Wonder how much Apple has shaken up the cell phone industry?

[TheWart]

pretty incredible numbers

This is a chart of Apple's profits from the iPhone compared to RIM, Motorola, Nokia, HTC, and Sony Ericsson.

That's just astounding. The folks at Nokia, RIM, etc., should hang their heads in shame.

And now consider the next shocking chart. Apple will generate 2X as much handset profit as the rest of the industry combined this year DESPITE SELLING ONLY 3% OF THE HANDSETS BY UNIT VOLUME:

Read more: http://www.businessinsider.com/you-...til-you-see-these-charts-2010-7#ixzz0uPjyeJTf

And the winner is........



the consumer!

 

[Spoooon]

Goes to show what lethargy and lack of innovation will do to you.

Now, if the carriers would do a little innovating...

 

[Pliablemoose]

 

[tatteredpotato]

I think you can thank Apple for Android, WebOS, and Windows Phone 7 too.

I'm not a huge iPhone fan right now, but it's probably one of the most revolutionary devices I'll see for a long time. Apple timed the release of such a phone so that they could get it to consumers affordably and be able to make the device cheap enough for mass market. Also when computing power was sufficient to fit a full touch screen device into your hand that will last all day.

 

[akugami]

Goes to show what lethargy and lack of innovation will do to you.

Now, if the carriers would do a little innovating...

The carriers are exactly what's holding cell phones back. Both AT&T and Verizon have been limiting the features of cell phones that are released into the US for years.

As much as some people may chaff at this comment, Apple has been good for the cell phone industry. They actually had the balls to stand up to AT&T early on when AT&T wanted to actually limit the iPhone. That's not to say that Apple hasn't put its own limits on the iPhone but cell phones have been more feature rich than at any time partially because of the iPhone and other vendors having to respond to the iPhone with products like Android based devices.

**EDIT**
That's not to say that the cell phone carriers aren't finding other ways to screw over customers. Tethering charges to use the data you already paid for with no added data on your plan with AT&T for example.

 

[Patranus]

The carriers are exactly what's holding cell phones back. Both AT&T and Verizon have been limiting the features of cell phones that are released into the US for years.

As much as some people may chaff at this comment, Apple has been good for the cell phone industry. They actually had the balls to stand up to AT&T early on when AT&T wanted to actually limit the iPhone. That's not to say that Apple hasn't put its own limits on the iPhone but cell phones have been more feature rich than at any time partially because of the iPhone and other vendors having to respond to the iPhone with products like Android based devices.

**EDIT**
That's not to say that the cell phone carriers aren't finding other ways to screw over customers. Tethering charges to use the data you already paid for with no added data on your plan with AT&T for example.

So get an investment group together and start a new cell phone carrier if you think you can offer a more competitive product at a lower cost.

 

[theeedude]

Sounds good for me as non-iOS consumer. Less profit for handset maker, more money in my pocket

 

[Cuda1447]

So get an investment group together and start a new cell phone carrier if you think you can offer a more competitive product at a lower cost.

Barriers to entry my friend, barriers to entry.

 

[preslove]

And the winner is........



the consumer!

????

 

[tatteredpotato]

????

I think he was alluding the the competition created by iDevices.

 

[preslove]

I think he was alluding the the competition created by iDevices.

I fail to see how more competition results from one firm getting ~60% of the profit in a market. Usually it trends in the reverse, with smaller firms exiting, resulting in less competition. I am very concerned about Apple becoming too dominant in this sphere.

 

[MJinZ]

I fail to see how more competition results from one firm getting ~60% of the profit in a market. Usually it trends in the reverse, with smaller firms exiting the market, resulting in less competition.

This is increased competition - aka innovation.

It's not a numbers game. Quality over quantity.

 

[tatteredpotato]

I fail to see how more competition results from one firm getting ~60% of the profit in a market. Usually it trends in the reverse, with smaller firms exiting, resulting in less competition. I am very concerned about Apple becoming too dominant in this sphere.

60% isn't unhealthy for the market though. The release of the iPhone sparked Palm and Microsoft to completely revamp their mobile software offerings. BB is evolving as well, albeit more slowly. Also Google was coaxed into the market by fear of being cut-off by a possible monopolistic Apple.

All in all it was good for the consumer.

 

[MrX8503]

I visited a thread where the topic was "Cell Phone Ownership Timeline". When I saw that thread there was a Starking difference between phones from before 2007 and after 2007. Now that we are in 2010 we have super smartphones now and IMO I think this is attributed to the success of the iPhone 3+ years ago.

When the iPhone was released in 2007, there was a huge jump in the smartphone industry. Before that, the industry was ladened with feature phones with garbage propriety OSs. Any smartphone out at the time was huge, clunky, ugly interface, and no actual app store. Any WinMo app you had to find for yourself, not only that the apps were expensive.

WinMo/RIM/Symbian enjoyed their dominance with their crappy OS software while Apple secretly invested time/money in their R&D for the iPad.

During the iPad/iOS development, Steve Jobs halted developing for the iPad and realized that iOS needs to be a phone, an iPhone. They had this great smartphone idea and presented it to Verizon. Being that both Apple CEO and Verizon CEO are control freaks, the relationship didn't work. So Apple released their iPhone on ATT, this opened the floodgates of what a smartphone can do without the stranglehold of a Cellphone Carrier.

Now that we are at present day....

An unlikely contender emerged and has one of the most successful mobile OS, Google Android. All the while WinMO, RIM, and Symbian thought their dominance would last forever, are bleeding users like crazy. Now they're scrambling to release WinMo7, BB OS 6, and Symbian4.

The funny thing is that WinMo7, BB OS 6, and Symbian4 still looks like junk, which leads me to believe that they did not start development until AFTER the iPhone became successful in 2007.

From what I remember Android was in development around the same time as iOS, I believe Google was trying to jump into the mobile space around the same time Apple was.

 

[Fingolfin269]

I think the other manufacturers should thank Apple for only releasing the iPhone on AT&T. You all know I'm right.

 

[zerocool84]

Anyone who says the iPhone wasn't good for the smartphone market is dumb. It was the spark that kicked off the smartphone market faster than anything before it. Of course there were smartphones before it but when it came out, it made look at smartphones and look where we are today.

 

[MJinZ]

Anyone who says the iPhone wasn't good for the smartphone market is dumb. It was the spark that kicked off the smartphone market faster than anything before it. Of course there were smartphones before it but when it came out, it made look at smartphones and look where we are today.

Well actually, iPhone was the first MASS MARKET smart phone for average ding dong.

To anyone who cared to use one for its real capabilities and not playing fucking farmville on it, we had perfectly functional smart phones with Windows Mobile, Symbian etc. WiFi tethering? Shit, I was doing that on a Sprint Mogul like 5 years ago.

 

[Glitchny]

The funny thing is that WinMo7, BB OS 6, and Symbian4 still looks like junk, which leads me to believe that they did not start development until AFTER the iPhone became successful in 2007.

From what I remember Android was in development around the same time as iOS, I believe Google was trying to jump into the mobile space around the same time Apple was

yea from what I remember Android was in dev right around the same time as iOS but the others are so far behind. Symbian/BB have 0 appeal to me and still look dated and Windows Phone 7 (stupidest god damn name ever) is only slightly interesting to me.

Overall Apple has pushed the smartphone market forward which is good. However it is amazing how much rabid fanboyism surrounds the smartphone market (on all sides, android/apple/BB/WebOS/Symbian). Makes it very difficult to have an actual discussion about any of the companies involved.

 

[zerocool84]

Well actually, iPhone was the first MASS MARKET smart phone for average ding dong.

To anyone who cared to use one for its real capabilities and not playing fucking farmville on it, we had perfectly functional smart phones with Windows Mobile, Symbian etc. WiFi tethering? Shit, I was doing that on a Sprint Mogul like 5 years ago.

I guess you didn't read me correctly. I said the iPhone provided the spark for where we are today. I said there were others before it but it pushed smartphone technology faster than we were going before. That's fine if you liked smartphones how you were back then the iPhone helped everyone out in the end.

 

[cheezy321]

Well actually, iPhone was the first MASS MARKET smart phone for average ding dong.

To anyone who cared to use one for its real capabilities and not playing fucking farmville on it, we had perfectly functional smart phones with Windows Mobile, Symbian etc. WiFi tethering? Shit, I was doing that on a Sprint Mogul like 5 years ago.

I had a tmobile MDA (one of the first HTC phones) back in the day.

Sure I could tether to it and stream video from my slingbox at home. The phone was still a gigantic pile of shit. It did these things, but it did them terribly.

 

[gsaldivar]

It's truly amazing to see how much the market has evolved since the introduction of the iPhone. We should give credit where it's due... Apple *has* definitely revolutionized the cell phone industry. Even people who never owned, and may never purchase an Apple device -- have been profoundly affected by the rich marketplace that has emerged in the wake of Apple's smartphone revolution.

However, I believe the reasons why Apple is doomed to fail in the long-term, is directly related to the amount of success that they are currently experiencing. Apple is dependent on an unsustainable revenue stream that they extract from App Store purchasers, developers, and advertisers. Here is a Newsweek article that explains:

Today the battlefield is mobile devices, and just as before, Apple jumped out to an early lead. And just as before, Jobs got selfish. He won't support Flash, or any cross-platform tools—because he wants developers locked into his platform, and his App Store, where he collects a 30 percent commission.

He's created his own advertising platform, and stacked the deck in his favor by refusing to share user data with other platforms. On that one he'll take a 40 percent slice, thank you very much.

http://www.newsweek.com/blogs/techt...nara-iphone-why-i-m-switching-to-android.html

Leaving so little money left on the table for advertisers, programmers, and content producers was acceptable - when Apple was the only game in town... However, that time has come and gone.

Now there are very real alternatives like Android that can match Apple's platform nearly feature-for-feature. And at a fraction of the cost. Of course, Apple currently has the advantage in number of apps, etc. But that lead is rapidly disappearing.

The Android OS is already outselling iPhone OS in the United States. Now it's blowing past Apple in terms of the technology it's delivering.

Yes, Apple still has a larger installed base. I was a little shocked recently when an Apple spokesbot responded to the news of Android's outselling iPhone OS by reciting the old chestnut about Apple's having more phones out there.

I was shocked because it's a familiar line, one that I've heard countless times in my 20-plus years covering technology. But I've only ever heard it from companies that are doomed and in total denial about it.

When a company is dependent on such rich cuts of commissions, and their captive market is in the process of being eclipsed by cheaper and more agile competitors such as Google... how will Apple be able to sustain the current level of profit in the future?

 

[TheWart]

However, I believe the reasons why Apple is doomed to fail in the long-term, is directly related to the amount of success that they are currently experiencing. Apple is dependent on an unsustainable revenue stream that they extract from App Store purchasers, developers, and advertisers. Here is a Newsweek article that explains:

When a company is dependent on such rich cuts of commissions, and their captive market is in the process of being eclipsed by cheaper and more agile competitors such as Google... how will Apple be able to sustain the current level of profit in the future?

Umm, I think you and this Newsweek blogger are confused. Apple's "rich" (ed. note, lol) cut from the App store is the same as Google's...but nice try there haha.

And as for how Apple is "dependent" on its revenues from the App store/iTunes to drive its bottom line: wrong again. In case the chart below isn't clear, Apple could basically take a 0% cut from the App store and still be fine.

 

[gsaldivar]

Apple could basically take a 0% cut from the App store and still be fine.

Ludicrous in the extreme.

And yes, I'm familiar with that RBS chart. Don't delude yourself into believing that Apple's growth isn't hugely dependent on those commissions. There are also other revenue streams that aren't made clear from the chart, such as the profit-sharing arrangement with AT&T (which presumably is up for renegotiation in the near future).

With desktop computer sales in a nosedive, iPods and other dedicated music players ubiquitous and no longer a growth market, Apple is foolish if they believe they can continue to extract the same commissions from the App Store, developers, and advertisers going forward...

 

[TheWart]

Ludicrous in the extreme.

And yes, I'm familiar with that RBS chart. Don't delude yourself into believing that Apple's growth isn't hugely dependent on those commissions. There are also other revenue streams that aren't made clear from the chart, such as the profit-sharing arrangement with AT&T (which presumably is up for renegotiation in the near future).

So are you saying that the RBS chart is incorrect? Have you taken a look at the quarterly statement which is where the chart gets its data? Or are you somehow looking at the slice of iTunes (which is more than just the App store cut...it includes music+movies...I guess you think Apple is taking a 'huge' cut on those too lol) and saying Apple's growth is "hugely dependent" on this slice?

With desktop computer sales in a nosedive, iPods and other dedicated music players ubiquitous and no longer a growth market, Apple is foolish if they believe they can continue to extract the same commissions from the App Store, developers, and advertisers going forward...

I am not sure what education system you grew up with that left you thinking a a 33% surge in iMac sales equates a "nosedive" for computer sales...

 

[MrX8503]

I had a tmobile MDA (one of the first HTC phones) back in the day.

Sure I could tether to it and stream video from my slingbox at home. The phone was still a gigantic pile of shit. It did these things, but it did them terribly.

I agree. I think this is where people lose sight in a discussion.

So many times I hear people say "My phone did that years ago". I think the point that people are missing is that yeah your phone could do that, but it was a piece of shit phone and what it did do, it was terrible at doing it.

Overall Apple has pushed the smartphone market forward which is good. However it is amazing how much rabid fanboyism surrounds the smartphone market (on all sides, android/apple/BB/WebOS/Symbian). Makes it very difficult to have an actual discussion about any of the companies involved.

I agree it can be difficult. At this very moment WinMo, RIM, and Symbian are losing marketshare and they need to do something fast. With the release of WinMo7, BB OS6, and Symbian4, they obviously know that they are a sinking ship. Despite all of this, fanatical fans still argue about it.

At this current stage, the ones in the spotlight are iOS4 and Android. But as history has taught us, even Apple and Google can fall as well and maybe WinMo7 will take over.