Whenever I hear about MSFT, Nokia, or RIM struggling to catch up to the incredible lead that Apple has, I remember back in 2007 when Steve Jobs said basically "the iPhone is at least 3 years ahead of everything else in the market."
It took about 3 years for most of the competition to catch up to what the iPhone launched as. Microsoft kept trying to ride the WP 6 train hoping the iPhone was going to flop and not become the next iPod. Eventually they had to do a major rewrite which put them a few years behind of iPhone. Oops. Blackberry Storm and Torch are both still below par and not even competitive against Android devices, let alone iPhone. Nokia never caught up at all with the iPhone.
Similar story is playing out with the iPad. Android is catching up on hardware, but not software ecosystem. Maybe that will be different in a year, but the market could certainly shape up to be more like the iPod dominance of music players than the iPhone/Android dominance of phones. Windows 8 will launch when? 2 or 3 years after the iPad. Sound familiar? Blackberry Playbook is out, but that's such a mess it's not worth discussing.
Steve Jobs was right back in 2007 and most of the market is still 2-3 years behind where Apple is.
The root of the problem lies in the OS and their SDK. For a while BlackBerrys were the best platform to develop for. Symbian, pain is the ass. JavaME, even worse. WM6 was a little bit better, but it still was a pretty bad WinCE fork, with all the glory of the Win32 Api. Now along comes Apple in 2008 with an extensively documented SDK, that includes all kind of high-level APIs, and an IDE with tools, that actually work.
This has never been the case in mobile development before. Although ObjC was a stranger to most people back then, it's certainly something you can learn and work with.
Next comes Google, again massive APIs, everything perfectly documented, tools that work. On top of that, the language of choice is Java and the former best platform for developer, Blackberrys, just looks severely outdated in comparison to Android.
RIM's root APIs basically didn't change since the age of monochrome-displayed Blackberrys. Over time they patched in support for colored displays, then 2-way navigation wheel, then 4-way navigation ball, and later on touchscreens. The reason the BlackBerry Storm has an extra 'click' in the screen (you could tap the screen to highlight something e.g. a button and then press the whole screen down, like a mouse button, to actually click the button), is that the whole User Interface APIs relied on onFocus and onClick events, something that comes from the times of the 2-way navigation wheel and is fundamentally incompatible with the way touch devices work.
Now in retrospect its easy to say they should have rewritten everything a couple years ago and started with a new OS from scratch, but that's a big risk to take and generally not how big companies work.
Anyway the new generation of modern smartphone OS'es is now in full swing and RIM OS is pretty much dead. Microsoft knows that, they started from scratch, Nokia knows that, they gave up on Symbian. RIM? They probably can hold on to business customers for some years, but recovery is gonna be hard.
As I understand it, before the iPhone, the real challenge that cellphone app development companies had was negotiating with the carriers. Compared with that barrier, the pain of coding to a badly-designed API was not worth caring about.
There are many decisions Jobs and company have made that for me has made Android look more attractive. I currently own an iPhone and have so for over a year now, but there are things I want it to do that it can not while Android can. When my contract is up Im getting a Nexus or EVO.
I want to enjoy flash, i want to truly run apps in the background, i want the ability to have voice search on home screen via click of a button, i dont want to have to go through sync process when i connect iPhone ( i dont want to find out how to stop sync), I want Google's awesome built in GPS and I want the ability for more customization.
Ive enjoyed my iPhone but playing with girlfriend's Droid X2 and her prior Droid Incredible just showed me Im on the wrong platform. Though Apple's customer service is almost unmatched - will miss that.
They have hordes of cash now but to me with what I mentioned above maybe Apple is truly headed down and destined to repeat it's own history?
To each his own. I enjoy simplicity on my phone, excellent battery life, and the odd game, as such, I use an iPhone. It doesn't mean that either way is right, but it also doesn't mean that Apple is destined to repeat their failures.
Bare in mind that although Android outsells iPhone's, Apple still has 40% of the profit of the entire smartphone industry.
Ppl always repeat the profit of Apple, but why? What exactly is that relevant to, unless you're a shareholder or Apple employee? Is it just a comment to indicate that Apple isn't about to go out of business?
To each his own.
This is really the important statement. Phones are in a state now that I think we can actually have 3 viable OSes in the market. I know families where the dad has a BB, the mom an iPhone, and a child an Android (or Sidekick back in the day), and no one cares. It's not like PCs.
When I go and look at a WebOS device or WP7 I'm not worried about the fact that they have small market share. For the most part it doesn't matter that much to me as a consumer. Sure WP7 only has 20,000 apps. But unless you're Robert Scoble, you'll be more than happy (and if you're Robert Scoble, apps don't even count until you hit 500k).
It's a very different world, and I think we'll see things evolve quite differently.
"Is it just a comment to indicate that Apple isn't about to go out of business?"
Partially, and partially to indicate that the way Apple is doing things must be at least somewhat right and sustainable.
Why is it so hard for Android manufacturers to release updates for their phones? Because they don't make enough on them to continue supporting them. They make money on new devices sales, so they keep churning out more new handsets.
partially to indicate that the way Apple is doing things must be at least somewhat right and sustainable.
Just an odd concern for an end user, IMO. When I go to buy a car I don't look at the profits of Honda vs Ford. Sure you may not want a company that will go bankrupt, but even if they did the impact really isn't all that huge.
Why is it so hard for Android manufacturers to release updates for their phones?
Because they make deeply integrated skins. They have to reintegrate the skin with a new drop from Google -- not on their schedule, but on Google's (that's when customers start screaming for the update).
Because they don't make enough on them to continue supporting them. They make money on new devices sales, so they keep churning out more new handsets.
Everyone makes money on new device sales. The difference is if you get an iOS device -- Apple gets the profit. HTC/Samsung/Moto/LG/etc have to compete for the next sale, even if you've already decided it will be Android.
Of course you don't think about Apple's share of profit when you're buying the iPhone, but when you're discussing the iPhone's long term future, the fact it makes an immense amount of profit is very much relevant.
To me, when discussing the long term future of an OS, a very valuable metric is how many companies are using it to build their hardware.
Apple is ridding the wave, releasing kick-ass products one after another; but you never know how tomorrow will look like for Apple. On the other hand, if Samsung stops making Android devices or goes out of business, there are others to fill in.
About as odd as end users concerned about which OS has a more true multi-tasking implementation. Those who mention the profitability of iOS devices as a plus are probably about as numerous as those who mention multi-tasking.
"Everyone makes money on new device sales."
I think you misunderstood. I never said Android manufacturers aren't making money, I said they aren't making enough to support the device as long as people would like:
"Because they don't make enough on them to continue supporting them."
"Those who mention the profitability of iOS devices as a plus are probably about as numerous as those who mention multi-tasking."
These are both uncommon concerns, to be sure, but they're not both odd.
The difference is that the former has no direct effect on the user experience, at best it's an enabler for continued updates.
There might well be a use for the phone in which true multitasking is desired, if you need that use then wanting the feature is no more 'odd' than someone wanting a plumber's snake because they're a plumber.
Profitability has a direct impact on user experience, in that it fuels the third-party app ecosystem. A platform is only as good as its apps, and a company that is on the verge of bankruptcy is not likely to inspire confidence in developers.
The GP's car analogy falls apart here because when I buy a car, unless I'm an after-market modder, I don't plan to add more functionality to the car. Instead, I expect the car to continue to work as I bought it (aside from normal wear and tear of course), regardless of what other cars are on the highway. I expect my phone, on the other hand, to be able to run the latest and greatest apps and games, so when another platform keeps getting all the shiny apps, it impacts my user experience.
Yes, "true" multitasking might be a desired feature for some people, in which case it should be weighted accordingly. But it's not anymore odd to consider a company's profitability as a decision factor.
Profitability has a direct impact on user experience, in that it fuels the third-party app ecosystem.
Not true. Apple making a huge profit says nothing about your ability to make a profit. XBox wasn't profitable for a long time, yet game devs have made tons of money from it. In contrast the Wii was FAR more profitable out the gate, but the attach rate is much lower than the XBox360.
So XBox360 has a bigger ecosystem, better attach rate, higher quality games -- yet was less profitable than the Wii. How can that be? Because profit != ecosystem.
Yes, "true" multitasking might be a desired feature for some people, in which case it should be weighted accordingly. But it's not anymore odd to consider a company's profitability as a decision factor.
Again, a company's profitability says nothing about the phone or the app ecosystem. The ONLY thing it says is that Apple has huge margins which it has obtained through very good deals with the carriers. End users buying phones are paying about the same price for Android or iPhone devices. They all pretty much range from $50-$250 dollars on contract.
And while Android may not have the margins that the iPhone does, do you think anyone goes into a Verizon and thinks -- what if Google goes bankrupt?
> I expect my phone, on the other hand, to be able to run the latest and greatest apps and games, so when another platform keeps getting all the shiny apps, it impacts my user experience.
The funny thing is, nobody had that expectation until the iPhone came along. Score one for Apple.
When GM asked for bailout money, they cited a survey which said 87% of customers would not buy from a bankrupt company. IMO that qualifies as a huge impact.
If you read what I wrote, it's completely consistent with what you said, "Sure you may not want a company that will go bankrupt, but even if they did the impact really isn't all that huge."
I was saying that you probably wouldn't want to buy from a bankrupt company (psychological), which is the figure you cited. But I point out that even if you did the impact wouldn't be that huge. The impact you point out is to sales, not the actual consumer.
There are several reasons why this is the case:
1) Your warranty is almost certainly not owned by the company, but rather another company who will continue to fulfill it.
2) Service centers will continue to thrive. In fact sales are often loss leaders so that they can host authorized service centers.
3) AAA has almost all of the services provided by most car companies.
4) Parts for discontinued cars can still be made, and often/usually are.
Most people have virtually no contact with the corporation after they purchse their cars.
so yes, going bankrupt will have a huge impact on Ford's bottomline. But if you bought a Ford car today and tomorrow they went bankrupt, the impact on you, as the average consumer, will be close to zero.
Because as a company profit is a very important goal if not the most important goal.
RIM collapsed this quarter but for keen market watchers its fate was clearly shown when its profit per unite slipped with no significant unit gain.
The same goes for Apple, when iPhone has to be sold at a discount but market share does not go up noticeably, Apple is in trouble. For now iPhone enjoys a better half of the entire industry profit while ARP goes up and defies seasonal fluctuation.
The 40% is relevant because it means Apple is taking most of the smartphone profits and it's just one manufacturer. I think with the long term trends we will see Android gradually replace the dumbphone market. Low end hardware, fragmented versions across carriers, and low margins of return as time progresses. Apple is aiming at the upper end of the market and I think they're succeeding pretty well if the profit share is anything to by.
Excellent battery life? My iPhone lasts just as long as my girlfriend's Droid X2 does, which is a day if we are lucky.
Currently yes the app store does have all the latest games and that makes sense as iPhone users were previous iTunes users. Unfortunately, i think Android draws more the non music buyers who used p2p and are looking for free ride - not all but a good majority. I think a useful study would be iPhone and their P2P usage(always, rarely - iTunes instead or never pirate iTunes buyer always) vs. Android users & their P2P usage(always, rarely - use iTunes instead or never pirate iTunes buyer always). I think you would see why apps are developed first for the iPhone and sometimes only for the iPhone. Even with a bigger market share Android developers are not making the mint iPhone developers have been and continue to make. iPhone owners are of a different mind-set/demographic (for the most part) i am thinking. Also Android's marketplace is a mess comparatively.
Overall i was an Apple iPhone fanboy but the tons and tons of Android phones are outpacing Apple's prior innovations.
In my limited experince my iPhone 4 lasts up to twice as long as some phones of my friends. And iOS 5 sounds like it has many features you may want (notifications, wifi sync, Sync with iCloud). But speaking of todays sync: It is in the summary Tab when the iPhone is connected. No learning how to disable it, it is just there where you would guess it is.
Sounds like you have an iPhone 3GS or 3G (since you've had it for over a year).
The iPhone 4 is much better than either of those in terms of battery life and performance. Mine lasts about two days on one charge, whereas my previous iPhone, the 3G, barely lasted a day. The new phone is also much faster.
Then something is wrong with your iPhone. Many news sources[1] say the Droid X2 lasts literally hours (5 in this test), due to the multi-core processor.
It depends how you use the phone. Android phones can last between 5 hours to 3 days. It all depends on usage. Just because you heard or experienced 1.5 days of battery life with iPhone, and then you heard somewhere else that Droid X2 stayed 5 hours on a charge, doesn't mean the iPhone's battery is 3x better.
Games or heavy wifi browsing can easily eat into your battery life in several hours, regardless of the phone.
As a consumer, why is that a good thing to you? This means that you know Apple is charging you substantially more than it cost them to make their product. Shouldn't this make you less trusting of Apple and their intentions instead?
They can charge a high margin because of a lack of suitable replacements. That there is a lack of suitable replacements means the product (which consumers evidently highly value) very well might not exist if not for that company making it. Companies that make high quality products being rewarded with profit is something that encourages other companies to make high quality products.
"Shouldn't this make you less trusting of Apple and their intentions instead?"
No. My default assumption is that the intentions of every for profit company is to maximize their profits. Maximum profit determines the price a product will sell at and a company that sells at a price that minimizes profit will quickly find itself in bankruptcy court.
Due to shifting exchange rates it might cost Apple 5 bucks more or less to make the exact same ipad next month and their profits will increase or decrease accordingly but that doesn't have any impact on the buyer who gets the exact same ipad.
Your question about how this helps the consumer is well taken, but Apple is NOT charging consumers more. Apple makes most of the profit because the carriers pay a far higher subsidy to Apple than any other phone.
>Bare [sic] in mind that although Android outsells iPhone's,
>Apple still has 40% of the profit of the entire
>smartphone industry.
Bear in mind that RIM probably has more profits in mobile than Google. Would you argue that profits as a metric is still useful in this case?
Usually, unless there are serious switching costs (see Microsoft-of-the-90s), production learning curves (see Exxon), etc, excess profits invite high levels of competition and the mobile market seems pretty crazily competitive and innovative right now. (HTC 3D?! Gimmicky? Sure. Super cool? Totally!)
40% of smartphone manufacturer profit, not the entire industry which would include the networks and Microsoft and Google amongst others who profit from Android.
And the consistent 2nd and 3rd place by this metric are Nokia and RIM, both gently falling below 20% each over the last year, who most people consider to be dead ducks.
I still use an iPhone as my primary device, but I develop for Android. After the recent WWDC keynote, I'm confident I'm now creating and delivering apps (HD Widgets, Cloudskipper music player) with features that will show up on iOS6 next year.
Apple was once the platform for innovation, but only Android offers that freedom now.
Personally, I use an Android as my primary phone, but I also have an iPhone 3GS for whatever development needs I might have.
Even though I like the iPhone and the apps available on iTunes, I think high-end Android phones are just better. For example I made the switch basically because on Android I can block unwanted calls and even make it do various tricks related to that and even if the API itself is not public, there are apps in Android's marketplace that do this (though eventually I ended up cooking up my own app, for fun). To do the same on iPhone, you have to root it and use Cydia.
This is one example of freedom the Android gives you that is immediately useful to some end-users that couldn't live without blocking some calls or SMS messages.
On Android you need to deal with a greater variety of screen resolutions and other features. Thus, even if you have a device, testing on it alone is not sufficient.
I think there's a good chance you'll get your Android then come back. All of the controversial technical decisions Apple has made have proved well-founded, whether it was excluding Flash or limiting background activity. (Their legal decisions have been less well-founded, but they've been willing to change course very quickly there.)
Agreed, iOS isn't perfect and other mobile OSes have features I want. Jailbreaking fixes that most of the time, but it would be nice to have those features without having to hack them onto the device.
I don't think Apple is headed the way of 90s Apple. That was a disaster because Jobs left the company and left a bunch of clueless idiots in charge of everything. I'm sure Apple will decline, but I don't think 90s Apple will be back anytime soon.
And even though you've probably heard this a million times, I'm going to type it: Apple makes features really nice. For example, they weren't the first with Cut/Copy/Paste, but they made it really nice and usable. That sounds really fanboy-ish, but it's true. Multitasking, notifications, even the iOS design itself.
Google is strong with services in the cloud, Gmail, Google Maps, Voice recognition they are all of the same category. And Google is not platform neutral, it want unrestricted reach on every mobile platform but reserve the best for its own, which is just business, and sometimes, especially with iOS, it is hindered by the platform vendor.
Flash, customization et al can be personal preference. I don't even want custom ringtone and wallpaper is silly to me. Oh and flash is fading, even Adobe knows it.
iOS multitasking leaves a lot to be desired. So is Android's approach(modern smartphone battery life sucks period, Android sucks spectacularly, largely due to its Laissez-faire multitasking and widget management.). The same for notification systems, now they are pretty much the same and I'll still say they both kinda suck, iOS went from sucks hairy dunkey balls to just suck a little less than Android.
Lately I feel iOS busy plugging holes and Android becomes more and more desktop-esque and hateful (feature wise even Honeycomb didn't bring much to the table). I still prefer iOS and find WP7 more interesting than both of them, for now. Though I dislike Metro's animation abuse with a passion.
I think the difference is Google built Android with a cloud first mentality (and still pursues that) whereas Apple approached with an App first mentality. Subsequently, Google owns in the cloud (until we see how iCloud turns out) and Apple does better on hardware because they make their own hardware and Google farms it out (some better than others). Gradually they're moving towards the middle where Apple expands into Google's territory and Google starts imposing hardware requirements (and OS software improvements) onto manufacturers to improve hardware performance.
i dont want to have to go through sync process when i connect iPhone ( i dont want to find out how to stop sync)
Just thought I'd mention that iOS 5 has fixed this. iTunes sync no longer locks the phone. Also, iCloud and OTA updates mean you'll probably never have to connect to iTunes again if you don't want to.
Yes Apple seems to be stupid in their own ways, and that a big reason why Android is overtaking them. No one can argue that Apple is a successful company, but I believe they could have had a de facto MONOPOLY on smartphones right now.
First, there's only THE iPhone. When Nokia was the biggest manufacture of mobile phones in the world they released 10-20 phones a year. There's a reason for that, people have different budgets and people don't want to have the same phone as everyone else. That's such an important point I can't believe they are still ignoring it.
Next, they really need to open up the system. iOS would have had wireless sync 2 years ago if APIs were more open and there weren't any AppStore restrictions. The walled garden is supposed to for the benefit of the users, but - to be really honest - that kind of ideology has been proven, time and time again, to not work very well.
So I'm kind of disappointed in Apple they didn't take the opportunity, they had, to truly own the mobile market, and instead let it slip, because of what, stubbornness?
You're disappointed? Unless you're an Apple shareholder I'm trying to think why anyone would want a single company to have a monopoly in such an important market. A monopoly with a control freak like Steve Jobs would have been scary, thank goodness for Android!
There is a second element in the NOKIA/RIM/MSFT/AAPL/GOOG that I wish someone like Asymco or JD Powers would track - and that is "Consumer perceived value 1 year later" - I realize WP7 hasn't been out for a year yet, but most of the other platforms (is Nokia still a platform?) have, and it would be interesting to see if people still value their smart phone after the initial wow factor has worn off, or whether they have seen a decreased, or increased value.
It's complex - because a lot of factors come into play. iPhone has better battery life (as long as you don't touch the GPS), Android has more freedom, WP7 has a nice engaging interface, RIM is unbeatable in messaging, etc...
But, it would be nice to see what people think of their smart phones a year after purchase, and add _that_ into the unweighted graph [1] of Profit/Market Share/Revenue Share that Asymco does.
I guess, to some degree, that's represented in a "Will you buy the same model during the next refresh" - and the answer to that question might be a good proxy for "How happy are you, one year later, with the value you receive from your smart phone"
That, too me, will be a key indicator of which of the mobile providers will prevail.
False--price is largely dictated by what new users (who can't afford to buy a new device) are willing to pay, not what the seller (who used the device) wants.
(Nitpick: I think there's a difference between "False--" and "FALSE!".) Regardless, though, it may be on the blunter side, but I think it's a better choice than, "I'm sorry, good sir, but in my humble opinion you are perhaps less than correct."
To the OP--I'm sorry if I came off as impolite, I truly was aiming for conciseness, not malice.
Apple probably has the most experience creating top-notch interfaces of any company in the world. Added to this their experience creating leading edge consumer hardware, and how can Google or Microsoft, even less so Samsung, Motorola, RIM, hope to compete? Apple has at least one big advantage over any company I can think of. They do it all, and do it better than everyone else.
Apple is really hitting their stride, after almost 30 years, and the state of the market is perfect for a company just like them. With how closed they are, though, I don't think they'll dominate. That seems to be fine with Apple, though - they're not after the next Windows.
I think the momentum behind Android, and the wide variety of companies using it, is going to keep it at the #1 mobile OS spot. The future of the ones other than Android and iOS doesn't look great for phones. Tablet are still so new, that it's difficult to predict what will happen.
I think Apple's strength is more that 'they do it all' then 'they do it better'. We used to think that trying to do everything was harmful, and that you should stick to what you're good at and partner for the rest.
I think what we are seeing is that Apple's ability to develop hardware and software in lock-step gives them the ability to release earlier than anybody else.
Think about something like Windows 8. Microsoft develops it, shows it to manufacturers as it gets closer and closer to being completed, gets feedback and makes adjustments while manufacturers start designing for the new platform, then they finally get a 'release candidate' and finish of the hardware. Then who is responsible for marketing?
Of course, RIM is also an end-to-end provider, but they haven't had the vision to lead.
Lets not forget that all the manufacturers were showing tablets before Apple launched the iPad, but it took another year for non-Apple tablets to hit the market en-masse.
They do seem particularly good at what they do, to me. Marketing, style of hardware design, hardware technical design and quality, user interface, stability, distribution, product timing, marketing strategy...
I was discussing the same thing with friends. It's impressive how a company have three years ahead of competition, more thinking that the money is not the problem.
In other words, it seems like even if MSFT, Nokia, RIM and Google have virtually infinite money they can't catch up. That's a real competitive advantage for Apple.
Android is not winning because of the ecosystem. The real reasons Android is "winning":
(1) it came close to parity with the iphone quickly.
(2) the flexible licensing model allowed Android to leverage supply perfectly and compete at every price point from $700+ superphones down to sub $100 budget phones and everything in between all the time with new releases every week on any carrier in the world. If you can only build X million iphones in quarter x and the smartphone market is 100 million phones that quarter you can only get X% at best. It looks like X was around 15-20%.
Now for the 80%+ of the market Apple couldn't even hope to address:
WebOS beat Android by a couple months at (1) but failed miserably at (2). By launching a CDMA phone on Sprint only you're fighting over a tiny slice of a tiny slice of the pie (low single digit percent of the entire world).
Microsoft took 18 months too long to deliver (1) but brings most of (2) (supposedly they are targeting high end only but Android currently out high ends them). Many have written them off I'm not one of them.
RIM had arguably the best brand pre-Aple but they are only now (and only on tablets) starting to deliver on (1) and were just as limited as Apple on (2).
Nokia had all the supply they could want but categorically failed at putting out an iOS/WebOS/Android/WP7 quality product.
So looking again at those hypothetical 100 million devices, 15%+ Apple, 15%+ RIM, Less then 10% total WebOS/WP7/old Windows Mobile/other and the other ~60% started with Nokia and month by month was slowly eaten by Android (prolly 40-20 Android by now)
Android is winning just because of the free license. If Samsung, Motorola, and HTC could load iOS on their own hardware, Android would be dead tomorrow.
I think price is going to be key in the long term. Right now there's not that much difference in price between an iPhone and a comparable Android phone, but at the rate the hardware is improving, it will soon be possible to sell very capable phones at a very low price point. Apple is going to have a very hard time competing at that end of the market and, as usual, I expect the low end will eventually come to drive the high end.
Even today you can get a very capable Android phone for a quarter of the price of an iPhone. Phones like the ZTE Blade, Samsung Galaxy Mini and SE Xperia X8 are perfectly capable phones. Sure non of them can go head to head with the iPhone, but for a quarter of the price they certainly hold their own.
The interesting question is will the person who bought a Galaxy Mini upgrade to a Galaxy SIII or an iPhone 5 in a couple of years time.
"I think price is going to be key in the long term."
I think long term platform is irrelevant, for the most part your phone (and computer and tv and everything) will just decode an HD video stream from the cloud where datacenters crunch everything and send it at low pings over true 4G or mesh networks. ARM processors are already good enough to do this, the networks are "a few" years away. Google's got a huge lead over everyone at cloud but they're giving the OS away. Apple will make money because they will continue to make easy to use software (and poss good looking hardware).
I think it's just because smartphones are now just normal phones, and using Android for free is the best option for all those phone makers who were going to keep making phones in some capacity regardless of how well the iPhone did.
And Apple is manufacturing at full capacity - the prices suggest that there is still lots of pent up demand for iOS devices, but they cannot produce enough to meet that demand
However, those things don't seem to matter as much with stand-alone devices that are sold sans-contract, such as the tablet market. Nobody could outmarket and outsell the iPod when they went head to head. Didn't matter if the device was cheaper or better, iPod outsold them. If the tablet market dynamics are similar, Android won't fare as well on tablets as it does on phones.
Simply put, if the and Android tablet is the same price as an iPad, most consumers will buy the iPad. All Apple products are seen as expensive luxury goods. Nerds might disagree, but that's how people tend to view Apple.
If you could buy a BMW for the same price as a Chevy, you'd probably buy the BMW. Most people would.
Most people buy into Android phones because iPhone is only available on 2 carriers. If iPhone was available on all carriers, Android phone sales would be much, much less.
Most people buy into Android phones because iPhone is only available on 2 carriers. If iPhone was available on all carriers, Android phone sales would be much, much less.
The iPhone is available on all carriers in my country (Australia) and Android is outselling it.
This is due to a number of factors, but two factors appear to be critical:
1) Lower Priced Android handsets undercut Apple at the low end.
2) The iPhone 4 is now regarded as an old handset at the high end. Sales of high-end Android handsets appear to be competitive with iPhone sales on their own, at the same price point (ie, even without the low-end advantage Android might be outselling the iPhone at the high end. This is difficult to judge, because of the mid-range Android phones, and price discounting on older high-end Android phones. For example, the Samsung Galaxy S (not S2) is now available at around half the price of an iPhone 4, but a year ago was directly comparable)
"Most people buy into Android phones because iPhone is only available on 2 carriers. If iPhone was available on all carriers, Android phone sales would be much, much less."
Sales figures in countries outside the USA where the iphone is on all networks shows that statement to be extremely unlikely to be true in the USA
You're both half right. The thing to remember is it's limited on carriers because the overall supply is limited. Many people that wanted a new phone and might well have bought an iphone if it were available certainly walked out with the closest substitute: android phones.
OTOH all indications are that when in stock the iphone kills android head to head. The conventional wisdom was that this happened on AT&T because if you were with sprint or verizon and wanted an iphone you left and went to AT&T. This again was half true. However the other half was that when the iPhone came to Verizon it killed Android head to head again.
Winning can be measured different ways. I've owned both devices simultaneously (recently switch Verizon HTC incredible to iPhone ).
Android app store outright sucks. Many minor usability things on android are annoying. I don't think Android is 'winning' but I do think they are shipping a lot of handsets. IMO there is a distinction.
Chevy 'wins' over Bentley. Which would you rather drive?
It depends. If the Chevy drivers don't buy as many accessories as the Bentley drivers do, you better believe I'll be selling to Bentley drivers. And if those Bentley drivers use their accessories more, all the better.
There may be more Android phones, but mobile web usage of iOS (or even just iPhone) dwarfs that of Android. Ditto with app purchasing/usage.
Globally it looks set to overtake in the next few weeks (it's a couple of percent above just iPhone, but 4.5% iPod Touch share keeps mobile iOS slightly ahead), though both are trailing Symbian by some distance on that global measure.
UPDATE: Ahh, I see the problem. You linked to a OS market share graph, not a browsing market share. I didn't dispute there are more Android devices, I said the iOS devices are used to browse the web much more than the Android devices, even if they are fewer. Also, not including iPad share by StatCounter is silly. The iPad's browsing share is quite large.
It's not sales or installed base share, it's browser share.
I could put the difference down to just iPads, which apparently have much higher browsing rates than mobile devices, but the numbers don't agree there either e.g. my source has iOS as lower than Linux whereas your numbers has it as twice as high.
(Once you add iPad numbers you start to wonder why netbooks aren't included and then the fact that iOS and Android numbers total are dwarfed by any single version of IE begins to make it seem ridiculous.)
Why not both? Or just pick the one ypu're better with?
I don't get why fanboys of each platform wants the other to die... The worst thing that could happen is a smartphone platform monopoly... Hello stagnation... Hello nineties...
To be clear, I completely agree with you. I was just pointing out that this Chevy v Bentley analogy wasn't this slam dunk where everyone just says, "Of course a Bentley, Chevy sucks".
It wasn't meant to be a "slam dunk". I was trying to illustrate that some people define "win" by sheer volume, some define "win" by panache and polish and things like that.
Depending on how you want to measure it, Chevy or Bentley, Android or iOS, both "win" for some definition of "win".
1. RIM needs to to stop trying to be Apple. I'm not saying ditch the touch screen completely, but they need to stop following so closely in Apple's product development footsteps.
2. RIM needs to stop being shy about where they manufacture their products. They need to bring manufacturing completely (as in 100%) in to North America and advertise the heck out of that. Apple relies on inexpensive, cheap labor - hit them in the marketing cahones.
3. RIM needs to build a profitable developer marketplace. The only reason anyone cares about iOS Apps is because there is a chance small developers can make a lot of money developing. RIM needs to create a system where developers can easily earn money. From in-app purchases, to a robust in-app ad serving platform to flexible purchasing options, RIM needs to take a giant step back and let a developer develop any app they want and charge any way they want.
4. RIM needs to remember that it is first and foremost, a hardware company. They've never been good at making pretty software that works well. Palm, Handspring, HP, Microsoft, and Apple have all at one time or another beat RIM time and again with software - but rarely hardware. Mobile Internet Devices don't need to be complicated or even revolutionary - they just need to be sturdy, refined and fashionable. Forget about saving money on Curve keyboards, forget about trying to breakthrough some crappy "clicking screen", build really great hardware, even if that hardware doesn't conform to the latest trends.
5. Last, RIM needs to kick cellular providers in the butt. They need to step up where Apple hasn't and make their consumer level data plans inexpensive, open and user friendly.
Some great points here. I went to school in Waterloo (where RIM is) and worked for 4 months in product design at Apple, so I am pretty aware of the differences between the two companies. Here are my thoughts on your points:
1) Very true. Apple is anal about the smallest details, RIM isn't. RIM has too many products in parallel development to dedicate the kind of resources they would need to match Apple. Just can't happen. Just accept it and come with your own style.
2) I absolutely love this. RIM does have a lot of manufacturing done overseas, but they have a very modern manufacturing facility right in Waterloo. Bring it all here and hype that up. It might flop, but it's a ballsy move that people would appreciate.
3) I am not sure if this is the case anymore, but for a while there, BlackBerry's were being shipped without App World on them. Wtf!
4) I disagree here. Their acquisition of QNX was brilliant. Use the playbook and you realize that it's an entirely different operating system than OS6. I think it could be very successful on their phones.
5) Interesting. Would help to become the low-cost smartphone while keeping margins relatively high.
In my opinion, it all comes down to how well QNX can create a compelling smartphone operating system. Do it well, and RIM will do just fine capitalizing on their legacy customers and getting those who want a keyboard. Screw it up, we might be looking at the next Palm.
"3) I am not sure if [Blackberry apps are a problem] anymore."
Yup - they are. I think the solution is in the money developers can earn. Quote from Gizmodo: "BlackBerry App World debuted in 2009 and had about 26,000 applications as of April 2011. Android had over 200,000 apps and iOS was pushing 350,000."
"In my opinion, it all comes down to how well QNX can create a compelling smartphone operating system."
With the current outlook and direction of RIM in mind, I completely agree with you. However, Apple's mobile devices are founded on cheap, disposable hardware. It's a sound strategy. RIM however previously found a great deal of success by founding their products on the hardware along with a secure, reliable OS. The times have certainly changed, but I think that the fundamental problem with RIM is that they have lost sight of this.
Do people actually care about where the product is manufactured? I don't, as long as they're not using slave labor etc; I actually think outsourcing improves the standard of living around the world and provides me a better product at a lower price.
Of course. For many people "buy American" is a mantra. People from car makers to American Apparel try to tap into this sentiment. (obviously the degree to which something was actually "made in the USA" is not always clear)
Some Americans care about "buy[ing] American", but most don't. A prime example is the Japanese auto manufacturers taking market share away from American companies with better quality cars since the 80s, eventually becoming dominant.
Not to mention that the US isn't the only market for smartphones out there, so a large portion of the market certainly don't care if something is manufactured in the US.
Making quality software is probably the biggest opportunity for RIM right now, not the location of manufacture.
Consistently, Apple's "dirty secret" has been their use (and sometimes over use) of cheap offshore labor. This has allowed them to release products quickly and earn high profits.
RIM is still in a position to take the high road. Their devices don't need to compete on price. They can compete on quality. With manufacturing brought completely in to North America, RIM could say things like "take pride in our products - we do" and "Apple is in it for the money, we're in it to make our lives better".
pride when you make inferior product is not a good idea. Imagine the reaction of the people if just after I lose on first round of a Tennis open(I did) I scream to the stands: I'm so proud of me!!!
"Apple is in it for the money, we're in it to make our lives better"
If they say that they will be lying. Actually Apple has so much money in the bank that they could take the luxury of not being on it for the money, while RIM needs it to survive. Does Steve Jobs is there for the money? I bet you not.
1. Agree to a degree they already doing it on Playbook by taking good stuff from WebOS whenever I use iPad I wish I had PB ui on it.
2.It would take a very good marketer to pull this off and make real money. Not sure about it.
3. You can make money on AppWorld and competition is not like on iOS. They have payment and ad api. They also now introducing BBM sdk, which could be a massive money maker for some apps that can integrate with it.
4. I do not think they can do this, huge part of their brand is software (security BBM etc) QNX is what will either save them or kill them I think.
5. Not sure, my plan costs me $35 cdn and its unlimited sms, 5gb of data etc (go WIND!)
QNX is the key, I just hope we do not have to code in flash to make stuff for it.
This si an exciting time to be a dev in mobile I think both RIM and MS can really surprise many people who think this is all over. US is farm from the only market, people here tend to forget that.
"4. I do not think they can do this, huge part of their brand is software"
I don't think that RIM should ignore their OS or the software that runs on it - far from it. I think that RIM needs to make a course correction and that the course correction should focus on hardware. Software is will easily make or break RIM (as you've noted with QNX), but centering their products on a strong, reliable, thin and easily extendable OS should become front-and-center.
"5. Not sure, my plan costs me $35 cdn and its unlimited sms, 5gb of data etc (go WIND!)"
Sadly, Wind is only available in heavily populated metropolitan areas and RIM has done nothing to ensure low rates. Wind is simply competing on price.
RIM needs to publicly open discussions with every carrier in the world. They need to form collations to reduce cellular data fees so that their devices proliferate even faster. How much more popular would the Playbook be if it came with an unlimited data plan that cost $5 a month? How many more Blackberries would we see (regardless of product changes) if they openly supported the customers who used their devices?
Beyond offsetting hardware costs with term fees, monthly data costs are outrageous. Battling them is a way to win favor with the public and secure a larger number of users.
1. As they did before(they tried to follow their own path but market disagreed with them), so the can continue losing market share even faster...
2. So people that is not North American, like Europeans, Japanese, Chinese and South Americans have more reasons to not choose it. Do you honestly think that you(Americans) are the center of the world?
3.4.Yes, they have to.
5. They can't kick their customers!! Remember that RIM does not have a direct sales channel as Apple has, they need cellular providers. It is terrible expensive to have it(you need billions of dollars in inventory).
1. Agreed. I was going to switch to them when the Torch came out (love my physical keyboard), but what a failure that was.
5. So much of this, but I doubt they have enough power to do this anymore. Case in point: BESX (the free enterprise server). When BESX came out everyone was happy until Verizon were assholes and still required some nonsense fees that BESX was supposed to make free.
I don't know how much things have changed since then -- it's been about a year now -- but I doubt its any different now.
Blackberry became the big name in smartphones by making emailing dead simple. In the middle part of last decade, that's what mattered. People were mostly used to mobile phones for making calls, the occasional text message, and maybe a stupid game or two.
When RIM made emailing from the road a very simple process, and created an enterprise-class system for businesses, their brand hit its peak. When they tried to leverage themselves into the consumer market, they did have some initial success. But when they were starting to actually jump into the pond--after dipping their toes in--Apple came in and sucker punched the entire market in January 2007.
All of a sudden, big players like RIM were behind the curve, figuratively and, for RIM, literally.
They essentially had a 6-month period to get phones that could compete with Apple and nobody really did a good job. The first iPhone was very vulnerable--no native apps, EDGE, and big price tag--but by the time anyone could offer an iPhone-like experience, Apple had the 3G, native apps, and a lower price tag.
RIM seemed to simply take too long to close their gaps. Their first touchscreen had a hugely misplaced marketing campaign. When RIM released the Storm, they made their SureTouch (or whatever it's called) screen a huge focus. Differentiation is certainly a product strategy, but it seemed like a fairly ridiculous thing to try to base your marketing around. At the time, a lot of people were weary of touchscreens vs. physical keyboards, but the added "value" of the SureTouch didn't come close to a physical keyboard and hindered the use of the touchscreen.
It seems like RIM's major problems were with product design / development, coupled with bad marketing. They controlled the business market, which helped drive the consumer market, and then lost control of it.
I think you hit the nail on the head with email. So much is about perception and not technology. When people think about Blackberry they think about email and business. That's it. They don't imagine awesome fun games or music players or videos or cameras even though the blackberry (in theory) has all those.
Nokia has a similar problem, I think. When people imagine Nokia they imagine a 1990s era dumb phone, or at best a crippled feature phone. It doesn't matter what else Nokia does, they are defined that way in the consumer mind.
When people think of Android they think of Google, super smart things like mapping, searching, voice recognition, translation, calendaring, etc. They feel like they are on the edge, living in the future.
And when they think of the iPhone they think of the slick, super smooth experience, the games and multimedia features, apps.
It doesn't really matter what any of these companies do, they'll continue to be defined this way and only Android & iPhone have a truly positive image in this new world. WP7 is hard to define and I'm divided on whether Nokia is good or bad because when Nokia becomes an influence on the brand it may well act like a boat anchor rather than the winch MS obviously wants it to be.
RIMM is one of the few companies that can actual compete based on it's hardware specs, as opposed to it's software. People who use blackberry's love their keyboards. They also love their email functionality. They should have switched over to Android based devices running on their hardware with their email client, with BBM thrown in. It could have been a killer device with a ton of apps available from the get go.
This really could have, and should have, been done a while ago, but it's seems like Mike Lazardis is on some kind of a ego trip.
Funny you should say that. I remember when reading the interview with Mike Lazardis in "Founders at Work" it struck me how much he boasted about himself and his pals being cool, smart, and innovative. It was somewhat off-putting, and also surprising how someone with so little humility and self-awareness made it so far.
> This really could have, and should have, been done a while ago, but it's seems like Mike Lazardis is on some kind of a ego trip.
No, he's just doing what any good CEO of a large enterprise should do - increase shareholder value. They've pushed strong numbers from 2007 and have only recently started to plummet. (for now obvious reasons) Innovator's dilemma at its finest.
Could you elaborate on this some more, particularly the email client?
I had a Blackberry 8830 a few years ago and, even at that time, I thought it was a barebones POS. The email client was pretty unremarkable, as I recall.
It's unremarkable to me as well, but people who I know who have switched over from a Blackberry to a iPhone are typically happy with their decision, but the only thing they claim the Blackberry was better with is email. Maybe this is primarily for corporate environments, where they use the enterprise server.
I'm not really a fan of RIM, but the Playbook gave me a very good impression when I first played with it at Best Buy. It isn't an iPad, but it was far more pleasant to use than any of the Android tablets currently on the market.
The decision to ship it without email or calendaring, though... I don't know what they were thinking.
Phrases like this make me feel a little bit queasy:
Cost Optimization Program:
The company also announced that it will begin a program to streamline operations across the organization,
which will include a headcount reduction. This realignment will be focused on taking out redundancies
and a reallocation of resources to allow us to focus on the areas that offer the highest growth opportunities
and align with RIM strategic objectives, such as accelerating new product introductions.
Sometimes PR speech is directly symptomatic of executives' thinking. They talk like this because they think like this - i.e. vague, non-committal, detached abstract concepts that sound professional but are ultimately flat, uninspired and purely reactionary.
I'm only saying this because I'm still bitter from my last employment where this kind of business talk was routinely used to fill the void where management's vision was supposed to be. It really begins to grate.
"RIM's real problems center around two big issues: its market is saturating, and it seems to have lost the ability to create great products. This is a classic problem that eventually faces most successful computer platforms. The danger is not that RIM is about to collapse, but that it'll drift into in a situation where it can't afford the investments needed to succeed in the future. It's very easy for a company to accidentally cross that line, and very hard to get back across it."
> "and it seems to have lost the ability to create great products"
I disagree with this part. RIM's products are just as good/bad as they've always been - the problem is that Apple came in and raised the bar across the board, and Google came in and did it some more.
RIM is creating early-2000s product in a landscape that has been completely reshaped by iOS and Android.
This has been true, but recently RIM has moved towards a system more similar to iOS and Android than their previous products. The Playbook is the first product in this new technology stack.
I imagine that they are basing their future growth around other products based on this new stack. They are behind, but they may still catch up enough to do well. After all, if Apple has proven anything it's that execution matters a whole lot. More so even than features.
Android is a good competitor to iOS only because they have both the features and execution down well enough. Apple may still have an edge in polish, but it's diminishing.
The problem is RIM still thinks it's making great products - the Blackberry phones. They think this because countries that have heard of the Blackberry brand for years, but not so much about "Android" or even iPhone, have started buying a lot of Blackberry phones lately.
What RIM didn't realize is that this was happening because of their global inertia, not because their products are still very competitive with iPhones and high-end Android phones. After all, there are still a lot of people who keep buying high-end Nokia phones rather than iPhones or Android phones.
It's all about inertia. They experience growth in new markets (for now - just a matter of time) but their core markets are fading away. This could blind them for years from seeing that they will be in trouble eventually, because overall they were still making a lot of money until more recently.
The next time something like the iPhone launch happens, I'm going to listen to the voice in the back of my head telling me to short the competition over the next three years...
When the iPhone was announced, RIM was trading at just under $50/share. It's now trading at ~$35, its lowest point since. To realize that gain, you would have had to hold your short position in RIM for over 4 years.
Alternatively, if you believed in the iPhone, why not just invest in Apple? Their stock has risen 300% over that same period.
Good luck spotting the next iPhone. It wasn't exactly a given that the iPhone was going to be a success. And if you remove the recession, MSFT hasn't really moved it's just stagnent. Same for RIM from what I can see EDIT: I was wrong on rim they went to 100 bucks in 2008 but quickly dropped back to 40-50 range where they are now. I was looking at 2007 where they were in the same range.
Point of order: Shorting is a bit more complicated than just a "anti-buy". If you short a stock, and it goes up, then you owe your broker money. This is called a "margin call", and if you will recall, it was what bankrupted the Duke brothers in Trading Places.
If you shorted a stock at $50, covered your margins up to $100, and waited another three years to close out your position at $35, either you have testicular elephantiasis, or a goddamn crystal ball.
I think it was pretty obvious that the iPhone was going to be a huge success. It's one reason why Microsoft's board is negligent in keeping Ballmer as CEO. If it was obvious to me that the entire cell phone industry (or at least the only profitable part of it) was being turned on its head, it should've been even more obvious to Ballmer, Lazaridis, and other key industry executives.
The iPad, though, was a different story. I knew I wanted a giant iPod Touch as soon as the iPhone came out, but when the iPad was finally announced I wasn't sure if they were going to sell 2,000 of them or 20,000,000. To this day I think my uncertainty was defensible, because unlike phones there was no existing mass market.
If you think Alan Kay had any vision and market sense whatsoever, you might have guessed they'd do well (this was the day before the iPad was to be released):
I think it was pretty obvious that the iPhone was going to
be a huge success.
There's more 20/20 hindsight in this thread than a rear-view mirror convention. Could you please furnish the public statement you made four years ago where you asserted the doom of all the market leaders, or failing that, brokerage documents showing your massive investment in Apple Inc in 2007?
I didn't assert anyone's doom. At the time I assumed that everybody interested in the smartphone business, not just Apple, was heading in the same obvious direction.
Jobs' boast about being three years ahead of everyone else sounded like empty hype, and Ballmer's public assertion that the iPhone would never gain significant market share sounded like strategic misdirection.
I'm not going to post any trade confirmations, but I did buy some AAPL in response to the iPhone announcement, thinking it was a good way for the company to leverage its existing strengths in UX design. Should've bought more, but hey, it was AAPL, and the conventional wisdom at the time went something like, "What kind of moron would put a lot of money into AAPL?"
I don't lay claim to any magical insight, and that's the whole point of my post.
I realize it's probably early, but can anyone find any layoff numbers? (even vague numbers, on a scale between "a few" and "a boatload" will be accepted)
I'd expect that the layoffs would be centered around the old OS. Anyone involved in the new OS is likely to be safe. Or at least that sounds like a logical approach.
I'd expect the layoffs to be around 5% maybe at most 10%, but really things can still turn around for RIM if they can get their new OS out in mass, so I think we are still not quite in a complete panic.
Blackberry had the smartphone lead in the UK for 2010 [1], and is still growing. [2]
Blackberry has a 42% share of the smartphone market in Canada. [3] They also dominate other markets like Argentina. [4]
I wouldn't count them out just yet. I don't see the Playbook getting much of a response from users who don't already use BBs, but their handsets will have a long life. They will have to move fast to keep up with Android, but I think this announcement is a good example that they are aware.
Not to mention their growth in India. Where 50 million subscribers get added every month. BB is growing very fast here and iPhone is not affordable to most of the indians.
The sad fact is that RIM just can't seem to decide where it's going as a company. They have an entire host of phones that are totally obsolete[1], their tablet doesn't run an operating system that was built in house[2] and for some reason they decided to force people to have a blackberry phone to get the very features most people would use the tablet for.[3] So if I'm in the market for a phone, why on earth would I go with a blackberry?(And no, BBM is not enough)
Rather than build the OS themselves, they decided to acquire it. That tells me that RIM is suffering from a lack of creativity and while you can buy your way to innovation(Microsoft has been doing it for more than 20 years) it's always better to develop new technology in house. The fact that RIM didn't for a flagship product is a huge red flag.
When it became clear to Apple that they would need a new OS, they bought NeXT in 1996, and the OS they got that way seems to have worked well for them -- on computers and on phones. Also, Google got its mobile OS by buying Android, Inc, in 2005.
The potential deathblow for a lot of these struggling platforms is that Apple is coasting on a longer (15 month?) product cycle this year. RIM, Nokia (and Windows Phone generally)and HP's webOS platform are counting on big fall launches, but a big simultaneous iPhone launch might relegate the rest to noise. If the rumored new Nexus phone launches around the same time, it's not hard to imagine a 2 way platform race.
It took about 3 years for most of the competition to catch up to what the iPhone launched as. Microsoft kept trying to ride the WP 6 train hoping the iPhone was going to flop and not become the next iPod. Eventually they had to do a major rewrite which put them a few years behind of iPhone. Oops. Blackberry Storm and Torch are both still below par and not even competitive against Android devices, let alone iPhone. Nokia never caught up at all with the iPhone.
Similar story is playing out with the iPad. Android is catching up on hardware, but not software ecosystem. Maybe that will be different in a year, but the market could certainly shape up to be more like the iPod dominance of music players than the iPhone/Android dominance of phones. Windows 8 will launch when? 2 or 3 years after the iPad. Sound familiar? Blackberry Playbook is out, but that's such a mess it's not worth discussing.
Steve Jobs was right back in 2007 and most of the market is still 2-3 years behind where Apple is.