Apple, Samsung Capture All Of Industry's Smartphone Profits (zdnet.com)

Continuing to operate on razor thin margins, smartphone manufacturers other than Samsung and Apple are bleeding money. Apple accounted for 75 percent of the smartphone's profits in the second quarter this year, down from 90 percent a year ago, according to Canaccord Genuity. Samsung, which has reported strong sales thanks to its Galaxy S7 series of smartphones, accounted for more than 30 percent of the industry, the research added. ZDNet reports: While this tale could revolve around Apple vs. Samsung the larger question is this: Why would any company want to make smartphones? Let's get real. All the profits go to Apple (high end) or Samsung (high end and scale). The rest of the players in the market don't make money and get disrupted by whatever vendor is flavor of the month? Remember that Xiaomi was supposed to be the next big thing in China and elsewhere, but is now being disrupted by Oppo and Vivo. A quarter from now Oppo and Vivo will be thumped by some smartphone manufacturer we haven't heard of yet.

Comments

Stop chasing the shiny

[TWX]

So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.

Then they need to ask themselves what device accomplishes these tasks, and then start comparing extra features that cost more along with various price points.

After they've done all that, basically identified needs, wants, what's superfluous, then they're in a positon to actually make a choice.

We tend to be a bit conservative with our spending, using devices until they stop working, and in some cases doing a bit of home repair to keep them going when there are problems. I used an HTC Dream until the "A" key quit. We used Galaxy SII phones until her power button kept getting stuck where it was engaged, fixed that a couple times before having enough, and I used my SII until something failed and it no longer recognized SIM cards or that it had a WIFI chip. She didn't feel a need for more functionality than the SII so we replaced it with a Galaxy Core Prime, and I wanted durable without needing a case so I went with the Kyocera DuraForce XD. She spent around $200, I spent around $400, both a far cry from the $700 phones that are so common, and I expect these will give us many years of good service.

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

Re:Stop chasing the shiny

[MitchDev]

"Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was."

While practical and intelligent, that is not the American Way (according to Madison Avenue and big corporations)! That's communism! Forget thinking and comparing and saving for the future and choosing wisely, just spend spend spend!!!!!!!!

Re:Stop chasing the shiny

[jeffmflanagan]

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

Those of us that aren't locked into a fixed set of needs, find that a new phone each year or two is required to meet our new needs. We first used phones to make calls, then we started using them as pocket computers. Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.

Re:Stop chasing the shiny

[tomhath]

that is not the American Way

Nor is it the European Way. Or the Asian Way. Or anywhere else.

Re:Stop chasing the shiny

[TWX]

Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.

Is this a need, or is this a want?

Is this something that you need with you all of the time? Is this something that you need your communications device to do?

Re:Stop chasing the shiny

[OzPeter]

So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.
...
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

I look at the phone industry and think .. hmm this is looking like how the car industry plays out. Aside from actual safety and engine improvements, is there any real benefit to continually changing styling every year - aside from trying to convince buyers that "new is better"?

Sort of related anecdote. Back in the 80's or 90's I saw the motorcycle industry basically go from shiny chrome to matt black and then back to shiny chrome. With both transitions being heralded as "great new styling".

Re:Stop chasing the shiny

[jeremyp]

If I can afford it why shouldn't I buy stuff I merely want as opposed to need?

Twenty years ago I didn't have a mobile phone at all so I guess I don't need my iPhone now, but it sure makes life easier.

Re:Stop chasing the shiny

[TWX]

I look at the phone industry and think .. hmm this is looking like how the car industry plays out. Aside from actual safety and engine improvements, is there any real benefit to continually changing styling every year - aside from trying to convince buyers that "new is better"?

At least with vehicles there are visible differences. Phones, you have the little rectangle, the medium-sized rectangle, and the big rectangle. The color of the rectangle might be changable or might be enclosable with a case.

Does anyone really care what their phone looks like? Really?

If it's any consolation my vehicles are 21 years old at the newest. My large, powerful sedan is still a large, powerful sedan. My pickup truck is still a pickup truck.

Re:Stop chasing the shiny

[ruir]

Tell that to million of people if what they want is a shiny rectangle. If it were the case, a brick or a piece of cheese would do nicely, or in an alternate work, nokia would be doing well. People want something that works well.

Re:Stop chasing the shiny

[DigitalSorceress]

As someone who had an Apple 3gs and then a 4s, then said "I don't really ~love~ my apple, so I'll go Samsung Galaxy S6" ... and then realized how much crapware Samsung and the carrier piled on it.. then when I saw how long it took to get StageFright updates out.. I realized just how useful it was having Apple directly updating stuff.

TL;DR: this is why I think I'll go back to Apple when my contract allows it and I'll stick with it despite not really loving Apple.

Re:Stop chasing the shiny

[PsychoSlashDot]

So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.

Why?

I'm playing devil's advocate because I'm more like you than like "most buyers", but again, why? Why do buyers NEED to ask themselves that question? What's the dire consequence of them perhaps wastefully spending some of their disposable income on redundant version++ hardware?

It's about as sensible a statement as saying "people need to stop wasting money on stadium tickets to football games, hockey games, and concerts." Gratification is gratification.

Re:Stop chasing the shiny

[swillden]

Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.

Is this a need, or is this a want?

That question is irrelevant. If I want to have a device that does something, and I want it enough to shell out the money for it, why in the world shouldn't I?

Your whole premise is that people are somehow wrong if they want a shiny new phone every year. Who are you to tell people what they should want?

Re:Stop chasing the shiny

[iONiUM]

Yea, because attempting to change all of society is going to work /s. People are going to keep doing what they're doing, if companies want to capitalize on it, they need to make their product more attractive to potential customers.

Re:Stop chasing the shiny

[MightyMartian]

That's why I go with the unlocked Nexus devices. These are the reference Android installs, and the only thing they come with is the stock Google apps like Chrome, Calendar and the mail app. While Samsung may make pretty attractive hardware, I have little interest in the crapware and the odd changes they make to the UI and default apps.

Re:Stop chasing the shiny

[Streetlight]

About frequent automobile replacements: when I was living in metro Detroit many years ago, J. P. McCarthy had on his noontime radio interview program a high executive of General Motors. Getting to the quick, the guy basically said that cars were being built to last three years so that folks would need a new one every three years. The result is that the car payment would be a permanent part of one's expenses just like the house mortgage payment. Remember, GM had a car financing company, General Motors Acceptance Corporation (GMAC) which was a big profit center. We all know what happened to that business plan: non-American car companies, notably from Japan, started building cars that lasted a lot longer than three years. GMAC no longer exists as it became Ally Bank during GM's bankruptcy, though they may have another financing arm now.

By the way, JP was a great interviewer and there's a nice Wikipedia biography: https://en.wikipedia.org/wiki/.... I didn't know he had died. RIP JP.

Re:Stop chasing the shiny

[cusco]

Indeed. My wife occasionally tells me that I "need" a new truck. I tell her that the wheels haven't fallen off yet, so it doesn't need replacing.

I'm much the same way with my phone. If I hadn't finally broken it this spring I'd still have the four year-old $60 phone that did absolutely everything that I needed. I do have to admit that the low-light performance on the camera is better on the new one, but that's just a nice-to-have, not a need.

Re:Stop chasing the shiny

[AmiMoJo]

Lots of people buy non-shiny phones based on their features, which is why Chinese brands are on the rise. Same quality, same shine apart from the logo, but 1/3rd the price and with lots of the amazing features like an SD card slot, large battery and headphone jack. They even push out software updates occasionally.

Anyway, I didn't read TFA but the summary apparently can't add up or doesn't understand what a percentage is, and the headline is clearly horseshit because there are many profitable smartphone makers aside from those two.

Re: Stop chasing the shiny

[karmatic]

The biggest advantage to buying new cars is consistency and ability to plan.

I've been running the same car since 2012. It had a catastrophic engine failure, just a little past the warranty. It cost me $8,000 to fix.

With a leased car (or a new car), I know exactly what my costs are, and if it breaks (like mine did on occasion during the warranty period), it's not my problem - it's theirs.

Re: Stop chasing the shiny

[thundercattt]

You paid for your phone? Vast majority of people upgrade for free to the newest/latest phone. I just went through this experience. Every store instantly push Apple/Samsung. 1st was always Apple, when I said I'm not a hipster, they turned to Samsung. I also declined Samsung because of my previous experience with their products. Every Samsung phone dies at the 14th month mark for me. S2 went through 4mobos in the year warranty. Rugby LTE same thing. S3 same thing. When I asked for other models of phones they just kinda went "o well have some other brands here, not big sellers". I was surprised how little stock they had with Nexus. Which has been fantastic for me. I went to every store in the mall (there was a dozen), mostly to see if any of them throw in perks for buying. Like BestBuy gives you $100 in store credit. Not the greatest perk since they sell $1 cases (seen on eBay) for $30 bucks.

Re:Stop chasing the shiny

[war4peace]

Who are you to tell people what they should want?

Someone with more brain than money?

Seriously now, who are the companies to tell people what they want? it's the same thing. The companies advertise something, the GP advertises something else.
People usually have to be told what they want, hence the rush for the latest we're seeing today. It's simply unhealthy.

Re:Stop chasing the shiny

[war4peace]

Because with phones, unlike more classical ways of entertainment (games, concerts, etc), people are suffering from what I'd like to call "sheepification". It's peer pressure forcing them to buy the 700 dollar phone they wouldn't otherwise need, many times that expense is straining them financially and they're making sacrifices elsewhere just to stay afloat socially speaking. It's ridiculous.

Re:Stop chasing the shiny

[jon3k]

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

New high end smartphone is $200 on contract in the US. That's about $17/mo to have the latest, fastest phone with all the newest features. For a device that I use constantly and carry around eight to sixteen hours, that is essentially nothing. That's between one and a half and three cents per hour.

I understand everyone has a different set of financial circumstances, but for a device that useful, that we spend that much time using, why NOT have the latest and greatest, if it's well within your financial means? I'm not talking about buying a $100,000 car here. We're talking about $100/year for a device that most people use very frequently.

Re: Stop chasing the shiny

[karmatic]

The non-replaceable batteries are more a function of being smaller and smaller. With quick charge, it's less necessary the first few years, and it's actually not too hard to replace the batteries with the right tools, or going to a shop.

As for the upgradable storage, that was more a function of the OS than anything else. Memory cards were originally mass storage devices running variants of FAT. While convenient, this caused a lot of problems - the Android security model requires processes not writing to each other's data or reading it (otherwise your games can steal credentials from your online banking, for example).

When running FAT on the memory card, any app with SD permissions could read all the files (a very bad thing), and it led to some real problems (such as very bad things being possible for users of LoJack, which included many Samsung Phones by preload. Disconnecting the mass storage would break apps that required the files on the card.

Addressing these issues first required the use of something like MTP (which uses a daemon and doesn't require exclusive access to the SD card). This makes it possible to write and read without breaking apps. Next, the card needed to be encrypted in order to protect the user data - otherwise, anyone who steals the phone can extract all the data on it. Locked boot loaders are designed to wipe the device when being unlocked for the first time, so that stolen devices aren't easily hacked.

Finally, cards needed to get fast enough to be functional as internal storage. Android marshmallow added support for external storage being treated as internal once those requirements could be met (accessible, secure, fast enough), and now we have phones that have external storage again. Apple does their own thing, but on the android side, it was more technical reasons than anything else for the lack of upgradable storage. It caused a lot of problems and took up space, so companies removed them.

You can see this with the Moto X. The X2 (second edition) took SD cards out. The pure edition added them back, using the same tray as the SIM card. Samsung's S5 had removeable batteries and external storage. The S6 took those out (for size and technical reasons). The S7 added the card back, but added quick charge instead of a removable battery, because the technical issues for the SD card have been addressed, but the size constraints stay.

Apple, on the other hand, wants to charge a bundle for more storage. They are control freaks, too, but the embedded encryption make external flash storage a viable option for them without losing that control. They may relax this requirement at some point - they finally made RAW photos an option in IOS 10, coming off external SD card. All data from an SD card has to be imported in their own app - it can't be read directly by other apps.

Re:Stop chasing the shiny

[irrational_design]

I agree in principle, but my work pays for my phone and lets me upgrade every 12 months so I take advantage of it even when my "old" phone is perfectly serviceable. However if I was having to pay out of my own pocket I'd probably never have a smartphone to begin with ;-) People are shocked to learn that my wife does not have a phone, but we simply aren't willing to pay the exorbitant prices (either for the phones or for the data plans). Shockingly it turns out to be perfectly possible to survive in this world without a cell phone.

Re:Stop chasing the shiny

[Ed_1024]

I have to admit to replacing my phone every 12-18 months with the latest one as Im a bit of tart like that. However, every single one of my phones is still in use, having been passed through the (extended) family. Even the iPhone 3GS is still being used as a music player by one of my nephews. If they had gone in the bin, then yes I would feel guilty as a hedonistic consumer and planet-wrecker. If most of the phone can be recycled when it eventually does pack up, then even better. Its not like there are landfills full of old iThings: theyre worth enough to scavenge even when dead from the raw material point-of-view.

Re:Stop chasing the shiny

[Moof123]

90% of people don't operate on "needs". The other 10% are either poor (need and frugality is enforced by harsh boundary conditions), or they are headed to financial independence where they will be just as happy (or happier) as the 90% until they "retire", then be about double as happy once they hit financial inpendence and are either working on what they love, or retired entirely.

Wasting over well over a grand a year on a new shiny phone with a massive data plan so you can stream cat videos to numb the pain of their wage slavery just further traps further. Spending $60k every few year on a shiny SUV that depreciates alarmingly fast so you can sit in traffic to get to your wage slave location traps you. I could go on, but "need" is so far gone as a concept these days it is not funny.

Re:Stop chasing the shiny

[Jesus_666]

Not everyone lives on the cutting edge. My phone is expected to last me for another three years at least - my needs simply won't exceed what's possible with today's technology before then. While they are growing they are't growing that fast: My current phone already fits my entire music collection plus a few episodes of whichever show I want to watch and is plenty fast enough to play it al. VR/AR was cute for a while but hasn't yet produced a killer app that would keep my attention for more than a few minutes (and besides, sufficiently good realtime positioning for AR would probably require an upgrade of the GPS satellite network first). I'm essentially doing nothing the original iPhone couldn't do except with a bigger screen and more cycles to spare.

There is no sufficiently disruptive technology on the horizon to warrant a new phone soon; next year's models will pretty much just have a faster CPU, more RAM and more storage than today's - and I'm starved for none of the three.

Re:Stop chasing the shiny

[dontbemad]

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

The problem that you, like most tech-savvy posters on /. have is that you can't understand what the average consumer's "needs" are. Many people just like the thrill of buying a new product. Couple that with the slight gains or improvements (in the products functionality, in your own social status, etc) that are to be had, and it is pretty apparent why people routinely buy new things even when they don't, in your opinion, "need to".

Of course, this is why most of us here work in tech, and not in sales or marketing. Our needs and tastes tend to differ when placed next to those of the average consumer, and we often make assertions about the worth of a product based on those same metrics.

Re:Stop chasing the shiny

[thegarbz]

Cost? What cost? We pay x number of dollars per month for a plan and after 2 years a new phone magically appears. There is no cost.

Well yes there is a cost, but not a direct one that people see hitting their budgets.

Re:Stop chasing the shiny

[Killall -9 Bash]

Then explain how the iPod ever got off the ground. Compared to Creative Nomad, it was GARBAGE. Small HDD, music only (no video), tiny monochrome screen, counterintuitive button interface, and would break when you tried to go jogging with it like in the iPod commercials. Oh, and cost $399 vs Nomad for $199.

iPod was nothing but an "I have money" status symbol. Same with the iPhone when it first came out.

Re:Stop chasing the shiny

[ranton]

Who are you to tell people what they should want?

Someone with more brain than money?

More likely just someone without either. These phones are obviously discretionary purchases so anyone being asinine enough to differentiate between need and want in this discussion is either not very bright or biased enough in some way to limit their rational thought. Obviously any feature someone "needs" in their smartphone is actually a "want" from a survival or overall life enjoyment standpoint, but that doesn't change the fact the device may need to have a feature for them to buy it.

Swillden was absolutely correct that the need vs want question was completely irrelevant to what is being discussed here. I can't remember the last time I purchased any good or service because I needed it, outside of health care related services that is.

Re:Stop chasing the shiny

[OzPeter]

why NOT have the latest and greatest

Have you ever considered where your old phone goes after upgrade? Here's a hint .. it doesn't just magically disperse back into its raw materials with no impact to the environment. E-Waste is a big problem, and not having the latest and greatest is an important part of tackling it.

Remember the3 R's: Reduce, Reuse, Recycle. The are actually in this order for a reason. First you reduce, then you try and reuse. Recycling is only the last step in the process after the other 2 have steps have been exhausted.

Re:Stop chasing the shiny

[SvnLyrBrto]

I'd counter that by pointing out that my phone is the single most-used piece of technology. Setting aside its communication functions the sheer number of devices it has replaced makes it a with: camera, videocamera, PDA, iPod, alarm clock, car GPS. It's also my notebook, address book, and calendar. It controls my lighting and my TV. It tracks the quality of my sleep and replaces the white noise generator that I used to use to get there. It's the hub where that sleep data goes, along with the data from my scale, blood-pressure cuff, and watch (heartbeat, exercise) go, along with the calories and nutrient data from my food tracking app. I have a widget in my car's OBD2 port that logs my performance and trip data to the phone; and I get automatic reminders to move my car before the meter runs out or the space becomes a street cleaning zone. And when I'm taking MUNI or BART, the 3rd-party apps are more accurate wrt/ arrival times than the transit agencies' own displays. It replaces the Nintendo DS and Kindle I used to use to keep occupied when riding transit or airlines. I can also use it, and the watch, to pay my bill at many stores and restaurants. And none of these even touch upon its usefulness for work. I could knock out another whole paragraph for that.

Given the amount of utility I get out out of it, if there's any piece of technology which really does justify having the top of the line, the iPhone really is the one. That said, I do stick to the the 2-year cadence and get the s-models. Though if the 5s hadn't been able to store credit cards for use with the watch, I'd have early-upgraded to the 6 to get ApplePay. Happily, the 5s plus watch did that job, so I'm still on the s cadence.

Re: Stop chasing the shiny

[Teun]

You keep believing that rental phone comes for free and I have a nice bridge for sale.
Personally I prefer to pay up front for the phone, get a cheap contract and be done with it.
Like now my new OnePlus 3 with a €14 /month contract, calculated over 2-3 years it'll be a lot cheaper than an all-inclusive contract.

Re:Stop chasing the shiny

[Teun]

Only for people whose financial horizon is their next pay day...

Re:Stop chasing the shiny

[edtice1559]

This is a discussion of the utility. Mobile phones are fashion accessories first and technology second.

Re:Stop chasing the shiny

[blkmajik]

I am sanity.

Re:Stop chasing the shiny

[antdude]

I am fine with this old iPhone 4S I got for free. It prevents me to play games like Pokémon Go since it crashes and is unsupported. Also, its battery life sucks. :P

Re:Stop chasing the shiny

[swell]

I hope you are not really that stupid. Your phone cost 200? Do you really believe that? What does your monthly service cost? And how much would that service cost if you paid full price for your phone? There is no 'high end smartphone' that costs less than $500.

My phone cost $500 and my service costs $30/month (Nexus 6p, Google Fi network). Which of us pays less after two years?

Re:Stop chasing the shiny

[jon3k]

I guess you're not from the US? You pay the same price for service either way. They subsidize the cost of the phone to lock you into a two year contract.

Re:Stop chasing the shiny

[jon3k]

You can get off your high horse, we donate all our old phones to a local women's shelter.

Re:Stop chasing the shiny

[Rexdude]

So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.

Then they need to ask themselves what device accomplishes these tasks, and then start comparing extra features that cost more along with various price points.

After they've done all that, basically identified needs, wants, what's superfluous, then they're in a positon to actually make a choice.

Most people unfortunately just go by 'ooh, shiny, 16 cores and 32 GB RAM, I just have to have it!' and the bandwagon effect (in the case of the iPhone)
The rest of the no name phones crowding the bottom of the (obviously Android) market are such cheap shit they fall apart within a year or less anyway.
I had a HTC One X for 2 and a half years, until the screen just died. Currently using a rooted Xperia Z2 since Nov 2014 that still runs smoothly and has stellar battery life, so I'm guessing there's another year or so left in it.

Re:Stop chasing the shiny

[thegarbz]

So most people then? Those who's idea of saving is their next holiday, and who's idea of retirement is just that, an idea.

You are of course right and that's the truly sad part.

Re:Stop chasing the shiny

[ozzo]

That's why I went with unlocked Moto X Pure Edition. Practically pure Android with a SD card for 400. It was the best value for me.

No surprises there

[TonyJohn]

So, in an established market you can't succeed big unless and until you beat the big players. You either make a loss or small profit trying to beat them, or you carve out a niche and make a more reliable profit which will never be big (so long as it remains a niche).

Re:No surprises there

[bluefoxlucid]

That depends on your definition of success.

Start a business. You take a pile of money (possibly a loan), use it to set up operations, and run for a while. Three, five years go by, and you struggle just to hold up. Your balance sheets get worse over time, until you can't keep all the creditors satisfied; then you file bankruptcy. Failure, right?

From one perspective, while in business, you supplied a valuable product or service. People bought enough that you stayed in business for five years. You didn't gouge them, probably, since you got enough business to stay in business. Maybe you couldn't keep up because the other manufactures slimmed their margins, provided better products, or otherwise changed their markets to compete with you before you got off the ground. You did something real.

From another perspective, a shitload of money flowed through your business. The jobs you provided came from your revenues, and those revenues took away from other businesses, so you stole jobs rather than creating them (not destroyed; instead of 1,000 new employees at Verizon, there were 1,000 employees at NewMobile); that's not really bad for those people, aside from the sudden disruption--which might not be a real thing, since you'll wind up selling your operations to another competitor to pay debts, and most of those people will probably not get laid off. Those who do will be replaced elsewhere--someone unemployed gets a job, or they get a job; doesn't matter by the numbers.

The one thing all that cash flowing through your business *did* accomplish is *it made your executive board friggin' rich*! Success? You started a business, paid yourself a $250,000 salary for a few years, then bailed. Your salary was something like $150-$400 per employee, so it's not like you were robbing your employees; the rest of the economy, maybe. Ethics and distant economic considerations aside, *you got rich*.

What is failure? What is success?

Re:No surprises there

[I4ko]

With health "insurance" instead of health care, and with mortgages where you sing you unborn kid, yes, this is a failure. Disruptions to the 1000 employee lives are the social failure. Paying yourself @250k when you are paying your employees $180k is border line ok, but when you are paying your employees $60k then it is stealing. $400 per employee for 1000 employees increases the living standard of two city blocks. This decreases crime, lowers the need of the entire city paying taxes, etc..

Re:No surprises there

[bluefoxlucid]

Disruptions to the 1000 employee lives are the social failure

Economics are demand-side: all jobs are paid for out of revenue, and thus out of consumer spending. Population grows in lack of scarcity, and tends to exceed employment opportunities by a margin--that's unemployment. There's 40% workforce turnover in the United states: 4 of every 10 people will leave their job this year, which means open job opportunities everywhere waiting to be filled; and that doesn't *create* jobs, so there are still not enough jobs for everyone to get a job.

The people who are unemployed right now, collecting welfare, and watching their lives approach the critical point of failure and homelessness as their limited savings or 6-months of unemployment benefits run out? Those people depend on *someone* being disrupted out of a job so they can snap up an open position, sending another working man to the unemployment line in their place.

That doesn't mean disrupting 1,000 employees's job is a public service; it means the argument is economically-ambiguous. If you focus on the individual, it sounds sad; if you look at the entire economy as a whole, you realize it's part of the basic functioning of any economy without central planning--and central planning can't be effective because of information load (including unknown and unknowable information, such as the development of technology and the shift in consumer demand for products).

Paying yourself @250k when you are paying your employees $180k is border line ok, but when you are paying your employees $60k then it is stealing. $400 per employee for 1000 employees increases the living standard of two city blocks

This argument, however, is unambiguous.

At higher rates of income, people save more. More savings means less spending, which means fewer jobs. Any cost-per-employee increase--the employee's salary or the management chain overhead--reduces buying power by increasing product costs, leading to fewer jobs as well. This suggests that paying the employees executive-level salaries actively destroys jobs to enrich a small set of elites.

It's more complex than that, too; but only slightly.

Paying your employees $60k versus paying them $60,400 won't make a huge difference *to the employee*. It's literally $15/pay, cut by taxes to under $10/pay.

Raising your employee's pay to $180k increases the cost of products; raising the back-end cost by $2,800/year (7 executives) per employee raises this cost less. It's the same effect on a different magnitude, meaning it makes fewer people poorer.

It's not true that higher employee pay with the same spending would lead to the same number of jobs, because the number of things purchaseable with that spending goes down. There's still $200,000 to spend, but a widget costs $1,200 instead of $800, thus 166 widgets can be bought instead of 250, meaning the number of total jobs in the economy is decreased by one-third of the jobs required to supply 250 widgets. The employees making $180k instead of $60k are, of course, getting $120,000 more and have to spend $1,200 more, so they come out ahead; if the entire market increases wages as such, we need more money, so we print and loan more money, all prices go up, and you just have inflation--essentially, prices didn't change if all prices and wages changed by the same proportion. If it's just isolated to this set of employees, then these people get rich while other people get poor.

This extends to the executive: Your $250k salary does, in fact, chomp at a few jobs. If you spend all the money your employees would have spent if they had $400/month more, then the impact is diminished, but not completely eliminated; if you sack the same proportion away into savings, then you've reduced the money available in the economy, taking a somewhat bigger toll.

Raising either the employee's pay -or- the executives's pay tends to decrease total jobs (you need to get the money

Re:No surprises there

[I4ko]

My my my.. so much bigotry and self importance here.

If you really cared about efficiency and optimization you would support full automation and immediate reduction of the world population to the size of 20M to 200M with mandatory sterilization of the remaining 98%. Children should be planned and produced as any other goods in vitro and all the robots and automation will do menial work and people will have all their needs provided for. All the people would do is research of new technology, which the automation can't do yet.

Re:No surprises there

[Attila Dimedici]

The jobs you provided came from your revenues, and those revenues took away from other businesses, so you stole jobs rather than creating them (not destroyed; instead of 1,000 new employees at Verizon, there were 1,000 employees at NewMobile)

And there is where your whole argument falls apart, if NewMobile employed 1,000 people off of that revenue, Verizon would have employed a significantly smaller number. All of the statistics show that small businesses employ more people per dollar of revenue than big businesses.

Re:No surprises there

[bluefoxlucid]

Those solutions are not optimal. Full automation at a rapid pace creates a distribution problem: it can only produce and distribute goods with a command economy, which is ineffective at managing the large amounts of data required to maximize growth. Technical progress would slow.

Reducing population size isn't efficient; it's reductive. It's like saying that you could make your car more efficient by driving it less: you would simply drive less, and still get 17mpg. This would leave you less-wealthy (you don't have the ability to go everywhere all the time anymore, because you're driving less).

You seem to have responded to a technical analysis of economics with a well-poisoning argument. Your fantasy about being fair and equitable hurts people, and you don't like to acknowledge that.

Re:No surprises there

[bluefoxlucid]

Perhaps true; and that doesn't debase my argument. If NewMobile employed 1,000 people and Verizon, being more-efficient, lost fewer in equivalent operations, then the remaining balance would be taken from other businesses. Those businesses aren't necessarily mobile; maybe you spend more on phones, and you can't spend as much on fancy shoes.

The point is jobs are paid for from revenue, and so consumer spending supplies jobs. You get more jobs with population growth (more people) and improvements in an economy's efficiency (lower unemployment rates); businesses grow employment by taking a share of this or by reducing another business's employment.

As an aside, if NewMobile is truly less-efficient, its products must cost more. That doesn't mean they don't employ more people per dollar of revenue; it means they must employ fewer people per product or service provided. To employ more people per dollar of revenue, they would *pay lower wages*; to fully-describe this situation, I'd have to write a lengthy Ph.D. thesis, and so what I wrote is an appropriate approximation and grossly-correct.

Re:No surprises there

[Attila Dimedici]

I am going to assume that you are saying that improving an economy's efficiency lowers the unemployment rate rather than saying that lowering the unemployment rate improves an economy's efficiency because otherwise you are talking nonsense. Your argument is that the economy is a zero-sum game, for business A to be successful it must reduce the success of business B. This is false.

Re:No surprises there

[I4ko]

Growth is not something to be chased after. Stability is, for every person. So "growth" should only be limited and equal to the population delta over time. But not it isn't.

We only have growth because people are greedy and self gratifying, but the current growth is just inflation, there is nothing real behind it. What you express with all those words, is a badly hidden greed. I don't see anything else behind them.

There will be no reason to have growth if all the people don't need to work but have 100% of their needs (and wants) provided for by robots and automation. And because you mention initial ramp up of distribution is a problem, reducing the world's population is mandatory.

It is also mandatory for a reason that we now are over consuming natural resources about twice as fast as the planet can recover them. With reduced population, even if everyone goes on a self gratifying binge, and orders the robots to produce a ton of stuff for them, the consumption will still be within reasonable limits.

Re:No surprises there

[bluefoxlucid]

improving an economy's efficiency lowers the unemployment rate rather than saying that lowering the unemployment rate improves an economy's efficiency because otherwise you are talking nonsense.

They're both sort-of true. Higher employment means higher production-per-capita, thus more buying power per-capita, thus more wealth; although an extremely-low-unemployment economy falters because of labor shortage, thus can't grow.

Efficiency in an economy is complicated.

One of the primary drivers of efficiency is technical progress. Technical progress simply means new technology allows us to produce more goods in the same labor. Take the same population, employ fewer farmers, employ more engineers, employ more doctors, and still produce the same amount of food because the farmers plus engineers are able to output more food per total labor hour; these doctors used to be farmers, but we don't need them anymore, so now we have healthcare. When you get down to money, you realize all the services being bought are paid for by consumers (that's where revenue comes from, and we pay wages out of revenue), and so necessarily things must get cheaper as a percentage of the per-capita income (that doesn't say the distribution is equitable; just that the cost of product X is a smaller fraction of *all* money being spent).

I like to talk about the cost of wage dollars. An employer pays an employee's wage, plus payroll taxes, plus benefits, plus unemployment insurance premiums; and the employee pays income taxes and such things as OASDI and Medicare (not to mention sales taxes, VAT, etc.). An employer has to spend some number of dollars for an employee to take home some number of dollars--for example, $1000 minus 6.2% OASDI is $938; at a 25% tax rate, the employee takes home $703.50. An employee's time is divided among products, and the employer's cost is divided into products; the employee must buy those products (and produce the revenue source to pay wages of employees) out of his wages.

Obviously, more take-home pay per employer cost means more maximum buying power. A business may or may not lower the price of goods to a minimum. Tere are economic pressures which cause this to occur to varying degrees, which is why food has a slimmer margin than diamonds and cars have a slimmer margin than food (lots of bulk negotiation up the production chain for cars; the manufacturer might make 10%, but the coal and steel mines negotiate low-margin contracts for multi-billion-dollar profits). Still, a 10% or 3% or 40% margin is a proportion on top of cost; and costs have always trended toward stability--lowering--when technology improves, else we would never advance as a society because we'd never have the consumer buying power to buy anything we hadn't bought before.

That's efficient. It's why progressive taxes are efficient, why some forms of universal basic income are efficient, and why accomplishing economic goals such as state welfare to greater effect with lower cost is efficient: consumers end up with more spending money per dollar paid as production cost by employers, and thus can buy more.

That effect tends to not simply lower unemployment, but stabilize the economy: when there are problems, your Jenga tower doesn't just collapse; it wobbles a little, and a piece falls off the top.

Your argument is that the economy is a zero-sum game, for business A to be successful it must reduce the success of business B. This is false

Technical progress would suggest that an economy is not a zero-sum game because the economy grows.

That does not mean that the economy is infinite at a given time. The economy, as it is now, has limited consumer buying power. In the future, technical progress will increase the per-capita buying power, and population growth will increase the number of consumers, thus causing an exponential (f(t) = g(t)*p(t))) growth in the economy. For any point in time (t), there is a limited amo

Re:No surprises there

[bluefoxlucid]

Growth is technical progress.

People today are more wealthy than people 10 or 20 or 50 years ago. The median family spends less on food, Cars have more features, yet only reflect a purchase price of 56% of the purchaser's income in the median case. We've gone from extremely-expensive computers with 4MB EDO RAM and 33MHz CPUs to having high-speed, multi-gigabyte RAM, 64GB storage devices in our pockets as a simple fact of life. Communication is ubiquitous with cell phones and high-speed Internet.

Clothing is cheaper; people today have about 50% increased access to more and better healthcare than people of the 90s; and we spend nearly half our money on luxuries.

Automation won't just put us into caves and cages to be fed a nutritious gruel by robotic keepers; it will make the Tesla Model S the household car of the lower-middle class, while the poors make do with that currently-$45,000 Model 3. It will place more electronic gadgets into everyone's hands. It will dramatically increase the access to healthcare, while lowering the cost of complex tests and treatments. $800 ceramic-on-ceramic fillings--the best remediation you can get for dental caries--will become the standard, even among the poor, because they cost $20.

The poor will not simply be shoveled off into the corner. They'll work, hard, and live beneath the rest of us, as they do today. They'll work and they'll live as well-off middle-class families live today. Their hard-earned money will buy them the sorts of $2,000 appliances I purchase for myself, because that $1,897 double-oven stove only costs $350 in the world of the future (well, there's inflation, but the poors have that much more money, too, so whatever).

Luxury. Technical progress brings luxury down to the people. There was a time rags were made of old clothes because cloth cost more than 90% of the population could afford; people wore one or two sets of simple clothing--nothing fancy and expensive, because frills and pleats increased fabric use--and many were haphazardly dressed in the poor's last-season fashion, tacky and out-of-style, handed down to the rabble because it simply won't do in noble social circles. Now we all have 10 days's worth of fancy clothing, coats, hats, a million pairs of shoes... things that would have cost us 15 years's salary--and, the fancy stuff with all the pockets and pleats we use today, 40 or 60 years's salary--back then.

Remember when a cell phone cost $4,000 in 1983? In 2015 that's over $9,000; two hours per week of talk would cost you $550/month. Not everyone can afford that; yet poor people buy a $60 feature phone or spend $170 on a used iPhone, and $60/month for unlimited talk and text plus 3GB data. I use under 500MB of data, so I spend $33/month and just get Ting.

How many rich people luxuries do you use now? How much of the stuff you're using is a much-more-advanced version of something that was available to people who could spend 3 times the median income on it 25 years ago? Your cell phone is comparable to a multi-million-dollar supercomputer in 1985. Microwaves were an invention of the air force, because a million-dollar radar emitter in a fighter jet pumps out a lot of microwaves, and they put a door in the cockpit where you can slide in a tray of food and then have yourself a hot meal; your microwave probably cost $70.

Do you really think people will just roll over and eat the slop the robots pour down their throats? We'll do what we've always done: Get richer. We'll take all the luxuries of the rich and then complain they've found new toys we can't afford.

Re:No surprises there

[I4ko]

Excuse me, but you sound a bit delusional and self contradicting. That's how it comes across, though it is probably not what you mean

Prices are going up. They have been going up. Computers and small electronic gadgets are the only ones where they may have gone down for a while and they are again going up. For what is the standard of the day.

Cars are definitely more expensive for the same quality percentile level averaged over all brands. Same as food, same as clothes. Not to mention mortgages.

The prices will continue to go up, at a rate higher than the salaries because of greed. Look at the "prosperous" San Francisco Bay Area, Seattle, Denver, etc.. In 4 years the cost of living in these places has gone up anywhere between 50% and 120%. Salaries on average have gone up between 5% and 25%. How is that growth? How is that speeding up? It isn't - it is slowing down. You are thinking like a stock speculant that only sees 3 months ahead.
Poor people and lower middle class are becoming increasingly poorer planetwide. The problem is the ownership of the means of production. The people in the board rooms don't care if anyone and even everyone ends in the gutter, as long as they got their money - their profit. What you pipe dream of only work if the robots and automation work at no profit, and this will never happen, as long as they are owned by someone in particular. You have to detach the human society from ownership to get to where you are aiming.

Technical progress is just that - progress, but on average it is not growth, it is sustainability. Moving the baseline from 5 to 10, when everyone can now jump 10, just increases the baseline, old stuff gets deprecated, but that isn't growth. You just ensure some minimal level. What you describe definitely isn't luxury, as luxury is something way on top of the baseline. What you describe is moving the baseline. It is the luxury of the past, whish is the median of today. But it is still a median. While it is true that in 198X a cell phone was several K, my first cell phone in 2000 cost $198 and I could run it on 2 AA batteries in a pinch. My latest cell phone from late 2014 cost over $700, and I need to hug a wall. Prices are now going up. It was a saddle and the lowest part was around 2004. Now they are back up. The phone calls used to cost me $0.30 per call (that's right - per call, not per minute).

I don't use rich people luxuries of today. My vacuum, my computer, my cell phone, my car, my microwave - they were rich people luxuries of the past. But they are baseline or below baseline today. Who cares that my cell phone is comparable to a multimillion dollar computer - that is technical progress. It is the average of the day. That isn't growth, it is a slow pace refined improvement, which again, isn't growth. Moving from a phaeton to a horseless carriage was not even growth in the long term, it just became a baseline, progress, but not growth, not inflation pumped BS.

I do believe that if no one owned the robots and automation we could order them to build and produce whatever we want. I can order them to build a house and a bed and a breakfast table, and server me such and such breakfast at the time I wake up. Then I can leave and go about my day, and have lunch waiting for me at some place where I am going to be at lunch time, and have flowers handed to me before I get home to give to my wife. When you are constantly moving the goalpost, this is progress but not growth. You are just contradicting yourself with the terms you are using.

I somehow doubt this is accurate

[LichtSpektren]

LG's been talking about cutting their mobile division entirely, so I don't doubt how cutthroat the competition is. But it seems awfully unlikely that Samsung and Apple are the only profiteers, since Lenovo and Huawei both boast about how much money they're taking in.

Re:I somehow doubt this is accurate

[Noah Haders]

Revenues do not equal profits.

Re:I somehow doubt this is accurate

[LichtSpektren]

Obviously, but what's the point of selling anything if you're not making a profit?

Re:I somehow doubt this is accurate

[currently_awake]

It is standard practice to use accounting tricks to minimize income, so as to maximize profits. Also: give away the razor and sell the blades is a profitable plan. If there was no profit in the phone industry, most of the players would get out and do something else.

Re:I somehow doubt this is accurate

[Locke2005]

jet.com (and many other web sites) have a strategy of selling at a loss to capture "market share", then sell the company to some other sucker that doesn't realize they will lose their customer base as soon as they start charging enough to make a profit.

Re:I somehow doubt this is accurate

[Noah Haders]

Your investors, for one.

Re:I somehow doubt this is accurate

[Solandri]

Mobile phones are still a developing market. Companies will want to grab a share of that market even at zero profit or even a slight loss. Remember, profit = revenue - expenses. If you're in it for the long haul, the expenses part of the equation include R&D costs. So even if you're not making any monetary profit, you're still getting R&D done essentially for free (revenue is enough to offset it). The hope is that in the future when the market matures and the pace of development slows, you can decrease your R&D costs. But because your name is well-known your revenue will stay up there. Leading to profits then. If you decided to stay out of the "unprofitable" market until then, that means you (1) start with zero market share and zero brand recognition, and (2) you have to pay out of pocket for all those years of R&D you missed out on.

Also, Apple is an outlier. Most of the computer and electronics industry operates on between 3%-7% profit margins, and has thrived for decades on that. Mobile phones are only slightly below that after you remove Apple (who is usually between 20%-25% profit margin). And for the Apple customers who inexplicably think this is a good thing, no it's not (unless you're a shareholder). It means you're just forking over more money for less materials and less R&D (Apple's R&D budget as a % was near the bottom of the industry until last year). You're essentially paying extra to make a fashion statement. And the extra money you're paying isn't going into better materials or new research, it's going straight into shareholders' pockets.

Re:I somehow doubt this is accurate

[rhodium_mir]

As long as one of your expenses is the salary you pay yourself, and you don't have or don't give a damn about other shareholders, who cares about profit?

Re:I somehow doubt this is accurate

[Noah Haders]

you can't just "not give a damn about other shareholders". if you have other shareholders, you likely answer to a board of directors. if the BOD isnt' satisfied with your performance, then they'll fire you.

Mobile Phones

[JasterBobaMereel]

So Mobile phones are sold with very narrow margins, as they always have been, except for one or two premium products which are heavily marketed and sold at premium prices even though they are not much better than some of the others

Sounds like every othe industry ...

Re:Mobile Phones

[danbob999]

Exactly. Smartphones will soon be just another home electronics commodity like DVD players, PCs, TVs.
What was not normal was the 50%+ profit margin on phones, an anomaly in the market that will soon be fixed. Capitalism at work.

Re:Mobile Phones

[Anonymous Coward]

Smartphones will soon be just another home electronics commodity like DVD players, PCs, TVs.

I don't think you can lump smartphones in with general consumer electronics. They are more like fashion accessories or clothing. You can buy a cheap pair of jeans from Primark that fulfils the required function or spend 100s on the latest designer label. Whether Apple and Samsung can maintain their margins will depend on whether then can successfully continue to market style over substance.

Re:Mobile Phones

[cusco]

I think that will depend on the VR industry. Currently most of the VR headsets work off a smartphone, generally a Samsung one. VR porn is supposedly absolutely amazing and studios are starting to put out titles that really take advantage of its abilities. If the VR industry starts putting out decent cheap headsets that don't require a phone (and there's no reason for them not to, the electronics are cheap now) we may see smartphones become commodity devices, the way they should be. If they keep relying on smartphones for their guts we'll probably see at least one or two more generations of "I need this new phone because of X" (X being some nominal unimportant feature but the real reason will be porn, of course).

Re:Mobile Phones

[dugancent]

VR is a gimmick, just like it was when it came out in the 90's. It will go the way of 3D TV soon enough. I don't follow porn or the porn industry, so I can't comment on that.

Aside from tech sites, I don't know of anyone who even knows whats going on with VR, nor cares.

Re:Mobile Phones

[DerekLyons]

But. This. Is. Slashdot.

Where we don't really have any clue about how business works, but that doesn't stop us from ranting and raving and bitching anyhow.

Meh

[TFlan91]

Fuck that. Only reason they are so profitable is because they charge an arm and leg for them.

I'll stick with my OnePlus One that was only 300$ thank you (still has more or equal "power" than the latest galaxy or iphone) and above all, i've dropped this sucker 100+ times (without a 100$ 1" thick case) and it hasn't splintered into a 100 pieces like the more fragile than glass iphones.

Microsoft continues to profit off Android

[micahraleigh]

A win for Android is a win for Microsoft due to their IP royalties.

Re:Microsoft continues to profit off Android

[Actually, I do RTFA]

A win for Android is a win for Google.

The play store (and the app store) make so much more money than the hardware its not even funny.

New math?

[MitchDev]

If Apple accounts for 75%, and Samsung 30%, that equals 105%... does not compute

(Yes I know, they specified Profits for Apple, poor writing by the author actually)

Re:New math?

[jeremyp]

Because everybody else together is making a loss.

Let's pretend the total profit of the entire smart phone industry is $100. We look at Apple's profits and find they are $75. We look at Samsung's profits and find they are $30. We look at everybody else and find that, in total, they are losing $5 between them.

Re:New math?

[cusco]

Ah. That makes sense, thanks.

Wither LG? Good phones, no market share?

[Etcetera]

They are both scummy companies and shouldn't be trusted. It's Nexus or nothing.

Not sure why you're trusting Google here. Are you disassembling the binaries in your Android operating system*? If not, then you have no idea what Google's doing there to use the sensors you've got strapped to your body 24/7. The only safe smartphone is one that doesn't have sensors at all, and has a physically removable antenna and battery or physical off switches for both.

(*And face it, no body is. Even if, in principle, it's possible, no one is *actually* doing it before use except security researchers.)

Going back to the article, though... I'm surprised LG doesn't have a larger share of the market -- and isn't making more in the way of profit. I've been a fan of their phones since the EnV chiclet keyboard days, up through the touch feature phones, and have had the G2, G3, and G5. They've all for the most part been extremely reliable phones with good feature sets and a camera that's second-to-none at the price point for low light conditions.

Re:The limit of capitalism is state capitalism...

[tripleevenfall]

When you say "Controlled by a small group of people", do you mean the collective worldwide shareholders of Apple and Samsung?

Reading comprehension

[tomhath]

75% of profit.

30% of market share.

Re:Reading comprehension

[EvilSS]

Not according to the article:

Apple accounted for 75 percent of the smartphone industry's profits in the second quarter, but that's down from more than 90 percent a year ago due to Samsung's Galaxy device lineup, according to Canaccord Genuity. Samsung's Galaxy S7 launch and the Note 7 follow-up likely indicate that profits will continue to do well, said Cannaccord Genuity analyst T. Michael Walkley in a research note. The other item that may ding Apple's industry profit is that customers are delaying purchases ahead of the iPhone 7 launch. Add it up and Samsung has captured more than 30 percent of industry profits in the second quarter.

Re:Reading comprehension

[danbob999]

They have a much smaller market share than 30%.

Re:Reading comprehension

[MitchDev]

You lack reading comprehension if you didn;t read my whole post. You must be an Apple zombie

Re:Reading comprehension

[tomhath]

Yup, I didn't RTFA. Also, whoever wrote that article called it "profit" in one place and "industry share" somewhere else.

Reading more closely it appears that neither the 75% nor 30% are a share of profit though. They're the companies' the share of industry wide operating income, which has little to do with profit anyway.

Re:Reading comprehension

[EvilSS]

Yup, I didn't RTFA. Also, whoever wrote that article called it "profit" in one place and "industry share" somewhere else.

Reading more closely it appears that neither the 75% nor 30% are a share of profit though. They're the companies' the share of industry wide operating income, which has little to do with profit anyway.

Doesn't change the fact that the article states that Apple had 75% of industry profits while Samsung had 30%, which is what the OP pointed out. Also, even if it's their share of overall industry operating income, it's the same problem, 75%+30%=105%

Too bad for Sammy

[wardrich86]

Too bad Samsung has been making some absolutely shit business decisions on their phones lately. I was going to upgrade to an S7, but with the bootloader being locked down to such an extreme, my next phone will 100% be a Nexus. I guess if Samsung wins the chance to build the Nexus models in a year or two they'll win my vote again, but until then - so long.

Re:Too bad for Sammy

[Locke2005]

My only complaint about the S7 is they dropped the infrared transmitter, so now I have to use my old phone when I lose my TV remote.

Re:Too bad for Sammy

[wardrich86]

Not the guy you replied to, but I live with kids. Having a remote on my phone is invaluable.

Re:The limit of capitalism is state capitalism...

[Anonymous Coward]

No, I mean the major shareholders of Apple and Samsung.

Re:3 year old whitebox phone, thanks

[ledow]

Here. Have a $2 case for your phone for if you ever drop it.

I bought mine on my smartphone, we have this thing called "online shopping" nowadays.

Seriously, though, with the exception of stupid people doing stupid things to their phones (like wandering around without cases or putting them on the toilet while they flush, etc.) and shitty Apple screens that cost a fortune to repair, it's really not that big an issue. I've never broken a phone screen. Ever. I've destroyed any number of laptops (usually by their hinges breaking through too much use), but not a smartphone.

And, yes, mine's tumbled down stairs, onto concrete, out of my pocket off a windowsill and down the back of a bunch of desks, all sorts. Hell, it spends it's ENTIRE LIFE in my pocket being bent, sat-on, smashed against my bunch of keys (with hard metal caribiner for a keyring), etc.

The crappy $2 leather case with plastic edges means nothing breaks unless you smash it face down onto a rock, and it doesn't scratch unless you're an idiot. My previous phone had the same case (literally the cheapest shite on Amazon) and after 4 years it was dog-eared and had dents all over the plastic case but that was it - the phone came out looking like the day it went in. And that took at least two "straight out of the case, spewing battery out" hard tumbles.

Note, I work in schools so I get a LOT of repairs come my way, so I see some carnage. Per-pupils iPads for a start, and I send at least 2 a week on average off for repair.

But phones? Out of all the school-provided staff smart phones, I've never sent one off for repair or had one broken beyond repair before it was decided it was obsolete. Even taking into account random people asking me to look at "IT stuff", iPhone screen-cracks are repairable and I get about one a year. I've yet to have to repair any other model of phone (and, no, we don't use exclusively Apple even for staff phones, just the opposite in fact - we have everything from Lumia to Samsung).

Sorry, but the days of a smartphone being fragile and your laptop robust are long gone. Most laptops these days, and the cheap Chromebooks, are almost made of god-damn paper, they're so shit. Don't even get me started on those things with hinges that wrap-around to become a tablet. The MOST VULNERABLE bit of the laptop and you make it undergo even more stress? Great idea.

Why would any company want to make smartphones?

[magarity]

Smartphones are becoming the electronics version of the airline industry in the 60's and 70's Jet Age. More people do it for the cachet than anything else.

LG

[kalpol]

It's a shame Apple and Samsung dominate - I really like my LG G4. The last iPhone I liked was the 3GS, and Galaxy lost me when I couldn't add storage.

Why make smartphones?

[Locke2005]

Because there are 7 billion people in the world, and not all of them can afford to buy a $600 phone!

Re:Why make smartphones?

[geek]

Most phones aren't $600

Re:Lets see how long iPhone will manage to go...

[Locke2005]

Agreed. Apple _used_ to innovate. Now they are falling behind Samsung in so many ways. Where is the wireless charging, water resistance, memory card slot, etc. in the new iPhone 7? Oh yeah, they are "innovating" by dropping the audio connector... gosh, I wonder how many users requested that "feature"?

Why compete if there are no profits?

[cahuenga]

It's sometimes helpful to first check to see if a layer of management is making a killing.

Re:3 year old whitebox phone, thanks

[cyberchondriac]

I've dropped my work S4 so many times, I've lost count. The clip on the holder case is fickle so it's easy to pop off , but the phone still works perfectly.
I hadn't used a case at all on my old personal iPhone5 for the past year and a half; one minor drop, no damage at all. However, the wife had a case on hers and still managed to crack the screen. Ah well. Have a new 6s now, I did get a case for that. But I don't run out and get the new shiny every 2 years, I usually give it twice that, but eventually the batteries go bad, buttons go bad, etc..

Re:Lets see how long iPhone will manage to go...

[Serge_Tomiko]

It really is extraordinary. Originally, I thought he was not a bad guy for handling, quietly, being "outed". But he has gotten sucked into the vortex. You would think he could be like Peter Thiel and just use his "other" status to disarm the Red Guards...

I smell BS

[Zappy]

You can get a very decent, usable Android smart phone for less than $100.
So, either the article grossly misrepresents the facts, or brands like Motorola, LG, HTC really, for some inexplicable reason, cannot make a profit on a $500+ phone.

Re:I smell BS

[rat7307]

They can't. For whatever reason they are not selling as many units as the big two, therefore have a much smaller slice of the profits. R&D and manufacturing costs per-unit therefore suffer, making what may be an awesome handset in to a lemon (profits wise).

How about I spend my money how I want?

[Brannon]

and you spend your money how you want. Maybe you don't approve of how I spend my money, but on the other hand I don't approve of how you're a smug condescending assclown.

The limit seems to be 105%

[flyingfsck]

So, between Apple and Samsung they have 105% of the market sewn up. Marketing speak indeed.

This is why I still read /. smartphone threads...

[Brannon]

because I am endlessly entertained by just how completely clueless the typical /.er is about why some electronic products succeed while others fail.

People don't buy iPhones because of benchmarks.

Re:Apple just has temporary advantage

[pastafazou]

your analysis is total horseshit. My wife switched from Apple to Samsung because of the cost savings. She thinks the Samsung is an inferior product. It glitches and crashes occasionally, and the auto-correct is horrible compared to the older Apple version she had been using. I'm sticking with Apple because: 1. I own a Mac, and the apps integrate well
2. I like my current iTunes setup, playlists, etc
3. I was impressed by the camera on the current model
4. I agree with my wife about the auto-correct sucking on her Samsung
5. All 5 of my kids own iPods, and I can text them and facetime them, my wife can't
6. I prefer iOS to Android as far as ease of use
7. I don't like the fractured Android versions market.
8. Better games in Apple store
9. Development looks easier for iOS than for Android (I haven't actually gotten around to serious development on either yet)

Re:This is why I still read /. smartphone threads.

[Bryan Ischo]

You sir, are correct. I wouldn't have been quite as harsh as you, but I was about to respond and say more or less the same thing.

Remember remember...

[cloud.pt]

the Nth of Nth-ember - give it time. Why keep speculating crappy stats. Apple - I get it: was the first to make an actual Smartphone. And yes, it did piggybak on Samsung chip-making most of the way. But Samsung really had no reason at all to be where it is now in the smartphone market, other than bleeding money until it didn't. Guess what: if Samsung had it's technology, fabs, and long-standing product-cycle experience to back them up, all of them chinese market disrupters also got their own trump cards: direct access to quasi-free labour, thieving tech from the top makers that depend on making their products in mainland .cn, and boy oh boy, do they have money to throw at the problem (until they don't need to anymore). You can try and speculate all you want, but a big chinese name will take the top 2 eventually, 2, 4 or 10 years from now. They are already threatening in revenue, it will be natural. Accept it: the market changes, you might want it to stay in US or US-friendly soil forever, but fact of the matter is: it won't. You should stop being afraid that the tech things you use might be designed in a communist state. And the main reason for stopping: THEY ARE ALREADY ASSEMBLED THERE. China actually CHOSES not to lead profits in the top of the line (read: design phase), because they hadn't felt the need to yet - but man, they already lead in the profits they currently pursue. And whoever is afraid they might lead in something else eventually is just thinking wishfully - they, or whoever else will. It's how a free market works.

Re:This is why I still read /. smartphone threads.

[Anonymous Coward]

No. I buy iPhones because it's not that Android shit. Yeah, you get to customize a thing or two but unless you're a coder that's pretty much where it ends. Everything else on Android is a train wreck between Google, the manufacturer and the carrier you end up getting fucked coming and going. I can get an iPhone from any carrier and it just works and I get updates in a timely fashion.

Yes, I've played the Android game. I did the virtual fist pump when Android was being introduced and for a few months after I owned my first one and I shat on iSheep... then I seen it get bad for me and several people. I left that garbage behind and have never had a problem since. Now I get to watch clueless old folks try to figure out their latest "budget" smartphone and remember why I'm happy without that shit in my life.

Sorry this drives me nuts.

[AbRASiON]

"Apple, Samsung Capture All Of Industry's Smartphone Profits"

Who is "Industry's" What company is "Industry"?
If you said "the Industry's" I could assume you meant the smartphone industry since that was the topic but just "industry's"?

"Apple, Samsung Capture All Of the Smartphone Industry's Profits" ,.....solved.

Re:Apple just has temporary advantage

[Teun]

Yep, you just listed the proof you're locked in :(.

Apple hardware is good, no question, but their software is no better than others, you can always find certain apps from one side or the other that appeal to a group of people but it doesn't (in)validate a system.
About ease of use, I hate the illogic operation of the companies iPhone 4 and prefer to use my Android, until recently a Nexus4, now a OnePlus 3.
Yes people are different.
The Android market is not fractured (fragmented) but diverse, in genetics as in software an advantage.

Re:This is why I still read /. smartphone threads.

[2ms]

Did I say benchmarks? No I did not. I said iPhones have had roughly double the speed of anyone else for the last 3 years. In other words, that the user experience is more enjoyable. The GUI is snappier. Jumping around between apps and tasks is quicker. People love their iPhones because the workflow is more responsive and they are able to get more done faster. In other words, because the user experience is more seamless.

If you think seamlessness of user experience doesn't matter than you are the one who is "clueless".

Re:Apple just has temporary advantage

[2ms]

You are comparing a brand new processor to a 3 year old one. A 2 year old iPhone 6 is substantially faster than a brand new Galaxy Note 7. You can of course buy a 2 year old iPhone for much less than a Galaxy Note 7. In in so doing, one would additionally get better user experience, OS, customer support, and resale value. I'm sure you've observed people in your daily life who are completely happy with their 6 year old iPhone 4. Because of their durability and the quality of the materials they are made from, ancient iPhones will often look almost new.

There's no comparison between Apple phones and their Google knock-offs when it comes to performance. People clearly buy the latter for emotional reasons rather than rational ones. In order to feel different, or special, perhaps. Nothing wrong with that. What matters is what makes people happy.

It sounds like you're on the Google bandwagon. Good for you. The important thing is that what you do makes you happy. Don't try to tell people that there is something wrong with wanting the technically superior phone, though. Or mislead them by trying to compare the performance of your brand new phone with an iPhone from early 2013.

"disrupted"

[Punto]

Can we us some real words to describe things maybe? "Disrupted" doesn't mean anything