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To be clear I think Apple has a great model, but they need to be realistic that it won't last. The only markets in the world that the iPhone has substantial ma

To be clear I think Apple has a great model, but they need to be realistic that it won't last. The only markets in the world that the iPhone has substantial market share is in countries with subsidies (at least I believe so). In markets with no subsidy, Android is killing. As the US (and the world) moves more to a non-subsidy model I think this disproportionately impacts the iPhone. All OEMs will have to deal with this, but Samsung, LG, Huawei, Coolpad, are used to this world already as they sell really well worldwide. iPhone hasn't figured out how to sell full price phones around the world.

gress 13y ago
That 'android' that is killing is AOSP, not GMS, and the accompanying users are the least valuable to operators. Where the market is not saturated, any customer is a win, but in saturated markets, the competition is to skim premium customers out of the churn. If anything this situation is likely to become more prevalent, not less so.
blktiger 13y ago
Apple doesn't focus on market share and it never has. Instead they focus on profit. Take (for example), the personal computer market. According to wikipedia, Mac OS X has around a 7% market share[1] yet Apple's larger competitors like HP and Dell are barely making any money while Apple is still making huge profits. (Not as much as on their iOS businesses of course.) [1] https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste...
- kenjackson 13y ago
  Apple does focus on marketshare, but a different market than most pundits look at. Even when they launched the iPhone Steve Jobs had a specific marketshare target (I think it was 1% or something). The issue they have is that they've so dominated the US in marketshare with a great subsidy model that they've generated record profits. It's hard to come down from that to say, "well our profits will drop substantially, but we're happy at being 20% of the US market -- which is actually much better than our wildly successful PC market". They can't afford to do that -- unless they have some magic up their sleeve.
awj 13y ago
> As the US (and the world) moves more to a non-subsidy model I think this disproportionately impacts the iPhone. This is the exact model Apple's computer division deals with, and they're wildly profitable compared to most PC vendors even though they charge premium prices all around. What's different about phones?
- Touche 13y ago
  The computer division is funded by the overall success of Apple. It allows the computer division to have a bigger budget to spend on things like marketing and R&D. It's not a coincidence that the computer division has been doing so much better since Apple had other mega-successes that serve as the cash cow for the entire company. If the iPhone ever ceases to be as profitable it will have a ripple-effect throughout the entire company as they scramble to find the next thing that will replace those lost profits.
  - redler 13y ago
    Actually, Apple spends remarkably little on R&D, perhaps even to a fault. The third chart on this page from Asymco [1] is interesting, especially considering Apple's R&D is for computers, phones, and whatever other lines they're developing, and the R&D for a company like HTC is likely to be clustered around its narrower product lines. [1] http://www.asymco.com/2012/01/30/you-cannot-buy-innovation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Asymco+%28asymco%29 http://www.asymco.com/2012/01/30/you-cannot-buy-innovation/?...

gress 13y ago

That 'android' that is killing is AOSP, not GMS, and the accompanying users are the least valuable to operators. Where the market is not saturated, any customer is a win, but in saturated markets, the competition is to skim premium customers out of the churn. If anything this situation is likely to become more prevalent, not less so.

blktiger 13y ago

Apple doesn't focus on market share and it never has. Instead they focus on profit. Take (for example), the personal computer market. According to wikipedia, Mac OS X has around a 7% market share[1] yet Apple's larger competitors like HP and Dell are barely making any money while Apple is still making huge profits. (Not as much as on their iOS businesses of course.) [1] https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste...

kenjackson 13y ago
Apple does focus on marketshare, but a different market than most pundits look at. Even when they launched the iPhone Steve Jobs had a specific marketshare target (I think it was 1% or something). The issue they have is that they've so dominated the US in marketshare with a great subsidy model that they've generated record profits. It's hard to come down from that to say, "well our profits will drop substantially, but we're happy at being 20% of the US market -- which is actually much better than our wildly successful PC market". They can't afford to do that -- unless they have some magic up their sleeve.

awj 13y ago

> As the US (and the world) moves more to a non-subsidy model I think this disproportionately impacts the iPhone. This is the exact model Apple's computer division deals with, and they're wildly profitable compared to most PC vendors even though they charge premium prices all around. What's different about phones?

Touche 13y ago
The computer division is funded by the overall success of Apple. It allows the computer division to have a bigger budget to spend on things like marketing and R&D. It's not a coincidence that the computer division has been doing so much better since Apple had other mega-successes that serve as the cash cow for the entire company. If the iPhone ever ceases to be as profitable it will have a ripple-effect throughout the entire company as they scramble to find the next thing that will replace those lost profits.
- redler 13y ago
  Actually, Apple spends remarkably little on R&D, perhaps even to a fault. The third chart on this page from Asymco [1] is interesting, especially considering Apple's R&D is for computers, phones, and whatever other lines they're developing, and the R&D for a company like HTC is likely to be clustered around its narrower product lines. [1] http://www.asymco.com/2012/01/30/you-cannot-buy-innovation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Asymco+%28asymco%29 http://www.asymco.com/2012/01/30/you-cannot-buy-innovation/?...