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February 23, 2015

Comments

RottenApple

@Leebase:

"T-Mobile has shown that you can replace subsidy with financing...and users will still overwhelmingly choose the iPhone."

Huh? I have to say that it has been some months that I have looked at the data, but one thing was very clear:

iPhone's market share with this business model was quite a bit lower than the US average. It was also far from 'overwhelming' (20% if I remember correctly.)

"We are 30 years into the modern PC, and only 7 years into the modern smartphone. I think the "near 2 year" replacement cycle will be the rule for some more years to come."

Please don't start twisting numbers again. The 30 year span can hardly be compared to the 7 years since the first iPhone. You are both leaving out a sizable time period of smartphone evolution and at the same time add a significant period of early PC development that's more or less irrelevant in this context.
The smartphone's evolution was a also lot faster.
If you deliberately leave out the pre-iPhone era, by the same reasoning you can leave out the pre-Windows 95 era of PCs (as Windows 95 was the first mainstream OS that really got PC computing to the next level, just like the iPhone did for phones) - so it's 20 vs. 7 years.
The lengthening of PC replacement cycles started approx. a decade ago, shortening the relevant time period to 10 years. If we want to look for parallels that's 10 vs. 7 years with the faster smartphone evolution as an additional accelerator. Unless some magic boost to smartphone power happens we are very close to that point now, especially in countries where subsidised contracts are not the norm and can't drive phone replacements.

I believe the changes to the hardware that are to come will mostly be relevant to geeks and power users but not the average Joe on the street.

"They (Macs) are built to last and people take that into consideration when they buy them."

I hear this argument all too often but strangely enough I have yet to see any proof of Macs lasting longer than other manufacturers' hardware.
I still own a 7 year old Samsung laptop. Aside from being horrendously underpowered by today's standards it still works fine and is still in daily use (although I'll probably have to exchange its slow HDD for an SSD in the near future.)
My current desktop is 3 years old, of course it got two SSD upgrades over time (first for the system drive and later, as these things got cheaper also for the data drive), but unless the mainboard breaks, it's just going to be replacement parts in the foreseeable future.

Catriona

T-Mobile's customer base is much different from the US average, at least historically. AT&T and Verizon are moving away from subsidies, as well, toward financing plans. We have yet to see a real change in sales of iPhones in the US.

abdul muis

@LeeBase & @Tomi

"Great post Tomi. You are your best, Mr. Numbers Guru. Question, do you apportion your used numbers evenly? I would imagine that iPhones have a longer "second/third" life than average."

"yeah iPhone has longest life cycle also Blackberry serves far longer than average. Old Nokia used to do so too (huge second hand market) but not Windows Phone obviously...

Tomi Ahonen :-)"

I think it depends on how you see the number. I know a lot of iphone & BB have a second/third life right now. But NOT all the user were using it as as intended or categorized in smartphone or as you (LeeBase) & baron95 describe as bringing big ka-ching ($$) to the respective ecosystem.

For iPhone, I see lots of 'OLD' iphone in the hand of OLD people who use it only for phone/messaging/Family-Info, where messaging EQUAL to SMS/What's App and Family-Info EQUAL Facebook. That's it. These OLD people will NOT spend a dime on any other apps. And this market is NOT truly mobile because most of this old people mostly in home using WiFi, or in his kids/other family member using WiFi, most of them won't subscribe to mobile internet (not bringing extra $$$). Furthermore, most of this old people won't check their What's App while on street or in restaurant.

http://www.opptrends.com/2015/02/blackberry-ltd-nasdaqbbry-losing-non-business-uk-users-at-a-brisk-pace
Same as Blackberry, while in the past BB has a longer life than average, but NOT anymore, because BBM already available on Android and iphone. In UK (and also canada), this bb user NOW has MOVE ON to android or iphone. There were lots of BB user in SE Asia or Africa country that use BB, but not as a smartphone. They only use it for phone/Messaging, where messaging EQUAL to BBM. In the past, most of bb user use bb because they thought BB was cool (secure?, better?), but now, most of this BB user just use it because they don't think they NEED any other android/iphone feature such as apps(game), better web browser, etc.

The different for this old BB & old iphone user were some percentage of this old BB user DO SPEND money on internet connection, as that's the only way to use BBM, but in the poor nation, this only translate into $2/month (BBM only, no email, no browsing). and not all of this old BB user use internet. I see an article in a couple of months back that one carrier said that as of now (was in 2014) less than 25% of BB user use internet, most only use it for phone call.

Last.... smartphone will ALWAYS have a shorter replacement cycle than notebook (or PC), because notebook user won't use the notebook while walking, but smartphone user will use it while walking, driving, pooping, peeing, showering, swimming, diving, spa, etc.

abdul muis

@Tomi

....and this bring me into the QWERTY equipped phone that you used to whine. No Nokia QWERTY Windows phone, No iPhone QWERTY phone etc.....

I was a Nokia E-series user, and my first QWERTY was E61i, and I love my last QWERTY phone the most, the E7. and I think typing with QWERTY thumb board is a BETTER way of input system compared to the 3.5" iphone. But right now smartphone are big, and touching the cold glass of smartphone is easier because it's not as small as 3.5" anymore. Furthermore, it's faster typing using swipe than QWERTY thumbboard, and I prefer the extra screen estate and extra lightness compared to smaller screen and heavier device with QWERTY.

I believe this is one of the reason that many smartphone company stop producing the QWERTY device. This 3 were the example of the LATEST android device with QWERTY:
http://www.gsmarena.com/samsung_galaxy_appeal_i827-4771.php
http://www.gsmarena.com/motorola_photon_q_4g_lte_xt897-4885.php
http://www.gsmarena.com/motorola_defy_pro_xt560-4868.php

RottenApple

@Leebase:

"Number 1 phone on T-Mobile is still the iPhone. Even without subsidies. You just swap buying a subsidized iPhone for buying a financed iPhone. Of course, when the two years are up, some folks will just stick with their 2yr old iPhone longer and see their monthly bill go down."


Of course it is. There's only 3 iPhone models but hundreds(?) of Android models that make up the rest of the market. I merely pointed out that 20% is nowhere near 'overwhelming'.

@abdul muis:

Why are QWERTY phones so unpopular these days? My guess is that it comes down to one single factor: Weight. You can't produce something as light as an iPhone with a physical keyboard.
And due to advances of touch control the only thing it's useful for is if you frequently have to write longer texts - and most people do not need that. In all other use cases it's just useless baggage.

AndThisWillBeToo

What killed QWERTY and paved the way to touch screen monoblock is the HW cost. If you have to create a different HW variant on each market it costs a fortune. (e.g. Denmark, France and Finland have all their own specific QWERTY key layout, all of which differ from the U.S. layout.)
With virtual touch screen keyboard you can not only go with one HW, but in addition to that you can actually switch layouts on the fly by selecting different keyboard from settings. Add to that the possibility of word suggestions, Swype, etc. And you start to realize why QWERTY keyboards just vanished the moment the screen size managed to match dimensions of physical keyboard.

Crun Kykd

Regarding the accessories discussion: a future smartphone accessory folks will all want: goggles that phones snap in to with lenses to convert it into a head up display VR set. Along with it, arm bands (iWatches?) with built-in accelerometers to act as VR game controllers. Binaural (head-tracking 3D) speakers.

BTW, I think the smartphone replacement cycle lengthens right up to when VR takes off. Then it speeds up again because the hardware is simply far from good enough.

Tester

@Crun Kykd:

>> Regarding the accessories discussion: a future smartphone accessory folks will all want: goggles that phones snap in to with lenses to convert it into a head up display VR set.

Yes, sure. This is just another wet dream of the high tech industry that will never go mainstream for one simple reason: It's far too clumsy.

VR is something I don't see reaching far beyond the geek population.

aarohikapoor

That's great you say but I also want a real smart phone this is something that I will be using everyday. No worries about that here are specs.

bbbjez12

Some really good stuff on here, some really interesting debates, I would be interested in hearing peoples thoughts on the evolution of the 2nd hand market?

1,230k new smartphones are sold every fortnight in the UK, in 2007 the average trade-in value was £20 and many o0ld units ended up in a drawer. By 2013 the average value had reached £108, today trade-in prices can reach up to £400.

This rising value has increased the likelihood of a second life for smartphones, Deloitte estimated that 40% of 2nd hand smartphones (13m units) were destined to stay in use with a new owner through handing down or trade ins in the UK.

There must be an innovative, new business model that profits from the growing used smartphone market - ANY THOUGHTS?

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