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Wall Street concerned by lower-than-expected iPhone sales in Apple's holiday quarter - Page 5

post #161 of 170
Quote:
Originally Posted by TheOtherGeoff View Post
 

 

Or, you target the 10% of the world population that control 70% of the gross domestic product.   

 

Tim Cook needs to ask himself if he wants _Apple_ to be like Sotheby's.. a 270 year old company.  Sotheby's does quite well NOT trying to be everyone's auctioneer.

The computer market is not like auctioneering services.  The computer market is going to be commoditized. Any fool can see that.  Apple has done a nice job of delaying the commoditization and extracting value.  It has been a great strategy, but it is time to change. The long term play in handsets is services.  You can't dominate services unless you have a platform.  You can't have a platform if you only sell to the high end of the market.  I'm not saying Apple needs a shitty phone.  I'm saying they need to drop their prices to take more market share and then make money from services.  

To give you an example of why it needs a platform, consider a scenario where Gucci wants to provide a service that allows people to interact with their Gucci purses.  It would be a complete failure because there aren't enough people with Gucci purses to collaborate.

Am I the only one that sees the long term problem with Apple's strategy? Apple and its loyal followers can all stick their heads in the sand, but it doesn't change the fact that Apple has a long term problem and Wall Street isn't a bunch of idiots for expecting Apple to address the problem.  I haven't sold my Apple stock because I think there is plenty of time to fix the problem and the shift may still be a bit premature (Apple is making a hell of a lot of money).  However, the shift likely needs to happen in the near future.  Maybe 1-2 years.  Who knows, maybe Cook has it in the works. 

post #162 of 170
Quote:
Originally Posted by TheOtherGeoff View Post
 

the 150K a year household income consumer and the -20K a year consumer (college student) is a different market and you know it.

 

The enterprise server market is Premier league Football... Totally different game;-)  And the Bronco's didn't try to win that league either.

 

I understand your passion, and I do understand your  underlying logic.   I just feel it's flawed.   I spent dinner with a person who told me I was arrogant in saying Apple  didn't need to do NFC (after he spent 5 minutes saying NFC sucks).   He was wedded on the fact that 'no one is buying iPhones'  because 'everyone' is buying android based phones.  

 

My feeling is you buy what you can afford.   BMW isn't failing because it can't sell cars to college students.  Eventually, people begin to generate cash flow and they learn what then need from a car and if they aspire a higher performing car will purchase a BMW once they can afford it.  A lot just need a car. any car.. or a bus.  But some people 'value' a 'good car,' and are willing to pay a premium for it.   Apple's job is to make sure their devices attract enough of those people.and keep the 'delta' far enough to validate the profit premium.

 

The fact that people are not buying bicycles anymore (dumb cell phones) and are buying $0.99 android phones (Chevy Geo Metros) are learning how to be mobile device users, and what the desire in their phone.  A lot of people just want a phone and a browser and maybe 1 more app (FaceSpaceter).   They are not iPhone users.   And they aren't Samsung users... they are 'cheap phone users.'

 

Eventually the question is ecosystem and experience stickiness.  I'm arguing that apple has to innovate enough to keep the tactile experience above android/Samsung experience, give developers tools to build killer apps and establish a stickiness to the iTMS/AppStore (and eventually other transactional sub ecosystems).

 

In my analysis... the real threat isn't Samsung...  It's Amazon.  Only Apple and Amazon are positioned to deliver that hardware/software/apps/ecosystem that will compete in the Web 4.0 world.

Again, what you are failing to understand is that the handset market WILL get commoditized. When that happens, extracting value from services will be the name of the game.   If Apple doesn't drop its prices it will dwindle to extinction.  I will bet you any amount of money that phones will not cost $650 dollars (inflation adjusted) in 10-20 years from now.  If Apple charges $650 it will have about as much market share as the ball point pen manufacturers selling $300 pens today.  The time is shortly approaching where no one  will give a shit about the next feature in the iPhone.  At some point Apple won't be able to differentiate itself, even if it keeps inventing because nobody will care about the additions.  What's the plan when that happens? 

Both Samdung and Amazon are a huge threat.  They both have a propensity to commoditize the market. Apple can't stop that from happening.  Pricing pressure will drive down margins.

Apple's platform is big enough now that it would take some time to dwindle away.  But it may look a lot like Microsoft if it doesn't change its strategy.  Although, Apple appear to be outcompeting with the iPad, which may end up being the platform device that saves the iPhone.  Interestingly iPad has lower margins.  I think Cook should take the same margins on the iPhone and capture more market share. 

 

BTW, completely agree with your analysis of NFC.  It is a tougher nut to crack than most people think. Same with the TV. 


Edited by ash471 - 1/29/14 at 11:30pm
post #163 of 170
Faux from the word go... Let's create an iPhone for a market that doesn't exist.
http://www.youtube.com/watch?v=ejaDY8tXCts
post #164 of 170
Quote:
Originally Posted by Eric Swinson View Post

No, you need to ask yourself why you are so short sighted, because if you are thinking in terms of devices, incidental features and price points you have missed the point of innovation, and technological game changes.  If you think personal communications has reached its pinnacle in the form of a handheld smartphones and that building strong holds in existing technologies will keep you viable after the next big disruption You may as well be a card carrying member of the telegraph operators union.

You are right, the future is mobile. Even the iPod proved that. But the future may not, and probably won't, be a phone. I'd hate to be the CEO that built an enterprise delivering cheap phones to the masses erroding profits in the name of marketshare when the world is now using newfangled device X and you can't shift focus because Wall Street will eat you alive for abandoning your "core" business. By the way how is Jormal Ollila doing these days?

The future isn't a phone now and hasn't been since Apple introduced the original iPhone. Which was introduced as 3 devices in one ( are you getting it now?). We call it a phone but cars are named after carriages. It isn't a phone - which is basically an app on it - but a small portable internet enabled device. Most people use it for something other than phoning or texting most of the time.

So the future is now. If you think there is some other form factor for portable Internet devices ( glasses, wearables) I respectfully disagree. These are niche products at best.
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post #165 of 170
Quote:
Originally Posted by ash471 View Post
 

Again, what you are failing to understand is that the handset market WILL get commoditized. When that happens, extracting value from services will be the name of the game.   If Apple doesn't drop its prices it will dwindle to extinction.  I will bet you any amount of money that phones will not cost $650 dollars (inflation adjusted) in 10-20 years from now.  If Apple charges $650 it will have about as much market share as the ball point pen manufacturers selling $300 pens today.  The time is shortly approaching where no one  will give a shit about the next feature in the iPhone.  At some point Apple won't be able to differentiate itself, even if it keeps inventing because nobody will care about the additions.  What's the plan when that happens? 

Both Samdung and Amazon are a huge threat.  They both have a propensity to commoditize the market. Apple can't stop that from happening.  Pricing pressure will drive down margins.

Apple's platform is big enough now that it would take some time to dwindle away.  But it may look a lot like Microsoft if it doesn't change its strategy.  Although, Apple appear to be outcompeting with the iPad, which may end up being the platform device that saves the iPhone.  Interestingly iPad has lower margins.  I think Cook should take the same margins on the iPhone and capture more market share. 

 

BTW, completely agree with your analysis of NFC.  It is a tougher nut to crack than most people think. Same with the TV. 

 

I agree that Apple needs to branch out to services.  Personally I'd like Apple to sell another line of phones for $350 to capture at least 20% of the worldwide market.  That would be close to 1,000,000,000 users.  At that point they can make a ton of money on services.  I'm hoping in 3 years 40% of their revenue come from services.

 

But you are missing the point:

 

Computing devices will NEVER become a commodity.  NEVER.

Specific form factors will.

We went through the commodization of Supercomputers, Servers, desktops, laptops, mp3 players, tablets, and smartphones.

There will ALWAYS be the NEXT form factor.  Always.

 

And who do you think has the necessary skill and money to hit it big on the next form factor of computing devices?

I'll bet its Apple.

post #166 of 170
...and Apple just dropped under $500/share. Weird stuff.
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post #167 of 170
Quote:
Originally Posted by ash471 View Post
 

The computer market is not like auctioneering services.  The computer market is going to be commoditized. Any fool can see that.  Apple has done a nice job of delaying the commoditization and extracting value.  It has been a great strategy, but it is time to change. The long term play in handsets is services.  You can't dominate services unless you have a platform.  You can't have a platform if you only sell to the high end of the market.  I'm not saying Apple needs a shitty phone.  I'm saying they need to drop their prices to take more market share and then make money from services.  

To give you an example of why it needs a platform, consider a scenario where Gucci wants to provide a service that allows people to interact with their Gucci purses.  It would be a complete failure because there aren't enough people with Gucci purses to collaborate.

Am I the only one that sees the long term problem with Apple's strategy? Apple and its loyal followers can all stick their heads in the sand, but it doesn't change the fact that Apple has a long term problem and Wall Street isn't a bunch of idiots for expecting Apple to address the problem.  I haven't sold my Apple stock because I think there is plenty of time to fix the problem and the shift may still be a bit premature (Apple is making a hell of a lot of money).  However, the shift likely needs to happen in the near future.  Maybe 1-2 years.  Who knows, maybe Cook has it in the works. 

 

Are you drunk?

post #168 of 170
Quote:
Originally Posted by AaronJ View Post

Are you drunk?

Or is he sober and you lack simple comprehension?
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post #169 of 170
Quote:
Originally Posted by asdasd View Post


Or is he sober and you lack simple comprehension?

You have to admit....the analogy with Gucci purses and the services that interact with purses seems a little shaky/wobbly/drunken. :-)

post #170 of 170
Quote:
Originally Posted by asdasd View Post


Or is he sober and you lack simple comprehension?

 

I may be wrong, and I will admit that's a possibility (as it has -- rarely -- happened before :) ), but I'm guessing I know a hell of a LOT more about fashion than he does.  If he wants an analogy to the fashion industry, then Gucci purses are not the correct way to go.  

 

Swarovski necklaces, many worth over $500,000, are a much better analogy.  And even then ...

 

BTW, I see Gucci purses all the time.  And yes, I can tell the difference between the genuine article and the ones that are sold on the street for $100.

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