Apple an 'antifragile monopoly,' more secure than critics believe, analyst claims
In spite of views by some investors and critics, Apple is an "antifragile monopoly" that can withstand competition from other giants in the high-tech sector like Amazon and Google, an analyst argued on Thursday.
While people have been worried about Apple's competitiveness, the company displays "superior pricing power," UBS analyst Steven Milunovich said in a memo obtained by AppleInsider, making reference to ideas by outside analyst Horace Dediu. Pricing power is said to be a signature of monopolies, and the memo noted that in the last quarter, Apple achieved an average selling price for the iPhone nearing $700.
The iPhone 7 starts at $649, but many people opt for extra storage and/or the Plus model, which has proven unexpectedly popular -- likely because of its its dual-lens camera.
Berkshire Hathaway's recent boost of its Apple stake to $17 billion is a sign that its CEO, Warren Buffett, is convinced Apple has a "moat" like Coke and Wells Fargo, making it more resistant to change, Milunovich wrote.
On "antifragility," a concept by thinker Nassim Taleb, the note suggests that Apple is developing a better ability to compete and adapt precisely because it's facing down many threats. The company can be integrated or modular as needed, Dediu said, and displays a relentless focus on what it needs to do -- being under fire constantly may mean it keeps its eye on improving products, for instance.
Worrying signs would be "complacency, platform mistakes, or [an] unwillingness to cannibalize itself," the memo noted.
Some critics have in fact accused Apple of complacency, citing a lack of revolutionary products. Even the "iPhone 8," due later this year, is expected to count an OLED screen and wireless charging among its signature features, but these technologies have already been implemented in some Android phones.
While people have been worried about Apple's competitiveness, the company displays "superior pricing power," UBS analyst Steven Milunovich said in a memo obtained by AppleInsider, making reference to ideas by outside analyst Horace Dediu. Pricing power is said to be a signature of monopolies, and the memo noted that in the last quarter, Apple achieved an average selling price for the iPhone nearing $700.
The iPhone 7 starts at $649, but many people opt for extra storage and/or the Plus model, which has proven unexpectedly popular -- likely because of its its dual-lens camera.
Berkshire Hathaway's recent boost of its Apple stake to $17 billion is a sign that its CEO, Warren Buffett, is convinced Apple has a "moat" like Coke and Wells Fargo, making it more resistant to change, Milunovich wrote.
On "antifragility," a concept by thinker Nassim Taleb, the note suggests that Apple is developing a better ability to compete and adapt precisely because it's facing down many threats. The company can be integrated or modular as needed, Dediu said, and displays a relentless focus on what it needs to do -- being under fire constantly may mean it keeps its eye on improving products, for instance.
Worrying signs would be "complacency, platform mistakes, or [an] unwillingness to cannibalize itself," the memo noted.
Some critics have in fact accused Apple of complacency, citing a lack of revolutionary products. Even the "iPhone 8," due later this year, is expected to count an OLED screen and wireless charging among its signature features, but these technologies have already been implemented in some Android phones.
Comments
Apple - try to make technology good over time and then fit it to a phone.
A friend of mine was bragging about his Samsung Galaxy with its wireless charging. It was one extra step for me to plug my iPhone in and set it down, than it did for him to just his down. But then I picked mine up and started using it while it was charging... he couldn't do that without also picking up the charging station leaving him tethered to the wall by a wire anyway.
Also, OLED screens aren't an "innovation" - they're just another type of display technology that so far offer nothing superior to Apple's continued innovations in LCD technology. OLED display have worse color accuracy and ONLY save energy when the interface is mainly black.
Fingerprint Scanner Gestures?
AI for phone optimization?
Facial recognition?
On the simple hardware side I like to have a physical button I can apply actions too.
In software I can reduce the screen size for one handed use by using a simple thumb slide. If I ask my phone where it is and it's within listening distance, it will call back to me and flash the screen and LEDs. I can send files directly to other phones without failure.
You seem to be on the defensive with your 'it seems Apple is always behind'.
Apple can't be first with everything and it would be great if they borrowed some ideas from Android phones. They have a release cycle which limits what can be done.
Oled screens might be better but most users would be happy with current screens. Screen sizes are now optimum for most people too. The same applies to weight and thickness and many other phone 'must haves'. Cameras are decent enough. Noise cancellation is good enough. Speakers are good enough etc.
We are seeing some good under the hood improvements to antenna arrays, modems, the ability to hold a call in difficult areas (basements, tunnels etc) but, as most phones are more than good enough for most people, 'fashion' (colours, materials etc) can also sway a purchase.
And I don't even know what AI phone optimization means. I'm sure it's mind blowing, tho.
Gainimg popular support by every company and blogger site impacted by Apple's ruthless product development with the highest standards of engineering and design, Microsoft and Google in particular have remeained conspicuously silent, as their repective monopolies of desktop software and paid search could be next, despite repeatedly being fined for anti-competitive practices.
CEO's of former tech leaders, such RIM and Palm, have alternatively made random statements about 'fairness' and 'justice'. Meanwhile, TUSA's president has released a florish of emotional, irrational and inappropriate tweets that may, or may not, have been related to the topic of monopolies.
Unusually for popular media, however, major US news sources have begun discrediting ridiculous analysts as being inherently without merit based in their history of being paid to create surveys paid for by parties with vested interests.
At the time of this writing, Apple, naturally, is continuing to reinvest its profits into technological developments, proving that as a capitalist, consumerist entity is perfectly capable of supporting society with not only jobs but in contributing to standards of living and the overall health of society through transparent competitive practices.
These same critics probably think the Apple watch is a flop and amazon echo/Google home is the future. Um no mention that the watch sold more than both of those devices, combined.
the knockoffs will never be Apple. End of story.
If Apple makes a miss step 6months later you'll have a new dominant player.
Apple doesn't have a monopoly because of pricing power.
Monopolies are about dominance + barriers of entry. Anyone can make a smart phone, it's just difficult (but not impossible) to take mind share. If Amazon partnered with T-mobile (for example) and got aggressive with pricing, they could become a new dominant player.
Cable company's have monopolies and it's basically impossible to complete with them. They 'buy' regions of dominance from the government. Wireless providers do the same thing with buying spectrum. Unless you have 10s of billions of dollars you're won't and never will be able to compete.
Even Apple and Google can't make inroads without basically buying an established player. Google fiber's failure is an example...