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'. 

Comments

[Colin Crawford]

@Tomi, you may be correct about the Apple Watch but it's the first innings. I took the opportunity to re-read many of your predictions around the launch of the iPhone - then you were full of reasons why Apple was likely to stumble and struggle to get to significant sale - but it did not stumble. A company that was near bankruptcy in 1997 is now one of of most valuable companies in the world and mobile is it's core strategy. Apple will likely sell 100MM iPhone 6s Apple, globally it's the most profitable manufacturer of smartphones. It has deftly navigated a market it had to enter as a raw incumbent back in 2007, eliminating Blackberry, Nokia and others along the way who failed to appreciate the need for open access to the full internet on mobile - that move by Apple, alongside a developer eco-system changed the game. Without Apple - the Japanese, Koreans and Europeans would have desperately tried to restrict users to "walled gardens" You speak of the challenges with the apps stores but do not really dig into the in-app purchases and premium services, which are much stronger on the iPhone. Today, only Samsung, liberally borrowing from Apple is now a real competitor in marketshare but not profits. However, as the Chinese lock down their market - both Samsung and Apple may face significant challenges in this region. It will be interesting to come back in a year and re-examine the numbers. I'm an Apple fan having run MacUser UK and Macworld US from 1987 - 2003 and I believe Apple's understand the customer experience and total eco-system far better than most of their competitors. It's far from perfect and should be called out when it missteps. The Android / iOS war have echoes of the past. I remember well the specs wars in the PC-era - speeds and feeds were marketed as the differentiators when what was really important was the ease of use. From the customer perspective - competition is always welcome and prevents any player resting on their laurels. I look forward to continued mobile innovation no matter from which source it comes. "Religious" wars are tedious and unproductive - we need to work to push the whole industry forward rather than just focusing on particular companies.

[JMM]

Deceiving and lame reading, confusing also.

After (and before) this:

"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."

You spent thousand of words writing about market share.

Apple is about profit not market share, Microsoft won the desktop's war, no HP, no Dell, no Lenovo. Google is wining the smartphone's war, no HTC, no Sony not even Samsung who will see the same fate of the computer OEMs.

Apple is about UX and usability not about specs, Macs always performed better than their windows counterparts same goes for iPhone vs. the rest. Is like saying that a Ford Taurus is better than an Audi A6 because it has more cc.

I'm pretty sure that Tim Cook cannot sleep thinking about people in Kenya and the lack of radio in their phones, writing this means you know very little about Apple...

Worst insult (well, not insult but very annoying) is your mention to the Z3, do you know that the Z3 is a Z2 with a rounder frame? I can imagine a bunch o comic people at Sony saying "we have to lunch a(nother) flagship in H2/14 but we are not ready", and a small and wise Japanese guy answering "WTF, let's lunch the Z2 again with a slightly tweaked chassis". They are telling "sony customer, screw you up, your Z2 was made obsolete by the same freaking phone!!!"

I usually enjoy your readings, not this one, very sub par.

[Janne]

I'm sure Apple would be able to make a device with all the features in the world, but the question is why would they do that? The design is above everything. They are profitable in what they are doing; it's a well crafted model which is carefully steered forward.

There's a pattern of creating a desire. Just at the final point Apple introduces features that satisfy that desire. It's a slow intravenous drip that's borderline sadistic, but it works. I think that of all of the players in the market Apple understands and exploits the emotions best, and this will keep them well afloat.

[Enyi]

http://www.engadget.com/2014/09/16/iphone-6-and-6-plus-review/

"iPhone 6 and 6 Plus review: bigger and better, but with stiffer competition."

"Even though this is Apple's first attempt at building large phones, it's not breaking new ground -- in fact, it feels more like the company is catching up than innovating."

The review above echoes Tomi's opinion.

Even pro Apple blogs like Engadget can see the Emperors nakedness. They are still not as fair on Apple's competition, still very biased. TheVerge, in particular is horribly pro Apple. Thankfully, these are US centric blogs.....relatively insignificant in the context of global mobile. I will wait for gsmarena review.

[Enyi]

The pro Apple bias in US media is sickening. The likes of Mossberg and Pogue are more or less an extension of Apples marketing department. The UK also has Charles Authur of the Guardian newspaper playing second fiddle to these mugs.

Thank goodness that the US is no longer that much influential in mobile. Read more of the disgusting bias below. Apple has got the US media under a barrell. No doubt.

http://www.businessinsider.com/iphone-6-first-reviews-2014-9

[abdul muis]

@Enyi

Talking about bias, I think this is the worst. It's like being written by AppleTurfer & Baron95
http://www.ibtimes.com/iphone-6-vs-android-9-signs-youre-samsung-user-who-should-switch-apple-1690023

iPhone 6 vs. Android: 9 Signs You're A Samsung User Who Should Switch To Apple

Your move, Samsung. For years, big-screen smartphones powered by Google Inc.’s (NASDAQL GOOGL) Android operating system have been chipping away at iPhone's market share, particularly in emerging markets. But with the introduction of the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus, Apple Inc. (NASDAQ:AAPL) just copied the killer feature of most Android phones: big screens.

Pre-sales of the iPhone 6 and 6 Plus ahead of the devices’ Sept. 19 launch are breaking records. How many of these iPhone buyers are Android converts? We'll have to wait for the sales data. But if you're Apple fan living in an Android world, here are some signs that it might be time to switch:

You only chose Android for the large screen. Devices powered by the Android operating system have dominated the large-screen market for some time, with manufacturers commonly releasing devices with displays that surpass 5 inches and some that even surpass 6 inches. The previous protocol was: If you wanted a large phone, you likely opted for an Android device because Apple stubbornly released device after device with 4-inch displays.

Now, the iPhone 6 features a 4.7-inch display and the iPhone 6 Plus features a 5.5-inch display. Both devices cater to two very important sectors of the market. Analysts say that devices with displays larger than 4 inches but smaller than 5 is currently the fastest growing market, while devices over 5 inches are a vital niche market that does not have many devices at premium price points and specifications. It is believed that with the iPhone 6 and 6 Plus, Apple is trying to win back the Android users it previously lost due to device size.

You find Android interfaces too difficult. Apple’s iOS operating system is known for providing a simple and streamlined user experience, while the Android operating system is more focused on customization and ongoing development of applications and other features. Many programmers and hackers often opt for Android for this reason, but the variation in the software might be too much for a layman user.

The Android user experience can also vary depending on the brand of the device due to the custom software that manufacturers add on top of Android. There is pure Android found on Google’s Nexus line, the TouchWiz UI for Samsung (KRX: 005930), the Sense UI for HTC (TPE: 2498), the Optimus UI for LG (KRX: 066570) and many others. But the Apple user experience will be the same on the iPhone 6, iPhone 5s and so on.

You’re frustrated by infrequent Android updates. Apple is also completely in charge of sending software updates to all its supported devices, which means that updates become available for all iOS devices at roughly the same time. The process for receiving Android updates is much different since for most devices, the software has to go through device manufacturers and mobile carriers before they reach users. This often leaves devices without updates for several months following the release of a new Android system version. In particular, this could leave users with unfixed bugs and other issues for an extended period of time. Though Google is making an effort to fix this issue by optimizing its latest system version to be compatible with more devices, most Android devices still run a much older version of the operating system.

Your entire electronics ecosystem is Apple except your phone. Somehow you own a MacBook, an iPad, an iPod; all of your music is on iTunes, yet you have an Android smartphone. Dual fans of Apple and Android know all too well the stringent incompatibility between the two platforms. Connecting an Android mobile device to an Apple computer will prompt the Android File Transfer feature, which allows users to manually move files from one device to another -- instead of automatically syncing files. This is only one of many roadblocks of having incompatible devices. Tried and true Android smartphone fans with Apple computers will be accustomed to this, but if it’s too much of a hassle for you, it may be time to switch to an all-Apple device lineup.

You’re concerned about safety. Despite the major iCloud hack during which intimate photographs of several celebrities were stolen, Apple’s software is considered some of the safest on the market. Apple encrypts both its software and hardware, so that all information on its devices is confidential. The Android platform is considered open source, which means anyone can access the system’s code and modify it to their liking. While most developers and programmers use this ability for good, there are many that do not. The Android operating system reportedly contains 97 percent of all malware on the market. The truth is, no software is completely safe and it is quite easy to protect an Android device from malware threats. But for some, owning an Apple device gives an extra sense of security.

You’re interested in Apple Watch/Apple Pay. Apple also recently announced its new device Apple Watch and its new service Apple Pay. Consumers shouldn’t be surprised that these new products are compatible only with other Apple devices; so if you want to use either, you’d have to bite the bullet and get an iPhone.

You can’t decide on which Android device you want. Samsung recently announced its Galaxy Note 4 and Galaxy Note Edge smartphones; there is also the Sony Xperia Z3 and the Motorola Moto X (2014) among the latest Android-powered devices. In addition, there are many Android devices that released earlier this year, such as the Samsung Galaxy S5, HTC One M8 and LG G3. The question becomes which do you choose? If you’re unsure, an easier question might be: Do I choose the large iPhone or the larger iPhone?

The new iPhone will be available in just a few days. The iPhone 6 and iPhone 6 Plus will be available for purchase on Sept. 19 and the devices are already available for pre-order. Not only have the new iPhones sold more than 4 million pre-orders, they are expected to surpass 10 million handset sales during their introductory weekend. The iPhone 6 launch is expected to be the largest in Apple history. Additionally, mobile carriers are offering several deals in order to get customers to purchase the new iPhones on their network.

You want the new U2 album. While many iOS users are trying to figure out how to delete the new U2 album “Songs of Innocence” from their iTunes library, perhaps you’re still a fan on Bono. Notably, the album was sent to users for free during the iPhone launch event last Tuesday. This might be a sweet deal for some -- buy the iPhone 6 and get the new U2 album free.

[abdul muis]

My 3 favorite quote from above bullshit were:
1. You can’t decide on which Android device you want.... [...] ....If you’re unsure, an easier question might be: Do I choose the large iPhone or the larger iPhone?
2. You want the new U2 album..... [...] ..... This might be a sweet deal for some -- buy the iPhone 6 and get the new U2 album free.
3. You’re concerned about safety. Despite the major iCloud hack.... [...] ...The Android operating system reportedly contains 97 percent of all malware on the market.... [...] ....But for some, owning an Apple device gives an extra sense of security.

[Huber]

@Apple Turfer:

>>Apple's market share has gone down is debatable. Apple's share of the mobile phone market continues to rise. What you have is a erasing of the line between feature phone and smartphone. $100 Android phones are competitors to feature phones, not the iPhone and not the Galaxy line. So, really, if one MUST include the cheap Android phones, might as well consider all mobile phones.

Mobile phones are distinguished by features, not by arbitrary price points.

A $100 Android-phone actually has more features than your iPhone (file browser, sideloading, Bluetooth file transfer, any app can be replaced and even be set as new default app just to name a few), so the comparison is valid.

You cannot just introduce new rules to the game to make Apple look better.

>> they came up with an innovate way to help the large screen version via the double tap to bring down the far top of the screen into thumb range.

The first Samsung Galaxy Note in 2012 already had a similar feature, so again Apple is copying Samsung. The first Note even had pen input, a feature that the iPhone 6+ lacks.

Also the Galaxy Note has multiwindows to run 2 apps side by side. Apple does not have this feature - perhaps they copy it next year :-)

[Enyi]

Apple press vs Tomi Ahonen? No chance for Tomi lol.

See video below, the bias is disturbing :

iPhone 6 Review: Now Fewer Reasons to Get an Android…: http://youtu.be/SFCLYDwsjOA

[Ethan Hawk]

Apple is a margin company and will defend margins rather than market share. Nothing has changed since 1976

iPhone's biggest threat is not the standard giants (samsung etc) but rather niche products with enough brand value to address the key USP's where Apple fails. Apple is the generalist for the niche market.

1. Music - Nothing has changed , iPhone is still and iPod touch with telecoms jacked onto it. The challenge is that the ipod/itunes environment is still stuck in 2007 (hardware wise)

2. Camera - Come on seriously?

3. Portability - the iphone lacks scalebility which means that it is not a real productive tool. Sorry but its not really even good enough as a telco tool or note taking device. Most iPhone users (at least in my micro cosm) has secondary devices.

This means its the brand (Apple) and that it is an awesome brand with a good enough product.

Samsung, Sony, HTC .... seriously crap brands. Just NO lifestyle . The only thing keeping them alive are massive advertising campaigns. So is Apple that great or is it because the rest are so crap?

Fiona Keenan, consumer insight director at Kantar Worldpanel ComTech says that the (lifestyle) trend is most worrying for HTC and Samsung, where 29.7% of their current users would choose a phone based on other reasons * (hardware, OS, features), but only 6.5% on the (handset) brand.!

The smart phone market is about to change and Apple as a company is just TOO dependent on the iPhone for their own good.

[RottenApple]

@Janne:

"I'm sure Apple would be able to make a device with all the features in the world, but the question is why would they do that? The design is above everything. They are profitable in what they are doing; it's a well crafted model which is carefully steered forward."

You are absolutely correct about Apple's actions.

There's just one problem with this: Apple is acting as if they existed in a vacuum without competition. And that only works because the typical Apple customer tends to completely ignore what the competition does, assuming by default, Apple is 'best'. This can work for some time - but not forever.

[No doubt]

@RottenApple

"And that only works because the typical Apple customer tends to completely ignore what the competition does, assuming by default, Apple is 'best'. This can work for some time - but not forever."

The question is, when will this change? Will it take 10 years or a week?

[RottenApple]

@No doubt:

Very hard to say. What's sure is that Apple knows its current customers and completely plays their attitude to maximize profit.

But as market share numbers tell, they don't gain many new customers this way, the iPhone business has become mainly an upgrade-business and as such might be sustainable for quite some time.

The real threat comes from secondary effects of this strategy: Smartphone marketshare will inevitably fall further. And since that marketshare is very unevently distributed among countries, with almost half of Apple's customers located in just two countries - USA and Japan - it will also mean that in other parts of the world that marketshare can easily fall below a critical mass where iOS is merely considered an 'also ran' platform, and if that happens, then Apple really has a huge problem on its hands.

Imagine what would happen if some highly popular local service decided not to support Apple anymore due to low marketshare: Customers may switch platforms in a hurry to be able to continue to use that service (or Apple may be forced to pay that service for continued support - and should that happen only once, all dams will break loose, we already see with Microsoft how such a strategy ends.)

The thing is, what Apple does is great for their short-term profits, it ensures it can milk the same customers over and over and over again, of course they'll report record profits each year. But what they really need is to expand their reach to other customers to keep their marketshare above this critical mass. The Apple 'ecosystem' is gravitating towards services, not devices. But these services need users, lots of them, and many of the potential users do not use Apple due to their strategy that's all about squeezing the most profit out of the market.

[Spawn]

@TDC123

> of those how many can afford even a data plan !!!

A typical smalltown question. First the need for a "data-plan" for internet is not typical but exceptional. Typical is prepaid. Second the price you pay for your data-plan is insane and not normal.

Remove this both, bound through data-plan and high data prices, and add to the mix rich competition, an amazing portfolio of devices, a strong second and theird hand market, newer devices, way more customers. That explains why the turnaround-times, how long people here stick to a device before replacing it, are much lower here compared to US. Here (asia) lot of people change there smartphones more often then underware.

@RottenApple

> The thing is, what Apple does is great for their short-term profits

Exactly. Longterm iPhone goes the iPod way fading out and be replaced. Can Apple offer the product that replaces it? I would certainly see iPad, iPhone6+ and the Watch as attempts. iPad opened new channels, attracted nee customers, smashed. Now with Cook we got 6+ and Watch, both more iphone accessoirs then game-changers. Milking old cows rather then born new ones. Shortterm more profit but longterm... and that they have in common with Microsoft. Milking the old cow, more profits now while the WP/Surface-cows die and they are doomed to stick with a cow that wil not survive forever.

Is Apple without Jobs able to do betternthen Microsoft under Ballmer did?

[AndThisWillBeToo]

@spawn
You are now mixing data plan and American silly tariffs.
My kids have data plans with literal "all you can eat" data usage, i.e. no limit for megabytes you want to download. They pay 2 EUR (2.6 USD) per month for it.
Where's the catch? The speed is limited to 384kbps. Enough for most browsing, enough for WhatsApp, Skype (save video), Internet radio, Wordament,...

My wife has similar no-limit data plan except she has 4G LTE with speed of 50Mbps. She uses YouTube, Netflix, Spotify, etc.

My kids bring no value to carriers, app developers or service providers. They use every service as free version if they can. They don't have money to spend. My wife does. She pays per month for Spotify and Netflix. She needs fast data.

Guess who would be glad to have FM radio in her Lumia 620 and who couldn't care less?
Guess who is in the Apple target group and who is not?

[AndThisWillBeToo]

Oh one more thing: My wife's subscription costs 25 EUR (32USD) per month. Literally over an order of magnitude more than those of my kids.
Carriers want one of these as their subscriber. Guess who that is?
Samsung, Apple, LG, Huawei would primarily want to sell their phone to one of these. Guess who that is?

So what comes to Tomi's text:
Yes, Apple MUST have FM radio.

[Spawn]

@AndThisWillBeToo

> You are now mixing data plan and American silly tariffs.

Please read again. I wrote "First dataplan [...]. Second pay".

> My kids bring no value to carriers

Try to think outside of the personalization concept, think prepayed. Anybody can buy the same thing independent of personalized usage/services/... But it doesn't stop there. Know what promos are? Like if you open/start to use the prepayed card at a certain date you get double that. Like if you have a codeword you can tribble that. Like if you pay two such cards and stack them you get 3 (pay 2, get 1 free). Like replay to a certain sms and you get ...

Its not fixed price. Its not fixrd service either cause you can, at anytime, switch between 2G or 3G for example, surf 10 minutes and pay half using 2G and full using 3G depending on region, datetime, ...

Point is unlike your upfront 2 years contract with fixed datalimit, speed, etc. its variable. It depends on you and your willingness. The carriers are in competition and that all of thentime. They do not have you for two long years. You are not bound to them.

Think a bit future. Why are dualsim phones standard in that context? Imagine you buy 2 prepayed cards from two competing carriers and use them the same time. If you call your friend X whos at carrier N and you are at carrier N too the call is free. So, you are gonna use your carrier N prepayed card. If you are in a region where carrier N has bad connecrion you can swit h to carrier M. If carrier M has a special offer, like surf today pay the half, you are gonna use carrier M for mobile internet. No problem cause when you are not using your carrier N card for a week you not lose anything.

Point is, there is no fixed dataplan. The price of the orepaydd card is fixed. You are in charge to make out of that prepayed-card as you see fit.

That is competition, service and choice.

[Pissed Off]

Tomi is so full of himself that he now believes that he has predicted everything that can ever happen in mobile.

[Huber]

@AndThisWillBeToo:

>> Oh one more thing: My wife's subscription costs 25 EUR (32USD) per month. Literally over an order of magnitude more than those of my kids.
Carriers want one of these as their subscriber. Guess who that is?

Does your wife even get a subsidized phone with this contract?

The people I know with ~€20-contracts do not get subsidized phones anymore, it's just the SIM card. If you want to have a phone on top, you pay an extra fee (IIRC about €25/month for an SGS5 or iPhone 5S).

[Spawn]

@Huber

> Does your wife even get a subsidized phone with this contract?

That is a thing I actually not understood in Tomi's article. It sounds as there are still subsidized phones?

I made and still make complete different experiences in asia. There are no subsidized phones available at all since many many years. Its near impossible, or somebody needs to look really hard, to find such offers. China Mobile, sure, but its just a very special case.

Everywhere where there is choice, real choice, subsidized phones are long gone. Nobody is willing to stick with a phone for 2 long years here let alone would sign into 2 years fixed phone/data contracts. What was the number? 98% are on prepayed? My experience says 100% and there are no alternates. But this 2% are maybe business contracts. Still, why would a business buy subsidized phones?

I just not saw that since years. No offers available at all outside of such special cases like china mobile.