They claim their report is about smartphones. This is the point where Tallest Skil would be expected to add his customary, "Citation needed".
If you go to Strategy Analytics website and search on "define smartphone", we get this:
Quote:
"We define a smartphone as a pocket-friendly cell phone or wireless PDA with a branded high-level expandable operating system.
Typical examples of smartphone operating systems include Android, Apple iOS and Microsoft Windows Phone 8."
- Strategy Analytics
Some people claim that there are Android based feature phones, but they never seem to come up with an example.
I do remember that in the past, there were a lot of Symbian based phones which some people didn't consider full fledged smartphones, and that might be what jragosta is thinking of.
If Apple release an iPhone 4 remade in plastic, available in multiple colors for $200 - $250, it would prove to be a strong contender in the developing markets. At its release, the iPhone 4 cost $188 to make (http://news.cnet.com/8301-31021_3-20009027-260.html). After 3 years, I would expect that cost to have fallen dramatically.
How much profit and margin are there at those prices? Apple would have to put a different voice/data chip set in the phone. I don't think Apple has to start buying market share, that will further erode their margins.
Samsung is going to start feeling the effects of selling cheap phones and having to heavily discount to gain market share.
Obviously, the iPhone 5 will be next year's $100 2 year contract phone. Anything wrong with that?
Well, I for one don't want to find out if there is a tipping point where the proliferation of Android devices increases to the point where it compels developers to build for Android first, or, worst case scenario, where it marginalizes Apple even more causing a huge decrease in profits.
I'm not saying that there is a tipping point but the danger is definitely there and, as we've seen with the Mac, it's a long climb back.
[please know that I am mainly concerned about the Asian market]
The iPhone is a Rolex in a sea of Timex's. The analysts are used to a different business model than Apple. They want Apple to be like GM and be the largest auto manufacture (Toyota since regained this mantle) and sell cheap crap to everyone. Or like Coke, or Walmart, or McDonald's, or Microsoft, or Google, or, HP, or Dell, RIM, Nokia, or Proctor and Gamble and and sell cheap crap to everyone.
The difference is that google phones are being sold to people without money. People without money don't spend much on apps and content. If android has 70% market share, then why is Apple's iTunes and App Store selling 4x the amount of Google's equivalent?
Well, I for one don't want to find out if there is a tipping point where the proliferation of Android devices increases to the point where it compels developers to build for Android first, or, worst case scenario, where it marginalizes Apple even more causing a huge decrease in profits.
I'm not saying that there is a tipping point but the danger is definitely there and, as we've seen with the Mac, it's a long climb back.
[please know that I am mainly concerned about the Asian market]
The Asian market is the Asian market. I would guess that only a fraction of the apps in the US app store have any asian language support much less covers Korean, Japanese, Chinese, Hindu, Thai, Vietnamese, Cambodian, etc...
App developers build for their local markets first, then the next few major markets. China is important. India is important. Japan is somewhat important. Korea is somewhat important.
Everyone else can use Chinese or English versions of the apps.
If Apple release an iPhone 4 remade in plastic, available in multiple colors for $200 - $250, it would prove to be a strong contender in the developing markets. At its release, the iPhone 4 cost $188 to make (http://news.cnet.com/8301-31021_3-20009027-260.html). After 3 years, I would expect that cost to have fallen dramatically.
That is why Samsung is eating Apple's lunch. Maybe $200-250 is too low, but a mid-range phone would be good. I consider all of their phones high-end cost-wise. Sell an unlocked phone for $350-400 and maybe Apple won't lose more market share. Apple is getting hammered. Outside of the US it's going to be 95% Android I bet, over time.
How much profit and margin are there at those prices? Apple would have to put a different voice/data chip set in the phone. I don't think Apple has to start buying market share, that will further erode their margins.
Not necessarily a different radio chip. Remember, they only pay royalties on the patents they use. If they never turned on or added LTE support, they wouldn't have to pay for it. That's why many FRAND patents are paid for separately from the chips themselves.
Obviously, the iPhone 5 will be next year's $100 2 year contract phone. Anything wrong with that?
Nothing wrong with that, but it also doesn't affect the non-subsidized markets, unless the price drops dramatically there as well.
Quote:
Originally Posted by sagan_student
I'm needing a little help wrapping my head around this one. I don't know much about the android ecosystem so please excuse my ignorance. Google makes android, OEM's build their phones and then put their flavor of Android on it. Can these different flavors all purchase Apps from the same online store or do they require an OEM specific store?
To be able to be called "Android x.x" (fill in the version), it must pass a standard compatibility test for that version. That ensures that standard apps run on all devices with that version, and thus most developers target the standard x.x APIs.
The difference comes with specialty apps that rely on device-specific features. For example, originally HTC and Samsung had their own pen APIs, but those have now been rolled into Android. A more common example is with widgets that rely on a particular manufacturer's custom launcher. E.g. a lot of people love HTC widgets, but most only run on HTC devices. It's a way of differentiating their products.
The iPhone is a Rolex in a sea of Timex's. The analysts are used to a different business model than Apple. They want Apple to be like GM and be the largest auto manufacture (Toyota since regained this mantle) and sell cheap crap to everyone. Or like Coke, or Walmart, or McDonald's, or Microsoft, or Google, or, HP, or Dell, RIM, Nokia, or Proctor and Gamble and and sell cheap crap to everyone.
While this may be true, is there any analyst that wants to see Apple's revenue and profits fall? Do you think Apple wants to see its revenue and profits fall? Do you really think that Cook wants to see Apple lose more market share?
If Apple is marketing itself as the Rolex of phones, well, that market is small and it can become quickly saturated. Apple would remain profitable but it would be a lot smaller than it is today.
The difference is that google phones are being sold to people without money. People without money don't spend much on apps and content. If android has 70% market share, then why is Apple's iTunes and App Store selling 4x the amount of Google's equivalent?
The Asian market is the Asian market. I would guess that only a fraction of the apps in the US app store have any asian language support much less covers Korean, Japanese, Chinese, Hindu, Thai, Vietnamese, Cambodian, etc...
App developers build for their local markets first, then the next few major markets. China is important. India is important. Japan is somewhat important. Korea is somewhat important.
Everyone else can use Chinese or English versions of the apps.
... but that is exactly what I am saying. If Android dominates the Asian market then which platform will be the first choice amongst developers.
Except they don't. Google Play is essentially shut out from China.
"Most Android devices sold in China have been stripped of Google’s advertising-supported apps and services, as well as its Google Play store for third-party apps and music, books, and video.
...
The CEO of Baidu, the desktop Web search leader in China, said this year that 80 percent of Android-branded phones come with Baidu’s search service, rather than Google’s, loaded on the device."
Yes, Android dominates but like in handsets the app ecosystem is also fragmented. This is true for Apple as well in terms of how well apps are internationalized but at least the app is by default available in all app stores.
This is how things looks right now. The biggest danger is that if Apple fall to 6% developers will stop creating the best apps for iOS. I don't know how was the software situation when Microsoft defeated Apple in the '90. Anyway Apple is not yet defeated. If they give up the greedy margin, start making a lot of phones, modernize the iOS, start including all the cutting edge advancements in the iPhones, take more wild bets like Google is doing with their glasses and self driving cars, they could still win.
Apple was suffering pretty badly in the 1990's. They almost lost MS Office. Yes, as your share goes down, you reach a point where you can't likely dig out of a hole. Microsoft and RIM are there right now to struggle to grow share and developer support.
Their margins are too high. Not sure if it is greed, but they can no longer charge what they have charged in the past.
Their iPads with extra ram and LTE are way overpriced. Note, I've been using Apple products for 30 years.
Maybe I'll consider Android if Apple can't come out with a larger screen (not a freakishly long screen).
No, no and no. Didn't you hear Cook say on the investor call that Apple won't chase revenue for the sake of it? Android might have 70% market share but only one company has real profits - Samsung. I don't think Apple wants to give up profits for market share.
He didn't anything about chasing the profit. If Apple manages to get the build cost down to about $140 (which is very possible, it's been 3 years), the $200 price point would met 43% gross margin that Wall Street is looking for. Dropping the cost to $130, and voila, you have a fat 53% margin that is equivalent to the iPhone 5. That's revenue without sacrificing profit. Like Tim Cook said, cannibalization is not his concern. Better Apple eats Apple than anybody else.
I wonder how many of this 70% would rather have an iPhone if they only could?
Seems to me a hughe potential for Apple to grow beyond the wildest expectations.
That switch is currently under way. There's a VZW kiosk inside of a BJs Wholesale near that I often stop by mainly because the sales girl is hot but I almost always encounter someone switching from Android to iOS.
... but that is exactly what I am saying. If Android dominates the Asian market then which platform will be the first choice amongst developers.
The platform of choice in China will be that determined to be the platform of choice by the CCP through it's official and unofficial control and influence over Baidu and other chinese companies.
/shrug
Cost is one thing but control is key. Apple appears willing to play ball with the Chinese government but the ability to control every aspect of the Android must be mighty compelling to totalitarian governments. An activist with any smartphone is a trackable activist but hugely more so if you put in special hooks in the OS to covertly activate GPS, mikes, etc...
I'm needing a little help wrapping my head around this one. I don't know much about the android ecosystem so please excuse my ignorance. Google makes android, OEM's build their phones and then put their flavor of Android on it. Can these different flavors all purchase Apps from the same online store or do they require an OEM specific store?
They get apps from the same store. The core software is the same even if on the outside it looks different.
Except they don't. Google Play is essentially shut out from China.
"Most Android devices sold in China have been stripped of Google’s advertising-supported apps and services, as well as its Google Play store for third-party apps and music, books, and video.
...
The CEO of Baidu, the desktop Web search leader in China, said this year that 80 percent of Android-branded phones come with Baidu’s search service, rather than Google’s, loaded on the device."
There was a good debate about how Google should approach search in the China market here:
There's some unique reasons why Baidu gets the Chinese government nod of approval, while Google butts heads with them. There shouldn't be any surprise that Baidu would get the bulk of search requests considering the limitations forced on Google Search. IMHO it would be more distressing if Google was the market leader there as it would be clear evidence that they were deep in bed with the Chinese leadership.
Comments
Quote:
Originally Posted by MacRulez
They claim their report is about smartphones. This is the point where Tallest Skil would be expected to add his customary, "Citation needed".
If you go to Strategy Analytics website and search on "define smartphone", we get this:
Quote:
"We define a smartphone as a pocket-friendly cell phone or wireless PDA with a branded high-level expandable operating system.
Typical examples of smartphone operating systems include Android, Apple iOS and Microsoft Windows Phone 8."
- Strategy Analytics
Some people claim that there are Android based feature phones, but they never seem to come up with an example.
I do remember that in the past, there were a lot of Symbian based phones which some people didn't consider full fledged smartphones, and that might be what jragosta is thinking of.
How much profit and margin are there at those prices? Apple would have to put a different voice/data chip set in the phone. I don't think Apple has to start buying market share, that will further erode their margins.
Samsung is going to start feeling the effects of selling cheap phones and having to heavily discount to gain market share.
Obviously, the iPhone 5 will be next year's $100 2 year contract phone. Anything wrong with that?
Quote:
Originally Posted by island hermit
Well, I for one don't want to find out if there is a tipping point where the proliferation of Android devices increases to the point where it compels developers to build for Android first, or, worst case scenario, where it marginalizes Apple even more causing a huge decrease in profits.
I'm not saying that there is a tipping point but the danger is definitely there and, as we've seen with the Mac, it's a long climb back.
[please know that I am mainly concerned about the Asian market]
The iPhone is a Rolex in a sea of Timex's. The analysts are used to a different business model than Apple. They want Apple to be like GM and be the largest auto manufacture (Toyota since regained this mantle) and sell cheap crap to everyone. Or like Coke, or Walmart, or McDonald's, or Microsoft, or Google, or, HP, or Dell, RIM, Nokia, or Proctor and Gamble and and sell cheap crap to everyone.
The difference is that google phones are being sold to people without money. People without money don't spend much on apps and content. If android has 70% market share, then why is Apple's iTunes and App Store selling 4x the amount of Google's equivalent?
Quote:
Originally Posted by island hermit
Well, I for one don't want to find out if there is a tipping point where the proliferation of Android devices increases to the point where it compels developers to build for Android first, or, worst case scenario, where it marginalizes Apple even more causing a huge decrease in profits.
I'm not saying that there is a tipping point but the danger is definitely there and, as we've seen with the Mac, it's a long climb back.
[please know that I am mainly concerned about the Asian market]
The Asian market is the Asian market. I would guess that only a fraction of the apps in the US app store have any asian language support much less covers Korean, Japanese, Chinese, Hindu, Thai, Vietnamese, Cambodian, etc...
App developers build for their local markets first, then the next few major markets. China is important. India is important. Japan is somewhat important. Korea is somewhat important.
Everyone else can use Chinese or English versions of the apps.
Quote:
Originally Posted by zoffdino
If Apple release an iPhone 4 remade in plastic, available in multiple colors for $200 - $250, it would prove to be a strong contender in the developing markets. At its release, the iPhone 4 cost $188 to make (http://news.cnet.com/8301-31021_3-20009027-260.html). After 3 years, I would expect that cost to have fallen dramatically.
That is why Samsung is eating Apple's lunch. Maybe $200-250 is too low, but a mid-range phone would be good. I consider all of their phones high-end cost-wise. Sell an unlocked phone for $350-400 and maybe Apple won't lose more market share. Apple is getting hammered. Outside of the US it's going to be 95% Android I bet, over time.
Quote:
Originally Posted by drblank
How much profit and margin are there at those prices? Apple would have to put a different voice/data chip set in the phone. I don't think Apple has to start buying market share, that will further erode their margins.
Not necessarily a different radio chip. Remember, they only pay royalties on the patents they use. If they never turned on or added LTE support, they wouldn't have to pay for it. That's why many FRAND patents are paid for separately from the chips themselves.
Obviously, the iPhone 5 will be next year's $100 2 year contract phone. Anything wrong with that?
Nothing wrong with that, but it also doesn't affect the non-subsidized markets, unless the price drops dramatically there as well.
Quote:
Originally Posted by sagan_student
I'm needing a little help wrapping my head around this one. I don't know much about the android ecosystem so please excuse my ignorance. Google makes android, OEM's build their phones and then put their flavor of Android on it. Can these different flavors all purchase Apps from the same online store or do they require an OEM specific store?
To be able to be called "Android x.x" (fill in the version), it must pass a standard compatibility test for that version. That ensures that standard apps run on all devices with that version, and thus most developers target the standard x.x APIs.
The difference comes with specialty apps that rely on device-specific features. For example, originally HTC and Samsung had their own pen APIs, but those have now been rolled into Android. A more common example is with widgets that rely on a particular manufacturer's custom launcher. E.g. a lot of people love HTC widgets, but most only run on HTC devices. It's a way of differentiating their products.
Quote:
Originally Posted by christopher126
The iPhone is a Rolex in a sea of Timex's. The analysts are used to a different business model than Apple. They want Apple to be like GM and be the largest auto manufacture (Toyota since regained this mantle) and sell cheap crap to everyone. Or like Coke, or Walmart, or McDonald's, or Microsoft, or Google, or, HP, or Dell, RIM, Nokia, or Proctor and Gamble and and sell cheap crap to everyone.
While this may be true, is there any analyst that wants to see Apple's revenue and profits fall? Do you think Apple wants to see its revenue and profits fall? Do you really think that Cook wants to see Apple lose more market share?
If Apple is marketing itself as the Rolex of phones, well, that market is small and it can become quickly saturated. Apple would remain profitable but it would be a lot smaller than it is today.
Quote:
Originally Posted by drblank
The difference is that google phones are being sold to people without money. People without money don't spend much on apps and content. If android has 70% market share, then why is Apple's iTunes and App Store selling 4x the amount of Google's equivalent?
Along those lines, here's a recent article:
http://www.fiercedeveloper.com/story/distimo-google-play-revenue-climbs-43-apple-app-store-jumps-21/2013-01-22
Quote:
Originally Posted by nht
The Asian market is the Asian market. I would guess that only a fraction of the apps in the US app store have any asian language support much less covers Korean, Japanese, Chinese, Hindu, Thai, Vietnamese, Cambodian, etc...
App developers build for their local markets first, then the next few major markets. China is important. India is important. Japan is somewhat important. Korea is somewhat important.
Everyone else can use Chinese or English versions of the apps.
... but that is exactly what I am saying. If Android dominates the Asian market then which platform will be the first choice amongst developers.
Quote:
Originally Posted by NelsonX
They all purchase Apps from Google Play, which is the Google store for apps. Check https://play.google.com/store
Except they don't. Google Play is essentially shut out from China.
"Most Android devices sold in China have been stripped of Google’s advertising-supported apps and services, as well as its Google Play store for third-party apps and music, books, and video.
...
The CEO of Baidu, the desktop Web search leader in China, said this year that 80 percent of Android-branded phones come with Baidu’s search service, rather than Google’s, loaded on the device."
http://www.technologyreview.com/news/507961/android-takes-off-in-china-but-google-has-little-to-show-for-it/
Yes, Android dominates but like in handsets the app ecosystem is also fragmented. This is true for Apple as well in terms of how well apps are internationalized but at least the app is by default available in all app stores.
Quote:
Originally Posted by NelsonX
This is how things looks right now. The biggest danger is that if Apple fall to 6% developers will stop creating the best apps for iOS. I don't know how was the software situation when Microsoft defeated Apple in the '90. Anyway Apple is not yet defeated. If they give up the greedy margin, start making a lot of phones, modernize the iOS, start including all the cutting edge advancements in the iPhones, take more wild bets like Google is doing with their glasses and self driving cars, they could still win.
Apple was suffering pretty badly in the 1990's. They almost lost MS Office. Yes, as your share goes down, you reach a point where you can't likely dig out of a hole. Microsoft and RIM are there right now to struggle to grow share and developer support.
Their margins are too high. Not sure if it is greed, but they can no longer charge what they have charged in the past.
Their iPads with extra ram and LTE are way overpriced. Note, I've been using Apple products for 30 years.
Maybe I'll consider Android if Apple can't come out with a larger screen (not a freakishly long screen).
Quote:
Originally Posted by Rogifan
No, no and no. Didn't you hear Cook say on the investor call that Apple won't chase revenue for the sake of it? Android might have 70% market share but only one company has real profits - Samsung. I don't think Apple wants to give up profits for market share.
He didn't anything about chasing the profit. If Apple manages to get the build cost down to about $140 (which is very possible, it's been 3 years), the $200 price point would met 43% gross margin that Wall Street is looking for. Dropping the cost to $130, and voila, you have a fat 53% margin that is equivalent to the iPhone 5. That's revenue without sacrificing profit. Like Tim Cook said, cannibalization is not his concern. Better Apple eats Apple than anybody else.
That switch is currently under way. There's a VZW kiosk inside of a BJs Wholesale near that I often stop by mainly because the sales girl is hot but I almost always encounter someone switching from Android to iOS.
Quote:
Originally Posted by island hermit
... but that is exactly what I am saying. If Android dominates the Asian market then which platform will be the first choice amongst developers.
The platform of choice in China will be that determined to be the platform of choice by the CCP through it's official and unofficial control and influence over Baidu and other chinese companies.
/shrug
Cost is one thing but control is key. Apple appears willing to play ball with the Chinese government but the ability to control every aspect of the Android must be mighty compelling to totalitarian governments. An activist with any smartphone is a trackable activist but hugely more so if you put in special hooks in the OS to covertly activate GPS, mikes, etc...
We are not talking here about the Nokia Symbian based feature phones that counts toward Smartphone.
If it got Android OS (with or without keyboard) or iOS, Obviously it is SmartPhone.
Study/Comparision of 70/20 here tells that 70% are Android OS, so We would assume those are not some old feature phones but actual smart phones.
They get apps from the same store. The core software is the same even if on the outside it looks different.
Quote:
Originally Posted by nht
Except they don't. Google Play is essentially shut out from China.
"Most Android devices sold in China have been stripped of Google’s advertising-supported apps and services, as well as its Google Play store for third-party apps and music, books, and video.
...
The CEO of Baidu, the desktop Web search leader in China, said this year that 80 percent of Android-branded phones come with Baidu’s search service, rather than Google’s, loaded on the device."
There was a good debate about how Google should approach search in the China market here:
http://www.debate.org/opinions/should-google-try-to-prevent-the-chinese-government-from-censoring-search-engine-results
There's some unique reasons why Baidu gets the Chinese government nod of approval, while Google butts heads with them. There shouldn't be any surprise that Baidu would get the bulk of search requests considering the limitations forced on Google Search. IMHO it would be more distressing if Google was the market leader there as it would be clear evidence that they were deep in bed with the Chinese leadership.
http://www.cfr.org/china/us-internet-providers-great-firewall-china/p9856
This last link is an excellent read.
Quote:
Originally Posted by dasanman69
They get apps from the same store. The core software is the same even if on the outside it looks different.
They also can get Android apps from multiple stores, ie Amazon App Store, Google Play, Baidu's web-based store.