7 ms·

So this is going to play out just like Windows vs Mac.

by ryandvm 15y ago

jamwt 15y ago
Yep--low margin but ubiquitous commodity provider vs. high margin but low market share premium offering.
- deleted 15y ago
  [deleted]
- kenjackson 15y ago
  One thing I don't get though is that Android phones aren't very low margin. Their retail price is just as high as an iPhone (or at least close). Even feature phones aren't cheap. So do non-iPhone phones not get subsidized at full retail pricing (or generally much more substantially than the iPhone)?
  - jinushaun 15y ago
    With the exception of my gadget geek friends ponying big money for the latest 4G-whatever, everyone I know who has an Android phone got it on a two-for-one special or nearly free discount. These huge Android growth numbers aren't being driven by the $300 mega phones.
    - blinkingled 15y ago
      Cost of the handset is fraction of the overall 2 yr contract price with data plans that are must for these devices. I know people are eager to label Android as "cheap" and "commodity" but the reality is that there are hugely popular Android handsets in both premium and low cost segments and it isn't clear at all that all of the sales are from low end handsets. Similarly Apple sells $49 3GS - so does Apple now become a commodity/cheap brand?
    - enjo 15y ago
      My anecdotal experience would suggest otherwise...
  - nextparadigms 15y ago
    Nobody ever posts facts to back that up. They just assume it would be true. But HTC and Samsung are making a lot of profit on their Android phones, much more than they ever did with other mobile OS.
  - JohnsonB 15y ago
    The issue is that Android can be used on any hardware product whatsoever, so inevitably there will be both premium and more commodity type products that cover all market segments. Virgin Mobile already has non contract Android smart phones that retail (no rebate) for $150, far cheaper than an iPhone.
  - webwright 15y ago
    "One thing I don't get though is that Android phones aren't very low margin." http://www.verizonwireless.com/b2c/store/controller?item=phoneFirst&action=viewPhoneOverviewByDevice&deviceCategoryId=1 http://www.verizonwireless.com/b2c/store/controller?item=pho... $80 android phone right there. I assume that's lower margin than, say, the $200-300 iphones that Verizon sells with a 2 year contract. Apple is culturally stuck to high margins. Google cares only about making sure Apple doesn't win and the other handset makers are used to pretty lean margins... Androids will keep getting cheaper-- there'll be free/near-free ones out there soon.
    - kenjackson 15y ago
      For some reason that link doesn't work for me. But my point isn't the price the customer pays. But rather the price the carrier pays to HTC/Samsung. That's the money that the actual OEM makes. Those prices, if they're equal to the non-contract price, aren't that far off of the iPhone. Even feature phones are routinely $150 or so.
  - mercurio 15y ago
    iPhones get a much bigger subsidy from the carriers. This can be deduced from the ASP that Apple, HTC, RIM etc report. iPhone ASP has always been $600+, while HTC, RIM have ASPs around $300-400 (Samsung smartphone ASP is even lower). This can also be seen by looking at contract prices outside the US. For example, in the UK all phones can be had free on contract, but the monthly amount you pay for an iPhone is much larger than for a top of the line Android (see the O2 or Vodafone UK sites). The reason this is not reflected in the contract-less prices is because US carriers have a very strong incentive to inflate them to force you to choose contracts.
    - kenjackson 15y ago
      Perfect response. Thanks. That explains a lot of it.
    - nl 15y ago
      This isn't the case. The high-end Android phones start out roughly the same price as the iPhone, but drop quicker (because new high end models replace them quicker). Here are the Australian unlocked prices (Android reseller chosen because it was the top result in Google): iPhone4, prices $719-$999: http://store.apple.com/au/browse/home/shop_iphone/family/iphone http://store.apple.com/au/browse/home/shop_iphone/family/iph... Samsung Galaxy S2, price $749: http://www.mobicity.com.au/samsung-galaxy-s2.html http://www.mobicity.com.au/samsung-galaxy-s2.html Samsung Galaxy S (ie, old model similar age to iPhone4, which started out priced similar to iPhone 4), price $549: http://www.mobicity.com.au/samsung-i9000-galaxy-s-8gb-nextg.html http://www.mobicity.com.au/samsung-i9000-galaxy-s-8gb-nextg....
      - mercurio 15y ago
        Actually, in your link above, iPhone 4 prices start from $859. $719 is the price of the 3GS. I don't know how it is in Australia, but the contract price discrepancy between Android phones and iPhones is well known in England. For example, O2 sells the Galaxy S2 for free with a 24 month £42 plan, while the 16GB iPhone 4 is free on a 24 month £67 plan. http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Samsung/Galaxy_S_II http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Samsung/G... http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Apple/iPhone_4_16GB_Black http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Apple/iPh...
- zmmmmm 15y ago
  I'm not sure that's right. I think it's better to characterize it as high margin low market share premium offering vs everything (high, low, middle). Android's strength is exactly that it doesn't target anything and caters to every single demographic.
bonch 15y ago
Not necessarily. iOS already surpasses Android in mobile OS market share, and Android isn't making any inroads into tablets and other mobile computing devices, which will probably be the bigger market than smartphones.
- nextparadigms 15y ago
  It won't be a bigger market than smartphones, not even close. There are 5 billion phone subscriptions in the world right now. They will all be replaced by smartphones. EDIT: Also iOS growth is slower than Android growth, still, so it's just a matter of time before even iOS numbers get beaten, with or without Android tablets.
  - ChuckMcM 15y ago
    "There are 5 billion phone subscriptions in the world right now. They will all be replaced by smartphones." Not saying I disagree but I am saying you have to be careful with blanket statements like this. I recall Olympus stating that phones were simply incapable of competing with digital cameras, regardless of market. However the market has shown that phones eat into the low end market and the SLRs are pushing down from the top putting a lot of pressure on the mid-range market. I could imagine that the 'phone' function as an adjunct to all tablets. All you need is a headset and voice dialing and your tablet can go VOIP/Cellular as the channel availability demands. Services like Gvoice making the endpoints number vanish by overlaying it with a 'logical' phone number. Its not a huge step to cannibalization of the smartphone market by the tablet market.
    - Zaak 15y ago
      A tablet doesn't fit in your pocket. I carry my phone everywhere I go. Though I would love to have a tablet, I can't imagine doing the same with one.
      - cryptoz 15y ago
        It's a very person to person thing. I carry both a smartphone and a tablet with me everywhere and I find myself never using the phone unless someone actually....phones.
mercurio 15y ago
Except that Windows vs Mac was something like 95% to 5% in favor of Windows, while the smartphone market is likely to end up more like 60% to 30% in favor of Android. The situation is different qualitatively. The data consistently shows that iPhone share is growing, just not as fast as Android.
- cppsnob 15y ago
  When a market is growing, it allows everyone to grow... for a while. Check out the Commodore 64 in this graph: http://jeremyreimer.com/totalshare5.gif http://jeremyreimer.com/totalshare5.gif
  - deleted 15y ago
    [deleted]
tobylane 15y ago
It's easy to make a program for windows run ok on XP and brilliantly on 7 (I assume, never tried, that you do something like target net 3 or something else M$ have backported). It sounds like you can't be so successful with the old android phones, even if you tried.

So this is going to play out just like Windows vs Mac.

by ryandvm 15y ago

So this is going to play out just like Windows vs Mac.

jamwt 15y ago

Yep--low margin but ubiquitous commodity provider vs. high margin but low market share premium offering.

deleted 15y ago
[deleted]
kenjackson 15y ago
One thing I don't get though is that Android phones aren't very low margin. Their retail price is just as high as an iPhone (or at least close). Even feature phones aren't cheap. So do non-iPhone phones not get subsidized at full retail pricing (or generally much more substantially than the iPhone)?
- jinushaun 15y ago
  With the exception of my gadget geek friends ponying big money for the latest 4G-whatever, everyone I know who has an Android phone got it on a two-for-one special or nearly free discount. These huge Android growth numbers aren't being driven by the $300 mega phones.
  - blinkingled 15y ago
    Cost of the handset is fraction of the overall 2 yr contract price with data plans that are must for these devices. I know people are eager to label Android as "cheap" and "commodity" but the reality is that there are hugely popular Android handsets in both premium and low cost segments and it isn't clear at all that all of the sales are from low end handsets. Similarly Apple sells $49 3GS - so does Apple now become a commodity/cheap brand?
  - enjo 15y ago
    My anecdotal experience would suggest otherwise...
- nextparadigms 15y ago
  Nobody ever posts facts to back that up. They just assume it would be true. But HTC and Samsung are making a lot of profit on their Android phones, much more than they ever did with other mobile OS.
- JohnsonB 15y ago
  The issue is that Android can be used on any hardware product whatsoever, so inevitably there will be both premium and more commodity type products that cover all market segments. Virgin Mobile already has non contract Android smart phones that retail (no rebate) for $150, far cheaper than an iPhone.
- webwright 15y ago
  "One thing I don't get though is that Android phones aren't very low margin." http://www.verizonwireless.com/b2c/store/controller?item=phoneFirst&action=viewPhoneOverviewByDevice&deviceCategoryId=1 http://www.verizonwireless.com/b2c/store/controller?item=pho... $80 android phone right there. I assume that's lower margin than, say, the $200-300 iphones that Verizon sells with a 2 year contract. Apple is culturally stuck to high margins. Google cares only about making sure Apple doesn't win and the other handset makers are used to pretty lean margins... Androids will keep getting cheaper-- there'll be free/near-free ones out there soon.
  - kenjackson 15y ago
    For some reason that link doesn't work for me. But my point isn't the price the customer pays. But rather the price the carrier pays to HTC/Samsung. That's the money that the actual OEM makes. Those prices, if they're equal to the non-contract price, aren't that far off of the iPhone. Even feature phones are routinely $150 or so.
- mercurio 15y ago
  iPhones get a much bigger subsidy from the carriers. This can be deduced from the ASP that Apple, HTC, RIM etc report. iPhone ASP has always been $600+, while HTC, RIM have ASPs around $300-400 (Samsung smartphone ASP is even lower). This can also be seen by looking at contract prices outside the US. For example, in the UK all phones can be had free on contract, but the monthly amount you pay for an iPhone is much larger than for a top of the line Android (see the O2 or Vodafone UK sites). The reason this is not reflected in the contract-less prices is because US carriers have a very strong incentive to inflate them to force you to choose contracts.
  - kenjackson 15y ago
    Perfect response. Thanks. That explains a lot of it.
  - nl 15y ago
    This isn't the case. The high-end Android phones start out roughly the same price as the iPhone, but drop quicker (because new high end models replace them quicker). Here are the Australian unlocked prices (Android reseller chosen because it was the top result in Google): iPhone4, prices $719-$999: http://store.apple.com/au/browse/home/shop_iphone/family/iphone http://store.apple.com/au/browse/home/shop_iphone/family/iph... Samsung Galaxy S2, price $749: http://www.mobicity.com.au/samsung-galaxy-s2.html http://www.mobicity.com.au/samsung-galaxy-s2.html Samsung Galaxy S (ie, old model similar age to iPhone4, which started out priced similar to iPhone 4), price $549: http://www.mobicity.com.au/samsung-i9000-galaxy-s-8gb-nextg.html http://www.mobicity.com.au/samsung-i9000-galaxy-s-8gb-nextg....
    - mercurio 15y ago
      Actually, in your link above, iPhone 4 prices start from $859. $719 is the price of the 3GS. I don't know how it is in Australia, but the contract price discrepancy between Android phones and iPhones is well known in England. For example, O2 sells the Galaxy S2 for free with a 24 month £42 plan, while the 16GB iPhone 4 is free on a 24 month £67 plan. http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Samsung/Galaxy_S_II http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Samsung/G... http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Apple/iPhone_4_16GB_Black http://shop.o2.co.uk/mobile_phone/pay_monthly/init/Apple/iPh...
zmmmmm 15y ago
I'm not sure that's right. I think it's better to characterize it as high margin low market share premium offering vs everything (high, low, middle). Android's strength is exactly that it doesn't target anything and caters to every single demographic.

bonch 15y ago

Not necessarily. iOS already surpasses Android in mobile OS market share, and Android isn't making any inroads into tablets and other mobile computing devices, which will probably be the bigger market than smartphones.

nextparadigms 15y ago
It won't be a bigger market than smartphones, not even close. There are 5 billion phone subscriptions in the world right now. They will all be replaced by smartphones. EDIT: Also iOS growth is slower than Android growth, still, so it's just a matter of time before even iOS numbers get beaten, with or without Android tablets.
- ChuckMcM 15y ago
  "There are 5 billion phone subscriptions in the world right now. They will all be replaced by smartphones." Not saying I disagree but I am saying you have to be careful with blanket statements like this. I recall Olympus stating that phones were simply incapable of competing with digital cameras, regardless of market. However the market has shown that phones eat into the low end market and the SLRs are pushing down from the top putting a lot of pressure on the mid-range market. I could imagine that the 'phone' function as an adjunct to all tablets. All you need is a headset and voice dialing and your tablet can go VOIP/Cellular as the channel availability demands. Services like Gvoice making the endpoints number vanish by overlaying it with a 'logical' phone number. Its not a huge step to cannibalization of the smartphone market by the tablet market.
  - Zaak 15y ago
    A tablet doesn't fit in your pocket. I carry my phone everywhere I go. Though I would love to have a tablet, I can't imagine doing the same with one.
    - cryptoz 15y ago
      It's a very person to person thing. I carry both a smartphone and a tablet with me everywhere and I find myself never using the phone unless someone actually....phones.

mercurio 15y ago

Except that Windows vs Mac was something like 95% to 5% in favor of Windows, while the smartphone market is likely to end up more like 60% to 30% in favor of Android. The situation is different qualitatively. The data consistently shows that iPhone share is growing, just not as fast as Android.

cppsnob 15y ago
When a market is growing, it allows everyone to grow... for a while. Check out the Commodore 64 in this graph: http://jeremyreimer.com/totalshare5.gif http://jeremyreimer.com/totalshare5.gif
- deleted 15y ago
  [deleted]

tobylane 15y ago

It's easy to make a program for windows run ok on XP and brilliantly on 7 (I assume, never tried, that you do something like target net 3 or something else M$ have backported). It sounds like you can't be so successful with the old android phones, even if you tried.