I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
Note that most of the world can't afford anything from Nokia and, despite your previous comment, Nokia makes more products than Apple. Nokia is not altruistic. They are for-profit, publicly traded company, just like Apple. They would sell more high-end devices with high profit margins, LIKE THEY USED TO, if they could. They are working on getting back up there. You're hatred for Apple and the US are misguided.
PS: it would be great for you to stay on point for once. Having you jump to different topics with every post you get schooled on really throws these threads out of whack.
I am sorry, I was under the impression this was a discussion about the relative performance of the iPhone versus other devices. I took this to be a business discussion.
If we disregard business performance and simply compare compare products from a consumer point-of-view, we have to look somewhere else than profits or market-share.
We'd need to look at customer satisfaction data.
or
How frequently users actually use the internet functionality of the devices?
or
How often do customers actually buy applications?
I think if you took the time to look at comparative data, you might find the iPhone to be dramatically ahead of its peers in all these categories.
I would argue that these metric indicate that consumer approve of the iPhone. They consider the iPhone to be so desirable, they tolerate the price of the device.
I would argue, it is this desirability which is at the force driving the high profits. Not showmanship, or marketing or some massive rip-off con perpetrated on a stupid public.
And let's not fool ourselves, if Nokia could match those profits with the N900, they would be delighted!
I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
I have no idea what you're talking about.
I am saying that imagining that Nokia's business strategy of high volume/low margin is motivated by a deep concern for the less fortunate is absurd, just as imagining that Dell or Walmart or some anonymous Chinese widget factory are doing charitable work is absurd.
You'll notice there's nothing in there about demanding that these companies cease and desist and abandon their markets because I'm an elitist who hates poor people.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
Selling devices at a smidgin above the cost of their components is impressive why exactly?
Anyone can glue together components and sell them at cost.
The real magic of business is to perform some alchemy, add some value and sell the parts for more than you bought them for.
That value-added magic is why some companies are more profitable than others.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
This is true too, but it misses the point. Which was that Nokia is not dominant at the high end (N-series) of the market, altho they are in every other market segment.
Thus Nokia's ASPs and profit margins are less than Apple, who only sells high-priced and high-margin products at the high end of the market.
And Apple is being very successful at it, in terms of customer satisfaction and desirability. Because of this and the fact that the high-end market is yet to be saturated, Apple is not yet under significant pressure to reduce prices and margins.
Note that most of the world can't afford anything from Nokia and, despite your previous comment, Nokia makes more products than Apple. Nokia is not altruistic. They are for-profit, publicly traded company, just like Apple. They would sell more high-end devices with high profit margins, LIKE THEY USED TO, if they could. They are working on getting back up there. You're hatred for Apple and the US are misguided.
PS: it would be great for you to stay on point for once. Having you jump to different topics with every post you get schooled on really throws these threads out of whack.
So holding NOK and AAPL makes me biased about discussions about them.
Why did you invest in Nokia?
Is it a hedge around Apple (i.e., if Apple fails, it will most likely be Nokia that's benefitting)? Or do you think NOK will still capture most of the profits from the mobile boom?
I've thought about investing in NOK many times but haven't been able to pull the trigger.
If mobile phone manufacturers should be clammering only to make high end phones with huge profit margins, who exactly is supposed to be making phones for everyone else? What would the world be like if only the iPhone existed? Do some of you really think that would be a better world? There'd be billions of people who wouldn't be able to buy a mobile phone. I just can't fathom this apparent desire for other companies to be 'dead' and for only Apple to be left. How would that benefit anyone in anyway?
If mobile phone manufacturers should be clammering only to make high end phones with huge profit margins, who exactly is supposed to be making phones for everyone else? What would the world be like if only the iPhone existed? Do some of you really think that would be a better world? There'd be billions of people who wouldn't be able to buy a mobile phone. I just can't fathom this apparent desire for other companies to be 'dead' and for only Apple to be left. How would that benefit anyone in anyway?
I really don't understand this tone of "because I notice that Nokia is making most of its money on low margin phones, and have opinions about what that suggests for Nokia's business over time, I must be demanding that everyone refuse to sell affordable phones to poor folk, which puts me in league with the devil."
Actually, I do understand that tone, because it's much easier argue against than what's actually being said.
Is it a hedge around Apple (i.e., if Apple fails, it will most likely be Nokia that's benefitting)? Or do you think NOK will still capture most of the profits from the mobile boom?
I've thought about investing in NOK many times but haven't been able to pull the trigger.
Becaus their stock fell below $10/share, their profit drop looked to have bottommed out, and they were losing mindshare at the time. I've done well so far but I don't think $18/share sometime this year is unrealistic.
Nokia as had a lot of problems. The iPhone was certainly a wrench in the way they do business but this would have happened anyway if the iPhone hadn't come on the scene, though not nearly as quickly. Despite all that has happened they are a solid company with a lot of experience and IP under ther belt. They can wait out a restructuring and technology shift. I don't think we should underestimate Nokia as a mobile company.
Plus, any company's CEO that publically states they've been bested by another shows me a company that knows it's shortcomings and is working on resolovinh them. They've since made some odd comments about their business model but nothing that will scare me away from doubling my money with 2 years. Recessions are a great time to invest.
I really don't understand this tone of "because I notice that Nokia is making most of its money on low margin phones, and have opinions about what that suggests for Nokia's business over time, I must be demanding that everyone refuse to sell affordable phones to poor folk, which puts me in league with the devil."
Actually, I do understand that tone, because it's much easier argue against than what's actually being said.
Oh, hai there big fella:
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
This whole thread has been about market share and the indicators used to define it, in order to gauge how well companies are performing.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
Quote:
Originally Posted by mrochester
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
This whole thread has been about market share and the indicators used to define it, in order to gauge how well companies are performing.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
Exactly. Somehow we've wandered from the idea that Nokia having an overwhelming percentage of the global cell phone market might not mean all that much if the lion's share of that market is based on selling razor thin margin dumb phones (at least when compared to Apple's share of the smart phone market) to claiming that we're trying to snatch the phones out of hands of the world's poor.
As amusing as it is to yell about that, the fact remains that Nokia's share of the smart phone market is plummeting, and that the smart phone market is where most of the profits are, right now. If Nokia could field a hugely successful smart phone they would, their concern for poor folk notwithstanding.
And I guess I'm obliged to add I have nothing against Nokia, poor people, or dumb phones. I'm just stating the facts.
So holding NOK and AAPL makes me biased about discussions about them. Great Logic! Perhaps you should read up on these companies a bit more so you can make informed comments about them. Eventually, you may learn enough about technology to invest in such companies.
I know a lot about technology, but I am sure sure why you think that someone that has a knowledge of technology needs to purchase tech stock
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
Most of us have just been trying to understand what the ground truth is about Apple and Nokia in the smartphone market. We all know Apple has most often been low volume, high margin but wonder if they really have an interest in higher volume, lower margin due to what we've seen with iPod. Nokia was managing both for cellphones but has become more high volume, lower margin as their high-end has struggled since the end of 2007.
Most of us aren't making a value judgment on which is better or worse. What we know is that the pressures on/threats to a company differ depending on which path they take. The high volume, low margin route runs the risk of becoming a commodity and getting undercut by companies who have even lower costs because they invest little in R&D and quality. Dell is an example of this. The low volume, high margin route runs the risk of a disappearing market (due to too high prices) or a quickly-saturating niche market.
From where I sit, I thought most of us were simply debating what the real risks are to Apple (because that's what this site is about) and Nokia (because they are the top dog).
And I guess I'm obliged to add I have nothing against Nokia, poor people, or dumb phones. I'm just stating the facts.
This thread demands that you do so. So I'll echo addabox here: I have nothing against Nokia, poor people, or dumb phones (really these are now called featurephones but Jetz called them dumb phones earlier in this thread and well, it kinda stuck.)
This whole thread has been about market share and the indicators used to define it, in order to gauge how well companies are performing.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
That really depends on what you define as 'how well a company is doing'. If you're talking about making the most profit, Apple is clearly the best in that regard. If you're talking about having the most prolific product, Nokia are doing the best. There is more to a company being successful than just making the most profit, which I think a lot of people forget around here.
I am saying that imagining that Nokia's business strategy of high volume/low margin is motivated by a deep concern for the less fortunate is absurd, just as imagining that Dell or Walmart or some anonymous Chinese widget factory are doing charitable work is absurd.
I didn't say they had a deep concern for those people, I said they saw a business opportunity and adjusted to meet that market segment. I just don't understand why you, or anyone else here finds that an issue, if they are meeting a market need, and are making money from it, that seems to be a perfectly ok business practice.
I didn't say they had a deep concern for those people, I said they saw a business opportunity and adjusted to meet that market segment. I just don't understand why you, or anyone else here finds that an issue, if they are meeting a market need, and are making money from it, that seems to be a perfectly ok business practice.
No, actually, what you said was
Quote:
...maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
The phrase "enable to afford one" coupled with citing Nokia's "vision" clearly introduces a moral aspect to this argument. You're suggesting that Nokia is choosing to sell low margin phones out of a desire to make sure anyone and everyone can enjoy the benefits of owning a cell phone, because of their "vision." Again, nonsense.
At any rate, as has been said, I don't have any problem with that. I don't find it an "issue." It is, in fact, a perfectly reasonable business strategy. It's just that most of that strategy has nothing to do with the market Apple is in and isn't relevant to discussions of the iPhone.
Comments
I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
Note that most of the world can't afford anything from Nokia and, despite your previous comment, Nokia makes more products than Apple. Nokia is not altruistic. They are for-profit, publicly traded company, just like Apple. They would sell more high-end devices with high profit margins, LIKE THEY USED TO, if they could. They are working on getting back up there. You're hatred for Apple and the US are misguided.
PS: it would be great for you to stay on point for once. Having you jump to different topics with every post you get schooled on really throws these threads out of whack.
I am sorry, I was under the impression this was a discussion about the relative performance of the iPhone versus other devices. I took this to be a business discussion.
If we disregard business performance and simply compare compare products from a consumer point-of-view, we have to look somewhere else than profits or market-share.
We'd need to look at customer satisfaction data.
or
How frequently users actually use the internet functionality of the devices?
or
How often do customers actually buy applications?
I think if you took the time to look at comparative data, you might find the iPhone to be dramatically ahead of its peers in all these categories.
I would argue that these metric indicate that consumer approve of the iPhone. They consider the iPhone to be so desirable, they tolerate the price of the device.
I would argue, it is this desirability which is at the force driving the high profits. Not showmanship, or marketing or some massive rip-off con perpetrated on a stupid public.
And let's not fool ourselves, if Nokia could match those profits with the N900, they would be delighted!
C.
Well said.
I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
I have no idea what you're talking about.
I am saying that imagining that Nokia's business strategy of high volume/low margin is motivated by a deep concern for the less fortunate is absurd, just as imagining that Dell or Walmart or some anonymous Chinese widget factory are doing charitable work is absurd.
You'll notice there's nothing in there about demanding that these companies cease and desist and abandon their markets because I'm an elitist who hates poor people.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
Selling devices at a smidgin above the cost of their components is impressive why exactly?
Anyone can glue together components and sell them at cost.
The real magic of business is to perform some alchemy, add some value and sell the parts for more than you bought them for.
That value-added magic is why some companies are more profitable than others.
C.
..because I'm an elitist who hates poor people.
I'm not an elitist but most people are too stupid to realize that.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
This is true too, but it misses the point. Which was that Nokia is not dominant at the high end (N-series) of the market, altho they are in every other market segment.
Thus Nokia's ASPs and profit margins are less than Apple, who only sells high-priced and high-margin products at the high end of the market.
And Apple is being very successful at it, in terms of customer satisfaction and desirability. Because of this and the fact that the high-end market is yet to be saturated, Apple is not yet under significant pressure to reduce prices and margins.
Note that most of the world can't afford anything from Nokia and, despite your previous comment, Nokia makes more products than Apple. Nokia is not altruistic. They are for-profit, publicly traded company, just like Apple. They would sell more high-end devices with high profit margins, LIKE THEY USED TO, if they could. They are working on getting back up there. You're hatred for Apple and the US are misguided.
PS: it would be great for you to stay on point for once. Having you jump to different topics with every post you get schooled on really throws these threads out of whack.
Yup to both parts.
So holding NOK and AAPL makes me biased about discussions about them.
Why did you invest in Nokia?
Is it a hedge around Apple (i.e., if Apple fails, it will most likely be Nokia that's benefitting)? Or do you think NOK will still capture most of the profits from the mobile boom?
I've thought about investing in NOK many times but haven't been able to pull the trigger.
If mobile phone manufacturers should be clammering only to make high end phones with huge profit margins, who exactly is supposed to be making phones for everyone else? What would the world be like if only the iPhone existed? Do some of you really think that would be a better world? There'd be billions of people who wouldn't be able to buy a mobile phone. I just can't fathom this apparent desire for other companies to be 'dead' and for only Apple to be left. How would that benefit anyone in anyway?
I really don't understand this tone of "because I notice that Nokia is making most of its money on low margin phones, and have opinions about what that suggests for Nokia's business over time, I must be demanding that everyone refuse to sell affordable phones to poor folk, which puts me in league with the devil."
Actually, I do understand that tone, because it's much easier argue against than what's actually being said.
Oh, hai there big fella:
Why did you invest in Nokia?
Is it a hedge around Apple (i.e., if Apple fails, it will most likely be Nokia that's benefitting)? Or do you think NOK will still capture most of the profits from the mobile boom?
I've thought about investing in NOK many times but haven't been able to pull the trigger.
Becaus their stock fell below $10/share, their profit drop looked to have bottommed out, and they were losing mindshare at the time. I've done well so far but I don't think $18/share sometime this year is unrealistic.
Nokia as had a lot of problems. The iPhone was certainly a wrench in the way they do business but this would have happened anyway if the iPhone hadn't come on the scene, though not nearly as quickly. Despite all that has happened they are a solid company with a lot of experience and IP under ther belt. They can wait out a restructuring and technology shift. I don't think we should underestimate Nokia as a mobile company.
Plus, any company's CEO that publically states they've been bested by another shows me a company that knows it's shortcomings and is working on resolovinh them. They've since made some odd comments about their business model but nothing that will scare me away from doubling my money with 2 years. Recessions are a great time to invest.
I really don't understand this tone of "because I notice that Nokia is making most of its money on low margin phones, and have opinions about what that suggests for Nokia's business over time, I must be demanding that everyone refuse to sell affordable phones to poor folk, which puts me in league with the devil."
Actually, I do understand that tone, because it's much easier argue against than what's actually being said.
Oh, hai there big fella:
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
This whole thread has been about market share and the indicators used to define it, in order to gauge how well companies are performing.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
Exactly. Somehow we've wandered from the idea that Nokia having an overwhelming percentage of the global cell phone market might not mean all that much if the lion's share of that market is based on selling razor thin margin dumb phones (at least when compared to Apple's share of the smart phone market) to claiming that we're trying to snatch the phones out of hands of the world's poor.
As amusing as it is to yell about that, the fact remains that Nokia's share of the smart phone market is plummeting, and that the smart phone market is where most of the profits are, right now. If Nokia could field a hugely successful smart phone they would, their concern for poor folk notwithstanding.
And I guess I'm obliged to add I have nothing against Nokia, poor people, or dumb phones. I'm just stating the facts.
So holding NOK and AAPL makes me biased about discussions about them. Great Logic! Perhaps you should read up on these companies a bit more so you can make informed comments about them. Eventually, you may learn enough about technology to invest in such companies.
I know a lot about technology, but I am sure sure why you think that someone that has a knowledge of technology needs to purchase tech stock
So what does it suggest about Nokia's business over time? Are they suddenly going to fall from grace? Are poor people going to be banned from owning mobile phones? Selling massive volume, low margin products is just as valid as selling low volume, high margin products. What is it about one of those methods that is so bad? I really don't understand this tendency towards only the low volume, high margin method being the only valid one, and why doing anything different is wrong.
Most of us have just been trying to understand what the ground truth is about Apple and Nokia in the smartphone market. We all know Apple has most often been low volume, high margin but wonder if they really have an interest in higher volume, lower margin due to what we've seen with iPod. Nokia was managing both for cellphones but has become more high volume, lower margin as their high-end has struggled since the end of 2007.
Most of us aren't making a value judgment on which is better or worse. What we know is that the pressures on/threats to a company differ depending on which path they take. The high volume, low margin route runs the risk of becoming a commodity and getting undercut by companies who have even lower costs because they invest little in R&D and quality. Dell is an example of this. The low volume, high margin route runs the risk of a disappearing market (due to too high prices) or a quickly-saturating niche market.
From where I sit, I thought most of us were simply debating what the real risks are to Apple (because that's what this site is about) and Nokia (because they are the top dog).
And I guess I'm obliged to add I have nothing against Nokia, poor people, or dumb phones. I'm just stating the facts.
This thread demands that you do so. So I'll echo addabox here: I have nothing against Nokia, poor people, or dumb phones (really these are now called featurephones but Jetz called them dumb phones earlier in this thread and well, it kinda stuck.)
This whole thread has been about market share and the indicators used to define it, in order to gauge how well companies are performing.
No-one is saying Nokia or others should stop selling high volumes of low value phones, it's in the way that these high volumes skew the data and don't give a true indication of how well a company is doing.
That really depends on what you define as 'how well a company is doing'. If you're talking about making the most profit, Apple is clearly the best in that regard. If you're talking about having the most prolific product, Nokia are doing the best. There is more to a company being successful than just making the most profit, which I think a lot of people forget around here.
I have no idea what you're talking about.
I am saying that imagining that Nokia's business strategy of high volume/low margin is motivated by a deep concern for the less fortunate is absurd, just as imagining that Dell or Walmart or some anonymous Chinese widget factory are doing charitable work is absurd.
I didn't say they had a deep concern for those people, I said they saw a business opportunity and adjusted to meet that market segment. I just don't understand why you, or anyone else here finds that an issue, if they are meeting a market need, and are making money from it, that seems to be a perfectly ok business practice.
I didn't say they had a deep concern for those people, I said they saw a business opportunity and adjusted to meet that market segment. I just don't understand why you, or anyone else here finds that an issue, if they are meeting a market need, and are making money from it, that seems to be a perfectly ok business practice.
No, actually, what you said was
...maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
The phrase "enable to afford one" coupled with citing Nokia's "vision" clearly introduces a moral aspect to this argument. You're suggesting that Nokia is choosing to sell low margin phones out of a desire to make sure anyone and everyone can enjoy the benefits of owning a cell phone, because of their "vision." Again, nonsense.
At any rate, as has been said, I don't have any problem with that. I don't find it an "issue." It is, in fact, a perfectly reasonable business strategy. It's just that most of that strategy has nothing to do with the market Apple is in and isn't relevant to discussions of the iPhone.