I'd be curious to get some figures on all the lost revenue for Apple because iMessage isn't cross platform. Same for iTunes. If someone can show data that indicates Apple would make decent money off these things going cross platform then I'd support it. How many Android users would actually buy content from iTunes over Google Play? Or use iMessage over an existing service?
With 40% margins, that's $400m net income in 2015. If it doesn't grow, that revenue keeps coming in forever.
To pay off $19b, it would have to run like that for about 50 years ...
There’s a slight problem with your analysis: you’re ignoring something as basic as time value of money.
$19B today is nowhere near equal to ~50 years of $400M. At a growth-adjusted discount rate of, say, 10% (which is quite generous), basic arithmetic shows us that even forever won’t get us anywhere close. In fact, it’ll never get past $4B in value today (present value = 400M/.1 = 4B; that is just the sum of an infinite series).
Except for Skype, Facebooks current messenger, Viber, WeChat, Nimbuzz, plus don't Google and Yahoo also have cross platform alternatives. Twitter isn't far off being comparable either.
I can Google too, but the point is of course that WhatsApp is a text service that replaces SMS for free and does only that.
Note that it is tied to an existing mobile number, exactly the same as SMS (and that it's very easy to use because it uses your address book in a smart way).
Apples iMessages is almost identical in usage (and interface) and that implementation makes it so successful and unique.
So Apple has a chance to replace this service with iMessage when it creates an android client and by doing that destroying WhatsApp and seriously damage Facebook and improving the iOS user experience at the same time.
Looks like win win win to me.
Your wrong, in Europe everyone was paying for SMS and it was extremely popular. This changed with the introduction of iMessage and WhatsApp (and WhatsApp gets most of the credits because android phones are a large majority over here).
Doubt Apple will want anything to do with developing and supporting an Android app. You get the distinct impression that they only made their Windows apps against much kicking and screaming.
What an arrogant statement to make. Who are you to tell your friends which device to use? There is a freedom of choice in democratic countries. My family has mostly Apple devices, too. But others may make different choices. Either because they cannot afford buying everything Apple for their families or because they don't want to. Should I unfriend them for that? Or be the guy who tries to force them to buy Apples stuff in order to communicate with me? Do I get paid by Apple? Not a dime. I pay for the products they sell me. That's it.
It costs very little (compared to Apples operational costs) to make something like iMessage universally available. It is probably too late to gain any significant market share anyways. But it would also be a good service to Apple customers to make iMessage platform-agnostic. The value of a communication tool increases with the number of people you can reach. Limiting yourself or customers NEVER adds value. The so-called free-loaders (Android smartphones and contracts do still cost money as you should know) don't get subsidized by opening up to them. They already have other choices. It simply helps increasing the value of said service to those who bought Apples devices. That should be worth a couple of $$$ to Apple.
Doubt Apple will want anything to do with developing and supporting an Android app. You get the distinct impression that they only made their Windows apps against much kicking and screaming.
I wouldn't like to develop for Android either, but I would if it made sense.
And it does makes sense now, so I don't doubt it for a minute.
Your wrong, in Europe everyone was paying for SMS and it was extremely popular. This changed with the introduction of iMessage and WhatsApp (and WhatsApp gets most of the credits because android phones are a large majority over here).
What an arrogant statement to make. Who are you to tell your friends which device to use? There is a freedom of choice in democratic countries. My family has mostly Apple devices, too. But others may make different choices. Either because they cannot afford buying everything Apple for their families or because they don't want to. Should I unfriend them for that? Or be the guy who tries to force them to buy Apples stuff in order to communicate with me? Do I get paid by Apple? Not a dime. I pay for the products they sell me. That's it.
It costs very little (compared to Apples operational costs) to make something like iMessage universally available. It is probably too late to gain any significant market share anyways. But it would also be a good service to Apple customers to make iMessage platform-agnostic. The value of a communication tool increases with the number of people you can reach. Limiting yourself or customers NEVER adds value. The so-called free-loaders (Android smartphones and contracts do still cost money as you should know) don't get subsidized by opening up to them. They already have other choices. It simply helps increasing the value of said service to those who bought Apples devices. That should be worth a couple of $$$ to Apple.
I see no problem with making suggestions to people. I recently made a suggestion for the WinPC vendors I think are best. I also told them that if they get a new WinPC instead of buying a Mac that I would no longer fix their machines. Even though I'm happy to assist others my time has my limits and therefore has value.
Once iMessage officially arrived and most everyone I knew was on the latest version of iOS I sent out an email stating that I was killing my SMS. If they are sent I wouldn't have received them. I basically said I won't read nor reply to your SMS messages so either use iMessages, email or call. That saved me quite a bit of money per month for a service I feel is
I think I've heard jungmark make similar comments over the years so my question to you is why can't he choose to not engage in group chat if it requires him to install yet another app when he's happy with iMessage?
Is that anymore worse than iTunes for Windows? How many millions upon millions less devices would've Apple sold if there wasn't iTunes for Windows?
It's a lot worse. Apple made iTunes for Windows so it could sell iPods, and then later iPhones and iPads. I don't see any argument that would help sell iDevices if they made iMessage for Android. I'd argue that moving iOS apps and services to other platforms just dilutes iOS which in turn can make it easier for people to move to a different platform because then a single HW feature or spec can then be the decider.
It makes Microsoft's purchase of Skype look really cheap in comparison and everyone thought that was expensive!
It's not about the functionality though, its about the users and them actually using the service. To question value you also have to look at how much the SMS market is worth, as a strong competitor to it, that's where its potential value is going to come from.
Yes, to someone who has no one, I can see the value in having many. However, for Facebook, launching their own and gaining quick adoption would be easy, and far, far cheaper than this acquisition.
Is that anymore worse than iTunes for Windows? How many millions upon millions less devices would've Apple sold if there wasn't iTunes for Windows?
It's a lot worse. Apple made iTunes for Windows so it could sell iPods, and then later iPhones and iPads. I don't see any argument that would help sell iDevices if they made iMessage for Android. I'd argue that moving iOS apps and services to other platforms just dilutes iOS which in turn can make it easier for people to move to a different platform because then a single HW feature or spec can then be the decider.
I am with dasanman69 and knowitall (ugh) on this one.
Just as it has with AppleTV, iPad, iPod, iPhone, iTunes, and Safari, it’s way past time for Apple to make its communication/networking offerings – e.g., FaceTime, iMessages, iCloud – platform-agnostic. Such products and services have even more value when users, especially Apple users, can communicate and network with more, rather then fewer, people. It's simply a question of positive network externalities.
Arguments to the contrary are, frankly, knee-jerk throwbacks, I am afraid.
Comments
So if using SMS is 'just fine' why create iMessage? Why are all these SMS alternatives so popular?
You must recall that before iMessage came along, Americans were paying per text message. Apple took that annoyance off the table for iOS users.
With 40% margins, that's $400m net income in 2015. If it doesn't grow, that revenue keeps coming in forever.
To pay off $19b, it would have to run like that for about 50 years ...
There’s a slight problem with your analysis: you’re ignoring something as basic as time value of money.
$19B today is nowhere near equal to ~50 years of $400M. At a growth-adjusted discount rate of, say, 10% (which is quite generous), basic arithmetic shows us that even forever won’t get us anywhere close. In fact, it’ll never get past $4B in value today (present value = 400M/.1 = 4B; that is just the sum of an infinite series).
PS: I am moving on with this, at this point....
Cite?
http://www.telecoms.com/212062/global-sms-revenue-declines-for-first-time/
4th paragraph "In 2014, Deloitte expects operators to generate more than £60bn from SMS services in 2014" and it's an article on revenue declining.
Thank you.
Very few people were paying per text message.
I can Google too, but the point is of course that WhatsApp is a text service that replaces SMS for free and does only that.
Note that it is tied to an existing mobile number, exactly the same as SMS (and that it's very easy to use because it uses your address book in a smart way).
Apples iMessages is almost identical in usage (and interface) and that implementation makes it so successful and unique.
So Apple has a chance to replace this service with iMessage when it creates an android client and by doing that destroying WhatsApp and seriously damage Facebook and improving the iOS user experience at the same time.
Looks like win win win to me.
Your wrong, in Europe everyone was paying for SMS and it was extremely popular. This changed with the introduction of iMessage and WhatsApp (and WhatsApp gets most of the credits because android phones are a large majority over here).
Exactly!
I wouldn't like to develop for Android either, but I would if it made sense.
And it does makes sense now, so I don't doubt it for a minute.
The OP said Americans.
I see no problem with making suggestions to people. I recently made a suggestion for the WinPC vendors I think are best. I also told them that if they get a new WinPC instead of buying a Mac that I would no longer fix their machines. Even though I'm happy to assist others my time has my limits and therefore has value.
Once iMessage officially arrived and most everyone I knew was on the latest version of iOS I sent out an email stating that I was killing my SMS. If they are sent I wouldn't have received them. I basically said I won't read nor reply to your SMS messages so either use iMessages, email or call. That saved me quite a bit of money per month for a service I feel is
I think I've heard jungmark make similar comments over the years so my question to you is why can't he choose to not engage in group chat if it requires him to install yet another app when he's happy with iMessage?
Why does it make sense for Apple?
Because it enhances the UX, sheesh.
But it will still be on Android.
Is that anymore worse than iTunes for Windows? How many millions upon millions less devices would've Apple sold if there wasn't iTunes for Windows?
It's a lot worse. Apple made iTunes for Windows so it could sell iPods, and then later iPhones and iPads. I don't see any argument that would help sell iDevices if they made iMessage for Android. I'd argue that moving iOS apps and services to other platforms just dilutes iOS which in turn can make it easier for people to move to a different platform because then a single HW feature or spec can then be the decider.
It makes Microsoft's purchase of Skype look really cheap in comparison and everyone thought that was expensive!
It's not about the functionality though, its about the users and them actually using the service. To question value you also have to look at how much the SMS market is worth, as a strong competitor to it, that's where its potential value is going to come from.
Yes, to someone who has no one, I can see the value in having many. However, for Facebook, launching their own and gaining quick adoption would be easy, and far, far cheaper than this acquisition.
Is that anymore worse than iTunes for Windows? How many millions upon millions less devices would've Apple sold if there wasn't iTunes for Windows?
It's a lot worse. Apple made iTunes for Windows so it could sell iPods, and then later iPhones and iPads. I don't see any argument that would help sell iDevices if they made iMessage for Android. I'd argue that moving iOS apps and services to other platforms just dilutes iOS which in turn can make it easier for people to move to a different platform because then a single HW feature or spec can then be the decider.
I am with dasanman69 and knowitall (ugh) on this one.
Just as it has with AppleTV, iPad, iPod, iPhone, iTunes, and Safari, it’s way past time for Apple to make its communication/networking offerings – e.g., FaceTime, iMessages, iCloud – platform-agnostic. Such products and services have even more value when users, especially Apple users, can communicate and network with more, rather then fewer, people. It's simply a question of positive network externalities.
Arguments to the contrary are, frankly, knee-jerk throwbacks, I am afraid.
(Btw, what do you mean by ‘dilutes’?)
(Edited)