AppleTV uses iOS... it doesn't have apps... Is it a pointless device?
I don't think people understand why Apple moved into the phone business to begin with. The portable media player market was dwindling - it was shifting towards mobile phones; smart phones in particular. Apple saw this happening before it did and was able to gracefully make the transition.
Media players as media players are going to completely die off soon. The best selling iPod is the iPod touch right now. If Apple wants to get the iTunes ecosystem into more hands, then why not tap into the massive feature phone market?
Bingo!...it's not just iOS, it's actually the entire Apple platform that is in play.
Re: phone business...may I also hypothesize that a specific prediction made by Apple at that time was the inevitability that people would choose between carrying their iPod or carrying their mobile phone. Apple could've just slapped a phone on the iPod (a shortcut) to respond to this inevitability, instead they took a gamble and reinvented the phone. In contrast, and as you recall, many of the phone companies did take a shortcut and just slapped on a MP3 player to their phones.
I don't think so. The appeal of the iPhone is the Internet without compromise (flash notwithstanding). How would you limit it to sell as a feature phone? No apps? No camera?
I think they will just minor upgrade the 4 to be $300 with no contract when the 5S come out.
I just read mjtomlin's blog...and agree (in fact advocating the same ideas for about a year now).
The only thing missing (albeit potentially obvious) from his blog in support of an Apple feature phone is the resulting reduction in the TOTAL COST OF OWNERSHIP...i.e. the monthly plans as compared to smartphone data plans.
How is apple not a volume dealer? They sell millions of devices each month. That's pretty volume to me.
I can see that people would like to see apple as a luxury brand to make them feel better about themselves. For me a luxury brand is not only defined by lacking lower-mid-end products but also of the limit number of a certain product.
So for me, apple isn't a luxury brand as for example a ferrari is (you don't see many ferraris around do you?).
I think the comment was referring to the iPhone only holding 15% of smartphone market.
So... tiny market share and rather expensive hardware could be considered luxury.
The rumor mill is just getting started. Notice how Phil carefully phrased his response ...
He did not say Apple will not make a less expensive iPhone, he just said they won't make a cheap one. He confirmed that's not how Apple does things.
But there will be a less-expensive iPhone mini. Guaranteed.
I agree, Jobs used to play games with the media too. I wish I could have seen Phils face as he spoke to get the nuance. Interesting though that it was him who said it and not others. I think they are playing a pseudo plausible denaibility gambit ie If an opponent lacks incontrovertible proof (evidence) of their allegation, one can "plausibly deny" the allegation even though it may be true. In this case Apple is denying they are making a cheap iPhone, even though they may be working on something similar at lower cost , not cheap. I have no idea what they will call it. iPhoneMini meh! nah . It also gives the false impression to the competiton that they having nothing to worry about with apple competing in the low cost phone space. hmmmm don't bank on that! They just went half way with the iPadMini and took a lot of money . Who knows? its all SPECULATION.
How is apple not a volume dealer? They sell millions of devices each month. That's pretty volume to me.
I can see that people would like to see apple as a luxury brand to make them feel better about themselves. For me a luxury brand is not only defined by lacking lower-mid-end products but also of the limit number of a certain product.
So for me, apple isn't a luxury brand as for example a ferrari is (you don't see many ferraris around do you?).
First, don't confuse luxury with premium. And yes, it is a premium brand, because prices are really higher than the industry average (as someone else said, remember to refer to the TCO, and not just the amount you pay in cash to buy the phone).
And "volume dealer" means little.
Usually, companies who aim at big volumes are the aggressive players in the industry, who pursue a cost leadership strategy. And this is definitely not Apple's case, because Porter says so
However, consider that the iPod Touch starts at $299. Now, add cellular capability (extra electronics, antennae, microphone, and bigger battery) and explain how you can reduce the price enough to get it to sell for $99 to $149 as has been proposed.
Just can't happen - not without seriously cutting corners which Apple isn't likely to do.
The iPad Touch is Apple's top of the line entertainment device. It roughly matches up with the iPhone 5 in terms of features including the expensive Retina Display. Ask the iPad Mini, Apple could drop the Retina Display. Additionally, why assume a less expensive iPhone for the prepaid market needs to be similar to Apple's current offerings? For example, Apple could do something more akin to the iPod Nano, which comes with a limited set of apps. If so, a less capable processor would be fine. Apple also wouldn't have to subsidize free app downloads.
Further, six months from now it is likely the cost of components in the iPod, iPhone, and iPad are going to drop as new components destined for Apple's other higher end devices will drop. Moreover, it is possible such devices could be sold through carriers only and the carriers pay Apple a bounty (they already do this for other companies in some cases). This would make up for a decrease in margins. The iPhone 4 is $450 unlocked. It is built using expensive materials like glass and metal. It also has a retina display. Apple can probably shave a hundred dollars off a redesigned less expensive phone by dropping the retina display and moving to a high end plastic like Nokia (Lumia phones), Microsoft (Surface), and Google (Nexus) does. My point is just because you or I can't envision how Apple can bring a lessor expensive but not cheap phone to the market, doesn't mean Apple can't. I suspect many people would have not guessed Apple's iPad Mini would have forgone the Retina Display, yet Apple was willing to make that trade off.
I don't get it. People have been saying that Apple neeeeeeeds to make a cheap iPhone since 2008. Meanwhile, the strength of iPhone sales just increased. When are people going to realize the Apple way isn't the traditional way, but it works.
What "people'? I've never said they needed to make "cheap" phones. Apple is typically not interested in making low profit products. They can't sustain their business model with low profit business. Just look at IBM, Compaq, and others that sold off their businesses because of low profits.
Just because there are a bunch of cheap Android phones doesn't mean Apple wants to compete against them. Apple is interested in those that purchase Apple products, and their sales of iPhones are going up year after year and they might need to focus on different screen sizes and constantly bringing new processor designs, screen technology, etc. to product line, but making cheaper phones that don't make much profit?
I would much rather have Apple focus on always coming out with better products on the high end and push down the models downward over time so their low end products are old flagship products, which seems to be doing well for them. Eventually the iPhone 5 will be their $450 unlocked phone, $0 with 2 year service contract phone in the US.
I don't think so. The appeal of the iPhone is the Internet without compromise (flash notwithstanding). How would you limit it to sell as a feature phone? No apps? No camera?
I think they will just minor upgrade the 4 to be $300 with no contract when the 5S come out.
I do not know if Apple is interested in the market or not, but there are plenty of people who are not interested in Apps. They want to make phone calls, send texts, and read email. You couldn't get either one of my parents to use a so called smart phone. They probably would go for an iPhone Nano though that used a more Nano like interface. Moreover, that probably would make them more comfortable using full featured smart phones.
Why assume a less expensive iPhone for the prepaid market needs to be similar to Apple's current offerings? For example, Apple could do something more akin to the iPod Nano, which comes with a limited set of apps. If so, a less capable processor would be fine.
They could do that but I think the App Store tying in the ecosystem isn't something they'd want to readily give up. The iPhone 4 already has a 2 year old ASIC and the G4 iPod Touch despite being Retina is only a TN panel, not IPS.
The only way I can see this scenario working in any way is with China Mobile by reducing the baseband processor configuration but who knows if their homegrown 3G is better or worse for licensing.
The iPhone 4 is $450 unlocked. It is built using expensive materials like glass and metal. It also has a retina display. Apple can probably shave a hundred dollars off a redesigned less expensive phone by dropping the retina display and moving to a high end plastic like Nokia (Lumia phones), Microsoft (Surface), and Google (Nexus) does. My point is just because you or I can't envision how Apple can bring a lessor expensive but not cheap phone to the market, doesn't mean Apple can't. I suspect many people would have not guessed Apple's iPad Mini would have forgone the Retina Display, yet Apple was willing to make that trade off.
Not being cheap doesn't mean it can't be inexpensive. We now have a great iPad that starts are $329. It doesn't feel cheap or sacrifice anything reasonable. Let's remember that the first iPad with 264 PPI 2048x1536 display only arrive less than a year ago with a resolution on a tablet that gets 10 hours of battery life. Most PC monitors don't come close to that resolution.
Let's examine the foolishness people wanted with the iPad mini. A 326 PPI 2048x1536 IPS display in a form factor that is about half the volume of the iPad (3) and lasting 10 hours. Oh yeah, to be hundreds of dollars less expensive. No one who actually thought about the available technologies would have believed that was possible.
When asked about the possibility of a low-cost iPhone, Apple marketing chief Phil Schiller said his company is not interested in making cheap, low-profit products.
"Exclusivity" is also about the difficulty of obtaining it.
As long as you have to pay 730€ for it, you likely have to save money somehow. True, with carrier subsides you can pay it much less... But, eventually, carriers have to get the money back (plans with the iPhone are much more expensive).
This is also not necessarily accurate. It's common to see "smartphone" plan pricing. This is not exclusive to the iphone. As an example Verizon charges more for "smartphone" line access. They carry a range of products that are subject to this.
Quote:
Exclusivity is also about being impossible to find iPhones in the months just after the launch of the new model.
That doesn't happen months after the launch in a given country. You're looking at US launch dates and comparing to other markets where it's released later.
Quote:
Originally Posted by EgoAleSum
The problem is that people buy the iPhone because it's "exclusive". If they were to release a low-end, cheap iPhone, they would lose many customers, instead, in my opinion.
The success of the iPhone relies, for a big portion, exactly on it being expensive and, in the first months after a new model comes out, hard to obtain (because it's always out of stock).
Those people are remarkably stupid, and I think the illusion is wearing off at this point. I viewed it as a mass market product from the beginning. Subsidized pricing in certain markets only reinforced this. In markets without subsidies, you still have secondhand options. Whether or not it makes sense for Apple to pursue a greater range of price points outside of heavily subsidized markets, it's important to recognize that you can't expect to maintain a feeling of exclusivity with a product that ships millions of units per quarter. No one is going to marvel at your new device, as they likely own some variant of it. At least in the US, sold out stock hasn't been so much of an issue on recent releases. It doesn't really mean anything anyway. The Nexus 4 was sold out too for a while. That doesn't make it an exclusive device. All sold out really means is that demand is often higher early on, where production takes some time to ramp up fully.
But the iPod Shuffle was just one model. Apple continued to sell the higher-margin Nano and Touch.
And... the Shuffle was great for the gym... but I don't think it can be a replacement for one of the bigger iPods. Plus... it's not unusual to think of someone owning an iPod Shuffle and another iPod, iPhone or iPad.
Just guessing here but if Apple offers another tablet/phone size it won't be 5" it will be 6" .. to fill the gap in the progression 4", 8", 10" (10, 20, 25 cm). A 15 cm touch device, prob running iPhone apps esp. games, eBooks, and for sat-nav. I'd get one as a book reader provided it wasn't too expensive (For which iPod touch is too small and the iPad is more than large enough.).
Comments
Quote:
Originally Posted by mjtomlin
AppleTV uses iOS... it doesn't have apps... Is it a pointless device?
I don't think people understand why Apple moved into the phone business to begin with. The portable media player market was dwindling - it was shifting towards mobile phones; smart phones in particular. Apple saw this happening before it did and was able to gracefully make the transition.
Media players as media players are going to completely die off soon. The best selling iPod is the iPod touch right now. If Apple wants to get the iTunes ecosystem into more hands, then why not tap into the massive feature phone market?
Bingo!...it's not just iOS, it's actually the entire Apple platform that is in play.
Re: phone business...may I also hypothesize that a specific prediction made by Apple at that time was the inevitability that people would choose between carrying their iPod or carrying their mobile phone. Apple could've just slapped a phone on the iPod (a shortcut) to respond to this inevitability, instead they took a gamble and reinvented the phone. In contrast, and as you recall, many of the phone companies did take a shortcut and just slapped on a MP3 player to their phones.
Quote:
Originally Posted by jungmark
I don't think so. The appeal of the iPhone is the Internet without compromise (flash notwithstanding). How would you limit it to sell as a feature phone? No apps? No camera?
I think they will just minor upgrade the 4 to be $300 with no contract when the 5S come out.
I just read mjtomlin's blog...and agree (in fact advocating the same ideas for about a year now).
The only thing missing (albeit potentially obvious) from his blog in support of an Apple feature phone is the resulting reduction in the TOTAL COST OF OWNERSHIP...i.e. the monthly plans as compared to smartphone data plans.
P.S. it would have a camera.
I think the comment was referring to the iPhone only holding 15% of smartphone market.
So... tiny market share and rather expensive hardware could be considered luxury.
Quote:
Originally Posted by mjtomlin
Agreed.
Personally, I think Apple will enter the feature phone market.
Been writing my thoughts on it... http://www.obviouslogic.com:8080/opinions/iphone-nano.php
Just read your thoughts on this...wish I knew it was there earlier, I'd have just referred people to your blog instead of frantically typing.
I do think you should address the effect of data plan and total cost of ownership as I think that is an appealing aspect of a feature phone.
Then again, addressing phone networks is a risky thing as many often respond with emotional comments since networks are so different around the world.
Quote:
Originally Posted by Mac_128
The rumor mill is just getting started. Notice how Phil carefully phrased his response ...
He did not say Apple will not make a less expensive iPhone, he just said they won't make a cheap one. He confirmed that's not how Apple does things.
But there will be a less-expensive iPhone mini. Guaranteed.
I agree, Jobs used to play games with the media too. I wish I could have seen Phils face as he spoke to get the nuance. Interesting though that it was him who said it and not others. I think they are playing a pseudo plausible denaibility gambit ie If an opponent lacks incontrovertible proof (evidence) of their allegation, one can "plausibly deny" the allegation even though it may be true. In this case Apple is denying they are making a cheap iPhone, even though they may be working on something similar at lower cost , not cheap. I have no idea what they will call it. iPhoneMini meh! nah . It also gives the false impression to the competiton that they having nothing to worry about with apple competing in the low cost phone space. hmmmm don't bank on that! They just went half way with the iPadMini and took a lot of money . Who knows? its all SPECULATION.
Quote:
Originally Posted by changeover
How is apple not a volume dealer? They sell millions of devices each month. That's pretty volume to me.
I can see that people would like to see apple as a luxury brand to make them feel better about themselves. For me a luxury brand is not only defined by lacking lower-mid-end products but also of the limit number of a certain product.
So for me, apple isn't a luxury brand as for example a ferrari is (you don't see many ferraris around do you?).
First, don't confuse luxury with premium. And yes, it is a premium brand, because prices are really higher than the industry average (as someone else said, remember to refer to the TCO, and not just the amount you pay in cash to buy the phone).
And "volume dealer" means little.
Usually, companies who aim at big volumes are the aggressive players in the industry, who pursue a cost leadership strategy. And this is definitely not Apple's case, because Porter says so
Quote:
Originally Posted by jragosta
That's certainly true.
However, consider that the iPod Touch starts at $299. Now, add cellular capability (extra electronics, antennae, microphone, and bigger battery) and explain how you can reduce the price enough to get it to sell for $99 to $149 as has been proposed.
Just can't happen - not without seriously cutting corners which Apple isn't likely to do.
The iPad Touch is Apple's top of the line entertainment device. It roughly matches up with the iPhone 5 in terms of features including the expensive Retina Display. Ask the iPad Mini, Apple could drop the Retina Display. Additionally, why assume a less expensive iPhone for the prepaid market needs to be similar to Apple's current offerings? For example, Apple could do something more akin to the iPod Nano, which comes with a limited set of apps. If so, a less capable processor would be fine. Apple also wouldn't have to subsidize free app downloads.
Further, six months from now it is likely the cost of components in the iPod, iPhone, and iPad are going to drop as new components destined for Apple's other higher end devices will drop. Moreover, it is possible such devices could be sold through carriers only and the carriers pay Apple a bounty (they already do this for other companies in some cases). This would make up for a decrease in margins. The iPhone 4 is $450 unlocked. It is built using expensive materials like glass and metal. It also has a retina display. Apple can probably shave a hundred dollars off a redesigned less expensive phone by dropping the retina display and moving to a high end plastic like Nokia (Lumia phones), Microsoft (Surface), and Google (Nexus) does. My point is just because you or I can't envision how Apple can bring a lessor expensive but not cheap phone to the market, doesn't mean Apple can't. I suspect many people would have not guessed Apple's iPad Mini would have forgone the Retina Display, yet Apple was willing to make that trade off.
Quote:
Originally Posted by 2oh1
I don't get it. People have been saying that Apple neeeeeeeds to make a cheap iPhone since 2008. Meanwhile, the strength of iPhone sales just increased. When are people going to realize the Apple way isn't the traditional way, but it works.
What "people'? I've never said they needed to make "cheap" phones. Apple is typically not interested in making low profit products. They can't sustain their business model with low profit business. Just look at IBM, Compaq, and others that sold off their businesses because of low profits.
Just because there are a bunch of cheap Android phones doesn't mean Apple wants to compete against them. Apple is interested in those that purchase Apple products, and their sales of iPhones are going up year after year and they might need to focus on different screen sizes and constantly bringing new processor designs, screen technology, etc. to product line, but making cheaper phones that don't make much profit?
I would much rather have Apple focus on always coming out with better products on the high end and push down the models downward over time so their low end products are old flagship products, which seems to be doing well for them. Eventually the iPhone 5 will be their $450 unlocked phone, $0 with 2 year service contract phone in the US.
Quote:
Originally Posted by jungmark
I don't think so. The appeal of the iPhone is the Internet without compromise (flash notwithstanding). How would you limit it to sell as a feature phone? No apps? No camera?
I think they will just minor upgrade the 4 to be $300 with no contract when the 5S come out.
I do not know if Apple is interested in the market or not, but there are plenty of people who are not interested in Apps. They want to make phone calls, send texts, and read email. You couldn't get either one of my parents to use a so called smart phone. They probably would go for an iPhone Nano though that used a more Nano like interface. Moreover, that probably would make them more comfortable using full featured smart phones.
Quote:
Originally Posted by Michael Scrip
I think the comment was referring to the iPhone only holding 15% of smartphone market.
So... tiny market share and rather expensive hardware could be considered luxury.
Yet when Apple entered the market, it's goal was to only take one percent of the smartphone market.
They could do that but I think the App Store tying in the ecosystem isn't something they'd want to readily give up. The iPhone 4 already has a 2 year old ASIC and the G4 iPod Touch despite being Retina is only a TN panel, not IPS.
The only way I can see this scenario working in any way is with China Mobile by reducing the baseband processor configuration but who knows if their homegrown 3G is better or worse for licensing.
Not being cheap doesn't mean it can't be inexpensive. We now have a great iPad that starts are $329. It doesn't feel cheap or sacrifice anything reasonable. Let's remember that the first iPad with 264 PPI 2048x1536 display only arrive less than a year ago with a resolution on a tablet that gets 10 hours of battery life. Most PC monitors don't come close to that resolution.
Let's examine the foolishness people wanted with the iPad mini. A 326 PPI 2048x1536 IPS display in a form factor that is about half the volume of the iPad (3) and lasting 10 hours. Oh yeah, to be hundreds of dollars less expensive. No one who actually thought about the available technologies would have believed that was possible.
Quote:
Originally Posted by AppleInsider
When asked about the possibility of a low-cost iPhone, Apple marketing chief Phil Schiller said his company is not interested in making cheap, low-profit products.
Exactly.
So they've blown by that goal... and picked up tens of billions of dollars in the process.
That's why the "Apple is doomed" comments are absurd.
What is the profit margin on the iPod Shuffle?
Quote:
Originally Posted by EgoAleSum
"Exclusivity" is also about the difficulty of obtaining it.
As long as you have to pay 730€ for it, you likely have to save money somehow. True, with carrier subsides you can pay it much less... But, eventually, carriers have to get the money back (plans with the iPhone are much more expensive).
This is also not necessarily accurate. It's common to see "smartphone" plan pricing. This is not exclusive to the iphone. As an example Verizon charges more for "smartphone" line access. They carry a range of products that are subject to this.
Quote:
Exclusivity is also about being impossible to find iPhones in the months just after the launch of the new model.
That doesn't happen months after the launch in a given country. You're looking at US launch dates and comparing to other markets where it's released later.
Quote:
Originally Posted by EgoAleSum
The problem is that people buy the iPhone because it's "exclusive". If they were to release a low-end, cheap iPhone, they would lose many customers, instead, in my opinion.
The success of the iPhone relies, for a big portion, exactly on it being expensive and, in the first months after a new model comes out, hard to obtain (because it's always out of stock).
Those people are remarkably stupid, and I think the illusion is wearing off at this point. I viewed it as a mass market product from the beginning. Subsidized pricing in certain markets only reinforced this. In markets without subsidies, you still have secondhand options. Whether or not it makes sense for Apple to pursue a greater range of price points outside of heavily subsidized markets, it's important to recognize that you can't expect to maintain a feeling of exclusivity with a product that ships millions of units per quarter. No one is going to marvel at your new device, as they likely own some variant of it. At least in the US, sold out stock hasn't been so much of an issue on recent releases. It doesn't really mean anything anyway. The Nexus 4 was sold out too for a while. That doesn't make it an exclusive device. All sold out really means is that demand is often higher early on, where production takes some time to ramp up fully.
Good point.
But the iPod Shuffle was just one model. Apple continued to sell the higher-margin Nano and Touch.
And... the Shuffle was great for the gym... but I don't think it can be a replacement for one of the bigger iPods. Plus... it's not unusual to think of someone owning an iPod Shuffle and another iPod, iPhone or iPad.
Quote:
Originally Posted by TBell
Yet when Apple entered the market, it's goal was to only take one percent of the smartphone market.
Well, it was all they were willing to predict.
Always better to set expectations low and let everyone be surprised, than to set them too high and be disappointed.
Well obviously Apple isn't going make anything "cheap" as in "cheapo"
But if Apple is enjoying success with an iPad Mini... why not enjoy success with an iPhone Mini?
Originally Posted by SolipsismX
What is the profit margin on the iPod Shuffle?
Hopefully $40.