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« Not 'One of the Best' but Undeniably THE Best Ever, that is what Steve Jobs was as CEO | Main | Why Do Carriers Hate Skype? Let Me Count The Ways... (updated) »

September 07, 2011

Comments

michael

iPhone with QWERTY? Why? The paradox of Apple is that they have become no.1 consumer electronic software/hardare company with minimal number of products available. And those minimal number of products available are more expensive than those of competition.

All those numbers may show one side of the story. The other side of the story is: don't sell crap products and markets will reward you!

Bob

the main reason why Apple has become no.1 is because of Steve Jobs who has studied microsoft ecosystem closely and then devised elegant solutions which surprassed microsoft products(windows 0S, windows mobile, lack of centralized app stores, the horrid regedit etc), now that he is off the picture, equation changes dramatically. An operations guy like Tim Cook does not inspire much confidence to bring about future disruptions. Sure he is a good optimizer and can run stuff efficiently and all, but that is a job which any reasonably smart guy can do. Tim Cook just happened to be lucky and to be in the right team at the right time. So for Apple's sake, I hope Steve Jobs health improves and comes back as CEO. Else all bets are off and we cannot predict the future.

Tomi T Ahonen

Second set of replies, from Sept 7

Hi LeeBase, Baron, Joe, virgil, elmo and peter

LeeBase - first, Lee, you've been here on this blog for years. I was here when Q2 results came out in 2010, and Q3 and Q4. I said when others called it that Apple had peaked, that it was not how I defined it, and that we had to wait to Q4 results available at January 2011 to know if 2009 was a peak and 2010 had started to decline. And I very clearly ON THIS BLOG said that I had been wrong. It is not 'belated' admission in September of 2011. I was here right when the Apple numbers came out saying so. Don't put words into my mouth, and don't distort what I say or you know what happens to your postings, Lee. I won't put up with that. You can disagree with me, but don't make statememnts about me on this blog which are not true. You KNOW I was the first to say so here on this blog when the Apple numbers came out.

But yes, we agree clearly that Apple could sell more with a Nano variant and a QWERTY variant. And you know my position, I am 100% certain Apple will sooner or later release the Nano cheaper but new, fully cellphone (not iPod Touch or iPad) version of the iPhone to sell as a new model alongside the newest 'main' iPhone. I am also hoping but not expecting a QWERTY version and that might not happen until Steve Jobs steps aside from Chairing Apple, I do believe its Jobs's obsession which prevents Apple from giving us the QWERTY version.

But we also agree, yes this is typical Apple, as you put it 'leaving money on the table'. Fine. I think thats stupid and I will say so time and again. In mobile phones this is a war of a decade to rule all the major industries of the planet, not just telecoms but internet, media, advertising, retail.. money! and you need scale. Apple has easy wins now that it is abandoning, its long-term viability is hurt because of short-range thinking. I have been saying so in the past, I have not changed my mind on it, I think its stupid and short-sighted by Apple. Any iPhone Nano buyer today, would be a good candidate to buy future iProducts from Apple into perpetuity. Why not take them now, before every major smartphone maker has its act together.

On the Nokia implosion. The N8 was the 'best thing yet' by Nokia to try to match the iPhone. I am not claiming its as good, but it was also cheaper. And it had the best launch of Nokia's new premium smartphones ever. It was well on its way to far exceed that level of sales in Q2 when Elop caused the Elop Effect. When paired with the E7 - the best QWERTY and touch-screen phone on the planet - and a phone costing more than the iPhone, Nokia had the pair to do serious damage to the iPhone in Q1 and Q2. If there was no Elop Effect, I do think iPhone sales in Q1 and Q2 would have declined, not grown. But this is something that can never be proven.

You think there is unmet demand for the iPhone. Maybe. I think most of that is customers who would not under normal circumstances have considered the iPhone, but went there because the sales guy in the store asked 'what phone did you have' and heard Nokia. Then the sales guy thinks, this customer needs to learn a new phone to use, the easiest phone to learn is the iPhone, it has the highest satisfaction, and has a nice high price - hence good margin - and pushed the iPhone at the customer who under normal circumstances would have asked for a Nokia and left the store with a Nokia. Any other change - teach the Nokia user to switch to Blackberry or Windows Mobile or Android - would be a bigger chance of failure and unsatisfied customer. As long as the Nokia customer had had a premium Nokia phone before (N-Series, E-Series) then they could probably be upsold to the iPhone, in most markets..

But again, its my guess, this is something that can't be proven one way or the other. Clearly I expected RIM to pick up a lot of E-Series users to the Blackberry and that didn't happen. But Apple had a phenomenal time (as did Samsung, I think they split it so, that Apple got most of hte top-end and Samsung most of the mid and bottom end of Nokia customers, including featurephones to Samsung featurephones)

But we agree, when the next iPhone is coming, it will be a HUGE quarter for Apple. I am hoping, and increasingly we hear no word from Apple so this seems more and more unlikely - to see the new iPhone released during the last days of September. Now it seems more like October. But yes, Apple will have a record Christmas period either way.

Baron - when you say you disagree.. so do you think, regardless of what constrains Apple, that it would not benefit Apple's unit sales, its market share, Apple's revenues, and its profits - to offer a Nano and QWERTY variant of the iPhone?

I hear you on the components for the QWERTY variant, but the Nano variant would use essentially last year's guts and a smaller screen and form factor (but some new bits like a reasonably modern camera resolution). None of those are resource constrained today. I am not saying do a Retina Display screen for the Nano. So even if you're right, the QWERTY would cut into current main iPhone manufacturing, the Nano variant would not.

But at least we do, Baron, agree on the principle, you just think its not today's issue, you think the right timing is 5 years from now. Fine, I see your point. My counter-argument is what I told Lee in the above, its not the battle this year, its the war that runs this decade. Every point of market share abandoned this year is far more costly to try to grab in 2015 or 2020. Look at how Coke and Pepsi fight for literally fractions of a point in market share. That is what the smartphone market will be like in 2020. Now, in 2011, is the time to build your base and do the 'land grab' in the biggest economic opportunity of the decade certainly, of the century very likely. And that is why I say Nano specifically but also the QWERTY is needed sooner, even if there is some cost to profits. Apple has such an overabundance of profit, it is now prioritizing over-profit to under-market-share. Wrong choice. It should balance out some of that excessive profit to grab more of hte long term viability of the iPhone and iOS. In my opinion haha.

Then on the detachable bluetooth keyboard. That is a dead idea. Its been tried a million times and suffers same fate as detachable cameras did too. It sounds technically nice, and some geeks will love it, but the mass market consumer will not carry any extra bulky gear in their pockets that they don't need. And thus, when they suddenly have the need, the device is not there. The consumer finds no utility out of the gadget, its sales are a tiny fraction of what was expected (or of early sales) and soon discontinued as not viable. No, it has to be integrated...

Joe, thanks for the Canadian angle, very interesting.

virgil - be nice. Obviously Joe is seeing growth in the iPhone in Canada and if so, yes there is growth left.

elmo - thanks yes. I am so disgusted by just about everything I see about Nokia. What I think is in the patents they shifted to the patent troll company - I cannot see any other possible reason except that Nokia wants those patents to be used in patent wars, and decided the patent troll company is better suited to fight those with Nokia taking its gains as a share. But yes, this is not Nokia as we knew it. This is Nokia wanting to be Microsoft the new Evil Empire. Lawsuits included.

peter - thanks. You know I will be here to celebrate with you for every million that the N9 sells, I am hoping you are 100% right and I am 100% wrong and will cheer very loudly if so... At this point, however, I think the only chance of that happening is if Elop is fired. He is restricting the sales of the N9 to such marginal countries, Australia is probably the biggest which only is one tenth the size of the USA haha.. So yeah, I am hoping you're right.

Thank you all, keep the discussion going

Tomi Ahonen :-)

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Jukka

Now that HTC has revealed its Q3 results and we know Apple's record breaking pre-sales of iphone 4s, it is starting to look like Samsung and Apple are pulling even further away from teh competition than predicted. HTC is doing good, but cannot quite keep up with Apple and Samsung and may have difficulties to reach the 18M Q4 sales.

Apple may sell even better thatn you estimate, because now there are 3 iphones available in different price categories: 3s, 4 and 4s.

Also, when an artist dies, the books, paintings and records start to sell like crazy. Apple may be receiving similar sales boost in Q4 this year.

Jukka

Now that HTC has revealed its Q3 results and we know Apple's record breaking pre-sales of iphone 4s, it is starting to look like Samsung and Apple are pulling even further away from teh competition than predicted. HTC is doing good, but cannot quite keep up with Apple and Samsung and may have difficulties to reach the 18M Q4 sales.

Apple may sell even better thatn you estimate, because now there are 3 iphones available in different price categories: 3s, 4 and 4s.

Also, when an artist dies, the books, paintings and records start to sell like crazy. Apple may be receiving similar sales boost in Q4 this year.

elmo

Tomi,

Your prediction for Apple and Nokia was quite off.

Nokia should have sold 12.9 M SmartPhone in Q3 ... It did 16.8M ... just a 30% error.
So in Q4 the predicted 9.5 M is not going to happen.

Possibly in Q4 Nokia will sell more then Apple again

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