Slashdot Mirror
On the iPhone and Apple's Meteoric Rise To the Top
zacharye writes "Friday marks five years since the world first got its hands on a smartphone that would turn the industry on its head. In five short years, Apple went from the ground floor to being the most profitable company in the smartphone business by a staggering margin. Apple and Samsung — two companies that weren't even on the smartphone industry's map a few years ago — are now the only two major global vendors making money, and the split was estimated at 80/20 in Apple's favor last quarter. That's 80% of smartphone industry profits in less than five years with just five different smartphone models under its belt during that span."
Alright gentlemen we have a fine flame war in store for you tonight.
To offset political mods, replace Flamebait with Insightful.
Steve Jobs and his team made a damn fine piece of technology: A screen large enough for web-surfing & an easy-to-use touch interface. Plus people were already thrilled with the best-selling iPod, so stepping up to an iPhone was a natural next step.
In other news: I was just reading this morning that phone sales are down for everyone (except Apple apparently). Overall retail sales in the EU have dropped 7%. Sounds like we're headed for great recession part 2. :-|
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
with just five different smartphone models under its belt during that span."
That's a significant part of the reason for it, right there.
Wouldn't that mean it came hurling down to earth and usually burned to nothing in the atmosphere?
"Meteoric" brings to mind "meteor" which is something that falls down very fast and tends to burn up in the sky. (Yeah, I get that "meteor" as in "meteorology" and the notion that meteors are "fast"... it's the other properties of the word that I find horribly misplaced.)
Sorry, but it seems "meteoric rise" has been used a lot lately and it's almost as if people are being tested to see how stupid they are.
I wonder if this will continue for Apple.
iOS 6 is a yawner. Yes, what we need -- more facebook integration. Already, there is a backlash against FB. The latest Android announcement had some cool items in it including another method of protecting against piracy that does not depend on if a device is not rooted.
The Retina Display Macbook Pro has a cool screen, but cannot be repaired or upgraded.
Mountain Lion?
Jobs's RDF is gone.
What Apple needs to do is start figuring out how to get themselves enterprise-friendly without losing their consumer market. Enterprises buy stuff in such large chunks that a few good contracts are a lot better than lines around the building of hipsters.
First, redo the Mac Pro. Make a chassis that works like a tower, but can have a rack drawer attached so it can be slammed into a standard enclosure. Offer not just 8Gbs FC cards, but NICs with enough packet offloading power so FCoE is workable.
Second, make something like BES but for managing iPhones. Yes, Exchange can do a lot, but having a dedicated policy management server that can handle data transmissions, perhaps even backups of phone devices would bring a lot of revenue.
Third, the ARM processor supports worlds. In this day of BYOD, offer iPhones and iPads with a "work" partition and a "home" partition. That way, the employee only needs to type in the long password when accessing the "work" side, and the Exchange erase only blows that out. It also allows for apps to only see a subset of data, so the FB app isn't able to access work contacts.
Fourth, make an antipiracy mechanism similar to Google's LVL or new encryption mechanism in Jelly Bean. That way, apps don't have to rely on the fact a device is not jailbroken. As an added bonus, more money can be spent on features, not anti-jailbreak BS.
Fifth, make a business friendly Mac desktop that can push the Dells and Compaqs out of the offices. Take an iMac, toss the camera and mic, and sell that as a business PC with service plans to follow. Lots of cash there to be made, as most companies would switch to Macs if they could, only for the artistic value of the machines.
"Better, faster, stronger," Apple could have easily lifted those Kanye West lyrics for their press release announcing the coming of the iPhone 3GS in 2009.
*facepalm* Sorry, I know its a minor detail, but Daft Punk originally wrote "Better, faster, harder, stronger", and Kanye sampled it (with permission) for his song. They have a cameo in his video, which is an awesome tribute to Akira for those that haven't seen it.
*watches Daft Hands and Daft Bodies on youtube*
It's funny how people fight over which smartphone is superior. If people from the past (even 10 years) could see people name-calling over who has what smartphone, they would think it absurd.
Let me make it simple for you. Me touch phone. It do stuff. Me make phone call. Me play game. Nice blinky lights.
It's no more complicated than that people.
Only Apple Haters care about Steve Jobs.
The rest of us just like functional devices.
The rest of us realize Jobs didn't really matter, except that he had a talent for creating teams with amazing people.
Not to belittle that talent, but since his team is the reason Apple succeeds Apple will do fine without him.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I am a phone geek. The cell phone that I like the best. Actually the best cell phone ever made, in my opinion is the Nokia N9. Now dead, no longer made, it's corpse used to make shitty Lumia's. It could have been the 3rd leg in the cell phone triad.
But, it isn't about technology. The people that buy cell phones aren't the real customers, but the companies that suck user information and sell it.
The Nokia N9 is like the 2002 BMW E39 M5. the last of the great road cars where you could actually shift it, and trurning off the traction control really did just that.
So, long Nokia. The N9 could have been a stellar hit.
* Carthago Delenda Est *
I remember hackers jail breaking the thing to expose the underlying Mac UNIX. Opening it up to 3rd party developers was an uncertain but profitable move.
iOS 6 is a yawner
Spoken like someone totally ignorant of details, or lacking in vision...
iOS6 has such major, important updates for developers that going forward I will go with iOS6 support only as soon as it comes out, with no backwards support.
Finally developers will be able to display anything on the built in maps framework, without any of the limits imposed by GOOGLE on how you can use maps.
Also developers will be able to create regionally focused mapping applications that users can buy in the map itself! Android does not have nearly as open and extensible built in third-party map helper support - only what Google chooses to provide. Yes you can buy other mapping apps but you have to find them yourself, and determine if they will work where you are.
Also iOS6 has an really advanced constrait based layout engine that goes way beyond a springs/struts model, or Android's Relative layout model. It makes support for proper internationalization trivial.
Apple never needed Jobs mythical RDF, just great products... and Apple is continuing to provide that for users.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
According to ZDnet Samsung is ahead of apple in the smartphone market.
Samsung’s success in the U.S. is both a blessing and a curse. It dominates the U.S. smartphone market, even outshining Apple’s iPhone. But delays, sales injunctions, and supply chain issues are hampering Samsung’s latest efforts to crank out its Galaxy S III smartphone to the market.
Market research firm
Samsung Electronics' Galaxy series has overtaken Apple's iPhone as the number-one individual smartphone sub-brand in the world.
According to a report published by American market research firm Strategy Analystics in the first half of the year, Samsung sold 41-million units of its Galaxy series, which comprised 28 percent of the global smartphone market.
Apple was close behind, selling 35-million units of the iPhone and taking up 24 percent of the market share.
Research in Motion's Curve was the third-largest smartphone brand, but it only accounted for FOUR percent of the market.
The report said Samsung and Apple are "clear leaders," since they make up over half of the global smartphone market combined.
That is "my shade of gray is better than your shade of gray" reasoning. Pick up a first gen iPhone today. It will be painful. Heck, I find iPhone 4s to be painful to use with their crappy keyboard. Yes, phones before the iPhone (first gen) were generally worse than the iPhone. Phones after the iPhone (first gen) were frequently better than the iPhone. Pick any point in time, and you will find the same pattern.
There are two things that would make someone declare the I phone to be the watershed device. 1) It has Apple's label on it. 2) It happened to hit their individual pain point threshold on an ever improving scale. The fact that group 1 was a very vocal group helped the uptake of the iPhone more than anything else.
That last graph includes non-smartphones. Apple is not in that market, never will be, and doesn't care about it.
If Apple also made a non-smartphone then the metric might mean something (in terms of "it being not so hot for Apple" ), but the fact that they have chosen to concentrate on a small segment (by global phone use) standards, but one that is growing all the time, is the area you need to look. In that market they are competing well and doing quite nicely for themselves.
The summary says correctly that Apple makes 80% of the profits, not 80% of the phones. Samsung appears to be shipping the most phones, although the only numbers available are estimates of SHIPPED phones, not phones sold to consumers. For some reason, Samsung refuses to release any numbers at all.
I think Apple's large margin on the iPhone comes from multiple things: 1) There are no "BOGO" offers for iPhones. Period. 2) According to reports, they buy larger quantities and pay ahead on so much that they get better prices than anyone else. 3) They are leveraging parts across multiple devices. For example, the A5 appears in both iPads and iPhones. 4) As demonstrated by Sprint's experience, an iPhone is required in order to be a successful carrier today, at least in the U.S. I'm sure that does allow Apple to charge the carriers more for their phones that others are able to do, at least on average.
Just guessing what comes next...maybe the hardware of the nexus 7 shrinks down to the size of a usb stick, and can be plugged into screens of any size (phone/tablet/monitor/tv/google glasses) that have their own power supply, similar to what ASUS has attempted with padfone, but a couple iterations further down where the OS dynamically adjusts to whatever display the device is plugged into. I have a desktop at work 2 laptops and a phone. Would love to just shrink all that into a little keychain.
Okay, so you're a cellphone geek? Good for you.
But the truth is that the vast majority of people don't care that much about a great big feature list. They care about "will this make me happier?" - emotional benefits, if you like.
The iPhone is regularly advertised with video chat to the hypothetical user's nearest and dearest. That's a great emotional-benefit type feature.
Only 2 vendors making money? PLEASE. The article trots out has-beens like aging NBA basketball players, but doesn't mention Han Hoi Precision, HTC, or any of the hundreds of fast growing Android-clone manufacturers. 30 companies on 3 continents cooperated to make the IPhone. I like Apple, but I admire how IBM gave Lenovo credit compared to how Apple shares the credit with the geeks of color in Asia who made this generation of touchscreen phones affordable, scaleable, and possible.
Gently reply
Jobs didn't want third-party code on the iPhone
This is false. The volume of documentation and the quality of it demonstrated Apple had planned for 3rd party app development all along... They just delayed initial access to shake out the API's before the public had access to them.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Unless, ya know, you count what actually matters... profit?
Now, you see, I wonder about this. Do you really care about how much a company profits?
I agree with you that "total market share" becomes somewhat of a dick-measuring contest. But as a consumer, I don't really care how profitable the company is. Whether or not they sell a good product at a good price is my main concern. Since people like the toaster analogy to phones, I could not tell you about the profitability of Waring, Black & Decker, Hamilton-Beach, or Chefman. It doesn't figure into my analysis when I'm buying a toaster. Does it do what I want it to do at a price that I'm willing to pay? Will it look good in my kitchen? Those are the concerns I have when buying a toaster.
As a developer, I'm not all that interested in Apple's "profit share," other than the standard "will they be around in 5 years?" I am interested in market share, but not necessarily over-all market share. If I'm developing educational software for pre-school children, I'd be interested in Apple's market share in those homes. If I'm developing accounting software suitable for medium-sized businesses (eg between 100 and 500 employees), I'd be interested in Apple's market share in that environment. To use that last example, Apple's market share isn't that big in that environment, so I probably wouldn't have much for sales.
As an Apple Investor, hell, yeah, I'm interested in Apple's profit share. If I'm deciding whether or not to invest some of my money into Apple or HTC, I'd probably pick Apple. But all profit share means is that Apple makes more money than anyone else. I used to work for the #1 accounting software company--by revenue. That didn't mean we had the best product. It just meant we charged more than everybody else. Arguably, if Apple is making so much more money than everybody else, I'd have to wonder whether or not Apple's stuff is overpriced. A wise man once told me that, "Unless you're buying an Armani suit, never buy from a salesman wearing one." It means they make way too much money.
App developers have also in large part found that iOS users vastly outspend their Android counterparts.
The same has been true with Macs for quite some time--Mac users buy more software than PC users. Of course, 10% of 25,000,000 is still less than 2% of 250,000,000. I remember reading somewhere that 75% of Adobe's revenue comes from Windows users and 25% from Mac users. But, as a percentage, more Mac users paid Adobe for their applications than Windows users.
This is part of the reason lots of Android software is ad-supported. I'm not sure I've ever seen a study of Ad-Supported versus Charging, though, which would be interesting. If I sell my game for 99 cents, how long would it take me to make 99 cents in advertising...
It wouldn't be the first time that somebody in Apple went and did something behind Jobs' back anticipating a change of heart. The story of the Sony/Alps situation for the original Mac floppy drive is probably the most famous example.
Jobs loved the new Sony 3.5" floppy drive format, and decided seven months before the Mac was supposed to ship that he wanted to use it... and he wanted that to happen via an Apple/Alps developed-from-scratch clone. The team thought this was insane, so while grudgingly going through the motions with Alps, they secretly continued working on integrating the Sony drive. They kept all the meetings/negotiations/hardware secret from Jobs, to the extent that they would hide the Sony engineer visiting Cupertino in a closet whenever Jobs was nearby. This obviously greatly confused the Sony engineer, but he went along with it.
Later, when Alps told Apple that they needed eighteen months to get the thing ready, the team revealed to Jobs that they had gone behind his back and kept the Sony deal alive, and he ended up thanking them for their little rebellion.
I'm not saying that this is the same situation here, only that what Jobs was convinced was the right approach and what the Apple engineers working on the internal SDK were convinced was the right approach may not have aligned. It's pretty well documented from multiple sources internal to Apple that Jobs was obstinately refusing to consider third-party apps. He didn't want other people messing with his perfection, and he didn't think his team had the bandwidth to figure out how to make it work (in terms of reliability and integration) on top of their existing workload.
The volume of documentation and the quality of it demonstrated Apple had planned for 3rd party app development all along...
Kudos to the tech pubs team at Apple, but I'm afraid you're mistaken. At launch time, there was no intention to allow third-party apps on the phone. It took quite a lot of convincing to get SJ to allow it.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The reason it is considered a watershed device is because it was leaps and bounds ahead of anything that was out at the time (and for a while after). Apologies to everyone else for stating the bleeding obvious, but for your benefit, here's what made the iPhone revolutionary:
It had a screen big enough that web browsing was possible. Compare that with the crappy browsers that the old Nokia E90s and other smartphones had, where you had to scroll around using arrow keys and navigate through menus to enter text in a text box.
The touchscreen interface and gestures made apps like Google Maps possible. There is no way this could've been implemented on the smartphones that came before the iPhone.
The software was designed and integrated well with the new hardware (the capacitative touchscreen). The UI was smooth and wasn't clunky and annoying to use.
Sure, Google and Apple have been incrementally improving the design, but their steps haven't been as big as the one Apple took in 2007. You must have your head deep, deep in the sand to think that it is considered revolutionary just because 1) it had an Apple logo on it or 2) it was just an incremental improvement and somehow everyone's pain threshold magically happened to be just below where the iPhone was.