Would somebody please explain to me why Apple needs to increase its share of the market of "people who have no money"?
That seems like a really crappy market to be in, frankly.
Back in the days of the home computer wars, Apple wisely stayed out of the cost-cutting fray Jack Tramiel launched with Commodore. Atari, TI, Coleco, even Tandy rushed headlong into the race to the bottom, and it either drove them out of the market (TI, Coleco) or nearly bankrupted them (Atari, eventually Commodore). Not one of those players remains in the computer market today.
As it turns out, people with no money make lousy customers, both for your products as well as the products of vendors who develop on your platform.
This premium brand thing is largely overdone. It's a middle income brand. They don't produce yachts. Apple engages in mass market sales to normal people ( in the West). The market is not the same as the sales of BMW - about 50% of the US...
Agreed...the premium brand thing is overdone. I have witness several gearheads genuinely happy with their Android devices. They feel AAPL is overated, and arrogant. SJ did not exude arrogance, Cook absolutely does with his mild mannered "limp" unit approach. What moron lets the stock of most impressive company ever created fall 40% WHILE making the most money in the history of the world? An iWatch and a new "space-ship" building? No wonder Wall St. is taking a humungous bite out of AAPL!!!
Or, Cook is brilliant and will announce a huge buy-back, 4 for 1 split AND keep the dividend at $2+/share!!!
AAPL is very similar to BMW with several different series of products, including some of the most awesome motorcycles ever created. You may have heard BMW say they aren't interested in building "crappy" products, but they certainly cater to middle class westerners as well with high-quality products up and dow the affluency meter.
Saying that AAPL is not interest in building an iPhone that caters to the 700M China Mobile subscribers is idiotic. I have no intentions of buying a BMW 300 series because I already own an M5. But I would buy a 300 series for my daughter, which is much less car and much less expensive.
Right now Cook and Co. (AAPL) has the unique opportunity to not only establish and immensely grow the AAPL computing/communication/entertainment platform throught the world via two words "integrated platform", but they also have the chance to invite guys like me who would like to invest $30-$50k in a stick that rules the world.
Right now though that proposition is like betting on old-school Chicago Bulls to win the championship without Jordon!!!
Come on Cook, are you really going to let the new Galaxy launch go off without a hitch....people really are buying those "crappy" gadgets and yes, it is needlessly cost AAPL market share in terms of new customers to the AAPL computing & communication ecosystem.
Apple needs to be in the market in developing countries because those countries are the future of consumerism. And I wouldn't point to Apples previous actions in not expanding its base as an example of wise management.
the iPhone + will actually be the less expensive model. The screen will be bigger, but therefore lower resolution (less expensive). The entire case will be bigger due to the larger screen, so there will be less need for the extreme miniaturization of the iphone 5 (again, saving money). The iPhone plus will also come in colors to appeal to a younger crowd. It will use the A6x.
The flagship iPhone 5s will keep the black and white colors and promote it's miniaturization as feature, not a bug. It will use the A7 and have a few cutting edge features like fingerprint activation and next-gen camera.
"the China Times report cited an unnamed industry watcher as saying that Apple plans to use Taiwanese chipmaker TSMC's 28nm process to build the cheap iPhone's Snapdragon SoC."
Bad translation? Apple may buy or not Snapdragon SoCs; but for sure they are produced for Qualcomm.
"the China Times report cited an unnamed industry watcher as saying that Apple plans to use Taiwanese chipmaker TSMC's 28nm process to build the cheap iPhone's Snapdragon SoC."
Bad translation? Apple may buy or not Snapdragon SoCs; but for sure they are produced for Qualcomm.
From which end? The China Times' interpretation of an unnamed industry watcher's interpretation of rumors of Apple's potential use of TSMC 28 nm node to make a Qualcomm SoC? Or the language interpretation from Chinese to English?
We've heard many rumors of Apple wanting to used TSMC for fabbing Apple Ax SoCs. Not sure what all this business of Apple using TSMC to manufacture Qualcomm's Snapdragon SoC is all about. Qualcomm has been using TSMC's 28 nm node to manufacture there Krait SoCs (Snapdragon 4 and higher) for almost a year now. The single chip LTE modems for almost 9 months. They don't need to get a foundry for Snapdragon SoCs. All they need to do is send a check to Qualcomm for x million SoC, and they start showing up after x time.
It will have a plastic case, a processor from Qualcomm and a removable, replaceable battery. And a 6" screen with a slide-out physical keyboard. And it will make clacking noises so you can use it like a castanet and dance around with your friends.
It makes no sense for Apple to do a special low cost phone only for emerging markets - the scope for black marketing, etc is too high. Also, I am sure there are enough people in the US who would like a lower cost iPhone.
The biggest risk in making a low cost phone, is that it might cannibalize sales of the high end phones. To avoid this, Apple has some straight forward solutions - make the low cost phone with regular display instead of retina display, make it with 3G instead of LTE, make it with lesser flash memory - upto max of 8GB, and use the previous generation A-series processor. Another thing Apple can do, is to offer the low cost phone in only one color - Red, so that it is instantly obvious that it is a lower cost iPhone. These 5 choices would allow Apple to release very low cost phones, and lowering the risk of cannibalizing their higher end phones. And they can offer lower cost phones, without compromising on their margins.
With these changes, they can probably hit a price point of $250 retail, with 30% margins, and put some serious pricing pressure on Android. At the same time, this phone would not meet the requirements of high end users, and would minimize cannibalization.
This should still be a Glass+Metal high quality device, so that Apple does not compromise on its image.
For those who think it is not worth Apple's while to do this, I think you cannot be more mistaken. If Apple is complacent and allows Android to get a large market share in the cheaper devices, it will be a matter of time before the Android market share becomes more attractive to developers. It is to Apple's advantage to be as aggressive as possible against Android. They did the exact same thing when it came to tablets, by releasing a cheaper iPad Mini - no reason why they should not use the same strategy in smartphones.
So how would Apple actually announce a cheaper iPhone, especially if it wasn't sold in North America (or Europe even)? Would it be part of WWDC or th iPhone 5S keynote? I get why they might have to do something like this but it seems like the least exciting thing ever. And how does Apple do cheap while still retaining decent margins and maintaining the brand image of producing high quality products? Presumably they'd have to compromise on the internals as well as the display, so all that's left really is the design. If they compromise on that too what would make someone want to buy this product. Especially knowing that an Android OEM will probably have something cheaper that's better (of course not making much money, if any, off of it). I think Apple competing in a race to the bottom would be a disaster for them.
i still think they'll be able to come up with a solution that is cheaper but isn't "cheap". iPod nano and shuffle had cheaper price points but they don't come across as "cheap" devices. Same with the iPad mini. What they come up with might not be this plastic phone everyone is expecting.
You are absolutely correct. I can't see BMW or Lexus making a cheaper car, like say a Mini or a Toyota, that would be focused on a cheaper spectrum of the market.
The difference here is that there are many different vihecle platforms. In smartphones there are two. Apples market mover and Ann droid copyist. At the moment there is a too wide gap between apple cheap and ann droid low end. It creates a void which will be filled even if apple doesn't want it to. It will hurt apple more than anybody else if web pages are optimized for Ann Droids instead of iPhones. The less iphones are being sold the less iPads iPods appletvs and macs are being sold not even counting apps and iTunes media sales!
There is no big black hole in car markets that is easy to fill.
"Would somebody please explain to me why Apple needs to increase its share of the market of "people who have no money"?"
Apple is doing well in the USA but some other markets are near vanishing for the iPhone.
Families! The apple ecosystem. What do you think happens if the family has 1 iPhone and several Ann droids?
No ecosystem benefit, no more sales!
Remember that its not always a question of if you have the money. Its a choice how you spend it. Can Apple justify the extra spending on their hardware over competitors. Many think not, hence market share.
And remember, you keep the iphone prices lower on the US market than eg Europe. Do you think people in europe will pay twice the amount that you pay for the same product. No, taxes arent that big.
My initial reaction is that they'd do what they did with the AppleTV. Take dual core chips with 1 faulty core and use that instead as a single core chip.
Families! The apple ecosystem. What do you think happens if the family has 1 iPhone and several Ann droids?
No ecosystem benefit, no more sales!
Remember that its not always a question of if you have the money. Its a choice how you spend it. Can Apple justify the extra spending on their hardware over competitors. Many think not, hence market share.
And remember, you keep the iphone prices lower on the US market than eg Europe. Do you think people in europe will pay twice the amount that you pay for the same product. No, taxes arent that big.
Apple has a couple of ways to address this. A 2 year old phone is free on contract, and presumably, everyone is moving to share plans; and, iPod touch devices are available from $199 to $399. A third way are hand me downs.
Having massive unit share is not a defense against attackers. Nokia had massive unit share and basically was reknown for its capability to ship low end units. Look at where they are now? Blackberry? For a few years, there story to investors was that there was a lot of growth left in low end markets. They are barely surviving.
Arguably, Samsung is the more vulnerable player out there today. All it takes is for the software to be just good enough, a willingness to live on little margin, and for Samsung's brand cycle to go down. The "brand" value will go down, it's inevitable.
Apple has a couple of ways to address this. A 2 year old phone is free on contract, and presumably, everyone is moving to share plans; and, iPod touch devices are available from $199 to $399. A third way are hand me downs.
Having massive unit share is not a defense against attackers. Nokia had massive unit share and basically was reknown for its capability to ship low end units. Look at where they are now? Blackberry? For a few years, there story to investors was that there was a lot of growth left in low end markets. They are barely surviving.
Arguably, Samsung is the more vulnerable player out there today. All it takes is for the software to be just good enough, a willingness to live on little margin, and for Samsung's brand cycle to go down. The "brand" value will go down, it's inevitable.
As usual the arguments are US centric. The developing world - in facts, in lots of Europe - use PAYG.
The 2 year old phone is expensive by the standard of most Android devices. And is two years old.
The 3rd way is not something which affects APples sales, although it helps with installed base.
Comments
Would somebody please explain to me why Apple needs to increase its share of the market of "people who have no money"?
That seems like a really crappy market to be in, frankly.
Back in the days of the home computer wars, Apple wisely stayed out of the cost-cutting fray Jack Tramiel launched with Commodore. Atari, TI, Coleco, even Tandy rushed headlong into the race to the bottom, and it either drove them out of the market (TI, Coleco) or nearly bankrupted them (Atari, eventually Commodore). Not one of those players remains in the computer market today.
As it turns out, people with no money make lousy customers, both for your products as well as the products of vendors who develop on your platform.
Who knew?
Agreed...the premium brand thing is overdone. I have witness several gearheads genuinely happy with their Android devices. They feel AAPL is overated, and arrogant. SJ did not exude arrogance, Cook absolutely does with his mild mannered "limp" unit approach. What moron lets the stock of most impressive company ever created fall 40% WHILE making the most money in the history of the world? An iWatch and a new "space-ship" building? No wonder Wall St. is taking a humungous bite out of AAPL!!!
Or, Cook is brilliant and will announce a huge buy-back, 4 for 1 split AND keep the dividend at $2+/share!!!
AAPL is very similar to BMW with several different series of products, including some of the most awesome motorcycles ever created. You may have heard BMW say they aren't interested in building "crappy" products, but they certainly cater to middle class westerners as well with high-quality products up and dow the affluency meter.
Saying that AAPL is not interest in building an iPhone that caters to the 700M China Mobile subscribers is idiotic. I have no intentions of buying a BMW 300 series because I already own an M5. But I would buy a 300 series for my daughter, which is much less car and much less expensive.
Right now Cook and Co. (AAPL) has the unique opportunity to not only establish and immensely grow the AAPL computing/communication/entertainment platform throught the world via two words "integrated platform", but they also have the chance to invite guys like me who would like to invest $30-$50k in a stick that rules the world.
Right now though that proposition is like betting on old-school Chicago Bulls to win the championship without Jordon!!!
Come on Cook, are you really going to let the new Galaxy launch go off without a hitch....people really are buying those "crappy" gadgets and yes, it is needlessly cost AAPL market share in terms of new customers to the AAPL computing & communication ecosystem.
Apple needs to be in the market in developing countries because those countries are the future of consumerism. And I wouldn't point to Apples previous actions in not expanding its base as an example of wise management.
Here's my theory:
the iPhone + will actually be the less expensive model. The screen will be bigger, but therefore lower resolution (less expensive). The entire case will be bigger due to the larger screen, so there will be less need for the extreme miniaturization of the iphone 5 (again, saving money). The iPhone plus will also come in colors to appeal to a younger crowd. It will use the A6x.
The flagship iPhone 5s will keep the black and white colors and promote it's miniaturization as feature, not a bug. It will use the A7 and have a few cutting edge features like fingerprint activation and next-gen camera.
"the China Times report cited an unnamed industry watcher as saying that Apple plans to use Taiwanese chipmaker TSMC's 28nm process to build the cheap iPhone's Snapdragon SoC."
Bad translation? Apple may buy or not Snapdragon SoCs; but for sure they are produced for Qualcomm.
Quote:
Originally Posted by smalM
"the China Times report cited an unnamed industry watcher as saying that Apple plans to use Taiwanese chipmaker TSMC's 28nm process to build the cheap iPhone's Snapdragon SoC."
Bad translation? Apple may buy or not Snapdragon SoCs; but for sure they are produced for Qualcomm.
From which end? The China Times' interpretation of an unnamed industry watcher's interpretation of rumors of Apple's potential use of TSMC 28 nm node to make a Qualcomm SoC? Or the language interpretation from Chinese to English?
We've heard many rumors of Apple wanting to used TSMC for fabbing Apple Ax SoCs. Not sure what all this business of Apple using TSMC to manufacture Qualcomm's Snapdragon SoC is all about. Qualcomm has been using TSMC's 28 nm node to manufacture there Krait SoCs (Snapdragon 4 and higher) for almost a year now. The single chip LTE modems for almost 9 months. They don't need to get a foundry for Snapdragon SoCs. All they need to do is send a check to Qualcomm for x million SoC, and they start showing up after x time.
Quote:
Originally Posted by msimpson
It will have a plastic case, a processor from Qualcomm and a removable, replaceable battery. And a 6" screen with a slide-out physical keyboard. And it will make clacking noises so you can use it like a castanet and dance around with your friends.
What? No stylus?
It makes no sense for Apple to do a special low cost phone only for emerging markets - the scope for black marketing, etc is too high. Also, I am sure there are enough people in the US who would like a lower cost iPhone.
The biggest risk in making a low cost phone, is that it might cannibalize sales of the high end phones. To avoid this, Apple has some straight forward solutions - make the low cost phone with regular display instead of retina display, make it with 3G instead of LTE, make it with lesser flash memory - upto max of 8GB, and use the previous generation A-series processor. Another thing Apple can do, is to offer the low cost phone in only one color - Red, so that it is instantly obvious that it is a lower cost iPhone. These 5 choices would allow Apple to release very low cost phones, and lowering the risk of cannibalizing their higher end phones. And they can offer lower cost phones, without compromising on their margins.
With these changes, they can probably hit a price point of $250 retail, with 30% margins, and put some serious pricing pressure on Android. At the same time, this phone would not meet the requirements of high end users, and would minimize cannibalization.
This should still be a Glass+Metal high quality device, so that Apple does not compromise on its image.
For those who think it is not worth Apple's while to do this, I think you cannot be more mistaken. If Apple is complacent and allows Android to get a large market share in the cheaper devices, it will be a matter of time before the Android market share becomes more attractive to developers. It is to Apple's advantage to be as aggressive as possible against Android. They did the exact same thing when it came to tablets, by releasing a cheaper iPad Mini - no reason why they should not use the same strategy in smartphones.
"Would somebody please explain to me why Apple needs to increase its share of the market of "people who have no money"?"
Apple is doing well in the USA but some other markets are near vanishing for the iPhone.
So how would Apple actually announce a cheaper iPhone, especially if it wasn't sold in North America (or Europe even)? Would it be part of WWDC or th iPhone 5S keynote? I get why they might have to do something like this but it seems like the least exciting thing ever. And how does Apple do cheap while still retaining decent margins and maintaining the brand image of producing high quality products? Presumably they'd have to compromise on the internals as well as the display, so all that's left really is the design. If they compromise on that too what would make someone want to buy this product. Especially knowing that an Android OEM will probably have something cheaper that's better (of course not making much money, if any, off of it). I think Apple competing in a race to the bottom would be a disaster for them.
i still think they'll be able to come up with a solution that is cheaper but isn't "cheap". iPod nano and shuffle had cheaper price points but they don't come across as "cheap" devices. Same with the iPad mini. What they come up with might not be this plastic phone everyone is expecting.
There is no big black hole in car markets that is easy to fill.
Families! The apple ecosystem. What do you think happens if the family has 1 iPhone and several Ann droids?
No ecosystem benefit, no more sales!
Remember that its not always a question of if you have the money. Its a choice how you spend it. Can Apple justify the extra spending on their hardware over competitors. Many think not, hence market share.
And remember, you keep the iphone prices lower on the US market than eg Europe. Do you think people in europe will pay twice the amount that you pay for the same product. No, taxes arent that big.
Can't see it myself.
My initial reaction is that they'd do what they did with the AppleTV. Take dual core chips with 1 faulty core and use that instead as a single core chip.
Quote:
Originally Posted by aBeliefSystem
"Would somebody please explain to me why Apple needs to increase its share of the market of "people who have no money"?"
Apple is doing well in the USA but some other markets are near vanishing for the iPhone.
You actually didn't answer the question.
Quote:
Originally Posted by habi
Families! The apple ecosystem. What do you think happens if the family has 1 iPhone and several Ann droids?
No ecosystem benefit, no more sales!
Remember that its not always a question of if you have the money. Its a choice how you spend it. Can Apple justify the extra spending on their hardware over competitors. Many think not, hence market share.
And remember, you keep the iphone prices lower on the US market than eg Europe. Do you think people in europe will pay twice the amount that you pay for the same product. No, taxes arent that big.
Apple has a couple of ways to address this. A 2 year old phone is free on contract, and presumably, everyone is moving to share plans; and, iPod touch devices are available from $199 to $399. A third way are hand me downs.
Having massive unit share is not a defense against attackers. Nokia had massive unit share and basically was reknown for its capability to ship low end units. Look at where they are now? Blackberry? For a few years, there story to investors was that there was a lot of growth left in low end markets. They are barely surviving.
Arguably, Samsung is the more vulnerable player out there today. All it takes is for the software to be just good enough, a willingness to live on little margin, and for Samsung's brand cycle to go down. The "brand" value will go down, it's inevitable.
Quote:
Originally Posted by THT
Apple has a couple of ways to address this. A 2 year old phone is free on contract, and presumably, everyone is moving to share plans; and, iPod touch devices are available from $199 to $399. A third way are hand me downs.
Having massive unit share is not a defense against attackers. Nokia had massive unit share and basically was reknown for its capability to ship low end units. Look at where they are now? Blackberry? For a few years, there story to investors was that there was a lot of growth left in low end markets. They are barely surviving.
Arguably, Samsung is the more vulnerable player out there today. All it takes is for the software to be just good enough, a willingness to live on little margin, and for Samsung's brand cycle to go down. The "brand" value will go down, it's inevitable.
As usual the arguments are US centric. The developing world - in facts, in lots of Europe - use PAYG.
The 2 year old phone is expensive by the standard of most Android devices. And is two years old.
The 3rd way is not something which affects APples sales, although it helps with installed base.