Apple iPhone market share failure to grow in Q4 2010

[BK]

Re: Apple iPhone market share failure to grow in Q4 2010

Perhaps a down shift in Apples Revenues will be a sign that the general public is feeling inflation. For years and years you couldn't pay people to use a Mac or Apple product (I'm typing on my Mac Book and previously owned Powerbook 100 and a Mac SE). Anyone else remember the Newton? But, the fickle masses one day awoke to the great products that Apple designs and manufacturers. Isn't the problem with being the Cool product is that one day you may be deemed uncool?

Heck, does anyone remember trying to interest others in the value and use of e-mail - the masses are slow to change, but one day they change their mind and you can be crushed by the stampede.

At some point won't inflation bleed into technology products - and this may make the fickle mass consumer to look at the Android or the Windows 7-8 phone.

Will Apple be positioned to deliver a lower priced product to compete once the Every one is finally painfully aware of inflation and are making different choices with how they spend money?

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

Will Apple be positioned to deliver a lower priced product to compete once the Every one is finally painfully aware of inflation and are making different choices with how they spend money?

This is extremely unclear.

One of the reasons you get better experience on iPhones is that it uses some of the most expensive components on the market. Better processors, better touch screens, better electronic components, etc etc.

Go downmarket, and you both threaten your branding and very possibly damage the 'experience'.

Certainly the software is a big factor, but it is much less of one than you might think. For one thing, software is easy to copy/replicate as well as improve.

Were Apple competing against the hardware companies alone, it might be possible - in fact it would be probable - that Apple could maintain a long term software advantage. Hardware makers - at least in the mobile market - have a long and sordid history of f**ked up software. See Symbian and Jave ME. This doesn't apply to a software company like Google, however.

This is why the technology curve is such a big issue: as time goes by and the hardware cost/performance tradeoff narrows, the price premium which Apple commands becomes harder and harder to justify.

It happened with Mac; the question is whether Apple can either forestall it via a permanent technology leadership position (extremely unlikely as they're competing with the big boys) or can build a luxury brand premium.

[jk]

Re: Apple iPhone market share failure to grow in Q4 2010

re luxury brand premium. i think there is no doubt that apple phones and laptops have become fashion statements. the "i'm a mac" ads illustrated this quite nicely.

also:

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

re luxury brand premium. i think there is no doubt that apple phones and laptops have become fashion statements. the "i'm a mac" ads illustrated this quite nicely.

Quite true. But this was true for Mac PCs as well in the 'good old days'.

That evaporated as soon as the technology differences did.

[jk]

Re: Apple iPhone market share failure to grow in Q4 2010

Quite true. But this was true for Mac PCs as well in the 'good old days'.

That evaporated as soon as the technology differences did.

you don't take out your mac pc in front of your friends. the iphone and apple laptop fashion statement may have more legs.

[thriftyandboringinohio]

Re: Apple iPhone market share failure to grow in Q4 2010

Apple is consistently one of world's largest manufacturers of personal computers, usually ranking #3 to #5 on unit volume.
Last year as worldwide market shrank, Apple grew it's share.
Plus they command a premium price and margin on their machines.

If that's losing a war, losing ain't so bad.

[mfyahya]

Re: Apple iPhone market share failure to grow in Q4 2010

After a couple of months using a Nokia N8 my opinion of it has not changed. It is piece of crap phone. The software is utter garbage.

I am not sure if the alliance with Microsoft is going to save Nokia [or MS], but after years of losing market share because of their lousy smartphone software Nokia had to do something...

The N8 uses the aging Symbian OS, which is as you say, utter garbage in 2011.

They had Maemo OS in the N900 which was almost perfect, if you're a geek (they even used demoscene music in the promos), and 90% there when compared to Android/iOS if you're a regular user. Then they went rudderless, and got a CEO/mole from Microsoft and are using Windows Phone 7. Maybe they thought combining two losers makes a winner.

Bizarrely, they are now releasing the Nokia N9 running Meego (next version of Maemo). I would still buy it if it had a physical keyboard.

[mfyahya]

Re: Apple iPhone market share failure to grow in Q4 2010

Not sure if this is a good indicator, but I subscribe to Safari online library (mainly technical books). Several months ago, 7 of the top 20 books were iPhone/iOS related. Now there are only two.

[jk]

Re: Apple iPhone market share failure to grow in Q4 2010

Apple is consistently one of world's largest manufacturers of personal computers, usually ranking #3 to #5 on unit volume.
Last year as worldwide market shrank, Apple grew it's share.

that's only because the wintel standard is run by so many different producers, so wintel production numbers are fragmented. it's similar with android- you've got moto, htc, and samsung just for starters, dividing the android market.

Plus they command a premium price and margin on their machines.

If that's losing a war, losing ain't so bad.

as someone said, they're pursuing an lvmh strategy. lvmh will never be the high volume producer of, e.g. handbags, but it makes a huge profit on each item it sells. by the same token, people don't buy lvmh for the VALUE, they buy for the fashion statement/prestige.

the only exception to this, afaik, is in graphics, where wintel was for some time not as facile in graphics post-production. although i believe this is no longer the case, i think there is a generation of graphics professionals now wedded to apple.

[mfyahya]

Re: Apple iPhone market share failure to grow in Q4 2010

Android tablets running the latest honeycomb version (which is designed for larger screens) are pretty neat as well.

Samsung's Galaxy tab is thinner and lighter than the iPad, with greater screen resolution. It has the ability to turn off the auto-screen rotation per application basis, as well as the entire device, which i useful when you're in a couch or in bed.

You can display anything on a bigger hdmi enabled screen - games, movies etc. With the iPad, the only way it will allow you to play a movie through to a bigger screen is only if you purchase the movie through iTunes. Even if you have netflix streaming you'll have to purchase that same movie a second time.

It looks like it has Apple scared. They've blocked sales of Samsung's Galaxy Tab in Australia over patent claims.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

you don't take out your mac pc in front of your friends. the iphone and apple laptop fashion statement may have more legs.

True, but people weren't changing their Macs every 8 months to 1 year either.

that's only because the wintel standard is run by so many different producers, so wintel production numbers are fragmented. it's similar with android- you've got moto, htc, and samsung just for starters, dividing the android market.

And looking at the overall market - Windows is on 90% of all computers.

I'd pretty much guarantee no iOS/MacOS is on Intel machines, though there are some emulators available. Vice versa, few if any Windows programs on iOS/MacOS machines though again emulators exist.

as someone said, they're pursuing an lvmh strategy. lvmh will never be the high volume producer of, e.g. handbags, but it makes a huge profit on each item it sells. by the same token, people don't buy lvmh for the VALUE, they buy for the fashion statement/prestige.

The problem with this strategy in technology is that the performance is a huge chunk of the prestige.

For one thing, only experts can tell the difference between an LVMH and a merely well made bag. For a cell phone, there are huge differences even in phones released the same year.

I'd note that while Apple's profit margin seems high by technology standards, it is nothing compared to the $10,000 or more dresses and purses LVMH sells.

the only exception to this, afaik, is in graphics, where wintel was for some time not as facile in graphics post-production. although i believe this is no longer the case, i think there is a generation of graphics professionals now wedded to apple.

Actually the graphic artists and what not were exactly the diehard Apple fanboi core demographic. It is inaccurate to say that this is new.

The other dynamic which Apple is fighting with a new strategy is software. The biggest disadvantage of Apple's OS - especially as an overall niche player - is that it just isn't worth making versions for both Apple OS and Windows unless you're really big. This starved the Apple OS world of a lot of breadth of software choices.

The apps paradigm seeks to get around this both by making publishing easier and cheaper. Combined with cloud it makes stocking software on an iPhone or iPad much easier than it could have been.

The problem of course is that for purposes besides Angry Birds, the I/O capabilities on iPhones and iPads suck. You can get an app to view an Excel spreadsheet, or a Word document, or a Powerpoint, or a PDF file, etc etc but it is damned hard to work on such.

This of course applies to any mobile platform, but it does point to a still fundamental disconnect between usage patterns between PC/laptop and the smartphone/tablet world.

[jk]

Re: Apple iPhone market share failure to grow in Q4 2010

The problem with this strategy in technology is that the performance is a huge chunk of the prestige.

apple users think their devices are really cool, or hot, or whatever temperature conveys status these days. i don't think they pay great attention to fine points of performance. that kind of concern is for android users.

For one thing, only experts can tell the difference between an LVMH and a merely well made bag.

no, it often SAYS LVMH on it, to make sure you know.

I'd note that while Apple's profit margin seems high by technology standards, it is nothing compared to the $10,000 or more dresses and purses LVMH sells.

total sales for lvmh in ALL categories for 2010 was a bit over 20billion euros. q4 2010 apple sales were over $20billion, so apple's revenues are 3-4 times that of lvmh.

Actually the graphic artists and what not were exactly the diehard Apple fanboi core demographic. It is inaccurate to say that this is new.

i didn't say it was new. i specifically said it was old, a reflection of a past condition when wintel couldn't do graphics processing as well as apple. that is no longer the case but it established brand loyalty/familiarity/preference in a generation of graphics professionals.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

total sales for lvmh in ALL categories for 2010 was a bit over 20billion euros. q4 2010 apple sales were over $20billion, so apple's revenues are 3-4 times that of lvmh.

The core LVMH audience is less than 10 million people worldwide.

The core Apple audience is much larger than that, so unclear what your point is. For that matter, Samsung's 2010 revenue was $133.8 billion. Sony's revenue was $78 billion. Sony in fact used to be a 'luxury' brand in the same market Apple was in.

that is no longer the case but it established brand loyalty/familiarity/preference in a generation of graphics professionals.

I'm not so sure; graphic design is a heavily software dependent enterprise. While Intel processors were pretty much always crap for graphics (see nVidia and AMD/ATI), the aforementioned add-on processors increase power but don't add anything significant for design purposes.

[jk]

Re: Apple iPhone market share failure to grow in Q4 2010

Sony in fact used to be a 'luxury' brand in the same market Apple was in.

yes, sony is an interesting example. it used to be premium, but lost that status somehow. but apple is safer than sony, i think, because it is truly a closed system, whereas sony could lose its place in your life one component at a time.

I'm not so sure; graphic design is a heavily software dependent enterprise. While Intel processors were pretty much always crap for graphics (see nVidia and AMD/ATI), the aforementioned add-on processors increase power but don't add anything significant for design purposes.

my wife just purchased a custom photoshop workstation, and the video card was an important component. but cs5 for windows is, i gather, no less powerful than the apple version. and i don't believe that was true in its earliest incarnations.

[c1ue]

Re: Apple iPhone market share failure to grow in Q4 2010

yes, sony is an interesting example. it used to be premium, but lost that status somehow. but apple is safer than sony, i think, because it is truly a closed system, whereas sony could lose its place in your life one component at a time.

Sony built its brand as the 'first' with Walkmans. You could easily argue Sony's 'luxury technology' brand arose from the same personal consumer device origins as Apple in its latest incarnation; certainly Sony stereo components were never the highest end. The most recent invigoration of the franchise was the Playstation.

However, Microsoft's entry into the gaming box field (there were others, but none as well capitalized as Xbox) reduced the previously massive impact Playstation had on Sony's image and fortunes.

I've had close personal involvement with the CPU side on the Playstation; ultimately what killed that market dominance was again the technology curve.

In the beginning the Playstation was a significant, if not quantum leap upwards in terms of performance. The graphics processors combined with Sony's software game development programs produced a significantly superior product vs. existing console and PC games. This system had huge custom development portions; the graphics processors, the data buses, the memory architecture, etc etc.

However as the technology curve progressed, it became easier and easier for competitors to stay in the same ballpark, until it was possible for Microsoft to build an Xbox using off the shelf components which was competitive performance wise with PlayStation. The same technology curve issues allowed a much smaller company - Nintendo - to bring out a product with similar performance but with a better interface though I do not know the details of the Wii system.

The resulting 3 way split of the market crushed not just the Playstation, but Sony's overall profitability.

In this example you see 2 different paths by which an otherwise hugely profitable market segment gets ground down by the forces of competition: a large multinational choosing to branch out, and a mid-size national company launching into international prominence - both abetted by the technology curve allowing them to create competitive products with minimal institutional hardware expertise and investment.

This is why Apple's technology strategy is so interesting; they are going backwards from a system house to more of a Sony model: it isn't quite a vertically integrated manufacturer, but all the suppliers are very much captive.