I was at AT&T yesterday upgrading my mom from a feature phone to the iPhone 5 and I witnessed this in action. A middle-aged woman walked in the door and even though there was a sea of Android devices that were bigger, newer, and bidding for her attention, she was on a mission. She bought the iPhone 4 with 8GB; just what her son wanted. Apple can take this market if it wants; it remains to be seen whether they want to enter it seriously or not. To Author: Great points, by the way, in every respect
I'll bet there were certain apps the son wanted, hence the value of the Apple ecosystem. Apple iPhones have a certain cachét also. Losers usually carry wannabe iPhones and the cool kids carry the real thing.
You don't know what you are talking about. There are some excellent margins being made in the server market. Look at Cisco's UCS. It isnt cheap and they came out of no where and disrupted the server market in a big way.
UCS, VBlock etc... are not typical servers. They are very high end packages and super expensive, and they too are designed to run VMWare.
I would not say that they came out of nowhere and disrupt the server market.
Cisco, EMC and VMWare rule the high end infrastructure world so what ever the come out with is highly regarded and when they team up to come out with something like VBlock, they know that there is a need for it and how to sell it, so they make money. If company XYZ came out with an equivalent box, it would not be as successful.
Great article, but I have some problems with parts of it.
When Daniel describes Apple's "low end disruption" of the market, I think he's mostly dreaming or twisting things around to fit his own opinion. Apple rarely if ever engages in classic "low end" market disruption. Specifically, when he describes Apple's inclusion of the camera in the iPhone as low end disruption of Flip's camera market he's really got it backwards.
"Disruption" is a strategy and by definition, intentional. The Flip camera was itself, a classic low end disruption of the camera market. One simple, cheap, and easy to use device took the place of what was at the time many hundreds of dollars worth of more complicated equipment that was actually quite difficult to use. It was a purposeful act to try and capture a huge segment of the digital video camera market and it worked.
I generally agree with this post. However, with regards to this second paragraph, you overlooked the possibility of collateral disruption and that's what I believe Daniel was pointing at. While "intentionally" building a superior camera in a phone, Apple disrupted the dedicated camera market segment occupied by Flip's camera. Which may not have been an intentional target. Just as Apple may not have intended to disrupt the "point of sale" equipment market, the capability of the iPhone and iPad to function in that capacity has done so.
What I find so amazing to me about the Apple iDevices is how they have became the platform for creating solutions to categories that I doubt Apple set out to affect. If Apple were to create the right kind of low-cost iPhone, and they start showing up inside radio controlled model aircraft, that doesn't mean, QED, they set out to intentionally disrupt products in that market.
Reality check here too -- iOS has never held a market share lead in the global phone industry, especially this mythical "huge lead" that the lazy tech press keeps ascribing to Apple. The meme of the moment is that Apple is doomed -- never mind the actual market share, unit sales, and revenue data -- the tech press can only perpetuate this story by making crap up. The fact of the matter is that iOS has consistently held either the #2 or #3 market position for at least the past 3+ years, yet controls 2/3 of the smartphone industry profits. Android's unit sales ascent has been at the expense of Symbian and Blackberry. Stagnant? Whatever. I just want my devices to perform the functions that I use well. I prefer quality over quantity. Useful over novel. I don't need a laundry list of new half-baked checkbox features that I will never use. New or different is not the same thing as better.
Oh yeah? Check again...
Who has the highest profit share by far in the smart phone industry?
Who has nine straight JD Powers awards for customer satisfaction?
Really? No AppleTV, No iTunes, No iPhoto, no Airplay, no iTunes Match, no cross-product compatibility (e.g., keeping my music files synced perfectly between all my iPads, iPhones, iPods, Macs), no GarageBand, no FaceTime, no Find My iPhone...... you just glossed over all else that he mentioned?
I am guessing you probably were not much of an Apple user to begin with.
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
I guess that it would take a long time if they used similar search algorithms as google to scan and index the entire Internet. I am no search expert but Siri appears to use different knowledge base sources that have already been developed and can be improved separately. Apple hired William Stasior of amazon A9 fame and Altavista fame to manage Siri last year but they had been building Siri search well before that. Lets see what they come up with. The Altavista was the Google of its time period. Then Google took over. Perhaps Stasior can come back with Siri.
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Who has the highest profit share by far in the smart phone industry?
Who has nine straight JD Powers awards for customer satisfaction?
JD Power awards should be taken with a grain of salt -- Apple's products are the most expensive, so it is harder to be dissatisfied. I suspect that Apple wins that comparison anyway, but the margin is not quite as big as it seems.
Wow this has been the best article Ive read in a long time and exactly what I've been telling my android friends in terms of value, perceived value, market positioning and marketing. Apple is a just amazing at how they do this stuff I mean if you are good at chess or a coach and your work is in knowing how to position your players (products) then you can understand why apple is highly admired. And yes an Apple search engine is much needed but they are going to have to catch the next wave on this one.
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
I find iTunes to be superior to those me too, half-baked services. iTunes works as advertised. Those others make you jump through hoops to use them.
What lock in are you referring to? I can use my mp3s with any of these services.
The market dynamics of Servers is vastly different since as others have stated. It's becoming more and more 'commoditized' with OS's running in a virtualized layer. Apple's xServe brought no competitive advantages and being tied to Apple's OSX Server was a major drawback for Window-centric IT shops. Perhaps if VMWare supported it with Windows and Linux as host OS's it might have had a chance. Apple was wise to kill it (along with their RAID product) and focus on their smartphone and tablet projects. IMHO, Apple is at it's best when it IS disrupting markets and not chasing the market with low-cost knockoffs.
The iOS vs. Android competition reminds me of the MacOS vs. Windows battles of the late '80's, early '90's. Apple tried to compete, with Microsoft, by turning out 'low-end' Macs which damaged their brand and did nothing to stop the Windows juggernaut. I suspect Apple has learned a thing, or two since then, but as there is no Steve Jobs around to rescue Apple this time lets hope they get it right...
2 - Android's other advantages are: Distribution - here, I don't see Apple catching up in markets like SE Asia where phones are sold in the majority by little tech shops in the malls. None of those little shops carry iPhones. Most never carried iPods either. Apple doesn't seem to have a good model to deal with those mom and pop operations. The effect is that in SE Asia for every iPhone on display, there are about 100 Android phones on display. That's got to have an effect on sales. iPhone success so far has been despite distribution issues.
Even here in the US, where there's a "mobile" shop on every other corner, you don't see the iPhone either... These shops usually cater to non-contract phones.
But, I think when he mentioned distribution he was referring to carriers, not necessarily retail shops. The iPhone is currently offered by half the number of carriers Android devices are. And of course the biggest carrier in the world, China Mobile, has yet to offer an iPhone, although talks are supposedly underway.
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Don't bet the farm on that.
Apple Maps and Siri are doing great.
If William Stasior's team can develop a good search engine with integrated advertising, then Apple can remove Google as the default search engine on iOS and Mac OS X.
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
iTunes is far superior to those other offerings. You're not looking hard enough, or you're fine with settling for what those other lack.
The thing most people miss with Apple's services is... Apple doesn't create and build services for the public at large, they offer these services to their customers - meaning you have to buy an Apple product to use that service. This is the same argument that people used to make about not being able to install Mac OS X on a generic PC... That argument is quickly shot down because Apple doesn't sell their operating system to the public at large, they sell their operating system to their existing customers - meaning you have to buy an Apple product. You can't compare Windows and Mac OS X just as you can't compare services like Dropbox and iCloud. Windows and Dropbox ARE the products. Mac OS X and iCloud are features of a product. Windows and Dropbox are of course going to be in as many places as possible, if not, those companies aren't making money. On the other hand... Apple makes money selling devices and if they can add unique features to those devices, then they'll have a leg up on their competition.
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Now, I haven't watched TV in a long time, but not too long ago people hated commercials and advertising. And yet here we are living in a world where the company with the largest share of the mobile phone OS market is in fact an advertising company. And to even further baffle my mind, here is someone excited about that! However, I guess without advertising the free-loaders wouldn't have anything to do on the Internet.
Gee, I sure hope Apple DOESN'T want to duplicate that!
So you're saying Apple's NEW service sucks, even though it is NEW, you agree it takes a long time to build up infrastructure. But you're not going to give Apple time and just assume it won't EVER get any better just because some of those services currently don't live up to YOUR expectations?
Apple has its own search engine - Spotlight. Of course, it is not a search engine for the WWW.
Apple's market disruption savvy does not come from its research teams. If you were right, their research teams would go to the marketing team and say, "We have developed xyz. Which relevant markets would be interesting targets?" Instead, it's the other way around; Apple's (rather small and focused) marketing team goes to the engineering team and says, "We want you to make xyz. What kind of cool technology can you develop to make this a unique Apple experience?"
Quote:
I loved Xserve - an exemplar of clean Apple design, but your pricing equation is off. I don't know where you were buying your Windows servers but the ones we have been getting from HP and Dell in the last 20 years have NEVER been twice as expensive as Xserve, let alone Xserve with drives replaced by more expensive ones.
We miss Xserve because it always looked so cool next to the other racks.
It's Xserve, btw, not xServe, btw (shows how much you know).
Well spotted. He also is an expert in the field of Chemistry.
If you only bought hardware, that might be relevant. When you add in software, a Windows server is far more expensive. Look at the comparison in tihs article.
So the fact that I miscapitalized it somehow eliminates the ones that I've bought?
Comments
Quote:
Originally Posted by hill60
I'm in Australia the telecoms basically operate the same as AT&T, Verizon, etc, we are NOT part of the USA.
Is Android phone market share in Australia as big as in the third world nations or as in the US? If it is later then my point is proved.
Quote:
Originally Posted by swaylon
I was at AT&T yesterday upgrading my mom from a feature phone to the iPhone 5 and I witnessed this in action. A middle-aged woman walked in the door and even though there was a sea of Android devices that were bigger, newer, and bidding for her attention, she was on a mission. She bought the iPhone 4 with 8GB; just what her son wanted. Apple can take this market if it wants; it remains to be seen whether they want to enter it seriously or not. To Author: Great points, by the way, in every respect
I'll bet there were certain apps the son wanted, hence the value of the Apple ecosystem. Apple iPhones have a certain cachét also. Losers usually carry wannabe iPhones and the cool kids carry the real thing.
Quote:
Originally Posted by Phone-UI-Guy
You don't know what you are talking about. There are some excellent margins being made in the server market. Look at Cisco's UCS. It isnt cheap and they came out of no where and disrupted the server market in a big way.
http://www.cisco.com/en/US/products/ps10265/index.html
UCS, VBlock etc... are not typical servers. They are very high end packages and super expensive, and they too are designed to run VMWare.
I would not say that they came out of nowhere and disrupt the server market.
Cisco, EMC and VMWare rule the high end infrastructure world so what ever the come out with is highly regarded and when they team up to come out with something like VBlock, they know that there is a need for it and how to sell it, so they make money. If company XYZ came out with an equivalent box, it would not be as successful.
Quote:
Originally Posted by Gazoobee
Great article, but I have some problems with parts of it.
When Daniel describes Apple's "low end disruption" of the market, I think he's mostly dreaming or twisting things around to fit his own opinion. Apple rarely if ever engages in classic "low end" market disruption. Specifically, when he describes Apple's inclusion of the camera in the iPhone as low end disruption of Flip's camera market he's really got it backwards.
"Disruption" is a strategy and by definition, intentional. The Flip camera was itself, a classic low end disruption of the camera market. One simple, cheap, and easy to use device took the place of what was at the time many hundreds of dollars worth of more complicated equipment that was actually quite difficult to use. It was a purposeful act to try and capture a huge segment of the digital video camera market and it worked.
I generally agree with this post. However, with regards to this second paragraph, you overlooked the possibility of collateral disruption and that's what I believe Daniel was pointing at. While "intentionally" building a superior camera in a phone, Apple disrupted the dedicated camera market segment occupied by Flip's camera. Which may not have been an intentional target. Just as Apple may not have intended to disrupt the "point of sale" equipment market, the capability of the iPhone and iPad to function in that capacity has done so.
What I find so amazing to me about the Apple iDevices is how they have became the platform for creating solutions to categories that I doubt Apple set out to affect. If Apple were to create the right kind of low-cost iPhone, and they start showing up inside radio controlled model aircraft, that doesn't mean, QED, they set out to intentionally disrupt products in that market.
Quote:
Originally Posted by Woochifer
Reality check here too -- iOS has never held a market share lead in the global phone industry, especially this mythical "huge lead" that the lazy tech press keeps ascribing to Apple. The meme of the moment is that Apple is doomed -- never mind the actual market share, unit sales, and revenue data -- the tech press can only perpetuate this story by making crap up. The fact of the matter is that iOS has consistently held either the #2 or #3 market position for at least the past 3+ years, yet controls 2/3 of the smartphone industry profits. Android's unit sales ascent has been at the expense of Symbian and Blackberry. Stagnant? Whatever. I just want my devices to perform the functions that I use well. I prefer quality over quantity. Useful over novel. I don't need a laundry list of new half-baked checkbox features that I will never use. New or different is not the same thing as better.
Oh yeah? Check again...
Who has the highest profit share by far in the smart phone industry?
Who has nine straight JD Powers awards for customer satisfaction?
Quote:
Originally Posted by anantksundaram
Really? No AppleTV, No iTunes, No iPhoto, no Airplay, no iTunes Match, no cross-product compatibility (e.g., keeping my music files synced perfectly between all my iPads, iPhones, iPods, Macs), no GarageBand, no FaceTime, no Find My iPhone...... you just glossed over all else that he mentioned?
I am guessing you probably were not much of an Apple user to begin with.
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
Quote:
Originally Posted by AppleSauce007
I guess that it would take a long time if they used similar search algorithms as google to scan and index the entire Internet. I am no search expert but Siri appears to use different knowledge base sources that have already been developed and can be improved separately. Apple hired William Stasior of amazon A9 fame and Altavista fame to manage Siri last year but they had been building Siri search well before that. Lets see what they come up with. The Altavista was the Google of its time period. Then Google took over. Perhaps Stasior can come back with Siri.
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Quote:
Originally Posted by AppleSauce007
Oh yeah? Check again...
Who has the highest profit share by far in the smart phone industry?
Who has nine straight JD Powers awards for customer satisfaction?
JD Power awards should be taken with a grain of salt -- Apple's products are the most expensive, so it is harder to be dissatisfied. I suspect that Apple wins that comparison anyway, but the margin is not quite as big as it seems.
Quote:
Originally Posted by SolipsismX
You may want to actually look into what Apple's ecosystem can actually offer users...
http://www.apple.com/support/systemstatus/
One login to rule them all
One login to find them
One login to bring them all
And in the iCloud bind them
Is this so different from Google's ecosystem?
Quote:
Originally Posted by igriv
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
I find iTunes to be superior to those me too, half-baked services. iTunes works as advertised. Those others make you jump through hoops to use them.
What lock in are you referring to? I can use my mp3s with any of these services.
The iOS vs. Android competition reminds me of the MacOS vs. Windows battles of the late '80's, early '90's. Apple tried to compete, with Microsoft, by turning out 'low-end' Macs which damaged their brand and did nothing to stop the Windows juggernaut. I suspect Apple has learned a thing, or two since then, but as there is no Steve Jobs around to rescue Apple this time lets hope they get it right...
Quote:
Originally Posted by orthorim
2 - Android's other advantages are: Distribution - here, I don't see Apple catching up in markets like SE Asia where phones are sold in the majority by little tech shops in the malls. None of those little shops carry iPhones. Most never carried iPods either. Apple doesn't seem to have a good model to deal with those mom and pop operations. The effect is that in SE Asia for every iPhone on display, there are about 100 Android phones on display. That's got to have an effect on sales. iPhone success so far has been despite distribution issues.
Even here in the US, where there's a "mobile" shop on every other corner, you don't see the iPhone either... These shops usually cater to non-contract phones.
But, I think when he mentioned distribution he was referring to carriers, not necessarily retail shops. The iPhone is currently offered by half the number of carriers Android devices are. And of course the biggest carrier in the world, China Mobile, has yet to offer an iPhone, although talks are supposedly underway.
Quote:
Originally Posted by igriv
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Don't bet the farm on that.
Apple Maps and Siri are doing great.
If William Stasior's team can develop a good search engine with integrated advertising, then Apple can remove Google as the default search engine on iOS and Mac OS X.
Quote:
Originally Posted by igriv
iTunes is not superior to the corresponding Amazon product, nor to Google music, and both of which offer storage of your own content a la iTunes match. With google (or dropbox, or amazon) you have complete cross-platform compatibility. (and yes, I have several generations of apple hardware of all kinds, like it, but really resent Apple's attempts at lockin).
iTunes is far superior to those other offerings. You're not looking hard enough, or you're fine with settling for what those other lack.
The thing most people miss with Apple's services is... Apple doesn't create and build services for the public at large, they offer these services to their customers - meaning you have to buy an Apple product to use that service. This is the same argument that people used to make about not being able to install Mac OS X on a generic PC... That argument is quickly shot down because Apple doesn't sell their operating system to the public at large, they sell their operating system to their existing customers - meaning you have to buy an Apple product. You can't compare Windows and Mac OS X just as you can't compare services like Dropbox and iCloud. Windows and Dropbox ARE the products. Mac OS X and iCloud are features of a product. Windows and Dropbox are of course going to be in as many places as possible, if not, those companies aren't making money. On the other hand... Apple makes money selling devices and if they can add unique features to those devices, then they'll have a leg up on their competition.
Quote:
Originally Posted by igriv
Search algorithms are important, but Google also has AdSense and, even more importantly, the best infrastructure in the world. It would take Apple a LONG time to duplicate this, and given the lousy implementation of their current cloud services, the sun might well go nova before then.
Now, I haven't watched TV in a long time, but not too long ago people hated commercials and advertising. And yet here we are living in a world where the company with the largest share of the mobile phone OS market is in fact an advertising company. And to even further baffle my mind, here is someone excited about that! However, I guess without advertising the free-loaders wouldn't have anything to do on the Internet.
Gee, I sure hope Apple DOESN'T want to duplicate that!
So you're saying Apple's NEW service sucks, even though it is NEW, you agree it takes a long time to build up infrastructure. But you're not going to give Apple time and just assume it won't EVER get any better just because some of those services currently don't live up to YOUR expectations?
The comparison is miscalculated. You could get Windows Small Business Server OEM with Exchange and SharePoint for as low as $400.
DED has been noted before, but he seems to have forgotten about it. For SMBs Dell is less expensive than Xserve.