That's the choice Apple made. 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. I hope Steve has a good out clause in his AT&T contract.
It's also not so simple. There's no disagreement in the industry, if you read articles that had come out in the early days, that Apple couldn't have gotten what it needed from networks if it hadn't had an exclusive deal at first. Networks used to getting their own way would never have done the work in their network and database to allow the visual voicemail that Apple had AT&T do for them, or allowed the App Store. At the time, visual voicemail was a pretty advanced thing to have. It was a major advantage for Apple. AT&T did that only because they were given an exclusive. There would have been no incentive if several companies all started selling it at the same time.
Now, the situation is different. It's a very popular phone wherever it is, so networks are willing to do the work to get the ability to sell it. But, Apple had to prove it would work, and be desirable in the first place. Likely, Apple convinced AT&T to take the chance of giving up the control on the phone that they had on the others. But in order to do that, they would have wanted a long enough contract to make it worth while if it worked out, which it did.
At this point, Apple could sell it on all four networks here and possibly double the sales, as has happened outside the US wherever they were able to have more than one company offer it.
The day it's announced that the iPhone is going to be on Verizon, which it will at some point, both Apple's and Verizon's stocks will rise, and AT&T's will plunge.
I think we all know that, no matter how we feel about Apple and the phone.
At the time, visual voicemail was a pretty advanced thing to have.
Verizon still considers VVM so advanced that they have to charge an extra monthly fee for it. The whole smartphone thing is such trouble to support that Verizon charges a $350 early termination fee, as well.
Absolutely not! A company that is profitable can put money toward innovation and customer service. They can take more risks with their ideas. If successful, then others follow suit trying to cash in on that success, thus pushing innovation throughout the industry which is better for consumers. The problem isn't with Apple charging too much as their quarterlies obviously show by sales and increasing sales, but that others aren't good enough to force Apple's profit per unit down. Do really think the consumer is better off with the pre-iPhone smartphone market? Everyone who buys an smartphone, even if you never buy an iPhone, has gained from their advent into this market.
edit: Pipped by Melgross.
Yes, but you took it further than I did.
People are forgetting that it was Apple who led the industry down the path it's going now. If people will think back three years, and honestly evaluate what was available, they would see why this is so important.
Another thing that relates to profits has to do with the number of models a company has. The fewer models, and the more of each they sell, the higher their profits will be.
We have cell manufacturers selling 50 models of phones. from the cheapest junk to high end smartphones. They sell a lot of phones, like Nokia. But like Nokia, most of those sales are of cheap, hardly profitable models. Their individual smartphones don't sell that many, but all together they sell a lot. Unfortunately, that makes for less profit.
They need a lot of people and equipment to do the R&D on all those models, many of which sell only in a few tens of thousands.
Apple has one new model a year. They only sell two versions of that one model, and they only differ by the amount of memory. The second model is the old model, which was paid off earlier, so they can sell it much more cheaply.
This is why they can make much more profit.
The same thing it true for their computers. Have you seen how many models Dell and Hp have? Dozens! And each comes in as many as a dozen versions. That's one reason why their profits are so low for that. Apple has few computer models. R&D costs, again, can be lower, yet accomplish so much more.
So Apple sold 8.75 million phones last quarter. Almost all were of one model phone. How many different Android models, from how many different manufacturers did it take to sell the number of phones they sold? Quite a few.
Verizon still considers VVM so advanced that they have to charge an extra monthly fee for it. The whole smartphone thing is such trouble to support that Verizon charges a $350 early termination fee, as well.
Well, I think it's obvious that their ideas have advanced. They've now said, several times, that they would like to have the iPhone, and that it's up to Apple.
That's not entirely true of course, as it's up to them to do what they would have to as well.
If you want to allow children to buy porn, get an Android phone. We don't allow such content on our marketplace as a commitment to the quality of our service.
- Sent from my iPad
Why would I give my phone or credit card to a child?
And do you think porn was the only low-quality product in the app store?
This is good news for iPhone users... downward pressure on pricing, incentive to offer more features and hopefully encourage them to ease up on restrictions.
It may not happen right away and next quarter will likely see a surge of iPhone 4 sales, but with the trend continuing, it will make Apple products more attractive for everyone. As a consumer of all kinds of products, Apple included, seeing one manufacturer way out in front is never a good thing. Fierce competition is very much applauded.
Agreed! You know when the first one blinks when one of them offers 'tethering!' No doubt about it, it's a win, win for us poor consumers! And when I say, 'poor' I mean anyone not working for the bloodsucking Goldman Sachs!
all companies are unethical to a degree. if apple is ethical, why is it doing business in China?
How can you say that?
Have you ever owned or run a company?
I have, with two other principals!
We had three basic objectives:
1) return a fair profit to our owners and investors
2) provide the best possible products and services to our customers
3) have fun
All our employees were salaried!
We provided health care and retirement. *
* After several years, we were forced to discontinue our retirement program due to Federal Tax and Regulation changes. This is my biggest regret! Though, a couple of early employees received over $100,000 (half a million in today's dollars).
We had the reputation as the best damn computer stores in Silicon Valley.
We sold and serviced customers from Bogota and Guam to London to Sindelfingen... and points in between.
I am proud to say our valued (and repeated) customers included State, Local. Federal Govts.; major corporations (IBM, Apple, Adobe, HP, Xerox, Intel, Fairchild, US Army, Stanford University, Daimler Benz, EMI Thorne, Piper-Jaffray); well-known individuals (Mike Scott, Regis McKenna, Woz, John Sculley, Charles Schwab, Todd Rundgren, Bill Graham, Reid Anderson, Andy Hertzfeld, Jean-Louis Gassée, Dave Winer); not-so-well-known people (Steve Schwartz, Doc Holiday, Ralphy, Mike Ternaski)... to name a few of each.
We treated all fairly and ethically. We started in 1978 when microcomputers were an oddity, survived for 11 years through great times and bad (a computer store on every corner).
We sold the stores in 1989... and I can honestly say that we never treated anyone unfairly or acted unethically. During the tough times, we always treated our customers and employees well, even though we weren't making much money, or having much fun!
Yeah, I'm an Old Fart... but I owned and ran an ethical business... and I'm damn proud of it!
...and it really pisses me off when someone like you flippantly characterizes others through the looking glass of his own morals and ethics!
Since there are so many non-phone devices that use the iPhone OS and run the iPhone Apps, this is an important point for Apple to make. Apple has by far the largest App marketplace, which is what makes it so attractive to developers.
Agree, Apple's carefully understated point is that it's the platform that really matters in the long run, not just the individual devices. So iPod touch units matter to the platform. Journalists and analysts are having a hard time grasping that.
Look at Apple's iPhone and iPod touch advertising to see what's important. It's the Apps; it's the platform.
Absolutely not! A company that is profitable can put money toward innovation and customer service. They can take more risks with their ideas. If successful, then others follow suit trying to cash in on that success, thus pushing innovation throughout the industry which is better for consumers.
The problem isn't with Apple charging too much, as their quarterlies obviously show their sales increasing, but that others aren't good enough to force Apple's profit per unit down.
Do you really think the consumer is better off with the pre-iPhone smartphone market? Everyone who buys a smartphone, even if you never buy an iPhone, has gained from their advent into this market.
Without a doubt, Apple has changed the whole mobile market and loosened the grip of the carriers in controlling the user experience for the better and everyone benefits.
While I can see Android supplanting the iPhone OS in short order, I see Android to be more in the disposable budget category phone business, rather than the premium sector.
If for no other reason than the carriers and handset manufacturers disinterest to update the OS or firmware. Initial data already shows that and I believe this trend will accelerate as price points drop.
I enjoy the iPhone because over time, the phone has actually become better and more useful with additional OS updates, new applications and tighter integration. As such, it continues to deliver great value on a daily bases.
This is a first in the phone industry and, if Apple continues to do so, will allow them to grow share while maintaining their high margins.
I think 'likely' underestimates the matter by several orders of magnitude. Next quarter's iPhone sales will stagger the smartphone market.
If it's got a bunch of compelling features and a lower price tag, that is.
Remember how many folks are locked into 2-year contracts, or have just finished their 2-year contracts and want to spend some time with a cheaper plan...
While there is a small percentage waiting for the new phone and avoiding the 3GS, that's a very small percentage, not too many keep up on all the rumor sites' speculations.
I think price and form factor will be huge here, as well as some sort of feature that makes it stand out a bit from the Android offerings, and the 3GS. Most people really don't care if their phone has a slightly faster processor, or slightly better display. Not compelling enough reasons to switch or upgrade. Way better camera, smaller form factor, lower price will all prompt average people to upgrade...
The difference here is just US versus World. iPhone does better internationally because Apple has multiple carriers in most countries. Apple only has one carrier in the US, so Apple doesn't do as well in the US.
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.
The exclusivity in the US has certainly caused the other carriers to be hungry for a competitive handset. Which was the Palm Pre and these Android-based phones.
But my sense is the main reason Android hasn't equalled Apple in smartphone sales worldwide is that Android-based phone mfrs haven't made a big distribution and marketing push overseas (excluding the UK) yet. iPhone has only just expanded worldwide in a big way during this past year.
If you're located outside the US, can you weigh in on this? Has HTC, Motorola, and Samsung really pushed Android-based phones? Or have they and the phones just aren't catching on?
People loved, Loved, LOVED America-On-Line. They loved the things that they can do on it and it's pleasantly controlled content. Fans would defend it tooth and nail. I just realized, Apple is not mimicking Microsoft, it's mimicking AOL and we all know what happened to AOL. Hopefully Apple is not as delusional and do something about it rather than talk.
AOL had fans? The only good thing about AOL were the free floppies they kept mailing me.
It depends. A strong company can do more with its products, and take more chances. do you think that if Apple's sales were lower, and its profits were marginal, they could afford to come out with products that were not in their old line of business the way they have? They couldn't. With high profits, and a lot of money in the bank, they can afford to take chances that companies like Dell can't.
They can also afford to sell higher quality products that small companies like Archos can't. They can also afford to support them better.
Too a point. When you have $40 billion in the bank, I think it's well beyond being profitable so that they can strong and innovative.
Now don't get me wrong. I don't begrudge Apple and their success. I like Apple products. And I love the Mac I am typing on right now.
But I just find it absurd that people go on and on about Apple's profitability (people who are not stockholders that is). Don't they realize, this is their money Apple is talking about? Seriously, do people get this worked up over any other company? Are people glad to pay well over asking price for a house or car?
If it's got a bunch of compelling features and a lower price tag, that is.
Remember how many folks are locked into 2-year contracts, or have just finished their 2-year contracts and want to spend some time with a cheaper plan...
While there is a small percentage waiting for the new phone and avoiding the 3GS, that's a very small percentage, not too many keep up on all the rumor sites' speculations.
I think price and form factor will be huge here, as well as some sort of feature that makes it stand out a bit from the Android offerings, and the 3GS. Most people really don't care if their phone has a slightly faster processor, or slightly better display. Not compelling enough reasons to switch or upgrade. Way better camera, smaller form factor, lower price will all prompt average people to upgrade...
The exclusivity in the US has certainly caused the other carriers to be hungry for a competitive handset. Which was the Palm Pre and these Android-based phones.
But my sense is the main reason Android hasn't equalled Apple in smartphone sales worldwide is that Android-based phone mfrs haven't made a big distribution and marketing push overseas (excluding the UK) yet. iPhone has only just expanded worldwide in a big way during this past year.
If you're located outside the US, can you weigh in on this? Has HTC, Motorola, and Samsung really pushed Android-based phones? Or have they and the phones just aren't catching on?
This is very true. Android's big push was first in the US (and Canada). But Android is only really ramping up in Europe (outside the UK) now. Ditto for Asia. In a lot of places, Android arrived after Apple. And it certainly has the potential to do well. Look at the Sony Ericsson X10 in Japan. Look at how popular that is. So I would hope Apple doesn't write off Android as some on here.
But where Apple does sell on multiple carriers, they do well. Canada is a great example. We've got the iPhone on all 3 carriers. And iPhones abound. That said Android is gaining traction. And with all 3 carriers selling the iPhone, Android handsets are now marketed by the major carriers as differentiators, the way the lone iPhone carrier (Rogers) used to market the iPhone. One carrier (Telus) still has ads and store banners proclaiming the Motorola Milestone, and its far more prominent than the iPhone. So who knows how things will play out.
In a year's time, with Android handsets coming out on most major carriers globally, we'll finally get to see how the iPhone stacks up. For now though, Apple's still king.
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.
Of course it's still profitable. With a two-year contract and $30 data plan, VZW rakes in $720 (assuming it doesn't allow early upgrades). If the handset cost VZW $300, that's $420 in extra revenue, which provides the needed cash flow for capital investment for their LTE network, and most of the $420 is profit.
But the real reason Verizon does BOGO is that their retail postpaid churn rate (net % of subscribers leaving) has grown by 20% since AT&T started selling iPhone. During that same period, AT&T's churn rate has decreased by 22%. This past quarter, the churn rate for both carriers is the exact same 1.07%; I believe it's the first time that AT&T has equalled VZW ever (I have data as far back as 1Q06 when AT&T was at 1.6 and VZW was at 0.92.) For comparison, Sprint and T-mobile churn rates have almost always been over 2%, and thus, they keep losing postpaid subscribers.
Look back at some history. VZW did some BOGO for Blackberries in 4Q08 and postpaid churn was 1.05 (12% higher than year before). Then in 1Q09, VZW churn surged to a never-seen-before 1.14 (23% higher than year before). That's when VZW committed to Motorola (and gave up control to allow Android Marketplace). In 2Q09 with the release of iPhone 3GS, VZW churn surged to 1.13 (22% higher than year before). Finally in 4Q with the release of Droid, they managed to hold churn to a negligible .01 increase and that's with BOGO in effect all through December. With continued BOGO on all smartphones in 1Q09, they finally got churn to decrease year-over-year. Can they afford to stop?
Not only did iPhone help AT&T to take subscribers from the other US carriers, but it has also helped AT&T to move way ahead of VZW in average revenue per user (ARPU). AT&T is taking in almost $62/mo per postpaid subscriber, while VZW is in the low 50s. And despite what you read on geek blogs, these iPhone owners are very loyal to iPhone (and thus, to AT&T).
Quote:
I know the iPhone has done much better worldwide than Android. However, since NPD's data is for the US market, I'd like to see the break-down of those worldwide sales. Using worldwide sales to compare in the US market is...well...skewing.
Here's the AT&T (US) iPhone activation data:
1Q08: <1M (est) 1Q09: 1.6M 1Q10: 2.7M
2Q08: <.4M (est) 2Q09: 2.4M
3Q08: 2.4M 3Q09: 3.2M
4Q08: 1.9M 4Q09: 3.1M
Reading across, it's clear that every year, there is around a million more subscribers per quarter in the US.
Canalys estimates for all of 2009 that there were 4.6M Android-based phones sold in North America, with 7.8M sold worldwide (Gartner estimates Android at 6.8M worldwide, so again, take these numbers with grain of salt). Compare that to Canalys estimates of 10.9M iPhones in N Amer (600K more than AT&T reported activations but includes Canada), and 25.1M sold worldwide (this number is an actual from Apple reports).
I have not seen a breakout for North America or US for 1Q10 - I'm sure it's been done and Apple and others have seen it, but I'm not paying $5000 or more for those reports.
As I wrote earlier, I think NPD's survey is as accurate as these other estimates. 4Q09 and 1Q10 were breakout quarters due to VZW and Motorola Droid.
And as I wrote earlier, Apple doesn't really care, it's never been in first place anyway, and it's the platform (which includes iPod touch) that matters because it's the Apps and iTunes content that create much of the experience.
....And when I say, 'poor' I mean anyone not working for the bloodsucking Goldman Sachs!
GS are not bloodsuckers, they are in business to make a profit and there are few companies who do it better. It's easy to kick a company when they are being presented as a scapegoat by the government to gain political advantage to push through absurd, ineffectual financial regulations. Have you actually studied the regulations proposed? They are virtually meaningless. You have been played.
Yes I do have the sales figures, motorola said they only shipped 2.1M droid phones and HTC numbers were not much different.
BTW it was survey and by definition of survey it is statistical analysis and the only thing you can conclude from it is the data is wrong
Also, you have not clue about marketing, Apple is not interested in gaining market share over devaluing the product. This is marketing 101, Apple will never allow the product to be given away, either you pay the price of you do own the product. Why give away a product when people are whiling to pay for.
Actually, iPhone 3GS 8G in Japan is free, with two year contract. It's about $53/month, unlimited data (actually the limit is 300G).
Comments
That's the choice Apple made. 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. I hope Steve has a good out clause in his AT&T contract.
It's also not so simple. There's no disagreement in the industry, if you read articles that had come out in the early days, that Apple couldn't have gotten what it needed from networks if it hadn't had an exclusive deal at first. Networks used to getting their own way would never have done the work in their network and database to allow the visual voicemail that Apple had AT&T do for them, or allowed the App Store. At the time, visual voicemail was a pretty advanced thing to have. It was a major advantage for Apple. AT&T did that only because they were given an exclusive. There would have been no incentive if several companies all started selling it at the same time.
Now, the situation is different. It's a very popular phone wherever it is, so networks are willing to do the work to get the ability to sell it. But, Apple had to prove it would work, and be desirable in the first place. Likely, Apple convinced AT&T to take the chance of giving up the control on the phone that they had on the others. But in order to do that, they would have wanted a long enough contract to make it worth while if it worked out, which it did.
At this point, Apple could sell it on all four networks here and possibly double the sales, as has happened outside the US wherever they were able to have more than one company offer it.
The day it's announced that the iPhone is going to be on Verizon, which it will at some point, both Apple's and Verizon's stocks will rise, and AT&T's will plunge.
I think we all know that, no matter how we feel about Apple and the phone.
At the time, visual voicemail was a pretty advanced thing to have.
Verizon still considers VVM so advanced that they have to charge an extra monthly fee for it. The whole smartphone thing is such trouble to support that Verizon charges a $350 early termination fee, as well.
Absolutely not! A company that is profitable can put money toward innovation and customer service. They can take more risks with their ideas. If successful, then others follow suit trying to cash in on that success, thus pushing innovation throughout the industry which is better for consumers. The problem isn't with Apple charging too much as their quarterlies obviously show by sales and increasing sales, but that others aren't good enough to force Apple's profit per unit down. Do really think the consumer is better off with the pre-iPhone smartphone market? Everyone who buys an smartphone, even if you never buy an iPhone, has gained from their advent into this market.
edit: Pipped by Melgross.
Yes, but you took it further than I did.
People are forgetting that it was Apple who led the industry down the path it's going now. If people will think back three years, and honestly evaluate what was available, they would see why this is so important.
Another thing that relates to profits has to do with the number of models a company has. The fewer models, and the more of each they sell, the higher their profits will be.
We have cell manufacturers selling 50 models of phones. from the cheapest junk to high end smartphones. They sell a lot of phones, like Nokia. But like Nokia, most of those sales are of cheap, hardly profitable models. Their individual smartphones don't sell that many, but all together they sell a lot. Unfortunately, that makes for less profit.
They need a lot of people and equipment to do the R&D on all those models, many of which sell only in a few tens of thousands.
Apple has one new model a year. They only sell two versions of that one model, and they only differ by the amount of memory. The second model is the old model, which was paid off earlier, so they can sell it much more cheaply.
This is why they can make much more profit.
The same thing it true for their computers. Have you seen how many models Dell and Hp have? Dozens! And each comes in as many as a dozen versions. That's one reason why their profits are so low for that. Apple has few computer models. R&D costs, again, can be lower, yet accomplish so much more.
So Apple sold 8.75 million phones last quarter. Almost all were of one model phone. How many different Android models, from how many different manufacturers did it take to sell the number of phones they sold? Quite a few.
So far less profits.
It will always be thus.
Verizon still considers VVM so advanced that they have to charge an extra monthly fee for it. The whole smartphone thing is such trouble to support that Verizon charges a $350 early termination fee, as well.
Well, I think it's obvious that their ideas have advanced. They've now said, several times, that they would like to have the iPhone, and that it's up to Apple.
That's not entirely true of course, as it's up to them to do what they would have to as well.
But it will happen. They both want it.
If you want to allow children to buy porn, get an Android phone. We don't allow such content on our marketplace as a commitment to the quality of our service.
- Sent from my iPad
Why would I give my phone or credit card to a child?
And do you think porn was the only low-quality product in the app store?
This is good news for iPhone users... downward pressure on pricing, incentive to offer more features and hopefully encourage them to ease up on restrictions.
It may not happen right away and next quarter will likely see a surge of iPhone 4 sales, but with the trend continuing, it will make Apple products more attractive for everyone. As a consumer of all kinds of products, Apple included, seeing one manufacturer way out in front is never a good thing. Fierce competition is very much applauded.
Agreed! You know when the first one blinks when one of them offers 'tethering!' No doubt about it, it's a win, win for us poor consumers! And when I say, 'poor' I mean anyone not working for the bloodsucking Goldman Sachs!
all companies are unethical to a degree. if apple is ethical, why is it doing business in China?
How can you say that?
Have you ever owned or run a company?
I have, with two other principals!
We had three basic objectives:
1) return a fair profit to our owners and investors
2) provide the best possible products and services to our customers
3) have fun
All our employees were salaried!
We provided health care and retirement. *
* After several years, we were forced to discontinue our retirement program due to Federal Tax and Regulation changes. This is my biggest regret! Though, a couple of early employees received over $100,000 (half a million in today's dollars).
We had the reputation as the best damn computer stores in Silicon Valley.
We sold and serviced customers from Bogota and Guam to London to Sindelfingen... and points in between.
I am proud to say our valued (and repeated) customers included State, Local. Federal Govts.; major corporations (IBM, Apple, Adobe, HP, Xerox, Intel, Fairchild, US Army, Stanford University, Daimler Benz, EMI Thorne, Piper-Jaffray); well-known individuals (Mike Scott, Regis McKenna, Woz, John Sculley, Charles Schwab, Todd Rundgren, Bill Graham, Reid Anderson, Andy Hertzfeld, Jean-Louis Gassée, Dave Winer); not-so-well-known people (Steve Schwartz, Doc Holiday, Ralphy, Mike Ternaski)... to name a few of each.
We treated all fairly and ethically. We started in 1978 when microcomputers were an oddity, survived for 11 years through great times and bad (a computer store on every corner).
We sold the stores in 1989... and I can honestly say that we never treated anyone unfairly or acted unethically. During the tough times, we always treated our customers and employees well, even though we weren't making much money, or having much fun!
Yeah, I'm an Old Fart... but I owned and ran an ethical business... and I'm damn proud of it!
...and it really pisses me off when someone like you flippantly characterizes others through the looking glass of his own morals and ethics!
.
Since there are so many non-phone devices that use the iPhone OS and run the iPhone Apps, this is an important point for Apple to make. Apple has by far the largest App marketplace, which is what makes it so attractive to developers.
Agree, Apple's carefully understated point is that it's the platform that really matters in the long run, not just the individual devices. So iPod touch units matter to the platform. Journalists and analysts are having a hard time grasping that.
Look at Apple's iPhone and iPod touch advertising to see what's important. It's the Apps; it's the platform.
Absolutely not! A company that is profitable can put money toward innovation and customer service. They can take more risks with their ideas. If successful, then others follow suit trying to cash in on that success, thus pushing innovation throughout the industry which is better for consumers.
The problem isn't with Apple charging too much, as their quarterlies obviously show their sales increasing, but that others aren't good enough to force Apple's profit per unit down.
Do you really think the consumer is better off with the pre-iPhone smartphone market? Everyone who buys a smartphone, even if you never buy an iPhone, has gained from their advent into this market.
Without a doubt, Apple has changed the whole mobile market and loosened the grip of the carriers in controlling the user experience for the better and everyone benefits.
While I can see Android supplanting the iPhone OS in short order, I see Android to be more in the disposable budget category phone business, rather than the premium sector.
If for no other reason than the carriers and handset manufacturers disinterest to update the OS or firmware. Initial data already shows that and I believe this trend will accelerate as price points drop.
I enjoy the iPhone because over time, the phone has actually become better and more useful with additional OS updates, new applications and tighter integration. As such, it continues to deliver great value on a daily bases.
This is a first in the phone industry and, if Apple continues to do so, will allow them to grow share while maintaining their high margins.
I think 'likely' underestimates the matter by several orders of magnitude. Next quarter's iPhone sales will stagger the smartphone market.
If it's got a bunch of compelling features and a lower price tag, that is.
Remember how many folks are locked into 2-year contracts, or have just finished their 2-year contracts and want to spend some time with a cheaper plan...
While there is a small percentage waiting for the new phone and avoiding the 3GS, that's a very small percentage, not too many keep up on all the rumor sites' speculations.
I think price and form factor will be huge here, as well as some sort of feature that makes it stand out a bit from the Android offerings, and the 3GS. Most people really don't care if their phone has a slightly faster processor, or slightly better display. Not compelling enough reasons to switch or upgrade. Way better camera, smaller form factor, lower price will all prompt average people to upgrade...
The difference here is just US versus World. iPhone does better internationally because Apple has multiple carriers in most countries. Apple only has one carrier in the US, so Apple doesn't do as well in the US.
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.
The exclusivity in the US has certainly caused the other carriers to be hungry for a competitive handset. Which was the Palm Pre and these Android-based phones.
But my sense is the main reason Android hasn't equalled Apple in smartphone sales worldwide is that Android-based phone mfrs haven't made a big distribution and marketing push overseas (excluding the UK) yet. iPhone has only just expanded worldwide in a big way during this past year.
If you're located outside the US, can you weigh in on this? Has HTC, Motorola, and Samsung really pushed Android-based phones? Or have they and the phones just aren't catching on?
People loved, Loved, LOVED America-On-Line. They loved the things that they can do on it and it's pleasantly controlled content. Fans would defend it tooth and nail. I just realized, Apple is not mimicking Microsoft, it's mimicking AOL and we all know what happened to AOL. Hopefully Apple is not as delusional and do something about it rather than talk.
AOL had fans? The only good thing about AOL were the free floppies they kept mailing me.
who cares
the iphone is what people think "smartphone"
they could have a gazillion smartphones but i will buy the iphone
verizon paid this shill
oh yea the google customer service .....can't wait, and wait and wait and wait whew, and wait
It depends. A strong company can do more with its products, and take more chances. do you think that if Apple's sales were lower, and its profits were marginal, they could afford to come out with products that were not in their old line of business the way they have? They couldn't. With high profits, and a lot of money in the bank, they can afford to take chances that companies like Dell can't.
They can also afford to sell higher quality products that small companies like Archos can't. They can also afford to support them better.
Too a point. When you have $40 billion in the bank, I think it's well beyond being profitable so that they can strong and innovative.
Now don't get me wrong. I don't begrudge Apple and their success. I like Apple products. And I love the Mac I am typing on right now.
But I just find it absurd that people go on and on about Apple's profitability (people who are not stockholders that is). Don't they realize, this is their money Apple is talking about? Seriously, do people get this worked up over any other company? Are people glad to pay well over asking price for a house or car?
If it's got a bunch of compelling features and a lower price tag, that is.
Remember how many folks are locked into 2-year contracts, or have just finished their 2-year contracts and want to spend some time with a cheaper plan...
While there is a small percentage waiting for the new phone and avoiding the 3GS, that's a very small percentage, not too many keep up on all the rumor sites' speculations.
I think price and form factor will be huge here, as well as some sort of feature that makes it stand out a bit from the Android offerings, and the 3GS. Most people really don't care if their phone has a slightly faster processor, or slightly better display. Not compelling enough reasons to switch or upgrade. Way better camera, smaller form factor, lower price will all prompt average people to upgrade...
Clearly, you haven't been paying attention
The exclusivity in the US has certainly caused the other carriers to be hungry for a competitive handset. Which was the Palm Pre and these Android-based phones.
But my sense is the main reason Android hasn't equalled Apple in smartphone sales worldwide is that Android-based phone mfrs haven't made a big distribution and marketing push overseas (excluding the UK) yet. iPhone has only just expanded worldwide in a big way during this past year.
If you're located outside the US, can you weigh in on this? Has HTC, Motorola, and Samsung really pushed Android-based phones? Or have they and the phones just aren't catching on?
This is very true. Android's big push was first in the US (and Canada). But Android is only really ramping up in Europe (outside the UK) now. Ditto for Asia. In a lot of places, Android arrived after Apple. And it certainly has the potential to do well. Look at the Sony Ericsson X10 in Japan. Look at how popular that is. So I would hope Apple doesn't write off Android as some on here.
But where Apple does sell on multiple carriers, they do well. Canada is a great example. We've got the iPhone on all 3 carriers. And iPhones abound. That said Android is gaining traction. And with all 3 carriers selling the iPhone, Android handsets are now marketed by the major carriers as differentiators, the way the lone iPhone carrier (Rogers) used to market the iPhone. One carrier (Telus) still has ads and store banners proclaiming the Motorola Milestone, and its far more prominent than the iPhone. So who knows how things will play out.
In a year's time, with Android handsets coming out on most major carriers globally, we'll finally get to see how the iPhone stacks up. For now though, Apple's still king.
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.
Of course it's still profitable. With a two-year contract and $30 data plan, VZW rakes in $720 (assuming it doesn't allow early upgrades). If the handset cost VZW $300, that's $420 in extra revenue, which provides the needed cash flow for capital investment for their LTE network, and most of the $420 is profit.
But the real reason Verizon does BOGO is that their retail postpaid churn rate (net % of subscribers leaving) has grown by 20% since AT&T started selling iPhone. During that same period, AT&T's churn rate has decreased by 22%. This past quarter, the churn rate for both carriers is the exact same 1.07%; I believe it's the first time that AT&T has equalled VZW ever (I have data as far back as 1Q06 when AT&T was at 1.6 and VZW was at 0.92.) For comparison, Sprint and T-mobile churn rates have almost always been over 2%, and thus, they keep losing postpaid subscribers.
Look back at some history. VZW did some BOGO for Blackberries in 4Q08 and postpaid churn was 1.05 (12% higher than year before). Then in 1Q09, VZW churn surged to a never-seen-before 1.14 (23% higher than year before). That's when VZW committed to Motorola (and gave up control to allow Android Marketplace). In 2Q09 with the release of iPhone 3GS, VZW churn surged to 1.13 (22% higher than year before). Finally in 4Q with the release of Droid, they managed to hold churn to a negligible .01 increase and that's with BOGO in effect all through December. With continued BOGO on all smartphones in 1Q09, they finally got churn to decrease year-over-year. Can they afford to stop?
Not only did iPhone help AT&T to take subscribers from the other US carriers, but it has also helped AT&T to move way ahead of VZW in average revenue per user (ARPU). AT&T is taking in almost $62/mo per postpaid subscriber, while VZW is in the low 50s. And despite what you read on geek blogs, these iPhone owners are very loyal to iPhone (and thus, to AT&T).
I know the iPhone has done much better worldwide than Android. However, since NPD's data is for the US market, I'd like to see the break-down of those worldwide sales. Using worldwide sales to compare in the US market is...well...skewing.
Here's the AT&T (US) iPhone activation data:
1Q08: <1M (est) 1Q09: 1.6M 1Q10: 2.7M
2Q08: <.4M (est) 2Q09: 2.4M
3Q08: 2.4M 3Q09: 3.2M
4Q08: 1.9M 4Q09: 3.1M
Reading across, it's clear that every year, there is around a million more subscribers per quarter in the US.
Canalys estimates for all of 2009 that there were 4.6M Android-based phones sold in North America, with 7.8M sold worldwide (Gartner estimates Android at 6.8M worldwide, so again, take these numbers with grain of salt). Compare that to Canalys estimates of 10.9M iPhones in N Amer (600K more than AT&T reported activations but includes Canada), and 25.1M sold worldwide (this number is an actual from Apple reports).
I have not seen a breakout for North America or US for 1Q10 - I'm sure it's been done and Apple and others have seen it, but I'm not paying $5000 or more for those reports.
As I wrote earlier, I think NPD's survey is as accurate as these other estimates. 4Q09 and 1Q10 were breakout quarters due to VZW and Motorola Droid.
And as I wrote earlier, Apple doesn't really care, it's never been in first place anyway, and it's the platform (which includes iPod touch) that matters because it's the Apps and iTunes content that create much of the experience.
....And when I say, 'poor' I mean anyone not working for the bloodsucking Goldman Sachs!
GS are not bloodsuckers, they are in business to make a profit and there are few companies who do it better. It's easy to kick a company when they are being presented as a scapegoat by the government to gain political advantage to push through absurd, ineffectual financial regulations. Have you actually studied the regulations proposed? They are virtually meaningless. You have been played.
Yes I do have the sales figures, motorola said they only shipped 2.1M droid phones and HTC numbers were not much different.
BTW it was survey and by definition of survey it is statistical analysis and the only thing you can conclude from it is the data is wrong
Also, you have not clue about marketing, Apple is not interested in gaining market share over devaluing the product. This is marketing 101, Apple will never allow the product to be given away, either you pay the price of you do own the product. Why give away a product when people are whiling to pay for.
Actually, iPhone 3GS 8G in Japan is free, with two year contract. It's about $53/month, unlimited data (actually the limit is 300G).