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« Obviously my forecast was totally wrong on US Midterms. What happened to Democrats?GOTV sy | Main | So What Do We Learn From the Nokia N1 Tablet on Android? »

November 07, 2014

Comments

adi purbakala

@baron

Apple situations is bb situations 7 yr ago.
Current successful do not guarantee future successful.

If apple marketing share keep down. Apples will be unrelevant soon.

Winter

@Boron95
Thanks for illustrating why commodization was not priced in Samsungs shares. Your believe in the Apple bubble is exemplary.

Share holders are like smokers in that they are unable to believe the warnings. "Past results are no guarantee for the future", and "smoking can kill you". But that does not hold for me, as I am unique.

WonTheLottery

There are signs European app developers are starting to go Android first:
http://uk.businessinsider.com/facebook-sees-android-first-app-developer-trend-2014-10

mark

@WonTheLottery

Thanks for the article link. Very useful info. Similarly, this developer blog describes the abandonment of devs from the Mac App Store. http://blog.helftone.com/mac-app-store-the-subtle-exodus/

I think Steve Jobs carried the company and without him all signs are pointing to a shrinkage happening. Not a sudden snap, but a slow ant trail.

To get a sudden snap, we'd have to see a new contender of the Elon Musk-Tesla variety come in at the luxury level and cause an over night disruption.

Along dev marketshare lines of discussion. With a mature App market starting to firm up, nothing revolutionary is going to get released, as all the early innovators launched their canoes. HOWEVER, the next wave will be utility apps aimed at the average joe such as banking, taxes, clerical, paper work, procedures, forms and work driven. If you're a gov agency or large service firm that makes an app as an extension to your core business, you would have to target Android. iPhone users may have to invest in an android device just to file their paper work. I'll have to do more research but its obvious where the next wave is going and which platforms will be supported.

Phil W

Pretty much agree with you Mark, but I don't think they will abandon IOS completely, it will just get secondary treatment.

I'm glad I crack you up Baron, but you my friend are living in cloud cuckoo land. Up until now every year Apple has added enough new to entice people to upgrade, but I think the Iphone has just about reached the end of the road for major upgrades and that will cause people to keep their phones longer and make last years cheaper model much more attratctive to any potential newcomers. So it will be impossible to keep the same ASP and sales volumes. Apple will keep the ASP high and sacrifice market and sales. I would think they have thought this through and will be content with a market share about the same level as with the Macs. So don't get me wrong, I am in no way suggesting that Apple is doomed or doesn't know what it is doing.

And if you are seriously deluded enough to think that you can maintain a high margin business and high volume business when the development process has reached its limit then I would be interested to know any examples that prove that. Won't happen.

Phil W

It is also interesting to see that companies like Barclays Bank, Easyjet and Brittany Ferries have now built a much improved mobile web experience, so perhaps the penny is beginning to drop with these organisations. Companies I am a customer of and important to me as I run an outdated operating system that doesn't merit the attention of App developers.

abdul muis

@Phil W

"but I don't think they will abandon iOS completely, it will just get secondary treatment"

First, they give iOS second treatment, then, iOS lose the premiumness, the cool factor of any-apps-always-iOS-first, after that, it become second-grade OS. Then some apps will, some apps will not support iOS. This is the cliff that Tomi talk about. Once it reaching the tipping point, it would not be easy to make it right again. Look at blackberry. They were too late to react to iOS/Android threat, and now, they could only survive with less than 1% market share.

Having as big profit as Apple can is NOT a smart way to stay in business. It's only bring benefit to the share holder. Apple should lower the profit by introducing cheaper (not last year) product, and get more market share.

abdul muis

@LeeBase

Android DID NOT have 85% marketshare as of now. It grab 85% of new phone sold, but the market share is NOT 85%.

Look at Tomi's post (this very article):
Q3 2014, it's 74%.
Q2 2014, it's 72%
Q2 2013, it's 58% -- one year back
Q2 2012, it's 41% -- two years back

The thing is, big (PREMIUM) apps such as game weight 1GB+, were not build over night. Some apps (game) were build a year, some even more. So, the effect of 70% vs. 19% of market share to the apps (game) ecosystem will not be now, but in 2016 or 2017. This is when the hard core (gamers) will switch platorm to Android. This is where the one that bring BIG $$$ moves to android.

RottenApple

Congratulations to Leebase for finding the one outright false statement in the article and quoting it. It's funny that you always come back to that bogus 'fragmentation' claim that holds no merit whatsoever, unless you are inept.

The rest of what you write is bullshit, too, you seem too focussed on US business data.
You should also get a grip on reality: Many services are not meant exclusively for the rich and affluent, they need all the 'normal' customers they can get - and those are not on Apple. Period.

You also seem to preoccupied again with making direct revenue from the app, which has been clearly shown, is peanuts. The real business lies elsewhere.

It is true that the US market is quite lopsided in Apple's favor but in the rest of the world, being on Apple first means nothing if it means alienating 90% of the people around. That may be economically feasible if you do not have a good product at hand and want to make a quick buck with the undiscriminating Apple user - but real world economics to not tick like Apple does - and this discrepancy will only increase.

No matter how hard you and Baron and the rest of the Apple shills try to deny it, the scale is in the early stages of tipping right now, at least it is outside North America. Apple once was the ultimate first platform to go, it'd have been harakiri not to do so, but that's no longer the case. The masses don't take well being constantly underserved by ignorant idiots, and this does affect business for many companies that use a service app. Customers may switch to a competitor that takes Android more seriously.

Last but not least, don't ever confuse the spike in Apple's numbers right now with actual growth. It's merely the result of finally, after how many years(?), to listen to their customers' demands and offer larger screens.
Next year that will be gone and growth curves return to normal.

King_of_q

@leebase

Why do you think that the difference between Android and iOS on ad revenue, app revenue etc. will get bigger, just because android phone makers earn less?

I don't see the connection between these two things.

Just because my next Android phone might be 200 € cheaper, that doesn't imply that I will spend less money on apps etc. Maybe I might even use that saved 200 € to purchase apps. The last one was a joke :p

RottenApple

@Leebase:

That's not what I meant. You quoted that nonsense about fragmentation which was flat out incorrect.

You are also wrong and persistently ignore the facts. I sit right at the source and can tell you that my employer's revenue on Android has surpassed iOS last year and significantly increased this year. Of course our market is Europe, not the US.

So, to no one's surprise, our next product will get priority for the Android version, although our workflow is not so stupid as what seems to be the rule with many developers. We do not finish one platform and do the second one afterward. We start right from the beginning on both platforms with the same code so that we don't have to redo all the gory details yet again for the second platform. That way we do not have a 6 month gap or some inferior or unsatisfactory product for the second platform but right from the start something that works well on both.

The writing is on the wall: In most European countries iOS is slowly but steadily retracting into the luxury niche, but that's utter poison for mainstream services to start there. So obviously, priorities will have to change - and that will put strictly iOS centric US companies at a significant disadvantage if they don't wake up.

Cheaper phones do not inevitably mean less affluent customers, it mostly means that many customers do not see any point in spending money on overpriced high end hardware, if something for half the price can give them the same user experience.

"And really, folks have been claiming Android's dominance in app ecosystem is arriving "real soon now" for YEARS. "

Define YEARS. The first time this seriously came up was two years ago, and in those two years the shift of focus away from Apple has become quite strong, of course you cannot see that in Apple-land. But it has become quite rare here in Germany to actually see people use an iPhone. Wherever I look, be it in schools, offices, bus stops and what else, Android dominates. Two years ago this was different.

Fact: We don't have dominance yet, but what we have is two platforms with nearly equal weight in ecosystem power. That wasn't the case last year, and most certainly not two years ago. The direction things are moving in is abundantly clear. But feel free to stick your head in the sand, ignore the signs and be surprised if things do not turn out like you'd like them to. And of course admitting to these facts would mean that Apple is going to lose.

EduardoM

I think Microsoft is going to get rid of Nokia, either shutting it down or selling it. In fact, I think it will probably happen in the next six months.

The reason is simple. Microsoft has changed its basic strategy. For decades its strategy was Windows Everywhere. When touch-based smartphones took off, it was forced to develop a touched-based smartphone version of Windows in order to try to keep up the strategy.

But under Satya Nadella, Microsoft has changed its strategy to Services on All Platforms, so it no longer has a reason to waste money on a failing Windows smartphone strategy. So Nokia is dead, and likely Windows Mobile, too.

KPOM

@RottenApple, I hate to break it to you and Tomi, but Europe isn't the center of the universe. Stop burying your heads in the sand. Europe is a dying continent that quite literally is fading away since your people, quite frankly, don't have enough children to sustain your way of life. You are quickly running out of other people's money to spend. After 5 decades of European integration, it's still the case that when the US gets a cold (2008), the world gets the flu.

Bottom line, it's much better to have 40% of the American market and 15% of the European market than to have 45% of the European market and a small part of the American market. Just ask Nokia.

abdul muis

@KPOM

America only represent 7% of world market!!!
Europe, along with the rest of the world FAVOR android!!!

Without USA, the Apple could not get 12% of (new device) market share. It would roughly only 7%.

Winter

@KPOM
"@RottenApple, I hate to break it to you and Tomi, but Europe isn't the center of the universe. Stop burying your heads in the sand. Europe is a dying continent that quite literally is fading away since your people, quite frankly, don't have enough children to sustain your way of life. You are quickly running out of other people's money to spend. After 5 decades of European integration, it's still the case that when the US gets a cold (2008), the world gets the flu. "

GDP 2012 in $B
World 71,707
EU 16,584
USA 16,245

So, in 2012 the economy of the EU was bigger than that of the USA.

RottenApple

@KPOM:

My, my, aren't we more than a little bit arrogant?

America is not the center of the world, either, and is quite irrelevant if your business is elsewhere - which normally is the case for nearly any service provider outside of information technoligy that may want to use an app.


But I guess this little fact goes over your American pea-brain.

RottenApple

@Meggan:

"The fear I think many long time Apple users have is that Apple will become the brand it was in the time before Steve Jobs came back. Boring products at high prices, compromised hardware and software. Even though some Android fans feel that's exactly where Apple is now, to me it's nowhere close to the early 90s."

No, it's not as bad as back then but since I am working in the business I meet people and get to know their opinion. And a not insignificant portion of Apple customers think that their quality is no longer what it was a few years back when Jobs was still alive.

I think a lot of where Apple will go depends on the influence Steve Jobs had on keeping the corporate attitude at check that was responsible for the misdevelopments 20 years ago. If the same kind of people get more influence over time things can turn bad rather quickly. Making a product with such a high vendor-lock-in factor as iOS devices is always a delicate thing. As long as the surrounding ecosystem stays relatively free of poison it will work nicely, but someone has to actively keep it poison free - and that includes poison from the own management.

Jack D

Samsung's business was eroded by the onslaught of cheap Android phones from China. Android users always tend to be more budget conscious (witness the grumblings about the Nexus 6's premium price), and the folks who want to spend more money have already sided with Apple - good luck getting them to move out of Apple's ecosystem.

Besides, the Samsung experience isn't all that great (Touchwiz and other bloated crap). Samsung is good as a hardware parts manufacturer, but it just sucks at software. If you want a good non-stock Android experience the HTC Sense skin is much better.

Which brings me to my next point: the Microsoft Lumia 535. Microsoft wants to compete with the cheap Android phones with a Windows phone, and yet at the same time drop the Nokia branding, thinking that the Microsoft branding alone is alluring enough to boost sales (just like Apple).

Sometimes I really want to know what is the good stuff they're always smoking at Microsoft.

Phil W

Firstly I agree with Baron that Apple will function perfectly well with an 8% market share, but I do think that is where it is headed.

And I agree with Jack D, Apple users are not going to rush out and switch to Android, but sales are going to slow, because to persuade someone to replace a £600 phone every year requires a significant improvement in the phone, either in performance or functionality. Something that you wish to do that can't be done on the current hardware. Up until now that has been the case, but in my opinion we are at the point that it will be increasingly difficult to add significant additions to drive the yearly upgrade cycle. People will just keep their phones longer and longer. And talk of contact lens screens is just fanciful nonsense.

That is in part what has hit Samsung, its latest premium offerings don't add much over last years model, so people either stick with last years model or if they are new buyers they choose to buy last years model at the lower price.

Of course Samsung was squeezed at the bottom by the chinese manufacturers and at the top by Apple, but that's not the whole story. That's my opinion for what its worth.

I think the ecommerce question is interesting. I think the reason why Apple punches above its weight is because a lot of the ecommerce business originates in the US where Apple still retains a preeminate position. So for that to change will require the balance to shift in the US regardless of whether it has already happened elsewhere.

And way to go KPROM, feel you are losing the argument, so resort to slinging insults at us Europeans. Clever....not.

AndThisWillBeToo

Guys.
Apple does not have their customers in a lock-in to their ecosystem. The day Cook steps out and proves Apple has the lock-in is the day their share price doubles overnight. Google stock will drop and Samsung will crater.

That day may never come (I hope it doesn't) but if it comes, you'll notice it.

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

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