China is a communist economy in a terrible mess. The way they kept the dragon at bay was to unfairly grow exports to make up the difference. When the US put on the unfair export brakes, train wreck!
The smartphone business used to be a two year cycle as people chased longer battery life and 2G-3G-4G revision. Now with all the added features, decent speed, and decent battery life (near or beyond full day for most) phone life is probably leaning more towards a four year replacement cycle.
Which is not so terrible for Apple as it would be for Android. Apple has now grown their installed base so large that if ‘only’ 1/4th upgrade each year that would still be a huge number of iPhone sales. Even accounting for folks switching away from iPhone to Android it would still be 150-200 million upgraders. Add in switchers to iPhone and new-to-smartphone users, which you automatically get as a new crop of children grow into the age where they get their first smartphone (often meaning they get a hand-me-down from a parent who in turn is the one who gets the new iPhone), and you have a very healthy iPhone business each year.
On the Android side you have a refresh cycle that’s much shorter already, due to Android phones not being updated as easily so get replaced more often. If consumers begin to demand a longer update cycle, then those cheap Androids that have a realistic lifespan of two years will be replaced with more premium models that promise a longer useable life. And Android consumers looking at the premium end of the smartphone market are exactly the ones who might decide to switch over to iPhone. In other words, longer replacement cycles bring Android consumers right to Apple’s doorstep.
Strange, but I did not see this information sprayed across the Internet, repeating on every news channel, along with commentary on the supposed DOOM of Samsung. Samsung Electronics is a bigger company (revenue and product line wise) than Apple, and their drop in earnings is going to be more, so how is this not front page news?
Samsung isn’t bigger than Apple. They USED to be, but not anymore (revenue wise). They sure do have a lot more products, though.
Things are changing, and so few of the analysts can see it. DED, PED and Horace Dediu have pretty much nailed the whole unit economics thing and how it applies to Apple's new love of services. If every device is a business unit, then you aim to make each device as profitable as possible. Why is it so important to Apple that each device lasts as long as possible? Yes, it's good for consumers, but what does Apple get out of folk keeping the device for longer?
1/. They stay in the ecosystem for longer. 2/. The longer the device lasts, then the more profitable it is as an access point for the ecosystem. Especially if, in the future, Apple simply gives you a device (or massively subsidises it) when you sign up.
Fascinating stuff. Apple is cannibalising itself again. The phone was the centre of the Apple universe, now it's being shifted to the side to sit alongside the iPad, the Mac, the TV, the future car … all plugged in to an expanding ecosystem.
People that always see a 'narrative' around them are prime candidates not to see their own narratives.
Strange, but I did not see this information sprayed across the Internet, repeating on every news channel, along with commentary on the supposed DOOM of Samsung. Samsung Electronics is a bigger company (revenue and product line wise) than Apple, and their drop in earnings is going to be more, so how is this not front page news?
Samsung isn’t bigger than Apple. They USED to be, but not anymore (revenue wise). They sure do have a lot more products, though.
Things are changing, and so few of the analysts can see it. DED, PED and Horace Dediu have pretty much nailed the whole unit economics thing and how it applies to Apple's new love of services. If every device is a business unit, then you aim to make each device as profitable as possible. Why is it so important to Apple that each device lasts as long as possible? Yes, it's good for consumers, but what does Apple get out of folk keeping the device for longer?
1/. They stay in the ecosystem for longer. 2/. The longer the device lasts, then the more profitable it is as an access point for the ecosystem. Especially if, in the future, Apple simply gives you a device (or massively subsidises it) when you sign up.
Fascinating stuff. Apple is cannibalising itself again. The phone was the centre of the Apple universe, now it's being shifted to the side to sit alongside the iPad, the Mac, the TV, the future car … all plugged in to an expanding ecosystem.
People that always see a 'narrative' around them are prime candidates not to see their own narratives.
That’s precious. Pot, meet kettle.
Not at all. We could have gazillion word articles daily trying to tell us how everyone - except the author - sees things wrong.
That won't change the underlying facts, though.
This is going to be (already is!) a bad start to the year for iPhone. It's why Tim Cook announced an all hands meeting.
Apple miscalculated. Time to accept that - openly - and learn from it.
Apple has 10 months ahead of it to stabilise the iPhone ship. Taking a bow shot in your biggest quarter obviously isn't good but let's not continue with the fantasy that Apple doesn't have iPhone business issues by creating a narrative to counter a narrative. It is absurd.
China is a communist economy in a terrible mess. The way they kept the dragon at bay was to unfairly grow exports to make up the difference. When the US put on the unfair export brakes, train wreck!
They’re a blend of capitalism and an authoritarian central government. A bad combination. It’s clear their people are ready for free-market capitalism and perhaps they’ll have it in another couple of decades.
Strange, but I did not see this information sprayed across the Internet, repeating on every news channel, along with commentary on the supposed DOOM of Samsung. Samsung Electronics is a bigger company (revenue and product line wise) than Apple, and their drop in earnings is going to be more, so how is this not front page news?
Because Samsung is not a one trick pony. They will be fine. They are a huge chunk of SK's GDP.
True, thieves and liars always have a backup plan.
Strange, but I did not see this information sprayed across the Internet, repeating on every news channel, along with commentary on the supposed DOOM of Samsung. Samsung Electronics is a bigger company (revenue and product line wise) than Apple, and their drop in earnings is going to be more, so how is this not front page news?
Samsung isn’t bigger than Apple. They USED to be, but not anymore (revenue wise). They sure do have a lot more products, though.
Things are changing, and so few of the analysts can see it. DED, PED and Horace Dediu have pretty much nailed the whole unit economics thing and how it applies to Apple's new love of services. If every device is a business unit, then you aim to make each device as profitable as possible. Why is it so important to Apple that each device lasts as long as possible? Yes, it's good for consumers, but what does Apple get out of folk keeping the device for longer?
1/. They stay in the ecosystem for longer. 2/. The longer the device lasts, then the more profitable it is as an access point for the ecosystem. Especially if, in the future, Apple simply gives you a device (or massively subsidises it) when you sign up.
Fascinating stuff. Apple is cannibalising itself again. The phone was the centre of the Apple universe, now it's being shifted to the side to sit alongside the iPad, the Mac, the TV, the future car … all plugged in to an expanding ecosystem.
People that always see a 'narrative' around them are prime candidates not to see their own narratives.
That’s precious. Pot, meet kettle.
Not at all. We could have gazillion word articles daily trying to tell us how everyone - except the author - sees things wrong.
That won't change the underlying facts, though.
This is going to be (already is!) a bad start to the year for iPhone. It's why Tim Cook announced an all hands meeting.
Apple miscalculated. Time to accept that - openly - and learn from it.
Apple has 10 months ahead of it to stabilise the iPhone ship. Taking a bow shot in your biggest quarter obviously isn't good but let's continue with the fantasy that Apple doesn't have iPhone business issues by creating a narrative to counter a narrative. It is absurd.
This will be an interesting year alright. Apple in the past appeared to execute better when they were under pressure. They have the talent, so now they have to prove those huge salaries.
Samsung having over $9 billion in net income projected is not a terrible quarter. It’s down, but many public companies are not profitable.
Samsung sells a lot more than smart phones and memory. They have a much more diverse product line than Apple. Apple doesn’t design and sell washing machines, TVs, cameras, Blu-Ray DVD players, lithium ion batteries, hard drives, and refrigerators, for example.
They are more of a conglomerate, on the likes of Siemens AG.
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On the Android side you have a refresh cycle that’s much shorter already, due to Android phones not being updated as easily so get replaced more often. If consumers begin to demand a longer update cycle, then those cheap Androids that have a realistic lifespan of two years will be replaced with more premium models that promise a longer useable life. And Android consumers looking at the premium end of the smartphone market are exactly the ones who might decide to switch over to iPhone. In other words, longer replacement cycles bring Android consumers right to Apple’s doorstep.
That’s precious. Pot, meet kettle.
That won't change the underlying facts, though.
This is going to be (already is!) a bad start to the year for iPhone. It's why Tim Cook announced an all hands meeting.
Apple miscalculated. Time to accept that - openly - and learn from it.
Apple has 10 months ahead of it to stabilise the iPhone ship. Taking a bow shot in your biggest quarter obviously isn't good but let's not continue with the fantasy that Apple doesn't have iPhone business issues by creating a narrative to counter a narrative. It is absurd.
I’m not worried.
Samsung sells a lot more than smart phones and memory. They have a much more diverse product line than Apple. Apple doesn’t design and sell washing machines, TVs, cameras, Blu-Ray DVD players, lithium ion batteries, hard drives, and refrigerators, for example.
They are more of a conglomerate, on the likes of Siemens AG.