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>>Ya I wouldn't make the mistake of saying that it's the death-knell of the smart phone. I just think we'll be seeing a significant contraction of the market th

>>Ya I wouldn't make the mistake of saying that it's the death-knell of the smart phone. I just think we'll be seeing a significant contraction of the market that has driven the insane profits apple has had for the past few years. Certainly smartphones will be a massive and massively profitable product for years to come.<< I'm unsure my point came across clearly; if it didn't then the fault lies with me. The GTR and the 911 (in all its variants) are in the performance segment. No one is saying just because the GTR exists, all other segments like SUVs, MPVs, saloons/sedans etc will no longer exist. To reiterate: despite Porsches costing more and GTRs costing less, and on an objective level the GTR is a better car in terms of performance, 911 sales are not flagging off. They have instead increased. And the 911 is already more than 50 years old. [1] So your conjecture that premium luxury smartphone sales like the iPhone will level off or even be reduced due to "commoditization" is not very well-supported. In fact the inverse is true: Porsche is one of the most profitable car makers on a per-unit basis. [2] >>I don't expect Apple to lose significant market share in places where they're already established. I mostly expect that the upgrade rate will slow, and they will not gain new market share in India and China. The sum of those two things is a substantial decline in profits for them over the next couple of years.<< I think this is where we fundamentally disagree. In my experience I have never once met a person who said they aspire to own a Hyundai, Kia, Lada etc or have a poster of these cars on their bedroom wall. Nothing wrong with these brands of course, they bring in profits for the manufacturers. But these are different markets we are talking about. It is true that Porsche had to come up with the Cayenne to stave off bankruptcy, because at that time SUVs were in demand and they did not have one in their lineup. Yet this is instructive as it only reinforces my point because the Cayenne is now the #1 selling Porsche. Chevy, Ford and all the other makers combined can continue to sell more SUVs than Porsche does Cayennes but they are in different markets. People who buy Cayennes don't even consider these other brands. They might consider Land Rover or Mercedes/BMW or even sister-label Audi (essentially the same chassis). Same applies to the iPhone vis-a-vis Android "replacements". Who knows, perhaps the iPhone SE may one day become the #1 selling iPhone? tl;dr it is possible for a premium luxury manufacturer to continue to grow and expand its business, despite being in a mature industry like autos. [1] http://press.porsche.com/more_about/statistics/ http://press.porsche.com/more_about/statistics/ [2] https://en.wikipedia.org/wiki/Porsche#Production_and_sales https://en.wikipedia.org/wiki/Porsche#Production_and_sales

darawk 10y ago
Ya, your point is well made. I think where I would disagree is that cars have always been about identity. Nobody (or very few, at least) people buy a Cayenne because it's fast or performs well. People buy it because they think it says something about who they are. The fact that it's highly performant is just how you rationalize the price to the consumer. Cars can get away with this because they are so well wrapped up with the presentation and identity of their owners/drivers. To some extent, this is true of phones. But I guess I just don't think it's nearly as much the case as it is with cars. Somewhat ironically, this is because an iPhone is not expensive enough to really say much about the wealth of its owner. At least - not in the way that a car does. Admittedly, that might be slightly hold less true in developing economies, where the ownership of an iPhone really is something only the (relatively) wealthy can attain. But in that case, their rate of expansion is determined by the rate at which people rise out of poverty. Which I don't think is fast enough to outpace the declining upgrade rates.

darawk 10y ago

Ya, your point is well made. I think where I would disagree is that cars have always been about identity. Nobody (or very few, at least) people buy a Cayenne because it's fast or performs well. People buy it because they think it says something about who they are. The fact that it's highly performant is just how you rationalize the price to the consumer. Cars can get away with this because they are so well wrapped up with the presentation and identity of their owners/drivers. To some extent, this is true of phones. But I guess I just don't think it's nearly as much the case as it is with cars. Somewhat ironically, this is because an iPhone is not expensive enough to really say much about the wealth of its owner. At least - not in the way that a car does. Admittedly, that might be slightly hold less true in developing economies, where the ownership of an iPhone really is something only the (relatively) wealthy can attain. But in that case, their rate of expansion is determined by the rate at which people rise out of poverty. Which I don't think is fast enough to outpace the declining upgrade rates.