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« Emerging World Stories in Mobile, these should cheer you up | Main | Big Bloated Billions Blog - The Preview to Mobile Stats in Year 2012 (plus freebie gift) »

April 27, 2012



RIM were starting their massive BB10 campaign as of now, targeted directly at Apple


In fact, Korea is taking place left by Japan... soon Korean cars will outsell Japanese, so will technology if not done already.

Alex Kerr

Worth noting:

Samsung will produce a Windows Phone 8 version of the Galaxy S3. Very very strong competition for whatever Nokia has in the pipeline (and I say that as no fan of Samsung or the Galaxy line but rather from a consumer's perspective), meaning it will be MUCH harder for Nokia to differentiate as Elop said would be easy for Nokia.

Yet more evidence, as if any were needed, that Microsoft/WP/Lumia is a disastrous strategy for Nokia and will take them to the grave if they persist.


@cycnus: 'third ecosystem' can be M$ BS, I do not know, but having three (or more) 'equally' popular _device_ would make operator's life easier - I guess...

You are right the 'duopoly' is not between Apple and Google but Apple and Samsung - from operators point of view. Currently iPhones are the most desired phones by the end user thus Apple has significant negotiation power. Operators are not so happy with that:

"Apple requires carriers to subsidize the phones at a higher level, leaving less room for profit, said John Hodulik, an analyst at UBS AG in New York.

“They hope Lumia can take some market share to help lower their subsidy costs, now that so much of the spending is in Apple’s favor,” he said."

It is a good question whether Lumias will be their savior or not - I guess not. At least not in short term...

On the other hand operators would not really care whether that third device is made by Nokia, LG or HTC. They just want something they can use 'against' Apple and Samsung...

I have no clue how many operators would be OK in USA - I live in Hungary :-) - but how the increased number of operators would help them during negotiation with Apple about the subsidization the operators have to pay? ;-)


@Alex Kerr: an other evidence how bad the current strategy of Nokia is... Samsung plays their cards in much batter: produce phones for all available OS - whatever wins they win, too...

Elop made a colossal mistake with selecting WP only. I'm really interested in the coming annual meeting of stock holders in May. Somebody has to question this madness there...

Of course, no problem with selecting WP but making it exclusive - either abnormal optimism or total stupidity...


@Alex Kerr

That's why everyone that really understand this problem called Elop the trojan chicken, ehm... i mean trojan horse. Elop really think that nokia brand is the best in the world nokia + ugly (wp7) = can sell a lot. and nokia still can beat all other maker in wp7. this guy really stupid.


What I meant were,
The increased number of operator will benefit the user.
In america right now it's fake free market in term of carrier,
they were doing multi-poly. It's a cartel.
America rate were expensive compared to the rest of the world.


@cycnus: OK, I've got your point.

Increased number of operators would boost competition from customers point of view.

But it would not solve the problem operators referring to: no real challenger of iPhone. At least there is not enough challengers thus Apple ask whatever it wants to ask (in term of price).

Hopefully it will be changed later this year - in one way or an other...



I'm just saying that the operator in the united states also need to be punished :) lol.

and btw,
in indonesia, when government suddenly give 2 more operator a license and this 2 operator willing to show the real cost of communication, there were no more room for carrier subsidize.

Here is the math (and what really happened in indonesia).
for example if ATT and other big guy say US$ 0.2/minute for call and US$ 0.1/SMS, but if you buy package for US$ 100/month, i will give you an iphone and 500 minute call.
new guy come in and say US$ 0.05/minute for call and US$ 0.05/1000sms/day (send 1 sms, pay US$ 0.05, and send 999 free sms for the remaining of the day). i won't give you subsidize phone because it's already cheap. would it make some of the user leaving AT&T, would AT&T and other big guy change the way they conduct business?


@Vikram When you say "... but Apple crushes Samsung in phone revenues and makes roughly70%-80% of the entire mobile industry profits..." I guess you mean of some sub-category in the industry, like "handsets", "handsets + related VAS".
Mobile industry as a whole has a size of around 1.9 Tn USD, and the sales you mention are just a drop in the sea of the telecoms...
Open your eyes guys, of course devices, apps etc... are all nice and attractive, but mobile industry is much more than that.
And now I am doing Tomi's SMS dance or Myself's Voice! Voice! Voice dance ;)

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it would have to be a local monopoly kind of thing.

Tomi T Ahonen

(more replies, am on Apr 27)

Hi CN, Louis, zlutor, KPOM and vladkr

CN - I think there is good discussion here about the subsidy. Let me try to be brief and summarize. The subsidy is a total marketing gimmick only, has zero bearing on what consumers pay or what Apple gets. It is a forced monthly payments scheme (where the carrier then imposes a credit risk charge upon your payments too). So there is no difference if you paid 650 dollars for the iPhone 4S, or paid 199 dollars and then the rest of the 451 dollars goes into 24 monthly payments. There are many countries where there are no handsets subsidies, the penetration rates of smartphones are totally the same, as are replacement cycles, etc. If the carriers were to suddenly abandon subsidies (as they did for example in Israel and in South Korea) it does suppress new phone sales in the short run, but that recovers well before a year is done.

Louis - good points but on the last item, you say iPhone share is highest in most saturated markets. That is totally not true. The highest smartphone penetration rates are in UAE, Qatar, Singapore, Hong Kong and Australia. Only in Australia is the iPhone the strongest player. Samsung beats it easily in Singapore and Hong Kong. in UAE and Qatar the bestselling smartphone is the Blackberry and the iPhone is nowhere.

zlutor - again, good points, except that the subsidy is not profit going to Apple or any of its rivals. It is only a marketing gimmick and a forced part-payment plan. The money going to Apple is the same whether paid on subsidised contract or unsubsidised 'full price' basis.

on the iPhone sales, yes in those countries with no subsidy, like say Italy or Belgium or South Korea, yes the consumer pays full 650 dollars at retail, per iPhone (plus any local phone taxes etc which sometimes add considerable additional fees like in Brazil iPhones are over 30% more expensive due to local luxury goods import taxes). Same is true in almost all of the Emerging World markets, so in Nigeria or South Africa or Indonesia, you pay 650 dollars (plus taxes) per iPhone.

KPOM - again, the subsidy has nothing to do with the money Apple gets. Reducing or raising the subsidy level makes no difference to Apple income, it is only how much the carrier wants to lower the initial payment price of the phone.

vladkr - `hear hear!

Keep discussion going, will return with more comments

Tomi Ahonen :-)

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