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I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsun

by foobar1962 8y ago

I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsung and Huawei. He may be right about Apple being 3rd, but Apple looks to be the only one making a decent profit from their phones. How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free?

malux85 8y ago
Because when the iPhone came out it was very expensive but significantly ahead of competition. People paid for it, even people who couldn’t afford it found a way to pay for an iPhone The huge cash burst into Apple meant everyone was scrambling to deal with them. Then economies of scale, negotiating leverage with third parties and sheer momentum propelled them
- AceJohnny2 8y ago
  > Because when the iPhone came out it was very expensive but significantly ahead of competition. From a CPU perspective, they still are: https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-review-unveiling-the-silicon-secrets/4 https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-re... (for the rest of the features, that's indeed debatable) Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house.
  - oblio 8y ago
    The thing is, that CPU bit is not really relevant for the average consumer, anymore. Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years. Not that I'm against extra horse power, we'll find a use for it. But we're in "desktop land", almost, for smartphone CPUs. They're good enough. The real smartphone battles now are in camera quality, gaming oomph and battery usage.
    - praveenweb 8y ago
      CPU bit might be relevant for those who care about Privacy. Apple markets the fact that all processing (some ML/AI stuff) is done on device and not on the cloud, hence requiring good processing power. But as you mentioned the battle is skewed towards Camera and Battery usage.
    - viraptor 8y ago
      > Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years. I think it's been longer. I'm on a non-flagship from last year, watching YouTube in PiP mode while writing this comment. Way more than necessary power for causing use.
      - Beldin 8y ago
        Depends of course on your use case. I've been using my flagship phone for 7 years now. It has fulfilled all my needs without any problems, with one hand tied behind its back even. Probably also a case of modest needs, but still.
    - Retric 8y ago
      CPU is far more relevant if you want to keep your phone for 4+ years. The 2 year upgrade cycle on a smartphone is a major expense for many people.
      - oblio 8y ago
        Smartphone tech has matured. A smartphone CPU from 2011 would have been a drag in 2015, a CPU from 2018 will probably still be adequate in 2022.
        lancesells 8y ago
        I've got an iPhone from 2014 and it holds up for me in 2019. I replaced the battery last year and it was like a new phone.
        Retric 8y ago
  - tooltalk 8y ago
    >Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house. I thought PA Semi's specialty was in power management and many didn't consider the acquisition a success as most key figures left the company not too long after the acquisition. Are you sure that Apple actually designed the SOC in-house? Wasn't it Intrinsity, Samsung's collaborator, that co-developed Samsung's Hummingbird core (also used in Apple's A4) to compete with Qualcomm's APs and go beyond the 1Ghz barrier, changed the game? I always thought the Hummingbird was the breakthrough that made the A chips competitive -- Apple bought Intrinsity afterward.
grey-area 8y ago
They target the high end where all the profit is.
anthony_doan 8y ago
> How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? It's their ecosystem, all their hardwares work very well between each other. You have Apple messenger on a macbook connecting to your iphone. For android you need to download pushbullet. I'm not in the ecosystem I prefer Android but I can see why people such as consumer would continue to buy Apple stuff. I'm not entirely sure about their laptops though... Also Apple make a lot of money from services such as itune and their app store. Itune made more than Spotify. It all works together with their close ecosystem. It's a real pain to move from apple to android because text messages goes straight to apple server. You need to sign off and jump a hoop to get text message back to android. Also getting mp3 off of itunes or getting bandcamp mp3s on to itune. It's like LA fitness, at least in 2010, where if you want to cancel your gym membership you need to download the pdf from their website and then mail it to the provided address and then they'll charge you anyway one extra month.
- eridius 8y ago
  You're saying Apple's making the money from the ecosystem, but that's not what the parent is asking. The parent is asking how Apple is making a money on each individual iPhone, which they absolutely are. Even if you never buy into the rest of the Apple ecosystem, merely purchasing an iPhone means Apple is making a profit from you.
- joesb 8y ago
  Lots and lots, I might even say majority, of people who bought iPhones don't have Mac or any other Apple device but iPhones. It's also only recently that the Apple ecosystem is relevant with Continuity stuffs. Before that, iPods, iPhones and iPads are all very isolated and don't require Apple ecosystem much.
- Krasnol 8y ago
  > For android you need to download pushbullet. TIL people are still sending SMS from their PC... I'd say most of us will either use the Signal client or web.whatsapp.com without bothering connecting the actual devices together.
- 8y ago
on_and_off 8y ago
I am of 2 minds about this. On one hand, smartphones are more or less commodities now. Most established smartphone makers can make great phones (at this point I only compare cameras and even then, they also to all be great) so it is only natural that margins become pretty thin. But right now they are just too thin and the ecosystem is not really healthy. We don't really need another Apple making huge margins on its smartphone business though.
- tonyedgecombe 8y ago
  >We don't really need another Apple making huge margins on its smartphone business though. I think I'd argue we need another two or three. Monocultures are almost never a good idea in the long term.
  - pjmlp 8y ago
    I bet monoculture will come to an end when most devices get to run web sites good enough. Even Google is now facing the issue that despite Project Treble, most OEMs don't care to release newer versions or provide the respective upgrades, thus rending useless whatever they show at IO.
Redoubts 8y ago
> when all the others get the software for free? Because it shows.
jayalpha 8y ago
"How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? " Content and Apps. Apple takes a nice bite. Samsung sells a commodity. Then people use the Google Play store and google makes money. I guess Samsung dreams of it's own phone OS. Was it LG or Samsung who bought WebOS?
- sanxiyn 8y ago
  It was LG.

malux85 8y ago

Because when the iPhone came out it was very expensive but significantly ahead of competition. People paid for it, even people who couldn’t afford it found a way to pay for an iPhone The huge cash burst into Apple meant everyone was scrambling to deal with them. Then economies of scale, negotiating leverage with third parties and sheer momentum propelled them

AceJohnny2 8y ago
> Because when the iPhone came out it was very expensive but significantly ahead of competition. From a CPU perspective, they still are: https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-review-unveiling-the-silicon-secrets/4 https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-re... (for the rest of the features, that's indeed debatable) Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house.
- oblio 8y ago
  The thing is, that CPU bit is not really relevant for the average consumer, anymore. Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years. Not that I'm against extra horse power, we'll find a use for it. But we're in "desktop land", almost, for smartphone CPUs. They're good enough. The real smartphone battles now are in camera quality, gaming oomph and battery usage.
  - praveenweb 8y ago
    CPU bit might be relevant for those who care about Privacy. Apple markets the fact that all processing (some ML/AI stuff) is done on device and not on the cloud, hence requiring good processing power. But as you mentioned the battle is skewed towards Camera and Battery usage.
  - viraptor 8y ago
    > Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years. I think it's been longer. I'm on a non-flagship from last year, watching YouTube in PiP mode while writing this comment. Way more than necessary power for causing use.
    - Beldin 8y ago
      Depends of course on your use case. I've been using my flagship phone for 7 years now. It has fulfilled all my needs without any problems, with one hand tied behind its back even. Probably also a case of modest needs, but still.
  - Retric 8y ago
    CPU is far more relevant if you want to keep your phone for 4+ years. The 2 year upgrade cycle on a smartphone is a major expense for many people.
    - oblio 8y ago
      Smartphone tech has matured. A smartphone CPU from 2011 would have been a drag in 2015, a CPU from 2018 will probably still be adequate in 2022.
      - lancesells 8y ago
        I've got an iPhone from 2014 and it holds up for me in 2019. I replaced the battery last year and it was like a new phone.
      - Retric 8y ago
- tooltalk 8y ago
  >Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house. I thought PA Semi's specialty was in power management and many didn't consider the acquisition a success as most key figures left the company not too long after the acquisition. Are you sure that Apple actually designed the SOC in-house? Wasn't it Intrinsity, Samsung's collaborator, that co-developed Samsung's Hummingbird core (also used in Apple's A4) to compete with Qualcomm's APs and go beyond the 1Ghz barrier, changed the game? I always thought the Hummingbird was the breakthrough that made the A chips competitive -- Apple bought Intrinsity afterward.

grey-area 8y ago

They target the high end where all the profit is.

anthony_doan 8y ago

> How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? It's their ecosystem, all their hardwares work very well between each other. You have Apple messenger on a macbook connecting to your iphone. For android you need to download pushbullet. I'm not in the ecosystem I prefer Android but I can see why people such as consumer would continue to buy Apple stuff. I'm not entirely sure about their laptops though... Also Apple make a lot of money from services such as itune and their app store. Itune made more than Spotify. It all works together with their close ecosystem. It's a real pain to move from apple to android because text messages goes straight to apple server. You need to sign off and jump a hoop to get text message back to android. Also getting mp3 off of itunes or getting bandcamp mp3s on to itune. It's like LA fitness, at least in 2010, where if you want to cancel your gym membership you need to download the pdf from their website and then mail it to the provided address and then they'll charge you anyway one extra month.

eridius 8y ago
You're saying Apple's making the money from the ecosystem, but that's not what the parent is asking. The parent is asking how Apple is making a money on each individual iPhone, which they absolutely are. Even if you never buy into the rest of the Apple ecosystem, merely purchasing an iPhone means Apple is making a profit from you.
joesb 8y ago
Lots and lots, I might even say majority, of people who bought iPhones don't have Mac or any other Apple device but iPhones. It's also only recently that the Apple ecosystem is relevant with Continuity stuffs. Before that, iPods, iPhones and iPads are all very isolated and don't require Apple ecosystem much.
Krasnol 8y ago
> For android you need to download pushbullet. TIL people are still sending SMS from their PC... I'd say most of us will either use the Signal client or web.whatsapp.com without bothering connecting the actual devices together.
8y ago

on_and_off 8y ago

I am of 2 minds about this. On one hand, smartphones are more or less commodities now. Most established smartphone makers can make great phones (at this point I only compare cameras and even then, they also to all be great) so it is only natural that margins become pretty thin. But right now they are just too thin and the ecosystem is not really healthy. We don't really need another Apple making huge margins on its smartphone business though.

tonyedgecombe 8y ago
>We don't really need another Apple making huge margins on its smartphone business though. I think I'd argue we need another two or three. Monocultures are almost never a good idea in the long term.
- pjmlp 8y ago
  I bet monoculture will come to an end when most devices get to run web sites good enough. Even Google is now facing the issue that despite Project Treble, most OEMs don't care to release newer versions or provide the respective upgrades, thus rending useless whatever they show at IO.

Redoubts 8y ago

> when all the others get the software for free? Because it shows.

jayalpha 8y ago

"How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? " Content and Apps. Apple takes a nice bite. Samsung sells a commodity. Then people use the Google Play store and google makes money. I guess Samsung dreams of it's own phone OS. Was it LG or Samsung who bought WebOS?

sanxiyn 8y ago
It was LG.