iPhone primed to trump rivals in audience appeal

Posted:
in iPod + iTunes + AppleTV edited January 2014
Analysts at Bank of America and Morgan Stanley say Apple is poised to snap up marketshare from competing smartphone producers, even though some segments, as always, would prove tough to crack.



Research notes from the financial institutions, published late this week, told investors that the iPhone is entering a market where many of its audience's tastes (and competitors' weaknesses) would play into its creator's hands.



Ironically, much of this support came after a conversation held by Bank of America's Keith Bachman with Apple's strongest opponent, Nokia. Executives from the Scandinavian company painted an optimistic picture for the high-end phone business, predicting that sales would blossom from 90 million phones sold worldwide in 2006 to over 250 million by 2008.



The Finnish cellphone maker went on to note that today's environment is already very friendly to media-wise phones from its own line -- and, Bachman added, the iPhone. Roughly 60 percent of premium phones are used for music on a regular basis, Nokia estimated. Some owners are even dependent on their handsets to such a degree that just under half of the segment's users rely on the devices as their only cameras.



And while Nokia's devices were best positioned to compete with those from Apple, the latter could brag of advantages its rivals simply couldn't offer. No current phone designer has the same kind of devoted fan base, the Bank of America researcher said. Neither could they claim iTunes' grip on existing customers nor the same skill with creating a user interface.



Other cellphone heavyweights are at considerably greater risk, said a similarly-voiced investor note from Morgan Stanley's Katheryn Huberty.



While some phone makers are shielded from the potential damage of Cupertino's initial onslaught, particularly RIM and its work-oriented BlackBerry line, others are especially vulnerable. Those devices whose Internet or media features appealed to the iPhone's target audience, but yet weren't crucial to a corporate environment, were the most likely to be dropped in favor of the Apple model.



Palm's Treo phones may be at the greatest risk of all, Huberty said. Beyond sharing features and prices, Palm is also in the unfortunate position of having a disproportionately large number of Apple enthusiasts in its midst. Treo owners are twice as likely to own an iPod or Mac, according to a Morgan Stanley survey, and are much more likely to consider iPhones regardless of their existing Apple product ownership.



Motorola, which helped Apple experiment with music phones through the ROKR, is now a virtual non-factor thanks to the poor reception of its music efforts and an emphasis on less expensive phones.



Still, both Huberty and her equivalent at Bank of America cautioned shareholders that the iPhone wouldn't have automatic control of the market. Price was a particularly familiar sore point, with the two experts independently concluding that Apple needs to quickly expand its lineup with phones under the $499 mark if it wants to grow outside of its soon-to-be-established niche.



Bachman also noted that Nokia's assessment of the market's hardware preferences would have Apple falling just short of the ideal. The "sweet spot" for camera phones is between 3 and 5 megapixels versus the iPhone's 2-megapixel unit, Nokia claimed. A lack of 3G wireless could also hinder the California-based company's success outside of North America, Bachman wrote.



With most of these potential problems likely to be solved by 2008, however, the two analysts were convinced that Apple could spark a long-term interest in its pioneering phone over the long run.



"We believe there is [a] high likelihood the iPhone portfolio expands in the next 12+ months, generating additional demand," said Huberty.
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Comments

  • Reply 1 of 62
    kreshkresh Posts: 379member
    All iPhone, all the time.
  • Reply 2 of 62
    physguyphysguy Posts: 915member
    Finally. Someone who 'Gets It'.
  • Reply 3 of 62
    jeffdmjeffdm Posts: 12,946member
    Quote:

    Palm's Treo phones may be at the greatest risk of all, Huberty said. Beyond sharing features and prices,



    It really depends on what they mean. The SRP might be pretty close, but after discounts and subsidies, the 700wx and 700p are both $250 out the door from my carrier. It's kind of weasely to compare a Treo's SRP with Apple's prices, which might be post-subsidy. Whether Apple's price is post- or pre-subsidy (with with bonus service) has not been properly clarified and as such, hard to know if the comparison is valid. As for features, it's clear that the feature sets are different, I'm not sure they really share the same target market.
  • Reply 4 of 62
    zandroszandros Posts: 537member
    And no mention of SonyEricsson as usual... you know, everything isn't America.



    Motorola sucks anyway, they're hardly a competitor.
  • Reply 5 of 62
    Amongst all this "news" that analysts seem to be generating lately as Ai correspondents, where's Mr. Wu? I miss him.
  • Reply 6 of 62
    mbaynhammbaynham Posts: 534member
    zzzzz
  • Reply 7 of 62
    irelandireland Posts: 17,552member
    The iPhone will sell for lots of reasons, but it'll sell mostly for one main reason. Ease of use, ease of use, ease of use and ease of use.
  • Reply 8 of 62
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by Ireland View Post


    The iPhone will sell for lots of reasons, but it'll sell mostly for one main reason. Ease of use, ease of use, ease of use and ease of use.



    I think that statement is probably more Microsoft-like than you let on. Developers! Developers! Developers! Developers!
  • Reply 9 of 62
    irelandireland Posts: 17,552member
    Quote:
    Originally Posted by JeffDM View Post


    I think that statement is probably more Microsoft-like than you let on. Developers! Developers! Developers! Developers!



    huh...
  • Reply 10 of 62
    jbelkinjbelkin Posts: 74member
    What are the best selling apps for other PDA's - calendars, word processors, notes, address books, etc, etc ...



    That's because the included apps are so minimal or useless - why would you need to replace Apple apps on the iphone?



    You even have evidence on the ipod there's "closed" and then there's CLOSED. You have hundreds of additional add-ons you can download and run on it from transit maps to restaurant menus to games.



    You can't just randomly repeat things without thinking it through.



    It's like the people who are sure they'll hate the touchscreen - just because they used one before, for now and all eternity - all touchscreens are bad. Did they feel the same way about the opposite sex at 7 also?



    If you're happy with your PDA and the 5 calendar apps you bought plus the 1-lb keyboard attachment - great - enjoy that. We're moving to the next gen.
  • Reply 11 of 62
    nagrommenagromme Posts: 2,834member
    "Sweet spot" for camera phones is 3-5 MP? No thanks. Are these "hardware preferences" that the market has for 3-5 MP actualy sales trends? Or someone checking a box on a questionnaire, "would you rather have 1, 2, 3, 4, or 5 MP?" I have to wonder, given that an Apple competitor is the source of that statement



    In my Googling, other smartphones, and popular phones like the RAZR, have 640x480 (.3 MP) up to about 1 MP. Unless you're printing posters, 5 MP doesn't do much but waste storage--which is NOT what you want on a phone. If ever there was a reason to trade pixel area for capacity (and portability) a phone is it.



    2MP, like the iPhone, is 1600x1200. That's not at all bad. I don't know how much more than that I'd want to store... and I don't know how much space in the device I want to devote to optics good enough to justify more than that anyway. (High MP with poor optics? No thanks--I accept that superslim can't match the quality of a full size camera. If the phone's optics won't make a GOOD 5 MP image, then I'll stick with fewer pixels and not waste data on blurriness.)



    My current (non-phone) cam is 3.0 MP and I honestly wouldn't want more 99% of the time: those are already huge images. At a certain point--for most users (not pros, not poster artists) Megapixels seems more like a buzzword that a real measure of quality.
  • Reply 12 of 62
    crees!crees! Posts: 501member
    More like Bank of Amigo
  • Reply 13 of 62
    wallywally Posts: 211member
    Quote:
    Originally Posted by nagromme View Post


    "Sweet spot" for camera phones is 3-5 MP? No thanks.



    I thought the same thing when reading the article.... who needs a 5mp camera in their phone? It might sound cool... but mp are part of the picture quality equation. At 5mp I want a good lense to go with that... I could see myself using the iPhone's camera to take "quick and dirty" snapshots for design inspiration purposes... but I'm not planning on enlarging these shots to hang over the mantle... 5mp is a waste...
  • Reply 14 of 62
    jasonfjjasonfj Posts: 530member
    Absolutely right nagromme. I'm a tv commercials director and designer, and even professionally I usually set my Canon Ixus to 2MP for snapshots. If I'm shooting for print I use my SLR, as you say small optics do high MP counts no justice.



    I was kind of disappointed at first when I heard 2MP, but in retrospect it's more than enough for that sort of device. When friends ask me what to look for in a compact camera, I tell them they're wasting their time paying for anything more than 2 or 3MP, cos they're never going to use it.



    eg. http://www.kenrockwell.com/tech/mpmyth.htm
  • Reply 15 of 62
    Quote:
    Originally Posted by crees! View Post


    More like Bank of Amigo



    yes becuase amigo really means america in spanish... We all know what your getting at and what you want to talk about but take those politics somewhere else
  • Reply 16 of 62
    obelixobelix Posts: 18member
    Quote:
    Originally Posted by AppleInsider View Post


    Bachman also noted that Nokia's assessment of the market's hardware preferences would have Apple falling just short of the ideal. The "sweet spot" for camera phones is between 3 and 5 megapixels versus the iPhone's 2-megapixel unit, Nokia claimed.



    Hogwash.



    Camera phones are of such low quality, that a 5MP sensor merely magnifies the flaws of a 2MP sensor. Such cameras are little more useful than disposable film cameras for drunken parties, insurance claims, remind the user of what that coat in the store looked like, or to record instances of police brutality.



    The only significant hardware flaw of the iPhone is lack of 3G, which anyway will probably come only six months after the initial launch in June. Lock out of 3rd party software can be undone with an OS upgrade, prices can be changed,
  • Reply 17 of 62
    Quote:
    Originally Posted by crees! View Post


    More like Bank of Amigo



    Bank of Amerigo Vespucci?
  • Reply 18 of 62
    Quote:
    Originally Posted by Obelix View Post


    Camera phones are of such low quality, that a 5MP sensor merely magnifies the flaws of a 2MP sensor. Such cameras are little more useful than disposable film cameras for drunken parties, insurance claims, remind the user of what that coat in the store looked like, or to record instances of police brutality.



    You forgot happy slapping.
  • Reply 19 of 62
    Best "selling apps"? Most smartphone come preloaded with these. I've used a touchsreen phone, and it's the main reason I'm gettig a iPhone, I love them.



    The great thing about smartphones, are all the apps available. I'd have to say that I have my MPX220 loaded with they, and most are great, others, not so much. Go visit www.handango, and you'll see why people love having a "open" system for smartphones.

    Quote:
    Originally Posted by jbelkin View Post


    What are the best selling apps for other PDA's - calendars, word processors, notes, address books, etc, etc ...



    That's because the included apps are so minimal or useless - why would you need to replace Apple apps on the iphone?



    You even have evidence on the ipod there's "closed" and then there's CLOSED. You have hundreds of additional add-ons you can download and run on it from transit maps to restaurant menus to games.



    You can't just randomly repeat things without thinking it through.



    It's like the people who are sure they'll hate the touchscreen - just because they used one before, for now and all eternity - all touchscreens are bad. Did they feel the same way about the opposite sex at 7 also?



    If you're happy with your PDA and the 5 calendar apps you bought plus the 1-lb keyboard attachment - great - enjoy that. We're moving to the next gen.



  • Reply 20 of 62
    wallywally Posts: 211member
    Quote:
    Originally Posted by crees! View Post


    More like Bank of Amigo



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