Apple has (almost) always had a strategy of taking the profitable portion of the market and letting others fight for the rest. They know that success is not about market share, but profit share. This strategy has served them well and will continue to do so in the future, even in emerging markets. It is a long view, but effective. The only reason Apple might end up with a majority of the market in any space (as they have in portable music players) is if their offering has so transformed the space that the majority of the the market has transformed into a lucrative one for their more complete and integrated offering.
Quote:
Originally Posted by gwmac
At some point market share will impact profit share. Apple has to be mindful of market numbers. I don't see how they can maintain a 70% or whatever it now is profit share and see their global market share in sales decline every single quarter. Eventually many of these people that buy these crappy and super cheap Android phones will buy more expensive models and if they are already in the Android ecosystem and are familiar with that platform they will be more likely to stick with it.
Apple is not doomed if they don't release a smaller and larger iPhone this year. Nor are they doomed if they do. They have time to address concerns at least until 2014. But eventually I think these analysts are correct and Apple will have a cheap, standard, and large version to compete in the global market space. What works in the U.S. doesn't always work in other countries and even in the U.S. the trend is for larger displays. They are getting hit on both sides. Without a larger display iPhone this year you might see a lot of iPhone defectors to Android.
The cheapest phone Apple now sells overseas is the iPhone 4 for $500. A 2 1/2 year old phone selling for that dear a price is just not going to cut it. If they can make a 16GB iPod touch and sell it for a nice profit at $199 there is no reason why they couldn't at $330 either. The phone specific parts are not that expensive especially if it is just a 3G phone without LTE.
If Samsung, HTC, Motorola, and the rest are changing consumers' impression of what a smartphone should be, then Apple has to respond to the view of consumers. It's quite clear that the iPhone is loved by consumers, which is why analysts are not calling for Apple to abandon the current model. It's also quite clear, however, that Apple can be successful with larger and cheaper models in addition simply due to market demand, not because it's what Samsung does.
Apple doesn't need to respond. If it did, it would have released a Mac Netbook, a sub $500 Mac, and an iPhone with a physical keyboard. Apple sold 48MM iPhones last quarter when the SG3 and Note were out.
True, but AAPL shareholders care - every time these analysts open their mouths, the stock falls some more. Even when their ramblings are consistently shown to be nonsense later, the damage has already been done. Everyone repeats these "Apple is doomed" stories. No one repeats the "never mind" stories.
No, they're not morons.
But two questions:
1. Are they smarter than Apple's leadership?
2. Are these recommendations what's best for Apple, or what's best for them?
1. They're not more knowledgeable about Apple's product plans, but may be more in touch with industry trends.
2. The recommendations are what they think financial managers should watch for, which implies they are the best for shareholders. If you subscribe to the belief that what's best for the shareholders the same as what is best for the bottom line, then yes that's what they think is best for Apple. Is it actually best for Apple? Nobody can know until the results of Apple's decisions are seen.
Apple doesn't need to respond. If it did, it would have released a Mac Netbook, a sub $500 Mac, and an iPhone with a physical keyboard. Apple sold 48MM iPhones last quarter when the SG3 and Note were out.
Apple does need to respond. They respond to consumers' demands every time they update one of their models with a faster chip, more RAM, or a brighter screen. There is a line, however, that they don't cross when it comes to margins. Netbooks and sub $500 PCs are not realistic options for increasing profits. The keyboard isn't widely demanded by consumers at the expense of other features like weight and size; if it were then more than a few phones would have physical keyboards.
Finally, I've said this about sales before: when someone wants iOS, they buy an iPhone. All sales of iOS phones are sales of iPhones. If there were other phones running iOS, sales of the iPhone would decrease because consumers would have more than one choice. Even though sales of the iPhone would be lower in this scenario, sales of iOS devices would be higher due to the fact that consumers would have more hardware options, options that would reduce the chance for a given limiting factor to sway a person away from an iOS device. I want to see Apple make some of those other hardware options a reality. Of course in this reality these other iOS devices would still be iPhones, and all the additional sales would go to Apple.
RE: 1. "Industry trends" — that's laughable. The industry trend in this space is what Apple did 3 or 4 years ago. Apple is an innovator, which means they create industry trends. Apple's competitors are "phone manufacturers," which makes them followers.
RE: 2. You are a quibbler of Olympic talent.
Quote:
Originally Posted by wakefinance
1. They're not more knowledgeable about Apple's product plans, but may be more in touch with industry trends.
2. The recommendations are what they think financial managers should watch for, which implies they are the best for shareholders. If you subscribe to the belief that what's best for the shareholders the same as what's is best for the bottom line, then yes that's what they think is best for Apple. Is it actually best for Apple? Nobody can know until the results of Apple's decisions are seen.
RE: 1. "Industry trends" — that's laughable. The industry trend in this space is what Apple did 3 or 4 years ago. Apple is an innovator, which means they create industry trends. Apple's competitors are "phone manufacturers," which makes them followers.
RE: 2. You are a quibbler of Olympic talent.
RE: RE: 1. Apple hasn't done most of the things that Android phone manufacturers are doing with their phones. I'm not saying that the iPhone isn't competitive or even that it's worse, but it's evident that Android phones are packing in new technologies and features that Apple hasn't yet touched.
RE: RE: 2. Thank you very much! That's the compliment of a lifetime considering the quibbling on these forums.
Frankly I don't care if anyone accepts my view or not. It's typically contrary to the general sentiment here anyway.
That said, these analysts are not the morons so many here think them to be. They have enormous resources backing their research because their analysis is used by the financial institutions to manage assets in massive portfolios. These analysts specialize in particular industries and learn as much as they can from any source within the industry to make judgments about likely future performance of industry players.
Besides the analysts that you're defending, I can think of one other profession where they can be wrong 75% of the time and not get fired.....and consumers still come back---time and time again---for their advise.
Weather people.
My opinion? Anyone that takes advise from anyone in either profession.....is foolish.
2. The recommendations are what they think financial managers should watch for, which implies they are the best for shareholders. If you subscribe to the belief that what's best for the shareholders the same as what is best for the bottom line, then yes that's what they think is best for Apple. Is it actually best for Apple? Nobody can know until the results of Apple's decisions are seen.
Apple has the most profitable CY in human history yet it wasn't good enough for these analysts.
Apple does need to respond. They respond to consumers' demands every time they update one of their models with a faster chip, more RAM, or a brighter screen.
Finally, I've said this about sales before: when someone wants iOS, they buy an iPhone. All sales of iOS phones are sales of iPhones. If there were other phones running iOS, sales of the iPhone would decrease because consumers would have more than one choice. Even though sales of the iPhone would be lower in this scenario, sales of iOS devices would be higher due to the fact that consumers would have more hardware options, options that would reduce the chance for a given limiting factor to sway a person away from an iOS device. I want to see Apple make some of those other hardware options a reality. Of course in this reality these other iOS devices would still be iPhones, and all the additional sales would go to Apple.
The upgrades are evolutionary. They weren't going to stick with the original iPhone specs forever. If Apple waited to respond to what customers want, there be no iDevice in the first place. Apple is HW. Unless they license iOS at $300 a pop, they aren't going to do it.
RE: RE: 1. Apple hasn't done most of the things that Android phone manufacturers are doing with their phones. I'm not saying that the iPhone isn't competitive or even that it's worse, but it's evident that Android phones are packing in new technologies and features that Apple hasn't yet touched.
Spec list warning! NFC? Check. Stylus? Check. Can run split screen apps? check, although only 20 are available. Have you ever bought a car based on a spec sheet?
The upgrades are evolutionary. They weren't going to stick with the original iPhone specs forever. If Apple waited to respond to what customers want, there be no iDevice in the first place. Apple is HW. Unless they license iOS at $300 a pop, they aren't going to do it.
Spec list warning! NFC? Check. Stylus? Check. Can run split screen apps? check, although only 20 are available. Have you ever bought a car based on a spec sheet?
You're getting there. Why did Apple make these changes? Were they made out of the goodness of management's hearts? Were they made on a dare? Apple made these changes because consumers demanded them.
Call it what you want, features are features, and the iPhone has fewer, so it's not fair to say that Android manufacturers are following Apple's lead.
You're getting there. Why did Apple make these changes? Were they made out of the goodness of management's hearts? Were they made on a dare? Apple made these changes because consumers demanded them.
Call it what you want, features are features, and the iPhone has fewer, so it's not fair to say that Android manufacturers are following Apple's lead.
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
Given the opportunity, people generally value usable capabilities that make sense and fit into their lives. This is the only "feature" they care about.
That's why Apple designs products that provide this sort value offering. They design for an optimum and valuable user experience, not for a list of "features."
Quote:
Originally Posted by wakefinance
Call it what you want, features are features, and the iPhone has fewer, so it's not fair to say that Android manufacturers are following Apple's lead.
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
They don't have to demand IPS specifically to be demanding a better screen. That Apple chose IPS for their Retina display shows that they take pride in their work. I honestly don't think that Apple is self-motivated to evolve their products. I think they take enormous pride in what they produce, but the goal has always been and will always be to make money. If consumers weren't demanding that Apple add features and upgrade their components, then they wouldn't pay for new models.
Comments
No, actually.
Apple has (almost) always had a strategy of taking the profitable portion of the market and letting others fight for the rest. They know that success is not about market share, but profit share. This strategy has served them well and will continue to do so in the future, even in emerging markets. It is a long view, but effective. The only reason Apple might end up with a majority of the market in any space (as they have in portable music players) is if their offering has so transformed the space that the majority of the the market has transformed into a lucrative one for their more complete and integrated offering.
Quote:
Originally Posted by gwmac
At some point market share will impact profit share. Apple has to be mindful of market numbers. I don't see how they can maintain a 70% or whatever it now is profit share and see their global market share in sales decline every single quarter. Eventually many of these people that buy these crappy and super cheap Android phones will buy more expensive models and if they are already in the Android ecosystem and are familiar with that platform they will be more likely to stick with it.
Apple is not doomed if they don't release a smaller and larger iPhone this year. Nor are they doomed if they do. They have time to address concerns at least until 2014. But eventually I think these analysts are correct and Apple will have a cheap, standard, and large version to compete in the global market space. What works in the U.S. doesn't always work in other countries and even in the U.S. the trend is for larger displays. They are getting hit on both sides. Without a larger display iPhone this year you might see a lot of iPhone defectors to Android.
The cheapest phone Apple now sells overseas is the iPhone 4 for $500. A 2 1/2 year old phone selling for that dear a price is just not going to cut it. If they can make a 16GB iPod touch and sell it for a nice profit at $199 there is no reason why they couldn't at $330 either. The phone specific parts are not that expensive especially if it is just a 3G phone without LTE.
Apple doesn't need to respond. If it did, it would have released a Mac Netbook, a sub $500 Mac, and an iPhone with a physical keyboard. Apple sold 48MM iPhones last quarter when the SG3 and Note were out.
I'm and AAPL shareholder.
I call it another buying opportunity. :-)
Quote:
Originally Posted by jragosta
True, but AAPL shareholders care - every time these analysts open their mouths, the stock falls some more. Even when their ramblings are consistently shown to be nonsense later, the damage has already been done. Everyone repeats these "Apple is doomed" stories. No one repeats the "never mind" stories.
1. They're not more knowledgeable about Apple's product plans, but may be more in touch with industry trends.
2. The recommendations are what they think financial managers should watch for, which implies they are the best for shareholders. If you subscribe to the belief that what's best for the shareholders the same as what is best for the bottom line, then yes that's what they think is best for Apple. Is it actually best for Apple? Nobody can know until the results of Apple's decisions are seen.
Care to give me a link? I'd like to read one of their full reports.
There's usually a link to the original article (varies by AI author) if it is not behind a pay wall.
For the rest, Google works well, although it may take a few minutes depending on your skill and luck.
Apple does need to respond. They respond to consumers' demands every time they update one of their models with a faster chip, more RAM, or a brighter screen. There is a line, however, that they don't cross when it comes to margins. Netbooks and sub $500 PCs are not realistic options for increasing profits. The keyboard isn't widely demanded by consumers at the expense of other features like weight and size; if it were then more than a few phones would have physical keyboards.
Finally, I've said this about sales before: when someone wants iOS, they buy an iPhone. All sales of iOS phones are sales of iPhones. If there were other phones running iOS, sales of the iPhone would decrease because consumers would have more than one choice. Even though sales of the iPhone would be lower in this scenario, sales of iOS devices would be higher due to the fact that consumers would have more hardware options, options that would reduce the chance for a given limiting factor to sway a person away from an iOS device. I want to see Apple make some of those other hardware options a reality. Of course in this reality these other iOS devices would still be iPhones, and all the additional sales would go to Apple.
RE: 1. "Industry trends" — that's laughable. The industry trend in this space is what Apple did 3 or 4 years ago. Apple is an innovator, which means they create industry trends. Apple's competitors are "phone manufacturers," which makes them followers.
RE: 2. You are a quibbler of Olympic talent.
Quote:
Originally Posted by wakefinance
1. They're not more knowledgeable about Apple's product plans, but may be more in touch with industry trends.
2. The recommendations are what they think financial managers should watch for, which implies they are the best for shareholders. If you subscribe to the belief that what's best for the shareholders the same as what's is best for the bottom line, then yes that's what they think is best for Apple. Is it actually best for Apple? Nobody can know until the results of Apple's decisions are seen.
Quote:
Originally Posted by DESuserIGN
RE: 1. "Industry trends" — that's laughable. The industry trend in this space is what Apple did 3 or 4 years ago. Apple is an innovator, which means they create industry trends. Apple's competitors are "phone manufacturers," which makes them followers.
RE: 2. You are a quibbler of Olympic talent.
RE: RE: 1. Apple hasn't done most of the things that Android phone manufacturers are doing with their phones. I'm not saying that the iPhone isn't competitive or even that it's worse, but it's evident that Android phones are packing in new technologies and features that Apple hasn't yet touched.
RE: RE: 2. Thank you very much! That's the compliment of a lifetime considering the quibbling on these forums.
Well, that's indeed true. There's no lack of quibbling talent representing a variety of viewpoints here at AI.
Quote:
Originally Posted by wakefinance
RE: RE: 2. Thank you very much! That's the compliment of a lifetime considering the quibbling on these forums.
Quote:
Originally Posted by wakefinance
Frankly I don't care if anyone accepts my view or not. It's typically contrary to the general sentiment here anyway.
That said, these analysts are not the morons so many here think them to be. They have enormous resources backing their research because their analysis is used by the financial institutions to manage assets in massive portfolios. These analysts specialize in particular industries and learn as much as they can from any source within the industry to make judgments about likely future performance of industry players.
Besides the analysts that you're defending, I can think of one other profession where they can be wrong 75% of the time and not get fired.....and consumers still come back---time and time again---for their advise.
Weather people.
My opinion? Anyone that takes advise from anyone in either profession.....is foolish.
Apple has the most profitable CY in human history yet it wasn't good enough for these analysts.
The upgrades are evolutionary. They weren't going to stick with the original iPhone specs forever. If Apple waited to respond to what customers want, there be no iDevice in the first place. Apple is HW. Unless they license iOS at $300 a pop, they aren't going to do it.
Spec list warning! NFC? Check. Stylus? Check. Can run split screen apps? check, although only 20 are available. Have you ever bought a car based on a spec sheet?
And by "hole" I don't mean a hull breach in a sinking ship. I mean "we have a cruise ship with a gap on the deck. Lets put a frigging wave pool here!"
A 5" won't replace the 4".
Quote:
Originally Posted by jungmark
The upgrades are evolutionary. They weren't going to stick with the original iPhone specs forever. If Apple waited to respond to what customers want, there be no iDevice in the first place. Apple is HW. Unless they license iOS at $300 a pop, they aren't going to do it.
Spec list warning! NFC? Check. Stylus? Check. Can run split screen apps? check, although only 20 are available. Have you ever bought a car based on a spec sheet?
You're getting there. Why did Apple make these changes? Were they made out of the goodness of management's hearts? Were they made on a dare? Apple made these changes because consumers demanded them.
Call it what you want, features are features, and the iPhone has fewer, so it's not fair to say that Android manufacturers are following Apple's lead.
Originally Posted by wakefinance
Why did Apple make these changes? Apple made these changes because consumers demanded them.
Wait, what changes?
…features are features…
Mmm… I disagree with this.
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
Quote:
Originally Posted by Tallest Skil
Wait, what changes?
Mmm… I disagree with this.
The evolutionary changes as he called them.
I think there are ways that Apple has led too. Don't worry Tallest!
Given the opportunity, people generally value usable capabilities that make sense and fit into their lives. This is the only "feature" they care about.
That's why Apple designs products that provide this sort value offering. They design for an optimum and valuable user experience, not for a list of "features."
Quote:
Originally Posted by wakefinance
Call it what you want, features are features, and the iPhone has fewer, so it's not fair to say that Android manufacturers are following Apple's lead.
Dito! +5
Quote:
Originally Posted by Flaneur
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
Quote:
Originally Posted by Flaneur
Consumers didn't demand in-plane switching, Retina screens, glass backs, aluminum unibody chassis, thinner and lighter, glass-to-film touch layers, machined phone cases—all these things that "analysts" (and maybe you) fail to see are the driving challenges that cause Apple's engineers and designers to do what they do. The company is motivated by urges for technical excellence that people who sit at desks and think about competition for market share don't understand. Or can't even see when they are pointed out to them.
This is why "analysts" get Apple so wrong so often, and why I personally think they are a doomed parasitic encrustation on the new kind of market system we find ourselves in. Apple is something they have never had to deal with before: a company that succeeds by a self-directed drive to "trip out" their customers with a good experience, to enrich people's lives with great products, in their words. Cynical old-market thinkers can't handle this level of sincerity. They think Apple plays by the old rules of competition and change for change's sake. Clearly Apple does not work this way.
Gruber links today to a discussion on this very point of Samsung's "innovation." Not to be missed.
They don't have to demand IPS specifically to be demanding a better screen. That Apple chose IPS for their Retina display shows that they take pride in their work. I honestly don't think that Apple is self-motivated to evolve their products. I think they take enormous pride in what they produce, but the goal has always been and will always be to make money. If consumers weren't demanding that Apple add features and upgrade their components, then they wouldn't pay for new models.