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May 23, 2018

Comments

Jim Glu

You think the Chinese are that much better than the Koreans? I don’t. I think they are both great. Therefore I don’t believe at all that a $350 Huawei is in the same league as a $1,000 Samsung.

Just like Apple’s new iPhone XR is not just as good as the more expensive iPhone Xs. One camera vs two, an LCD instead of an OLED, and less on the water proofing. Even I though the cpu is the same and most everything else. To get to a lower price you have to cut somewhere.

And yes, it is known that the Chinese have NOT been paying for the IP in Android and that has hampered their rollout outside of China.

I’m not saying these midrange phones are bad...I’m saying that they are NOT as good as the top flagship phones from the likes of Samsung, Sony, HTC and LG. The Chinese are certainly capable of creating $1,000 phones....they are not capable of creating $1,000 phones and charging $350 for them.

BennyDover

”This has been discused here many times, and have been debunked by Tomi. Active iPhone is about 500 million. Not 1 billion!!! Do not make false statement”

Who cares what the Tomi says. These numbers are official numbers and that is it.

BennyDover

”Apple will grow slightly this year”

If you read closely those links what I posted. We expect Xmas sales to be close of the 115 Billion and that is huge increase YOY. Next year revenue will be over 300 B$ ASP will go up in every gategory and so will also the unit sales. Double-digit growth that will be. As I said before the Android Lemmings Whining Barometer (tm) never fails to predict the success of Apple.

Per "wertigon" Ekström

@Benny:

Xmas will not sell 115M units. Apple market is saturated and people are keeping their iPhones longer. Apple units will start falling and be around 200M units within a couple of years from now. And unfortunately, cheap iPhones will not be the savior - rather cheap iPhones will make iPhones more undesirable and lead to weaker sales. But for this year, 215M yearly is right on the mark.

This is the most likely scenario, of course. Could be Apple makes a major screwup like the antennagate, and thus will end up with 210M phones. Could also be that Apple makes a major homerun, and sells 225M phones. Most likely is 215M however. Anything higher than 220 is unlikely, and 225M at the edge of what is possible...

Let's watch and wait and see. :)

BennyDover

“Xmas will not sell 115M units”

Who says 115 million units? I was talking about 115 Billion dollars in revenue. That divided with expected ASP gives you the amount of units. You have to do some calculations.

Expected ASP is 765$ up YOY 20%.

BennyDover

The Apple Effect is that overall smartphone sales are going to go down. That means that the Android OEMs are going to sell less.

Per "wertigon" Ekström

@Benny:

Anything other than units or market share is not relevant to the discussion.

Whether Apple makes a gazillion dollars in profit is also not very interesting or relevant.

What is relevant is:

1. How many units will Apple sell, and will this number rise or fall?
2. How much market share will Apple achieve, and will this number rise or fall?
3. Will Apple in the future achieve more market share, or less?
4. Will that market share rise / fall due to a change in units, or something else entirely?

Please motivate in what way stock price, ASP and profits will affect any of the above points.

BabelHuber

@Jim: "The Chinese are certainly capable of creating $1,000 phones....they are not capable of creating $1,000 phones and charging $350 for them."

While you are right, I would turn around the question: What advantages does a $1,000 phone have?

Answer: Better performance, better camera and a better screen.

Disdavantages: Most mid range phones have an audio jack and SD card support, lots of high end devices lack these features. On top, you can buy mid range phones which don't have a glass back.

The problem is that a lot of mid range phones meanwhile have "good enough" performance, screen and camera meanwhile.

For users who use WhatsApp, Facebook and Maps and are no camera nerds paying three times the price makes less sense year after year.

A Nokia 7.1 you can use for 3 years and not miss much compared to a Note, Pixel or V40.

In 2019 it even will get worse - the high end won't most probably see much innovation, and the mid range only gets better.

This is in the Android camp of course.

But since Android's market share is 85%, this is also the trend of the industry as a whole. It will be interesting to see if - or how long - Apple can be successful against this trend...

BennyDover

“But since Android's market share is 85%”

We do not care. User base is the differentiation. You can have119% market share. User base is the thing.

cycnus

@Benny
"We" don't care?
Who would the "we" be?

#FreudianSlip

Jim Glu

Tomi's 500M number was put forth long ago. Apple installed base has been growing double digits. It's definitely in the 600M range. the 1.4Billion number is "how many iPhones sold since the beginning" not the current installed base.

We'll all have to wait until Feb. to find out just how well iPhone sales are. iPhone's have sold more than the naysayers here have predicted...forever. I don't buy into Benny's excessive optimism at this point. Will wait and see.

I agree that the $350 midrange Android phone can be a very nice phone. Not so good a camera...and I'm a camera buff. The < $200 range is where the vast volume of Android sales come from. Even these phones have become halfway decent. Again, if you aren't interested in the camera or are a heavy "many apps at the same time" type user.

BabelHuber

Problem with sub-$200 devices I have seen is that they still are slow: Rendering web pages, Maps navigation and other "heavy" stuff leads to delays and stuttering.

$350 devices like the Nokia 7.1 play in another league - they are almost as fluid as my Pixel 2 XL. Not quite as fluid, mind you, but for 1/3 the price you cannot go wrong. 4GB RAM provide good multitasking performance. Low light pictures also look better on my phone, but the difference is smaller than it used to be a few years ago.

In 2019 such phones will be shipped with a Snapdragon 710 instead of the 660 and receive a camera upgrade and probably more RAM. At the same time the Pixel 3 series will only be slightly better than the previous generation, and the same goes for the Galaxy S and Note - I don't see much Samsung can come up with.

So you will pay 3 times the price for bragging rights, a slightly better camera and a performance advantage the average user will hardly even recognize.

This trend already puts gigantic pressure on Samsung, and I don't think that Apple is immune to this in the long run...

Jim Glu

When your work depends on the reliability of your phone, it’s not “bragging rights” that spur the choice of a top end phone. And I’ve yet to have an “I don’t need any better” opinion of any of my iPhone cameras.

But yes, Apple will eventually need to lower prices more than they have. The $450 iPhone 7 is a terrific phone. My daughter has my 7+ or else I’d still be using it.

One of Apple's many talents is coming up with the use cases/user stories to go along with their premium hardware.

Per "wertigon" Ekström

@Jim:

95-98% of all smartphone customers do not depend on their phone to make a living.

I agree that some do. But it's a teensy, tiny minority. Even smaller than the PC desktop market which has dwindled to what, 100M units yearly?

So while your argument makes sense for you... It doesn't for your average waitress, grandma, or sales clerk. If you depend on your phone to make a sale you are doing something wrong (and no, telemarketer doesn't count).

Jim Glu

Well, let me not take the "everyone who buys an iPhone does so for purely 'scientific' reasons" position.

I do chaffe at the description that "bragging rights" describes why people buy iPhones. That may be true for some, though. Maybe many.

Clearly far more people buy much lower cost Android phones than iPhones. Where we disagree is how big and how valuable the size of the market of folks that do buy iPhones is. Those that would be lured away be "good enough and much cheaper" have had years to abandon the iPhone like they are abandoning the high end Android.

I don't think there is ever going to be a significant change in the existing Apple customer base to be of a different mindset. Apple has cornered the market/carved out a niche -- and is facing very little pressure to keep these customers out of Android's hands. Apple does have a challenge to keep people buying iPhones more often.

And that's ok. Apple has a stable business. Google has a stable business. None of the Android manufacturer's have a stable business....but as folks here say --- it doesn't really matter from whom you buy your Android phone.

Where folks go most awry is in comparing Apple's market share to all of Android and then project what will or won't happen among the ecosystem of partners and developers. Apple's out sized "value to be made catering to iPhone customers" keeps partners happy to keep supporting iPhones.

Yohing Bahso

Trump just announcing another round of tax and iPhone will got 10% tax from september 24, and 25% starting Januyari next year.

This willing be intresting


BabelHuber

"I do chaffe at the description that "bragging rights" describes why people buy iPhones"

Did I say "iPhones"? No, I said high end phones in general.

I see people with the latest iPhones, Galaxies and Pixels all the time - most of them do social apps, mail, maps and browsing, that's it.

There are valid reasons to buy such phones, I also got the Pixel 2 xl when it was released last year for the camera, software and easy bootloader unlock.

But stating that using a Nokia 7.1 is dangerous for your business is a little bit crazy, isn't it?

BennyDover

Apple does not need to lower prices. They just raised the prices. They can take the ASP up not down. Apple is not in this competition with the Android OEMs to sell things cheaper than the next guy. When do you learn that?

Stop whining about the price because the price is irrelevant. Apple will sell a record amount of these new iPhones. I am going to order 256Gb something, but I first have to see these in their natural city environment ie. In the Apple Store. Only the Apple Watch series 4 was easy to order.

The shipment days are already slipping to October with certain models and that means excellent demand.

BennyDover

You do not buy Android phones for your business. You have no support whatsoever, you have no updates. Android phones looses value faster than a new car. When you take Android phone out from the shop the value crashes to zero.

Per "wertigon" Ekström

@Benny, @Jim:

Ultimately, Apple must answer the question - why should I buy an iPhone for $450, $750 or $1000 when my $350 smartphone does everything I require it to?

Because it's faster? My Android phone is good enough.

Because it's more user friendly? For me as an Android user it's still quite an (un)learning curve.

If you are locked in to Apple, sure Apple is the way forward. But many people are not, in fact most people are not.

Therefore I think Apple customers will be those who already have a significant investment in the Apple platform - but those will become fewer and fewer, lured over by cheaper prices and bigger innovation on Android.

Imagine if a bendable phone comes out as the Galaxy 10. Or an ultra-thin touchpad/phone hybrid with hinges and a bendable screen. And so on. That would create novelty and buzzfeed around Android. The swipe keyboard feature on default Android impresses a lot of my iPhone friends. And so on.

Android does have desirable features the iPhone does not, and they are becoming more numerous, and iPhone will not be able to keep up - heck they have been unable to do so, and their attempts to keep up the pace meant more bugs in iOS, because Apple cannot keep up with Android, and it is more and more apparent.

Will Apple fall behind? Yes. Will this be a disaster for the iPhone? Not really.

The comments to this entry are closed.

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