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

[theeedude]

Atta boys all around

 

[Pliablemoose]

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:

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.



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?

I don't see how Android delivers anything at a fraction of the cost.
-purchase price iPhone sets the lead @ $199 for state of the art, Android OS'd phones $199

-App prices Apple has the luxury of scale so the apps are cheap as dirt

-Contract cost Android isn't a fraction of the cost there either

Apple can sustain it's growth because the smartphone market is huge and getting huger, US sales may slow, but they (Apple) sells most of it's products overseas and that market is massive.

Apple has been doomed for 30+ years now

 

[ChAoTiCpInOy]

The funny thing is that Apple is more profitable overseas than in the US (in regards to iPhone sales).

 

[Strk]

I don't see how Android delivers anything at a fraction of the cost.
-purchase price iPhone sets the lead @ $199 for state of the art, Android OS'd phones $199

-App prices Apple has the luxury of scale so the apps are cheap as dirt

-Contract cost Android isn't a fraction of the cost there either

Apple can sustain it's growth because the smartphone market is huge and getting huger, US sales may slow, but they (Apple) sells most of it's products overseas and that market is massive.

Apple has been doomed for 30+ years now

At least as far as the phones are concerned, some of the top of the line Android phones can be had for less than $199.

 

[TheStu]

At least as far as the phones are concerned, some of the top of the line Android phones can be had for less than $199.

iPhone 3GS - $99

 

[jpeyton]

Apple can sustain it's growth because the smartphone market is huge and getting huger, US sales may slow, but they (Apple) sells most of it's products overseas and that market is massive

In terms of gross marketshare, Android will end up capturing most of the overseas market. I don't see Apple licensing iOS without their hardware, which is something that the two largest mobile markets (China and India) are uninterested in on a large scale. On the other hand, Chinese and Indian mobile companies will be happy to put custom skinned variants of Android on their smartphones.

 

[cheezy321]

In terms of gross marketshare, Android will end up capturing most of the overseas market. I don't see Apple licensing iOS without their hardware, which is something that the two largest mobile markets (China and India) are uninterested in on a large scale. On the other hand, Chinese and Indian mobile companies will be happy to put custom skinned variants of Android on their smartphones.

Weird how this is the same thing people were saying about Windows decades ago...

How did that turn out again? I forgot...

 

[jpeyton]

Weird how this is the same thing people were saying about Windows decades ago...

How did that turn out again? I forgot...

What are you talking about?

 

[Strk]

iPhone 3GS - $99

If you're going with previous gen phones, you can get most Android phones for free.

Personally, I love the fact that you can get these phones for so little. I always found it absurd that the subsidized prices for these phones were still so expensive.

 

[dwell]

Weird how this is the same thing people were saying about Windows decades ago...

How did that turn out again? I forgot...

Except Windows was/is a closed source OS tightly controlled by a single body.

All that's going to happen with Android is that it will be forked into many disparate and incompatible projects around the world. The only reason Google is keeping to together now is that it's paying carriers to include their services and that's only in the US. Once the coffers run dry every carrier will have their own variation of Android.

 

[rudeguy]

Except Windows was/is a closed source OS tightly controlled by a single body.

All that's going to happen with Android is that it will be forked into many disparate and incompatible projects around the world. The only reason Google is keeping to together now is that it's paying carriers to include their services and that's only in the US. Once the coffers run dry every carrier will have their own variation of Android.

links to support any of what you just said?

Also...isn't Apple a closed source tightly controlled by a single body in a black turtleneck?

 

[dwell]

links to support any of what you just said?

What do you need links for? Just look at any open source project and see how they get forked. Android is already forked in China (oPhone). The state of Linux on the desktop should give you a good idea of where Android is headed.

Also...isn't Apple a closed source tightly controlled by a single body in a black turtleneck?

It is, but you don't see me saying the result will be like Windows vs Linux in Apple's favor. The claim that the mobile market will play out like the desktop OS battle of 20 years ago is idiotic.

 

[jpeyton]

All that's going to happen with Android is that it will be forked into many disparate and incompatible projects around the world. The only reason Google is keeping to together now is that it's paying carriers to include their services and that's only in the US. Once the coffers run dry every carrier will have their own variation of Android.

As long as the phone is running any variation of Android, it's a victory for Google.

Google's endgame with Android can be distilled down to this: by offering an alternative to iOS, it ensures one less eyeball/wallet/consumer tied to Apple's ecosystem. That means one less iTunes user, one less iAd viewer, one less App Store customer, etc.

Apple can't price the iPhone low enough for 99% of China and India's 1.4 billion mobile phone users.

 

[dwell]

As long as the phone is running any variation of Android, it's a victory for Google.

Google's endgame with Android can be distilled down to this: by offering an alternative to iOS, it ensures one less eyeball/wallet/consumer tied to Apple's ecosystem. That means one less iTunes user, one less iAd viewer, one less App Store customer, etc.

Not true. Their end game is get Google's services all over the mobile space. A forked Android with Google's services and ad hooks gutted out (as is the case with oPhone in China) is no good for Google.

By your logic, Windows Phone 7 is a victory for Google.

 

[uli2000]

pretty incredible numbers

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

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



the consumer!

The iPhone isn't the only product Apple sells. Thats Apple's total profit, not just from the iPhone. I would say the biggest slice of that this last quarter was from the iPad.

 

[jpeyton]

Not true. Their end game is get Google's services all over the mobile space. A forked Android with Google's services and ad hooks gutted out (as is the case with oPhone in China) is no good for Google.

Google makes money serving ads.

Google serves ads on the internet.

Android is free, making web-enabled phones/tablets affordable in developing nations with huge mobile phone user bases.

Android phones have a web browser.

Google can serve ads to these phones via their browser.

So having millions of Android devices is simply that many more eyeballs that can potentially view Google's ads. Let's face it, Apple isn't even bothering targeting the mass-market in developing nations.

India is in the headlines for developing sub-$50 mass-market tablet computers. It's a safe bet many of these low-cost tablets will be running Android.

 

[dwell]

Google makes money serving ads.

Google serves ads on the internet.

Android is free, making web-enabled phones/tablets affordable in developing nations with huge mobile phone user bases.

Android phones have a web browser.

Google can serve ads to these phones via their browser.

So having millions of Android devices is simply that many more eyeballs that can potentially view Google's ads. Let's face it, Apple isn't even bothering targeting the mass-market in developing nations.

India is in the headlines for developing sub-$50 mass-market tablet computers. It's a safe bet many of these low-cost tablets will be running Android.

You're contradicting your own argument. All the pluses you outline for Google serving ads on the web can be applied to the iPhone. If you're talking ads in apps, OPhone and the forks won't hook into the Google Android Market as that's closed source/proprietary so that's moot.

 

[TheWart]

The iPhone isn't the only product Apple sells. Thats Apple's total profit, not just from the iPhone. I would say the biggest slice of that this last quarter was from the iPad.

I don't think that is the case. I say that because those bars represent entire years, and Apple made $5.3 billion this last quarter on the iPhone alone.....that makes me think the chart is representing iPhone revenues separately from the company.

 

[akugami]

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.

Wonderful reply. It really added a lot to the conversation.

As Cuda1447 says, barriers to entry. Basically money. Hell, I remember playing EQ back in about 2001 and we were talking about where some of the big changes were going to be. One of the things that me and my guildmates agreed would be a "big thing" was wireless technologies. That doesn't mean we could just throw a startup together and strike it rich. The costs involved are simply too great. That's not even counting the technological knowledge needed.

But to get back to what I said. The cell phone carriers have been limiting features that were already available on the phones. For example, Verizon disabling Bluetooth on phones which were fully capable of it.

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:

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.



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...Apple makes most of its money on hardware. iTunes is merely a vehicle to get more iPhone, iPod, and iPad sales. iTunes does make money. That shouldn't be questioned. However, it is the hardware that is Apple's bread and butter. As the Apple ecosystem grows, it only strengthens Apple's position and makes it less likely to fail.

Now, the PC market is different and certainly Apple's Macs are not great values, though in certain segments they're not bad buys. However, in the cell phone (and we'll assume tablet) market they are price competitive with any other smart phone out there. In fact, they're priced pretty much the same as most Android phones. Unfortunately they're refurb units but you can get a 3GS for $100+ and iPhone 4's start at $200+. iPhone prices are pretty much in line with the latest Android phones.

As long as the phone is running any variation of Android, it's a victory for Google.

Google's endgame with Android can be distilled down to this: by offering an alternative to iOS, it ensures one more eyeball/wallet/consumer tied to Google's ad dispensing system. That means one more ad viewer, one less iAd viewer, one more Google customer, etc.

Fixed that for ya.

 

[rudeguy]

What do you need links for? Just look at any open source project and see how they get forked. Android is already forked in China (oPhone). The state of Linux on the desktop should give you a good idea of where Android is headed.



It is, but you don't see me saying the result will be like Windows vs Linux in Apple's favor. The claim that the mobile market will play out like the desktop OS battle of 20 years ago is idiotic.

you gave some very specific details...I just wanted to know if they were your opinions or hard facts. No big deal either way.

And I think anyone saying they know what is going to happen 20 years down the road is idiotic. Its worth than those stock market idiots on CNN that make one correct prediction out of 1000.

I just wanted to grind your gears a bit. I haven't been around much and I was afraid your blood pressure had dropped back down to normal

What do you make your trips to Castle Redmond for anyways?

 

[dwell]

I just wanted to grind your gears a bit. I haven't been around much and I was afraid your blood pressure had dropped back down to normal

Touché

What do you make your trips to Castle Redmond for anyways?

Working with MS on several things. They do a lot of things on Apple platforms ya know.