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« Some Smartphone Market Updates - Xiaomi, Huawei, Blackberry, Palm, TCL-Alcatel, Lamborghini | Main | Grand Convergence Means Grand Competition (Google, Apple, Facebook, Microsoft, Samsung, etc and all the mobile operators/carriers) »

January 10, 2015

Comments

AndThisWillBeToo

@Tomi
"In smartphones the 10 biggest global brands control nearly 80% of the global market"

Sorry? Your own Q3 numbers say that those outside top ten sold 27.4% of phones sold. Is this going to change to ~20%?

Tomi T Ahonen

AndThis

Haha good catch but Q3 was not very indicative of the full year. Apple had its lowest point of the year and Lenovo and Motorola were still reported separately while they'll be reported as one brand in December 31. So it'll be about 78% maybe for the Top 10 brands and 22% for the rest. Closer to 80% than 75% or 70% as my math currently shows. Depends mostly on how good/bad is Samsung's last quarter and how great is iQuarter 2014.

Tomi Ahonen :-)

AndThisWillBeToo

@Tomi
OK, thanks.
To the actual topic (Xiaomi): Who are you talking to? I haven't seen a single seriously taken analyst say that Xiaomi is new Apple, will take over the world or be the next Apple.

I've multiple times heard that Xiaomi is "the Apple of China". That has some sarcasm in it because:
Xiaomi sells cheap phones (Apple sells expensive).
Xiaomi copies Apple blatantly.
Yes, Xiaomi has grown at insane rate _in_China_. That is rather unexpected but is happening as it is extremely unlikely that Apple will sue Xiaomi in China. The moment Xiaomi entered India they faces their first lawsuit. Blatant copycat that sells in millions inside China, insane growth rate in China...
...hence "the Apple of China".

Who's saying the rest?

AndThisWillBeToo

And now that I'm on a commenting spree:
I threw you this link (Talouselämä news article, mentions you) and ask what were your thoughts about it. You never answered. So what do you think about it? One extra whiskey tonight to celebrate? ;)
http://summa.talentum.fi/article/te/uutiset/102969

AndThoseWhereRightleySo

What a concentration of BS and MS propaganda. Ex-Nokian stopped blogging because MS is no longer paying. Amen.

khim

@Baron95: Lets say that Xiomi did 3 simple deals - a deal to have their phones distributed (SIM unlocked) globally by Walmart, Amazon and Carrefour?

Well, it'll be big. Amazon Firefone Phone size "big". In other words: not bit at all.

Carriers DO matter. They may not be as important as Tomi wants to portray them, but they DO matter.

John F.

Guys,

It would be very useful and educational to read this phenomenal pice from stratechery, published a few days ago

http://stratechery.com/2015/xiaomis-ambition/


Tomi is way, way wrong about Xiaomi, he just sees a smartphone maker, it seems there is a lot more to consider, none written here and a lot found in stratechery, or at least an angle to consider.

AndThisWillBeToo

"The author declares that Xiaomi is known as the “Apple of China”"
Rest my case.

KPOM

Tomi is right, but for the wrong reasons. Xiaomi isn't the "next Apple" because they sell a product that can't be sold outside in lucrative North American and European markets because they blatantly rip off other companies' IP (particularly Apple). And they are barely breaking even doing it, which indicates that if they had to pay proper licensing fees that they would not be profitable outside China.

As for carriers, Apple has had to acquiesce to some carrier demands, but they have done so far less than anyone else out there. It's mostly been a matter of carriers caving to Apple. Sure, Apple does let carriers limit tethering, etc. through carrier settings, but they haven't allowed any carrier branding, links to carrier app stores, or anything else of that sort. They have also extracted fairly significant sales commitments from many of the larger carriers.

abdul muis

I think XiaoMi intentionally cut the carrier and sell directly to customer.

As a "apple from china", I guess that because the company try to mimic apple a lot from their skin for android & the CEO clothing choice... and also... maybe from the amount of exposure & love from China (compare to Apple in USA) & the rabid way of both company fans.

Lullz

Since Tomi will probably miss this from any other place, I'll put this here.

http://en.wikipedia.org/wiki/Books_published_per_country_per_year

About 2 200 000 books are published every year. Tomi, could you point out about the source for 220 000 hit books each year? It looks very unlikely that there could be that many hit books every year.


Here are some stats for you:

You're assuming that your book will get published at all. Most first novels don't. You need to write, on average, a million words of fiction for practice before you're capable of writing something publishable.

Here’s the reality of the book industry: in 2004, 950,000 titles out of the 1.2 million tracked by Nielsen Bookscan sold fewer than 99 copies. Another 200,000 sold fewer than 1,000 copies. Only 25,000 sold more than 5,000 copies.

The average book in America sells about 500 copies” (Publishers Weekly, July 17, 2006). And average sales have since fallen much more. According to BookScan, which tracks most bookstore, online, and other retail sales of books, only 299 million books were sold in 2008 in the U.S. in all adult nonfiction categories combined. The average U.S. book is now selling less than 250 copies per year and less than 3,000 copies over its lifetime.

But I agree with others, don't let this stop you. There are always those who sell beyond their expectations. Stephanie Meyer's Twilight series, case in point.

Of the tiny fraction of novelists who make any money at all from their writing, most don't make enough for it to be their sole source of income. There was a survey done in the UK about five years ago, which found that the average income from writing fiction was about a quarter of the national average income. This is less than minimum wage, meaning that those writers who were making the average amount could have earned more by flipping burgers or stacking shelves.

Writing a book looks like one of the worst ways to make any money. Unless of course you are very lucky.

Paul Ionescu

Oh no, not again!

Samsung to make play for Windows Phone in bid to end Android reliance

http://www.theinquirer.net/inquirer/news/2389720/samsung-to-make-play-for-windows-phone-in-bid-to-end-android-reliance

chithanh

The most important part is actually in the end:
"the firm would have to resolve its legal differences with Microsoft first, which might not happen until the third quarter."

So Samsung will only sell Windows Phones again if Microsoft drops the patent litigation. Given the recent string of bad news about WP (showing further erosion of its market share in Europe, China and the US), Microsoft will be quite amenable to that.

chithanh

The most important part is actually in the end:
"the firm would have to resolve its legal differences with Microsoft first, which might not happen until the third quarter."

So Samsung will only sell Windows Phones again if Microsoft drops the patent litigation. Given the recent string of bad news about WP (showing further erosion of its market share in Europe, China and the US), Microsoft will be quite amenable to that.

Angkasa Pura

@Tomi

There is a good article at seeking alpha about BB.
http://seekingalpha.com/article/2813415-blackberry-in-terminal-decline

Winter

@Lullz
"It looks very unlikely that there could be that many hit books every year. "

I looked up the numbers for the Netherlands (in Dutch, sadly, and with price controls) for 2008.

Titles published ~20,000 a year. Around 20% make a profit.

Things seem to become more lopsided over the years with some publishers depending on a single mega bestseller, e.g., Harry Potter or 50 shades.

RottenApple

The Microsoft/Samsung thing reeks of desperation on Microsoft's part.
Samsung can only gain from it, if they manage to get the patent litigation dropped.

After that, let the market decide, and a year later declare the entire undertaking a failure.
In the end nothing has changed: Microsoft's only option is to waste more money to keep WP alive.

Lullz

@Winter

"Titles published ~20,000 a year. Around 20% make a profit."

Profit for who?

Maybe the publisher will make profit on 20% of the books they sell. It would be equal to Apple making profit with some % of the apps they sell.

It's highly unlikely that 20% of authors with published books would live on that. Also lots of books are never published.

Tomi T Ahonen

Hi all

Good discussion. Two quick comments

On the Samsung WP announcement. One, Samsung is ALREADY the other 'preferred' partner in Windows Phone ahem 'ecosystem' aside of Nokia that Microsoft now owns. So this is celebrating your most important provider might launch another phone on your platform. Two, Samsung is squeezing Microsoft with the lawsuits. Three, there will be negligable sales on Samsung brand on Windows Phone for the same reason that one third of shipped Lumia phones were never activated, there is no demand. Period. The developers are abandoning this dead platform. But 4, look at Vaio unit of Sony that I wrote about in the Grand Convergence article today on the blog. If ever there was the best case for Windows partner, Vaio proves that WP is dead. Read it and weep. Nadella will shut down the Lumia unit within 2 or max 3 years.

Lullz the stat is frequently sited for all hits businesses, music, books, movies and videogaming. Its not by actor or writer or programmer, its by publisher. Because roughly 1 in 10 products is a hit and 2 out of 10 break even, the profits of the hit product have to sustain the loss-making 7. That is why there is the publisher middle-man, to take those risks, bring their 'competence' to evaluate the viability of products. As to books specifically, the numbers of books were recently vastly expanded through self-publishing, so you should remove those titles. But yeah, the publishers of games, producers of books, music, publishers of books, they are commonly called the 'hits industries' and I am not an expert on them but just last autumn again I was at a conference in South Africa where a speaker quoted explicit numbers on the books industry as an example (I recall he said 10% profitable 20% break-even, 70% make a loss. I don't remember exactly which market was it US market or global or perhaps UK market, but I posted those on Twitter at the time and nobody argued thats nonsense. The speaker was from one of the big analyst houses).

Many of those who drank the Apple cool-aid when the App Store first launched were excited that this was the newest hits business. They felt when we got Angry Birds style success that it was the proof. It wasn't until the economics were studied more deeply that it emerged that its not anywhere as successful as the gamble that is hits business. Apps are a lottery where only 1 in 100 (I think my math said 1 in 85, go read the blog) is a hit. Thats not sustainable. Its pure luck and chance now. It will not continue, obviously, as now today in 2014 and 2015 the 'experts' are slowly coming to the view I have expressed on this blog for 5 years, there is no economy here, unless you are making games - apps as games are almost exactly 1 in 10 successes - except for games, apps are a disaster with no economy. So now most developers will quit and the apps ecosystem will adjust and shrink to the gaming industry engine it was always geared up to be. That is what the numbers say. That was my point and I have been publishing the numbers here as I found them. I am a 'mobile' industry expert not a 'hits businesses' expert haha

Tomi Ahonen :-)

Lullz

Because roughly 1 in 10 products is a hit and 2 out of 10 break even, the profits of the hit product have to sustain the loss-making 7."

I have never seen a source explaining how it's world wide and not just for some specific established publishers.

"As to books specifically, the numbers of books were recently vastly expanded through self-publishing, so you should remove those titles."

Isn't this the same for apps? There are lots of self-published apps and even those who have been launched by a company are quite often something similar to the people self publishing books. I wasn't quite able to follow you when you excluded those from the app business who were not serious about it. With books it's easier.

10-20-70 is obviously a number for some publisher but it's not telling the whole story. How many established publishers do we have and how many authors are actually making a living out of this business? The number of successful authors is usually quite limited and you really need to be successful in order to live with this industry.

Today it's easy to write a book and maybe even get it published if the print is reasonably small. However this is also true to the apps industry where it's even easier to create a generic game compared to writing a book. Even a crappy book.

"(I think my math said 1 in 85, go read the blog) "

I have read it. Now what I don't get is the number of the amateurs. It's incredibly hard to exclude those.

"I am a 'mobile' industry expert not a 'hits businesses' expert haha"

It looks like we still need to evaluate the books industry and try to compare that to the apps. Both industries have tons of amateurs and counting them out is not an easy task.

From my point of view writing a book is also complete lottery. If I don't find a publisher it's incredibly hard to self publish and become profitable. Even with a publisher the print may be so small that it won't provide a living. The average U.S. book today is selling less than 250 copies year and less than 3,000 copies over its lifetime.

Can you say books are any more profitable with that number?

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