My Photo

Ordering Information

Tomi on Twitter is @tomiahonen

  • Follow Tomi on Twitter as @tomiahonen
    Follow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

  • Contact Tomi T Ahonen for Speaking and Consulting Events
    Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

  • Tomi on Video including his TED Talk
    See Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media


Blog powered by Typepad

« Why Do I (still) Think Nokia Will Be Sold (soon)? - This article explains it | Main | Future trends in mobile »

May 02, 2013



"In the process of doing that, Apple has locked in 500,000,000 high-value, high-disposable-income accounts with credit cards on file and ready for one-click purchases."

As you present your point, I can totally imagine you singing the praise of the trans-Atlantic slave trade.


... and it still remains to be seen if they can keep those high-value customers long term. What if the cost of staying starts to appear higher than the cost of switching platforms?

Which brings us back to the diversity issue. The better the competition gets the more demanding Apple's own customers get. You can bet there's many that would like a 5'' phone or a 6'' phablet. So what if Apple doesn't give these people what they want?

Will they grudgingly accept that they get screwed or will they switch?

It's hard to say but since technology is a relatively volatile business it's always a grave mistake to take one's market position for granted. One fatal mistake and you will suffer the consequences. Not even Apple is immune from that. Right now they are merely profiting from their early lead in the market, not from a technological advantage.


@Baron: Samung does not care about customer lock-in, because there is none. I switched from a Samsung to an Asus tablet without losing any App I bought.

@leebase: The problem I see is that you evaluate the market based on buzzwords (ecosystem) and wishful thinking without considering the basics.

And the basics are logistics on one hand and customers at the others.

With the iPhone, Apple first was in a unique position: They were product leaders (having a product with unique features customer desire) and cost leader (due to high numbers of phones produced [=economies of scale]) at the same time.

This was a unique position no other manifacturers I know had.

Addionally, Apple's Supply Chain is lean because they produce only a single device (and some predecessors, which are simply continued).

And to top it off, some features, like the multitouch capacitive touch displays, couldn't even be bought by other companies after iPhone's release.

This is the reason why the first wannabe-iPhone killers had inferiour displays.

This mix of advantages over the competition was key to Apple's strategy.

Just look at the iPhone 3G: e.g. in Germany T-Mobile was the exclusive provider at first.

Since customers left other carriers and switched to T-Mobile just because of the iPhone, carriers like Vodafone had to beg for iPhones.

So you can imagine how the negotiations went, Apple sold the iPhone at high prices. Combined with their low manufacturing costs, this created huge profits.

But now, 5 years later, the market has matured. The iPhone is only one of many devices, and the competition has various form factor, features and prices (which Apple does not have).

Of course the die-hard Apple fans won't switch to Android anyways. But not every iPhone owner is a fanatic. A lot of them were attracted by the coolness-factor.

Once the coolness wears off, Apple gets in trouble.

Apple has to react to this changed environment or become a failure. Wild theories about 'ecosystems' can't change this.

So iOS7 and the next iPhone are the most important Apple products in years.

If these products still look inferior to Google/ Samsung/ HTC, customer demand will get lower.

But everything in Apple's strategy depends on customer demand: Just imagine an iPhone release without long queues in front of the Apple stores...



Your entire analysis is meaningless as long as it completely ignores or sidesteps the future problems Apple may face.

There's 2 options:

1) Apple addresses these issues and they'll retain their current position.

2) Apple continues with business as usual. They don't have the technological edge anymore and their products are simply overpriced so once the balance shifts away from Apple they may be in for a nasty surprise.

For 5 years, Apple has been in the offensive: defining and leading the market with a superior product. They now live off the aftereffects of this situation.

However, since last year this is no longer the case. Modern high end Android (and yes, even Windows Phone devices!) match or outclass the iPhone. So far not enough time has passed for this to have a profound effect on the overall market - but this can and is already changing. Just see how fast Android app revenue is growing right now - much, much faster than Apple.

The conclusion to draw here is simple: Apple already lost in market share. Next they'll lose is revenue share and after that profit share. Once they have to enter a price war to hold their market share (and thus their app revenue share) they may be in for a very rude awakening. And I'm fairly certain this will happen if they stick to their one-device-a-year strategy and don't expand quickly beyond their tiny 4'' screens.


@Baron 95

Rather odd argunents. Handsets are not soldiers, but handsets in a customers pocket are the country to be conquered. Tech wars are often decided by who gets the majority of users. After that it is over. If 90% of humans end up with an Android phone in their pocket, its over. There will not be a second round.


I see it's pointless to argue with people who refuse to understand what's being discussed.

The entire argument of Baron and leebase seems to be that Apple cannot fail because they are Apple and thus can't make harmful business decisions. That's just idiotic.

Anyone who runs a business like that will inevitably run into a wall sooner or later.

We just witnessed such a fiasco with Windows 8. The only thing that saved Microsoft from a total wreck is their utter dominance in the desktop/laptop PC sector that makes it close to impossible to switch platforms.

What if that happened in mobile? There's 2 things:
1) The replacement cycle is much, much shorter
2) There's viable alternatives. If one platform fails, people can switch to another one and still be in a good situation. (Hint: For someone who pays a few $100 for a phone it won't hurt much to pay a few $ more to get their apps back)

So, should Apple misjudge the market as seriously as Microsoft did, they'd be in really serious problems, because there's far less holding people back than there is in the desktop world.

But according to leebase and Baron95 such a thing is a total impossibility because Apple can't do wrong.


Leebase & Baron:
do you write on any other forum than this? I love your patience in explaining why Apple does not target their products to constantly growing low end, but I hate it that when I check back here in a week, the best of your arguments have been deleted.


"Poor Apple. Out of it's league. Everybody's got better tech. Only stupid Apple fans buy iPhones. Apple products are too expensive."

In 1Q2010 Apple sold 8.8M million iPhones and Android 5.5M. In 4Q2012 the numbers were 47.8M and 147.3M, respectively. That is, iPhone outsold Android by 50% at the start of 2010. Now Android outsells iPhone by 3:1. For tablets the switchover has just happened.

The point is, more than half a billion people would not have had access to a Smartphone without Android.




And here are the latest global estimates for 1Q2013

Android:iPhone 4.3:1
Sounds like iPhone is losing to me.

Android 162.1M (75.0%)
iOS 37.4M (17.3%)
WP 7 (3%)
Total 216.2M



>> you might find it interesting reading on Tomi's first handicapping of the chances of the original iPhone

Let's not talk about analysts misjudging the importance of a new disruptive product. It's not the first time it has happened and it won't be the last time. I read all these 'expert' opinions back in 2007 and was just shaking my head while holding the iPhone in my hand with amazement.

>> Apple's tech is mostly behind the times.

Uh... No. Not here.

The iPhone was way ahead of everything else in the market of its time. Frankly, back in 2007 what was considered a 'high end' phone was mostly utter garbage - it just sold because people were used to that low quality. The iPhone really was an amazing device when it came out.

Easily as important is that once the SDK became available, the iPhone was the first smartphone that could be programmed like a real computer, not like a toy with limited processing power.

Imagine the effect all this had: The thing was popular, it was developer friendly, it opened completely new markets. It took years until the competition managed to catch up, and barely at first. It was such a massive head start that the competition still hasn't managed fully - but current numbers say they are progressing fast.

>> I'm pointing out that the things folks are talking about today, have ALWAYS been talked about as reasons Apple MUST fail.

Yes, they have been pointed out, and yes, they are still as relevant now as they were then. Apple is playing a risky game. This game will work if you got the right product, but it may easily fail if your product doesn't differentiate sufficiently.
That means, that the things that were pointed out have no merit as long as Apple got the superior product. That was clearly the case until mid 2012. It wasn't even an issue last year because the difference between high end Android and iPhones wasn't that large - but even that has changed.

And before you say anything else, let me remind you that the current market situation where this is no longer the case is new, it hasn't fully sunk in yet, we do not know the outcome - and we certainly do not know how Apple will react.

>>We will be saying this same story for the next several years -- easily.

You know, the same thing has been said about Nokia, too, even after the iPhone was released. Until 2010 Nokia was the most profitable company in the game and many analysts were dead certain that they'd retain that position, after a little needed shake up. (not me, though... ;) ) And just look where they are now. One bad decision and they were gone - and it took only a few months!

Look at any market projection being made in 2006-2009. They all are so far off it's utterly laughable they have been made at all. Even most predictions made in 2010 were off. I tend to take any prediction of this market with a grain of salt, especially projections that treat this as a conservative market where changes are slow and gradual.

So, sorry, but any future projection of the mobile market is a huge gamble. Managing mistakes in this area have the fatal effect of doing an incredible amount of damage because the market is so fast.

So yes, even Apple and Samsung need to be careful. Their current leadership positions are anything but assured. I'm not too concerned about Samsung because they are playing all cards and the one thing that could bring them down is if they get too arrogant and try to push out Android in favor of Tizen. But for Apple things look different. Their biggest asset is that they thoroughly locked their users into their ecosystem and of course their cult following in the US. It's not the phones because they are really not that great anymore. And even if Apple continues to play the high end card, they still need to be careful that their users can't escape without a hefty price.

And you still haven't answered the most important question here. You continue to say that Apple plays the high end only game. Ok, that part is clear. So why - please answer me that - is Apple not properly targetting the entire high end? Why only one niche with a relatively small screen? Why are they still ignoring the growing market demanding screens of 5'' or larger? Why is it that the upcoming Android mid range is already coming dangerously close to matching the iPhones's capabilities? Apple has to offer genuine value for money but the current situation looks like for the same amount of money Apple asks you can get a significantly larger and faster Android phone and for considerably less money you can already get an Android phone that almost got the same capabilities as the iPhone 5.

And even if I repeat myself, this will inevitably have to mean one of two things, if Apple wants to continue to dominate the revenue sector:
1. Apple needs to compete with Android's high end devices on feature parity.
2. Apple will have to lower prices if their competitors' mid range devices catch up with the iPhone.

You can't keep a lock on the most sophisticated part of the market if your product doesn't match your competitors' capabilities and you certainly can't keep a lock if your product is so overpriced that switching to the competition is cheaper, even when factoring in the loss of investment into the ecosystem.

As I see it, Apple's current problem simply is that their product line is insufficient to cover the entire market they should cover to ensure continued dominance in the revenue sector. Why do they let all the users who want more than 4'' escape to Android? These large Android devices are as expensive than the iPhone itself so these are mostly clearly affluent customers who could bring in a lot of money - but Apple is losing them because they don't offer any product that they might buy.

No, they absolutely do not have an assured lock on the high end market. If staying with Apple, despite all the investments into their ecosystem, becomes too expensive I wouldn't guarantee anything.


If they insist on talking revenue and profit, let's not counter their arguments with market share but with reasons why this isn't a continuously guaranteed busineess, ok? ;)

The only alarming thing for Apple in those recent sales numbers is that their absolute growth is approaching zero. Sounds a bit like Nokia in 2010, isn't it?


And the latest latest news:

Android Reached 900 Million Activation In The Year 2013


"If they insist on talking revenue and profit, let's not counter their arguments with market share but with reasons why this isn't a continuously guaranteed busineess, ok?"

I know. If Apple started to make luxury cars or wine, they would scramble to another forum to sing the praise of Apple cars/wines over Rolls Royce/Chateau Rothschild


"Tomi's first handicapping of the chances of the original iPhone"
Oh that is so classical Tomi. SMS is the king of the apps&features, phone without HW QWERTY is worthless for SMS. It's almost identical to his list of reasons why Lumia will fail:

Let's ignore the fact that vast majority of the smartphones sold today are without HW QWERTY and remember that when iPhone came out with discussion-style SMS I said every single manufacturer needs to do the same or they are out. It was so intuitive and natural way to present messages.
Look and behold, isn't it so that all phones have the bubble view, including Symbian and MeeGo, no matter if they have touch screen or not.
But iPhone (and Lumia) has inferior SMS experience since they do not sport HW QWERTY.
That was Tomi's line in 2007, 2012 and will be in 2013. Mark my words.


You manage to get every aspect of my position wrong. You might take the effort to actually read what others write.

But you also miss the most important point:
Humanity is going online with Smartphones. Android Smartphones. Apple is trying to stop this conversion to protect their profits.



>> Apple, however, does what Apple does and has a very good grasp of the market they wish to server. And it's not everyone. Never has been. Apple understands that "less can be more". That makes them very unsuited for many uses and users...but VERY useful to a certain segment of the market. Frankly, were money not the issue...Apple would dominate in sales everywhere. Apple's simplicity and "less is more gestalt" is highly favored in the market. It is very hard to do and only looks easy after Apple has done it.


utterly stupid.

Sorry, that's really just nonsense mixed with marketing bullshit and fairytale dreams and merely defending bad decisions by declaring them 'smart'. Just because Steve Jobs deemed larger screens 'unnecessary' a few years ago and made his company stick to that for too long doesn't mean it's right - just as it wasn't right for Nokia to stick to keyboard-based Symbian phones longer than it was healthy.

Nokia got disrupted because they ignored market trends and thought they were smarter than the rest of the business. Blackberry got disrupted because they didn't manage to get their new OS out in time. Apple may get disrupted because they missed that many people actually like and desire large screen phones.

I really don't see any difference here. It's all the same: Management feeling too safe with the Status Quo and dismissing developments made by the competition.

Just read this:

I wonder how many of these people would have bought an iPhone if Apple had something better to offer. The 'less is more' thing only works if the 'less' is enough to bait most customers. Even if Apple may still have 'enough' users, there's no denying that they could have a lot more well paying, affluent high end customers if they had a better range of devices on offer.

You can deny all you want.
I can understand that Apple got no interest in the low end, low revenue market.
I can not understand, however, why they are apparently ceding the top end of the business to the competition without putting up a fight.


Some people seem to just do not want to understand the difference between 2011/2011 and 2013:

Back then, I would never have bought an iOS device, because trying to sell me a computer without a file browser is an insult to me. Add to this crippled USB and bluetooth functionality and the inabilty to sideload Apps, and you have a device I wouldn't buy no matter what.

But when you pointed this out to iOS users back then, they looked at you like you were an alien - this just did not matter to the typical iOS user, so Apple could get away with it. As long as the phone was deemed 'cool' by the target audience, it would sell nevetheless.

But when you point out now that the iPhone screens are ridiculously small, it is an issue that the dumbest person can understand. Even more so, this is an issue even the dumbest person recognizes immediately at the store.

The iPhones look outdated, this is something completely different.

But no, things are no different than a few years ago. It's time to wake up.



Concerning disruption, this is not a sudden process. Yes, the iPhone was disruptive and damaged many companys' businesses - but clearly not all. Many reacted quickly to the disruption and are now well positioned - just look at Samsung.

So what was the problem with the ones that did get disrupted, in particular Nokia and Blackberry? Yes, right, both dismissed the disruption and stuck to their outdated product line for too long and when it became obsolete they had nothing in the pipeline to make up for it and crashed badly.

And it's this precise attitude I see creeping in at Apple: They seem to feel too safe in light of their highly profitable market share and react too slowly to the changes in the market, resulting in a current product line that looks antiquated in direct comparison with the competition. With Nokia and Blackberry it started the same.


>> Back then, I would never have bought an iOS device, because trying to sell me a computer without a file browser is an insult to me. Add to this crippled USB and bluetooth functionality and the inabilty to sideload Apps, and you have a device I wouldn't buy no matter what.

Right, but let's not forget that the competition was the same, if not worse. Mobile phones back in 2007 were generally not designed like computers so obviously Apple's customers didn't miss these things. That's why they got away with it. It was an unnecessary feature for a mobile phone. In many ways it still is.

I think any problems coming from this will far more likely hit the iPad than the iPhone, seeing that the entire competition sees to make their tablets fully featured computers (let's exclude Windows RT for now - it failed for good reasons)

>> But no, things are no different than a few years ago. It's time to wake up.

This is the attitude that has destroyed too many businesses in the past: failure to recognize change and adapt to it.

And sorry, the latest market numbers do NOT suggest that Apple is doing 'really well'. They are merely doing ok, but is that enough? I don't know.

seo daytona

Amazing blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple adjustements would really make my blog stand out. Please let me know where you got your design. Thanks a lot

klicken Sie sich durch den nächsten Artikel

Superb post however I was wondering if you could write a litte more on this subject? I'd be very grateful if you could elaborate a little bit more. Many thanks!


Thanks for another informative site. The place else could I get that type of info written in such a perfect method? I've a project that I am simply now operating on, and I've been at the look out for such information.

The comments to this entry are closed.

Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati