As an investor I would be interested in these figures too.
I suspect that Apple has the highest profit per unit, and highest profit within the smartphone category.
What also surprises me is how little the the completion understands what Apple does:
1) identify a market potential
2) determine why that potential isn't being realized (what others are doing wrong)
3) determine what is needed to do it right
4) determine how to do it at a reasonable (high) profit
5) just do it!
One can only imagine what Apple would provide if they decided to get into:
-- the cable network market
-- the TV market
-- the automobile market
To see examples of what I am talking about, just look at:
-- the I/O connections on the back of an iMac (a powerful computer) vs an HDTV, VCR, DVR, Cable Box (a dedicated appliance)
-- the remote control (or remote control app) for the above
-- the setup procedure for the above
-- the manual for the above
It's the User Experience, Stupids!
.
Agreed that's it in a nutshell! I think HP is getting the message with their acquisition of Palm's WebOS....still no one does it like Apple....I find cell phones, cable boxes, TV interfaces and most electronic equipment infuriating with their complex remotes, cables and crappy software. I wish Apple would hurry up and make a TV. Probably won't happen though!
I won't buy any software, or electronics unless it's made by Apple. Obviously, I've had to buy a flat screenTV, camera, printer and a DVD player. But I really try not to buy other stuff!
How will showing YoY quarterly comparisons "bite Apple in the end"? These are facts, nothing more. They won't sway anyone to do anything, except perhaps add to their stock investment choice. For 3 years now we've seen quarterly stats and for 3 years now the iPhone has been growing. Where has this bitten Apple in the ass?
Let us take the theoretical numbers: Let's assume that a product sold
10,000 units (Q1 2007)
100,00 units (Q1 2008)
500,00 units (Q1 2009)
1,000,00 units (Q1 2010)
1,500,00 units (Q1 2011) -- forecast
etc
Calculate the sales growth rate. The numbers for Apple, or any other company would be different, obviously but I hope you get the point.
The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know. One clueless journalist may then prepare a figure showing the eventual decline in the growth rate of an Apple product, and conclude incorrectly that there is a declining interest in the product. Example, the mature iPod market. Apple iPod share still is predominant by a wide margin from any other competitor.
And yet, an obscure company may have a very good growth rate but still outsell the predominant company. Example: Nokia, RIM vs Appke iPhone.
If you accept the premise of this article, that iPhone outsold Motorala, then be prepared to accept the possibilitythat Android may outsell iPhone eventually simply because there are more phone manufacturers that feed contract Androids to willing telecommunications company worldwide.
As I noted in another post in another thread. The iPhone might have defeated Motorola. So, why then not accept the fact that the iPhone was defeated by five other companies worldwide, Nokia beating Apple by a wide margin? It is like the "losers" of a raise competing among themselves who is the better.
As to the phenomenal 130% growth rate of iPhone, YoY, consider that during the period last year, 2009; the world economy was still in the midst of the worst recession. What made a difference in Apple was that the iPhone market was being marketed worldwide with a version better than the 2G.
If you standardize the growth rate or the percent share per total phone customer base, considering the worldwide expansion, you might be surprised what you will find.
Quote:
Originally Posted by solipsism
First you say that people won't switch to a carrier to get the phone they want, then you say that brand loyalty is a known phenomena. DOES NOT COMPUTE It's been well documented that AT&T is gaining more customers and having less turnover since getting the iPhone.
There may be people who would switch carriers, that is not unheard of; however, considering more than two hundred million phone customers in the US, what is a few millions, or a few hundreds of thousands?
If memory serves me, the number or at least the growth rate of "new iPhone customers" might have been declining. [You are known for being able to tract information, so you may eitehr prove or disprove me on this.]
For one reason or another, I am sure you have heard how loud some Verizon customers "hate" AT&T, and would like to have an iPhone version for their company. Do you really think that these Verizon loyalists, who wanted so much to have an iPhone would switch to AT&T, if an iPhone for Verizon was available. I am sure you also have heard of those who had to give up their iPhone, after switching, because they were fed up with AT&T service. Or those who would leave AT&T once the iPhone is available in the carrier of their choice.
These are good examples of "brand loyalty" no matter how misplaced it might be.
You might be astounded how much increase in the total sales of the iPhone in the US, if Apple does decide to manufacture a version, perhaps for Verizon, or even Sprint or T-Mobile. I am sure there are reasons why Apple has not done so already. Perhaps, it is a "contract agreement" or the possibility that Apple has to tap the worldmarket. Or, it is possible that since Apple is really still a very new telephone manufacturer company, it may have decided to make a full handle of one technology, GSM, that happens to be the predominant worldwide.
The reality however is that most telephone manufacturers, Nokia, RIM, and all the Asians, and even the lowly and now merged Palm were able to create phones that will cater to variants of the same technology or different technologies, e.g,, Nexus One phones for GSM, including the T-Mobile variant, as well as the variants of CDMs specific for Verizon, Sprint. Similarly, other phone companies, e.g, RIM, were willing to manufacture a CDMA variant specific for the large China market.
Quote:
Originally Posted by solipsism
So you are saying that AT&T has not increased their subscriber count because of the iPhone. I don't think that is just improbable, but impossible. I and many people I know certainly jumped to AT&T specifically for the iPhone. Do you have that report?
Our anecdotal experiences should not become the foundation of how the general population may behave. If I am not mistaken, many here have criticized the "geek POV" to mirror the buying patterns of the average consumer.
"I act [this way], therefore they must..."
When studying a river, do not be too enthralled with the eddies, or its tributaries and miss the general flow of the river.
Small by unit number shipped doesn't equal small in profit per handset -
It would be really interesting to see those figures giving ranking by profit made rather than handset number sold.
This is one of the reasons why I stated earlier why Apple-centric sites should not gloat too much about Apple beating Motorola or some other phone manufacturer, especially when it comes to market share of all phones. And, in fact, even in thee more rarified :"high end" phone market.
The carriers, as gatekeepers, preclude any true competition.
For example, to my knowledge, RIM has consistently outsold the iPhone for many quarters now. Two possible reasons, RIM phones are sold by more telephone carriers. Also, many of those who may have gotten used to a RIM phone may be hesitant to "learn" new technologies (the maladay called "complacency") because they have gotten used to a product (brand loyalty).
Many claim that such phone sales grwoth came about only because of gimmicks like "two for 1", but how does that matter to the phone carriers, If both two phones are activated?
Small by unit number shipped doesn't equal small in profit per handset -
It would be really interesting to see those figures giving ranking by profit made rather than handset number sold.
This is one of the reasons why I stated earlier why Apple-centric sites should not gloat too much about Apple beating Motorola or some other phone manufacturer, especially when it comes to market share of all phones. And, in fact, even in thee more rarified :"high end" phone market.
The carriers, as gatekeepers, preclude any true competition.
For example, to my knowledge, RIM has consistently outsold the iPhone for many quarters now. Two possible reasons, RIM phones are sold by more telephone carriers. Also, many of those who may have gotten used to a RIM phone may be hesitant to "learn" new technologies (the maladay called "complacency") because they have gotten used to a product (brand loyalty).
Many claim that such phone sales grwoth came about only because of gimmicks like "2 for 1", but how does that matter to the phone carriers, If both two phones are activated?
Quote:
Originally Posted by jragosta
We don't know that.
AT&T is undoubtedly giving Apple a very sweet deal in order to get exclusivity. I have no idea what it is, but let's say it amounts to $100 extra per phone.
I would understand if Apple is truly bound without any loop hole to its contract with AT&T such that it has no recourse but to have exclusive contract until 2012.
However, if there is not such iron-clad contract, Apple may win the battle but lose the war. No matter how profitable such a deal might be with AT&T, it may lose potential iPhone customers in other carriers.
The technology is there to create iPhones for other GSM or CDMA variants.
Technology shall improve not only for the iPhone but also for others like the Android, perhaps even the HP-Palms, etc.
If these technologies may become good enough, customers that do not want to switch customers will be satisfied with the available brand, other than iPhone
Even if the iPhone becomes avalaible to other phone carriers, those customers who already got accustomed ("good neough" conditioning creating "brand loyalty") may no longer be as intrigued to switch brands)
When it comes to "virgin territories", those who got rich may not always be because they are the best or most cunning, it may only because they were there first.
CGC
Edit: read observation by "newbee" below. Thanks. I meant to state, as corrected: " Apple may win the battle but lose the war."
Let us take the theoretical numbers: Let's assume that a product sold
10,000 units (Q1 2007)
100,00 units (Q1 2008)
500,00 units (Q1 2009)
1,000,00 units (Q1 2010)
1,500,00 units (Q1 2011) -- forecast
etc
Calculate the sales growth rate. The numbers for Apple, or any other company would be different, obviously but I hope you get the point.
Sold 10,000 units (Q1 2007)
Growth of 90,000 units YoY (Q1 2008)
Growth of 400,00 units more YoY (Q1 2009)
Growth of 500,00 units more YoY (Q1 2010)
Growth of 500,00 units more YoY (Q1 2011
What you're talking about is growth represented as a percentage.
This is a completely different than simply stating the growth in units. It's also one that is only viable when all other relevant data is represented. Your original comment was ,"Apple-centric sites should not focus too much about quarter to quarter numbers because they will comeback to bite Apple in the end." This article has represented all the viable data points about growth, not just the percentages so I don't see what could possibly "bit them in the end".
Quote:
You might be astounded how much increase in the total sales of the iPhone in the US, if Apple does decide to manufacture a version, perhaps for Verizon, or even Sprint or T-Mobile.
It's unlikely that I would be astounded. I expect at least a 15 point jump if they do announce a Verizon iPhone. I have also stated, among other things, that Apple's inability to keep iPhone supplies up may be a reason why they haven't offered a Verizon iPhone; they simply can't produce enough as it is and Verizon's sales would likely trounce AT&T's sales. And if they do, it will be off cycle from the 3GSM iPhone.
However, that does not mean that people ARE NOT going to AT&T specifically to get the iPhone. There are plenty of reports showing that people are leaving other carriers to get the iPhone and that smartphone sales are up because of the iPhone.
Many claim that such phone sales grwoth came about only because of gimmicks like "two for 1", but how does that matter to the phone carriers, If both two phones are activated?
There is a causality that makes that hard to refute.
You have it backwards, BOGO is good for the carriers because they get two contracts out of it. It's potentially bad for the vendor and potentially a bad sign for investors as it usually means they have lowered the wholesale price to push more product in an attempt to increase their bottom line. RiM has great management and have done exactly that, but at the expense of their per unit profit. This growth is typically harder to maintain.
Apple should find itself in 4th place this year. They would have beaten RIM already, except for the 2-for-1 promo by Verizon - but it is just a question of time before Apple go ahead of RIM and Sony-Ericcson.
Amazing, when you consider that Apple did not sell a single phone just 3 years back!
What's really amazing is that Apple has 3% of the world cellphone market but is actually getting about 30% of the world cellphone profits (sorry can't remember the figure exactly, but I know its between 25% and 33%.)
Apple really knows how to skim the cream and maximize profits (and all the haters keep whining about how they are so stupid, blowing it, etc.)
There is a causality that makes that hard to refute.
You have it backwards, BOGO is good for the carriers because they get two contracts out of it. It's potentially bad for the vendor and potentially a bad sign for investors as it usually means they have lowered the wholesale price to push more product in an attempt to increase their bottom line. RiM has great management and have done exactly that, but at the expense of their per unit profit. This growth is typically harder to maintain.
RIM are an interesting case. They're the only major manufacturer that get a cut of subscription fees. RIM can afford to offer a lower price per unit because they know that they can make it back from ongoing fees.
And let's not forget that RIM are a global company. The BOGOF offer isn't available worldwide.
First you say that people won't switch to a carrier to get the phone they want, then you say that brand loyalty is a known phenomena. DOES NOT COMPUTE It's been well documented that AT&T is gaining more customers and having less turnover since getting the iPhone.
The last Strand report on cell phone market share showed that AT&T gained no market share from offering the iPhone. It might have prevented them from losing customers because of their service but not gaining customers.
I take all Strand reports with a grain of salt. Seems like he has a bone to pick with Apple.
For every quarter since iPhone arrived in 2007, AT&T has added postpaid subscribers and said 33-40%+ of iPhone subscribers were new to AT&T. New iPhone subscribers in some quarters was more than new postpaid subscribers due to churn (people leaving) and AT&T subscribers upgrading to iPhone. AT&T has also reduced postpaid churn by 18-20%.
Of course, it's possible that all those people would've joined AT&T even without iPhone, and that people would've stopped leaving AT&T without iPhone. But when you look at what happened at Verizon Wireless (increased postpaid churn by 20%), Sprint (continued postpaid subscriber losses), and T-Mobile (minimal gains) during these last 3 years, you'd find it very unlikely.
So you are saying that AT&T has not increased their subscriber count because of the iPhone. I don't think that is just improbable, but impossible. I and many people I know certainly jumped to AT&T specifically for the iPhone. Do you have that report?
I believe Verizon has just done something really stupid that is going to greatly move people over to ATT.
It looks like someone in Verizon got the bright idea to force users to get a data plan on most of their phones including ones often used by teens simply for voice and text. Verizon has about 50 phones they off and now 38 of them requirea data plan of either 9.99 or 29.99.
This is the biggest joke of it all. The 9.99 plan is for 25mb. Most consumers have no clue how much 25mb and they are going have their teens racking up 3,000 dollar bills. So really they are forcing consumers to buy a data plan even on basic multimedia phones like the LG envy or LG Chocolate.
I just called my friend at Verizon and he said customer service is getting hammered because of this change.
It looks like someone in Verizon got the bright idea to force users to get a data plan on most of their phones including ones often used by teens simply for voice and text.
I can see the necessity for heavily subsidized phones, like the iPhone and Droid Incredible, but I don't think they offer many phones that are being subsidized by ~$300.
I'm also surprised AT&T hasn't raised the ETF fee to more closely match Verizon. I assume their subsidization of the iPhone is more than $175.
Nothing personal intended here, but I find your posts confusing. They sound all technical and stuff but they don't convey much meaning to me. This part here where you mention the "sigmoid curve" and how folks don't understand it:
Quote:
Originally Posted by cgc0202
... The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know. One clueless journalist may then prepare a figure showing the eventual decline in the growth rate of an Apple product, and conclude incorrectly that there is a declining interest in the product. Example, the mature iPod market. Apple iPod share still is predominant by a wide margin from any other competitor. ...
Couldn't you just say "S-curve" instead and talk about how this really means that sales will plateau once the market is saturated? How is that something that others don't know or wouldn't understand?
You also talk about how brand loyalty prevents switching, but the whole story of AT&T's success in the years since the iPhone is the absolutely unprecedented numbers of "switchers." I get the logical point you are trying to make and it's technically true, but it ignores what's actually happening.
All this theoretical stuff means nothing if what's happening is actually the reverse of your predictions and it seems to me that in general, it is.
Brand loyalty theoretically can prevent people from switching, and the constraints and antics of various carriers can also easily affect the uptake of new devices, but I don't see that this is actually happening with the iPhone nor does it seem likely to affect iPhone sales at all in the near future. These are interesting theories overall, but I don't see the substance.
The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know.
Here is iPhone's YOY unit sales growth beginning with 2008 Apr-Jun qtr:
Except for one quarter, Apple managed to at least double (or almost double) sales YOY by appropriately setting launch dates throughout the world. The one no-doubling quarter occurred because in 2008 it was the launch quarter and in 2009, it was not. Regardless, did anyone notice it?
Apple doesn't really care about market share per se, and it's focus isn't on market share. Nokia talks about market share in its quarterly results press release. Apple talks about units sold, ASP and profit. You can see the difference. However, Apple does care a lot about having enough iPhone OS units in the market so that developers will develop Apps for it, because Apps are essential to the PLATFORM Apple is building. So Apple keeps bringing up 85 million (even though some original iPhones have been turned into no-phone-service-iPod-touch or put in drawers) to remind developers of the right perspective. The platform is what Apple believes is its sustainable advantage over all its smartphone competitors.
A platform is more than just a common OS. It includes common UI items/gestures, common Apps, continued OS upgrades, common SDK (and continued SDK upgrades), common peripherals, common product naming, etc. Google is also trying to build a platform, but by giving freedom to each hardware mfr to add a different UI, and freedom to each carrier to not provide OS upgrades and refuse basic apps, and by having a second different OS/SDK for tablets, Android is a much more fragmented platform. (Here's a research topic: How much fragmentation can a platform withstand before it loses most of its benefits?) RIM also has a "platform" but their platform is really split by having keyboard-based phones, and touchscreen-based phones. And their touchscreen-based product (Storm) and SDK are poor. Nokia is building multiple platforms, and by moving to a new UI for Symbian^3 and the new MeeGo, they will for the most part, be starting again. HP recognizes the importance of platform and that's why they just bought Palm. But they have much work to do. With regard to building a platform, Apple is ahead and continuing to move further forward.
The one no-doubling quarter occurred because in 2008 it was the launch quarter and in 2009, it was not. Regardless, did anyone notice it?
That first quarter that you couldn't find an iPhone anywhere. They literally had stopped producing them sometime before April. It shows it was up 166% but remember that they only sold the original iPhone for a weekend before that quarter ended.
I recall this vividly because even though the 3G iPhone was imminent for release in July I (and many others, included NasserAE) were able to sell their original iPhone for more than retail price.
edit: It looks like it was Friday after 5pm sales and all of Saturday before that quarter ended.
Apple doesn't really care about market share per se, and it's focus isn't on market share. Nokia talks about market share in its quarterly results press release. Apple talks about units sold, ASP and profit. You can see the difference. However, Apple does care a lot about having enough iPhone OS units in the market so that developers will develop Apps for it, because Apps are essential to the PLATFORM Apple is building. So Apple keeps bringing up 85 million (even though some original iPhones have been turned into no-phone-service-iPod-touch or put in drawers) to remind developers of the right perspective. The platform is what Apple believes is its sustainable advantage over all its smartphone competitors.
If Apple doesn't care about market share, then why did Steve Jobs mention it in the original iPhone announcement, and why does he mention it during his other announcements?
This is just a convoluted and overly complicated way to say that you want the iPhone on Verizon.
It would be more interesting if it were not for the fact that this past quarter AT&T added a record number of iPhone's. AT&T had less churn than Verizon and AT&T added more subscribers than Verizon. I'm not saying that Apple should not expand the iPhone to more carriers, there is little reason why they could not use T-Mobile. At the same time people keep coming up with these ATT/Apple dooms day scenarios that never play out.
Quote:
Originally Posted by cgc0202
For one reason or another, I am sure you have heard how loud some Verizon customers "hate" AT&T, and would like to have an iPhone version for their company. Do you really think that these Verizon loyalists, who wanted so much to have an iPhone would switch to AT&T, if an iPhone for Verizon was available. I am sure you also have heard of those who had to give up their iPhone, after switching, because they were fed up with AT&T service. Or those who would leave AT&T once the iPhone is available in the carrier of their choice.
Comments
As an investor I would be interested in these figures too.
I suspect that Apple has the highest profit per unit, and highest profit within the smartphone category.
What also surprises me is how little the the completion understands what Apple does:
1) identify a market potential
2) determine why that potential isn't being realized (what others are doing wrong)
3) determine what is needed to do it right
4) determine how to do it at a reasonable (high) profit
5) just do it!
One can only imagine what Apple would provide if they decided to get into:
-- the cable network market
-- the TV market
-- the automobile market
To see examples of what I am talking about, just look at:
-- the I/O connections on the back of an iMac (a powerful computer) vs an HDTV, VCR, DVR, Cable Box (a dedicated appliance)
-- the remote control (or remote control app) for the above
-- the setup procedure for the above
-- the manual for the above
It's the User Experience, Stupids!
.
Agreed that's it in a nutshell! I think HP is getting the message with their acquisition of Palm's WebOS....still no one does it like Apple....I find cell phones, cable boxes, TV interfaces and most electronic equipment infuriating with their complex remotes, cables and crappy software. I wish Apple would hurry up and make a TV. Probably won't happen though!
I won't buy any software, or electronics unless it's made by Apple. Obviously, I've had to buy a flat screenTV, camera, printer and a DVD player. But I really try not to buy other stuff!
Best
How will showing YoY quarterly comparisons "bite Apple in the end"? These are facts, nothing more. They won't sway anyone to do anything, except perhaps add to their stock investment choice. For 3 years now we've seen quarterly stats and for 3 years now the iPhone has been growing. Where has this bitten Apple in the ass?
Let us take the theoretical numbers: Let's assume that a product sold
10,000 units (Q1 2007)
100,00 units (Q1 2008)
500,00 units (Q1 2009)
1,000,00 units (Q1 2010)
1,500,00 units (Q1 2011) -- forecast
etc
Calculate the sales growth rate. The numbers for Apple, or any other company would be different, obviously but I hope you get the point.
The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know. One clueless journalist may then prepare a figure showing the eventual decline in the growth rate of an Apple product, and conclude incorrectly that there is a declining interest in the product. Example, the mature iPod market. Apple iPod share still is predominant by a wide margin from any other competitor.
And yet, an obscure company may have a very good growth rate but still outsell the predominant company. Example: Nokia, RIM vs Appke iPhone.
If you accept the premise of this article, that iPhone outsold Motorala, then be prepared to accept the possibilitythat Android may outsell iPhone eventually simply because there are more phone manufacturers that feed contract Androids to willing telecommunications company worldwide.
As I noted in another post in another thread. The iPhone might have defeated Motorola. So, why then not accept the fact that the iPhone was defeated by five other companies worldwide, Nokia beating Apple by a wide margin? It is like the "losers" of a raise competing among themselves who is the better.
As to the phenomenal 130% growth rate of iPhone, YoY, consider that during the period last year, 2009; the world economy was still in the midst of the worst recession. What made a difference in Apple was that the iPhone market was being marketed worldwide with a version better than the 2G.
If you standardize the growth rate or the percent share per total phone customer base, considering the worldwide expansion, you might be surprised what you will find.
First you say that people won't switch to a carrier to get the phone they want, then you say that brand loyalty is a known phenomena. DOES NOT COMPUTE It's been well documented that AT&T is gaining more customers and having less turnover since getting the iPhone.
There may be people who would switch carriers, that is not unheard of; however, considering more than two hundred million phone customers in the US, what is a few millions, or a few hundreds of thousands?
If memory serves me, the number or at least the growth rate of "new iPhone customers" might have been declining. [You are known for being able to tract information, so you may eitehr prove or disprove me on this.]
For one reason or another, I am sure you have heard how loud some Verizon customers "hate" AT&T, and would like to have an iPhone version for their company. Do you really think that these Verizon loyalists, who wanted so much to have an iPhone would switch to AT&T, if an iPhone for Verizon was available. I am sure you also have heard of those who had to give up their iPhone, after switching, because they were fed up with AT&T service. Or those who would leave AT&T once the iPhone is available in the carrier of their choice.
These are good examples of "brand loyalty" no matter how misplaced it might be.
You might be astounded how much increase in the total sales of the iPhone in the US, if Apple does decide to manufacture a version, perhaps for Verizon, or even Sprint or T-Mobile. I am sure there are reasons why Apple has not done so already. Perhaps, it is a "contract agreement" or the possibility that Apple has to tap the worldmarket. Or, it is possible that since Apple is really still a very new telephone manufacturer company, it may have decided to make a full handle of one technology, GSM, that happens to be the predominant worldwide.
The reality however is that most telephone manufacturers, Nokia, RIM, and all the Asians, and even the lowly and now merged Palm were able to create phones that will cater to variants of the same technology or different technologies, e.g,, Nexus One phones for GSM, including the T-Mobile variant, as well as the variants of CDMs specific for Verizon, Sprint. Similarly, other phone companies, e.g, RIM, were willing to manufacture a CDMA variant specific for the large China market.
So you are saying that AT&T has not increased their subscriber count because of the iPhone. I don't think that is just improbable, but impossible. I and many people I know certainly jumped to AT&T specifically for the iPhone. Do you have that report?
Our anecdotal experiences should not become the foundation of how the general population may behave. If I am not mistaken, many here have criticized the "geek POV" to mirror the buying patterns of the average consumer.
"I act [this way], therefore they must..."
When studying a river, do not be too enthralled with the eddies, or its tributaries and miss the general flow of the river.
CGC
Isn't that the Nokia mentality fallacy?
Small by unit number shipped doesn't equal small in profit per handset -
It would be really interesting to see those figures giving ranking by profit made rather than handset number sold.
This is one of the reasons why I stated earlier why Apple-centric sites should not gloat too much about Apple beating Motorola or some other phone manufacturer, especially when it comes to market share of all phones. And, in fact, even in thee more rarified :"high end" phone market.
The carriers, as gatekeepers, preclude any true competition.
For example, to my knowledge, RIM has consistently outsold the iPhone for many quarters now. Two possible reasons, RIM phones are sold by more telephone carriers. Also, many of those who may have gotten used to a RIM phone may be hesitant to "learn" new technologies (the maladay called "complacency") because they have gotten used to a product (brand loyalty).
Many claim that such phone sales grwoth came about only because of gimmicks like "two for 1", but how does that matter to the phone carriers, If both two phones are activated?
CGC
Isn't that the Nokia mentality fallacy?
Small by unit number shipped doesn't equal small in profit per handset -
It would be really interesting to see those figures giving ranking by profit made rather than handset number sold.
This is one of the reasons why I stated earlier why Apple-centric sites should not gloat too much about Apple beating Motorola or some other phone manufacturer, especially when it comes to market share of all phones. And, in fact, even in thee more rarified :"high end" phone market.
The carriers, as gatekeepers, preclude any true competition.
For example, to my knowledge, RIM has consistently outsold the iPhone for many quarters now. Two possible reasons, RIM phones are sold by more telephone carriers. Also, many of those who may have gotten used to a RIM phone may be hesitant to "learn" new technologies (the maladay called "complacency") because they have gotten used to a product (brand loyalty).
Many claim that such phone sales grwoth came about only because of gimmicks like "2 for 1", but how does that matter to the phone carriers, If both two phones are activated?
We don't know that.
AT&T is undoubtedly giving Apple a very sweet deal in order to get exclusivity. I have no idea what it is, but let's say it amounts to $100 extra per phone.
I would understand if Apple is truly bound without any loop hole to its contract with AT&T such that it has no recourse but to have exclusive contract until 2012.
However, if there is not such iron-clad contract, Apple may win the battle but lose the war. No matter how profitable such a deal might be with AT&T, it may lose potential iPhone customers in other carriers.
The technology is there to create iPhones for other GSM or CDMA variants.
Technology shall improve not only for the iPhone but also for others like the Android, perhaps even the HP-Palms, etc.
If these technologies may become good enough, customers that do not want to switch customers will be satisfied with the available brand, other than iPhone
Even if the iPhone becomes avalaible to other phone carriers, those customers who already got accustomed ("good neough" conditioning creating "brand loyalty") may no longer be as intrigued to switch brands)
When it comes to "virgin territories", those who got rich may not always be because they are the best or most cunning, it may only because they were there first.
CGC
Edit: read observation by "newbee" below. Thanks. I meant to state, as corrected: " Apple may win the battle but lose the war."
Let us take the theoretical numbers: Let's assume that a product sold
10,000 units (Q1 2007)
100,00 units (Q1 2008)
500,00 units (Q1 2009)
1,000,00 units (Q1 2010)
1,500,00 units (Q1 2011) -- forecast
etc
Calculate the sales growth rate. The numbers for Apple, or any other company would be different, obviously but I hope you get the point.
You might be astounded how much increase in the total sales of the iPhone in the US, if Apple does decide to manufacture a version, perhaps for Verizon, or even Sprint or T-Mobile.
It's unlikely that I would be astounded. I expect at least a 15 point jump if they do announce a Verizon iPhone. I have also stated, among other things, that Apple's inability to keep iPhone supplies up may be a reason why they haven't offered a Verizon iPhone; they simply can't produce enough as it is and Verizon's sales would likely trounce AT&T's sales. And if they do, it will be off cycle from the 3GSM iPhone.
However, that does not mean that people ARE NOT going to AT&T specifically to get the iPhone. There are plenty of reports showing that people are leaving other carriers to get the iPhone and that smartphone sales are up because of the iPhone.
Many claim that such phone sales grwoth came about only because of gimmicks like "two for 1", but how does that matter to the phone carriers, If both two phones are activated?
There is a causality that makes that hard to refute.
You have it backwards, BOGO is good for the carriers because they get two contracts out of it. It's potentially bad for the vendor and potentially a bad sign for investors as it usually means they have lowered the wholesale price to push more product in an attempt to increase their bottom line. RiM has great management and have done exactly that, but at the expense of their per unit profit. This growth is typically harder to maintain.
Apple should find itself in 4th place this year. They would have beaten RIM already, except for the 2-for-1 promo by Verizon - but it is just a question of time before Apple go ahead of RIM and Sony-Ericcson.
Amazing, when you consider that Apple did not sell a single phone just 3 years back!
What's really amazing is that Apple has 3% of the world cellphone market but is actually getting about 30% of the world cellphone profits (sorry can't remember the figure exactly, but I know its between 25% and 33%.)
Apple really knows how to skim the cream and maximize profits (and all the haters keep whining about how they are so stupid, blowing it, etc.)
There is a causality that makes that hard to refute.
You have it backwards, BOGO is good for the carriers because they get two contracts out of it. It's potentially bad for the vendor and potentially a bad sign for investors as it usually means they have lowered the wholesale price to push more product in an attempt to increase their bottom line. RiM has great management and have done exactly that, but at the expense of their per unit profit. This growth is typically harder to maintain.
RIM are an interesting case. They're the only major manufacturer that get a cut of subscription fees. RIM can afford to offer a lower price per unit because they know that they can make it back from ongoing fees.
And let's not forget that RIM are a global company. The BOGOF offer isn't available worldwide.
However, if there is not such iron-clad contract, Apple may win the montary but lose the war.
CGC
In any business I ever heard of .... the montary is the war. ( I assume you meant monetary) If not, feel free to enlighten me.
Small by unit number shipped doesn't equal small in profit per handset -
It would be really interesting to see those figures giving ranking by profit made rather than handset number sold.
Why would consumers be interested in that? This isn't an investment strategy site.
Why would consumers be interested in that? This isn't an investment strategy site.
Do you not read the articles on AI. They do a great deal of investor-based articles. Usually written by Neil Hughes.
First you say that people won't switch to a carrier to get the phone they want, then you say that brand loyalty is a known phenomena. DOES NOT COMPUTE It's been well documented that AT&T is gaining more customers and having less turnover since getting the iPhone.
The last Strand report on cell phone market share showed that AT&T gained no market share from offering the iPhone. It might have prevented them from losing customers because of their service but not gaining customers.
I take all Strand reports with a grain of salt. Seems like he has a bone to pick with Apple.
For every quarter since iPhone arrived in 2007, AT&T has added postpaid subscribers and said 33-40%+ of iPhone subscribers were new to AT&T. New iPhone subscribers in some quarters was more than new postpaid subscribers due to churn (people leaving) and AT&T subscribers upgrading to iPhone. AT&T has also reduced postpaid churn by 18-20%.
Of course, it's possible that all those people would've joined AT&T even without iPhone, and that people would've stopped leaving AT&T without iPhone. But when you look at what happened at Verizon Wireless (increased postpaid churn by 20%), Sprint (continued postpaid subscriber losses), and T-Mobile (minimal gains) during these last 3 years, you'd find it very unlikely.
So you are saying that AT&T has not increased their subscriber count because of the iPhone. I don't think that is just improbable, but impossible. I and many people I know certainly jumped to AT&T specifically for the iPhone. Do you have that report?
I believe Verizon has just done something really stupid that is going to greatly move people over to ATT.
It looks like someone in Verizon got the bright idea to force users to get a data plan on most of their phones including ones often used by teens simply for voice and text. Verizon has about 50 phones they off and now 38 of them requirea data plan of either 9.99 or 29.99.
This is the biggest joke of it all. The 9.99 plan is for 25mb. Most consumers have no clue how much 25mb and they are going have their teens racking up 3,000 dollar bills. So really they are forcing consumers to buy a data plan even on basic multimedia phones like the LG envy or LG Chocolate.
I just called my friend at Verizon and he said customer service is getting hammered because of this change.
Even more amazing considering that Apple only sells one model of smartphone at a time and zero dumbphones (a.k.a. "feature phones").
Are people still saying this rubbish, go to the Apple store, they sell more than one model of the iPhone
It looks like someone in Verizon got the bright idea to force users to get a data plan on most of their phones including ones often used by teens simply for voice and text.
I can see the necessity for heavily subsidized phones, like the iPhone and Droid Incredible, but I don't think they offer many phones that are being subsidized by ~$300.
I'm also surprised AT&T hasn't raised the ETF fee to more closely match Verizon. I assume their subsidization of the iPhone is more than $175.
... The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know. One clueless journalist may then prepare a figure showing the eventual decline in the growth rate of an Apple product, and conclude incorrectly that there is a declining interest in the product. Example, the mature iPod market. Apple iPod share still is predominant by a wide margin from any other competitor. ...
Couldn't you just say "S-curve" instead and talk about how this really means that sales will plateau once the market is saturated? How is that something that others don't know or wouldn't understand?
You also talk about how brand loyalty prevents switching, but the whole story of AT&T's success in the years since the iPhone is the absolutely unprecedented numbers of "switchers." I get the logical point you are trying to make and it's technically true, but it ignores what's actually happening.
All this theoretical stuff means nothing if what's happening is actually the reverse of your predictions and it seems to me that in general, it is.
Brand loyalty theoretically can prevent people from switching, and the constraints and antics of various carriers can also easily affect the uptake of new devices, but I don't see that this is actually happening with the iPhone nor does it seem likely to affect iPhone sales at all in the near future. These are interesting theories overall, but I don't see the substance.
The growth rate is phenomenal during the early stages, but if the market is restricted, i.e., simply one carrier, the growth rate will eventually follow a sigmoidal curve. A phenomenon that many people would not know.
Here is iPhone's YOY unit sales growth beginning with 2008 Apr-Jun qtr:
166%, 516% (iPhone 3G launch), 88%, 123%, 626% (iPhone 3GS launch), 7%, 100%, and 131%.
Except for one quarter, Apple managed to at least double (or almost double) sales YOY by appropriately setting launch dates throughout the world. The one no-doubling quarter occurred because in 2008 it was the launch quarter and in 2009, it was not. Regardless, did anyone notice it?
Apple doesn't really care about market share per se, and it's focus isn't on market share. Nokia talks about market share in its quarterly results press release. Apple talks about units sold, ASP and profit. You can see the difference. However, Apple does care a lot about having enough iPhone OS units in the market so that developers will develop Apps for it, because Apps are essential to the PLATFORM Apple is building. So Apple keeps bringing up 85 million (even though some original iPhones have been turned into no-phone-service-iPod-touch or put in drawers) to remind developers of the right perspective. The platform is what Apple believes is its sustainable advantage over all its smartphone competitors.
A platform is more than just a common OS. It includes common UI items/gestures, common Apps, continued OS upgrades, common SDK (and continued SDK upgrades), common peripherals, common product naming, etc. Google is also trying to build a platform, but by giving freedom to each hardware mfr to add a different UI, and freedom to each carrier to not provide OS upgrades and refuse basic apps, and by having a second different OS/SDK for tablets, Android is a much more fragmented platform. (Here's a research topic: How much fragmentation can a platform withstand before it loses most of its benefits?) RIM also has a "platform" but their platform is really split by having keyboard-based phones, and touchscreen-based phones. And their touchscreen-based product (Storm) and SDK are poor. Nokia is building multiple platforms, and by moving to a new UI for Symbian^3 and the new MeeGo, they will for the most part, be starting again. HP recognizes the importance of platform and that's why they just bought Palm. But they have much work to do. With regard to building a platform, Apple is ahead and continuing to move further forward.
The one no-doubling quarter occurred because in 2008 it was the launch quarter and in 2009, it was not. Regardless, did anyone notice it?
That first quarter that you couldn't find an iPhone anywhere. They literally had stopped producing them sometime before April. It shows it was up 166% but remember that they only sold the original iPhone for a weekend before that quarter ended.
I recall this vividly because even though the 3G iPhone was imminent for release in July I (and many others, included NasserAE) were able to sell their original iPhone for more than retail price.
edit: It looks like it was Friday after 5pm sales and all of Saturday before that quarter ended.
Apple doesn't really care about market share per se, and it's focus isn't on market share. Nokia talks about market share in its quarterly results press release. Apple talks about units sold, ASP and profit. You can see the difference. However, Apple does care a lot about having enough iPhone OS units in the market so that developers will develop Apps for it, because Apps are essential to the PLATFORM Apple is building. So Apple keeps bringing up 85 million (even though some original iPhones have been turned into no-phone-service-iPod-touch or put in drawers) to remind developers of the right perspective. The platform is what Apple believes is its sustainable advantage over all its smartphone competitors.
If Apple doesn't care about market share, then why did Steve Jobs mention it in the original iPhone announcement, and why does he mention it during his other announcements?
It would be more interesting if it were not for the fact that this past quarter AT&T added a record number of iPhone's. AT&T had less churn than Verizon and AT&T added more subscribers than Verizon. I'm not saying that Apple should not expand the iPhone to more carriers, there is little reason why they could not use T-Mobile. At the same time people keep coming up with these ATT/Apple dooms day scenarios that never play out.
For one reason or another, I am sure you have heard how loud some Verizon customers "hate" AT&T, and would like to have an iPhone version for their company. Do you really think that these Verizon loyalists, who wanted so much to have an iPhone would switch to AT&T, if an iPhone for Verizon was available. I am sure you also have heard of those who had to give up their iPhone, after switching, because they were fed up with AT&T service. Or those who would leave AT&T once the iPhone is available in the carrier of their choice.