Communities Dominate Brands

Blackberry Passport Square Screen is the Landau Top of Smartphones (those were fake convertible tops on American cars)

So I finally figured out a good analogy for the Blackberry Passport.

So first, I do applaud Blackberry for experimenting in unconventional form factors. Secondly, I applaud Blackberry for returning to its QWERTY roots. But the Passport is a dud. And I couldn't quite put my head to why, I kinda know why - its a bizarre technical solution which actually deliberately avoids a benefit to the user. And finally now I have the analogy to explain it. Landau tops of US cars (in recent years, not around WW2). So what is a Landau top? Its a vinyl top added to a normal steel roof car, with the hardware on the outside that appears to show hinges that will let the vinyl top be opened like a convertible. But they are only decoration, the roof does not open. Obviously it adds also a layer of useless roofing decoration (And cost) A fake convertible. Why on earth would anyone pay to get that? Add the vulnerability of vinyl to a steel roof, and the added wind resistance of the ridiculous decorative 'hinges' on the sides that suggest the top can be rolled down. Plus the vinyl roof now requires specialized care different from the other parts of the car that normally you'd just wax the steel roof with the same wax as the rest of the car...

Designed to NOT do what we want. Bizarre but true, Landau tops were quite popular on many cars in the USA. So that is what I think the 4.5 inch square touch-screen is on the Blackberry Passport. So, you have a 4.5 inch screen. That sounds big. Especially if you consider that the base model IPhone 6 now is 4.7 inches and the older iPhone 5 models were only 4 inches in size. 

Ok. Thats the math of the measurements. But screen size is measured (like TVs like PC screens) diagonically, from corner to furthest corner. Because the Passport screen is square, there is no benefit from turning the phone onto its side. It is only 3.2 inches WIDE. And its 3.2 inches TALL. So you never get to see any images or videos wider than 3.2 inches wide. Now compare to the iPhone 6, it is 4 inches wide in landscape mode. FAR bigger pictures and YouTube videos (without the huge black bars on the top and bottom of the screen. In fact, if you go back to the ORIGINAL iPhone from 2007 with a 3.5 inch screen, the movies and photographs in landscape mode are essentially the same size as on this giant Blackberry Passport.

So Blackberry have managed to discover the worst possible screen form-factor for a mobile phone to make it as cumbersome as possible and yet give us the tiniest image conceivable - for pictures and videos. Now, on websites its not that bad but even then, holding an old iPhone 5 side-ways gets you a far wider website page view than on the Passport but the Passport partially compensates that you don't need to scroll down as many times. As the Passport doesn't eliminate scrolling, this is a very modest gain for rather huge pain.

And thats before we talk pain in the pocket. SRSLY? Are you aware that the Blackberry Passport is 3.6 inches (9.2 cm) wide ! the phone! gosh. Its 20% WIDER than the massive iPhone 6 Plus !!! who has pockets this massive? That is only slightly less than the narrowest 7 inch tablets! Yes Viewsonic for example has a 7 inch tablet that is 4.3 inches wide.

So you have to have gargantuan pockets and what do you get for that? A screen who is so nasty, videos and photographs on it are as tiny as looking at a 2007 original iPhone. This is the Landau top, with all the problems of vinyl roof but none of the benefits of a fold-down roof.

A square screen might make sense on some fixed instruments (say in figther jets where you don't want the sceen to behave differently when the airplane is flying upside down) but on a smartphone that we can easily twist orientation on our hand, the square shape is the worst possible shape, giving no conceivable benefit from turning the phone! Sorry Blackberry. I love you guys and you brought one of my heroes, greatest hockey player of all time Wayne Gretzky even to the launch but sorry, the Passport wont' bring the gold back to Canada. We need something else. 

PS GIVE US THE REAL CONVERTIBLE

So on that Landau top analogy, how about a real convertible? Not convertible top car, a convertible form-factor smartphone. Blackberry, you know your loyal users demand a phsyical keyboard. Great. But that large screen trumps anything else. So why not give us both. The size we can't live with is width. We can't fit this wide devices in our pockets! Seriously! There have been phones that were less tall than this Blackbery Passport is wide! Taller is also starting to be a problem. But thickness? We can put up with a little bit more of thickness, say 5 mm more for example, if that goes to 'a good cause' like a great camera or a long-lasting battery or....  a hidden real physical QWERTY keyboard.

Blackberry, swallow up your pride, admit that Nokia had a good idea in that slider/folder idea they had. That is how you do the convertible phone. That is how you do a huge touch-screen WHILE fitting also a physical QWERTY keyboard. You make a slider and hide the QWERTY under the screen. And then do as Nokia did with the E7, offer us the tilt to the screen, that when it is on the table, it tilts towards us for watching videos etc. This superphone from 2011:




Yes thats the Nokia E7 the last of the Communciator line (even though Nokia didn't call this device anymore a Communicator). It had a 4 inch touch screen when the contemporary iPhone only had 3.5 inches and it had the best QWERTY keyboard any phone had ever produced. It was a massive hit selling superphone in China when it launched in January 2011 but obviously it died fast in February when Stephen Elop did his Elop Effect nonsense setting his platforms on fire with his idiotic memo etc. This phone factor, Blackberry, this is how you get both the best QWERTY keyboard AND a real wide massive touch screen onto one device. Do this as your next flagship and you can safely sell for 800 dollars today if the top iPhone costs 750. And i promise there will be some people standing in lines even to get that Blacberry.

Notes from the Smartphone Wars - Panasonic, Blackberry, Jolla, Xiaomi, Tizen

So a few quick comments about the Bloodbath fourth-tier players (the very dark horses not in the Top 10)

Blackberry came out with its newest flagship. It is priced at 599 US dollars without subsidy (a little below iPhone) and features a 4.5 inch x 4.5 inch square screen in a 'classic Blackberry' style physical QWERTY button-phone and touch screen. The square screen will be a bit odd for some things especially pictures and videos but for a website you get the width of something similar to a 3.5 inch screen in landscape mode - pretty wide - but with far more space below so you do less scrolling. Its still not anywhere near as wide as a 'normal' 4.5 inch wide screen (and far less than the 5 inch or larger phablets) but at least Blackberry is fighting back and this is one type of compromise. You do get the excellent Blackberry keyboard.

My comment.. what Blackberry really should do - remember screen size trumps everything - is to also release a slider/folder handset that has the wide phsycial QWERTY keyboard hidden under the slider/folder touch-screen like Nokia Communicator models used to have or say the Danger or Nokia E7 for example. That is the way to solve a good QWERTY keyboard and an honest large touch-screen. But this square-screen Blackberry is at least an interesting play and I hope it sells well enough to keep our Canadian brothers alive for a year more...

Then lets move from one past giant smartphone maker who is now a tiny fish to another former giant mobile phone global maker who is also now a tiny fish: Panasonic. The Japanese electronics giant has introduced aother in those occasional devices that says its a camera first and mobile phone second. The Panasonic Lumix CM1 (with Leica branded optics) looks a bit like the Samsung Galaxy K Zoom with a large round protruding part on the back, from which emerges the lens consctruction. So far so good. Except for some bizarre reason this lens construction is single-focus lens (only wide angle, no zoom!!!). WTF? So you expect someone to pay 900 Euros (1,150 US dollars) for this camera that also includes an Android smartphone functionality and you have that camera equipment all built in but there is no optical zoom at all? And even the flash - at this price unit - is only LED flash? Sorry Panasonic, this is a dud in really big terms. If you want a similar odd-shaped device in your pocket that has a retractable camera unit - then you buy the Samsung Galaxy K Zoom obviously that has the same 20mp size sensor but 10x optical zoom and real Xenon flash which costs 2/3 of this price. If you really only want a wide-angle camera on your phone, then you buy the Nokia Lumia 1020 with a similar wide angle lens - with Carl Zeriss optics - but 41mp sensor and you get far more detail into your landscapes or group-photos, plus again you get real Xenon flash not LED flash, and the price is less than half of what Panasonic wants you to pay.

Hey can I make a shout-out to the nice folks at Samsung. Why isn't the Galaxy K Zoom sold in all markets? What is wrong with you guys? Its the best cameraphone on the planet right now so why aren't you celebrating it in every market, especially as Apple didn't bother to upgrade its camera sensor in the iPhone 6 models? And for the Samsung R&D folks, please PLEASE put a tripod screw onto the bottom of the next version of the K Zoom, please pretty please. That 10x zoom really can use a steady mount and now the silly 'grabber' claws that let us affix a cameraphone to a tripod are very flimsy... please give us the tripod-screw, it won't take much of the space of the phone but very many of us who buy the K Zoom really love photography and many of us will have a tripod or monopod (or both).

So then Jolla? Jolla launches now in India next. They have given suggested price there to be Rs 28,000 to 30,000. Jolla is the Finnish start-up handset maker which is now the only Finnish handset maker left haha, and their OS is called Sailfish (an Linux-based evolution of the software projects at Nokia that were called Maemo and MeeGo).

Talking about India, Samsung has now indicated that India will be the first launch market for Tizen. The timing is November. No word even on which model they will launch and I am growing increasingly skeptical of the whole prospects of Tizen. This is yet another change to where and when Tizen first sales will happen on a smartphone (Samsung has given us one camera and two smart watches runing Tizen but very alarmingly for Tizen developers, after those two watches, Samsung then backpeddaled and annoucned that future Galaxy Gear smartwatches would go back to running Android). So don't hold your breath, this may turn out yet another in Tizen's endless series of delays and disappointments.

Then on Xiaomi, the newest brand to crash into the Top 10, Xiaomi is now selling in India and the local retailer there can't keep up with demand. 

So thats some of the major developments going on in smartphones by the smaller makers. More news and updates from the Bloodbath wars as we get them.

Time For Some Told-ya-so About iPhone - Is Anyone This Accurate?

Ok. Now that we’ve finally seen phablet-sized screen iPhones and the migration of the flagship iPhone price up the price pyramid, its about time to do a bit of review of history. Has this blog given you value on the future of the mobile industry or perhaps steered you wrong. Lets examine the rise and fall of the iPhone and what I wrote before the events happened. Just like we saw with Nokia, with Apple’s iPhone, I have been by far the most accurate forecaster (again) in mobile. This is my backyard and I know my business. And I am fast to tell you either on Twitter or here on this blog exactly what I think (all of it free on this blog, no advertising, no registration).

Before this blog existed, in my 2002 book m-Profits I wrote for the first time that the stand-alone iPod musicplayers would lose the battle to the featurephone class we called ‘musicphones’. Then in my next book 3G Marketing in 2004 I expanded that to explain that all featurephones would eventually migrate to a superphone class called ‘smartphones’. In those books I did not explicitly argue that Apple would have to release a musicphone but I did say the iPod could not maintain its growth and would be superceded. I was right that musicphones would outsell iPods and I was correct that the musicphones themselves would then become superceded by smartphones. So from 2002 I've been quoted about the future of the iPod being on a collision course with mobile pohnes. Nobody else said at that time that the iPod was doomed. It was setting sales records globally.

In 2005 Apple’s iPod sales grew massively and powered Apple to record profits. Yet I was quoted in the Financial Times (and wrote the same point also on this blog on October 7, 2005) promising that next year, while I said iPod sales would continue to grow, Apple would lose the war to the ‘musicphones’. The actual market share of the iPod as portable musicplayers would diminish to the degree that the reign of the iPod as top dog portable musicplaye was to end. So understand, I knew iPod sales were in hypergrowth. I accepted heavy growth would continue, yet the iPod would lose the market share within the next year (2006) as it also did happen.

I was crucified on this blog. The Apple fanboys descended onto this blog and posted vile comments and hatered and said it would never happen, I didn’t understand Apple, I was no fan of music and no fan of Apple and I was a fool. And musicphones were not proper musicplayers etc. Nobody else predicted in October 2005 that the cross-over in total sales volume would happen that fast, that it was over by 2006. I did. I was correct. And we heard years later by Apple CFO Peter Oppenheimer that exactly at this time - Autumn of 2005 is when Apple came to that same view, that the iPod would lose to musicphones and Apple had to release its own musicphone (that would become the iPhone). Did I give you value on this blog if years before there was an iPhone I mapped out the market future for the iPod and what would come after it. 

In that blog for the first time in public, on October 3 2006 (3 months before Steve Jobs was on stage first time showing the iPhone),  I said I would welcome the iPhone, writing in the comments section this accurately: "I would very strongly welcome it. Apple makes excellent user interfaces, and any iPhone would no doubt shake the phone industry - some of whom are horrible at user interfaces. It would be most welcome."

I have been one of the people who saw the inevitability of musicplayers taking over for the iPod and have started to publish opinions of how the iPhone would shake this industry from literally 3 months before Steve Jobs ever strutted on stage with his iPhone, already warning the industry that our phones were hard to use, and Apple DNA was to make the iPhone the easiest-to-use phone that ever existed. Was I correct. Obviously. Who else was published with this view about the upcoming iPhone's strongest suit. Not that it would have a massive music library. I correctly forecasted in 2006 that when the iPhone would launch it would have the best user interface that would shake the industry. And I said this in 2006?

STEVE JOBS ON STAGE

Three days after the iPhone was unveiled by Steve Jobs and while many details were not final, I did my first market impact analysis of the iPhone. In that blog I explained that it was feasible for Apple to reach 10 million sales in its first year but not as a proper smartphone as many analysts were calling it (the original iPhone, later known as the iPhone 2G was only a featurephone) but rather as a featurephone/musicphone. I said I expected Apple to hit its sales targets but only after price cuts (as it happened by end of 2008, the old model price was slashed). I explained why the US market was a laggard so it didn't matter that the original iPhone didn't do 3G or have a modern camera but both would have to be upgraded before the iPhone could sell well in Europe or Asia (as it happened in 2008 with the iPhone 3G). This was not conventional wisdom. Many tech writers in January 2007 thought that 2 megapixels was good for a cameraphone at the time. Others thought 3G was not really needed, EDGE was enough (haha). I also explained in that blog already 3 days into the life of the iPhone, that its success was wholly dependant on achieving carrier deals, mentioing already in 2007 the relevance of China. I was right, right right right and nobody else wrote this in January 2007. Everybody else was doing the double-pinching of the touch-screen and thinking that this was so cool. In that blog i also pointed out that the iPhone, being so deficient as a featurephone would propel the sales success of a close rival, the LG Chocolate/LG Prada, haha (I totally forgot about that forecast). I was proven right. In the first year the Chocolate easily outsold the iPhone globally. Both were touch-screen featurephones (the Chocolate design was released before the iPhone so LG could have sued Apple for stealing their design but back in those calm years, nobody was suing everybody).

Note very importantly what I did NOT say. My blog was not a laundry list of what the top Nokia smartphones had at the time. I didn't say Apple would need to do optical zoom or GPS navigation or 5 megapixel camera or an app store - all that were already in top Nokia smartphones. I very clearly identified the single biggest key to iPhone market share growth - carrier support even mentioning how important Japan and China were at the time (Japan's NTT DoCoMo and Chinas' China Mobile were among the very last of the major carriers to sign up to the iPhone and were greatly celebrated by Apple now when they did). I accurately identified the most important development points what had to happen in the first year so that the iPhone could reach 10 million sales in its first full year (ie calendar year 2008) being 3G and an upgraded camera to 3mp. And while Americans were ignorant of advanced phones, they'd love the original iPhone, it would not sell well elsewhere, until these rudimentary upgrades were completed (I was correct). And that the iPhone 2G would have to see its price dropped seriously before that 10 million was reached (as it was in the Spring of 2008). I also wrote my open letter to Apple asking for a QWERTY variant but I also acknowledged back then that likely Steve Jobs would never authorize a QWERTY-slider variant to the iPhone no matter how much that might make economic sense. So I never forecasted it would come, only that if Apple gave us that version, it would be a global hit and boost Apple profits and loyalty.

Then my first presentation to include the iPhone! Only two weeks later I was speaking in Tokyo at Japan's largest mobile event, the 3G Forum. And would you know it, my topic assigned months earlier, was about handset user interfaces (total coincidence). The room was packed as everybody expected that Tomi must also give his thoughts about the brand-new iPhone. What would he say? The previous slides set up my conclusion, based on what I have now mentioned in the above, but this was my concluding slide about the iPhone on January 25, 2007, in Tokyo (and do remember, I was speaking to the Japanese 3G mobile expert audiience, the most sophisticated moblie audience in the world):




Yes I said the iPhone 2G would be a disappointment (only a 'success' in America) but the next edition - iPhone 3G would be good enough to revolutionize the world including Japan. And notice the last bullet point. It hit me already in January 2007 - six months before the first model went on sale - that far bigger impact than changing existing handset maker models like Nokia or Motorola or Samsung, the iPhone would wake up Silicon Valley to mobile: HP, Dell, Intel, Microsoft, Google, Yahoo, Amazon etc... Who else said that in January 2007? Who else noticed that wait, the iPhone will reach now beyond mobile? This before anyone had played even with a demo model?

Then I was thinking further and observed that the media industries with mostly USA based headquarters, would be radically energized by the iPhone and suddenly all would believe (as has happened). But again, notice the timing. I wrote this in February 28, 2007, months before the first iPhone was sold. I predicted that the traditional media industries which had ignored the mobile, would suddenly believe. And boy was I right about that. Who else wrote that in February 2007 or before that, that the iPhone would not just be a transformative gadget for phone-makers but it would revolutionize industries who up to that point did not believe in mobile?

Then in early May of 2007 I wrote about the 7 C's of cellphones (as the 'swiss army knife gained more abilities) I talked briefly of the iPhone at the end. "the iPhone comes at a critical time for our industry. We cannot keep on adding buttons to the tiny device, something HAS to be done, and much of that has to be in intelligent design. Now, personally, I don't think a "one button" solution by Apple is the perfect solution with all others on the multitouch screen, but we do need vital innovation in this space."

And once again, yes obviously today the majority of all phones are descendants of the original iPhone in their touch-screen interfaces but that original one-button idea that we saw in the demo before the original started to sell was just too pure. The actual iPhone when it shipped had a separate volume button (so two buttons). But even that was not enough even Apple had to expand its button options and by iPhone 4 it had 5 separate physical buttons. 

So understand the nuance. Some like Nokia executives for example were dismising the original iPhone for its touch screen as not sustainable, claiming that consumers would tire of the touch screen. Ah, their view is 'go back to fill keyboards' in other words. Most felt that Steve Jobs was the genius and this one-button iPhone was the obvious future. But a Tomi Ahonen here on the blog said yeah, its almost ok, but a couple of more buttons would not be a bad idea. And what happened? Can you find any other pundit making this - very relevant - point about iPhone's user interface before the first iPhone was sold?

THE DEFINITIVE iPHONE FORECAST

Then the most relevant posting on this blog. The best single forecast posting I ever made anywhere. The definitive iPhone relevance forecast. The post about how we will mark time in handsets just like in calendar time (Before and after the birth of Christ) we will mark phone time before and after the iPhone. The blog which created the term 'Jesusphone' (something that was assigned to me, even though I never used that word on the blog). If you want to read one fun 'forecast' blog about the future, written in the recent past, that we can now evaluate go read this one. And remember, I wrote it before I had ever held an iPhone and before even one unit had shipped to any store.

I wrote first about the iPhone vs its rivals, that it would reign supreme as the best phone in side-by-side tests for usability  or as I wrote then the 'yardstick of usability into the foreseeable future'. And boy did that come true. Its only now, in 2014 that we finally see many reviewers pick a rival smartphone just edging the latest iPhone. Giving the iPhone the best phone crown for 7 years in a row is getting that forecast right into the foreseeable future - and then some! Who sees 3 years into the future of this volatile industry far less 7 years. Pretty good call, eh?

Then the mobile internet? Wow did that forecast come out perfect. Yes from 2007 we did see all major internet players come to mobile. Note that Facebook was still so tiny, I used MySpace as the social media example haha.. but yeah. 'Do we need a new computer if an iPhone is enough." Yes today touch-screen smartphones, Androids and iPhones are growing strongly and PC sales are in decline, Various international surveys now say that consumers are switching from buyinig another PC to replace the old one, and happy to remain on their smartphones only (or tablets). Note how wild this is as a forecast in 2007 - PC sales were GROWING at the time yet I said the iPhone would bring in the era of their demise.

I forecasted back then, before the iPhone had sold one unit, that it would be seen as the start of the mobile internet, that gaming, downloadable music, social media etc would all count that as the starting point even though the internet had existed on mobile phones for 8 years at that time. Suddenly the past simply would not exist and it all seems to have started from zero in 2007. At the birth of the iPhone. As we so frequently see and read various analysts describe this industry. As if it started in 2007 with the iPhone haha. What a powerful forecast!

Then there was the advertising industry. I knew that the dudes and dudettes of Madison Avenue were already MacHeads. Now they would also become iSheep. Every CMO would want an iPhone and then put an ad campaign on the iPhone somehow. There had been mobile ads for seven years before this moment (I chaired the world's first conference for mobile advertising in 2001) but now, the iPhone woke up that sleeping giant. Since 2008 the global mobile advertising market has doubled to 2009, then doubled again to 2010, then doubled once again to 1011, nearly doubled to 2012 and nearly doubled again in sze to 2013. The magic started at the iPhone. Exactly as I predicted. Who else told you in May that the ad industry was about to awake to mobile?

I predicted the cultural impact, that comedy shows like The Daily Show would do parodies of the iPhone. They didn't do that of the Nokia N95 haha... 

Then I said the single biggest change triggered by the iPhone was the new Klondyke for Silicon Valley to rush into smartphones. Boy was I correct on that haha. And who else said that? Before the iPhone was sold anywhere? And check out this sentence about computers: "The true coming of the first honest pocket computer will be attributed to the iPhone (while Nokia N-Series will dramatically outsell iPhones, still this is futile. iPhone will gain the Apple marketing magic)." Touché Tomi. Yes, most on the West Coast truly think the iPhone started this 'revolution'. And yes, Nokia's N-Series easily outsold the iPhone for several years (until an idiot Elop took over Nokia and wrecked the victorious and record-breaking profitable unit of Nokia).

Do I know my industry? Yes. Who else said in May of 2007 that while the iPhone would hit its sales target (ie I was not an 'Apple hater' claiming it would fizzle) Nokia's N-Series alone would still easily outsell the iPhone globally? Duh. I know my numbers! But did this blog give you value? Who else made that point? Can you find anyone other than Nokia staff (who themselves said the iPhone wouldn't come near the 10M mark) who promised in 2007 that the N95 would outsell the iPhone?

What about the new fools? I wrote "the massive West Coast blogging community will start to buzz around the iPhone and the "wirelesss" and "cellphone" space. They will think they're discovering it all for the first time. They will make the same mistakes we've made years ago in Japan, in Scandinavia, in South Korea, etc but it won't matter. To the Americans if it wasn't invented there, it isn't really important." Hahahahaha... Yes. Location-based madness! Banners and spam. App store nonsense. Yes. We learned these lessons years before but the West Coast insisted on tossing billions into the wells that we found were not filled with water. Well, who cares the richest man during this time became a mobilista, Carlos Slim, taking the title from the PC dude Bill Gates haha... Those who read the right books (haha and blogs, or follow the most accurate forecaster in mobile are doing just fine, millionaires and billionaires).

Yes, one of the most linked and most referenced articles at this blog. If you want to read about how I see my industry and can I foresee the future beyond just some hardware haha, read Entering the iPhone Era. And note, the reactions were not by any means all positive. Many wrote separate blogs commenting on my forecast with opinions like "bonkers" or "idiot" or "rude" or "disrespectful" or "blaspheming" or that I was an "iPhone pusher". Yeah it goes with the territory that when you write a controversial forecast, it will also receive a lot of hatered. I have grown quite a thick skin by now haha.

Then if you want the most amazing numbers-crunching 'rolling the sleeves' forecast for the iPhone before one unit was sold, only 3 days before sales start, I gave the definitive forecast of the international regional split of how the iPhone will sell around the world. This, at the time when the majoirty of forecasts still felt that Apple cannot even hit its 10 million market - I gave the regional split - that was essentailly perfect, You want to know which countries would buy the early iPhones, here was the best mobile industry forecaster, days before any iPhones shipped, already giving the first year split by geography, and so accurately, I was off by only points of percent per region. Essentially a perfect forecast. As far as I know, nobody else gave a regional split forecast at this time. And I did it for free, simply because I like to share.

So, while i make it very clear that I like the iPhone and based on all the above, obviously I am convinced it will be a transformational phone, i write days before its launch: "the iPhone as it ships now in June, is actually a seriously flawed device, for this time. Not fatally flawed, but seriously flawed." I explain that as Americans are not familiar with advanced phones, they will mostly be blissflly unaware of the missing parts but that Apple has to fix: the 2 mp camera. That there is no flash. That it did not record video. And that it wasn't 3G. I explained these were non-starters in the advanced markets where far more advanced 3G smartphones were sold but in the USA, these defects weren't deadly. The iPhone would have to, however rapidly correct those deficiencies. I also said there were plenty of other things that I didn't like about the original design, but those perhaps Apple could live with and just deal with the aggravation by customers like the battery haha. 

I wrote that the competition was far ahead, with the example of the Nokia N95 which trumped the iPhone on all other features except screen size and touch-screen. 3G, GPS, 5 megapixel camera etc. And yes, obviously the N95 easily outsold the original iPhone globally. Easily. 

I predicted that the US market will outperform the iPhone global sales to the Industrialized World and Asia will underperform. And that was true in 2007 and it is still true today in 2014. Apple's best market is the USA. Australia is good, Britain is good, several European markets are good but Advanced Asian markets (Singapore, South Korea, Japan, Hong Kong, Taiwan etc) far less so. Still true today! Only Japan does good sales for the iPhone in Asia while South Korea its near zero... Yes. Good call Mr Consultant.

Then I modelled the options and possibilities and noted that because Apple had to rush its next-gen iPhone for 2008, it could not now bother with a lower-cost iPhone (as it finally gave us with the colorful plastic iPhone 5C vs the flagship 5S). There were many who were already callling for cheaper iPhones at this time. Then there is this gem: "Many analysts have suggested the iPhone will hit Blackberry. It won't. Blackberry is the most insulated of all smartphone makers against the iPhone, simply because the Blackberry is part of a corporate wireless email system. The iPhone won't have a direct rival for that, and corporate buyers will happily approve more Blackberry devices, but will shy away from buying iPhones to employees. No, the Blackberry is not hit by the iPhone." American pundits were for years pushing that bullshit that the iPhone was/is stealing customers from the Blackberry.

Here are the facts. In 2006 before the iPhone launched, Blackberry had 6% market share. While the iPhone gobbled up market share the next four years reaching 16% market share in 2010, what happened to the Blackberry? It also grew!!! to 16% market share! There was no cannibalization of the Blackberry by the iPhone! Now that Blackberry has collapsed from 16% to under 2% where is Apple? Did it grow? Now, since 2010, Apple has also lost a point of market share! It is utter bullshit to suggest that the Blackberry suffered because of the iPhone or the iPhone killed the Blackberry. The facts are clear. The iPhone devastated Palm !! and Windows Mobile! The Blackberry grew with the iPhone and only died to Android. But who told you in 2007 that Blackberry was immune to the threat of the iPhone? Did anyone else tell you this? How many times were you still reading in 2011 that the Blackberry is dying because of the iPhone haha.. (the Blackberry died to Android smartphones at near perfect symmetry when one grows the other declines). I told you before the first unit was sold, and I explained why the Blackberry and iPhone were not rivals, of essentially zero overlap. Like a jet airliner vs a helicopter. Yes they are both aircraft and have jet engines but if your jet is grounded, you can't replace it with the helicopter to fly over the ocean to carry your passengers. Duh. Did I give value on this blog?

Then of the phone maker brands, I said clearly that the biggest casualty to the iPhone would be Motorola (which was the world's second bestselling phone at the time and went bankrupt in only a few years later). I felt SonyEricsson would not lose badly and might recover (good call). And I said very clearly that the biggest gainers from the luanch of the iPhone were to LG Chocolate and Nokia N-Series. Totally spot-on what happened in the next 12 months. Who else said this in 2007? Anyone? I do know my industry!

Then that selfie camera. I pointed out why, back in June 2007 that Apple has to include an inward-facing second camera. Its not that we use or don't use the second camera. Its because the carriers insist. And there were howls of laughter on the blog about how silly and old-fashioned Tomi was and didn't understand Apple because (nonsense follows) and Apple would never do this etc. And Apple of course gave us that eventually. Right again Tomi. Good call.

I also predicted the Asian Clone Wars. That various Asian makers would introduce iPhone-spec touch screen smartphones of similar appearance but far lower cost (the typical Android offering today, Huawei, Xiaomi, ZTE etc). 

And of that future, seen in 2007, while I've said already that all phones will be measured in two eras, before and after the iPhone, I ended my long blog with this opinion: "The phone to fear, the ultimate superphone of its age, the one striking fear into the HQ's of Nokia, Motorola, Samsung, SonyEricsson and LG, is the first re-designed iPhone, after feedback from users in Europe and Asia. That truly re-designed "iPhone II", that may be released in the summer or autumn of 2008 at the earliest, that is the must-have smartphone. I can't wait to use that iPhone. This first iPhone is more like the Lisa for Apple PCs, an important step along the way, but the next iPhone is like the Macitosh, a true masterpiece." (emphasis in the original). As we saw, that was the iPhone 3G and the first proper smartphone from Apple with the obvious birth defects mostly cured and the first 3G iPhone and the first with the app store etc. That iPhone 3G became the first global hit phone where the original iPhone 2G was a sales success only in America, the laggard mobile marker where consumers had not seen modern flagship phones, exactly as I predicted.

In November of 2007 we got the official launch price of the original iPhone in unsubsidised form in Europe. T-Mobile started to sell the iPhone base model for 999 Euros (1,450 USD at the then-current exchange rate). So from that lofty level by the time the iPhone model line settled to a 600 dollar unsubsidised price by late 2008, clearly I was correct that the original iPhone price was too high and Apple had to cut costs dramatically to hit its 10 million sales target. But also in that blog, I told my readers that the 10 million target was well on track. (before you bitch about 'Apple made record profits in 2008 - yeah imagine if the price for the SAME device sold for about 600 dollars - what AT&T pays Apple after the 2 year contract - instead Apple had managed to get 1,450 dollers per iPhone? That is pure profit there as the device components, manufacturing, shipping and marketng is all included in the 600 dollar price. But 850 dollars - per iPhone sold - of pure profit had to be sacrificed from 2007 to 2008 when Apple had to reduce the price to make the promised 10 million target.)

January 2008 I looked at some big trends for the mobile industry. I touched for the first time on an iPhone effect, the screen size, and predicted we would now want larger screens in our pockets just like how laptop screens were constantly growing. (Nokia's new E90 Communicator had already a larger screen back then than the iPhone's 3.5 inch. Nokia went to what was the industry's largest, at 4 inches alreedy then in 2008. Apple followed four years later when the iPhone 5 finally gave us a 4 inch screen for the iPhone). But yeah, somewhere around 2011 it was no surprise that larger-screen phablets were going to be popular. But who told you all the way back in early 2008 that we had entered a screen size race and Apple's massive 3.5 inches would soon be seen as too small?

In January 2008 I did an update of the iPhone and 10 million target. I concluded that blog with this: "I am pretty confident, that as long as there is a 3G iPhone this Spring or Summer, then Apple will rather easily hit its 10 million mark this year. Very impressive for a high end expensive smartphone by a company that had never made a phone before. Remember it took RIM six years of sales to reach 8 million users for its Blackberry worldwide, and the Blackberry is less expensive than the iPhone."

In Q1 of 2008 I took a look at the global handset market based on Gartner's numbers. I noted that Apple had cracked into the Top 10 largest handset makers (while having 0.7% market share, remember this is all phones not just smartphones). And the big gainers were Nokia, Samsung and SonyEricsson, with Motorola the big loser (in line with my pre-iPhone launch forecast) and now I for the first time noted the 'stampede' of West Coast tech giants into mobile with Google and Dell joining Apple and Microsoft. Again as I predicted would happen only eight months before.

Then days before the first total updated iPhone would be announced, the iPhone 3G, I wrote my speculative blog about what I expected it to have in terms of 'must have' and other nice-to-have and not-needed features. I said the new iPhone would have to have 3G (it did), MMS messaging (it added a year later). Video calling ie second inward-facing camera (it didn't have, Apple added that only 2 years later in 2010). 

I said that HSDPA (3.5G) was not yet necessary and GPS only a nice-to-have feature but both of those did appear already in 2008. And I said I didn't expect many of the miscellaneous features that other phones had, like digital TV tuner, microSD slot, removable battery etc to arrive to the iPhone (as they didn't). So it was not one of those blogs that just predicfed a massive laundry list of everything. I had all the must-have items - every one of which arrived (but a few with delay of a year or two). Of the other things, some that I didnt' find that important did also arrive but those I said were not coming also didn't come. Not a perfect forecast but darn close. At that time, no doubt, there will be others who also guessed pretty closely most of those features. I dont' know if many got the MMS at the time haha.. I know my customers and what they say. Most on this blog were launghing at me that Apple would never bother with MMS because of (nonsense follows).

SECOND GEN iPHONE

Then we got the first new revised iPhone model, the 3G, and with it came GPS. I was here on this blog one week after the new iPhone 3G specs were relased, to explain why 'location-based services' were not the pot of gold that so many had suddenly started to believe in. Now, in 2014, we can see I was correct and those 'pundits' were fools. LBS has been the worst-performing part of hte mobile ecosystem. Not that there isn't any growth there, but yes, the only sector in mobile that has managed worse performacne than smartphone apps. And the apps business is a lottery. Location-based services are worse than a lottery. Who told you the truth on this blog when the 'tech analysts' all were ooh-ing and ahh-ing about Apple's GPS on the iPhone 3G? Did I bring you value here or what?

So then just on the eve of the 10 million level being passed, I gave my view of where Apple needs to go next. I said the next edition in 2009 would now need video recording, a better camera and flash and MMS. Those all came either in 2009 or 2010. And I said Apple's smartphone market share would roughly double in the next year (it grew from 7% to 15% - spooky accurate!)

Then in June 2009 we saw the new iPhone 3GS when almost all of the birth defects were now all cured. It upped the camera to 3 megapixels, added video recording and MMS support. And in June of that year when the App Store was one years old. I gave my first analysis of the futility of the smartphone apps as a business, pointing out that for gaming yes, it was an ok market but that wasn't invented by the iPhone (Nokia's N-Gage was the world's first gaming smartphone with its own app store years before the iPhone). And I said in 2009 that the rest of the consumer apps were pure futility in terms of economic opportunity. Yes today most app experts say the same that apart from games its pretty hopeless, but who said this in 2009?

In January 2010 as the apps store hysteria was just growing, I wrote a long blog explaining why it was an illusion of an opportunity, there was no money to be made. I called it a freak show. And gave all the numbers to explain why there was no opportunity there (today this is very broadly accepted, in 2010 almost nobody dared say this). But then to truly illustrate that I know how this industry works and the benefits to the ecosystem owner, I wrote another blog the next day, explaining why inspite all that hopelessness for developers, the iPhone App Store was a brilliant move by Apple (and a vastly profitale one to Apple). And of course as I always do, I also showed where the real money opportunities were (SMS, MMS, WAP etc). It is nwo accepted very widely as the truth that yes, if app developers struggle with making direct money with apps, they can get some income from premium SMS payments or operator-billing (aka 'WAP billing') etc. MMS alone is far bigger globally than all app store revenues for all stores and more than half of MMS revenues are content/media. Duh. Do I know my shit? Yeah.

BLOODBATH STARTS 2010

In 2007 when the iPhone launched, this Communities Dominate blog was not really much of a 'mobile phone' blog or smartphone blog. By the heat of 2010 and 2011 this blog was often posting almost exclusively smartphone-related postings, about Nokia and Blackberry and Android and Windows and of course the iPhone. This shift was quite by design. In 2006 the smartphone market was a serene ultra-nerdy geekosphere. There were brands like Kyocera and HTC and Fujitsu and Palm and Blackberry plus of course the inventor of the smartphone: Nokia. The operating systems were utterly dominated by Symbian (about 80%) but you know who was the second bestselling smartphone OS? Windows Mobile. Yes. At one point Microsoft had the 'second ecosystem' which they then of course proceeded to destroy. But that was the calm and mostly invisible techie space called the 'smartphone'. Nokia and some techie dwarfs.

There were only 7 Fortune International 500 sized companies (for US readers, this is equivalent to about Fortune 200 sized companies on the more traditional listing in terms of their size, the Fortune Internaitonal 500 is the far more prestigious and exclusive list than the 'Fortune 500' of only USA-based companies). So seven global giant corporations were in the handsets business in 2006. Then came the iMagic and by 2010 that number had grown to a peak of 23 Fortune International 500 sized companies (very briefly 24) all peddling handsets to global audiences. The sleepy handset market had become almost overnight the most competitive industry in human history. Never before had that many giant corporations been competing in the same global industry. This is not true of cars. There have never been 24 car manufacturers in the Fortune International 500. Neither have there been oil companies, or banks etc. Banks for example yes, there are more banks in the Fortune International 500 but they don't compete against each other, internationally. Most banks only operate nationally. But in handsets an American Motorola competed with Finnish Nokia and South Korean Samsung and Japanese Sharp and Chinese Huawei and Canadian RIM (Blackberry). Newcomers were rushing in such as UK based Vodafone, US based Microsoft (before the Nokia acqusition it tried to sell Kin phones), China based Lenovo who had bought the IBM PC business, etc etc etc. 

So to be clear, there has never been any globally contested industry that had as many as 23 Fortune International 500 (or Fortune 200) sized corporate giants competing in the same market. Until 2010 with mobile phones. As I saw that rush to mobile in 2009, I christened the year 2010 to be 'the Bloodbath' as the MBA training in me suggested that this kind of competition could not be sustainable and there would be casualties. Some very major ones perhaps. Little could I guess that we'd see casualties almost immediately from Palm and Motorola to now the biggest of the big, the giant Nokia fall last year. Bloodbath was a most apt name. And yes, the Bloodbath series had a ton of analysis and forecasts and projections. I am not going to go through all of those. But I want to revisit a few of the most relevant iPhone-related matters.

So in February 2010 I did one of my many smartphone war dispatches and in it I upped my prediction about Apple from it has to split its product line (more than one new model per year) to "That will happen soon, its inevitable.."  At that time and through 2011 many came here to this blog or commented about my Twitter feed that it was a silly thing to suggest, Apple would never split its product line. It sold older models at a lower price. Well, who was right? We got that split in 2013 when the iPhone 5C and iPhone 5S were released. Very many analysts in 2013 said that split was 'too late' and clearly Apple should have done that sooner. But when I say something is inevitable, i do mean it is unstoppable and it will happen. I was not wrong.

Then came the iPad. I am not a PC industry expert (anymore) and said so on the blog but did my best to analyze the opportunities of the iPad. I got most of the parts right in that blog. The iPad was going to revolutionize tablets and get clones. It was not going to challenge smartphones and not desktop PCs. It would be a rival to portable computers like notebooks and the kindle. A new market space would appear for users who didn't use PCs before in particular when watching TV. But I did get the numbers wrong and the iPad far exceeded my expectations in the first year sales. You can't get every forecast right and it doesn't surprise me that the further we move away from mobile industry, the more there is error in my forecasts. Even so, that blog established right from the start the clear view that a tablet had to be considered a separate device from a smartphone, not as if it were a large-screen smartphone. Today most tech analysts have joined in that view but in 2010 that was a minority view.

MYTHBUSTERS AND APPLE 'LEADERSHIP'

So then yes, the American legend that somehow Apple leads anything other than usability. Apple did not invent the mouse for the Mac, Steve Jobs stole that from Xerox labs. And so it goes. The iPhone? Its looks were not invented by Apple they were - ahem - 'copied' from the award-winning LG design from 2006 which was launched as the LG Chocolate and LG Prada before the iPhone was sold, in 2007. But winning international design awards in 2006. So much for 'Apple' iconic design. Thank LG for the one-button touch-screen slab phones with large touch-screen that we have today from Androids to Lumias.

So what about the upgrades. I said the original iPhone in 2007 was both revolutionary, indeed transformational phone yet it was only a featurephone and fatally flawed. It was so lacking in its specs that some markets flatly rejected the original iPhone such as Japan which had shut down its old 2G network that year haha... Yes. the 'awesome' original iPhone to American eyes was literally obsolete for Japan. All of Japan was 3G or faster by end of 2007. (And still today you have plenty of 2G basic phones selling in the USA... talk about lagging markets haha. Japan launches 5G at its Olympics). But all those American pundits who were so mesmerized by the original iPhone who thought it would revolutionize the world? Did they tell you this that the original was unsuited for Japan. Did I give value to you on this blog?

So I have mentioned a few of the upgrades that Apple brought to the iPhone 3G in 2008 and iPhone 3GS in 2009. Then in February 2010 I catalogued all iPhone upgrades/changes that Apple found so important, it listed them in their press release about what are the highlights of whats new. Including the operating system upgrades, there were 12 total 'important' upgrades from the original iPhone from 2007. They are: 3G, MMS, GPS, better camera (3 megapixels), stereo bluetooth, cut-and-paste, voice dial, video record, autofocus for the camera, MS office apps support, user-installed apps (ie the App Store) and multitasking. 

I then showed, meticulously documenting by model number and launch year, how every 'improvement' from the original 2007 iPhone were actually only doing 'me-too' catch-up to what Nokia flagships had had years before. All of these 12 items were commercially sold on Nokia's flagship before the original iPhone sold in June 2007. And some of these were so 'old hat' tech that Nokia had sold them for more than 5 years. You cannot say these are trivial tech specs that only Tomi would care about, if Apple official launch press release sings songs about them. These were the 12 biggest changes/improvements to the iPhone and all of them were only copies from what Nokia (and others) had offered before. The truth is that Apple does not invent. It makes things better. And its products are often technologically behind others. This is particularly true of the iPhone models. Like today, the iPhone 6 models have new features that are 'me-too' catch-up that rivals have offered for years. Some of them worse than the rivals for example if its true that Apple's NFC is crippled to only do Apple Money and no other standard NFC functions (similar to how Apple's original Bluetooth was implemented also as crippled).

Here is where we got the joke 'if you want to see what will be in next year's iPhone, look at last year's Nokia flagship'. That was literally true of the iPhone 3G and 3GS. It also was true literally of all subsequent iPhones 4, 4S, 5C and 5S, and now 6 and 6 Plus. Did I give you value in 2010?

WHO SAW SAMSUNG?

So Sammy Sammy Sammy. Who ate the iCake? It was Samsung. Now we know that Samsung is such a smartphone juggernaut in all price points, it is unassailable by Apple. But in April 2010 when we had end-of-year 2009 numbers to consider, Samsung was only the 5th largest smartphone maker in the world (behind Nokia, Blackberry, Apple and HTC). Apple outsold Samsung in smartphones by 4 to 1. Did you see what I forecasted? From that hopeless position for Samsung, I made this forecast: "by early 2011, Samsung will pass Apple in smartphone sales." Yes. I wrote that. And it happened exactly as I said, in 2011. It was not Blackberry or HTC who were far bigger than Samsung at the time. And note - while Samsung had lingered in roughly 5th position in smartphones for years before that, I had never suggested that Samsung would have a sudden surge to become a Top 3/Top 2 smartphone maker before. 

Samsung was about to explode in market share. That was a BOLD brave forecast, for the brand stuck at number 5. And I told you why. "Why? Because they already outsell Apple in touch screen phones." Samsung had become the world's largest touch-screen maker (second largest phone maker behind Nokia) at the time. It was now inevitable that Samsung would shift that touch-screen customer base to smartphones (ie Android) and by 2011 would pass Apple. WHO ELSE SAID IN 2010 THAT SAMSUNG WOULD PASS APPLE BY 2011? Nobody thats who. Absolutely nobody. Even Samsung execs didn't dare to make that prediction (in public). And no, I had not thrown this line at every brand out there some given week. I never said Blackberry or HTC or SonyEricsson or Motorola or Palm or LG would pass Apple's iPhone. But I said that Samsung would - and that it would happen in 2011. Wow thats an uncanny forecast!

PEAK iPHONE

So my most courageous forecast. It does not take guts or skill to look at a strong growth curve and project another period of growth. That is the easiest forecast to make. The most difficult forecast is to take a growth (or decline) curve and forecast accurately the inflection point, when growth turns into decline (or vice versa). Apple had shown consistent and indeed world-record pace growth in market share in smartphones from launch in 2007 until the end of 2009. Then in April of 2010 before the First Quarter (january-March calendar quarter) sales of the iPhone were even released, I made that famous forecast: We had hit 'peak iPhone' and either year 2009 or 2010 would be the year when iPhone market share growth would have stopped and turned 'into gradual decline'. 

Ask any professional forecaster, that is literally the most difficult forecasting mission. To pinpoint an inflecioin point. And I announced in April 2010 that we were at peak iPhone (in terms of smartphone market share on an annual basis). Nobody else had dared suggest anything nearly this dramatic. Apple had just grown from 7% to 15% the year before! Almost any 'sane' forecaster would pick the safe bet and say the iPhone would continue to grow somewhere into the 20+ percent range. But Tomi Tomi Tomi... what did you say? Yes. I said in April 2010 that the growth had ended and while unit sales would continue to grow for the iPhone the market share growth period was past and now Apple would see 'gradual decline' in market share.

Now I did not nail that forecast but I was off only by one percentage point. That courageous and outlier forecast ended up being off by one percentage point. Apple did not stop growing but the record-setting growth rate almost stalled to snail-pace and the iPhone managed to grow only one point to 16% in 2010. Today the iPhone market share is in decline and was 15.5% last year and will be around 14% this year. I almost nailed it. I did correctly predict the end of the strong growth but there was still slight growth. 

Some like to ridicule me for that 'mistake'. Yet they cannot show anyone else who said before me that Apple's world-record market share growth was going to end in 2010. As this type of forecast is the most difficult to do, I am proud of how close I came and that nobody else was even in the same ballpark. Nobody else said in the Spring of 2010 that Apple's market share would be falling anytime soon. Most promised uber-rosy futures for Apple into 20+ and even 30% market share ranges. Even when I am wrong, I am the one who is least wrong. That is what being'most accurate forecaster' means literally. You take a series of forecasts over a period of time by the forecasters you want to compare - all forecasters including me make mistakes - you then find who was least wrong. That is the msot accurate forecaster. I was by far the most accurate forecaster of mobile industry stats. I was by far the most accurate forecaster of mobile handset stats. I was by far the most accurate forecaster of smartphones stats. I was by far the most accurate forecaster of Nokia and Windows Phone stats. And now, we see from the iPhone, I have been by A MASSIVE LEAD the most accurate forecaster of iPhoen stats. No contest.

If you deride me for that forecast, you must hate all the other 'analysts' who thought iPhone would continue dramatic growth in 2010 and beyond. I was not perfect, but even here, I was least wrong. By more than one order of magnitude. BY FAR the most accurate forecaster about the iPhone peak. And to be fair, immediately when the facts came in, and this forecast was thrown into doubt, I was on the blog telling you so. Who else does that? Who else is that professional that they warn you, my current forecast is not consistent with these fresh numbers, so beware. I am.

Today nobody doubts it that the iPhone has indeed peaked and as the market is in low-cost smartphones, Apple cannot gain market share. Today its an easy forecast. But who told you first? in 2010 as it was happening! Did I provide value to you my readers?

In June 2010 we saw the new iPhone 4. It added now the forward-facing second (selfie) camera, upgraded the main camera to 5mp and finally introduced an LED flash. The screen added higher resolution (which Apple calls 'retina display') and the OS finally added multitasking. You cannot accuse me of nitpicking features that are not relevant, those were the 5 highlights from Apple's own press release. Yes its not that Tomi thinks these were the big news, Apple itself (still run by Steve Jobs) felt that these 5 were the highlights of the new iPhone 4 compared to the predecessors. And once again, all those upgrades were mimicking years-old tech that Nokia had already had. Granted, while the E90 Communicator had up to that time held the pixel resolution world record, the iPhone 4 went even more sharp, but yeah, the E90 had far sharper resolution than the previous iPhones. But it was not quite 'retina display' level haha... so Apple went a bit further than where Nokia had been. Remember, this was still with a 3.5 inch screen size when Nokia's Communicator had gone to 4 inches already.

And the iPhone 4 finally abandoned the futile attempt to limit the phone to only 1 button (as I predicted) adding new buttons like volume controls. Then as numbers came in, on June 25 of 2010 I for the first time forecasted that Android would become the world's largest smartphone OS during 2011. Note that Andorid was in 4th place by latest quarterly market share data at the time (behind Symbian, Blackberry and iOS). I don't think anyone made that call that early (and many thought it would be either iPhone or Blackberry who might dethrone global smartphone OS king, Symbian, at some point, not Android which had only launched 2 years prior). Note that in a matter of only a few months I had been the world's first analyst to call it that Apple would lose out to Samsung in the smartphone handset brand race and also for iOS to lose to Android in the OS wars. Value yet?

SPLIT PRODUCT LINE

Do you remember the Death Grip? I said it wouldn't damage iPhone 4 sales to returning loyal customers but would damage new customer sales. Then in July 2010 I articulated the product line split strategy which I called the iPhone Nano lower-cost model like the iPod musicplayers had split into various lower-priced (and lesser capacity) MP3 players. I explained the iPhone Nano (ie the cheaper of the two new models that year) should not have all the new features of the new flagship, partly be consistent with the previous model but include some new features also on the flagship. That is exactly what Apple did with the split when they introduced the iPhone 5C and 5S, and it is exactly the strategy they still use now how the iPhoen 6 and iPhoen 6 Plus are designed. Exactly. I explained this strategy as something Apple had to do, in July 2010. But I also said in 2010 (and have said it repeatedly since) that the lower-price iPhone has to be significantly cheaper than the flagship, as the 'entry level' model similar to how BMW 3 Series is vs the 7 Series. It can't be almost the same price. That is where Apple made the mistake with the 5C and 5S, and now repeated that mistake with the 6 and the 6 Plus. The price difference is not wide enough to give this strategy its full effect. Many analysts have joined me in arguing this point, that the low-end iPhone model is still too expensive. (And please don't write about last-year's model. Thats not the same thing). I also explained the profitability issues and customer acquisition matters in that posting. Who else said this in 2010?

THE 10 DOLLAR iPHONE 4 (without handset subsidy or contract)

So then in July 2010 I made one of my epic long-term forecasts. I applied Moore's Law to the technical specs of the top smartphones of that moment and argued that by 2019 the cost of providing the exact same specs as the 'best smartphone in the world' of 2010 - the iPhone 4 - would cost only 10 US dollars to sell including profit margin. So I didn't mean that the iPhone 9 or whatever it would be called would be sold at that price in 2019. Rather, that some handset maker from China could sell the exact specs (3.5 inch touch screen, 3G, WiFi, GPS, 5mp camera etc) and sell that for yes ten US dollars without contract, profitably, year 2019. Wow. A true top-end superphone of 2010 by year 2019 would be so cheap it would make Nicholas Negroponte's 100 dollar laptop for every child a joke. This forecast has been quite widely quoted since (and I've shown it often in my presentations on all six inhabited continents). The more relevant part about that forecast is that I do a regular update to it. The very latest numbers I did two weeks ago verify that we are totally on schedule to get there. Those specs should cost 75 Dollars this December 2014. They are had today in China for 82 dollars this August so we are totally on track for 75 dollars by year-end. For the first four years at least, that forecast has held like clockwork. Is that valuable info to know that the iPhone 4 level performance will be the minimum tech spec of cheapest phones sold globally before this decade is done (running Android obviously not iOS). And that every new phone sold will be a smartphone before this decade s done.

That same blog also made this clear prediction about Apple's early lead in app store races: "In a few years all app stores will be cookie-cutter copies of each other with 90% overlap of content and apps. Just like almost any supermarket today will sell you both Pepsi and Coca Cola." We are almost at that point now (for those app stores that are still viable, so obviously excluding say Windows Phone that is dead). And that blog also explained that for winning the handset wars having the best phone was not the key, neither was the best app store or best loyalty. The global handset winner was going to be, as it always had been (and is today) the handset maker with the best carrier relations. That was Nokia in 2010 and is Samsung today. Best carrier relations does not guarantee you the best profits. But it guarantees you biggest market share. And in that blog I explained the inverse relation between profits and market share (if you grow market share, profit usually goes down, if you increase proffits you usually lose market share). I explained that it was impossible for Apple to win the market share wars but that the niche Apple was serving was one that allowed the biggest profits, not unlike BMW in cars. A profitable luxury niche.

I explained how profits were about today but platform OS market share was about the next decade. And that in 2010 when there were 10 different smartphone OS platforms, that was way too many to be sustainable, some would have to die (as they did). 

BIGGEST COMPUTER MAKER AGAIN AFTER 30 YEARS

When Apple made the Apple 2, it was once the world's largest computer manufacturer by volume of units of computers sold (ie before the Macintosh). Then it never reached that level again and almost went bankrupt in the 1990s. But I was the first analyst to call the second coming of Apple as computer-maker to the top of the hill. I called it on October 26, 2010 that for year 2010 Apple had passed HP and Nokia, so when smartphones and tablets were included in computer sales numbers (as most tech analysts now define a modern computer) yes Apple in 2010 became once again the world's largest computer manufacturer (by unit volume). You heard it first here on this blog.

Then we get to 2011 and the collapse of Nokia. Nokia's new CEO Stephen Elop who came from Microsoft suddenly took the world's bestselling smartphone platform (and second bestselling app store) and announced he is terminating it while switching to not the strongest of the contenders but the 7th largest OS platform that itself was already deeply struggling, Windows Phone. That bombshell announcement came on February 11, 2011 and I was the most accurate forecaster also about all the carnage that Elop then caused to Nokia. Up to that point Nokia was by far the planet's largest handset maker, by an even wider margin the world's largest smartphone maker, and generating the industry's second best profits behind only Apple while selling to every price point in dumbphones and smartphones in every country. From 2009 to 2010 Nokia grew more than Apple so the gap between Apple and Nokia was increasing - Apple was not catching up to Nokia in smartphones, Nokia was pulling away from the iPhone. Nokia so utterly dominated smartphones it was bigger than its two closest rivals combined (Apple and Blackberry). This is such a rare leadership position that no PC maker has ever enjoyed such a dominant lead. Yes, never has IBM or HP or Apple or Compaq or Toshiba or Lenovo etc been as big as the next 2 largest PC makers combined. Nokia towered over other smartphone makers in 2010. And while Nokia corporation reported a rare loss-making quarter in 2009 (and had its previous CEO fired), by the time Elop came to run Nokia, the smartphone unit was generating Nokia-record profits. Only a total idiot would destroy that.

Well, on February 11, 2011 Stephen Elop started the systematic destruction of Nokia. What we found out only after the Microsoft sale had been concluded in 2013, was that Elop had a secret clause in ihs CEO contract that incentivized him to destroy the handset division and then to sell it as scrap to Microsoft. Elop was paid a bounty of 31 million US dollars for that heist. However, in 2011, what Elop annnounced was just sheer madness and Nokia's share price started on its death-spiral from a sterling AA+ raring to junk status. Now yes, I predicted perfectly the horrors that were to come to Nokia from that day and the other damage inflicted by Elop, as it happened. This blog is not about how accurate I was about Nokia. This is about the iPhone. On the day when Elop announced his Windows strategy, many pundits rushed to give their views of was this good or bad for Nokia or Microsoft (about 3 out of every 4 said it was very bad, and one out of four thought very good). I wrote mere hours after that announcement on this blog not just how horrible it was for Nokia, but what was the impact to the rivals in the industry!!!

So the moment the Nokia collapse started, only hours from the announcement, I was on the blog telling what was the impact to Nokia's competitors. This is what I wrote of the impact to Apple iPhone: "Last year it was pretty hopeless to suggest super-high-cost Apple iPhone could pass Nokia which sells 100 million smartphones per year. Now, if Nokia is crippled and vulnerable on all fronts in smartphones - suddenly Apple can plausibly catch and pass Nokia. Wow. This changes the whole picture."

Did anyone else say that while Nokia sold literally more than twice the number of smartphones per year than Apple, and in 2010 Nokia had grown MORE than Apple (and Apple's own smartphone market share growth period had ended) - suddenly this one announcement by the new Nokia CEO meant that Apple would suddenly leapfrog that rival - the one twice as big as itself? That is an awesome forecast and a daring one! What happened? I wrote that on 11 February 2011. Apple passed Nokia smartphones in unit sales in Q2 o 2011 only five months later! Nobody else predicted this on that day! And I wasn't making some blanket forecast for all brands. I didn't say Blackberry or Motorola or LG or SonyEricsson or HTC could achieve this. But I said Apple would. And I was spot-on (again).

Incidentially on that day I also said that Samsung was now destined to overtake Nokia as world's biggest handset maker (as they did shortly). Remember already before I had predicted that Samsung would pass Apple in smartphones (as they did also in 2011). But try to find anyone else who analyzed the Nokia-MIcrosoft deal who said Apple would pass Nokia in smartphones and Samsung would pass Nokia in all handsets because of that stupid move by Elop.

Then in my preview to the 2011 year bloodbath I for the first time argued that when Apple splits its product line (which would be inevitable), this was the opportunity for Apple to move its flagship base price upscale form the 600 dollar level (unsubsidised price) to something like 700 dollars. Now we see the iPhone 6 Plus has its base price at 750 dollars. Exactly that strategy and even more aggressive in the pricing. Many argued that there was no room on the top of the price pyramid for Apple to do this kind of pricing move (and still at the time the vast majority of arguments were that Apple would never split the product line haha).

I then called it first that the iPhone had passed Nokia to become the world's largest smartphone maker (in the quarter) of Q2 of 2011 ( as it also was). Then on June 13, 2011, in my regular feature of the bloodbath updates, I discussed Apple's iPhone new model delay from June to September. Nothing amazing in that. Except that I was the only one at that time to correctly give the reason why there was that delay. It was because Apple had tried to launch the new iPhone model designed without a physical SIM card (using a 'virtual SIM') and the carriers had utterly rejected that idea. Apple had to rush back to the drawing board to redesign the model and include the physical slot for the (nano) SIM card slot. That redesign and subsequent testing etc meant a sudden urgent 3 month delay.

Then in 2011 as the industry started to have rumors that Apple might split the iPhone product range, I wrote a long blog explaining the details of the 'iPhone Nano' strategy. Expanding on my previous postings, I now explained why it was necessary to have a different physical size (the more expensive model being physically larger). This was not done with the iPhone 5S and 5C but it is what Apple now did with the iPhone 6 and 6 Plus. The 6 Plus is larger and more expsensive. In the blog I showed how the new cheaper model could have some aspects form the previous year's model (to save costs and ensure profitability) but had to include some new dimension only on the new models. The example I used was NFC. That is exactly what iPhone 6 did now.

The quarterly leadership position in smartphones fluctuated between Samsung and Apple in 2011 but when I wrote my Bloodbath 2012 preview in March of 2012, I said clearly that Samsung would win this battle decisively during 2012 (as it did).

Microsoft Lies. Then there is the perennial Microsoft propaganda and lies machine. On May 23, 2011, the Microsoft mafia decided to spin a story about Nokia Lumia Windows success in China. They picked the wrong target when they compared the supposed success to the iPhone in China. Microsoft mouthpiece Michel van der Bel (Microsoft COO of China) got himself quoted in the press claiming that Windows Phone smartphones like Lumia 800c were outselling the iPhone in China. You don't spread lies like that on my watch! So I debunked that sillyness with 18 separate items of proof. When the numbers came out two months later, I was of course correct and Mr van der Bel has not been seen in the press about this ever again. But for a brief moment there as this alternate reality created by the Microsoft Imaginarium. Who debunked them comprehensively and immediately for you to keep your Apple facts straight? Yeah.

Then as obviously nobody in their right minds could have thought that Europe's largest tech giant would decide to destroy its most profitable division, there was of course windfall market share gains that nobody could have anticipated before the year but I did correctly anticipate that Apple was one fo the beneficiaries of that in 2011. That meant that there was the sudden jump in market share for Apple from 2010 to 2011 that I call the Nokia customer give-away (also benefiting Samsung). But after that was over, we were back to the normal for 2012 and now there was of course the newest iPhone 5 with the first larger screen at 4 inches of size. As Apple did not split its product range yet, I said that Apple would end up with between 20% and 21% market share for the full year. Apple ended at 19.5%. If you round that off, its 20% and I was spot-on. If you want to quarrel, I was off by half a point.

Again for year 2013 I gave my Bloodbath preview and there I again speculated on the split in the product line. I said that the annual sales for the iPhone would be down from 2012 to a range of 15% to 20% but if a lower-cost iPhone model was released, then there was growth potential into the fourth quarter. Note that the moment we saw the product split later that year, and the prices, I said no, the price is not low enough and Apple's market share was not going to grow. Where did it end? 16%. Whose your daddy, eh?

Then the moment we had enough numbers, I was also again first to show that 'post-Nokia-collapse' the new iPhone peak had also come and gone. By July I could see that iPhone market share was again/still in decline and would not reverse to the end of the year and told you so. 

In September we saw the split of the iPhone model line to the iPhone 5C and 5S. I liked the split but explained that the price differential was not wide enough (and the cheaper model not cheap enough) to boost iPhone market share in any significant way. But we saw yet another Nokia innovation being copied by Apple (the cheesy colors in cheap plastic for the 5C model) and the gold color variant (also Nokia copy) for the new flagship 5S. There were again many on this blog who said Apple would never do colors haha while I said that this is basic marketing that even Henry Ford learned 100 years before with his Model T automobile...

I gave my target market share for full year 2014 iPhone at 14% in July after we had seen 2 quarters of sales. There I pointed out that a large screen iPhone costing as much or more as past iPhones was no answer, Apple needed lower-cost iPhones in the mix now, if it intended to return to some market share growth or even stability.

CONSIDER THE TRACK RECORD

So lets start with the simplest and easiest iPhone forecasts. What is coming. You could take a laundry-list of all features that rivals have, and say the next iPhone models will get those, and then be able to point back that look, this thing came now. Obviously the original iPhone (known now as iPhone 2G) was not a technology showcase and thus its easy to say it will evolve by a, b and c by just looking at the competition. But go back and look at my articles about the various iPhone models and what I expected was coming. I had many things I hoped for or wished for or said was possible but only a few things at any time that I said were inevitable. That Apple had to do. I said Apple had to do 3G, had to upgrade the camera, had to include MMS and a second inward-facing camera. Some of those were also echoed by ohters (3G, better camera) but others were very strongly argued that Apple would not need to do as being silly (second, inward-facing camera) or Apple would never do 'because its against Apple's philosophy (MMS). These were not all easy-to-make 'me too' predictions. If you look at what I said Apple HAS to do, it has literally done every single one of those items excepting for one (which it will do). The one it hasn't yet done, which I said was inevitable, Apple had to do, was to lower the price of the entry-level iPhone model after the model-line was split.

There are plenty of forecasts of sillyness suggesting Apple would have flexible screens or pico projectors or 3D displays etc. I have said those were possible but unlikely. Some things I wished for like physical QWERTY keyboard variants but I said even then that I felt it was unlikely Apple would do that. But out of everything I said Apple had to do - Apple has done that. And those have been - every one of them - an item so important to Apple, it has listed the change as one of their highlights in the new iPhone model press release. Note, I have not always been able to predict the correct timing - Apple has often left that item out for a couple of years before doing it. But I have been that correct, that even 2 or 3 years early, I have told you, this feature is a must-have and Apple will do this. Not that its a nice-to-have feature. It is a must-have and Apple will do it. Whether larger screens or splitting the model line or not being able to release an iPhone with a virtual SIM card, when I said 'this Apple has to do' I have been perfect (with one last prediction waiiting to be fulfilled - the price drop at the entry-level model). So many items that when I said it will be done, I was massacred on this blog, that Apple would never stoop to something that silly - like the colors. Or yes, inward-facing cameras or MMS support or splitting the product range or copying Samsung's Note into very-large-screen sizes (now known as phablet size).

You go read through all those blogs and anything else in the millions of words on this blog. I never once said that a flexible screen was inevitable or a 3D display or optical zoom (all aspects that other pundits have been predicting to be on an iPhone). Every single thing I said 'Apple has to do this' has indeed happened in the next iPhone or a later model a year or two after it. Note, as Apple has hugely celebrated each of those changes, it means Apple management agrees 100% with what I wrote on this blog, it is a major improvement, worthy of being included in the highlights of the press release. These have not been trivial issues nor obivous issues nor issues of natural progression that Apple might ignore. No, major changes.

And about half of them were so controversial, we had die-hard Apple loyalists on this blog arguing vehemently it will never happen. Apple will never do a larger screen than 3.5 inches because of (nonsense follows). Apple will not ever need a second inward-facing camera because (nonsense follows). There will never be MMS support or never be a split in the product line or colored iPhone models or larger screens than the 4 inch which was obviously the screen-to-end-all screens (retina display etc nonsense follows). Whenever I say this is inevitable, Apple has to do this, EVERY one of those things came to be. The only thing Apple fans should worry about is, if Tomi saw this as inevitable, and Apple did do it and celebrate that in a press release, why on earth weren't all those things done the immediate next release? Why some of those changes were delayed by a year or two? How much more competitive had the iPhone model line been, if Apple had bothered to do these things when they were technically capable and Tomi said these will come. How much money (profits) and customer loyalty did Apple 'leave on the table' because they didn't do these things right away? That is my love of Apple here. I have never wished for Apple to stumble or fail. I have celebrated and loved Apple, even as I see their latest model didn't fully take advantage of everything Apple could have done.

The technical part is the easiest. And no, I have not, by any means, guessed correctly all features of the next model and I missed several starting right in 2008 with GPS. But there is nobody else who has the record of saying 'these features Apple has to do' and have essentially a perfect record on those (with one item still pending). The far more difficult part to forecast is the impact to the market share out of the iPhone evolution. Can this help Apple grow market share or not. And here again, I have been by far the most accurate forecaster. Its not just that most years I have nailed Apple's annual market share, I was literally the world's first to call the moment when the market share growth stalled and its now in decline.

And again, if you are interested in more than just Apple, I have correctly predicted which brands will suffer from the iPhone (like Palm, Motorola) and which were immune and actually gained growth in sales (Nokia) and even growth in market share (Blackberry) in the early years when the iPhone market share grew from 0% to 16%. Then when Apple market shate growth had stalled, I correctly predicted Samsung's sudden rise when nobody else said that and I pinpointed the time when Samsung would pass Apple in both quarterly sales and annual sales of smartphones. I was first to predict the moment when Apple would pass Nokia to become (momentarily) the world's largest smartphone maker - and yet, that Samsng was going to pass Apple to become world's largest smartphone maker.

While this is not a financial analysis blog about share prices and Wall Street, I also have repeatedly reminded readers that any market share losses by Apple were not going to damage its enormously profitable iPhone business, and that Apple would continue to reap the world's largest profits out of its iPhone. While this blog focuses on 'mobile' and for smartphone platform wars, the performance of iPods and iTunes and Mac sales are irrelevant, I have also noted that those are also profitable - and benefiting - from iPhone sales (ie upsale/cross-sale to existng iPhone owners). So I have not been blind to Apple the corporation while that is not the focus of this blog.

Then the far more difficult parts. The iOS market share and the App Store effect. So many many writers have come here - and blogged on their own blogs - that the one part Tomi doesn't understand about Apple is the ecosystem and (nonsense follows). I have followed the MONEY. I have reported here from the beginning that the iOS App Store is the same story we saw on counting eyeballs on websites a decade before, an economic illusion. Most who make apps will not make money on it (and now most apps experts agree). Because of that most who were drawn to this mythological mirage of magical money have since gone and left their apps as Zombies. I told you the app stores ecosystems were a diversion from where the real money was in mobile services (90% of the mobile data business revenues are still made outside of the apps today, 6 years after the App Store. And those mobile services have literally a 10x better chance of becoming profitable than anyone developing an app).  My view has not changed one iota from the first app store posting (games is the only thing worth doing here) to now. But the silly iDreamers and iWishers who iHoped for a new iEconomy have now mostly woken up to the truth. I told you first, literally, the first, on this blog. Today most apps experts agree. And incidentially if you read what they now write like Peggy Anne Salz in her latest book about how app developers can make money - what does she teach? One of the keys is SMS of course, something I wrote in 2008 when the original App Store launched. Who told you so?

It very easy to be mesmerized by billions of downloads of free content. Its far more challenging to see the real impact to an industry and what it means to revenues, loyalty, consumers, developers, and what kind of economy will emerge from all that. I did that for you on this blog, in a series of articles explaining where the economic opportunity was, and where it was not, and those positions have not changed and today my old view is increasingly accepted as the truth.

What of an industry-wide catastrophic accident. An event that nobody could foresee, but one that shatters the status quo. Like when Nokia CEO had a secret clause in his contract that paid him 31 million dollars to destroy the Nokia handset business so badly, it would then be sold to Microsoft. Nobody could imagine that Nokia the world's largest handset maker (and very profitable at the time) would include this secret clause in the CEO contract. So we saw the systematic destruction of Nokia over 3 years, that the Financial Times calculated, paid Elop another million dollars for every half Billion dollars of shareholder value he managed to destroy. Elop was removed from CEO job in shortest time of Nokia history and yes he was shipped back to Microsoft after the damage was done .But this is an event nobody could foresee (and I still wonder why aren''t there investigtions about stock market rules infringements relating to this). I don't mean nobody could foresee Nokia falling. I mean nobody could foresee that a Fortune Internatonal 200 sized company would give its CEO a license to destroy its cash-cow and most profitable unit. So in February 2011 we saw the beginning of Nokia's sudden comprehensive collapse and a fall of literally world-record speed. Not world record for handset makers, the collapse was fastest of any market leader of ANY industry ever, of cars, food, airlines, hotels, you name it. Never has a global market leader collapsed as fast as Nokia did from February 2011 to 2013 when Nokia sold its remaining handset business to Microsoft.

So if there is a catastrophic incident in the industry, is there guidance by your analyst. I predicted accurately not only what was the damage to Nokia and Microsoft, but what was the benefit to Apple, how much the iPhone would gain and how long - and as Apple was not the primary benefactor of the Nokia collapse who was: Samsung. Again, even at such an event that nobody could 'prepare for' and the analysis is literally reacting to sudden bizarre news, even then this blog told you BY FAR most accurately what was the effect of Nokia's pending collapse to Apple and as the iPhone wasn't the main benefactor, then who was (Samsung). Nobody else gave these facts only days after the Nokia Microsoft partnership was announced.

So if all that is difficult, the single most difficult thing to forecast of a given technological change is how it impacts OTHER industries. When the telephone came, there were fears that it would kill live audiences as theaters and that people would stop going to chuch. Marconi invented the radio and when he was asked could it provide 'broadcast' type of media, he said flatly no, there was no chance of that business. When the internet came, few saw it would destroy the encyclopedia business or utterly change government procurement. Now go back and re-read that seminal blog about what is the global impact of the iPhone - written before the iPhone had sold one unit and accurately forecasting what sudden change would happen at the media, advertising, tech worlds; how they would suddenly discover 'mobile' even though smartphones had existed for ten years by then. Jesusphone was a most appropriate term (even thought I never used that term myself in that blog).

There are Apple fan-boys who think everything Apple does is golden and will always win the world. There are others who seem to be Apple haters who said the iPhone would never succeed. I have loved the iPhoen, celebrated its steps and milestones. I correctly forecasted its first year sales and its second year market share gains - not over forecasted, nor underforecasted. You cannot accuse me of being an Apple fan-boy nor of being an Apple hater. Then I have since accurately forecasted the end of market share gains while still projecting every year unit sales growth and profit growth. Again, not a hater, not a fan-boy. A realist. And on all biggest issues, whether its features, whether its prices, whether its the prodcut line spit, whether its regional success/failure, whether its carriers, whether its loyalty, whether its rivals and market sahre - I have been right. Not always perfect but by far the most accurate forecaster. And I have been able to see the truth of the mythological apps as well as the impact of the iPhoen beyond 'my' industry of mobile into tech, media, advertising, money etc.

So yeah. Try to find any analyst who released even half this number of iPhone-related forecasts and had 75% of them hitting the target. Nobody else has been anywhere as accurate as me on the iPhone. I have not been perfect, no forecaster can be. But I have been least wrong and have been most right for the full duration of the existence of the iPhone. So with that, if you wanted, this blog is my 'end of Decade forecast' for smartphones including iPhone and OS platforms including iOS yes up to year 2020. Consider this against all those silly numbers you can read that suddenly Windows Phone will jump from 2% to 15% haha... The most accurate forecaster and his decade-forecast. Maybe worth bookmarking :-)

If you were interested in my Nokia collapse predictions, I did a similar survey of those at this blog a while ago. And if you want to see a comparison of all forecasts about Windows Phone market shares published after the Nokia partnership (and see mine compared) its here.

Lets Discuss the iPhone 6 Models - Apple now in 'me-too' mode only following the leaders

Last week I discussed the new Apple Watch. Now lets do the iPhone 6 models. Once the iPhone was exceptional and magical. In the first three years of its life, the iPhone gobbled up market share globally and ran from nowhere to 16% market share of all smartphones sold globally for full year 2010. That was the most amazing launch of any smartphone brand ever before or since (did you notice how Amazon's Fire is not on fire at all). But then it stalled. Apple's individual quarterly market share might jump even over 20% but where is Apple now? Its market share has stalled. Apple's market share was down to 15.5% last year and this year is on track to be down to around 14%. Yes as the global smartphone market keeps growing at massive rates (25% growth this year) Apple also can keep reporting growing unit sales and growing revenues, but the iPhone market share has been falling and at some point the relevance of that issue will come home. Apple is growing unit sales yes but Apple cannot even close enough sales to keep up with the global growth rate. Apple is losing the war while winning some meaningless battles and celebrating those while ignoring the big picture.

Now that being said, Apple doesn't need to be market share winner. When it last tried that (in the PC/Mac wars of the 1990s) Apple went to the brink of bankruptcy. After Steve Jobs came back, Apple learned that they must abandon market share focus and rather serve high-end niche markets. Apple cannot win the global hardware races competiting against low-cost providers. And as I've been saying ever since the original iPhone appeared in 2007, as the low game plays out, Apple will end up with high single-digit market share out of the smartphone market when all phones sold are smartphones (this will happen by 2019 and possibly even earlier). Apple's market share of all phones sold today? 8%. I rest my case.

Some analysts look at the US market, see that the iPhone is the bestselling phone and iOS has market share well into the 30 percent range, and think this is the future. Those are clueless analysts who don't understand mobile. China alone as a market for smartphones is now twice the size of the USA. The US market is literally the laggard market out of the Industrialized World (rich world, 'first world' or 'Western World'). So you are excited about mobile payments on NFC now that Apple finally has bothered to give us. Whoop-te-doo. When did Nokia offer us NFC on its flagships? Four years ago! And that was on Nokia's OS platforms including that supposedly obsolete Symbian! Apple's wonderful money/wallet system? Yeah, Nokia had Nokia Money not announced but in commercial production in India for example (the world's second largest country and the country with the largest unbanked population) where Nokia Money had 13% market share (before idiot Elop killed the project because his favorite Windows Phone could not support NFC at the time). The old joke still holds true to this day, even after Nokia's handset business has ended, that to see what will be in the next iPhone, look at an old Nokia flagship from some years ago. True. Absolutely factually true. And yet obviously those old Nokias were 'not worthwhile smartphones' and 'only Apple invents anything in this industry' haha. American 'analysts' haha.

Incidentially NFC and mobile wallets was not of course a Nokia invention. It was, as is just about everything in our industry, first done in... Japan. When? NTT DoCoMo (a reference customer of mine by the way) introduced FeliCa into limited use in Japan in 2004 !!! Yes ten years ago. Ten YEARS ago. Don't tell me the USA knows anything about leadership in 'mobile'. South Korea has had for example Hana SK mobile payments on NFC for this whole decade (SK Telecom is also a reference customer of mine). And for Americans really to weep, we don't need NFC to do mobile payments. Look at Starbucks (15% of its total USA revenues come from mobile payments in less than 2 years from launch, powered primarily by a simpler technology called QR code). Or look at another US tech darling, Square. They added SMS payments just now a couple of weeks ago. Yes, SMS payments. Where have I heard that before? Coca Cola (another US giant) launched mobile paymenets on SMS when and where? 17 YEARS ago in Finland enabling some vending machines to accept SMS payments. How is that doing today? Latest stats by BookIt say 69% of total Finnish population use mobile payments in anything from paying for yes vending machines to train tickets to fast food restaurant bills. The USA leads, hahahaha. Look at Kenya. Kenya as in 'Obama born in Kenya that Kenya. Literally in middle of Africa, the poorest continent. M-Pesa launched in Kenya six years ago by Safaricom (ie Vodacom Group, another reference customer of mine) and today 51% fo the total Kenya GDP runs through a mobile phone. The rest of Africa is following in close synch based on when they did their first mobile payments launch. Zimbabwe is at 43% of its total GDP already transiting a moblie payment system. Apple. You are 10 years behind Japan and 6 years behind Kenya! Thanks for finally bothering to give us mobile payments finally!

No, what happens in mobile in the USA is not about to be copied in the rest of the world. It is totally consistently true, that everything that happens in Japan, will be copied in the rest of the world. Once again, we see it with Apple and the latest iPhone. So what Americans should prepare for, is that the US market will become more like the rest of the world where 96% of the planet's population lives. And even that last vestige of the argument 'but our economy is the biggest therefore USA rules' is now coming to an end, as the Economist said, by the end of this year 2014, China's economy will become larger than that of the USA. Why did Apple released phablet-sized phone screens? Americans are not driving that shift. It was China. Kantar reported that in March 2014, already 40% of smartphones sold in China had screen sizes of 5 inches or larger, ie 'phablet' size. No my dear American readers, Apple is not reacting to US market needs. USA market is not a leader by any definition in the mobile industry. Apple is reacting to what is happening in China, the world's largest smartphone market, and righthly so.

iPHONE 6 MODELS

So yes, its large screen models this time. Lets see whats now and how. Two new models still released in unison (this is again a stupid idea that Apple keeps doing, why? It would be better served splitting the release times, release one of the year's new iPhone models in the Spring, the other in the Autumn. That way Apple would catch more of the customers in the wild whose contracts end at any of the 12 months. As we know, Apple's current iPhone sales pattern is highly cyclical, a big peak in September-October and then dwindling down to very low levels by August). But now its beyond any doubt, that I was correct when I said that Apple had to split its product line. There were so many Apple fanatics here on this blog who argued that one model per year was enough and Apple would never split its product line. Whose still blogging today haha?

So lets see what the iPhone 6 models look like. These are the main specs:

MAIN FEATURES . . . iPHONE 6 . . . . . . iPHONE 6 PLUS 
Screen size . . . . . . . . 4.7 inch . . . . . . . 5.5 inch
Resolution . . . . . . . . . 1334 x 740 . . . . . 1920 x 1080
Main camera . . . . . . . 8 megapixel . . . . 8 megapixel
Image stabilization . . . no . . . . . . . . . . . yes
Flash . . . . . . . . . . . .. LED . . . . . . . . . . LED
Selfie camera . . . . . . . 1.2 megapixel . . .1.2 megapixel
NFC . . . . . . . . . . . . . yes . . . . . . . . . . yes
Waterproof . . . . . . . . . no . . . . . . . . .. . no
MicroSD support . . . . no . . . . . . . . . . . no
Removable battery . . . no . . . . . . . . . . . no
Fingerprint ID . . . . . . . yes . . . . . . . . . . yes
Wireless charging . . . . no  . . . . . . . . . . no
Dual SIM slots . . . . . . no . . . . . . . . . . . no
Price without contract . $649 . . . . . . . . . $749

Those are quite expensive smartphones with no spectacular specs. Even the iPhone 6 Plus screen size is barely larger than the original Samsung Galaxy Note from three years ago (which had a 5.3 inch screen size). And it is already at design worse than the current screen-boss, Galaxy Note 3, which has a 5.7 inch screen and Samsung is just scheduled to give us the next edition the Galaxy Note 4. Apple enters the screen races with two 'large screen iPhones' where its biggest screen cannot match the top dog of the industry. This is Apple's best moment in the screen races and it starts off this badly. In the next 12 months it will only fall further behind as every rival is eager to prove they can give a bigger screen than the iPhone.

Yes, obviously Apple fans have been dying for larger screens than the past iPhones, so of course the early sales are very strong - those are existing iPhone buyers who would buy the next iPhone almost whatever it was. But on its 'party piece' the screen size, even the 6 Plus fails to match the competition. And it will only get wose from here in the coming months as each next flagship from LG, HTC, Lenovo, Xiaomi etc can easily do a 'larger than 5.5 inch' screen and put the iPhone to shame. 

Which brings us toe the biggest disappointment of the new iPhone 6 models. The camera! Come on! Nokia gave us an 8 megapixel smartphone five YEARS ago. Top 'normal' flagship smartphones run 20 mp cameras today like the Xperia Z3. Thats before we consider the monster cameras like Microsoft-Nokia Lumia 1020 with its 41mp camera. Even Apple itself upgraded its camera to 8mp three YEARS ago. Come on, selling an 8mp camera in 2015 on a 'flagship' is pretty pathetic. And thats before we look at the Selfie Cam. The inward-facing second camera (again something Apple resisted in early iPhones and only gave us from 2010. And yes, haha, Nokia smartphones had second cameras from 2005. I argued on this blog for years that Apple had to do it and Apple fanboys said it would never happen and called me a fool. What do I know about this industry? Whose blogging now). Apple should have taken the opportunity here to up the camera to at least something like 16mp if not 20mp. And the seflie cam by now on a flagship should be 2mp at least. Again, before you argue - what is the point of the seflie? Not my own face in a picture. Its the context of the selfie - where was it, who was also in it. That is why you want a good resolution seflie cam, so we can see where that picture was taken. It needs to be better than this! On a flaghip! On a smartphone sold in 2015!

NFC is another me-too that others have done years ago. The iPhone 6 models did not give us wireless charging of waterproofing or any other leading edge tech. So this becomes a very pedestrian flagship already at launch, well before the rivals react. And Apple continues to annoy its users refusing to give common features like microSD storage cards or removable batteries or built-in FM radio etc. (BTW as you American readers laugh, because your homes and cars are all inundated by FM radios and you couldn't care less to have that on a phone, that is not the same for the rest of the world. I just saw fresh South Africa mobile users stats by the MMA and AMPS 2013 survey, that 42% of South African mobile phone owners listen to FM radio on their phones (and South African mobile phone penetration passed 100% per capita two years before the USA, so before you start to laugh). That may explain why Apple only has 0.7% market share out of South Africa. And it was these kind of bad design decisions that doomed the Nokia Lumia launch under Stephen Elop when he designed the Lumia series to appeal to US consumers (haha, see how that went) but going against the needs of where most phones were sold. Ask Chinese consumers if they listen to FM radio on their phones.  Wanna go check out specs for Lenovo's flagships? They have FM radio. As does Huawei. As does ZTE. As does Coolpad. And as does the latest tech darling out of China, Xiaomi. This is a no-brainer but Apple again leaves out vital parts that are necessary to the rest of the world, while fixating only on what the cool kids in Cupertino think their phone should have. The iPhone 6 was designed only for those few who live on that trivial slab of land in Siliconia while spitting in the face of most mobile phone buyers globally.

In 2009 Apple sold more than three times as many smartphones as Samsung. Today Samsung sells twice the number of smartphones as Apple. What happened? Samsung diversified and spread its product range to cover all major segments out there. Did you know there is a Galaxy serving the Blackberry style QWERTY segment? Yes they sell the Galaxy M Pro which looks like a Blackberry. Samsung has the Galaxy Note 4 if you want a large screen. If you want the best camera ever in a phone, the Galaxy K Zoom is now the top dog on the phoneshooters (20mp camera and 10x optical zoom ie real zoom rather than pixelation magic, plus Xenon ie real flash). If you like the metal frame of the iPhone, now there is a Galaxy in that style, the Alpha (with specs and size matching almost perfectly the iPhone 6). The flagship Galaxy S5 is waterproof. Then there are the low-cost Galaxies all the way down to Samsung Galaxy Y a smartphone roughly with specs similar to original iPhone 2G (2mp camera etc). You can buy one for 81 US dollars without contract - new model - in India today (at INR 4,995). This is how the market leader works, they expand their product line and reach more customers, with products targeted at different segments.  

Again for American readers, you may think 'but my iPhone only costs 199 dollars or 299 dollars'. No it doesn't. That is marketing bullshit. The real price of the iPhone 6 is 649 dollars (iPhone 6 Plus 749 dollars) for the base model (even more if you buy it with more inbuilt memory). What the carriers/operators do in the USA, is force you to sign a 2 year contract and force you to take a 24 month payment plan for that gadget - and they charge you interest on it too. The real price without contract is what most countries have - like for example in Italy and South Korea - and even most of those countries where handset subsidies are still used, will let you pick the option to buy so if you prefer to pay upfront the full price you then get cheaper minutes on you contract (like in the UK). And the subsidies are gradually being phased out globally, the latest country to make a move to reduce the amount of handset subsidies was China earlier this year. I am not talking about fake issues here on this blog, or marketing propaganda. The real price of the iPhone 6 is 649 dollars and the iPhone 6 Plus is 749 dollars. That is for example what they pay in Belgium or in South Africa where I just was. And when the consumer sees the real price they are forced to pay (whether upfront or in a payments-plan 24 month contract), the comparison becomes far more 'real'.

I should again mention that I argued this path for the product split on the new flagship before the model line was split (iPhone 5S and 5C). I said that because of Apple's strong loyalty they should go up-market in price for the top model and pursue far more expensive price points. The iPhoen 6 Plus starting at 750 US dollars is the right step for that. But I also said they have to do their mass-market phone at a lower price point than where they were. That was the fault with the colorful 5C models they were too similar to the flagship 5S and the price was not different enough. Apple haven't learned that marketing lesson yet that every carmaker for example knows. The Mercedes S Class is the flagship and people buy cheaper Benzes. Same for BMW 7 series or Audi S8. But yeah, Apple continues to do it the dumb way, trying every costly alternative before doing what every marketing book says is the logical thing. Sure, go ahead. But if its not with the 6 model range, soon in the next model range there will be lower-cost new iPhones more around 500 US dollars than 650 dollars. (And don't bother to write about last-year's models at discount haha. I mean new phones!) it will happen. EVERYTHING I said Apple HAS to do to its iPhones has happened except for the one wish I have still (QWERTY-slider). So I've correctly anticipated over 30 improvements to the iPhone and iOS line in the past 7 years (mostly just by studying existing Nokia flagships haha)

Look at the price. Consider the Samsung Galaxy W (latest model, model number T255). This is nowhere near Samsung's flagship. But it has a 7 inch screen (far far bigger than either iPhone 6). It has all the usual stuff that Apple now has like of course NFC. The primary camera is 8mp and LED flash but the selfie cam is better at 2mp. Of course it has all the usual things you'd expect Sammy to give us what Apple refuses, like microSD card slot, FM radio and removable battery. What does that cost? US $482 (Korean Won 499,000) gives you matching specs on most areas, is worse literally on nothing, and far better specs on some of the most requested features right now, compared to iPhone 6 Plus. If you buy phones on contract and the difference is slight between models, you won't really care. If you pay full price and 750 dollars gets you 5.5 inch screen but 482 dollars - two thirds the price - gets you also a far larger 7 inch screen.. suddenly the dollars start to matter very much. And this is before we consider Emerging World needs. If you earn so little you cannot afford to buy both a tablet and a smartphone, you buy a phablet and then you get the biggest screen you can. Again this mid-range Galaxy W utterly wipes the floor with the brand new iPhoen 6 Plus (for Emerging World market needs). But if the base iPhone 6 price was 500 dollars (ie 499) rather than 650 then this becomes at least a reasonable race...

VICTIM OF ILLUSION OF FAIRNESS

The iPhone 6 model range is ho-hum 'me too' copycat range now. Nothing spectacular here at all. And look, for the first time in any iPhone launch window, we see a plethora of articles saying that actually a rival smartphone is better. Like this Digital Spy has Galaxy S5 over iPhone 6, Gizmag compares iPhone 6 Plus to Galaxy Note giving most gains to Sammy. PhoneArena compares Sony Xperia X3 to iPhone 6 granting that Xperia is better on most counts. Extreme Tech compares both iPhone 6 models to HTC One M8 and gives verdict to HTC. Digital Trends gives choice between iPhone 6 and LG G3 to the LG. Christian Today compares iPhone 6 to Xiaomi Mi4 and says only reason Xiaomi can't win this fight is because Xiaomi is not yet sold in all the markets Apple is (ie they think Xiaomi is better value). Phone Debate compares Lenovo Vibe Z22 to iPhone 6 and gives it clearly to Lenovo. 

This has never happened! This never happened before to the iPhone that suddenly its new model is not impressing anyone and the current flagship of most rivals is seen as better! I did not have to dig into Google results to find those comparisons. They were the top page result, usually the top result of Google search of a comparison of iPhone 6 vs that given brand. And I think I know why. There is a kind of illusion of fairness in journalism. When a journalist feels obligated to pursue 'both sides' of a story even where one side is ludicrous, like when say Obama says he won't go to war, then the newsmedia go get Dick Cheney to say why Obama is an idiot and of course USA should got to war immediately (or else bring in McCain to say bomb everyone). Sometimes fairness does require both sides of the story but in other cases it should be obvious that the other side need not be heard. We don't need for 'fair' coverage of World War 2 to hear a passionate defense of Hitler's persecution of the Jews. Same thign happens in sports, where if one side gets a number of penalties, the referee suddenly feels 'obligated' to give the other side a penalty next, even on some totally minor infringement (and something that the frequently penalized team may then exploit). So yeah. For six years now we've seen always stories that the iPhone reigns supreme. The journalists have a guitly conscience that they always gave the verdict to the iPhone. Now when its so close, and Apple had so many victories in the past, they will tend to give the 'tie' going to the challenger. Thats why its such a strong chorus on all comparisons.

Will those comparisons sway an existing iPhone users to abandon Apple, of course not. They don't need any convincing anymore. They know what they want, when they walk into the store. But thats return business The new buyers! The first-time potential iPhone clients. They will be reading the reviews. And the sales reps! They will now have potent 'ammunition' to use to sway customers to switch and not buy the iPhone (Apple not known for serving retail channel needs well) to preferring a random Brand X in that market, whose sales promotion offers the best international trip or whatever bonuses for top salesguys. Apple has never felt this level of 'even' competition from rivals before. It will be their roughest year. This does not mean that Apple sales will fall. Apple has the best loyalty in the handset business. But this means three things.

It means the news customer acqusition to iPhone will be weakest its ever been. The growth in absolute unit sales will be worst its been, the iPhone market share for Christmas 2014 and Spring 2015 will be worst its been in years. (when we combine that with declining iPod sales, flat iPad sales and delayed launch of the iWatch to next year, it means very modest Christmas news for Apple). These two smartphones are priced at the top of the price pyramid where competition is rough and rivals are tough. The consumers of smartphones are not now on their first smartphone, they have grown to appreciate certain things and will seek the model they want. These two iPhone 6 models will not set the world on fire in the way that previous new iPhone model upgrades have. Yes the iPhone will set a new sales record of course for Christmas but its market share will be the worst the iPhone has seen for many years and the total annual market share for 2014 will be somewhere down near 14%. As China transitions away from handset subsidies, these two iPhone 6 models will not be very compelling to the Chinese market where local rivals already have competitive offerings and will upgrade their portfolio with even better (more competitive) models for the Chinese gift-giving season (Chinese New Year in early 2015). Thats also where we can expect for example Sony's next Xperia Z4 to arrive and if the current Xperia Z3 seems a better phone (and arguably sexier more cool phone) what will Z4 do in a couple of months' time?

Apple is not doomed. Apple makes the biggest profits in the industry. But these phones serve only the top-price niche while all the growth in smartphones is in the bottom price range. These two models come simultaneously so Apple doesn't gain any 'reaction' model for 12 months while rivals bring new models far faster to the market. The iPhone models now are only 'me-too' copies of what others have, with nothing exciting or eclusive to them but still missing many features considered normal in all phones, especially outside of the USA from microSD slots to removable batteries to FM radios to now increasingly, waterproofing. Samsung has been running a mocking ad campaign about Apple iPhone users and I am no expert no what ad campaigns are good or bad, but that campaign certainly draws attention to the fact that the iPhone model range is always very backwards on its tech. At least the camera should have been upgraded now to something near cutting edge, not that puny 8mp it still carries.

And it means that the iPhone 6 is a rare dog in Apple's offering. Its not possible that all rivals suddenly had a big surge forward (LG, Samsung, Sony, Xiaomi, HTC etc). It means that Apple didn't move ahead nearly as much as it needed to. It means that this was a half-hearted effort. Apple's focus was elsewhere (Apple Watch). They took the eye off the ball. The game is smartphones not watches. This is Tim Cook's strategy mistake. The iPhone is the centerpiece of all Apple iGoodness from Macs to iTunes to iPads to whatever level of sales the Apple Watch manages to achieve next year.

Note this means also that the reality starts to emerge to app developers. The iEconomi is a false promise. It is a niche. Niches are not mass market opportunities by definition. That is why there are already so many 'Zombies' in the app stores. The Apps Stores (all of them, including Google Play) are disasters as economic opportunities, akin to lotteries. But the best chances are in the one with the most users, that is ow clearly never going to be the iPhone or iOS. The iPhone App Store will gradually migrate to serve the two segments where Apple is strong -games and advertising/marketing. Those two sectors count for less than one half of one percent of human economic output. The other 99.5% of human effort will now prioritize Android always as the smartphone platform and pretty well ignore the others (except for games or the advertising industry)

Apple made the iPhone 6 again thinner. And why? Who was complaining that the iPhone was too thick? But what do consumer surveys say year after year, we want more battery life! If instead of making the iPhone 2 mm thinner, Apple had made it 2 mm thicker and if not giving us a renovable battery (absolutely vital to those 800 million people living in areas where electrical supply is not reliable) at least give us 50% more battery capacity to the iPhone! That would have been welcomed by everybody. Seriously. If Tim Cook had shown the animation on screen and said 'we listened to your needs and now the iPhone 6 will have user-replacable batteries' - it would have been the longest standing ovation in Apple history. Even if not that, if Cook had shown a closeup of iPhone 5 and 6, and shown the 6 is slightly thicker - then told the audience, the reason we made the iPhone 6 thicker this time, is so we can fit a battery that has 50% more power - they would have cheered him for a long time. But no. Lets make it even thinner than anyone ever requested. Why? Because some nerd showed us a Chinese phone last year that was half a millimeter thinner... Idiots!

So thats my view. Yes, this was needed. I begged for bigger screen iPhones for years on this blog. We finally have them (and to all who mocked me that there will never be big-screen iPhones: whose still blogging?). The camera is now piss-poor for a flagship. Apple will upgrade it next time. NFC finally came to the iPhone (as I've been begging for years, but I was mocked that it was not needed, nobody would use the mobile as a payment device, whose blogging now?). Yes the iPhoen 6 models will sell very well to existing loyal iPhone owners. But they are spectacularly weak compared to all rivals out there now, in terms of winning new customers to Apple. Apple's bleeding market share will continue and I think this year Apple ends with something around 14% market share (full year) and next year powered mostly by this model range, the iPhone market share continues to fall to something near 12%.

A sign to look out for is any price drops. If the iPhoen 6 models see price drops before Christmas sales 2014 or Chinese New Year sales 2015, that would be a very bad sign. Meanwhile we can monitor the performance of the iPhone models in Kantar's monthly numbers.

For all the haters, I am still BY FAR the most accurate forecaster in the mobile industry. I was most accurate to forecast Nokia's fall, Samsung's rise, Apple's inability to capitalize on Nokias fall, etc. I was the only analyst to issue a regional forecast of where the iPhone would sell (and where not) when it originally released. I was the first analyst to alert the industry when Apple's market share growth had ended, calling it before the numbers were out. I make my share of mistakes as does any forecaster but you can't find any other analyst who has more accurately forecasted every stage of the iPhone saga from before the first iPhone was even shown, to where it is now (including the evolution of the iPhone). No wonder I am referenced in 140 books by my peers, and Forbes rated me the most influential expert in mobile. I have over 500 press references by all of the top press from Wall Street Journal, Financial Times and the Economist on down. This blog has no advertising, I have no reason to force you to provide extra clicks to read the story and I don't ask you to register. I won't spam you. This blog is purely my hobby to share my thoughts as the most published author of the moblie industry (12 books and counting). We've been around for 9 years and have had over 5 million visitors to this blog and most of my readers keep coming back. The discussion in the comments section is some of the smartest in the industry. So there, go on and hate me. I will be here years from now to once again tell you 'I told you so'. 

Enter The iFlop, What Will Be Seen as First Apple Failure After Steve Jobs - But the first edition Apple Watch will of course sell massively to iSheep

Today we finally had the launch of new iProducts, the two new iPhone models and the Apple Watch (aka iWatch). This blog talks about the more relevant Apple move. Not the significant upgrade to its popular iPhone line (I will discuss those in a later blog posting). This is about the other new iThing, the Apple Watch. What will eventually be known rather as the iFlop.


UPDATE 10 March 2015 - I have now thought more deeply about these things and after Apple's March 9 Apple Watch event, have posted a totally rewritten article about this topic where my view has become even stronger about the fate of the latest Apple gadget, you may want to read that article instead of this, as it now both updates and supercedes this article I wrote in September 2014. The new article is here.

 

Mobile phone watches, aka ‘Dick Tracy’ style watches with phones in them and then even videophones, have been around for more than a decade. They pop up as newsworthy geeky items every few years usually from Japan. And they have rapidly died in the market place. Regular wristwatch sales have peaked in the past decade and are in gradual annual decline as more and more of us quit wearing wristwatches altogether, because we have a perfect time-keeper device in our pocket, the mobile phone (nowadays obviously for most of us, a smartphone). The O2 All About You study of UK consumers in 2012 found that 54% had quit using a wristwatch already because their time was now kept on their phones. The watchmakers say that its far easier to sell a sixth watch to someone who already owns five, than convince someone without a watch to buy their first. That is part of the world that our brave iEngineers enter today with the iToy.

 

Before you read any further, just a very quick background. Yes, I’m the author of 12 books to the mobile industry including the mobile industry’s first proper business book (how this industry makes its money). Not just geeky techie books, also proper business books. I am quoted in more than 140 books written by my peers. Very few authors still alive today have that much endorsement of their works by their colleagues. I was rated the most influential mobile expert in the world by Forbes. Thats me.

And do I love or hate Apple? I love Apple. I was a Macintosh trainer early in my career back when working for New York City’s first Internet Service Provider, a PC networking company called OCS. When the iPhone was announced and before it started to sell, I was one of the few who predicted accurately that in its first full year, yes the iPhone would hit 10 million sales but not much above that. There were many experts of the handset industry back then who said the 10 million mark was impossible to achieve, it would be a world record for a new phone brand. And there were some Apple-fanatics who felt 10 million was too low and Apple would do much more than that. I correctly predicted the 10 million mark, before the first iPhone was sold.

That is not particularly impressive as it was Steve Jobs’s announced target number at the time. So my ‘prediction’ was more about could Steve Jobs accurately forecast his first year sales than what the market would really be. The truly astonishing forecast by me, was the accurate geographic split of where those first 10 million iPhones would be sold. Nobody else gave a geographic split of iPhone sales before any were even shipped to stores. And I was dead-on with that forecast.

I am the most accurate forecaster of the mobile industry, have been for more than a decade, forecasting perfectly for example the downfall of Nokia and the rapid rise of Samsung. And back to Apple, I predicted accurately that Apple had to launch an ‘iPod Phone’ to respond to musicphone sales eating into iPod sales. Apple fanatics vilified me on this blog for daring to suggest that some musicphones could ever challenge the mighty iPod but we later learned from Apple’s Oppenheimer that exactly at the time when I was writing that on this blog, indeed Apple came to the same conclusion and their answer was then the first edition of the iPhone. I was correct that the iPad would not hold market share dominance in tablets, and that tablets would become bigger sellers than laptop PCs and yet, that tablets would not eat into smartphone sales. As we now see, tablet sales are stalling while smartphone sales at far higher levels are still growing strongly. And one last Apple related forecast, I said from the start that the smartphone apps business was a fool’s errand, that excepting for games, it will be a barren desert where almost nobody makes money. We see now, six years after the iPhone App Store was launched, that yes, 96% of all app developers do not break even. There are a few Angry Birds making the millions but the vast majority of smartphone app developers are poor beggars. I do know my industry and especially how it makes its money.

Thats me. I am an expert on ‘mobile’ but I am not an expert on the ‘watches and clocks’ industry and I am definitely not an expert on sporting goods and health monitoring businesses. Bear that in mind. But yes, we’ve seen this movie before. The iFlop, sorry, the iWatch aka Apple Watch is a rerun. This movie has been done many times and it always has the same sad ending.

NO COMPETITIVE ADVANTAGE

So lets start with the status quo and the competition. So lets do a bit of math here to map out the market potential. The OECD calculates that 2 Billion people are ‘middle class’ worldwide. Note that the OECD definition of middle class is not what we have in Europe or the USA, their definition for the planet goes far below our poverty level, so in poor countries even an annual income of just 2,600 dollars (10 dollars per day, adjusted for PPP ie Purchasing Power Parity) qualifies for middle class in those societies. And the cut-off at the top is 30,000 dollars in annual income. All who earn more than that are classified by the OECD as wealthy. Congratulations dear reader. You might not have known it, but you too are wealthy. We wealthy are only 2% of the planet’s population. So thats another 144 million of us. In total the potential market for a gadget like the iWatch is thus at most, 2.14 Billion people. Half of those who once wore a wristwatch have stopped doing so, so the total user base of wristwatch customers is far less than 1 Billion.

The total global population who can afford buying a smart watch already has a mobile phone and for all practical purposes they all now have a smartphone already (the world installed base of smartphones is already 1.8 Billion. It will be well past 2 Billion by year-end). That smartphone ownership skews very strongly by affluence, in any country, the richest get smartphones before the poorest, so out of the 2.14 Billion middle class or wealthy humans, its the very lowest end, those earning about 10 or 11 dollars per day, who today still have a featurephone rather than smartphone. Those will not be buying any smart watch before they have upgraded their basic phone to a smartphone. So that is the market. That is the direct competition for the Apple Watch. Only half of us have a wristwatch to compare to, but almost all of us have a smartphone already.

 

That in turn brings us to the decisive factor today in mobile phones. Screen size. Hello? Phablets. iPhone 6 proves it beyond any doubt. That pixel density (sharper screen) is trumped by larger screen size, else Apple would not have gone from the 4 inch screen size to the bigger screens announced today. We just heard yesterday from Kantar numbers out of China (world’s largest smartphone market) that 40% of all new smartphones sold in Q2 of 2014 were phablets (screen size 5 inch or larger). I explained on this blog a while back why screen size is the trump card, the overriding factor (and why Apple would have to release larger-screen iPhones. Incidentially many Apple fanatics were here arguing against me, some claiming Apple would never bother to copy Samsung’s lead in large-screen smartphones as first seen in the Galaxy Note).

 

Which brings us to the iFlop. The Apple Watch has a smaller screen than almost any premium smartphones sold today. But we all carry a smartphone and most who are rich enough to afford a ‘second’ gadget, will tend to have a recent premium smartphone, like an iPhone or Galaxy or Xperia etc. And that is in our pocket always. We take it to the toilet with us, we take it to bed with us, we wake up looking at that screen first thing in the morning as every consumer survey globally has said now for years. And the smartphones has a far larger screen. So the videos look better. The pictures look better. The websites are easier to view - and to manipulate with touch-screen. The virtual keyboard is far easier on a larger phablet screen than on a tiny touch-screen. The majority of the time we use on the smartphone is related to viewing content, viewing videos, reading Tweets, watching pictures posted by friends on Facebook, playing Angry Birds, etc. Screen size trumps everything else. And the Apple Watch brings to the game the smallest iScreen that ever existed. Even smaller than the original iPhone from 2007. This is not a compelling offering.

I don’t mean that its impossible and yes, a smaller screen on a phone outsells the larger screens of televisions or PCs. But these are direct competitors for our time, our money and our attention. So in our pocket, glorious 6 inch screen. Then what of that bulky iToy for the wrist with the clumsy small screen. It is not a compelling offering. Some will like it, some will appreciate its benefits, in health monitoring or fitness or whatnot but most of us have a better screen in our pocket already. Now the iWatch screen is losing the game on the most important criterion. Its like going back from the current phablet to an old Blackberry, remember those tiny screens? This is not a compelling offering to regular consumers who are flocking to smartphones and will then take a look at smart watches in the store as well. They will not be impressed.

Do you want to have an alert when you have an SMS text message arrive, or a Twitter update or a call arriving or whatever? Yeah ok, thats nice. But as we have our smartphone already, and it has something called ‘ringing’ and something else called ‘vibration’ - for most of us we can hear the notification and feel it in our pocket. We don’t need to pay an iTax on a new gadget to get a parallel notification also onto our wrist.

That is before we think of the usability of the device. It is big and clumsy on the wrist. The device is strapped to our wrist and that is VERY clumsy in regular use. Imagine twisting your arm always to get the ‘right angle’ to view a video or website or read a posting or message. That is carpal tunnel pains very rapidly. Your wrist will be aching from all the twisting you have to do. Then there is the cumbersome double-handed operation. A phone can be rather easily operated on many functions single-handed. The smart watch will mostly need two-handed operation. This is again a step back in tech evolution.

Zahid Ghadiali of Explano Tech has expanded on my earlier theory explaining the distinctions between personal computers, tablet PCs and smartphones, that I called 30 minute / 3 minute / 30 second tasks. Zahid added the 3 second task to the list, to show where smart watches sit in this spectrum. Consider his table and think where is the big market and where is it not. The smart watch, no matter who makes it, does not create a huge opportunity on this table:




Yes, there will be some market. Yes, a smart watch has some utility.  But it is utterly crushed by what a smartphone can do, and we already own those smartphones and are addicted to them. The smart watch has no chance of replacing the smartphone (and the Apple Watch doesn't work without the iPhone connectivity on most phone features). That means it is an expensive accessory. And one that is mostly useless for most users, unless yes, you are a health-nut perhaps and still want the iBranding on your iWrist.

Wristwatches today are sold mostly as jewelry more than to tell time. All wristwatch owners (and I mean more than 99.9% of them, allowing for the rare eccentric) have a mobile phone which of course tells time. The phone has far more utility than the typical wristwatch from alarms to multiple time zones to bright large lit digits, to calendar sycn to perfect time-keeping from network time that adjusts for daylight savings time etc etc etc etc. The wristwatch is ‘bling’. It is decoration. It is jewelry. And that is where the iWatch falls just in the hopeless midfield of no opporunity. It is not cheap ‘costume jewelry’ of a gold-color Timex costing 25 dollars. And its not a Rolex real bling costing 10,000 dollars. It is not real jewelry but its ridiculously expensive for not being genuine gold or platinum on your wrist. If you get the 18K gold version haha, then that market is about as huge as the Vertu. Yeah, hardly that either a mass market.

It tries to be a fashion item but its inherently nerdy and blatantly obvious. It may be ‘cool’ and desirable for a few weeks for the geeks, especially yes the iToy but a year down the line, it identifies you as a fool and many will feel ashamed to show up with that hideous thing on their wrists. The fashion watch industry will release new cheap models every few months. Apple struggles to do one update to the iPhone per year (vs Sony who does two Xperia Z flagships per year). The iToy will be out of fashion in a flash of an eye. And because Apple will make its iWatch distinctively Apple-ish it will also then stand out like a sore thumb when the hype stage has passed.

Then the iPhone connection. Why? The Apple Watch needs an iPhone even to work. Why? So now the market ceiling is not potentially the 2.14 Billion middle class or affluent humans. The market ceiling is now only current iPhone owners which is 359 million iPhone users. In fact less than that, in that it only works with 5 and 6 series iPhones. So lets call it 200 million maximum addressable market by year-end. This device could have been used to find new customers for Apple. Now it is only an iPhone accessory. Yeah. Call it an iTax. A very steep 350 dollar (unsubsidised) price gadget. Rival smartphones cost far less and do most of the same. That means if you want the functionality for some reason (even after all the failed attempts) you can get far more choice and lower prices for you smart wrist. So among those who might want this kind of functionality, this is a very expensive option, while still not being honest real bling of rich people like a Rolex, Tag Heuer or Omega (who often have top-end iPhones and won't swap their luxury watch for this iToy)

And note, you NEED the iPhone to be with you, for this thing to even have any utility for you. It does NOT allow you to leave your smartphone at home. No SIM card... so Apple concedes the battle immediately that every TIME you strap this thing on your wrist you also must carry the phone in you pocket. At least most rival smartphones can be used as the 'only' device and theorietically leave the phone at home if you go say dancing on a weekend and don't want the bulky big-screen smartphone with you. This device is dependent on the iPhone. So it is even a lesser offering than many rival smart watches.

Then yeah, you have to recharge it all the time. Many of those who still wear a wristwatch (and can afford a smartphone) have long since stopped worrying about the watch stopping to run. The Apple Watch will stop telling time when the battery runs out... and thats in days not years. Lovely inconvenient device.

This is no revolutionary device like the iPhone was or the iPod was. This is a me-too device that is perhaps a bit better than the rivals and yes, its iCool if you like that. It won't be a commercial mass-market success, its reach is limited to only a fraction of existing iPhone users, ie by definition a niche market. Out of those, its a very expensive accessory which serves no real purpose apart from the health parts, and that is a very tiny slice of iPhone users who will bother with that expense, in particular as far cheaper and less intrusive wrist-based health solutions already exist.

I understand that Apple spent a lot of time designing this thing. They have so much invested effort in it, they might just as well take this abusive tax on loyal iPhone users, to buy another iGadget. This one will not last long on those wrists. Some users will find it very useful. They will wear them proudly and buy the next edition. Most who buy the first Apple Watch will tire of it just like they've tired of all past watch form-factor digital gadgets, however smart or not. This is not a mass market. The first edition will sell well because iSheep. Many will buy the first edition thinking there is some investment value. But most who wear this thing in the coming months will not wear it a year from now. And they won't buy another Apple Watch 2.0 nor a rival smart watch. Most who buy the first edition will be disappointed, find it mostly redundant and useless weight on the wrist. Thus the first edition will have good sales and the Apple investors will love the new sales. The next editions will be seen increasingly as flops and Apple will discontinue this product after a couple of editions. This is their rare iFlop. Sorry. Won't hit anything near iPhone or iPad level sales. And won't achieve return business in subsequent editions.

Incidentially, the hype around smart watches will now help Galaxy Gear and other smart watches for a little while and those cute and clever Apple-ish wrist-apps will be rapidly copied into the Android world.

That is what I think of the iFlop. Sorry Apple, I so hoped you would surprise us and wow us and somehow prove you can reinvent this form factor. You failed. This will be similar to how the Newton fared, a technically brilliant product but one that never found lasting business and market that was eventually killed. 

As a side note, when the iFlop numbers are reported about a year from now and the new editions won't match the past sales, this will be seen as a danger sign for Apple that the Steve Jobs magic is gone and this will be seen as Tim Cook's blunder.