I don't think higher market share has to equal lower profits. Many times it does, but it's not necessarily a rule. If Apple can find a way to gain market share and profit then that'll be really huge and I think Apple is capable of doing that. The margin might be hurt a little, but Apple's margins can handle it considering how high they already are.
What would be a good amount of market share for Apple to have? Is it just a comfort thing? Or does a certain market share number actually have some merit?
The way I see it... Apple made billions of dollars when they only had 30% of the market. They made billions when they only had 20% of the market. And they will make billions when they reach 10% of the market.
The reason is... they sell enough products that have extremely good margins.
Who cares if the other guys sell more units? And some of those units barely have any margin in the first place! That's definitely a bad place to be!
Even if Apple makes a $300 iPhone (which they won't)... they are still competing against $79 Android phones around the world. Apple will never gain any traction in the low-cost smartphone segment.
And they aren't trying to anyway! Apple is not a low-cost smartphone vendor.
That's why I never understood saying simply "Android Market Share" when "Android" itself is made up of phones from $80 to $800.
Apple, on the other hand, only makes phones from $450 to $850.
Does it make any sense at all to compare the two platforms on sales/marketshare?
There were 187 million Android smartphones sold last quarter. And don't forget that "Android" is actually made up of dozens of manufacturers and includes hundreds of models sold around the world.
Then there's Apple, a single company and the only maker of iOS phones, selling 31 million.
So Apple is getting punishing for "not selling enough" or "they are falling behind in market share"
What would be a good amount of market share for Apple to have? Is it just a comfort thing? Or does a certain market share number actually have some merit?
Defining the future of the market.
The old world view was you needed to be the market leader to be comfortable in the computer world. IBM, Sun, MS, HP, DELL all sought to have 51% of the market, and ideally, 67% or more of a niche.
That was old world thinking
a) selling to IT/business/procurement types who wanted large vendors who would survive until the decision cycle retired. (I can't remember how many... "Look at MSFT's Market Cap" arguments I had arguing for Unix/NeXT/DEC based solutions. Better technology, but procurement was arguing based on a ...
b) a 10 year investment cycle in IT shops... Market size ensured some 'glide path.'
c) there were thousands of accounts, maybe millions of units in the field, therefore a few buying decisions could swing several %points of market share.
We are now in
a) selling to consumers, not procurement people
b) brand conscious, maybe even fashion conscious marketing
c) but more importantly, solving the problem of one person, yet in a manner that scales to billions.
d) a 2 year investment cycle (if that)
e) the buyer stickiness is in external service providers (itunes, icloud, facebook, salesforce.com), not in internal investments (IT staff, data centers)
f) there are billions of accounts.
Given that, everything I see is that Apple is not looking to control the market, but control a niche and more importantly, control the direction. and to that end, 20-30% of the 6Billion market is enough, as long as no one vendor has no one brand that controls more.
The Chinese government partially owns China Mobile. I believe the other telecoms operate more independently of the government.
The Chinese government also partially owns China Unicom and China Telecom.
Quote:
Originally Posted by Gatorguy
We don't know what the Chinese government required of Apple (or anyone else) as a condition to sell devices in mainland China. I don't think the Chinese normally publicize it do they and it certainly wouldn't benefit Apple to bring it up. Personally I'd be pretty surprised if the Chinese didn't require Apple to give them a way to access user's iDevices if not the underlying code itself.
As mentioned above, the government has part ownership of all three carriers. Are you suggesting they are demanding more for one company than for the other two? Any credible source for this? Thanks.
The Chinese government also partially owns China Unicom and China Telecom.
As mentioned above, the government has part ownership of all three carriers. Are you suggesting they are demanding more for one company than for the other two? Any credible source for this? Thanks.
China Mobile has a larger market share than the other two combined. It's like the music industry allowing Apple to sell music on Macs while not allowing anyone else to sell it on Windows. The Mac had a smaller market share back then, so anything goes, as nothing big could go wrong. If the music industry allowed selling music on Windows, if the system wasn't tightly controlled problems might blow out of proportion, because of the sheer size of Windows market share.
It the government allows it for Unicom, nothing big could go wrong, and the benefit is they can make Apple jealous. If they allow it for China Mobile without tightly controlling it, things can go wrong.
With every story and report, the upcoming plastic phone is looking like it WON'T be low cost.
More like a midrange phone that'll be the same price as the iPhone 4. I guess €400 isn't so bad for a new iPhone.
It's just hard to imagine paying $450 for a plastic iPhone, but at least it'll have the same specs as the iPhone 5. That means it should be better than pretty much every other smart phone available for the price.
This was always what "lower cost" referred to; a new model with an initial retail price lower than their flagship model. How anyone could interpret "lower cost" to mean a loss-leading, sub-$200 off contract is beyond me. That would completely tank sales of their flagship model; premium hardware where Apple makes their money.
If they want to appeal to a new market segment they want to edge in slowly. It serves many purposes to be seen to be at the premium end of a lower market segment. In the short term Apple will cede some smartphone buyers to Android. But customers that don't value your product enough to spend more than it costs to make aren't worth chasing. Anyway, fragmentation and lower investment in apps make Android less adhesive than iOS, so these markets may aspire to own Apple's devices eventually. The latter really comes down to whether Apple's motives are interpreted as "tasteful" rather than "controlling". I see a little of both, but the trade-off is more than worth it for me and I think the majority of users.
I think most people are glad we are moving towards an internet without flash and have an efficient model for managing malicious software that doesn't implicitly trust developers and palm all the responsibility off onto users.
I agree, $350 seems like more of a sweet spot for an unlocked iPhone.
But all the data is pointing to a $450 starting price. Although that's cheaper than the iPhone 5, will it be cheap enough?
For customers, the key is the upfront price.
The magic number for people all around the world, seems to be paying $200-250 upfront. It can be carrier subsidized down to that price, or there can be trade-in or external loan programs. But that's a killer spot.
So the trade-in & loan programs Apple has been using in India and China could be harbingers of what's to come.
China Mobile has a larger market share than the other two combined. It's like the music industry allowing Apple to sell music on Macs while not allowing anyone else to sell it on Windows. The Mac had a smaller market share back then, so anything goes, as nothing big could go wrong. If the music industry allowed selling music on Windows, if the system wasn't tightly controlled problems might blow out of proportion, because of the sheer size of Windows market share.
It the government allows it for Unicom, nothing big could go wrong, and the benefit is they can make Apple jealous. If they allow it for China Mobile without tightly controlling it, things can go wrong.
With all due respect, you're just making this up. Why do people here do this so often?
The magic number for people all around the world, seems to be paying $200-250 upfront. It can be carrier subsidized down to that price, or there can be trade-in or external loan programs. But that's a killer spot.
So the trade-in & loan programs Apple has been using in India and China could be harbingers of what's to come.
If I am mistaken, iPhone 4 and iPhone 4S are beating those price points up front. How will iPhone 5C be more appealing?
Why would the Chinese government make such a demand when it didn't do so in the other deals?
Because China Mobile is partially government owned, just like China Unicom, however it is also their largest telecom. The big deals made with foreign companies often include wholly unreasonable terms and it is up to the negotiators between the parties to form a deal that works.
Even if it takes another ten years of negotiations, Apple should never succumb to pressure to make a deal.
From the China Mobile Wikipedia page:
China Mobile likely enjoys substantial protectionist benefits from China's government[11] but also experiences frequent government intervention in its business affairs.[12] Government control is maintained through a presumably government-owned holding company, China Mobile Communications Corporation (CMCC), that owns 100 percent ownership of China Mobile (HK) Group Limited,[13] which in turn holds over seventy percent ownership of China Mobile–the remainder being controlled by public investors.[2] Established in 2000,[13] CMCC is China Mobile Ltd's current parent company as of 2011.[14]
Comments
What would be a good amount of market share for Apple to have? Is it just a comfort thing? Or does a certain market share number actually have some merit?
The way I see it... Apple made billions of dollars when they only had 30% of the market. They made billions when they only had 20% of the market. And they will make billions when they reach 10% of the market.
The reason is... they sell enough products that have extremely good margins.
Who cares if the other guys sell more units? And some of those units barely have any margin in the first place! That's definitely a bad place to be!
Even if Apple makes a $300 iPhone (which they won't)... they are still competing against $79 Android phones around the world. Apple will never gain any traction in the low-cost smartphone segment.
And they aren't trying to anyway! Apple is not a low-cost smartphone vendor.
That's why I never understood saying simply "Android Market Share" when "Android" itself is made up of phones from $80 to $800.
Apple, on the other hand, only makes phones from $450 to $850.
Does it make any sense at all to compare the two platforms on sales/marketshare?
There were 187 million Android smartphones sold last quarter. And don't forget that "Android" is actually made up of dozens of manufacturers and includes hundreds of models sold around the world.
Then there's Apple, a single company and the only maker of iOS phones, selling 31 million.
So Apple is getting punishing for "not selling enough" or "they are falling behind in market share"
Sheesh...
Quote:
Originally Posted by Michael Scrip
What would be a good amount of market share for Apple to have? Is it just a comfort thing? Or does a certain market share number actually have some merit?
Defining the future of the market.
The old world view was you needed to be the market leader to be comfortable in the computer world. IBM, Sun, MS, HP, DELL all sought to have 51% of the market, and ideally, 67% or more of a niche.
That was old world thinking
a) selling to IT/business/procurement types who wanted large vendors who would survive until the decision cycle retired. (I can't remember how many... "Look at MSFT's Market Cap" arguments I had arguing for Unix/NeXT/DEC based solutions. Better technology, but procurement was arguing based on a ...
b) a 10 year investment cycle in IT shops... Market size ensured some 'glide path.'
c) there were thousands of accounts, maybe millions of units in the field, therefore a few buying decisions could swing several %points of market share.
We are now in
a) selling to consumers, not procurement people
b) brand conscious, maybe even fashion conscious marketing
c) but more importantly, solving the problem of one person, yet in a manner that scales to billions.
d) a 2 year investment cycle (if that)
e) the buyer stickiness is in external service providers (itunes, icloud, facebook, salesforce.com), not in internal investments (IT staff, data centers)
f) there are billions of accounts.
Given that, everything I see is that Apple is not looking to control the market, but control a niche and more importantly, control the direction. and to that end, 20-30% of the 6Billion market is enough, as long as no one vendor has no one brand that controls more.
Quote:
Originally Posted by blackbook
The Chinese government partially owns China Mobile. I believe the other telecoms operate more independently of the government.
The Chinese government also partially owns China Unicom and China Telecom.
Quote:
Originally Posted by Gatorguy
We don't know what the Chinese government required of Apple (or anyone else) as a condition to sell devices in mainland China. I don't think the Chinese normally publicize it do they and it certainly wouldn't benefit Apple to bring it up. Personally I'd be pretty surprised if the Chinese didn't require Apple to give them a way to access user's iDevices if not the underlying code itself.
As mentioned above, the government has part ownership of all three carriers. Are you suggesting they are demanding more for one company than for the other two? Any credible source for this? Thanks.
China Mobile has a larger market share than the other two combined. It's like the music industry allowing Apple to sell music on Macs while not allowing anyone else to sell it on Windows. The Mac had a smaller market share back then, so anything goes, as nothing big could go wrong. If the music industry allowed selling music on Windows, if the system wasn't tightly controlled problems might blow out of proportion, because of the sheer size of Windows market share.
It the government allows it for Unicom, nothing big could go wrong, and the benefit is they can make Apple jealous. If they allow it for China Mobile without tightly controlling it, things can go wrong.
Quote:
Originally Posted by blackbook
With every story and report, the upcoming plastic phone is looking like it WON'T be low cost.
More like a midrange phone that'll be the same price as the iPhone 4. I guess €400 isn't so bad for a new iPhone.
It's just hard to imagine paying $450 for a plastic iPhone, but at least it'll have the same specs as the iPhone 5. That means it should be better than pretty much every other smart phone available for the price.
This was always what "lower cost" referred to; a new model with an initial retail price lower than their flagship model. How anyone could interpret "lower cost" to mean a loss-leading, sub-$200 off contract is beyond me. That would completely tank sales of their flagship model; premium hardware where Apple makes their money.
If they want to appeal to a new market segment they want to edge in slowly. It serves many purposes to be seen to be at the premium end of a lower market segment. In the short term Apple will cede some smartphone buyers to Android. But customers that don't value your product enough to spend more than it costs to make aren't worth chasing. Anyway, fragmentation and lower investment in apps make Android less adhesive than iOS, so these markets may aspire to own Apple's devices eventually. The latter really comes down to whether Apple's motives are interpreted as "tasteful" rather than "controlling". I see a little of both, but the trade-off is more than worth it for me and I think the majority of users.
I think most people are glad we are moving towards an internet without flash and have an efficient model for managing malicious software that doesn't implicitly trust developers and palm all the responsibility off onto users.
Quote:
Originally Posted by blackbook
I agree, $350 seems like more of a sweet spot for an unlocked iPhone.
But all the data is pointing to a $450 starting price. Although that's cheaper than the iPhone 5, will it be cheap enough?
For customers, the key is the upfront price.
The magic number for people all around the world, seems to be paying $200-250 upfront. It can be carrier subsidized down to that price, or there can be trade-in or external loan programs. But that's a killer spot.
So the trade-in & loan programs Apple has been using in India and China could be harbingers of what's to come.
Quote:
Originally Posted by em_te
China Mobile has a larger market share than the other two combined. It's like the music industry allowing Apple to sell music on Macs while not allowing anyone else to sell it on Windows. The Mac had a smaller market share back then, so anything goes, as nothing big could go wrong. If the music industry allowed selling music on Windows, if the system wasn't tightly controlled problems might blow out of proportion, because of the sheer size of Windows market share.
It the government allows it for Unicom, nothing big could go wrong, and the benefit is they can make Apple jealous. If they allow it for China Mobile without tightly controlling it, things can go wrong.
With all due respect, you're just making this up. Why do people here do this so often?
Quote:
Originally Posted by KDarling
For customers, the key is the upfront price.
The magic number for people all around the world, seems to be paying $200-250 upfront. It can be carrier subsidized down to that price, or there can be trade-in or external loan programs. But that's a killer spot.
So the trade-in & loan programs Apple has been using in India and China could be harbingers of what's to come.
If I am mistaken, iPhone 4 and iPhone 4S are beating those price points up front. How will iPhone 5C be more appealing?
Quote:
Originally Posted by StruckPaper
With all due respect, you're just making this up. Why do people here do this so often?
No offence taken. This is made up, but that's what "hunches" are. It's my hunch of what's happening. I'd like to hear your take on this.
Because China Mobile is partially government owned, just like China Unicom, however it is also their largest telecom. The big deals made with foreign companies often include wholly unreasonable terms and it is up to the negotiators between the parties to form a deal that works.
Even if it takes another ten years of negotiations, Apple should never succumb to pressure to make a deal.
From the China Mobile Wikipedia page:
China Mobile likely enjoys substantial protectionist benefits from China's government[11] but also experiences frequent government intervention in its business affairs.[12] Government control is maintained through a presumably government-owned holding company, China Mobile Communications Corporation (CMCC), that owns 100 percent ownership of China Mobile (HK) Group Limited,[13] which in turn holds over seventy percent ownership of China Mobile–the remainder being controlled by public investors.[2] Established in 2000,[13] CMCC is China Mobile Ltd's current parent company as of 2011.[14]