Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about.
Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about.
Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.
That's basically my opinion too. Every sale to Android is a lost sale to Apple. If you see services as a major branch for growth, the bigger your volume spread, the better your options.
If your hardware is ahead of the pack and people accept your premium prices, you can cruise on your profits but there will come a time when your market becomes saturated and the rest of the pack catches up with you. In that scenario you have to convince people that your premium price really does get you something more than cheaper rivals.
We have been down this route with TVs. Pioneer released what was to become a legendary line of TVs at premium prices. It received industry acclaim but then had to pull out of the TV business, in spite of having truly amazing panels and great video processing.
iPhones don't cost 3,000 dollars and there are other factors involved but the similarities are there.
Every Android phone at the very least means another person searching via Google and probably using Chrome.
Android phones can give you all the hardware you need - and then some. Sometimes at an even higher price than iPhones, but you can also get iPhone class hardware for a much lower price or slip down the lines as far as your budget needs you too. Google is still there, whatever you choose.
Short term, the redesign for the iPhone 8 should see a new surge in upgrades of existing iPhones but pricing might be an issue if rumours are correct. Long term, it will depend on saturation and if we are in the 'comfort zone' for users. If users are happy with what they 'already have' in terms of hardware, it gets even harder to sell premium products and maintain or increase your market share.
That won't give you the best leverage in services though, as it's unlikely that market share will increase all that much for Apple. They want to get a foothold in emerging markets but Android phones will be undercutting them every step of the way, and as I've said recently, where Huawei can roll out its networking technology, it will give discounts to carriers on its phones, incentivising them to promote them agressively. It's already working for them in parts of Europe and they basically came from out of nowhere on the mobile front to claim top spot in China (or second or third, it's still a lot of phones).
Apple has dipped a toe into non-premium iPhone territory on two occasions so it's fair to say that someone understands the need to go there, but if they release a large screen mid tier phone it will very probably cannibalise its higher end options which is basically all it has right now.
I will never pay more than 500 dollars for a new phone as, for me, I can get all I need for less than 300. This from an ex iPhone user.
At least for me, much of the value of Apple's products depends on the ecosystem.
I wonder if many Chinese are not yet in a position to appreciate the value of that ecosystem, or if perhaps the ecosystem isn't as fully developed in China.
Whereas Chinese mainlanders used to buy iPhones in Hong Kong, during the December quarter they bought in Japan. Sales of iPhones in Japan grew disproportionately during the December quarter. This is attributable to Chinese travelers ( business and holiday) taking advantage of iPhone pricing disparity caused by the unequal valuation of the Japansese Yen and Chinese Yuan to the US dollar. Much of the increase in Japanese iPhone unit sales found its way to the Chinese market.
You can see this in the increase in Chinese sales of Apple Services. The YoY percent increase in Services was much larger than the increase in Chinese iPhone sales.
so... I don't think there is any inevitable slide towards IBM. So long as Apple continues to innovate and charge a price commensurate with the value of that innovation, they'll be fine. It's not a foregone conclusion that Apple will do that, but it's certainly not a foregone conclusion that they won't.
I agree. Where were all those "futurists" on Nokia, Blackberry and Motorola just before Apple introduced the iPhone?
There were boo ad dollars spewing forth from negative click bait on Nokia, Blackberry or Motorola back then, certainly not like the unsubstantiated negativity on anything Apple does today.
I'm just glad Apple is able to sell iPhones in China. With time, perhaps more of that sixth of the world's population will learn to appreciate quality instad of price alone. No reason at all that Apple should sell product in China at a lower margin than elsewhere in the world. Certainly no reason to distribute the iPhone at zero profit, as do the other companies with their products.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters.
So fear then. Uninteresting. Apple are a great company. But are only a company. Apple never had this kind of money in the bank or were near this size. They are going nowhere. Let's focus our attention on more interesting matters.
so... I don't think there is any inevitable slide towards IBM. So long as Apple continues to innovate and charge a price commensurate with the value of that innovation, they'll be fine. It's not a foregone conclusion that Apple will do that, but it's certainly not a foregone conclusion that they won't.
I agree. Where were all those "futurists" on Nokia, Blackberry and Motorola just before Apple introduced the iPhone?
There were boo ad dollars spewing forth from negative click bait on Nokia, Blackberry or Motorola back then, certainly not like the unsubstantiated negativity on anything Apple does today.
I might be twisting things a little but Nokia, Blackberry, Motorola, Sony, Kodak and even Apple all once sat on the emperor's throne, only to find themselves thrown off and not see what was coming.
I'm sure Apple will try to take that into account.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about.
Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters.
So fear then. Uninteresting. Apple are a great company. But are only a company. Apple never had this kind of money in the bank or were near this size. They are going nowhere. Let's focus our attention on more interesting matters.
True. It is one of the big differentiating factors between companies that stalled in the past those that stayed afloat. Apple can ride a few storms just because of its cash hoard although that might not actually change underlying factors.
Isnt this the implied conclusion of any store concerning Apple? That the inevitable downfall is just around the corner, and if it's not that corner, then it's SURELY the next one!
AppleInsider has been covering the downfall of Apple for the past 10 years. It'll happen. Just give it more time.
Apple's emphasis on the Chinese market in the past 4 years might have been misguided. China has a history of slapping down dominant foreign companies to favor domestic one, especially in the tech sector. For example, Baidu became dominant after China crippled Google's services (out of Hong Kong). A lot of it has to do with control - Apple still controls its app store (even though China increasingly censors apps it dislikes such as the NYT app). However, it's much more convenient for the central government to have obedient domestic players such as Huawai with local app stores that can be directly monitored by the government.
Apple should enjoy the Chinese sales while they last but it's a fool's errant to try to counter Chinese industrial policy.
Apple's emphasis on the Chinese market in the past 4 years might have been misguided. China has a history of slapping down dominant foreign companies to favor domestic one, especially in the tech sector. For example, Baidu became dominant after China crippled Google's services (out of Hong Kong). A lot of it has to do with control - Apple still controls its app store (even though China increasingly censors apps it dislikes such as the NYT app). However, it's much more convenient for the central government to have obedient domestic players such as Huawai with local app stores that can be directly monitored by the government.
Apple should enjoy the Chinese sales while they last but it's a fool's errant to try to counter Chinese industrial policy.
The surest way to fail in China is to not try. They should take their ball and go home. /s
Isnt this the implied conclusion of any store concerning Apple? That the inevitable downfall is just around the corner, and if it's not that corner, then it's SURELY the next one!
AppleInsider has been covering the downfall of Apple for the past 10 years. It'll happen. Just give it more time.
Yep that's true. Intelligent, talking sophisticated apes will find the ruins of New City too, in fact the way the world looks I'm pretty sure of it.
Nothing wrong with Chinese people buying Chinese phone brands as preference and Americans buying Apple iPhone or Google Pixel in their own country as preference.
What is clear from China stats is that there is maturity in this market and people don't see value in the iPhone brand. At the end of the day most people want a phone with good camera and battery life and android has plenty of options to choose from.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about.
Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.
Good first post. (an anomaly)
Or, a new market evolves this way. Apple is the premium brand offering the premium experience. When a new market breaks, it's flooded with players, not unlike the early evolution of auto companies in America. What do most people buy? Model T or like cost vehicle. Ultimately, what do they aspire to? Porsche, Ferrari, etc. Early market development, especially in a market highly controlled by government, finds many racing to the bottom for share. These players are not providing a premium experience. Probably barely acceptable experiences. Slowly, customers will want something better. Apple will be there. We've seen this in America with the Andoid onslaught. Poop don't float.
Nothing wrong with Chinese people buying Chinese phone brands as preference and Americans buying Apple iPhone or Google Pixel in their own country as preference.
What is clear from China stats is that there is maturity in this market and people don't see value in the iPhone brand. At the end of the day most people want a phone with good camera and battery life and android has plenty of options to choose from.
Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about.
Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.
Good first post. (an anomaly)
Or, a new market evolves this way. Apple is the premium brand offering the premium experience. When a new market breaks, it's flooded with players, not unlike the early evolution of auto companies in America. What do most people buy? Model T or like cost vehicle. Ultimately, what do they aspire to? Porsche, Ferrari, etc. Early market development, especially in a market highly controlled by government, finds many racing to the bottom for share. These players are not providing a premium experience. Probably barely acceptable experiences. Slowly, customers will want something better. Apple will be there. We've seen this in America with the Andoid onslaught. Poop don't float.
The car analogy only works if you strip the smart out of 'smartphone' and even then, there are plenty of Android phones that offer the same premium product experience as Apple.
When you put the 'smart' back in you see the importance of ecosystems (including cloud services). When you have your internet life tied to cloud services via a mobile device, switching 'car' (phone) isn't as straightforward as you might imagine. There are migration issues to take into account.
Android will always be more fragmented than iOS simply because new phones come out every month and there are hundreds of phones that vendors have to consider supporting or not. However, this is a far cry from the problems Android had with fragmentation just a few years ago. From a user perspective, it just isn't an issue.
Security is far better than it was just a short time ago. The Google Play store is now cleaner than it was and I've been getting security updates pushed out to me that aren't rolled into major system upgrades.
Android users in the mid or lower tiers can aspire to an iPhone - or any other premium model from an Android maker if they want 'something better'.
What Apple has going for it, and it's a big plus, is that many of its users automatically look for another iPhone when but comes to upgrading. They just don't care about Android. They almost always lack any real knowledge on the state of Android and other manufacturers, though. It's the result of good press, marketing and having products that people are satisfied with.
If you fall out of favour with the press or the 'hipsters' you should go to yellow alert as your sales might take a knock sooner rather then later.
At least for me, much of the value of Apple's products depends on the ecosystem.
I wonder if many Chinese are not yet in a position to appreciate the value of that ecosystem, or if perhaps the ecosystem isn't as fully developed in China.
It will always be cheaper and easier to roll out a gadget with a free OS and little or no ongoing support than to roll out an Apple product with integrated hardware & software, ongoing support in the form of OS upgrades, automatic backups, ongoing security upgrades, etc., etc., etc.....
Both Apple and Android fan bases tend to compare devices based on their latest glitz feature as it comes out of the box. Using that as the criteria for comparison insures that the Apple product will always lose... The low cost manufacturers need only copy what Apple did six months earlier and release a 'new & improved' version.
Apple has a marketing dilemma because a large part of what they sell cannot be seen as the gadget comes out of the box. And, most people do not seem to even know that it exists... No matter how much Apple tries to produce a lower cost option, it will always need to charge a premium in order to pay for the infrastructure that goes around that gadget and makes it an outstanding product that "just works".
I saw the same thing transpiring in the battle between the mainframe world and the PC world back in the 90's. The PC applications were always cheaper -- not because PCs were invariably cheaper or the software was inherently cheaper -- but because they omitted features that made the mainframe versions secure, dependable and stable. I fear that Apple may go the way of the mainframe if it does not find a way to market its infrastructure effectively.
A few points:
1. The Android fan base does as you say. I'm not so sure about the iPhone base, at least not in the US. Maybe it's different in China. 2. There are a lot of features of the iPhone that cannot just be copied 6 months later. The best example is the SOC -- the competition is literally years behind Apple in basic performance. 3. When you talk about the mainframe vs the PC, what you're really talking about is IBM vs Microsoft. IBM had grown fat and lazy. Their pace of innovation had slowed dramatically, yet they continued to charge very high prices. It's not that customers failed to appreciate the value of mainframes -- it's that IBM overcharged and under-delivered. If Apple follows that model (and frankly, when it comes to the Mac Pro, they have) then that's why they'll go the way of IBM. But while I think there are very legitimate gripes about how Apple has been doing with the Mac, it seems to me that Apple continues to add value to the iPhone year after year. I might not always agree with every decision, but they definitely keep the product moving forward.
so... I don't think there is any inevitable slide towards IBM. So long as Apple continues to innovate and charge a price commensurate with the value of that innovation, they'll be fine. It's not a foregone conclusion that Apple will do that, but it's certainly not a foregone conclusion that they won't.
Your point about IBM vs Microsoft was the standard argument of the day: "IBM lacks innovation". It sounded credible and made good press -- but it was using a truth to tell a lie.
While it was true that IBM systems were not bleeding edge (there were always faster, bigger competitors), bleeding edge was not their goal. Their goal was to build a rock solid, bullet proof system that met their customers needs (which included having a rock solid, bullet proof system that they could depend on). In other words, they "just worked". To compare a PC system to a mainframe system would be like comparing a bicycle to a motorcycle: the bicycle would always be cheaper because it lacked the sophistication of the motorcycle.
The analogy fits for Apple today: As mobile systems become increasingly mature and commoditized, Apple is increasingly marketing on the same basis: systems that are solid, dependable and that "just work". Yet, that doesn't sell newspapers. The media loves glitz as much as it loves disasters. Solid, dependable systems that "just work" don't sell newpapers -- and the danger that Apple faces is the same that IBM faced: that the things that make their product great simply will go unrecognized.
Comments
If your hardware is ahead of the pack and people accept your premium prices, you can cruise on your profits but there will come a time when your market becomes saturated and the rest of the pack catches up with you. In that scenario you have to convince people that your premium price really does get you something more than cheaper rivals.
We have been down this route with TVs. Pioneer released what was to become a legendary line of TVs at premium prices. It received industry acclaim but then had to pull out of the TV business, in spite of having truly amazing panels and great video processing.
iPhones don't cost 3,000 dollars and there are other factors involved but the similarities are there.
Every Android phone at the very least means another person searching via Google and probably using Chrome.
Android phones can give you all the hardware you need - and then some. Sometimes at an even higher price than iPhones, but you can also get iPhone class hardware for a much lower price or slip down the lines as far as your budget needs you too. Google is still there, whatever you choose.
Short term, the redesign for the iPhone 8 should see a new surge in upgrades of existing iPhones but pricing might be an issue if rumours are correct. Long term, it will depend on saturation and if we are in the 'comfort zone' for users. If users are happy with what they 'already have' in terms of hardware, it gets even harder to sell premium products and maintain or increase your market share.
That won't give you the best leverage in services though, as it's unlikely that market share will increase all that much for Apple. They want to get a foothold in emerging markets but Android phones will be undercutting them every step of the way, and as I've said recently, where Huawei can roll out its networking technology, it will give discounts to carriers on its phones, incentivising them to promote them agressively. It's already working for them in parts of Europe and they basically came from out of nowhere on the mobile front to claim top spot in China (or second or third, it's still a lot of phones).
Apple has dipped a toe into non-premium iPhone territory on two occasions so it's fair to say that someone understands the need to go there, but if they release a large screen mid tier phone it will very probably cannibalise its higher end options which is basically all it has right now.
I will never pay more than 500 dollars for a new phone as, for me, I can get all I need for less than 300. This from an ex iPhone user.
You can see this in the increase in Chinese sales of Apple Services. The YoY percent increase in Services was much larger than the increase in Chinese iPhone sales.
I agree. Where were all those "futurists" on Nokia, Blackberry and Motorola just before Apple introduced the iPhone?
There were boo ad dollars spewing forth from negative click bait on Nokia, Blackberry or Motorola back then, certainly not like the unsubstantiated negativity on anything Apple does today.
You get what you pay for.
I'm sure Apple will try to take that into account.
Exactly. Thus making Google's Android world a load of ... you know I can't thing of really bad cars these days, wait does Russia still make cars?
Apple should enjoy the Chinese sales while they last but it's a fool's errant to try to counter Chinese industrial policy.
What is clear from China stats is that there is maturity in this market and people don't see value in the iPhone brand. At the end of the day most people want a phone with good camera and battery life and android has plenty of options to choose from.
When you put the 'smart' back in you see the importance of ecosystems (including cloud services). When you have your internet life tied to cloud services via a mobile device, switching 'car' (phone) isn't as straightforward as you might imagine. There are migration issues to take into account.
Android will always be more fragmented than iOS simply because new phones come out every month and there are hundreds of phones that vendors have to consider supporting or not. However, this is a far cry from the problems Android had with fragmentation just a few years ago. From a user perspective, it just isn't an issue.
Security is far better than it was just a short time ago. The Google Play store is now cleaner than it was and I've been getting security updates pushed out to me that aren't rolled into major system upgrades.
Android users in the mid or lower tiers can aspire to an iPhone - or any other premium model from an Android maker if they want 'something better'.
What Apple has going for it, and it's a big plus, is that many of its users automatically look for another iPhone when but comes to upgrading. They just don't care about Android. They almost always lack any real knowledge on the state of Android and other manufacturers, though. It's the result of good press, marketing and having products that people are satisfied with.
If you fall out of favour with the press or the 'hipsters' you should go to yellow alert as your sales might take a knock sooner rather then later.
While it was true that IBM systems were not bleeding edge (there were always faster, bigger competitors), bleeding edge was not their goal. Their goal was to build a rock solid, bullet proof system that met their customers needs (which included having a rock solid, bullet proof system that they could depend on). In other words, they "just worked". To compare a PC system to a mainframe system would be like comparing a bicycle to a motorcycle: the bicycle would always be cheaper because it lacked the sophistication of the motorcycle.
The analogy fits for Apple today: As mobile systems become increasingly mature and commoditized, Apple is increasingly marketing on the same basis: systems that are solid, dependable and that "just work". Yet, that doesn't sell newspapers. The media loves glitz as much as it loves disasters. Solid, dependable systems that "just work" don't sell newpapers -- and the danger that Apple faces is the same that IBM faced: that the things that make their product great simply will go unrecognized.