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« In Forecasting Racket, you win some, you lose some - Talouselama in Finland mocks me for my 'Nokia to be sold within weeks' comment | Main | Brief Notes from Smartphone Bloodbath Battlefield in Year Three: Digital Jamboree »

December 07, 2012

Comments

Lasko

Apple _has been_ making more money then Google. We are in a full transition period where Android finally start beeing generous customers and the value of a Android customer in terms of money spent on the store converges with the Apple user.

(Equally generous Android customer * Android installations) > (Equally generous Apple customer * Apple installations)

winter

@Baron95
Are you arguing status goods have higher margins than utility goods?

What is the point? That poor people should be ignored as worth-less?

Tester

@Winter:

>> Are you arguing status goods have higher margins than utility goods?

Basically, yes, that's what he's doing. It's all only smoke and mirrors though. His real point is to make Android look bad, by pulling out all kinds of crazy comparisons out of his hat.

It all makes little sense in the end. Lasko already said it, Android is now in a position to seriously attack Apple's stronghold directly by having some 'cool' devices that can actually compete with their features. With their high margins this can actually become a problem for Apple. Once they are no longer the coolest game in town it can easily happen that their customer base implodes. We're not there yet but the balance is definitely shifting. When I look at the upcoming Android flagship devices, the crusty old iPhone looks a bit pitiful in comparison. Apple really needs to jump over their own shadow and offer more than device or they will suffer.

In my opinion they will absolutely need a 5'' device sooner or later in addition to their classic 4'' size or they'll experience some problems because all the customers looking for something that large are forced to look elsewhere. That's not a good position for a supposed market leader. If you fail to capture a significant segment of the high end market completely you're in trouble if you position yourself as a premium brand.

So, if Apple stays with their undersized one-size-fits-all form factor I wouldn't bet too much on future growth.

Right now they only stay strong because they got so many customers locked in. But that will only work for so long. If Apple doesn't offer what the market wants, the market will go elsewhere. And right now it's all going bigger in screen size.

RyanZA

*Sigh*

@Baron95

"I'm not arguing anything. I'm simply pointing out that, Apple is somewhat unique, in that they have the premium priced product, but also have the volume lead."

They do not have the volume lead...

"Tell me. What is the Android's or Android OEM's answer to the Apple retail stores and the experience there?"
Samsung has set up mirror stores, often directly across the road from Apple stores. They are doing very well.

"What is Android's or Android OEM's answer to truly seamless SMS/iMessage toll-bypass?"
Android is currently looking to make SMS seamless, so any 3rd party app can register as an SMS contact sender. There are apparently security issues preventing it at present, so it's not available yet. If released, it would be far more useful than iMessage as it could use WhatsApps, Skype, Gtalk, all at once and thus work with all platforms. iMessage is restricted to iOS only users which are a small share of the market...

"What is Android's answer to 300M credit-card backed iTunes accounts?"
Carrier billing on the Play store.

"What is Android's answer to iTunes match, iTunes exclusive content (e.g. Beatles only available on iTunes)?"
Android is not about exclusivity, it's about openness, as seen by Google Maps happily going over to iOS.

"Which one is a bigger barrier to over come? Building hundreds of stores or changing screen sizes? Getting 300M credit cards on file or adding removable storage?"
Seems like the bigger barrier is removable storage and screen sizes, as it requires a culture of listening to your customers. Building stores and getting carriers on board is obviously easier as Samsung/Google are managing these without problem.


Tester

Baron95 certainly sounds like an Apple sales rep, doesn't he? Lots of FUDing the cometitors and showing one's own assets in a brighter spotlight than justified.

Well, things are changing. Android has caught up in most fields and right now there's quite obviously a LOT of innovation going on whereas Apple is still stuck with their original one-model-a-year model that was ok 5 years ago in a much less competetive market.
Today, though, better Android phones are popping up each week and guess what: People buy them, they eagerly await them, the only difference with Apple is that it's more evenly distributed over the year so that the insane post-release spikes do not appear.
Face it: Apple doesn't lead anymore. The iPhone 5 was not a quantum leap ahead of the competition, it was merely some catch up, and then only partially. By now even better Android devices get announced but Apple won't have anything to compete for another 9-10 months.
Yes, they only can survive due to their 'premium' image. But once sufficient people realize that they won't get appropriate value for money compared to the competition, sales will suffer.

As I said, we're not there yet. But with current market developments I'd be a bit more cautious with Apple. They are not the one calling the shots anymore. The first Android full-HD devices are something Apple has nothing to compete with yet for several months.

Oh, for iTunes exclusivity, that doesn't mean iOS exclusivity. I think if someone really wants some music that's not available anywhere else, to purchase it on a PC and upload it from there, don't you think?

With the current market developments Apple may eventually be forced to release an iTunes for Android app as well. Imagine losing all those customers that have no interest in purchasing an iPhone or iPad and don't need a PC anymore...


Imagine the horror: Current iTunes PC users giving up their PC and going exclusively mobile being lost as customers forever. With the fierce competition in the market that's a nightmare scenario. I guess Google and Amazon will gladly take them instead if Apple won't do anything to keep them.

cycnus

@RyanZA & @Tester

Android is leading now, and the momentum is with android. In China, iphone5 got a lukewarm respond, and Apple share dive to almost US$ 500. It's no use to debate with @Baron95, he's doing his backward mirror, looking back to 2 years ago, when iphone still considered cool, and can't accept the reality that iphone is ALREADY loosing the game..... I REPEAT... iphone ALREADY loosing the game.

Tester

Profit != marketshare.

More importantly: yesterday's profits do not equal tomorrow's profits and with the market in a transitional phase I'd take it even less for granted.

Nokia is a great example of how a company can end that takes its market power for granted and rests on its laurels for too long.
Eventually the time came where it all went south. Funny enough, the signs have been there long, long before it actually happened.

Microsoft is in a similar situation right now. They are dramatically losing market share and even more importantly market influence right now. And they seem to be incapable of doing the right thing.

Apple is not there yet. It's just that the first warning signs begin to show up and unlike MS and Nokia they still have competetive, albeit overpriced products. But it has started - and that's what the current share price reflects: Not current profits but future outlook. Apple's share price nosedive is a clear indicator that the market is not as confident as you are.


So, right now I'd bet my money on Google or Samsung.

RyanZA

@Baron95

There are multiple stakeholders involved in the mobile race. They are:

1) Device providers (includes hardware and software OS)
2) Application providers (development houses that build software for the different devices)
3) Accessory providers (bluetooth headsets, car kits, lots more)
4) Consumer facing businesses in retail/other sectors (Banks, journalism, property, etc)
5) Consumers who purchase devices
(and more)

Now let's look at the different stakeholders in terms of profit of device providers:

1) Very happy with more profits, core goal
2) Don't care
3) Don't care
4) Don't care
5) Care - the less profit skimmed off by device providers, the more intrinsic value is available to them

So it's a wash in terms of stakeholders. (1) wants profits higher (2) wants profits lower so they can pay less

Now let's look in terms of market share:

1) Very happy with market share - high market share means good penetration and customer satisfaction and ensures your product portfolio has a place in the market in the future
2) Very important - if market share is high they can focus on that platform and hit a high percentage of consumers
3) Very important (device level, not platform level). If SGS3 or iphone5 has a high market share they can make accessories for a broad market.
4) Very important - they need to hit the largest number of consumers with the lowest spend, as their core business is elsewhere (comes out of marketing budget)
5) Don't care directly, but high market share means the other players above will target them specifically if they are part of the ecosystem.


This is all very well known, and it is also why everyone talks about market share and not profits. Hope you have learned something, Baron95.

Lasko

I think we've reached a point where we can stop arguing, because Baron95 (or the one who is currently posting using this pseudonym, there seem to be several of them) has now become completely resistant against hard facts and he will spill his nonsense whatever betide.

You know what they say about arguing on the internet.

Maybe we need just a new banner. What about ... ?

I'M JUST WRONG. BARON95, 2012.
YOU MUST BE POOR BECAUSE YOU USE ANDROID. BARON95, 2012.
ANDROID - SUBPAR, SUBHUMAN. BARON95, 2012.

Lasko

I almost forgot, we don't seem to be the only one who discuss about Apple:

http://news.cnet.com/8301-13579_3-57559314-37/apple-stock-slouches-toward-$500-near-february-lows
http://truthdive.com/2012/12/15/Apple-stock-drops-amid-disappointing-iPhone-5-launch-in-China.html
http://www.tulsaworld.com/site/articlepath.aspx?articleid=20121215_498_E1_CUTLIN722484
http://www.nypost.com/p/news/business/peeled_and_cored_JYxFg3adhoK1zSnWSt0GUJ
http://www.berkshireeagle.com/berkshirebusinessnews/ci_22197561/apple-drags-down-stock-market
http://www.benningtonbanner.com/business/ci_22196790/stocks-edge-lower-apple-sinks-4-slow-beijing

Tester

>> I think we've reached a point where we can stop arguing

You are of course correct, there is no point arguing with someone whose opinion depends on who pays his bills.

That doesn't mean we shouldn't set the facts straight and point out his lies so that others won't fall for his nonsense.

cycnus

@Tester

It would be useless...
He would always answer what you wrote using his flawed logic.

There is only 1 think that can stop him from doing it... and that's TOMI DELETE HIS MESSAGE.

which is.... ashame....
I would like whoever visit this site 3-5 year from now look what he wrote....

@Tomi,

I think you should install an add on like in other web site.
So, if you think it's a troll, the comment is still there, but it's hidden.
we need to click it to be able to read it.

In some website, the comment were like this

"this comment is hidden because it does not follow this web site rule. To view this comment, click here."

newbie reader

ON IPHONE KILLER

>>> Porche selling more than VW, a Porche is 5-10 times more expensive >>>

I saw this many times... too many.

Problem with iPhone5 is, that it it ***NOT Porshe.***
Porshe is not made in ***tens of millions copies worldwide,*** with industry-average specs

iPhone is essentially a $250 phone, that they managed to sell at $600-700. And so called "iPhone killers", so far, they were just same $250 phones, but sold for $300. This makes Apple a unique company in the whole world history, (to have BOTH high margins and high volume)

And Real "Porshe", that would indeed kill iPhone.

Real Porshe Phone is the $700 phone, that really COSTS $600-700. Elite thing, only produced in small-to-medium quantities, due to the shortage of expensive components.

That is real iPhone Killer.

1. Best screen, low-power, hi-dpi, ***just not avaliable in big numbers***
2. Fine CPU tech process, low battery consumption
3. expensive case (not cheap choice of glass/aluminum but, say, titan, or something)
etc

This kind of product is natural in all other markets, see e.g. Elite Intel CPUs for $1000.

Also, it is very natural for screen industry: they also can produce either hi-volume low-quality stuff, or low-volume hi-quality stuff. /So far, they opted mostly for first/

But one day this would happen, real Porshe Phone, sold for $700 and more, and WORTH this money. Then iPhone, as we know it, would be dead.

cycnus

@newbie reader

There were plenty of devices that were iphone killer (better than iphone). The only problem for these phone were APPLE ECOSYSTEM (WAS) BETTER.

The proof that lots of that android is iphone killer is, lots of that phone (high end samsung galaxy, high end HTC, high end motorola) did sell well although Apple have a better ecosystem in 2011. and make ANDROID ECOSYSTEM CATCH UP with apple.

Now, at the end 2012, android ecosystem is barely behind apple ecosystem (in the number of great game developer launching game in both platform at the same time), and apple starting to feel the heat.... apple is not cool anymore.

in 2013, the BEST phone will have 1080p, 2GB-3GB RAM, etc. if you follow tech news you'll see that the oppo Find 5, ZTE nubia, Huawei, have these spec @ incredible US$ 500 price. Apple will have the hard time competing in 2013.

So, in recap about iphone killer, who kill iphone, etc.
Apple already lost the battle in 2011, they just don't see it yet
Apple know they already lost in 2012, but they don't realize how much damage have been done.
Apple realize that they already lost in 2013, and they will compete / try to be relevant.

Lasko

I think Apple is well aware that they are on the decending branch.
'Apple will never make medium-sized tablets.' -> iPad mini
'Apple does not allow apps competing with iOS-apps.' -> Google Maps for iOS6
'Apple will never make consumer electronics.' -> Apple SmartTV

They've broken so many 'absolute no-gos' lately and there will be much more to come; and that's a horrible situation for the Apple and i* brand, because you risk becoming 'average' or 'ordinary'. And nobody pays premium price for 'average' or 'ordinary' products.

Just take a look at the stock. It has been going down for unbelievable 25% within the last weeks - Apple has lost 160 billion dollars (!) of market value in just three months even though there have been two major flagship releases (iPhone 5 and iPad 3) and the strong forth quarter!

Analysis agree this is because both, the sales volume and the profitability of Apple has been going down, partly drastically, and Apple is not expected to grow any further in its current market.

Apple has trapped themselves in the tight corner of high-price, high-profit, religious-like market which already reached its maximum expansion. That's the Steve Jobs legacy, and Apple will have to deal with it. That's not something they don't know about, that's just something they don't really can do anything about.

Android on the other hand comes from quite the opposite direction. It has been always known as 'the versatile' - and it actually is. Low-price, high-price, phones, gaming consoles, TVs, tablets, thin clients - everything runs the same system and the same ecosystem: Android. And each new device, each new market does strengthen, and not weaken, the Android brand.

There is just no limit for Androids growth, that's the difference between Android and iOS, that's the reason Android is more likely in the 'winner' position then Apple - and that's also something you don't or won't understand if you are part of the religious Apple market.

cycnus

Since this thread is talking about MS vs. Android

Microsoft hired a hitman to hit directly at Android
http://www.nytimes.com/2012/12/15/technology/microsoft-battles-google-by-hiring-political-brawler-mark-penn.html?_r=0

The hitman Microsoft hired is the one who responsible for smearing Google name in Scroogled campaign.

newbie reader

@cycnus, I agree with you on all points.

Just to expand my additional "Porshe Phone as a real iPhone killer" point:

>>> in 2013, the BEST phone will have 1080p, 2GB-3GB RAM, etc. if you follow tech news you'll see that the oppo Find 5, ZTE nubia, Huawei, have these specs >>>

1. 1080p phones are announced... announced... and we still have to see it. I suspect, that the problem with them are 1080p screens.
There are just ***not enough of these*** to anything beyond samples.

2. So, eventually these phones will show up. In hundred thousands. Low millions. ***And NOT in 10s of millions!***

3. Problem? Not for Android vendors. But for Apple business model, yes. Problem. After they screwed it up with Sammy, they can hardly get screens even for iPad Mini, not to say for iPhone.

4. Some say, Samsung was only mighty supplier who could supply BOTH quality and volume. And now they've learned how to sell their components in premium market, all for themselves.

5. Others? One missed in 1080p list above is Sharp.
Yes, and Sharp now makes its own 1080p Android phones:

http://www.intomobile.com/2012/11/30/sharps-1080p-android-smartphone-announced-hong-kong-sell-some-580/

and sells them at iPhone range price, $580

If Apple wants to make "cool" phones, it should now at very least pay high enough parts price, so that e.g. Sharp prefers Apple to selling their own phones. It means: forget the profits.

And they are probably unable to get tens-of-millions volume anyway.

That is, ***Real Porshe Phones*** are here to come in 2013, at least screen-wise. :-)

newbie reader

And, just for everybody info. Recently released,

4-core MTK6589 ARM Cortex-A7 CPU

in addition to 28nm and new A7/A15 architecture,
has one important spec, ***that was not announced earlier***

It supports screens up to 1080p.

sve

If Android and Apple offerings were both free, which one do you think customers would want? Answer that one and you will know how the future rolls out.

Lasko

Android is selling 121,1 million devices, Samsung 56,2 million, Apple 26,9 million a quarter.
Android is powering 559 million devices, Apple 217 million.

How does that make Apple the volume leader?


AAPL -25%, -160 billion dollar market capitalization, stagnating market share, less profit, bleak stock prospects and decreasing customer loyality.

KS (Samsung) +33%, +55 billion dollar market capitalization, highly increasing market share, more profit, bright stock prospects and increasing customer loyality.

How does that make Apple the market winner?


Paid Apple employees and brainwashed addicts standing in line for a piece of consumer electronics.

Samsung customers buying twice as much consumer electronis either on the internet or within reason.

How does that make Apple customers more valuable?


Again, Baron95, you've shown absolute resistance against hard facts and you've decided to just play your broken records of untruth and absurd grounds.

You still haven't answered the question, whether you still support your statement that the only reason someone is not buying the most expensive product is obviously because he cannot afford i, and that this is a non-debatable fact.

The comments to this entry are closed.

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