back to article So, Apple won't sell cheap kit? Prepare the iOS garden wall WRECKING BALL

It’s that time of year again, when Apple’s annual iPhone launch is looming and the mobile chattersphere becomes entirely dominated again by one handset maker. In 2007 and 2008, that was completely justified. Since then, there have been progressively fewer reasons to define the whole smartphone sector by Apple. New models have …

  1. Bel Fegore

    Oh no

    Apple is dead again already? Have I seen this article before somewhere? No industry re-defining products, market share slipping, rise of the east, no 9" screen phone. Sell sell sell!

    1. Dave, Portsmouth

      Re: Oh no

      Market share is I think poorly understood by your typical journalist... possibly deliberately to make a statistically meaningless point which suits their own biases?

      In the same way Aston Martin don't make a sub-£10k hatchback, Apple don't make a phone for the low-end mass market. I wouldn't say that Aston Martin is failing because it's market share of all cars is (I guess) a tiny fraction of 1%. Equally I wouldn't say that Apple is failing because it's market share of all phones (or "smart" phones) is, what, 15-20%ish these days? I'd say that in its target market, luxury /performance cars, Aston Martin is doing very well. In its target market of high-end phones, Apple equally is doing very well, and shows no sign of stopping, no matter how much journalists might want to find some numbers to make it look like that's the case, because that makes for an interesting headline (apparently).

      1. jason 7

        Re: Oh no

        However, it would be interesting to know if Aston Martin is actually a profitable business and would survive on their own.

        Currently they are probably just a nice prestige brand and handy tax write off for their larger corporate owner/owners.

        Novelty value basically.

        1. jonathanb Silver badge

          Re: Oh no

          It is independently owned, not part of a larger group, and yes it is profitable.

          1. Yet Another Anonymous coward Silver badge

            Re: Oh no REDUX

            >whether IBM should try to play seriously in the low end PC market in order to drive volumes (the PS2 does not count as a serious low cost strategy);

            >how it can address the move to the PC in a way that generates new revenues and profits and maintains a distinctive user experience;

            >and how far new growth will come from PCs and how far from new product categories.

          2. jason 7

            Re: Oh no

            In that case I stand corrected. Thank you.

      2. ThomH

        Re: Oh no

        Ye standard Aston Martin retort: nobody has to make petrol specifically for Aston Martins. They just work on the same petrol as the £10k cars. Somebody has to make apps specifically for iOS. iPhones/etc don't just work on the same apps as sub-£100 mobile phones.

        Which isn't a perfect analogy because petrol is somewhat more fundamental to cars than apps are to mobile phones given that they're probably used just as much for the web, for photography and for texting, but apps are definitely used more often than oil is put into a car, etc, so forgive me?

        That being said, I'll consider Apple to be in serious trouble when the market stops supplying apps for iOS as abundantly as it does for Android. If, say, the iOS Facebook app (no, I don't use it; yes, it's the most popular app) started lagging the Android version by a year or two then I'd be likely to think that Mac-level relevance was pending.

        1. Joe 35

          Re: Oh no

          Ye standard Aston Martin retort: nobody has to make petrol specifically for Aston Martins. They just work on the same petrol as the £10k cars. Somebody has to make apps specifically for iOS. iPhones/etc don't just work on the same apps as sub-£100 mobile phones.

          =======

          Except to stretch that analogy (but not break it) due to Androids fragmentation, stranding of old OS's on models not much more than a year or so old, and their users reluctance to spend money, you can make petrol for any Aston Martin model and rake in about 4-5x compared to any other, because you would have to make different petrol for each Ford Fiesta, Ford Escort, Ford Mondeo etc and the same for every other Vauxhaull, Citroen etc model, any one of which individually has a tinier market share than AM's range overall, *and* and whose users spend less.

          1. Paul

            Re: Oh no

            android fragmentation is often raised yet rarely understood.

            http://www.androidcentral.com/android-fragmentation-seemingly-impossible-conversation

        2. rocwurst

          Re: Oh no

          Actually, they do make petrol specifically for Aston Martins - it' called High Octane Premium Unleaded and Fuel companies (developers) are more than happy to supply this additional fuel choice for the smaller number of high performance vehicles around the world (iOS devices) as it brings in much higher revenue from a much more lucrative user demographic (iOS users).

          Of course, both the Aston Martin and your average Hyundai share the same roads (the Internet).

          However, iOS device numbers and active iTunes/App Store users are both approaching 1 Billion (with a quarter of a Billion more iOS devices sold each year and growing) compared to Google's 1 billion active Android users.

          Thus, in the car analogy, Apple is actually equivalent to Aston Martin, Lamborghini, Audi, Mercedes, Porsche, Volkswagon, Honda, BMW, Lexus and Ferrari all put together in terms of installed base but bringing in vastly higher profit margins.

          1. Otto is a bear.

            Re: Oh no

            Mind you, anybody can make motor fuel, provided it meets the standard, in computing somebody makes the operating system and it isn't compatible with any other brand in quite the same way. You can upmarket fuel with additives, but that's a very difficult and expensive road to follow with marginal benefit for the end user, not usually reflected in the price difference. Get your additive wrong, and it has happened, and some engine systems start failing. Linux is the closest that our industry gets to the fuel analogy.

            Using car analogies for IT is dangerous, we are far less tolerant of vehicle failure than we are of software failure, for good reason. What's the apocryphal story about a computing executive telling an auto-maker executive that they needed to be more like the computer industry, and being told by the auto-executive that if cars were developed like computers, you would have a car that went from 0 - 1,000,000 mph in 6 seconds with no steering wheel or breaks.

      3. hammarbtyp

        Re: Oh no

        @Dave, Portsmouth

        The thing is Aston Martin are high end and low volume. They are not trying to sell a vantage to your average Joe, who is quite happy with there Ford Focus, or whatever

        Apple are trying to be high end and high volume, it is questionable whether they can do both. Don't get me wrong Apple make great products but the innovation gap has defiantly closed over the years and you start to wonder whether it is a case of the emperors new clothes.

        In you dig behind the hype and showmanship the recent iPhones have not brought much new to the party. 64bit was interesting, but the jury out whether it has really that much of an effect. They shaved a few mm off the case, but how far can you go down that route and still charge a premium?

        I think a better analogy is the PC market. Apple and IBM PC's were pretty much neck and neck, but PC's became ubiquitous and cheaper and eventually there seemed little point in paying the premium especially when the software manufacturers followed the market. It can happen, just ask Nokia

        Don't get me wrong. iPhone will always be there because too many people are tied into the Apple walled garden, especially in the States. But can they win the emerging markets and can they maintain the price differential.

        Or do they become a Aston Martin? A niche product and rich man's play thing.

        1. This post has been deleted by its author

      4. Cody

        Re: Oh no

        You're missing the point. It is that the low and the high end are not fixed. What is happening to Apple is that its high end premium features are moving down into cheap stuff, so there is basically no difference but the brand. What they should do is license the OS at the right time, as they should have done before. But they will not, and the result will first be falling share, and then falling volumes.

      5. P. Lee Silver badge

        Re: Oh no

        I'm not sure the Aston analogy holds. iOS and Android are the fuel which powers the hardware. They are pretty similar. iphones may be slightly better built than S5, but S5 has better functionality. Slightly nicer curves vs more boot-space and room for the kids in the back.

        Apple is obsessed with doing what they like. It could quite easily ruin them, as it almost did in the original Mackintosh vs PC days but I wish more coporates had the guts to do that. What I don't like is the more recent obsession with locking things down. Being the best is a worthy aim, lock-in is not. In the past, lock-in to the Mackintosh was a by-product of what they did, now it appears to be the aim - corporate efficiency at its worst.

        As far as I'm concerned the Apple's download vs cloud model is good. Local execution is more reliable and much of the cloud apps don't need to be cloud apps. GPS/Maps is a prime example of the nuttiness of cloud where it isn't needed, as is music streaming over a WAN. Plus if there is a failure, its only for one person and you generally don't get bad headlines for it. That's simpler and better, and for the vendors' benefit, will drive CPU/new model requirements. Even better for Apple, driving tablet-based (or phone-WiDi) apps could give them a proprietary hardware edge where the bloat of MS Office fears to tread.

      6. Stuart 22

        It's the Apps Stupid!

        "Market share is I think poorly understood by your typical journalist... possibly deliberately to make a statistically meaningless point which suits their own biases?"

        I remember when Android was struggling against Apple. The reason was not price, not cool but fewer apps. Only when it got to near parity did the reason not to buy Android disappeared.

        Those market share figures are important to the app market. They don't quite match the percentage revenues to the App makers but a majority and increasing share of revenue is coming from Android. Now if I produce an App it is going to be both Android and Apple. I might consider Windows but is it worth the effort in support & development - especially for the smaller companies (still responsible for the width of app offerings for each platform).

        If Apple goes lower than 10% and my development/support costs are appreciable higher then the Apple variant may be late (when Android has amortised the development cost) or even not at all.

        If 'premium' Apple costs you Apps you may not buy. That could herald a Blackberry/Nokia tumble. It can happen inside 18/24 months. Aston Martin is not a business model. They wouldn't sell many if it could only use motorway or A roads.

        1. rocwurst

          Re: It's the Apps Stupid!

          App Annie reports that Apple's App Store generated 85% more revenue globally than Google Play last quarter and Nanigans reports that iOS users generate 1,790% greater advertising ROI so Android app net income is a long way from getting near parity with iOS at this stage.

          As such, iOS's "Premium Unleaded high octane" fuel is not only available at just as many gas stations as Android's "Unleaded" fuel (iOS app download numbers are similar to Android), it is bringing in vastly more revenue for the Oil companies (developers).

          iOS runs on all the same roads (The Internet) so that's not a problem but with a built-in GPS (iOS Security architecture and App Store curation), drivers are kept away from minefields, dodgy fuel stations and broken bridges (malware) which Android users far too often stray onto.

          As such, developers would be foolish not to continue developing apps for iOS first unless this revenue and profit disparity reverses.

    2. Kevin McMurtrie Silver badge

      Re: Oh no

      One shouldn't forget that Apple has almost died at least once. They're so stubborn that they won't stop doing something wrong until there's nobody left at HQ to do it. The iPhone, to me, is an unfriendly device that wants to gather up my data and never let it go by any means. My Android phone has 144 GB of storage and I do use it. It's my modern day briefcase for things that aren't suitable for "the cloud". When I do use "the cloud" it's my own rather than a 5 - 10 GB novelty toy. Cloudy competitor Google hates microSD cards and file browsers as much as Apple but hasn't locked down the hardware and software to banish them (yet).

  2. Dave, Portsmouth

    Innovation...?

    Innovation is something that comes up a lot in discussion about phones - that it's missing, that companies (particularly Apple) don't innovate anymore, etc. But why do you think we need more innovation? Where? There are lots of little new features coming through in all of the phones every few months (or annually, for Apple), none of which are massive in themselves, but represent useful progress and refinement. Isn't that good? I'm not sure I want something completely re-invented every year or two, because what I've currently got already does the job fine. Yes, make it a bit thinner, lighter, faster and with a longer battery life - and improve the camera, improve reception and call quality, make it more scratch / water resistant ideally... but fundamentally I'm (and I think this applies to most people) aren't looking for anything massive.

    It might be boring for journalists writing about it, but for the consumer steady progress that refines something rather than flitting around all over the place is a good thing!

    Incidentally, I'm also surprised to see Chromebooks selling so well. Do people really use them? Last time I looked people were only buying them as a cheaper way to get a larger netbook, and immediately reformatting them and sticking Linux or Windows on them! Maybe it's all changed and they can work usefully offline now, keeping copies of everything local so you can use them out-and-about without worrying about your web connection?

    1. ThomH

      Re: Innovation...?

      Chromebooks have a lot of uses. Amongst those peers that we, commenters on a tech news site, discuss tech purchases with they're almost certainly just for use as something other than a Chromebook.

      One anecdote: I know a teacher who has recently kitted out her entire classroom with them. All her students need is access to certain web-based educational resources. They're the easiest to administer and cheapest to buy (safely*), reasonably large thing with a keyboard that doesn't end up tied to any particular desk and can do that.

      (* Android laptops seeming to require a gamble with the supplier, being overwhelmingly obscure off-brand imports)

  3. johnnymotel

    Same old market share mantra....forgetting that iOS users just spend more time and money on their devices.

    There's a lovely lady on our local market, she makes and sells goats cheese. Her cheese is simply divine. It's also £25 per kilo. Doesn't stop people queuing up to buy her cheese and she makes a really decent living out of it.

    1. william 10

      The same could have been said for BlackBerry users at one time. Your example is not comparable as she is not listed on NASDAQ employing thousands.

      Apple has become a fashion brand and in that sense it has no competitors in the IT Fashion space (HTC came close and then fell away). IMHO it will not be about the technology, it will be about the perceptions from it's user base - it's new product need to have that premium look and feel ?

      1. jai

        But... didn't Blackberry then start chasing the marketshare strategy and producing cheaper phones to supply to kids? and we all know how well that strategy worked out for them...

        1. Steven Raith

          I recall four companies who went to replace their Blackberry sync systems - and handsets - with exchange and iPhones/Android handsets once Exchange ActiveSync was good enough, because they didn't need the full device encryption, end to end encryption of content, encrypted remote wipe capabilities, nor the added complexity and micromanagement that the BB systems required. Nor their awful management interface.

          EAS (or Kerio mit EAS extensions) and an EAS compatible smartphone was more than good enough, and cost less as it meant they could be more agressive sourcing their handsets, rather than being locked into RIMs platforms.

          RIM didn't catch up to those who just needed a basic remote comms platform, and they crashed and burned as a result - it was halfway through the burning they started churning out phones to kids, Playbooks (which, hilarious, required a RIM handset for email) not before, as I recall.

          Anyone remember it any differently? Just me?

          Steven R

          1. ItsNotMe
            Megaphone

            "Playbooks (which, hilarious, required a RIM handset for email)..."

            Actually, they did not require a BB handset, but the first PlayBooks did not have any e-mail client whatsoever...or calendar application. Wasn't until the first major upgrade that both these items were added. And being that RIM made its reputation on messaging & calendars...what ever were they thinking? Obviously...not much.

            That was the first of many huge mistakes RIM made with the thing. Along with virtually no advertising of the product...EVER.

            I was able to connect my LG 3g & Motorola 4g phones to it either through Wi-Fi or Bluetooth. Worked just fine, but the e-mail program was poorly written.

            The PlayBook had/has a fantastic screen, and great sound as well. Far superior to any other tablet on the market...even now. But...and this is one huge "but"...RIM simply promised the world to owners in regards to the new OS... for nearly TWO YEARS...then hung them out to dry.

            I know...I own one...and it now sits quietly on a shelf next to my copies of Microsoft Bob.

    2. Anonymous Coward
      Anonymous Coward

      Goat Cheese

      If I remomber correctly, goat cheese is white and has rounded corners.

  4. Anonymous Coward
    Anonymous Coward

    Where do they find these people?

    So some stockholders disagree with the way Apple's share price is moving, and that somehow is forcing Apple's leadership to come up with new products? Where do they find these kind of authors? The Muppet show?

    If there is one thing that can be gleaned from Apple's history it is that they don't give a hoot about their shareholders (and rightly so, imo). As for "revolutionary" or "innovative" products, look at how well those kind of things have served the competition. Microsoft came up with some pretty good ideas, but they weren't supported by a long term-strategy. Apple builds one thing on top of another; the iPhone would not have been a success if Apple hadn't had the SSD supply locked down; without the iTunes store; without Mac OSX. Same thing for the retina display for the iPhone 4, oh wait, that wasn't an "innovative" design, right?

    I like reading articles on El Reg, but please, no more Jasper Hamill and his buddies, mmmkay?

    1. Anonymous Coward
      Anonymous Coward

      Re: Where do they find these people?

      As a stockholder in Apple, I am very satisfied with the current price. There again I bought my first batch of shares at $35 many years ago. My holding in Apple shares makes up a good proportion of my Pension Fund.

      The likes of Ichan can go take a hike for all I care about him and his views. The price at $100 after the 7:1 split if far higher than many so called experts predicted after the split. Ichan is not there for the long term. 2-3 years and if he does not get 25% return then is it a failire as far as he is concerned. Totally unrealisting IMHO.

  5. James O'Shea

    And yet another 'Apple is dead!' moment

    I'll let the good people at http://www.macobserver.com/tmo/death_knell/ know that #66 has arrived...

  6. Mage Silver badge
    Paris Hilton

    One Trick Pony

    Apple II

    Mac

    iMac

    iPod

    iPhone

    (Though all good ideas let's not consider Pippin, Newton, Lisa)

    It could be a few years till the next "trick".

    1. Anonymous Coward
      Anonymous Coward

      Re: One Trick Pony

      Maybe my maths is off, but that's at least 5 different tricks (and "Mac" is actually Macbook, iMac and Mac server, so it's really 8), and *all* still very profitable (although iPhone and iPad have cannibalised the iPod market). To that one could add iTunes as well, makes 9. And OSX makes 10, but that's not directly generating profit but more creating a good reason to buy the Mac in the first place.

      Sorry, I got distracted. Your point was again?

      1. Mage Silver badge

        Re: One Trick Pony

        One at a time. for example the any Mac is tiny volume compared to iPhone and iPod is nearly dead.

        There is no breadth of product range.

        OSX is essentially free. It's not a real product like MS Windows, never has been.

        IiTunes is a service to monitise the iProducts.

        The Mac Server line is dead. Mac OSX will be replaced by ARM based iOS iBook Mac Air look alike as soon as they decide that gives more control (iTunes only source) and profit.

        Apple have no loyalty to users. Apple fans really don't get it. I'm familiar with Apple since the original Apple II.

        1. Doug Petrosky 1

          Re: One Trick Pony

          Is this a joke? Did I not get the sarcasm?

          iTunes sells Music, TV, Movies, Applications and even the occasional eBook and makes good money doing it. The AppleTV is one of the most successful streaming boxes on the market even though it is over due for an update. The Mac has outpaced the rest of the industry in like 32 of the last 33 quarters. iPods, iPads, and iPhones continue to dominate their product categories when it comes to profit.

          Developers still make more money selling on iOS than Android as do advertisers so there is little concern that market share numbers will cause Apple any problems in the near future.

          Speaking of the future, Apple has it's fingers in Health Care, Automotive, and point of sale. Things like CarPlay, iBeacons, HealthKit, TouchID, and others, put Apple into position to take advantage of many of these feature profitable areas.

          1. Anonymous Coward
            Anonymous Coward

            Re: One Trick Pony

            Actually, I forgot about the AppleTV.

            So that makes it an 11 trick pony, and I'm not counting the freebies that make buying a Mac interesting (not a fan of Pages, btw, but Keynote is an absolute Powerpoint killer IMHO).

        2. Anonymous Coward
          Anonymous Coward

          Re: One Trick Pony

          I'm familiar with Apple since the original Apple II

          Familiar <> using it.

          I *built* an Apple II, but I actually intensely disliked OS 9 when I had to use at C&W which put me off Apple as a desktop. I was using Linux and Windows since, until I had to buy a Macbook to do some research for a book I'm writing. I bought an iPhone because it was a good concept (I had a Sony Ericsson P1i), but only when I started using OSX did I realise just how seriously *crap* Microsoft interfaces had become (I did have a hint of that when I had to use Visio post Microsoft - they totally butchered the user interface).

          More and more people have discovered this because of what MS did to Vista, and to Office - they had to find other ways to remain productive and once you're using OSX, going back to the pain MS inflicts on you seems positively masochistic.

          If you want to comment on something, USE it first. For at least a month. Otherwise you're not really having an opinion, you're having an assumption.

    2. This post has been deleted by its author

    3. Nifty Silver badge

      Re: One Trick Pony

      Are new tricks with apple like large prime numbers?

  7. Alan Denman

    Holding it wrong

    If you don't let everyone see the logo when making a phone call you really don't deserve to own an iPhone.

    Follow them rules, not the dropped calls Troopers.

    1. James O'Shea

      Re: Holding it wrong

      errm.... my iPhone lives in a case. And not one from Apple. And there ain't a hole to show the logo. And there ain't a logo on the case (and if there was a logo on the case, it wouldn't be Apple's, 'cause the case ain't from Apple...) I suppose that I don't deserve an iPhone, eh?

      Hint: a whole lot of people have reasons to buy iPhones which do NOT include wanting/needing to be seen with something fashionable... my iPhone does what I want, unlike my Android, which is going to be replaced Real Soon Now(tm) precisely because of its problems, which include freezing randomly. And, no, it's not a manufacturing defect, unless it's a common manufacturing defect as this one is the _third_ example of that particular handset I've had, all under the warranty, and all in less than nine months, and all of them have had the same problem. (Yes, it could be that this particular handset is a less than stellar example of Android phones. However, I am disinclined to repeat my experiment with another Android. This phone will be replaced by a iPhone 5c once the iPhone 6 comes out and the price drops on the 5cs. And I won't care what colour the 5c is, as it'll be in a nice black case, just like the one on my current iPhone.)

    2. Anonymous Coward
      Anonymous Coward

      Re: Holding it wrong

      You're still living in the days of Trigger Happy TV and the 5ft tall Nokia. I've got an iPhone because it's proven to be by far the least pain in the arse of a handset and platform to use. I couldn't give a shit if anyone sees it, and, given how ubiquitous they and other device are, I would be amazed if there was anybody so devoid of friends that they would remotely care. You're not the one, are you..?

  8. jason 7

    History catching up again.

    There is another issue with smartphones in that the tech is now pretty mature like it has for several years with PCs and laptops.

    Those 2012 spec quad core ARM CPUs are still plenty good enough to run today's apps and probably will be for another 18 months+.

    No need to buy a new smartphone every year if you look after it.

    1. Anonymous Coward
      Anonymous Coward

      Re: History catching up again.

      There is another issue with smartphones in that the tech is now pretty mature like it has for several years with PCs and laptops.

      Actually, the tech was already maturing when Apple created the iPhone (the last missing component was IMHO ActiveSync because SyncML didn't seem to deliver). Apple didn't invent the smartphone, they just made it very usable - if there was something not mature, it was the smartphone UI. Apple's design and non-geek audience focus was absolutely perfect to address that gaping hole in the market, and the rest is history. Nokia had its chance to do something sensible with Symbian, but they blew it.

      No need to buy a new smartphone every year if you look after it.

      Absolutely agree. I still have a 4S and it works well, although I suspect the battery will eventually fade as any slab of lithium seems to do except for the one in my Motorola v3i (still IMHO the best ever mechanical form factor, even if the shiny keyboard sucked about as much as the OS). My phone has a case and a screen protector, and that seems to be all it needs to survive.

    2. Thomas Wolf

      Re: History catching up again.

      I don't know about you, but my smartphone is still slower to display web pages (in my case I notice it most with "My Yahoo") than a desktop (both over wifi). Given how responsive games are on these phones, I've got to believe that it's got to be some limitation in the networking rather than CPU or graphics abilities.

      1. jason 7

        Re: History catching up again.

        I have to agree with you there.

        There is something adrift somewhere with web on mobile devices as I still find web browsing painfully slow and problematic. I use the web on my smartphone only as a last resort. If there is a specific app for getting that info its always much quicker than using the web on it.

        I have at home a A/C/N router capable of pushing 600Mbps wi-fi and it's still pretty slow to serve up webpages whether I use Firefox or Chrome on my Nexus 4.

        I don't think its a CPU issue, it lays somewhere else in the chain.

        1. Anonymous Coward
          Anonymous Coward

          Re: History catching up again.

          There is something adrift somewhere with web on mobile devices as I still find web browsing painfully slow and problematic

          I realised the difference when I installed the Kaspersky safe browsing app on my iPad. That is positively lighteningly fast compared to Safari..

    3. Salts

      Re: History catching up again.

      I will probably get the iPhone 6 in October, I will drop back to my old iPhone 4 sell the iPhone 5s and use the money to buy the 6.

      My reasons are simple, resale value of the 5s is good, therefore it costs less to keep up with the latest iPhone. This effort, affords me(normally) a little better battery life, a slightly faster phone, a slightly more reliable phone, a phone in warranty and lots of other little bits.

      Waiting until October, is to ensure, those little bits I mention are true, smartphones are smartphones, the brand you choose is, just the brand you choose, for the reason you choose. For me the differentiator is resale value and the iPhone and Mac products in general are clear winners in that. The buy in cost is higher, but once in, the running costs and feature set are about the same as any other product on the market, if not, well whats another year, did not miss them before, so the wait is no big deal.

  9. Mage Silver badge

    Cloud

    Why is Cloud listed? It's not a thing or product. Just marketing speak for remote hosted services such as:

    iTunes

    email

    Instant Messaging

    photo hosting

    So called social media

    Real Websites

    Collaborative documents (like Google Docs)

    Hosted storage (you're mad to rely on it as sole copy, Amazon, Dropbox, Google Drive etc, or your own private hosting.)

  10. Anonymous Coward
    Anonymous Coward

    Apple could never compete in a race to the bottom

    To suggest otherwise is madness.

    1. jai

      Re: Apple could never compete in a race to the bottom

      To suggest otherwise is just a lame exercise in click-bait to try and get some free advertising for some research newsletter that no one's ever heard of...

  11. William Donelson

    Great article, for 1-2 years ago!

    "As a result, Apple’s stock price has disappointed recently, at least by its usual high standards, and a new mood of caution has set in."

    Apple valuation is close to it's highest ever. This whole article reeks.

    You can to better than this. Talk about WHY Apple continues to dominate cellphone profitability, and WHY that might fail in the future.

    1. Tuomas Hosia

      Re: Great article, for 1-2 years ago!

      "... and WHY that might fail in the future."

      This is an easy one: There's nothing extraordinary offered for the high price.

      Every feature iphone now has, including slick UI, will be incorporated in a $100 model and even brand following has its limits: $600 phone won't sell if it doesn't have anything the 1/6 priced phone has.

      Not imagination either, that's exactly what happened to Nokia when they started to re-release old stuff in different package again, again and again: Nothing actually new but premium prices led to falling sales globally.

      Management problem, all the way, basically. And Apple is obviously in similar limbo now: CEO can't decide and/or has no visions of what next.

      Apple without visionaries is quite dead, internally. With their pile of cash they may run a long time as company, but that's only a shell. Just like Nokia did, almost 10 years, until Elop butchered it.

  12. Gene Cash Silver badge

    Breakthroughs

    Are rare. IBM's big breakthrough was the 360 architecture, where they had the idea you could sell software that ran on a whole price range of models, not just a single one-off model.

    Apple's was making a phone smart, with a form factor and design that appealed to everyone.

    You can make it nicer, with better features, but since the shiny bit has worn off, people will be going "meh, it's just another iPhone"

    This is why people are doing smart-watches. They want to capture that breakthrough moment, but since it's mostly derivative and not a true breakthrough, it's already flopping, even before most of them hit the market.

    And when was the last Google Glass story? It was a while ago, huh?

    1. Brewster's Angle Grinder Silver badge

      Re: Breakthroughs

      I wear glasses. I don't wear a watch. So I know which wearable I'm more likely to use.

      And the scope for Augmented Reality is massive.

      1. Thomas Wolf

        Re: Breakthroughs

        I wear glasses and don't wear a watch (at least not for the last 20 years). I, too, know which wearable I'm more likely to use - the one that gives me useful features, doesn't require daily charging, doesn't make me a social pariah, and is priced reasonably. Google Glass, in its current incarnation, fails for all but the first requirement.

        Google Glass has way more potential than a wrist-worn device. But I don't see Google Glass becoming mainstream for a long time - the battery technology is simply not there. Electronics giants have a hard enough time finding ways to keep smart watches charged for a whole day (at least judging by what Samsung's "Gear" has been able to do) - glasses are even more constained! You can't put much battery storage in a device worn on the bridge of your nose! And, unlike a smart watch that you look at a few times a day, an augmented reality device is really only useful if it's on all the time (at least while you're wearing it).....that's years away, IMHO.

    2. Mage Silver badge

      Re: Breakthroughs

      Apple didn't even invent the iphone concept, Just successful at marketing it and forcing carriers to offer attractive data plans. A simple GUI stuck on existing HW and similar did exist from niche companies. Just not from Nokia, who had real smart phones from 2002, but messed up on GUI and also data wasn't affordable.

      No innovation on original iPhone. I had a Samsung 4.3" touch screen dev kit (not a phone) based on same CPU Apple used. QT phone edition and some other GUIs pre Nokia take over and iPhone release were fine too.

      Lets not re-write innovation history simply because Apple was better at marketing and Nokia was drowning in internal politics and had a stupid GUI (as had MS, Sony, Motorola, Ericsson etc). Nokia wasn't the only phone maker then. The GUI is actually minor part of the design and not even part of the OS.

      1. ratfox Silver badge

        Re: Breakthroughs

        No innovation on original iPhone.

        I also had a smartphone before the iPhone (a Palm). And let me tell you, the UI of the iPhone was heads and shoulders above it. It's easy to forget now that all phones are like that, but there really was nothing comparable at the time.

        In particular, I don't think any other phone had swiping and pinch to zoom, which were a game changer for surfing the web using a small screen.

    3. Anonymous Coward
      Anonymous Coward

      Re: Breakthroughs

      "Apple's was making a phone smart, with a form factor and design that appealed to everyone."

      Nokias, really. Iphone has a lot of features directly copied from Nokia (and others), nothing basically new there but integration that works and imago. "Ease of use", even: Software which is ready, thought out and polished, while HW had nothing out of ordinary.

      That was was the biggest difference to anyone else IMHO, at that time.

      Especially Nokia had totally boneheaded habit to push phones out as soon as hardware is ready because HW-team wanted all the cool gizmos out asap and no-one gave a damn about sofware, so you basically were running on alpha or early beta all the time and (HW-people) management didn't want to change that.

      I've had several (company phones, freebies) and_all of them_ had crappy software at publish time. That was really fixed in last version of Symbian, Belle II, but that was way too late: HW-people had managed to kill whole company by that time in internal power struggles with SW-people.

      And CEO, Kallasvuo, who should have stopped those, didn't do anything.

    4. Philip Lewis

      Re: Breakthroughs

      IBM invented the "Winchester disk drive", an astonishing innovation that basically changed storage.

      http://en.wikipedia.org/wiki/History_of_hard_disk_drives

  13. ThePhantom

    All I really want from my iPhone is what I had on my Treo - a way to calibrate the keyboard so that the very consistent mistyping of backspace for M, O for P, and S for A get fixed.

    1. Anonymous Coward
      Anonymous Coward

      I'm almost afraid to say it, but could it be that you're holding it wrong? :)

      I have thick fingers, and I have the same problem unless I either switch to one-finger typing or use it in landscape mode.

  14. Arctic fox
    WTF?

    My personal opinion is that these companies are likely to...........

    " Soon it will be more important to see whether Apple can gain at the expense of Lenovo, Xiaomi and Huawei than its traditional arch-rival."

    ..........stuff Cupertino, Mountain View and Redmond combined. Do I welcome this? I am not sure that I understand what that question means. We are in the middle of a paradigm-shift in the world-economy. Where it is all going to end is something that I do not claim to have a clue about other than this kind of "navel-gazing" by the "First World" is an utter self-obsessed waste of time.

  15. DerekCurrie
    Holmes

    Who Innovates In The Cell Phone Business?

    Just Apple. Others follow, with cheap knockoffs.

    And thank you Apple for keeping UP the garden wall. I want no part of the rat's nest that is Android security OR the swamp that is fragmandroid. It's great to NOT have to go there.

    Meanwhile, arm chair analcysts persist in their inner world echo chambers that amount to sleep inducing brown noise.

    1. Anonymous Coward
      Anonymous Coward

      Re: Who Innovates In The Cell Phone Business?

      "Just Apple."

      As far as I've seen, they haven't innovated anything for a long time in cell phones. If ever. Polished UI isn't an innovation per se, but hard work.

      It's good but not an innovation.

      1. Anonymous Coward
        Anonymous Coward

        Re: Who Innovates In The Cell Phone Business?

        I thought the fingerprint scanner was innovative in the sense that while it was not the first industry attempt at the idea, unlike the earlier attempts by less skilled vendors, Apple's solution "just worked". In my world, an innovation is not an innovation, if it doesn't actually work. (Example: Samsung's "wave wildly at the screen" control method for TVs)

        The tech is devilishly complex, and was released essentially without hitches. It just worked. You just think it is irrelevant because it is so transparent.

      2. chr0m4t1c

        Re: Who Innovates In The Cell Phone Business?

        >It's good but not an innovation

        Given what was on the market at the time (and had been for >5 years), I think it could be argued that a polished UI *was* an innovation, but not in the sense of being an innovative idea, more in the sense of delivering it to the consumer as it seemed that no-one else had thought of actually doing that.

  16. Anonymous Coward
    Anonymous Coward

    Article is a complete waste of time

    "Apple's stock price has disappointed lately?" right before going on to point out it is currently at an all-time high? I wish all my investments were as "disappointing" and I would have retired long ago! I think the author is trying to imply that recent highs are due to unwarranted expectations for the iPhone 6. Personally I don't think they're unwarranted because going to larger sizes, which the market has amply demonstrated there is a lot of demand for, will if anything help Apple's sales. Certainly more than any feature they can add short of "it's unbreakable" or "it reads your mind".

    "Lack of innovation?" As compared to exactly what innovation that has been going on in non-Apple smartphones the last few years? Adding little gimmicks like eye scrolling that hardly anyone wants or uses is not innovation. There have been no fundamental changes to the smartphone since the original iPhone - neither from Apple nor from Android when they started shipping products a year and a half later. There has been no innovation, just incremental improvements in what was already there, or little bits glued on that make little difference in people's day to day use of the product.

    Then the usual worries about market share, that Apple isn't addressing the low end. You mean that low end that sees Android phones sold for as little as $30 in India and China now? Yeah, there's a market Apple needs to be in! Apple is in business to make the most money possible, not to achieve the highest market share possible. The iPhone makes more profit than every other phone in the mobile market combined. That's how they define success. Introducing a low end iPhone that could magically capture low end share without significantly cannibalizing the high end range is likely impossible.

    As I keep pointing out, Apple has been at around 10% of mobile market share for several years now, so the "declining" smartphone market share is irrelevant - everyone with a clue knew that would happen as low end smartphones replaced low end feature phones.

    1. Anonymous Coward
      Anonymous Coward

      Re: Article is a complete waste of time

      "As compared to exactly what innovation that has been going on in non-Apple smartphones the last few years? "

      None, but who's supposed to be the innovation leader in smart phones? At least in marketspeak.

      Apple.

      Excusing them for having basically nothing because others don't have anything either, is quite poor excuse and it's a failure for a ex-leader.

      Current situation is that market is maturing fast and no-one invents anything, not even the self-proclaimed leader. How long does it take to cheap manufacturers to copy everything iphone has now and sell that set of features at $100? Year? Or two?

      And what Apple is selling then?

      No idea and fortunately it's not my problem: But a lack of steam in Apple is obvious.

      1. Anonymous Coward
        Anonymous Coward

        Re: Article is a complete waste of time

        Apple's innovation was taking the pieces others had been doing poorly and putting together about as well as Ford parts into a Toyota, transforming the smartphone from a geek and PHB toy into something the masses wanted.

        That's what an innovation leader does. But you can only do it once, and it can't be done again until a new market is identified that has gone off in a bunch of different/niche market directions.

      2. Anonymous Coward
        Anonymous Coward

        Re: Article is a complete waste of time

        Apple continue to make oodles of money out of expensive phones because they do not massively innovate, they take modern technology, make it stable and predictable, give it an easy to use interface and deliver it to consumers who are not necessarily technical but can still use it to do clever things. iPhone, iPad and Apple TV aren't cheap devices, but

        This appeals massively to time poor/cash rich people who want a device they can do things on without having to spend a lot of time learning how to do those things. Because they keep delivering devices like this, people are reasonably happy to keep upgrading, because they know precisely what they will get for their money - exactly the same UI as they currently have, just on a faster device.

        The alternative to Apple is either "expensive Android" or "cheap Android". "Expensive Android" costs the same as Apple devices, provides the same features as Apple devices, does not have Apple consistent UI. "Cheap Android" will be missing features or functionality, and will have had little to no time spent on the UI by the manufacturer.

        Apple's current and past profitability depends upon capturing and keeping that segment of the consumers. It does not particularly depend on selling lots and lots of cheap phones, nor on constantly "innovating", which is why the article is so badly wrong .

    2. Anonymous Coward
      Anonymous Coward

      Re: Article is a complete waste of time

      I should like to observe, that in the past 5 years there have been absolutely massive amounts of innovation on the hardware and manufacturing process side of things from all the manufacturers.

      Irrelevant for the fandroids (despite android manufacturers' stake in these innovations), but blindingly obvious to those of us with a clue.

  17. Andy Taylor

    Chromebook?

    I always thought that Apple's Chromebook equivalent is called iPad.

  18. BjornofKelp

    Define "attempt," because I'm confused!

    "...pricing against the shift of growth towards entry level smartphones has been present for two years or more. It has not been convincingly addressed. The iPhone 5c was an attempt..."

    HOW? How, in any light, was the 5c any kind of attempt at a lower priced phone?

    (Note: I'm going to use US dollars for this post, because that's where I live and see the market. Numbers may vary from wherever you are, but I doubt the trend will.)

    Sure, it cost $100 less, but that's no different than in previous years. In case someone wasn't paying attention, here's what I mean: When the iPhone 4 came out, the 3GS dropped to cost $100 less than the 4 did, for the same capacity. A year or so later, the release of the 4s shifted the 4 to selling for $100 less than a same-sized (GB) 4s. Ditto when the 5 came out, relative to the 4s.

    What changed with the 5c? NOTHING, practically. Oh, yes, it was a "new" model, sure, but only in the same way that, say, Honda coming out with a new variant of the same-year Accord could be counted as a "new model of car."

    The iPhone 5c is almost identical to the iPhone 5, as far as the computing portion goes. Furthermore, the iPhone 5 was discontinued at the time, or at least I never saw them selling again, and Apple removed them from it's iPhone store online. With the iPhone 4s still listed, I'm pretty secure in my statement.

    Essentially, Apple repackaged the 5 and called it new again. But, did this "new" phone sell for a new, cheaper than ever (relatively) price? Nope. Both on contract, a new iPhone 5s costs $199, while a new iPhone 5c costs $99. Or, $649 vs $549, sans contract.

    So, again I ask: How, in any way, is that an attempt at addressing a lower cost market? They didn't do anything differently than in years past, except to have changed the package the last-gen model came in.

  19. Anonymous Coward
    Anonymous Coward

    I'm trying to recall

    The last time I saw anyone with a 5C in their hands. Has it been an unmitigated disaster? I think Apple needs to answer a number of simple questions for itself:

    1. Where's the real money? Is it in hardware, or is it in the money made from peddling apps, services, movies, tunes and books?

    2. If it's not in the hardware, then is it possible to make a cheaper iPhone, without compromising Apple's brand cachet?

    If the answer to 1 is still hardware, then Apple are already doing what they need to do, and might want to consider drawing a line under the 5C. Personally, I suspect once you factor in the potential of Asia, the software, services and entertainment are probably more important.

    1. Philip Lewis

      Re: I'm trying to recall

      The 5C was aimed at the segment of the market for whom colour matters. Choose your personal definition for that demographic.

      I have seen plenty of them in the wild.

      I suggest you chase up the sales figures, to answer your "unmitigated disaster" question.

      1. Anonymous Coward
        Anonymous Coward

        Re: I'm trying to recall

        Indeed, I think I probably see as many 5Cs in the wild as 5Ss. When I ask the owners if they like their 5Cs, the answer is always a quick and unqualified yes.

  20. Philip Lewis

    "Apple’s stock price has disappointed recently, at least by its usual high standards, and a new mood of caution has set in."

    I stopped here.

    Reality distortion field anyone?

  21. Anonymous Coward
    Anonymous Coward

    So, one person in the world is still upset about the 5C

    So a bunch of people expected Apple to release a cheap phone. They released the 5C instead.

    Everybody realized that Apple never promised a cheap phone, they didn't deliver one, the predictions were wrong, and everybody who expected a cheap phone went along their merry way (possibly a little embarrassed).

    It's ... great? ... to see that there's still one idiot, sorry, analyst who thinks the 5C was supposed to be cheap.

  22. Wisteela

    Apple love to be seen as a 'premium' brand, when in fact they sell over-priced, restricted crap.

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