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This is my biggest question (and I'd love thoughts from HN people on it); if Android is mostly seen on handsets with very small margins that compete on price wi

This is my biggest question (and I'd love thoughts from HN people on it); if Android is mostly seen on handsets with very small margins that compete on price with almost identical features... who's paying for the R&D to keep up with Apple's innovations? That question assumes that innovation is important in the smartphone sector. That may not be the case I guess. I'm just trying to understand the end situation as best I can as like a number of startups our future heavily depends on smartphones.

aditya42 16y ago
Innovation is always important. The iPhone was innovative. iOS was innovative. Without those two, we wouldn't be having this discussion. We would still be using Nokias and Blackberries, or Android phones which would be like Blackberries -- not the iPhone. As far as paying for R&D goes, how much does it take to replicate something? I'd say a fraction of the cost since you already have the product in front of you. All you need to do is duplicate it.
- DrJokepu 16y ago
  And that's exactly where the much hated patents (software or otherwise) would have a role, in my opinion; protecting hard-earned innovation. That's what they're supposed achieve, but due to the completely broken patent system, they're only good for "patent trolling".
ergo98 16y ago
Apple is responsible for shockingly little of the innovation in the smartphone field. They didn't create their processor (though they managed to brand it and fool a lot of people for a while). They didn't create the GPU. They didn't create the "Retina display" or their memory or their touchscreen sensor. They are a software company that other companies -- like LG and Samsung -- supply with hardware. The electronics market has traditionally been a very low margin industry (which is good for consumers). Apple has managed a pretty remarkable game of finding a very profitable niche and exploiting it as it exploded, with them in a leadership position, however it is not sustainable, which Apple realizes. And it is simply perverse seeing people actually bragging on behalf of Apple about the fact that they are rolling in cash.
- Hoff 16y ago
  Then why not connect all those thoughts together? If it was so easy and if the hardware was so widely available and if the stuff here is a commodity and if user interface design and fit and finish was so easy, then why is Apple the bunch that is rolling in cash, and not looking like roadkill? From what I've encountered with many of the low-margin commodity products, various manufacturers reach the "it works and meets our minimal specs, ship it" stage, and we get lids and covers and doors and other pieces that don't fit or quickly break and fall off, software and firmware incompatibility or crashes, fuzzy displays, sloppy switch mechanisms, user interfaces that are somewhere between truly bizarre and purely inscrutable, and related, well, dreck. And for the consumers, a low-margin business means plug-compatible race-to-the-bottom no-name interchangeable and irrelevant product vendors, too. Sure. There's a market for dreck. But as you've noticed, it doesn't pay well.
  - ergo98 16y ago
    >Then why not connect all those thoughts together? If it was so easy Who are you responding to? I didn't say it was "easy". I further said that Apple is a software company, not a hardware company. They do software well. Their hardware superiority is 90% myth, 10% reality. There were excellent Windows Mobile devices with high resolution displays, better processors, more RAM, and on and on, long before Apple brought that "innovation". You could directly attribute the fact that Apple isn't responsible for most of that hardware R&D for their high profit margins. They know to buy the cutting edge from the rest of the industry, put some software on it, and they've got a product. Apple puts some great software on it and made a well integrated device. Their only innovation is in software. In hardware they're not much more than a VAR. >From what I've encountered with many of the low-margin commodity products I like the addition of the editorialized "commodity" there. However your core point is utter nonsense. Almost every bit of extremely high quality electronics hardware you can buy in the industry, from ultra-high end LED televisions to audio equipment to high performance routers to digital cameras, came from a company making very low margins, yet managing to yield a very respectable billion or so in profit. Apple has a short time where they essentially could go to the bank on the backs of a cult-like following. That isn't a scalable business model, which is exactly why Apple is warning about reduced margins going forward.

aditya42 16y ago

Innovation is always important. The iPhone was innovative. iOS was innovative. Without those two, we wouldn't be having this discussion. We would still be using Nokias and Blackberries, or Android phones which would be like Blackberries -- not the iPhone. As far as paying for R&D goes, how much does it take to replicate something? I'd say a fraction of the cost since you already have the product in front of you. All you need to do is duplicate it.

DrJokepu 16y ago
And that's exactly where the much hated patents (software or otherwise) would have a role, in my opinion; protecting hard-earned innovation. That's what they're supposed achieve, but due to the completely broken patent system, they're only good for "patent trolling".

ergo98 16y ago

Apple is responsible for shockingly little of the innovation in the smartphone field. They didn't create their processor (though they managed to brand it and fool a lot of people for a while). They didn't create the GPU. They didn't create the "Retina display" or their memory or their touchscreen sensor. They are a software company that other companies -- like LG and Samsung -- supply with hardware. The electronics market has traditionally been a very low margin industry (which is good for consumers). Apple has managed a pretty remarkable game of finding a very profitable niche and exploiting it as it exploded, with them in a leadership position, however it is not sustainable, which Apple realizes. And it is simply perverse seeing people actually bragging on behalf of Apple about the fact that they are rolling in cash.

Hoff 16y ago
Then why not connect all those thoughts together? If it was so easy and if the hardware was so widely available and if the stuff here is a commodity and if user interface design and fit and finish was so easy, then why is Apple the bunch that is rolling in cash, and not looking like roadkill? From what I've encountered with many of the low-margin commodity products, various manufacturers reach the "it works and meets our minimal specs, ship it" stage, and we get lids and covers and doors and other pieces that don't fit or quickly break and fall off, software and firmware incompatibility or crashes, fuzzy displays, sloppy switch mechanisms, user interfaces that are somewhere between truly bizarre and purely inscrutable, and related, well, dreck. And for the consumers, a low-margin business means plug-compatible race-to-the-bottom no-name interchangeable and irrelevant product vendors, too. Sure. There's a market for dreck. But as you've noticed, it doesn't pay well.
- ergo98 16y ago
  >Then why not connect all those thoughts together? If it was so easy Who are you responding to? I didn't say it was "easy". I further said that Apple is a software company, not a hardware company. They do software well. Their hardware superiority is 90% myth, 10% reality. There were excellent Windows Mobile devices with high resolution displays, better processors, more RAM, and on and on, long before Apple brought that "innovation". You could directly attribute the fact that Apple isn't responsible for most of that hardware R&D for their high profit margins. They know to buy the cutting edge from the rest of the industry, put some software on it, and they've got a product. Apple puts some great software on it and made a well integrated device. Their only innovation is in software. In hardware they're not much more than a VAR. >From what I've encountered with many of the low-margin commodity products I like the addition of the editorialized "commodity" there. However your core point is utter nonsense. Almost every bit of extremely high quality electronics hardware you can buy in the industry, from ultra-high end LED televisions to audio equipment to high performance routers to digital cameras, came from a company making very low margins, yet managing to yield a very respectable billion or so in profit. Apple has a short time where they essentially could go to the bank on the backs of a cult-like following. That isn't a scalable business model, which is exactly why Apple is warning about reduced margins going forward.