Market shares collapse with 'brutal speed' in cyclical smartphone industry - Page 2

Quote:

Originally Posted by Frood 

 

I'd be interested if you (or anyone) could provide a link or something with substance to that incentive claim.  Either way I'd bet the 'incentive' amount is far less than Apple's strategy of providing a substantial disincentive to carriers- 'if you sell one of my iPhones to a customer- you owe me $300'  Carriers make up for the losses they take selling iPhones over the long run by the locked in contracts.  Since those are a fixed price (Android users pay the same monthly rates as iPhone users) it is actually a tremendous advantage for Apple (not in number of sales, but in profit margins).  Essentially Android users who pay high monthly rates to help carriers offset iPhone subsidies are really helping Apple users buy their expensive phones.

 

Back in 2010 or maybe earlier Google did reportedly share some small percentage of search revenue flowing from each carriers Google-enabled handsets, tho details are hard to come by. I don't see any mention since then so no idea if they still do so. It would make sense to from a business standpoint IMO.

http://arstechnica.com/gadgets/2010/03/google-reportedly-shares-mobile-ad-revenue-with-key-partners/

Quote:

Originally Posted by jragosta 


Why the discrepancy? Why is Blackberry 50% in one chart and in the teens in the other? Also, one chart shows Windows Mobile growing in 07-08 and the other shows it shrinking. Don't you think it would be helpful to label the charts so we know what's going on?

The second chart is based on total cell phones. 

Quote:

Originally Posted by stelligent 

 

There have never been as many BBs as there are iPhones or Androids. So it is impossible for past BB users to make up a significant portion of any competitor's market share.

I was trying to analyze the characteristics of the users of each group of smartphone users.  So the actual number of users is less relevant. 

Quote:

Originally Posted by jragosta 

Quote:

Originally Posted by mstone 

This one is US so Nokia is not very much.
 

Why the discrepancy? Why is Blackberry 50% in one chart and in the teens in the other? Also, one chart shows Windows Mobile growing in 07-08 and the other shows it shrinking. Don't you think it would be helpful to label the charts so we know what's going on?

I did on the top one. I wrote this is US. The bottom one I believe is worldwide.

Quote:

Originally Posted by tzeshan 

The second chart is based on total cell phones. 

I believe it says Smartphones in the title of the chart if we are looking at the same image.

Quote:

Originally Posted by mstone 

That would be a different chart indeed but this chart is about Android's rapid adoption which is why it starts when Android was introduced.

The chart would not be different per si, the visual 'perception of rapid change' may change to some readers... IMO the chart is an abrupt change from what I considered would be historical for nokia etc,

Quote:

Originally Posted by jragosta 


Classic misinterpretation of the data.

First, look at every line except Apple and Android. The changes are smooth and consistent. The market itself doesn't change that quickly.

There are only 2 data points where Apple changed quickly - the release of the iPhone 4S and the iPhone 5. In both cases, their share dropped a bit in the quarter before the release and then jumped after the product release. If you smooth those two points, you see that there are no drastic changes.

Android, of course, does just the opposite of what Apple does. In the months when Apple's customers are holding off their purchases, Android's share looks higher. When Apple gets a surge of orders from their new product, Android's share drops.

In the end, there's nothing in this market that's unusual - except that the dominant player only has a single (major) product and updates the product relatively infrequently. So the conclusion should be "Apple sales drop before new product launch and jump after new product launch." Hardly news to anyone.

Other than that, everything is a smooth, obvious trend.

Interesting counter-point.  It wouldn't make for a very juicy headline though. 

Quote:

Originally Posted by jragosta 


If you follow the first link, you'll get more detail:
http://paidcontent.org/2010/03/26/419-androids-secret-sauce-googles-little-known-advertising-rev-share-deals/
So they are providing a subsidy to carriers who sell Android handsets. Note, however, the last sentence. If I'm reading that correctly, they're also paying the carriers a percentage of search revenue for iPhones, as well, since Google is the default search engine in iOS, so this would not incentivize carriers to sell Android handsets. One report says that they're also paying Apple $1 B per year for the privilege.

That's the way I read it too. Revenue is shared whether it originates from Android, iOS or other Google Search-enabled mobile devices. 

Quote:

Originally Posted by tzeshan 

This chart is very indicative of the war between iOS and Android.  The Android based smartphones inaugurated in 2009/4. It quickly overtook iPhone in market share in 2010/1.  So in terms of market share iPhone was never a competitor to Android smartphones. 

 

I think there are two reasons.  First, there are huge number of Microsoft Windows PC users, they are historically dislike whatever Apple made.  Second, there are huge number of Microsoft Windows PC users, they dislike Apple because its products are expensive. 

 

Another interesting things you can see from the graph is Blackberry phone was not significantly affected by iPhone.  Its market share started to decline after the introduction of Android phones.  So Blackberry phones lost market share to Android phones.  I will say the most significant composition of present Android smartphones come from Blackberry users. So it is ironic and stupid that Blackberry chief will choose to attack iPhone instead. 

The graph also showed that there was a tug of war between iPhones and BBs before Android was introduced.  iPhone market share rose because of new model.  In the same quarter BB market share declined.  iPhone market share declined after the initial burst.  BBs market share then rose.  Then after Android was launched in 2009/4 BB market share decided dropped.  Thus BB lost market share to Android not really to iPhone.

Quote:

Originally Posted by jragosta 


If you follow the first link, you'll get more detail:
http://paidcontent.org/2010/03/26/419-androids-secret-sauce-googles-little-known-advertising-rev-share-deals/
So they are providing a subsidy to carriers who sell Android handsets. Note, however, the last sentence. If I'm reading that correctly, they're also paying the carriers a percentage of search revenue for iPhones, as well, since Google is the default search engine in iOS, so this would not incentivize carriers to sell Android handsets. One report says that they're also paying Apple $1 B per year for the privilege.

That's not really a subsidy since they're not asking them to suck up the cost- its actually a big part of Google's business model. Anyone who steers a 'hit' to Google via Google through their platform shares in the success. Apple users earned Apple $1billion from Google by choosing to use Google search on their iPhones. Carriers put their mandatory bloat on their own branded phones. Part of that usually includes Google search. Even though it is Googles platform (Android) they still share the wealth with the provider.

What I'm looking for is direct support of the claim that Google is providing kickbacks to either the carrier or salespeople themselves. To the carriers it would make little sense since they make the carriers pay a subsidy. What would be the point of "Hey for every one of my phones you sell, I'm going to give you $20, but I'm going to charge you $250 to sell it." Doesn't make much sense, no? But saying 'If you sell my phone I'm *only* going to charge you $250 instead of the $400 my competitor charges you- does make them want to sell your phone more than the other one- and it would be in their interests to incentivize their sales people to sell the one that makes them more money.

Quote:

Originally Posted by stelligent 

 

It depends on what you mean by initial kick. But I do believe carriers are paying upfront subsidies for some Android phones, just not as much as they do for the iPhone. Furthermore, Apple dictates iPhone pricing whereas there is a process of negotiation with other phone makers (or there used to be), with the carriers dominating the negotiations.

Yep.  You've got it right.   Apple dictates iPhone pricing....  and to their own advantage far more than Android handsets.  That is great for their margins, but not so great for their unit sales.

What I mean by initial 'kick in the teeth'??!!  Seriously?  Did you see AT&T or Verizons earnings on their record iPhone sales last quarter?

They did sell a record number of phones and in particular iPhone 5's and 4's.  (For the 4's Apple dictates the carriers have to give to users for free, but they still have to pay Apple a subsidy- so those are a 100% loss to the carrier as a direct sale).  As a result of their record iPhone sales they had a record quarterly loss of over $4billion.  Thats a pretty good kick in the teeth.

http://www.theverge.com/2013/1/22/3902712/verizon-q4-2012-earnings-iphone-sales

http://finance.yahoo.com/news/apple-iphone-subsidy-ipain-may-155200624.html

iPhones command that kind of premium because their users love them.  No doubt about that :)  But to say Android phones are only doing well because Android is bribing carriers or salespeople I think is probably innacurate.  Android does have a pretty big competitive advantage with carriers- but that advantage is provided more by Apple than by Google.

A number of you said similar things, the carries in some regards today do not have the influence they once had. In the past they were making and breaking cell phone companies by either pushing or ignoring a phone or company.

Today that is less true, just look as VZ who has a very strong affiliation with certain suppliers. When Apple was raising they made attempt to continue to push BB , we all know what happen there, When Apple and Android was growing they attempt to push Motorola Droid, we know what happen there as well. Apple is staying strong and constant due to the fact they control their own destiny. They still sell and market directly to the consumer and are not solely reliant on the service provides. Samsung is trying to do the same thing but the other guys are still relying the service provide to make their quarter.

Just want in into any service provider store and watch what they push, you know what their commission is based on, then watch how most people tell them what they want to buy, The only influence the service provide has on what phone someone buys today is the cheap give away two year contract phone.

Quote:

Originally Posted by jragosta 

So why is Blackberry only 15% of smartphones in one chart and 50% in the other (see post #41)? And why is WIndows Mobile declining in one chart for 07-08 and increasing in the other.

Because they are two different charts. The first one is for USA only. The second is worldwide. (see post #48)

Quote:

Originally Posted by SolipsismX 


2) These things only ever gauge "first sale," to use that term lightly, but I see iPhones have a long life after they stop being used by their initial owner. It would be interesting to see how many are actually being used as opposed to just sales of new devices. This might account for the excessively high iPhone activations on Verizon and AT&T.

This is true and, no has mentioned this, one company has indicated that the iPhone is three time more reliable than Samsung.  I personally know several people that have had their Samsung phones replaced.  Say one out of three phones Samsung phones can be repaired then Samsung it would look like Samsung is shipping twice as many phones are actually being used.

Quote:

Originally Posted by jragosta 


Evidence?

I do remember a report or two sometime back that the reason China Mobile has so far refused the iPhone was because they insist on Apple sharing app revenue with them and Apple so far declining..