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Canalys: iPhone outsold all Windows Mobile phones in Q2 2009 - Page 2

post #41 of 82
Quote:
Originally Posted by melgross View Post

Heh!

When I first glanced at your writing "MS' gross laziness and negligence", I thought; Does he know me that well?

But then I read the rest of the sentence and realized you didn't mean me.

You didn't, did you?





LOL, no, I was just trying to make it sound as serious as it deserves to be.

But it's interesting, the way you read the comment.
post #42 of 82
Quote:
Originally Posted by xtrmtrk View Post

Why? I'm not sure I follow the logic but I'd like to. Looking at desktop penetration of Linux and Chrome market share, I'm not seeing it. But I'd honestly like to hear the argument for that scenario.

Is it because of the low cost to phone hardware manufacturers? Their ability to modify it to meet their business needs? That I might understand.

It's a very modern smartphone OS with Google's brand behind it. It's being given away for free and Google are even giving the manufacturers free support. When you're in financial trouble, like some of the manufacturers are, that's incredibly attractive.

Android has got Samsung, Motorola, Sony Ericsson, HTC and many more manufacturers backing it in a big way. The momentum is huge. The $0 license fee means that manufacturers can take more risks with the OS and put it onto way more phones than they normally would. If Samsung alone puts it on half their featurephones then it'll take the kind of marketshare that Symbian currently enjoys.

The iPhone is a great product and will obviously do very well. However, it's a small family of high-end devices from one manufacturer. It's highly profitable but it'll never take 40%+ marketshare without Apple creating a iPod Shuffle-type iPhone. In the long run, I think the iPhone will take the same kind of marketshare than Apple has in the laptop market - around 10% but with a very heavy emphasis on the high end of the market.

In two years time, the market will be swamped with Android devices and the lines between featurephone and smartphone will be even more blurred. It'll be hard for the average consumer to avoid buying an Android phone.
post #43 of 82
Quote:
Originally Posted by melgross View Post

Yes, that's exactly why they're interested. Symbian is too old. It looks as though even Nokia is moving in other directions.

Win Mobil will cost them between $7 and $15 per phone. WebOS will also cost them money. Plus, they would have to pay again for each phone every year when an upgrade came out.

The Linux OS's haven't done too well, and so that leaves Android.

I'd be willing to bet that if Apple licensed their phone OS, they would be lining up at the door for the access to the App Store.

Oh? That's an interesting thought!. Your saying that Apple could potentially dominate the smart phone OS market, maybe even the entire phone OS (dumb and smart). It's kinda' fun to think of the possibilities!

I don't think that Apple would ever do that, any more than they would license Mac OS X. Rather, I think they will go in the opposite direction for both OSs by using proprietary PASC chips in all their hardware that must be present for the OS to work.

I have been playing around with some install base numbers, all current the within the last 6-8 months:


Code:



Total Install Base
___________________

.........45,000,000 iPhone OS X (iPhone and ipod touch)-- Jul 2009
.........75,000,000 Mac OS X all flavors-- Jan 2009
......1,000,000,000 Windows all flavors-- Dec 2008




The iPhone numbers don't include much of the 3GS and $99 3G sales. Gene Munster of Piper Jaffery estimates that by the end of 2009 there will be an install base of 62 million iPhones and 23 million iPod Touches (or a total of 85 million devices running iPhone OS X).

The above estimate does not include any rumored new devices (AppleTV, Tablet, Nano iPhone, etc.) which would, likely, run iPhone OS X.

So, it is not unreasonable to assume that the iPhone OS X install base will surpass the Mac OS X install base some time in 2010.

Now, I am not one of those people that thinks that the iPhone OS X is a second-class OS. Rather, all the underpinnings of Mac OS X are included in iPhone OS X. What Apple has done is remove the parts of Mac OS X that are unnecessary to an Appliance device (like the iPhone/iPod Touch and the AppleTV).

There remains a very powerful Unix system under the hood of iPhone OS X, just waiting to be exploited. For example (on a JailBroken iPhone) it is very easy to install a web server.

Should future Apple appliances require a component from Mac OS X, say the Finder, it could be ported with relative ease (The Snow Leopard Finder has been rewritten in Cocoa).

A good example of where Apple could do just this is with the rumored tablet which would have one foot in the appliance world and the other in the general-purpose computer world, Apple could use an enhanced iPhone OS X as the Tablet OS and include some ported Mac OS X components and apps to allow the Tablet to perform some traditional computing tasks (WP, SS, etc).


Where am I going with this?

Maybe we should think of Mac OS X and iPhone OS X as Apple OS X, a single OS with different components that can be packaged together to run efficiently on specific devices.

It s not too much of a stretch to say that Apple OS X (Mac and iPhone) has a combined install base of 120 million or about 10% of the install base of all major computer OSs (Windows + Apple OS X).

I strongly believe that by mid 2010 Apple will have released an Apple Tablet appliance/computer hybrid, that will revolutionize the "industry".

The appliance part is important as it will allow non-techies (or those new to computers) to have an initial experience that is easy, fun and rewarding.

The computer part is important as it will provide people who currently use laptops and desktops enough capabilities to do what they primarily do and gain all the advantages of a large screen touch tablet.

I think the biggest initial impact will be on netbook and laptop sales, as the tablet will provide a natural alternative to those devices.



Getting back to the OPs statement: "The Linux OS's haven't done too well, and so that leaves Android. [for smart phone competition to iPhone OS X]"


In the larger scheme of things, Android (or any dedicated smartphone OS) may have little future. I think that Google realizes that.

Microsoft has failed miserably, attempting to cram a desktop OS (and interface) into a mobile device-- I have to use that crap at work, why would I want it on my mobile?

Apple is in an unique position in that they have compelling hardware and a flexible OS that can be tailored to [almost] every device they make, from an iPod to a powerful floortop or a server. And to run each of those devices with a best-in-class UI.

Apple is poised to bring the appliance to the desktop, rather than vice versa. I fully expect to see tablets to be used in conjunction with desktop computers... eventually replacing them for most users.

Apple already has the proven OS that accomplishes all this.

Not: soon, this fall, end of next year... but, now!

*
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post #44 of 82
We've been selling HTC Magics for several months now, when we can't get iPhones we tried cross selling them, people don't care they want iPhones.

Quote:
Originally Posted by RichL View Post

It's a very modern smartphone OS with Google's brand behind it. It's being given away for free and Google are even giving the manufacturers free support. When you're in financial trouble, like some of the manufacturers are, that's incredibly attractive.

Android has got Samsung, Motorola, Sony Ericsson, HTC and many more manufacturers backing it in a big way. The momentum is huge. The $0 license fee means that manufacturers can take more risks with the OS and put it onto way more phones than they normally would. If Samsung alone puts it on half their featurephones then it'll take the kind of marketshare that Symbian currently enjoys.

The iPhone is a great product and will obviously do very well. However, it's a small family of high-end devices from one manufacturer. It's highly profitable but it'll never take 40%+ marketshare without Apple creating a iPod Shuffle-type iPhone. In the long run, I think the iPhone will take the same kind of marketshare than Apple has in the laptop market - around 10% but with a very heavy emphasis on the high end of the market.

In two years time, the market will be swamped with Android devices and the lines between featurephone and smartphone will be even more blurred. It'll be hard for the average consumer to avoid buying an Android phone.

Nokia is set to announce their first Maemo phone the N900 in a couple of weeks, based on Linux Symbian will be relegated to their mid range phones.

They are also in talks with Microsoft to get Office onto their phones, possibly the E series which will probably remain Symbian.

I really can't see Microsoft making Office for any Linux based system as this will expose it to porting to desktop Linux which would break the hold they have with Windows.

Meanwhile goodbye Zune HD
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post #45 of 82
*
To paraphrase James Carvil during the 1992 Clinton election campaign:

"It's the user experience, stupid"

*
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post #46 of 82
Quote:
Originally Posted by davebarnes View Post

Eighteen (18) months ago, Apple and RIM had much lower market share.
cf. http://www.canalys.com/pr/2008/r2008021.htm

Apple and RIM had 6.5% and 11.4% respectively.

Side by side comparison of what 18 months makes. RiM is doing great in growth and will continue to do so but they cant get the same profit that Apple can, nor do I see their expensive licensing and BES being as profitable as it once was. It was a great model, but its also a plateauing model.







What percentage of every gross profit dollar in smartphone sales goes to Apple right now?
post #47 of 82
Quote:
Originally Posted by Logisticaldron View Post

Side by side comparison of what 18 months makes. RiM is doing great in growth and will continue to do so but they cant get the same profit that Apple can, nor do I see their expensive licensing and BES being as profitable as it once was. It was a great model, but its also a plateauing model.

What percentage of every gross profit dollar in smartphone sales goes to Apple right now?

Short term --- Apple wins.

But long term, every single iphone carrier has a big bulleye on their back because of the high profile media coverage of the iphone --- especially after analysts going to start reporting whether carriers are getting their money's worth with their iphones.

Blackberry makes more money for the carriers --- using less bandwidth.
post #48 of 82
Quote:
Originally Posted by samab View Post

Short term --- Apple wins.

But long term, every single iphone carrier has a big bulleye on their back because of the high profile media coverage of the iphone --- especially after analysts going to start reporting whether carriers are getting their money's worth with their iphones.

Blackberry makes more money for the carriers --- using less bandwidth.

Can you cite a reference for the the Blackberry statement?

I am under the impression that the carriers are quite happy with the iPhone's effect on their profits, new customers, churn rate, etc.

http://gigaom.com/2009/04/22/why-att...to-the-iphone/

AIR, there is similar satisfaction from carriers in Japan, Australia and others.
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post #49 of 82
Quote:
Originally Posted by Dick Applebaum View Post

Can you cite a reference for the the Blackberry statement?

I am under the impression that the carriers are quite happy with the iPhone's effect on their profits, new customers, churn rate, etc.

http://gigaom.com/2009/04/22/why-att...to-the-iphone/

AIR, there is similar satisfaction from carriers in Japan, Australia and others.

What else are the carriers going to say?

It's been 2 years since AT&T has launched the iphone, and they still are getting quite a hit on their profit margin. It's been 1 year since AT&T has launched the 3G iphone (when they started their massive handset subsidies), and they are still getting quite a hit on their profit margin.

AT&T kept saying that they will start making a lot of money from the iphone long term --- but we have already been going 2 years now.
post #50 of 82
Quote:
Originally Posted by astrosmash View Post

Ballmer in 2007: There’s no chance that the iPhone is going to get any significant market share. No chance.

If this guy had any sense of responsibility and decency he should have resigned. When you make a fool of yourself in such way it's the decent thing to do. I feel sorry for people working for microsoft, although I probably shouldn't because birds of feather stick together and they wouldn't have been with this fat sweaty slob to begin with if there wasn't something wrong with them, still you can't help but pity them...

It's one thing making a prediction, it's another thing saying no chance, then saying again, no chance and having your competitor outsell every other mobile platform in terms of profit. That means you are absolutely clueless.

Anyway, enough with these guys, the world if full of talent and vision for us to spend more than a few moments pondering the really shortsighted fools that are good for making big fat and stupid proclamations.
post #51 of 82
Quote:
Originally Posted by samab View Post

What else are the carriers going to say?

"The iPhone has proven to be a drag on our profits, so we're not renewing our relationship with Apple."

There, that wasn't so hard, was it? I mean, why wouldn't a carrier say this, if the iPhone is such a boat anchor? Seems like they'd want to get rid of the damn thing as quickly as possible, so they'd have no incentive to suck up to Apple, would they?

Quote:
It's been 2 years since AT&T has launched the iphone, and they still are getting quite a hit on their profit margin. It's been 1 year since AT&T has launched the 3G iphone (when they started their massive handset subsidies), and they are still getting quite a hit on their profit margin.

AT&T kept saying that they will start making a lot of money from the iphone long term --- but we have already been going 2 years now.

And yet it was widely reported that AT&T was doing everything in their power to hold on to their exclusive agreement with Apple, beyond the original agreement.

Why would that be, do you suppose? Is it that AT&T wants to lose money on a phone that does nothing but stresses their bandwidth and sucks up all their profits via subsidies?

Or let me put it another way: your characterization of the iPhone's profit profile for the carriers doesn't make any sense, given what we know,
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post #52 of 82
Quote:
Originally Posted by addabox View Post

"The iPhone has proven to be a drag on our profits, so we're not renewing our relationship with Apple."

There, that wasn't so hard, was it? I mean, why wouldn't a carrier say this, if the iPhone is such a boat anchor? Seems like they'd want to get rid of the damn thing as quickly as possible, so they'd have no incentive to suck up to Apple, would they?

And yet it was widely reported that AT&T was doing everything in their power to hold on to their exclusive agreement with Apple, beyond the original agreement.

Why would that be, do you suppose? Is it that AT&T wants to lose money on a phone that does nothing but stresses their bandwidth and sucks up all their profits via subsidies?

Or let me put it another way: your characterization of the iPhone's profit profile for the carriers doesn't make any sense, given what we know,

Regarding the agreement, it was reported that Apple had to sign another year of exclusivity to drop the failed profit-sharing model, which was great for the consumer.

Beyond that, it’s quite possible that AT&T isn’t making much or any additional net profit at this time with the iPhone, but that is not the same as AT&T isn’t making money on the iPhone as others (not you) have suggested. With the iPhone AT&T has had to grow and beef up their network infrastructure substantially. Something we wish they would have done years ago but only seem to have started to go full throttle because of the iPhone. This upgrading is costing them billions in investments. Investments that cost them net profits but that better their network and add to the value of the company. The long term of what AT&T is doing is profitable, even if the short term profit isn’t.
post #53 of 82
Quote:
Originally Posted by addabox View Post

"The iPhone has proven to be a drag on our profits, so we're not renewing our relationship with Apple."

There, that wasn't so hard, was it? I mean, why wouldn't a carrier say this, if the iPhone is such a boat anchor? Seems like they'd want to get rid of the damn thing as quickly as possible, so they'd have no incentive to suck up to Apple, would they?

And yet it was widely reported that AT&T was doing everything in their power to hold on to their exclusive agreement with Apple, beyond the original agreement.

Why would that be, do you suppose? Is it that AT&T wants to lose money on a phone that does nothing but stresses their bandwidth and sucks up all their profits via subsidies?

Or let me put it another way: your characterization of the iPhone's profit profile for the carriers doesn't make any sense, given what we know,

No, the carriers are going to bury the results in fine print inside their public filings and paint a rosy picture. That's how the real world works. And most countries don't have a lot of public filing requirements --- just look at Vodafone in the UK, they give out half year results instead of American SEC quarterly filings.

Sure AT&T is doing everything right now to hang on to their exclusive agreement --- the reason, as soon as the exclusive agreement lapses, they face massive subscriber losses.

But the problem is deeper than that --- AT&T SHOULD be making money RIGHT NOW, instead of still facing profit margin hits. When are they going to make the real profits? If AT&T ain't making money right now, faces losing a lot of subscribers in 18(?) months when the exclusive lapses and must renew the deal with Apple and further and further and further delaying their money making schedule.

AT&T kept saying that they will make money in the long run --- but we are already talking about the END of the original iphone exclusivity agreement, so when are they going to make that supposed money.
post #54 of 82
Quote:
Originally Posted by samab View Post

What else are the carriers going to say?

It's been 2 years since AT&T has launched the iphone, and they still are getting quite a hit on their profit margin. It's been 1 year since AT&T has launched the 3G iphone (when they started their massive handset subsidies), and they are still getting quite a hit on their profit margin.

AT&T kept saying that they will start making a lot of money from the iphone long term --- but we have already been going 2 years now.

AT&T is not getting a hit on their profit margin, and you know it.

What happens is what happens whenever a very popular new phone model comes out. Hugh initial sales cut profits for the quarter by a bit. But those profits are more than made up by the two year profits from the contracts. And as has been said by AT&T and other carriers, iPhone customers are willing to pay more for their monthly use of the phone than are other customers, and the churn is far less.

You are being disingenuous about this, and ignoring all the other facts. No other phone sells in such numbers for the first quarter, and none have such a high percentage of sales with one carrier. So it's to be expected that AT&T's payment to Apple that quarter is so high. If they sold less iPhones at one, then you'd be saying that the phone didn't sell too well and had no affect.

You can't have it both ways.
post #55 of 82
Quote:
Originally Posted by melgross View Post

AT&T is not getting a hit on their profit margin, and you know it.

What happens is what happens whenever a very popular new phone model comes out. Hugh initial sales cut profits for the quarter by a bit. But those profits are more than made up by the two year profits from the contracts. And as has been said by AT&T and other carriers, iPhone customers are willing to pay more for their monthly use of the phone than are other customers, and the churn is far less.

You are being disingenuous about this, and ignoring all the other facts. No other phone sells in such numbers for the first quarter, and none have such a high percentage of sales with one carrier. So it's to be expected that AT&T's payment to Apple that quarter is so high. If they sold less iPhones at one, then you'd be saying that the phone didn't sell too well and had no affect.

You can't have it both ways.

AT&T said that they won't make money on the iphone until 2010 --- the moment that the exclusive iphone deal will lapse (supposedly).

http://blogs.barrons.com/techtraderd...etive-in-2010/

So during the entire existence of the iphone exclusive deal, AT&T won't make money.
post #56 of 82
Quote:
Originally Posted by Dick Applebaum View Post

Oh? That's an interesting thought!. Your saying that Apple could potentially dominate the smart phone OS market, maybe even the entire phone OS (dumb and smart). It's kinda' fun to think of the possibilities!

I don't think that Apple would ever do that, any more than they would license Mac OS X. Rather, I think they will go in the opposite direction for both OSs by using proprietary PASC chips in all their hardware that must be present for the OS to work.

I have been playing around with some install base numbers, all current the within the last 6-8 months:


Code:



Total Install Base
___________________

.........45,000,000 iPhone OS X (iPhone and ipod touch)-- Jul 2009
.........75,000,000 Mac OS X all flavors-- Jan 2009
......1,000,000,000 Windows all flavors-- Dec 2008




The iPhone numbers don't include much of the 3GS and $99 3G sales. Gene Munster of Piper Jaffery estimates that by the end of 2009 there will be an install base of 62 million iPhones and 23 million iPod Touches (or a total of 85 million devices running iPhone OS X).

The above estimate does not include any rumored new devices (AppleTV, Tablet, Nano iPhone, etc.) which would, likely, run iPhone OS X.

So, it is not unreasonable to assume that the iPhone OS X install base will surpass the Mac OS X install base some time in 2010.

Now, I am not one of those people that thinks that the iPhone OS X is a second-class OS. Rather, all the underpinnings of Mac OS X are included in iPhone OS X. What Apple has done is remove the parts of Mac OS X that are unnecessary to an Appliance device (like the iPhone/iPod Touch and the AppleTV).

There remains a very powerful Unix system under the hood of iPhone OS X, just waiting to be exploited. For example (on a JailBroken iPhone) it is very easy to install a web server.

Should future Apple appliances require a component from Mac OS X, say the Finder, it could be ported with relative ease (The Snow Leopard Finder has been rewritten in Cocoa).

A good example of where Apple could do just this is with the rumored tablet which would have one foot in the appliance world and the other in the general-purpose computer world, Apple could use an enhanced iPhone OS X as the Tablet OS and include some ported Mac OS X components and apps to allow the Tablet to perform some traditional computing tasks (WP, SS, etc).


Where am I going with this?

Maybe we should think of Mac OS X and iPhone OS X as Apple OS X, a single OS with different components that can be packaged together to run efficiently on specific devices.

It s not too much of a stretch to say that Apple OS X (Mac and iPhone) has a combined install base of 120 million or about 10% of the install base of all major computer OSs (Windows + Apple OS X).

I strongly believe that by mid 2010 Apple will have released an Apple Tablet appliance/computer hybrid, that will revolutionize the "industry".

The appliance part is important as it will allow non-techies (or those new to computers) to have an initial experience that is easy, fun and rewarding.

The computer part is important as it will provide people who currently use laptops and desktops enough capabilities to do what they primarily do and gain all the advantages of a large screen touch tablet.

I think the biggest initial impact will be on netbook and laptop sales, as the tablet will provide a natural alternative to those devices.



Getting back to the OPs statement: "The Linux OS's haven't done too well, and so that leaves Android. [for smart phone competition to iPhone OS X]"


In the larger scheme of things, Android (or any dedicated smartphone OS) may have little future. I think that Google realizes that.

Microsoft has failed miserably, attempting to cram a desktop OS (and interface) into a mobile device-- I have to use that crap at work, why would I want it on my mobile?

Apple is in an unique position in that they have compelling hardware and a flexible OS that can be tailored to [almost] every device they make, from an iPod to a powerful floortop or a server. And to run each of those devices with a best-in-class UI.

Apple is poised to bring the appliance to the desktop, rather than vice versa. I fully expect to see tablets to be used in conjunction with desktop computers... eventually replacing them for most users.

Apple already has the proven OS that accomplishes all this.

Not: soon, this fall, end of next year... but, now!

*

I don't want to break your post down to innumerable little parts, though I'm itching to.

So, I'll say that I agree with the general thrust of your argument.

To pinpoint a few specifics though, and explain in more detail.

I agree that it's far from likely that Apple would license their phone OS. I threw that out as a consideration in the Win Mobile paradox.

Going back to what I said about having to pay for Win Mobile, and paying every year in order to allow already bought phones to upgrade to the newest version, which is one of the biggest revolutionary advances Apple made in the cell phone universe, and one of the ways Apple is "wrecking" the industry (when that was written, he meant that Apple was wrecking the cell industries "traditional" way of doing business, not that they were wrecking the industry itself, which some people had thought).

What Apple had done was to essentially end the business of requiring people to buy a new phone in order to get the newest OS advances. That was a major part of the industries strategy. Now, people can keep their phones longer, perhaps a year or two longer.

Man! That just KILLS sales for them, doesn't it? But Apple isn't depending on it.

So Win Mobile depends on selling licenses every year, and would depend on also selling them to the same people every year. How do the phone companies react to Apple GIVING the OS away each year? Well, they go to free OS's.

Well, that KILLs MS's strategy as well. Why pay them for the OS? Esp. since its not doing too well. And, Win Mobile is not Windows at all. It has nothing to do with Windows. It's a totally different, and much simpler, and more primitive phone OS that was saddled with a Windows look-a-like GUI to make Windows users comfortable with it.

So maybe instead, for those who care, we can say that Apple is wreaking havoc on the industry.

Now, if Apple were to license the OS, it could be very different. Just like the cry for Apple to license OS X to other computer manufacturers, I'm willing to bet that other phone manufacturers would be willing to pay Apple for their phone OS.

Right now, I think that it's the only phone OS that anyone would be willing to pay for. If that came with access to the App Store, people would be willing to pay $10 a year for the upgrade.

Would it dominate smartphones? Well, it could, particularly if phones were designed to make something of it.

But I don't think it will happen. Apple has other ideas.

As for marketshare, even if Apple doesn't license either OS, well, there too I see Apple increasing.

Remember that every computer that Apple sells in advance of the PC industries growth increase, is one less Windows machine being sold.

So when we finally come out of this terrible recession, and the PC industry again grows at 9% a year, and Apple again grows at 20 to 35% a year, they will be taking from the PC industries growth. Over time, if that can continue, even at a lower multiple, the percentage shift will be noticeable.

We've now seen Apple move from a low of 1.2% worldwide sales to 3.8%, and from 2.8% US sales to 8.7%. That's a pretty big movement in just a few years.

At one point in time several years ago when Apple again began to grow, I thought that they could get to perhaps 4% worldwide, and 10% USA. Now I feel that as long as Apple continues to do the right thing, that will be conservative.

I can see 15% USA, and 7% worldwide. If Apple moves to increase their worldwide presence enough, possibly 10% worldwide.

While I have hopes, I won't even guess if they can do better until they reach close to those goals and they are still growing well.

I do have to admit though that Win 7 might prove to be more difficult than Vista.

I don't believe that the iPhone OS is a second class OS, but the small size of the devices did require a dropping of a lot of what we expect in our computers and software.

I can see some far out solutions, but they remain that - science fiction. Otherwise, the small screen and so far, weak processing, limits what they can do. That part will change over time, but will never be close to the processing that a stationary machine will have.

There are two limits to small devices now, and for the medium term. We all know what they are.

The now almost ancient concept of entering text with a "standard" keyboard is still by far the best method available. There is none as good. That's one major problem with a smartphone, text entry will never be as good for long documents.

The second is, of course, the small screen. We simply can't get much information on a small screen. Panning is a terrible way to look at large informational programs.

So while the iPhone OS isn't second rate when compared to the "computer" version, it has its limits, and will for at least, oh, five more years. Further than that is too far away to predict.
post #57 of 82
Quote:
Originally Posted by Dick Applebaum View Post

*
To paraphrase James Carvil during the 1992 Clinton election campaign:

"It's the user experience, stupid"

*

It's also user perception. One thing I learned way back when in advertising, is that what people THINK about something is more important than the actuality.

Apple is gong to have to stay on the ball here.
post #58 of 82
Quote:
Originally Posted by samab View Post

AT&T said that they won't make money on the iphone until 2010 --- the moment that the exclusive iphone deal will lapse (supposedly).

http://blogs.barrons.com/techtraderd...etive-in-2010/

So during the entire existence of the iphone exclusive deal, AT&T won't make money.

First of all that was almost a year and a half ago, when far fewer phones were being sold. While they're paying more in subsidies because more phones are being sold, they're also getting far more money in from the contracts. We also don't know if the contract is over in 2010, or if it is, when in 2010. Nevertheless, AT&T is dong very well with the phones.

Just because no other manufacturers phones have sold as well in the same amount of time, or to one carrier, doesn't mean the exact same situation isn't true for Nokia's phones, RIM's phones etc., except for the reduced sales. It's not likely the carriers are making money on them for some time either. When you look at the cost of all the top smartphones's unlocked prices, you can see that they are all close. They are also close when subsidized. That means that the subsidies are about the same. AT&T and the iPhone aren't unique.

It's just that the large iPhone sales have more of an effect on immediate profits.
post #59 of 82
Quote:
Originally Posted by melgross View Post

First of all that was almost a year and a half ago, when far fewer phones were being sold. While they're paying more in subsidies because more phones are being sold, they're also getting far more money in from the contracts. We also don't know if the contract is over in 2010, or if it is, when in 2010. Nevertheless, AT&T is dong very well with the phones.

Just because no other manufacturers phones have sold as well in the same amount of time, or to one carrier, doesn't mean the exact same situation isn't true for Nokia's phones, RIM's phones etc., except for the reduced sales. It's not likely the carriers are making money on them for some time either. When you look at the cost of all the top smartphones's unlocked prices, you can see that they are all close. They are also close when subsidized. That means that the subsidies are about the same. AT&T and the iPhone aren't unique.

It's just that the large iPhone sales have more of an effect on immediate profits.

So they are selling more iphones now, they are paying more subsidies now --- but that doesn't mean that they are going to change the schedule of when profits are going to start coming in.

But what we know is that when AT&T made their original announcement of their profit margin hit --- they expected that they won't make money during the entire 2 year contract you signed for the iphone.

It's not like what most people said earlier --- well, AT&T loses money in the first year and they start making money in the second year ---- and over the 2 year contract, they will make money.

We already know that the Curve beat the iphone in sales. We know that Verizon Wireless INCREASED their profit margin to 45% in the last quarter. We don't have Verizon Wireless announcing their profit margin will be hit by a buy one blackberry get one blackberry for free sale (and the curve outsold the iphone) --- so no, iphone is the only smartphone with that kind of handset subsidies.
post #60 of 82
Quote:
Originally Posted by samab View Post

So they are selling more iphones now, they are paying more subsidies now --- but that doesn't mean that they are going to change the schedule of when profits are going to start coming in.

But what we know is that when AT&T made their original announcement of their profit margin hit --- they expected that they won't make money during the entire 2 year contract you signed for the iphone.

It's not like what most people said earlier --- well, AT&T loses money in the first year and they start making money in the second year ---- and over the 2 year contract, they will make money.

We already know that the Curve beat the iphone in sales. We know that Verizon Wireless INCREASED their profit margin to 45% in the last quarter. We don't have Verizon Wireless announcing their profit margin will be hit by a buy one blackberry get one blackberry for free sale (and the curve outsold the iphone) --- so no, iphone is the only smartphone with that kind of handset subsidies.

The Curve is a cheaper phone, so subsidies would be lower, and you don't know what the deal between RIM and Verizon were for that promotion. How many Curves did Verizon sell in that quarter?
post #61 of 82
Quote:
Originally Posted by melgross View Post

The Curve is a cheaper phone, so subsidies would be lower, and you don't know what the deal between RIM and Verizon were for that promotion. How many Curves did Verizon sell in that quarter?

Don't need to know the specifics --- only need to know that Verizon has never announced a single profit margin warning in the time period when they have the buy one get one free sale.

Verizon Wireless's profit margin kept going up when AT&T Wireless profit margin kept going down during the last 2 years when the iphone was launched.
post #62 of 82
Quote:
Originally Posted by samab View Post

Don't need to know the specifics --- only need to know that Verizon has never announced a single profit margin warning in the time period when they have the buy one get one free sale.

Verizon Wireless's profit margin kept going up when AT&T Wireless profit margin kept going down during the last 2 years when the iphone was launched.

So without the numbers, you're just guessing.
post #63 of 82
Quote:
Originally Posted by melgross View Post

So without the numbers, you're just guessing.

Not guessing at all --- it's a legal/accounting issue.

Do you think that Verizon is doing some funny math on their SEC filings? I have no reason to believe that they are doing some funny math on their SEC filings.
post #64 of 82
Quote:
Originally Posted by melgross View Post

I don't want to break your post down to innumerable little parts, though I'm itching to.

So, I'll say that I agree with the general thrust of your argument.

To pinpoint a few specifics though, and explain in more detail.

I agree that it's far from likely that Apple would license their phone OS. I threw that out as a consideration in the Win Mobile paradox.

Going back to what I said about having to pay for Win Mobile, and paying every year in order to allow already bought phones to upgrade to the newest version, which is one of the biggest revolutionary advances Apple made in the cell phone universe, and one of the ways Apple is "wrecking" the industry (when that was written, he meant that Apple was wrecking the cell industries "traditional" way of doing business, not that they were wrecking the industry itself, which some people had thought).

What Apple had done was to essentially end the business of requiring people to buy a new phone in order to get the newest OS advances. That was a major part of the industries strategy. Now, people can keep their phones longer, perhaps a year or two longer.

Man! That just KILLS sales for them, doesn't it? But Apple isn't depending on it.

So Win Mobile depends on selling licenses every year, and would depend on also selling them to the same people every year. How do the phone companies react to Apple GIVING the OS away each year? Well, they go to free OS's.

Well, that KILLs MS's strategy as well. Why pay them for the OS? Esp. since its not doing too well. And, Win Mobile is not Windows at all. It has nothing to do with Windows. It's a totally different, and much simpler, and more primitive phone OS that was saddled with a Windows look-a-like GUI to make Windows users comfortable with it.

So maybe instead, for those who care, we can say that Apple is wreaking havoc on the industry.

Now, if Apple were to license the OS, it could be very different. Just like the cry for Apple to license OS X to other computer manufacturers, I'm willing to bet that other phone manufacturers would be willing to pay Apple for their phone OS.

Right now, I think that it's the only phone OS that anyone would be willing to pay for. If that came with access to the App Store, people would be willing to pay $10 a year for the upgrade.

Would it dominate smartphones? Well, it could, particularly if phones were designed to make something of it.

But I don't think it will happen. Apple has other ideas.

As for marketshare, even if Apple doesn't license either OS, well, there too I see Apple increasing.

Remember that every computer that Apple sells in advance of the PC industries growth increase, is one less Windows machine being sold.

So when we finally come out of this terrible recession, and the PC industry again grows at 9% a year, and Apple again grows at 20 to 35% a year, they will be taking from the PC industries growth. Over time, if that can continue, even at a lower multiple, the percentage shift will be noticeable.

We've now seen Apple move from a low of 1.2% worldwide sales to 3.8%, and from 2.8% US sales to 8.7%. That's a pretty big movement in just a few years.

At one point in time several years ago when Apple again began to grow, I thought that they could get to perhaps 4% worldwide, and 10% USA. Now I feel that as long as Apple continues to do the right thing, that will be conservative.

I can see 15% USA, and 7% worldwide. If Apple moves to increase their worldwide presence enough, possibly 10% worldwide.

While I have hopes, I won't even guess if they can do better until they reach close to those goals and they are still growing well.

I do have to admit though that Win 7 might prove to be more difficult than Vista.

The above is a good analysts-- I agree, with the caveat that it is based on the current offerings of computers and smart phones (the subject of this thread).

Quote:

I don't believe that the iPhone OS is a second class OS, but the small size of the devices did require a dropping of a lot of what we expect in our computers and software.

I can see some far out solutions, but they remain that - science fiction. Otherwise, the small screen and so far, weak processing, limits what they can do. That part will change over time, but will never be close to the processing that a stationary machine will have.

There are two limits to small devices now, and for the medium term. We all know what they are.

The now almost ancient concept of entering text with a "standard" keyboard is still by far the best method available. There is none as good. That's one major problem with a smartphone, text entry will never be as good for long documents.

The second is, of course, the small screen. We simply can't get much information on a small screen. Panning is a terrible way to look at large informational programs.

So while the iPhone OS isn't second rate when compared to the "computer" version, it has its limits, and will for at least, oh, five more years. Further than that is too far away to predict.

Again, I generally agree, when talking about the current offerings of computers and smart phones. But the elephant in the rumor [sp] is the 10" mobile tablet.

Apple could use that device to [begin to] break the shackles of a small screen and kb/mouse.

Sure panning on a small screen is a pain... but it is also a pain on a large screen or multiple large screens. So, being flexible, we humans adjust to the capabilities at hand. A 10" display provides more than 4 times the area of the iPhone's 3 1/2" display.

Also, text entry becomes less of an issue with a larger touch screen displaying a larger keyboard (QWERTY or alternatives), I won't cite them here, but there are lots of references that show that speed, accuracy, lessening of physical pain/limitations can be significantly improved with different kb layouts. The touch screen gives the ability to experiment with different layouts on a virtual keyboard. Or, something as simple as moving the keys [in the standard QWERTY] farther apart (I have fat fingers).

So, while I agree with:

"That's one major problem with a smartphone, text entry will never be as good for long documents".

I might challenge that with a larger screen virtual keyboard.

In any case, I don't see people using a smart phone or a tablet for power text entry,

The computational needs of a tablet could be handled, today, with multiple ARM CPUs, or in the very near future, with MultiCore ARMs and/or PASC custom chips.

The OS, and the basic apps: To me it makes sense to enhance the iPhone OS X to support the capabilities that come with a larger screen and port the additional features of Mac OS X Snow Leopard that "make sense". I could go either way on "multiple windows vs in-your-face" on a 10-inch screen. I don't think Photoshop, Final Cut Studio, or Logic make sense on a 10' tablet, but enhanced, touch-driven, iLife and iWorks apps would. I suspect Apple has already done most of the work on both the OS and the apps.

IMO, the limiting feature of a mobile tablet will be weight, or to be more specific the weight of the battery necessary to use the device for a reasonable period of time.

If Apple can hit the sweet spot and provide a mobile device that meets the needs of the masses, it will revolutionize both the smart phone and (mobile, for now) computer industries.

A lot of my investment $ are betting they can!

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post #65 of 82
Quote:
Originally Posted by Dlux View Post

Why stop there? Why not label anyone who doesn't think Android will beat Apple as clinically psychotic and probably suffers from microcephaly as well?

Why stating the obvious..?

post #66 of 82
Quote:
Originally Posted by samab View Post

Not guessing at all --- it's a legal/accounting issue.

Do you think that Verizon is doing some funny math on their SEC filings? I have no reason to believe that they are doing some funny math on their SEC filings.

No. Just that their profits dropped as well, for the same reasons AT&T profit dropped.
post #67 of 82
What's all this Android vs. Apple talk?

Android is currently nowhere. Google seems to be half-assing it. When it picks up momentum, if ever, then maybe we can have these comparisons.

The iPhone sets the bar. It's the standards to beat. So far the competiton is failing miserably, even after two years.
post #68 of 82
Quote:
Originally Posted by melgross View Post

No. Just that their profits dropped as well, for the same reasons AT&T profit dropped.

Actually, Verizon Wireless' operating income went up and profit margins went up.
post #69 of 82
Quote:
Originally Posted by Tofino View Post

i think that's going to be the biggest drawback for android. the average consumer will have to read the fineprint about the included features for specific models. that could lead to some buyer's remorse. overall i think android is going to be a viable alternative. it's just not going to be the no-brainer that (i think) the iphone is.

Well it sucks less than Symbian to develop for and works better than Symbian too. Sure Android will have large market share. The question will it have larger revenue share than OSX?

You can pretty much assume Android will kill off the other Linux variants except for Palm.
post #70 of 82
Quote:
Originally Posted by Quadra 610 View Post

What's all this Android vs. Apple talk?

Android is currently nowhere. Google seems to be half-assing it. When it picks up momentum, if ever, then maybe we can have these comparisons.

Android isn't yet a revenue stream for Google. The iPhone is for Apple.

To be honest, I'm not sure how Android gets monetized in a big way for Google. I guess it doesn't and is there just to get folks more wrapped into the Google ecosystem. Of which I am a mostly happy denizen. Google is better at web apps than Apple...even if I do pay Apple to be on mobileme it's mostly so-so.

You could say that Apple is half-assing Mobileme as well.
post #71 of 82
Quote:
Originally Posted by samab View Post

Don't need to know the specifics --- only need to know that Verizon has never announced a single profit margin warning in the time period when they have the buy one get one free sale.

Verizon Wireless's profit margin kept going up when AT&T Wireless profit margin kept going down during the last 2 years when the iphone was launched.

"King said Verizon's territory, which includes New York and New Jersey, has helped it weather the economic downturn more easily than industry leader AT&T Inc (T.N), which serves areas such as Florida, hit hard by the housing crisis.

"You are clearly seeing some geographic differences in the areas they operate in with regards to economic pressures," King said, even as he noted that Verizon's FiOS growth was weaker than he had expected"

http://www.reuters.com/article/techn...AB289020080728

Odd how I might expect an analyst to remark on what a drag the iPhone is on AT&T in that paragraph as opposed to regional differences.

"AT&T Inc (T.N) posted a smaller-than-expected drop in quarterly profit on improved margins for its wireless service, helped by the iPhone, and strong growth for its video and high-speed Internet service.

Subsidies for Apple Inc's (AAPL.O) iPhone had cost AT&T dearly in recent quarters, but analysts said the partnership is now starting to help rather than hurt profits as users of the touch-screen phone spend heavily on data services.

AT&T shares rose nearly 4 percent as analysts said the biggest U.S. phone company had reported impressive results given the weak economy.

"For this economy, it was an outstanding performance," said Commresearch analyst Gregory Lundberg, citing very strong broadband, video and wireless growth.

AT&T's first-quarter profit fell to $3.13 billion, or 53 cents per share, from $3.46 billion, or 57 cents a share, a year earlier. Analysts on average were expecting 48 cents per share, according to Reuters Estimates.

IPHONE BOOST/PREPAID DRAG

AT&T reported a wireless profit margin of 40.9 percent, above the 39.2 percent forecast by Bernstein analyst Craig Moffett, who saw iPhone as the key driver.

AT&T said 1.6 million Apple iPhone customers had activated services on the AT&T network during the quarter, more than 40 percent of whom were new to the telephone operator.

"The base of iPhone customers is now large enough to offset the subsidies for new iPhone users," said Moffett."

http://www.reuters.com/article/techn...53L29L20090422

Gee, analysts think you're wrong.
post #72 of 82
And then all the profit and profit margins plunged in Q2 when they launched the new iphone.

So basically Apple launches a new iphone every 12 months and AT&T gets one single quarter where they have a lower than expected margins (but still lower margins) and then promptly gets their profit margin fall down by 3-4% in the quarter when they have a new iphone.
post #73 of 82
Quote:
Originally Posted by samab View Post

Actually, Verizon Wireless' operating income went up and profit margins went up.

You can look at the first sentence in this Verizon report of earnings. As you can clearly see, when compared to last year's quarter, which is what we are, or at least should be talking about, both their EPS and their adjusted EPS went DOWN.

Their ARPU went down to $51.10.

And as a result of Allitel's purchase, their revenues went UP. I would hope so!

I don't know where you get your information from.

http://newscenter.verizon.com/press-...s-revenue.html
post #74 of 82
Quote:
Originally Posted by samab View Post

And then all the profit and profit margins plunged in Q2 when they launched the new iphone.

So basically Apple launches a new iphone every 12 months and AT&T gets one single quarter where they have a lower than expected margins (but still lower margins) and then promptly gets their profit margin fall down by 3-4% in the quarter when they have a new iphone.

You twist the numbers. Just give up. You're wrong.
post #75 of 82
Quote:
Originally Posted by melgross View Post

You can look at the first sentence in this Verizon report of earnings. As you can clearly see, when compared to last year's quarter, which is what we are, or at least should be talking about, both their EPS and their adjusted EPS went DOWN.

Their ARPU went down to $51.10.

And as a result of Allitel's purchase, their revenues went UP. I would hope so!

I don't know where you get your information from.

http://newscenter.verizon.com/press-...s-revenue.html

I said Verizon Wireless. EPS and adjusted EPS are both for the whole Verizon parent company.

As a result of the Alltel purchase --- their ARPU went down.

I got the information from here --- the wireless section of their business, but their operating income and profit margins went up:

http://investor.verizon.com/financia...66680247494874
post #76 of 82
Interesting turnover. Pure telephone interface is now seen as revolutionary one in the telephony realm.

We mean Apple no harm.

People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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We mean Apple no harm.

People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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post #77 of 82
Quote:
Originally Posted by samab View Post

I said Verizon Wireless. EPS and adjusted EPS are both for the whole Verizon parent company.

As a result of the Alltel purchase --- their ARPU went down.

I got the information from here --- the wireless section of their business, but their operating income and profit margins went up:

http://investor.verizon.com/financia...66680247494874

As you constantly like to point out to us, Alltel is part of Verizon now, so their contribution is Verizon's performance.

As I said Verizon's ARPU went down.

Facts are facts.
post #78 of 82
Quote:
Originally Posted by melgross View Post

As you constantly like to point out to us, Alltel is part of Verizon now, so their contribution is Verizon's performance.

As I said Verizon's ARPU went down.

Facts are facts.

It was an external one time event --- and on a pro-forma basis, Verizon Wireless went up.

Meanwhile, with 2 years of iphone selling --- AT&T Wireless is still behind on the ARPU with $50.70.
post #79 of 82
Quote:
Originally Posted by samab View Post

It was an external one time event --- and on a pro-forma basis, Verizon Wireless went up.

Meanwhile, with 2 years of iphone selling --- AT&T Wireless is still behind on the ARPU with $50.70.

But it's moved up because of it, and will continue to do so.
post #80 of 82
Gentlemen, I am sure MS is happy that this thread has been diverted from the fact that the iPhone has outsold all WM phones in Q2 combined. As someone else put it in another thread, this is MS's Wile E. Coyote moment where there feet are still moving, but the ground has already been yanked out from under them.
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