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January 28, 2015

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Tomi T Ahonen

Hey KPOM you are not being fair

You've been here for years. You know what I've written and said. I've said from the start, that I would LOVE to see a QWERTY keyboard version of the iPhone and that it would sell well and would boost Apple profits - but that it was unlikely Apple would do that. I have said the same for removable battery, microSD slot - that these changes would boost iPhone sales in markets where those are important factors but US execs don't necessarily understand those markets (Emerging World). I have not said Apple 'has' to do those changes, only that Apple leaves money on the table by not pursuing those market segments. Totally separately I have said Apple HAS to split its product line, it HAS to offer a cheaper model line, it HAS to launch larger screen iPhones (and I've said they will launch NFC and mobile wallets while I didn't say they have to). KPOM, seriously, that is a big difference. I said Apple HAS to do those things. And when I was calling for those, you can go read all the comments - they were said as totally silly and unnecessary, no no no, Retina display will be enough. Apple doesn't need to release more than one model per year. The price split will never happen etc. All happened. All happened FAR TOO LATE from when they could have/should have done it.

The one point we could argue forever is whether mobile wallets and NFC were too early then. Go see Japan, obviously NFC was viable for the Japanese market a decade ago but yeah, the USA, ok, maybe not 4 years ago. Fine. I didn't say Apple had to do NFC, I predicted that was something that was coming soon anyway. But the large screens, splitting product line, introducing 'nano' colored plastic lower-cost iPhones (iPhone 5C) all this happened as I insisted it had to, but all that Apple did almost obstinately late compared to when the market opportunity was OBVIOUS. Inspite all that, Apple is the most successful company in human history. So what I wish for is for Apple to do BETTER. I never said Apple is suffering and would die. I LOVE Apple and I can't wait for that iCamera to happen some day (the more I think of it, the more I am now convinced they will do it some year).

Now the Kantar prediction? I did calculate if I remember, rather accurately what Kantar numbers suggested - and I don't think anyone else did that translation of what Kantar market shares of its few countries it reports on, would mean to the total worldwide iPhone sales. And I did that for free for you here on the blog. Is that not of value to you? Kantar gave market share numbers, never did Kantar release a press release saying 'Apple will sell 76M'. That was my calculation. And their guess went above what actually happened. I did say I felt their number was too high, BUT that they had a good record and we should take that as a valid data point to consider. As to my 'silly' forecast of 70 million. The AVERAGE of Apple specialists was 66M as of yesterday morning. I was again far better than almost any published forecaster who gave a number. I was not perfect but most were saying the iPhone unit sales figure started with a 6 not a 7. And you KPOM cannot have enough integrity to admit, Tomi was again very close to the mark. Instead you mock me that I didn't hit the number exactly. Come on, KPOM, you are far better than that..

Tomi Ahonen :-)

Tomi T Ahonen

Hi KPOM

ok so Fortune lists 35 experts with an iPhone forecast number and only 5 of those were closer than I was. Only one out of every 7 iPhone forecasters was better than me. That doesn't make me even as bad as the average haha, far better than average. But we could see how many of those had changed their forecast near the release date (and were below 70M when I mae my forecast. Or which of those 5 who were more accurate than me, also released their number as early as I did... And would you even try to suggest any of those 5 have been consistently among the most accurate iPhone forecasters - as I have been...

I don't mind the arguments and for being called out whenever I am wrong. But when I'm one of the most accurate forecasters like with this iPhone number, if you come here to mock me for not nailing the number and only being one of the best at it (this time) then I think that was going over the line on what is fair...

As to 5C, it is the cheapest iPhone and was a clear break from the past when only one new model was released. Now its an Apple custom to release two distinct - and different-priced models. It was the cheapest, most colorful, plastic iPhone. It is the Nano strategy I outlined here years earlier. I never said Apple should do a 100 dollar iPhone. I always argued Apple should hold to the premium prices. But that Apple was losing market share - as it was - and NEEDED the split in the product line including a cheaper model, which the 5C was, and trust me KPOM there will be a smaller-screen successor to the 5C at a price below the currrent iPhone 6 that will be released this year... It is my 'Nano' strategy like I outlined, up to and including the colors haha.

PS on Samsung, you've heard me argue this same point dozens of times in the past. Samsung's main competitor is not Apple (but Apple's main competitor IS Samsung). Samsung cannot pursue Apple's strategy and Apple would be idiots if they followed Samsung's strategy. iPhone is a premium/luxury smartphone brand. It can command far higher prices. Samsung cannot become Apple. Samsung pursues a global mass market leadership position. Both Apple and Samsung are the BEST at their market segments. Samsung is not failing. The only 'fault' that Samsung has, is that its investors are disappointed in that Samsung turns out not to be another Apple. Sammy is executing mass market leadership exactly as well as Toyota in cars or Levi's in blue jeans. They sell many models at many price points through huge distribution globally. That CANNOT be as profitable per phone as Apple's luxury premium price strategy. Samsung's perceived problem is not one of bad business execution. As long as they are profitable as a handset maker and dominate both dumbphone and smartphone market segments, they are executing well. Samsung's problem is totally unsustainable market expectations - by silly investors who thought they can be another Apple. Since they overtook Nokia and Apple, Samsung has never reported a loss in their handset business. The SCALE of their profits is what worries investors. The business is sound and sustainable. Their RIVALS report losses in various quarters. As to shrinking their product line, some may be sensible, but too much culling it would be foolish. Again, Samsung cannot copy Apple's strategy. They would implode.

Tomi Ahonen :-)

AppleTurfer

Some interesting items from the investor call. Apple sold its one billionth iOS device last qtr. Apple devices completely dominate usage metrics like web traffic and ecommerce.

I think Tomi can feel good about is prediction of 70M iPhones.....but that wasn't his first take upon the announcement of the iPhone 6/6+ phones. There are a lot of claims he was way off on. I'll let others do the copy pasting on the details. But it is a bit rich to see Tomi writing about how right he was instead of offering some well deserved mea culpas. The iPhone 6/6+ are staggeringly successful. The competition in their price range has imploded. The "spec comparison" has yet again failed t have any relevance on what the market sees in Apple products.

AndThisWillBeToo

@Tomi
Comment from another loyal reader, if I may: It may well be that you have never said Apple "must" do these things. The reason they disagree with you is the way you have presented your view and here is your year 2011 forecast:

"If no new iPhone Nano (or QWERTY) is released in 2011, then Apple would be in the roughly 15% market share range, selling about 75 million iPhones. If they expand to the Nano model in the summer, expect Apple to come close to 100 million sales for the full year, and approaching 20% market share. If they are really aggressive and release the QWERTY model as well for Q4 Christmas sales, you can add another 10 million total sales, but if they are really serious and do the QWERTY for Q3 'back-to-school' sales or even the summer of 2011, then Apple would be selling iPhones in the scale of 120 million units - at roughly a 24% market share level."

http://communities-dominate.blogs.com/brands/2011/03/preview-bloodbath-2-electric-boogaloo-the-smartphone-wars-in-year-2011-will-be-bloodier-still.html

And what happened to your forecast on Q4 Christmas sales, Apple indeed had 24% market share. But there was no iPhone nano, no QWERTY, no larger screen.
So Apple reached your forecast but they did none of your prerequisites for it.

Pekka

What happened Tomi? You predicted 6 million shipped Lumias in 4th quarter of 2014. The real number was 10.5 million.
You predicted 57 million shipped iphones in december 23 for the 4th quarter. My myself by that date predicted over 70 million :)
But ofcourse you changed your totally wrong 57m shipped iphone to 70m just 10h before the quarter report knowing you were totally wrong :)

Gonzo

Tomi,

It is ok to be wrong, we all can be, in the case of the apple watch you are using the wrong metrics and therefore the 1 million units you get is wrong, let me try helping putting it into perspective with some information you might not be aware of;

The industry is around 1.3 billion watches a year.
95% of all watches above 1000 dollars are swiss made, they represent around 2.5% of the market, lets say around 32 million units a year

then there is the 300 to 900 dollar segment, so let's be conservatives here and say is around 70 million units world wide

Apple aims at 10-15% of this 2 segments, not counting a % of iphone users that will surely see it as a companion to their phone

Remember, this will be watch 1.0, remember iphone 1.0 and ipod 1.0 ? took some time to get to the next level

Do not underestimate the iOS ecosystem and the always surprising new and unexpected creations of developers, we don't even start to imagine what will be of this product 3 years from now.

Your iCamera dream resonates with me but is a smaller market compared with the watch/iphone combination, carrying another device will be too much when you have great cameras in smart phones which are getting better, therefore making the stand alone camera a redundant product.

Last, user experience, service, attention person to person, security and simplicity and the most desirable brand in tech are elements many here disregard, that lead to underestimating people's desire and willingness to pay more for an iPhone, also keep in mind that 600-700 dollars nowadays is peanuts, many here make a huge issue with this amount, for a life organiser, companion and for a lot of people some kind of status symbol, is not really that much for a product that will be with you for a couple of years, at least.

RottenApple

@Gonzo:

"also keep in mind that 600-700 dollars nowadays is peanuts"

Let me make one thing very, very clear:

For most people this is NOT(!!!) peanuts! For most people this is the better part of one month's income.
Just because you Apple fans seem to have suffucient surplus of money there is really no need to make that broad a generalization.

See, I do have a nice income - but I also need to pay for the stuff everybody needs to pay for, and having $700 less just means I'd have to cut down on my vacation plans - which I value a lot more than having a premium smartphone.

But then, I'm not an Apple customer, I'd rather spend my money on stuff I can enjoy rather than feeding the bottomless pit of a greedy corporation. (In other words: my YEARLY mobile phone costs come down to significantly less than $50!)

Also let's not forget one thing with iPhone sales this quarter: They are grossly overinflated due to the highest spike Apple ever got, thanks for finally - after far too many years - giving the customers what they really want. It'll be interesting to see where things will go from here, now that the market which was demanding big screens has been mostly saturated with that spike.

Lullz

@Tomi

"I never said Apple should do a 100 dollar iPhone. I always argued Apple should hold to the premium prices."

http://communities-dominate.blogs.com/brands/2011/08/some-nanothoughts-for-an-iphone-5-world-why-apple-needs-to-split-its-product-range-in-smartphones.html

I don't remember either of those happening. At least here you suggest Apple to go for a 300 dollar nano phone with inferior screen and features compared to the latest model. The 5C had the same display 5S had.

You made another suggestion 18 months ago about Apple making the iPhone Nano out of iPhone S and leaving the iPhone 5 alone. For that you suggested a price of 400 dollars.

http://communities-dominate.blogs.com/brands/2013/07/apple-q2-results-signs-now-do-indicate-that-we-have-passed-peak-iphone.html

It's hard to see how repackaged iPhone 5 would have been the nano you suggested when Apple continued selling iPhone 4S with even lower cost.

Winter

@RA
"For most people this is NOT(!!!) peanuts! For most people this is the better part of one month's income."

Correction, for most people in the world, $600 covers close to 6 months of income.

PhilW

Thoroughly Agree, I would never spend that sort of money on a smartphone and I'm certainly not poor. Not saying that there aren't plenty of people who would, though, but to say that it is peanuts is pure hokum!

Lullz

@PhilW

Some people would never spend $10 000 or more on a car and think that kind of people are wasting their money. How is this different from spending some money on a phone?

PhilW

It's not, but that wasn't what Gonzo was saying.

Lullz

@RA

"See, I do have a nice income - but I also need to pay for the stuff everybody needs to pay for, and having $700 less just means I'd have to cut down on my vacation plans - which I value a lot more than having a premium smartphone."

Some people spend $700 / month or even more for paying the rent or other costs for the place they live in. People are willing to pay that kind of money for a place they can rest and sleep while they could get all the so much cheaper. The low cost solution is living in a tent. There are lots of people living in those and even on arctic areas.

Despite that people are willing to pay for premium prices for a place to sleep and rest.

Maybe they feel that the extra cost adds some value to their lives. A tent can have really good specs and with a little effort it can be really comfortable. if a tent is not what you like, you can always live in a trailer and that's still much cheaper compared to a regular house or apartment.

There is a reason why some people pay premium.

Also notice that the cost of a phone is one time investment and you pay that $700 every month.

That $700 is just an illustrative example. You may pay $1000 or just $300 but still live cheaper somewhere else. You get the idea.

Lullz

@PhilW

"It's not, but that wasn't what Gonzo was saying."

Spending money is a state of mind. Paying $600 for something is peanuts for lots of people. It's peanuts if they think the product is worth the money. That lots of people may be 500 Million or 2 Billion. I bet 2 Billion people would be able to pay $600 for something at least once in their life. Now it's probable that this something isn't the iPhone. It may be a house or something else.

The point is that $600 is peanuts if the product or the service feels like worth the money.

That's the point.

enyi

Tomi,

Relax, its ok to be wrong. Apple iPhone has surpassed even the wildest expectations of Apple and its most loyal fans. Fact is still stranger than fiction!

I see Samsung imploding, they dont have the oomph needed to turn the corner. They have had their day in the sun, which they could have made more of but didn't. They should have moved from shabby plastic to a more luxurious material while they had the advantage of the big screen, while Apple was relatively weak, they did not. Rather, they continued to peddle cheap plasticky phones, unimaginative variants of the successful 'Galaxy' brand, coupled with the utterly unintuitive bloatware - the infamous TouchWiz.

They have realised their mistake and have improved design and material used in the shape of the A series and Note4, a copy of Apple inspired 'chamfered metal edge' design, which now looks increasingly outdated. Unfortunately for them, this is all too little too late. The move to Tizen is promisingm they will do well to double down on that as Google is totally confused and not to be trusted given the challenges ahead.

As for Apple; the bigger they come, they harder they fall !

RottenApple

@Lullz:

"Some people spend $700 / month or even more for paying the rent or other costs for the place they live in. "

Yes, people do that - but that's not the point. The point was to criticise that this amount of money was called 'peanuts' - which for anyone with a normal income clearly is not!

"Spending money is a state of mind. Paying $600 for something is peanuts for lots of people."

And that's not what Gonzo was saying. He said $700 were 'peanuts' period - with no qualification.
Sure there are people for which this is indeed peanuts but I think it shows a very skewed picture of the world to consider this normal for the majority.

@Winter:

What I obviously meant was for people in the developed world. The iPhone would be off limits for the rest anyway.

PhilW

@enyi, oh for God's sake absolute tosh. This is not a zero sum game. Apple only competes in the top end of the market and for sure Samsung has taken a hit there. That means they suffer there for sure, but in all of the other price segments they still make a perfectly sustainable living, so they are not imploding.

Gonzo

@PhilW
It's not, but that wasn't what Gonzo was saying.

it is exactly what i meant to say, but you must read my post and understand that i am talking in a specific context, that of high end smart phones, product, services, where apple has a % and other brands are selling a combined equal or bigger amount of phones.

In a context that involves service, user experience, branding power etc.
I assumed (wrongly I can see) that it was a given that we are talking people with disposable income, those who also buy Samsung, HTC, Sony high end smartphones.

It is absurd to even suggest that a person living on 600 dollars for 6 months should be included here, if we are discussing Ferrari price level cars we do not include second hand Fiat Panda buyers in the discussion, do we?

Do you own a car ? in the UK, Germany ? 3 times per month full tank ?
Do you rent a flat? How much per month ?

Allocate around 800 dollars for 2 years, Your iphone comes in handy for 35 dollars per month … for a LOT of people this is peanuts, and I mean the LOT of people who buy cars, plane tickets, holidays, purses…. A billion iDevices sold tells a very different story, Apple is the most desirable status brand in tech and consumers have spoken and paid happily

AndThisWillBeToo

Interesting to see what Tomi has to say to his defense on his original iPhone6 analysis. It's too bad all comments from LeeBase are getting deleted.

Seurahepo

@baron95
"Samsung needs to execute near perfection to escape the Apple (top) and cheap Android (bottom) squeeze"

This sounds quite a familiar situation. It is the Nokia 2010 all again. Two front war, where Apple took profits and mindshare, cheap Androids took customers.

"Apple hasn't released any new Mac laptops since 2013. None"

Apple refreshed the Pro line on July 2014, Air line on April 2014.

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