But either way you look at it, Android is certainly a real competitor and certainly the existence of Android seriously undermines Adobe's anti-trust arguments.
Hmm, it's almost as if Apple doesn't want to have overwhelming marketshare.
If it wasn't profitable, then why has Verizon kept it going for years on their BlackBerries and then extend it to all smartphones? They're the largest cell phone carrier in the US and I think BOGO has a large hand in that.
largest in volume or profit? I'll take the latter...
If Apple does not care about market share and volumen, then why did they drop the price of the original iPhone by hundreds of dollars?
Despite what the anti-Apple trolls type Apple does care about market share. Just not to the point of sacrificing profitability and brand value that desperation moves lie BOGOF represent.
You'd buy whatever Jobs tells you to, no? .. And that just so happens to be exactly how Apple likes it. You are Apple's ideal customer. No questions asked.
No one is buying stuff because "jobs tells them to[sic]"
People buy the things Apple produces because they want to. What in that concept is so hard to grasp?
And until the competition steps up to the level of Apple in integration and the user experience, I too will be little interested in anything else.
The moment Apple stops delivering the goods, or someone does it better I will have no problem switching. So far no one has given me a compelling reason to do so. And Android doesn't cut it for me. If I were more imbedded in the google world that might be enough to sway, but thankfully I am not.
Quote:
But listen, try removing your blinders long enough to see what the trend really is now that Android is out full bore. Watch and see how Android devices further penetrate the market from every possible angle from here on out. No? Android-Apple-RIM
Once you get past the techie geeks or Verizon zealots that blindly believe V marketing, Android sales will flop. They are already having to resort to two for one deals to artificially prop up demand!
It's desktop Linux all over again. Cue the next round of angry and confused geeks that lack a basic understanding of human nature of non-geeks.
Despite what the anti-Apple trolls type Apple does care about market share. Just not to the point of sacrificing profitability and brand value that desperation moves lie BOGOF represent.
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
Need I remind you all that Apple has been a successful and very profitable pc maker not by high volume of sales, but by higher margin, lower volume products. Its a very different business model, and market share is not as important to its success.
apparently you do because the marketshare fixaters swarm in full force over these stories.
You say this like it is a bad thing, are you saying you think people with less money than yourself, don't derserve to own a smartphone?
Or are you saying an iPhone is really five times better than a Nokia smartphone with an unsubsidised price of around ?100 ?
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
Spoken like a true geek who is completely out of touch with the real world.
Most people just one want device that works reliably wherever they are. The idea of having to keep 5 different phones charged up and changing from one to the other depending on whether you're at home, at the mall or at work is a crazy idea.
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
If they didn't have that AT&T exclusive, Android wouldn't have been able to get a toe into the US market. iPhones would have been everywhere. But they made their choice. And the consequences are playing out.
ugh - without that exclusive there would be no iPhone and verizon users would still have hobbled phones like blackberries with no wi-fi. All in blissful ignorance. We get to have these (ultimately) pointless discussions because of that agreement, not in spite of it.
There would be no android. Google didn't do android out of the goodness of their heart, they correctly see portable devices as being more relevant than PC's in the long run and they didn't want to get frozen out of mobile search. Which for google is code for advertising, which at the end of the day is what Google is - an engine for eyeball impressions.
I laugh at the same people who are anti flash for advertising yet think googles farts are the nectar of the gods...
I think that the newest, most fully-featured, coolest, most capable new phones will all be Android OS.
Depends on your perspective of fully featured and capable are.
If it's having an endless checklist of features and the capability to be mediocre in its experience for everyone, it will be desktop Linux all over again
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
If I'm not mistaken it was a warning that projected profits (that still beat V) weren't going to be quite as large as previously anticipated.
Yup, a real pickle of a problem to have. Esp. since it was a quarter when AT&T had a stale phone and everyone else had multiple new models.
If I'm not mistaken it was a warning that projected profits (that still beat V) weren't going to be quite as large as previously anticipated.
Yup, a real pickle of a problem to have. Esp. since it was a quarter when AT&T had a stale phone and everyone else had multiple new models.
Where's that "Apple is domed" picture?
It was a profit margin warning and Verizon Wireless has a higher profit margin than AT&T Wireless. Wow --- a real pickle for Verizon to have --- a higher profit margin without selling a single iphone and without issuing a single profit margin warning.
Much better for Verizon to do BOGO and still able to maintain their profit margin.
I never said that there is a "doomed" picture.
Verizon won't have sold that many blackberries and androids if they didn't do BOGO --- much as AT&T won't have sold that many iphones if they didn't massively subsidize the iphone. There is no difference between the two.
Hell the iphone wouldn't have even moved in many European countries if the European carriers didn't have zero dollar iphone deals.
Hell the iphone wouldn't have even moved in many European countries if the European carriers didn't have zero dollar iphone deals.
Very true. The iPhone is heavily subsidized outside the US. And that's not a bad thing. Sells more iPhones. Good for AAPL. And good for the customers who buy iPhones.
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
AT&T issued the warning because they were about to be hit with a double whammy at the introduction of the iPhone 3G, not because the phone subsidy was so large.
AT&T was also still paying a share of the monthly subscriber data fee for the original iPhone. So for the year after the intro of iPhone 3G, they would be paying both each quarter. That would lead to higher costs relative to the year before (when they were not paying subsidies at all for iPhone).
it is unfortunate that Apple has the ball and chain AT&T.. Iphone sales would be massive if they open iphone to other phone companies. This seems to be a repeat of Apple Microsoft all over.... I have great respect for Apple but I do not get this continued reliance on AT&T.... AT&T sucks..
AT&T issued the warning because they were about to be hit with a double whammy at the introduction of the iPhone 3G, not because the phone subsidy was so large.
AT&T was also still paying a share of the monthly subscriber data fee for the original iPhone. So for the year after the intro of iPhone 3G, they would be paying both each quarter. That would lead to higher costs relative to the year before (when they were not paying subsidies at all for iPhone).
It's actually even simpler than that. It's a cash flow issue. I don't know the actual numbers, so I'll use the following for examples. You can plug in whatever numbers you wish - the general principle is unchanged.
Let's say AT&T pays $500 per iPhone. They collect $199 from the customer. So on the day the customer receives his iPhone, AT&T is in the hole by $301. The more iPhones that are sold, the more AT&T is in the hole. Then, let's say that they receive an average of $60 per month from the subscriber and their out of pocket costs are $30 per month. That means that their their margin (revenues less DIRECT costs of supplying mobile service) are $30 per month. It's only in the 11th month that their margins put them into the black for that customer.
If AT&T had a surprisingly large number of customers (such as the 1 million iPhone 3GS customers in the first weekend), that means a HUGE expense for AT&T. In the end, it will mean greater profits, but in the short run, it probably means increased borrowing, no dividends, or other cash-saving methods.
Comments
I'm still surprised Apple/AT&T hasn't done one to even further increase its marketshare and profits.
If you truly paid attention to Apple and their success, you would understand there is very little corrilation between marketshare and profits.
They aren't doing such promotions because they don't have to.
But either way you look at it, Android is certainly a real competitor and certainly the existence of Android seriously undermines Adobe's anti-trust arguments.
Hmm, it's almost as if Apple doesn't want to have overwhelming marketshare.
Go figure...
If it wasn't profitable, then why has Verizon kept it going for years on their BlackBerries and then extend it to all smartphones? They're the largest cell phone carrier in the US and I think BOGO has a large hand in that.
largest in volume or profit? I'll take the latter...
If Apple does not care about market share and volumen, then why did they drop the price of the original iPhone by hundreds of dollars?
Despite what the anti-Apple trolls type Apple does care about market share. Just not to the point of sacrificing profitability and brand value that desperation moves lie BOGOF represent.
You'd buy whatever Jobs tells you to, no? .. And that just so happens to be exactly how Apple likes it. You are Apple's ideal customer. No questions asked.
No one is buying stuff because "jobs tells them to[sic]"
People buy the things Apple produces because they want to. What in that concept is so hard to grasp?
And until the competition steps up to the level of Apple in integration and the user experience, I too will be little interested in anything else.
The moment Apple stops delivering the goods, or someone does it better I will have no problem switching. So far no one has given me a compelling reason to do so. And Android doesn't cut it for me. If I were more imbedded in the google world that might be enough to sway, but thankfully I am not.
But listen, try removing your blinders long enough to see what the trend really is now that Android is out full bore. Watch and see how Android devices further penetrate the market from every possible angle from here on out. No? Android-Apple-RIM
Once you get past the techie geeks or Verizon zealots that blindly believe V marketing, Android sales will flop. They are already having to resort to two for one deals to artificially prop up demand!
It's desktop Linux all over again. Cue the next round of angry and confused geeks that lack a basic understanding of human nature of non-geeks.
Despite what the anti-Apple trolls type Apple does care about market share. Just not to the point of sacrificing profitability and brand value that desperation moves lie BOGOF represent.
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
Need I remind you all that Apple has been a successful and very profitable pc maker not by high volume of sales, but by higher margin, lower volume products. Its a very different business model, and market share is not as important to its success.
apparently you do because the marketshare fixaters swarm in full force over these stories.
"ooh, my e-penis is larger than yours"
Sigh...
You say this like it is a bad thing, are you saying you think people with less money than yourself, don't derserve to own a smartphone?
Or are you saying an iPhone is really five times better than a Nokia smartphone with an unsubsidised price of around ?100 ?
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
Spoken like a true geek who is completely out of touch with the real world.
Most people just one want device that works reliably wherever they are. The idea of having to keep 5 different phones charged up and changing from one to the other depending on whether you're at home, at the mall or at work is a crazy idea.
I'm waiting for the day when you will own a variety of "phone" devices, which can/will be activated when you are in proximity.
You could use different nice phones whenever you wanted. One for work, one for vacations, some scattered around the house like landlines. You could have your waterproof/heavy duty phone for the beach, while using your regular nice looking phone for evening engagements.
One phone for all uses seems limiting. One phone for all customers for all uses seems silly.
That's a pretty nice idea.
If they didn't have that AT&T exclusive, Android wouldn't have been able to get a toe into the US market. iPhones would have been everywhere. But they made their choice. And the consequences are playing out.
ugh - without that exclusive there would be no iPhone and verizon users would still have hobbled phones like blackberries with no wi-fi. All in blissful ignorance. We get to have these (ultimately) pointless discussions because of that agreement, not in spite of it.
There would be no android. Google didn't do android out of the goodness of their heart, they correctly see portable devices as being more relevant than PC's in the long run and they didn't want to get frozen out of mobile search. Which for google is code for advertising, which at the end of the day is what Google is - an engine for eyeball impressions.
I laugh at the same people who are anti flash for advertising yet think googles farts are the nectar of the gods...
Why hasn't any such data been released yet?
Do pirated free apps generate revenue?
Oh well, it works for engish rules (double negative) - too bad...
I think that the newest, most fully-featured, coolest, most capable new phones will all be Android OS.
Depends on your perspective of fully featured and capable are.
If it's having an endless checklist of features and the capability to be mediocre in its experience for everyone, it will be desktop Linux all over again
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
If I'm not mistaken it was a warning that projected profits (that still beat V) weren't going to be quite as large as previously anticipated.
Yup, a real pickle of a problem to have. Esp. since it was a quarter when AT&T had a stale phone and everyone else had multiple new models.
Where's that "Apple is domed" picture?
Why is Steve still working?
The only thing I can think of is that Steve has an inner dissatisfaction with the way things are and an overriding compulsion to make them better.
From my perspective, Steve, thanks for the ride!
You've made my life better!
You've helped change the world!
I wish you well, and as an AAPL shareholder, I say screw the Bozos and keep on, keepin' on!
Excellent post and very insightful. He touched on as much at the iPhone launch (and iPod launch, now that I think about it).
If I'm not mistaken it was a warning that projected profits (that still beat V) weren't going to be quite as large as previously anticipated.
Yup, a real pickle of a problem to have. Esp. since it was a quarter when AT&T had a stale phone and everyone else had multiple new models.
Where's that "Apple is domed" picture?
It was a profit margin warning and Verizon Wireless has a higher profit margin than AT&T Wireless. Wow --- a real pickle for Verizon to have --- a higher profit margin without selling a single iphone and without issuing a single profit margin warning.
Much better for Verizon to do BOGO and still able to maintain their profit margin.
I never said that there is a "doomed" picture.
Verizon won't have sold that many blackberries and androids if they didn't do BOGO --- much as AT&T won't have sold that many iphones if they didn't massively subsidize the iphone. There is no difference between the two.
Hell the iphone wouldn't have even moved in many European countries if the European carriers didn't have zero dollar iphone deals.
Hell the iphone wouldn't have even moved in many European countries if the European carriers didn't have zero dollar iphone deals.
Very true. The iPhone is heavily subsidized outside the US. And that's not a bad thing. Sells more iPhones. Good for AAPL. And good for the customers who buy iPhones.
I don't see any difference between Verizon doing BOGO and AT&T massively subsidizing the iphone to the tune that they needed to issue a profit margin warning.
AT&T issued the warning because they were about to be hit with a double whammy at the introduction of the iPhone 3G, not because the phone subsidy was so large.
AT&T was also still paying a share of the monthly subscriber data fee for the original iPhone. So for the year after the intro of iPhone 3G, they would be paying both each quarter. That would lead to higher costs relative to the year before (when they were not paying subsidies at all for iPhone).
AT&T issued the warning because they were about to be hit with a double whammy at the introduction of the iPhone 3G, not because the phone subsidy was so large.
AT&T was also still paying a share of the monthly subscriber data fee for the original iPhone. So for the year after the intro of iPhone 3G, they would be paying both each quarter. That would lead to higher costs relative to the year before (when they were not paying subsidies at all for iPhone).
It's actually even simpler than that. It's a cash flow issue. I don't know the actual numbers, so I'll use the following for examples. You can plug in whatever numbers you wish - the general principle is unchanged.
Let's say AT&T pays $500 per iPhone. They collect $199 from the customer. So on the day the customer receives his iPhone, AT&T is in the hole by $301. The more iPhones that are sold, the more AT&T is in the hole. Then, let's say that they receive an average of $60 per month from the subscriber and their out of pocket costs are $30 per month. That means that their their margin (revenues less DIRECT costs of supplying mobile service) are $30 per month. It's only in the 11th month that their margins put them into the black for that customer.
If AT&T had a surprisingly large number of customers (such as the 1 million iPhone 3GS customers in the first weekend), that means a HUGE expense for AT&T. In the end, it will mean greater profits, but in the short run, it probably means increased borrowing, no dividends, or other cash-saving methods.