they get bigger. Based on full calendar year totals (IDC numbers), Nokia had 40% market share in 2008, 38.9% in 2009, and possibly 37.7% in 2010 (assumes estimated 54% yoy growth in 2nd half, which is greater than the 48.7% yoy growth in the 1st half). RIM had 15.6% share in 2008, 19.8% in 2009, and possibly 18.3% (my projection) in 2010 (assumes estimated 48% yoy growth in 2nd half, which is greater than the 42.5% in the 1st half).

If Apple sells 25.5m iPhones in the 2nd half, which I think they can (and would only be 58.3% yoy growth, and less than the 61% yoy growth in the transitioning 2nd qtr, and much less than the 91% yoy growth in the 1st half), Apple ends up with 15.8% for 2010. That’s still growth from 15% (IDC has it at 14.4%) in 2009. If Apple continued the 91% growth, it would grow to over 17%.

So yes, it’s slowing down compared to previous years. But it’s still growing. Isn’t negative growth (loss of share), such as for Nokia and RIM, a much greater sign of trouble? (By the way, having played with a BB Torch this week, I don’t really think RIM will grow 48% yoy in the 2nd half unless the corporate market is in full upgrade mode.)

3. Looking forward, your arguments cover competition, lack of availability on all networks, lack of novelty, and price.

a. Competition: There’s been competition since 2007. As you’ve written many times, other smartphones have had more features (3G, GPS, camera, videocalls, etc) earlier than iPhone. iPhone, though, made many of those features easier and more pleasurable to use. You argue that now others are catching up in the UI, and though lesser, they’re good enough, just like Windows is to Mac. But the difference from the PC experience is that 1) more people have phones, so ease-of-use matters even more, and 2) no proprietary formats have been standardized/locked-in on phones.

b. Avaliability: I think we all agree that iPhone will in a couple of years be available on all networks that matter.

c. Novelty: So yes, there won’t soon be another paradigm-shift like multi-touch/large screen/data. And other phones now look like iPhone. But I think novelty goes beyond just how it looks, but also what it does. They’ll be other innovations both from Apple (software, aesthetic design, hardware) and others in the App space.

d. Price: You argue that iPhone 4 is too expensive, while iPhone 3GS is too expensive for last year’s model, especially in unsubsidized countries. So eventually, the pool of people who can afford and want iPhone will be saturated. And even if all of today’s iPhone owners remain fanatically loyal, Apple’s smartphone share will shrink as non-iPhone owners, especially those converting from dumbphones, buy cheaper smartphones.

So three questions arise:
i. How big is this pool of potential high-end smartphone consumers (today and in the future)? In subsidized and developed countries, I think it could easily be 50% of the cellphone (not smartphone) market within the next 5 years, especially as consumers see it as a very useful mobile computer, and as cell networks get faster and cell plans get cheaper. Over time, users will see SMS as just one feature among many. In emerging countries and in unsubsidized countries, I would see it being smaller, as they may be more price-sensitive and not as readily recognize the value of computers (vs. just SMS). However, note that Apple is building 25 stores in China; that’s a sign they must believe there is a big market there for iPhone and future Apple devices.

ii. Can Apple close a price gap (while maintaining higher profit margins)? If yes, how quickly? Obviously, I think the answer is yes. People are willing to pay more if they think the product is worth more to them; it’s not strictly price, it’s value. So 1st, most will agree that Apple already provides a better ecosystem (iTunes, accessories). Its iOS platform also includes other types of mobile products (iPad), and I predict soon will include Mac and AppleTV products. 2nd, Apple is planning to grow functionality through high-margin software, including iLife/iWork-like applications that help owners use the iPhone as a useful mobile computer. 3rd, Apple’s manufacturing and component cost structure is approaching that of Nokia and Samsung. It’s supply chain mgmt is considered one of the best. Apple clearly doesn’t have the scale, or distribution yet of either. But with so few models across all its devices, Apple can already arrange for very large volume component buys, like it does for Flash RAM.

iii. How soon before high-end smartphones become a commoditized good competing primarily, if not exclusively, on price? For the high-end smartphone, it may take several years given the amount of convergence still waiting to be added. In the same way that the mp3 player has become a phone, the smartphone is becoming a computer. (Yes, the computer will merge into the phone, but since people today already see smartphones as a phone, the new thing is the computer piece.)

d. Some loose ends:
i. In the mid-90s, Apple hardware and OS stagnated. Media/advertising companies still used Macs, but the software was from Adobe and Macromedia, and Adobe had started shifting resources to their Windows versions and bought out Macromedia. Upon Jobs return, Apple started investing in its Pro suite of software, such as Final Cut, by buying up small companies and technology.

ii. 73% of AT&T iPhone subscribers (or 2.34m) upgraded to iPhone last quarter; the other 27% were new to AT&T. Recognize “upgrade” isn’t just those upgrading from iPhone; it includes upgrades from any AT&T phone (like BB, dumbphone, etc). 73% is higher than before (previous high was 67%), but that looks to be driven more by the $15 data plan getting more AT&T subscribers onto data plans.

iii. Agree with Apple’s ability to create new market spaces. Agree that Mac stayed too long at premium prices in the 90s, esp when the price difference with PCs was in thousands of dollars, whereas for iPod and iPhone, the largest price gap is $100-300. iPods were not priced at mass market levels; the iPod started at $399, when Sony Walk/Discmans were $100 or less, and some digital music players were $250. Most analysts thought iPod was a luxury item and wouldn’t sell much at all. And it sold very slowly for the first 18 months.
In the US, iPhone went from $499 down to $99 in one year. Yes, $99 required a two-year contract, but practically speaking, at least in the US, consumers are still buying the same data plans (as you wrote in your justified rant against US carriers). For unsubsidized, the price movement has been less, so you may be right here in the perceived greater value of an iPhone nano.

But pricing is second fiddle to innovation in this discussion. The Mac in the 90s didn’t innovate. iPod continued to innovate – mini, video, podcasts, nano, shuffle, touch, apps. Under Jobs, Apple has shown more pricing flexibility. But the key has been continued innovation.

Here’s an excerpt from a 2004 interview with Steven Levy that shows Jobs knows market share matters, but innovation matters more:
‘If that’s so, then why is the Mac market share, even after Apple’s recent revival, sputtering at a measly 5 percent? Jobs has a theory about that, too. Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. “The Mac user interface was a 10-year monopoly,” says Jobs. “Who ended up running the company? Sales guys. At the critical juncture in the late ’80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.” ‘

Apple is interested in market share, but the main focus is innovating useful and usable functionality. Going after innovation will lead to market share; going after market share does not lead to innovation or long-term success. Apple doesn’t need to get 50% smartphone market share to survive; it needs just enough share to keep developers writing software, to allow Apple to get volume component/content/advertising deals, and to fund further R&D for innovation.

iv. BB Torch barely gets into iPhone’s class; it’s not an iPhone killer. For those who need physical keyboard and BB security, yes, Torch keeps RIM in the game. As for S. Korea, half million in 1 month for the native favorite is great, but 130K pre-sales in 1 day for a foreigner; that’s even more impressive.

v. Apple’s main competition, right now, is Android-based phones. Please read HH’s comment and my post in your OPK-Nokia article. HH nails it. I'll add that Android is a good imitation, but hampered from reaching system excellence by having separate hardware and software developments, each with different agendas and with the hardware makers fighting among themselves to make a profit and survive. So for $100-300 more, why not get the best now (assuming it’s available on the carrier network that’s best for you)?

vi. Finally, like you, if I’m wrong, I certainly will be back to acknowledge any errors. It won’t do me any good financially to stick my head in the sand and ignore the data. We are fortunate to be witnessing great mega-business-technology strategies being played out in front of our eyes, and having the opportunity to discuss/predict what will happen.

Thanks again for responding. Hope you're having a great vacation.

Intosh

The article makes sense. However, I don't think Apple, like Ferrari, is aiming for the biggest marketshare. Their business philosophy simply cannot accomodate a huge, and consequently diversified, users base -- confirmity cannot work with diversity. Apple knows that. So how will they grow their profit? Expanding in services, content and ads. And of course, creating new markets (e.g. tablet computers).

discount wholesale

Thank you for this insightful analysis! Tomi..

Iain

Apple Q3 2010 results are out - http://goo.gl/Wh5v

white iphone 4

Great recap, I can’t even believe you were able to write that.I got so much anxiety just watching that and I thought I was the only one who had unnatural rage/hate for Kelly, glad I’m not the only one, as I was getting concerned. These women show that you can age without maturing.

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