My Photo

Ordering Information

Tomi on Twitter is @tomiahonen

  • Follow Tomi on Twitter as @tomiahonen
    Follow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

  • Contact Tomi T Ahonen for Speaking and Consulting Events
    Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

  • Tomi on Video including his TED Talk
    See Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media


Blog powered by Typepad

« Revised Early Estimate of Nokia HMD Smartphone Unit Sales Year 2017 - Based on survey of carrier support and various data points (updated) | Main | Q3 Smartphone Market Shares and Prelim Estimate of Full Year 2017 Top 5 (plus installed base as always) »

November 03, 2017




The question remaining is what would cause the current premium prices to go down suddenly...


Suddenly? Nothing. But gradually, that can easily happen, unless the premium phones get stuffed with ever more useless features. But that's also not sustainable.

Jim Glue

Premium prices will come down. We need only to look at the PC to see the future of the smartphone.

The vast majority of the market will go to undifferentiated mass market boxes that are "good enough".

A few niches like gaming, video editing, VR will need all the power you can get.

A premium niche will still exist providing a higher quality build, after sales support and the like. The price of the premium in the future will be less than today...but always more than the mass market price.

Use to be PC's cost $5000 or so. When I bought my first one, it was a Gateway 486 33mhz at the breakthrough price of $3300. Now the average "good PC" is less than $2000. Gaming rigs and workstations can go much higher.

A good commodity latptop can be had for $500. Really cheap shit comes out for Black Friday Sales for less than $200.

If you want a Microsoft Surface, A Dell XPS 13, and Apple Macbook are going to pay closer to $1500.

If you want a "desktop replacement" developer's laptop you'll run around $3,000.

But most people will buy their laptops in the $500-750 range.

PC's don't change by leaps and bounds in a single year anymore. Smartpone's rate of change is still a lot more than PC's, but no where near the yearly leap they used too.

Commodity pricing will be the significant majority. Already is. But the premium segment will always exist.

Jim Glue

I must be an Oracle or something. Today there are stories about ApplePay becoming it's own bank (for peer to peer money exchange)....and Apple AR glasses


"Today there are stories about ApplePay becoming it's own bank (for peer to peer money exchange)"

Well, no. The descriptions of Apple Cash make it very clear that this is a "store-and-forward" scheme (in your own terminology) like Venmo, Paypal, SquareCash:

"Apple won't let you put money directly in your bank account. It always goes to that Cash Card first, similar to how Square, PayPal, Venmo and other payment services work."

Whatever is stored on that "cash card" cannot be used for anything else than making payments via Apple Pay, or transfers to another iPhone user. To freely use that "money" (possibly converting it to actual cash), you must first move it to an actual bank.

Hence, Apple is not yet becoming a real bank -- that would entail some more involved regulatory procedures, and a massive industry upheaval (commercial banks would be up in arms).

Apple may make things seamless in its own closed environment, but it is again a layer built on top of the existing finance infrastructure, not a replacement for it.


Even so, they may require some licenses to offer this service.
I remember that 5 years ago EBay tried something similar here in Germany but ultimately had to give up because of regulations.

I'm not really convinced that Apple can overcome these hurdles - most importantly to ensure that the money being stored in such an account is safe. And that's the big gotcha for all such services. They have to meet the same standards as regular banks - which will be hard to meet by tech companies whose prime motivation is not the money itself but the services it's supposed to drive.

Jim Glue

Hi E,

Not a bank -- yet. BUT -- taking away business from the CC already. That was my prediction, that Apple had started ApplePay by partnering with CC companies...but at some point they would be able to cut the CC company out.

And low and behold, we're here. I look forward to seeing the CC companies push back.

If I can put cash in my Apple account, and then use it anywhere that ApplePay is accepted, then I don't need to use my CC for facilitating transactions. And where is ApplePay used? Why, everywhere CC companies have already built the infrastructure.


@Jim Glue

What Apple offers is a more complicated debit card (with superfluous intermediate store and forward steps) embedded in a mobile phone combined with a kind of gift card system (for peer-to-peer transfers, which are not real bank transfers and are bound to further Apple Pay transactions).

The real motivation for Apple is, just like for PayPal, to make money with the interest accruing on the money transferred onto Apple Pay, but not yet actually used for payments.

Because when user X "charges" Apple Cash card of user Y, the money is actually debited from a bank account of user X and credited to the _Apple bank account_.

Then Apple makes some internal bookkeeping about a iPhone user Y having a sum at disposal. When user Y uses the amount received on the Apple cash card, Apple updates the ledger, and transfers money from _its bank account_ to the bank account of the merchant.

Since most people will not use the amount received on an Apple cash card right away, Apple can make short-term investments with it that bring in interest or currency exchange gains (just one day is enough with the kind of financial tools available to large firms).

That is why Apple is so keen on intercalating itself between the customers and their banks, just as it is between customers and merchants (there Apple gets commissions on each transaction).

And that, @Winter, counters your assertion that "tech companies whose prime motivation is not the money itself" -- in the present case the money itself is exactly the motivation.

All this makes transactions more expensive in the end, and the infrastructure more complicated. It is true that credit cards are a kind of surviving kludge for payments whose "credit" aspect is often useless, but this also depends on the development stage of financial systems. Apple Pay and all other similar schemes are an outgrowth that may well be swept away with a genuine mobile payment mechanism comes into play.


@E. Casais:

" Apple can make short-term investments with it that bring in interest or currency exchange gains (just one day is enough with the kind of financial tools available to large firms). "

For that the necessary license applies even more than if it just was some tool to bind the users to their service. In many countries there are stringent regulations what a bank or financial service provider can do with their customers' money - and one thing that's definitely a problem is to use it for high stakes gambles on the financial market. That can get them into trouble very, very quickly.

I have a feeling that many people taking part in these discussions forget about the deeper implications. After the last financial crisis some politicians (excluding the Insane States of America, of course) have become extremely paranoid with the banking infrastructure and you can be dead certain that they won't let a company like Apple into the fray without looking very, very closely at what they do.


(I do not know what's going on with commenting).


Delving into that Apple Cash Card, I discovered that you are mostly right, and that the system is even more involved than we all thought.

Funds transferred to Apple Cash Card from a user's bank actually end up in an account at Green Dot Bank (never heard of it), or to a subsidiary (such as Go Bank or Bonneville Bank -- never heard of those), linked to a prepaid virtual card, itself issued by Discover...

So Green Dot is the one getting to invest all the money lying in those accounts, but Apple certainly takes its cut -- there is no free lunch.

Getting a deal with a bank to manage those virtual cards is the way Apple eschews the FED/FDIC regulatory nightmare.

The complexity of all those schemes is an indication that there is potential for a disruption that will simplify and disintermediate those complex flows and interactions.

Gives us a 1st-world M-Pesa, call it M-Buck, M-Geld, M-Peso, M-Pèze, M-Raha, whatever, and get rid of all those cards, accounts, shifting money from one place to another, and associated fees and commissions.

Jim Glue

Hi E.,

I think you are assigning the complication to Apple rather than the financial system itself. Certainly from a user perspective, Apple has greatly simplified the experience of paying with your phone or watch. It's quicker and more secure than regular swiping (I know, America is late to the tap and go game because we were early to credit in the first place).

ApplePay is also quicker than using the CC with Chips. It's shocking to me that the American CC infrastructure brought in chips but not "tap to pay". Using the chip readers is actually slower than swiping.

Still...whether it's ApplePay or some Android payment system, mobile phones have the advantage over plastic because you always have your phone with you. And possession of the phone does not mean you can access it's ability to pay.

Owning the point of payment is a big deal and lots of companies are vying for it. The "ripe for disruption" is for the friction in the middle between the bank and the CC terminal. ApplePay has added security and convenience for the end user...I don't think that's where the disruption will occur.

Jim Glue

Anybody have the Canalysis report that this article is based on?

Interesting breakout of models.

iPhone 7 13M
iPhone 6s 7.9M
iPhone 8+ 6.8M
iPhone 8 5.4M
Combined iPhone 8 11.8M
Combined iPhone 7, 8, 8+ 24.8M

Samsung Galaxy S8 10.3
Samsung Galaxy Note 8
Combined Samsung Galaxy S8/Note 8 18.3M

We see that with just a week of sales, Apple beat the entire quarter of Samsung's latest Galaxy S8 phones.

Even without the number for the 7+, we see that Apple's "current year" offerings for the quarter handily outsold Samsung's.

All this WITH the reality that the iPhone X sales hadn't started yet and were surely a depressive effect on the initial iPhone 8/8+ sales.

And this is not Apple's "big yearly quarter". Hopefully some of you can start to understand that Apple's share of the total smartphone market does not indicate the shape Apple is in. Looking at the heads up competition, Apple is the number 1 by far. And even if we had the total premium Android to put with Samsung....Apple is still left with a very healthy market share.

You can also see why Android has still not matched, let alone beat, iOS in financial use metrics (Apps purchased, ad revenue, mobile commerce dollars, subscription revenue, etc.) even though they have 80% of the total install base.

Gul Dukat

iPhone 7 + iPhone 8 + iPhone 8+ vs. Note 8 + S8 = NOT FAIR

iPhone 7 + iPhone 8's vs. S7's + S8's + Note 8

iPhone 8 .VS. Pixel + Galaxy 8's + SONY XZ + Xiaomi Mi6 + Huawei Mate 10's + + + + +

Jim Glue

Go ahead and put every phone Apple charges $600+ for against every phone Samsung charges $600 + for. We just don't have the info.

Galaxy S7 was last year. As was iPhone 6s. iPhone 6s is still in the top 10, Samsung's is not.

The Galaxy S 8 was released this spring. The iPhone 7 was introduced last year Sept. That already should be giving Samsung the advantage.

The Galaxy Note 8 was just released in (Aug?) should be in it's most demand quarter. Whereas the iPhone 8 only had a week to sell in the quarter.

Newer phones...sold for the entire quarter...and you STILL think it's not fair for Samsung?

If we had numbers for those other premium phones...we could put them in. They sell so small, they aren't on any list. Let's say that altogether they match Samsung (a very generous assumption). You still end up with the iPhone having a massive market share more like Nokia of yore...not the 12.7% share of the total smartphone market during Apple's worst quarter of the year.

Jim Glue

Can Apple regain the top smartphone seller in the world, again, next quarter? Apple has done it twice before...including last year when Samsung was hampered by the exploding Note 7.

It won't matter for the entire's just a quarter in Apple's very lopsided annual release cycle.

But consider...the previous biggest quarter for Apple was $78B. Apple is guiding toward an $84B-$87B Christmas quarter. We know the early iPhone X sales are off to an even larger start than the iPhone 6 (the previous record holder)...and that's in addition to the iPhone 8/8+ sales...and 7, 6s, and SE lines starting at $349 for the entry level.

Well, Trendforce is predicting it:


@E. Casais:

"Gives us a 1st-world M-Pesa, call it M-Buck, M-Geld, M-Peso, M-Pèze, M-Raha, whatever, and get rid of all those cards, accounts, shifting money from one place to another, and associated fees and commissions."

That will never work. All the banking infrastructure is what keeps the economy going. Private payments are only a small part of the equation that cannot and should not dictate how money gets handled.

The major part of my monthly spendings is done automatically from my bank account, that's stuff like insurance, electricity and other costs directly involved with maintaining a house. Do you want to replace all this? All you'd get is another middleman which wants its cut from the money it handles.



There is no need to fragment or change the existing banking infrastructure. Just add a mobile payment system that is _directly_ connected to banks (instead of going through many middlemen), _or_ establish a new bank (like what telecom operators in Africa became) that can provide the service (and, as consequence, also traditional bank payments).

As I explained, postal banks play exactly that role. In Switzerland, the most used card (in supermarkets, shops, ticket automata for public transport, etc) is the debit card of the postal bank. And of course the postal bank allows one to make payments via Internet, set up automatic payment orders, or withdraw cash in ATM.

It would be a matter of extending their services with a mobile money scheme, and everything would be in place.

In the USA, the financial system is so awkwardly set up that this may well represent an insurmountable hurdle, I admit.


"There is no need to fragment or change the existing banking infrastructure."

That depends on the country. But in the Netherlands they saw the sign of the times decades ago. I can live my life cashless and CC less, I can even pay by debit card at market stalls. The same holds true in one form or another in other European countries. This can all be done with the current banks. The single change is that the payment transfer system is treated as an infrastructure that is "bank agnostic". The Dutch banks have implemented this as separate companies that handle POS and Online payments for all the banks.

Here is an excerpt about money transfers in the Netherlands:
Credit transfers and direct debits are mostly electronic

Dutch consumers mostly use computers, tablets or smartphones to transfer money electronically. Last year, 91% of bank customers used online banking and 54% used a mobile banking app. In 2016, consumers submitted a mere 2% of all payment requests on paper forms (10% in 2005). In the Netherlands, direct debit is a popular payment instrument. With ‘digitaal Incassomachtigen’ payers can submit electronic direct debit mandates to collectors, securely and efficiently, via the trusted online banking interface of their own bank.



"That depends on the country. But in the Netherlands they saw the sign of the times decades ago. I can live my life cashless and CC less, I can even pay by debit card at market stalls. The same holds true in one form or another in other European countries."

Same here in Germany. I normally use cash only for small payments up to a few Euros. Even though some stores accept cash-free payments for such small sums, paying those in cash is simply a lot faster. There's no need to reinvent the wheel, all that's really needed is some form of optimization that makes better use of the available resources to accelerate the payment process.

All this other stuff - be it ApplePay, M-Pesa or whatever else got invented, are merely the results of an insufficient or inefficient infrastructure and won't stand a chance in markets where the banking system actually works!

Abdul Muis

This is new...

A bug that effecting BOTH iOS and android...

A recently discovered vulnerability affecting almost 700 iOS and Android apps has exposed millions of text messages, calls, and voice recordings, researchers at enterprise mobile threat protection firm Appthority warned Thursday.

About 33 percent of apps with the Eavesdropper bug are business-related. They include "an app for secure communication for a federal law enforcement agency, an app that enables enterprise sales teams to record audio and annotate discussions in real-time, and branded and white label navigation apps for customers such as AT&T and US Cellular," Appthority wrote in a news release.

The comments to this entry are closed.

Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    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 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

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati