Well. I think you are mixing things up a bit. Safari, Music, etc. Those are apps that add value to the iOS platform as they are. iMessage is different. In communication cross-platform usability is a must. I mean Pages allows you to export documents in word-compatible format or as a pdf. Isn't that the same thing. If you shut out other platforms from a product like iMessage you are basically crippling it intentionally for the people who bought your devices. So basically to hurt people who bought competing products Apple seems to be willing to hurt (for lack of a better word) people who bought an Apple device. If your logic applies that is.
Well. I think you are mixing things up a bit. Safari, Music, etc. Those are apps that add value to the iOS platform as they are. iMessage is different. In communication cross-platform usability is a must. I mean Pages allows you to export documents in word-compatible format or as a pdf. Isn't that the same thing. If you shut out other platforms from a product like iMessage you are basically crippling it intentionally for the people who bought your devices. So basically to hurt people who bought competing products Apple seems to be willing to hurt (for lack of a better word) people who bought an Apple device. If your logic applies that is.
If iOS users want to communicate with non Apple users for free, they could download an app. I see no benefit for Apple.
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)
1) People buy Apple's HW but they come for the OS and services that come only on Apple's HW. This is what Apple knew from the start. If they dilute their OS by giving away all these iOS and Mac OS X apps and services to other OSes to use then they are giving away the reasons to use iOS which means they are weakening the desire for customers to buy their HW.
Let's take an extreme example and say that Apple gives iOS away for free. The whole thing. What does Apple now sell besides great HW with software that is designed for the HW? Sure, you and I will buy it but there are plenty that will see that iOS on a $200 (or less) device would look pretty good. Does Apple then benefit from selling less HW but having increased OS and services marketshare? Where is the value for them?
As I stated at the beginning of the previous paragraph it was an extreme example, but I think this is how Apple thinks. I don't see them giving up the elements that make their iOS great which in turn sells their HW.
2) iCloud isn't platform-sgnostic as it has a web interface that can be accessed by any modern web browser (except ironically mobile Safari), and a Windows control panel app for syncing mail, contacts, calendars, tasks, bookmarks, and photos, but that goes back to WinPCs helping to sell more iDevices.
If Android gets big enough perhaps they will have to follow the same steps they took with Windows after the iPod came out because the Mac platform wasn't large enough. For instance, Apple desiring iWearables to capture more of the market than iOS would allow. If that happens I'd think it would be regulated to specifically capitalizing on those HW sales, not opening up very iOS service and to others that makes iOS unique and great.
iTunes for Windows sold iPods. What does iMessage for Android sell? If you have an Android, you're not going to get an iPhone.
And those iPods turned into iPhones, iPads, and Macs. There's plenty of people who have a Android now but are considering an iPhone, being able to message their iPhone friends could be the deciding factor.
1) People buy Apple's HW but they come for the OS and services that come only on Apple's HW. This is what Apple knew from the start. If they dilute their OS by giving away all these iOS and Mac OS X apps and services to other OSes to use then they are giving away the reasons to use iOS which means they are weakening the desire for customers to buy their HW.
Let's take an extreme example and say that Apple gives iOS away for free. The whole thing. What does Apple now sell besides great HW with software that is designed for the HW? Sure, you and I will buy it but there are plenty that will see that iOS on a $200 (or less) device would look pretty good. Does Apple then benefit from selling less HW but having increased OS and services marketshare? Where is the value for them?
As I stated at the beginning of the previous paragraph it was an extreme example, but I think this is how Apple thinks. I don't see them giving up the elements that make their iOS great which in turn sells their HW.
2) iCloud isn't platform-sgnostic as it has a web interface that can be accessed by any modern web browser (except ironically mobile Safari), and a Windows control panel app for syncing mail, contacts, calendars, tasks, bookmarks, and photos, but that goes back to WinPCs helping to sell more iDevices.
If Android gets big enough perhaps they will have to follow the same steps they took with Windows after the iPod came out because the Mac platform wasn't large enough. For instance, Apple desiring iWearables to capture more of the market than iOS would allow. If that happens I'd think it would be regulated to specifically capitalizing on those HW sales, not opening up very iOS service and to others that makes iOS unique and great.
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac. (Note that you do not need any Mac hardware to run iTunes). It catapulted the company into the major leagues.
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
I’d even go a step further and suggest that Apple sell iLife (for a hefty fee) to non-iOS non-OSX users. I believe that the long-run outcome will be that Apple’s hardware sales will go through the roof.
2) Actually iCloud is the least interesting and useful product for me. It’s mediocre. I don’t think it’ll amount to much in other platforms. But FaceTime and iMessage are simply fabulous products.
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
And those iPods turned into iPhones, iPads, and Macs. There's plenty of people who have a Android now but are considering an iPhone, being able to message their iPhone friends could be the deciding factor.
This doesn't make any sense. They could iMessage their iPhone friends with an iPhone. Why would making iMessage global change in Apple's favor if they are considering an iPhone in the first place. In addition, they can still use what's app.
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac.
That's because it allowed for more iPod sales. It opened the market to increased HW sales. Where does giving away key apps and services help sell more iPhones and iPad that these key services are part of?
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
...
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
1. Wasn't Safari for Windows gonna do the same thing?
Did Apple block Facebook messenger, what's app? You can still use them so your email analogy is flawed.
That's because it allowed for more iPod sales. It opened the market to increased HW sales. Where does giving away key apps and services help sell more iPhones and iPad that these key services are part of?
I answered the parts I felt were relevant. What do you think is the main point?
PS: Usually I'm indifferent to ideas I read because even though I don't think Apple will add them if they did add them it would affect the normal in no negative way. With this idea of giving up all these great apps and services to any and all competing OSes I think it would absolutely hurt Apple to lose all these important features that help sell their devices.
edit: Ah, I think I see: "positive network externalities for communication/networking products"? That? That's too much to get into tonight but I can tell you I don't think the open email standards are the same as Apple's proprietary apps and services that I think help sell Apple's devices.
It's a subscription app with over 450 million users, $0.99 per year after the first year. It'll have some running costs but there's only 55 staff.
WhatsApp has a steep growth curve. This will follow the adoption rate of smart devices so it'll slow down with them too but it has room to more than double again.
The reason for Facebook's price is clearer now after this Google bid. I figured they'd have wanted in on this, they're always trying to buy into social media. At least now I know a starting price to sell them my Flappy Candy Chat app for.
I would have said $5b was a more realistic amount and $10b should have sealed the deal for Google (just like ~$3b did for Nest) but clearly Facebook decided they wanted it no matter what.
The only thing that drives WhatsApp's user base is the telco gouging for SMS. Notice that this is no longer true in the US, and it is not true in the Apple ecosystem (because of iMessage). Further, most people worth advertising to don't really care that much about $20/mo for unlimited texts. So, I am not quite sure (a) why the WA user base is worth anything resembling $19bn and (b) how long the "1 million users a day" growth is going to go on for (especially as, from what I understand, asian countries have their own messaging services, and are unlikely to adopt WA).
That is pretty good description of the deals value. Yet, I think people are overly critical when it comes to purchase prices compared to market capitalization. Using the dcf method companies like Twitter, Amazon or Linkedin are also way overvalued.
They ARE way overvalued. LinkedIn somewhat less so than others, since they have a pretty healthy revenue stream per user. I cannot even conceive of anything that would make TWTR justify its valuation. Amazon is pouring everything into top-line growth, but I really don't see this translating into bottom line anytime soon.
How many of their 400M+ users are already Facebook users, do you think?
The market and the analysts –perhaps even you -- appear to be treating this number as 0%.
The cynical view is that FB is having trouble retaining their current user base (they certainly failed to retain me, but that's neither here nor there), so they are throwing money at the wall, and hoping some of it will stick.
It's possible that every WhatsApp user is a Facebook user but Facebook has 1.2b users so 750m Facebook users can't already be WhatsApp users. This means there's room to grow the subscription revenue.
Also, the crossover doesn't matter as far as the current subscription revenue goes. 450m users still means $450m per year in revenue. While that would take a while to recoup $19b if it doesn't grow, there's not really a time limit on how long Facebook or WhatsApp will be around.
The success of this move really depends on how users react to it and if they start dropping the app in large numbers.
If Deutsche Telekom figures out that they have given up 90% of their SMS revenue to the likes of WhatsApp, they will adopt the US model of free text messaging, and that will kill (or at least severely injure) WA in Germany. Same in every other country, and this sort of event is probably months, not decades, away.
Seriously, why the hell would you pay that much goddamn money for an effing app that can be easily reversed engineered and recreated? LOL!
I am not particularly arguing with you, but the granddaddy of these sort of deals is YouTube: Google already HAD the technology (Google Video, which was in no way worse), and YouTube was not even particularly popular back then (it became so due to Google marketing), so it seemed like Google was setting a fire to $1BN. And maybe it was, but now this is viewed as a great success.
If Deutsche Telekom figures out that they have given up 90% of their SMS revenue to the likes of WhatsApp, they will adopt the US model of free text messaging, and that will kill (or at least severely injure) WA in Germany. Same in every other country, and this sort of event is probably months, not decades, away.
Probably true. But Deutsche Telekom would have to agree with all other german carriers about this to offer the same kind of service - including photo messages btw. And you would still not be able to send texts cross-borders for free. And what would be the incentive offering this for free? Surely they would hurt whatsapp, but also their own bottom-line. Right now there is still half the population paying for text messages and photo messages both inside germany and cross-borders. They would lose a lot of revenue offering the service for free. So I think an agreement that will really hurt whatsapp is probably not decades but a couple of years away. That said the 19bln dollars price tag is still too high considering this. But Facebook also had to take into account more than what they are gaining with whatsapp. Not buying them could have meant Google probably would have bought them. And that could have cost market share and revenue beyond 19 bln. in the long run.
Probably true. But Deutsche Telekom would have to agree with all other german carriers about this to offer the same kind of service - including photo messages btw. And you would still not be able to send texts cross-borders for free. And what would be the incentive offering this for free? Surely they would hurt whatsapp, but also their own bottom-line. Right now there is still half the population paying for text messages and photo messages both inside germany and cross-borders. They would lose a lot of revenue offering the service for free. So I think an agreement that will really hurt whatsapp is probably not decades but a couple of years away. That said the 19bln dollars price tag is still too high considering this. But Facebook also had to take into account more than what they are gaining with whatsapp. Not buying them could have meant Google probably would have bought them. And that could have cost market share and revenue beyond 19 bln. in the long run.
I agree that this would be a process. As for losing revenue beyond $19bn. FB's revenue is a little under $8bn, so they have paid 2.5 years of revenue for this? I really can't construct a scenario where this makes sense.
Comments
iTunes for Windows sold iPods. What does iMessage for Android sell? If you have an Android, you're not going to get an iPhone.
If iOS users want to communicate with non Apple users for free, they could download an app. I see no benefit for Apple.
1) People buy Apple's HW but they come for the OS and services that come only on Apple's HW. This is what Apple knew from the start. If they dilute their OS by giving away all these iOS and Mac OS X apps and services to other OSes to use then they are giving away the reasons to use iOS which means they are weakening the desire for customers to buy their HW.
Let's take an extreme example and say that Apple gives iOS away for free. The whole thing. What does Apple now sell besides great HW with software that is designed for the HW? Sure, you and I will buy it but there are plenty that will see that iOS on a $200 (or less) device would look pretty good. Does Apple then benefit from selling less HW but having increased OS and services marketshare? Where is the value for them?
As I stated at the beginning of the previous paragraph it was an extreme example, but I think this is how Apple thinks. I don't see them giving up the elements that make their iOS great which in turn sells their HW.
2) iCloud isn't platform-sgnostic as it has a web interface that can be accessed by any modern web browser (except ironically mobile Safari), and a Windows control panel app for syncing mail, contacts, calendars, tasks, bookmarks, and photos, but that goes back to WinPCs helping to sell more iDevices.
If Android gets big enough perhaps they will have to follow the same steps they took with Windows after the iPod came out because the Mac platform wasn't large enough. For instance, Apple desiring iWearables to capture more of the market than iOS would allow. If that happens I'd think it would be regulated to specifically capitalizing on those HW sales, not opening up very iOS service and to others that makes iOS unique and great.
And those iPods turned into iPhones, iPads, and Macs. There's plenty of people who have a Android now but are considering an iPhone, being able to message their iPhone friends could be the deciding factor.
1) People buy Apple's HW but they come for the OS and services that come only on Apple's HW. This is what Apple knew from the start. If they dilute their OS by giving away all these iOS and Mac OS X apps and services to other OSes to use then they are giving away the reasons to use iOS which means they are weakening the desire for customers to buy their HW.
Let's take an extreme example and say that Apple gives iOS away for free. The whole thing. What does Apple now sell besides great HW with software that is designed for the HW? Sure, you and I will buy it but there are plenty that will see that iOS on a $200 (or less) device would look pretty good. Does Apple then benefit from selling less HW but having increased OS and services marketshare? Where is the value for them?
As I stated at the beginning of the previous paragraph it was an extreme example, but I think this is how Apple thinks. I don't see them giving up the elements that make their iOS great which in turn sells their HW.
2) iCloud isn't platform-sgnostic as it has a web interface that can be accessed by any modern web browser (except ironically mobile Safari), and a Windows control panel app for syncing mail, contacts, calendars, tasks, bookmarks, and photos, but that goes back to WinPCs helping to sell more iDevices.
If Android gets big enough perhaps they will have to follow the same steps they took with Windows after the iPod came out because the Mac platform wasn't large enough. For instance, Apple desiring iWearables to capture more of the market than iOS would allow. If that happens I'd think it would be regulated to specifically capitalizing on those HW sales, not opening up very iOS service and to others that makes iOS unique and great.
1) I disagree. All we have to look at is what making iTunes platform-agnostic did to sales of the iPod, iPhone, iPad, and Mac. (Note that you do not need any Mac hardware to run iTunes). It catapulted the company into the major leagues.
You’re not giving Apple’s hardware nearly enough credit. Once people see what Apple’s software can do, I claim that it actually makes them want – even aspire to – Apple’s hardware.
I’d even go a step further and suggest that Apple sell iLife (for a hefty fee) to non-iOS non-OSX users. I believe that the long-run outcome will be that Apple’s hardware sales will go through the roof.
2) Actually iCloud is the least interesting and useful product for me. It’s mediocre. I don’t think it’ll amount to much in other platforms. But FaceTime and iMessage are simply fabulous products.
Moreover, I see that you completely ignored the more important point, i.e., positive network externalities for communication/networking products. Would you be willing to use an email system from Apple that only received emails from and sent emails to other Apple users? If your answer is ‘no,’ I hate to say that you’ve lost your argument.
This doesn't make any sense. They could iMessage their iPhone friends with an iPhone. Why would making iMessage global change in Apple's favor if they are considering an iPhone in the first place. In addition, they can still use what's app.
That's because it allowed for more iPod sales. It opened the market to increased HW sales. Where does giving away key apps and services help sell more iPhones and iPad that these key services are part of?
1. Wasn't Safari for Windows gonna do the same thing?
Did Apple block Facebook messenger, what's app? You can still use them so your email analogy is flawed.
Yeah, but the product has to not suck, like Safari does.
I don't understand the second part of your post.
I notice that you ignored the main point, again.
I answered the parts I felt were relevant. What do you think is the main point?
PS: Usually I'm indifferent to ideas I read because even though I don't think Apple will add them if they did add them it would affect the normal in no negative way. With this idea of giving up all these great apps and services to any and all competing OSes I think it would absolutely hurt Apple to lose all these important features that help sell their devices.
edit: Ah, I think I see: "positive network externalities for communication/networking products"? That? That's too much to get into tonight but I can tell you I don't think the open email standards are the same as Apple's proprietary apps and services that I think help sell Apple's devices.
“It’s the software, stupid!” and “It’s the UX, sheesh!”
We need a third. “It’s the hardware, dummy!”
It's a subscription app with over 450 million users, $0.99 per year after the first year. It'll have some running costs but there's only 55 staff.
WhatsApp has a steep growth curve. This will follow the adoption rate of smart devices so it'll slow down with them too but it has room to more than double again.
The reason for Facebook's price is clearer now after this Google bid. I figured they'd have wanted in on this, they're always trying to buy into social media. At least now I know a starting price to sell them my Flappy Candy Chat app for.
I would have said $5b was a more realistic amount and $10b should have sealed the deal for Google (just like ~$3b did for Nest) but clearly Facebook decided they wanted it no matter what.
The only thing that drives WhatsApp's user base is the telco gouging for SMS. Notice that this is no longer true in the US, and it is not true in the Apple ecosystem (because of iMessage). Further, most people worth advertising to don't really care that much about $20/mo for unlimited texts. So, I am not quite sure (a) why the WA user base is worth anything resembling $19bn and (b) how long the "1 million users a day" growth is going to go on for (especially as, from what I understand, asian countries have their own messaging services, and are unlikely to adopt WA).
That is pretty good description of the deals value. Yet, I think people are overly critical when it comes to purchase prices compared to market capitalization. Using the dcf method companies like Twitter, Amazon or Linkedin are also way overvalued.
They ARE way overvalued. LinkedIn somewhat less so than others, since they have a pretty healthy revenue stream per user. I cannot even conceive of anything that would make TWTR justify its valuation. Amazon is pouring everything into top-line growth, but I really don't see this translating into bottom line anytime soon.
How many of their 400M+ users are already Facebook users, do you think?
The market and the analysts –perhaps even you -- appear to be treating this number as 0%.
The cynical view is that FB is having trouble retaining their current user base (they certainly failed to retain me, but that's neither here nor there), so they are throwing money at the wall, and hoping some of it will stick.
It's possible that every WhatsApp user is a Facebook user but Facebook has 1.2b users so 750m Facebook users can't already be WhatsApp users. This means there's room to grow the subscription revenue.
Also, the crossover doesn't matter as far as the current subscription revenue goes. 450m users still means $450m per year in revenue. While that would take a while to recoup $19b if it doesn't grow, there's not really a time limit on how long Facebook or WhatsApp will be around.
The success of this move really depends on how users react to it and if they start dropping the app in large numbers.
If Deutsche Telekom figures out that they have given up 90% of their SMS revenue to the likes of WhatsApp, they will adopt the US model of free text messaging, and that will kill (or at least severely injure) WA in Germany. Same in every other country, and this sort of event is probably months, not decades, away.
Seriously, why the hell would you pay that much goddamn money for an effing app that can be easily reversed engineered and recreated? LOL!
I am not particularly arguing with you, but the granddaddy of these sort of deals is YouTube: Google already HAD the technology (Google Video, which was in no way worse), and YouTube was not even particularly popular back then (it became so due to Google marketing), so it seemed like Google was setting a fire to $1BN. And maybe it was, but now this is viewed as a great success.
Probably true. But Deutsche Telekom would have to agree with all other german carriers about this to offer the same kind of service - including photo messages btw. And you would still not be able to send texts cross-borders for free. And what would be the incentive offering this for free? Surely they would hurt whatsapp, but also their own bottom-line. Right now there is still half the population paying for text messages and photo messages both inside germany and cross-borders. They would lose a lot of revenue offering the service for free. So I think an agreement that will really hurt whatsapp is probably not decades but a couple of years away. That said the 19bln dollars price tag is still too high considering this. But Facebook also had to take into account more than what they are gaining with whatsapp. Not buying them could have meant Google probably would have bought them. And that could have cost market share and revenue beyond 19 bln. in the long run.
I agree that this would be a process. As for losing revenue beyond $19bn. FB's revenue is a little under $8bn, so they have paid 2.5 years of revenue for this? I really can't construct a scenario where this makes sense.