Behind Apple's record sales are signs of desperation

As we went to press with this story, Apple had just reported its first quarter results and Nokia was about to. For both arch-rivals, the quarter will not be indicative of longer term trends. For Apple, there has been disruption to its supply chain, while Nokia's future will be hard to judge until it launches its new WP7 devices …

[RichyS]

Pointless

Saw the vaguely controversial 'click bait' headline. Clicked through. Saw the byline. Won't be reading it as it'll be your typical Wireless Watch article that'll be wring on basically every point. Please, El Reg, stop publishing the drivel from this 'consultancy'.

[Ted Treen]

Agreed, Richy...

perhaps the headline SHOULD read "Behind Wireless Watch's analysis of Apple's record sales are signs of desperation"...

[Anonymous Coward]

God Moaning

"... wring on basically every point."

Shodn't thit by wring an bosicilly ovary pant?

[Anonymous Coward]

Title

Maybe Apple should consider that when they buy a screen and board from Samsung and put it in a device that isn't much more than a screen and board, it will look an awful lot like the Samsung products it is made of.

[Anonymous Coward]

Re: "Maybe Apple should consider..." : Yes that's intelligent

Well done. You have just designed and planned the production of the iPad. There isn't really any more to it than that is there? Clearly any two bit Chinese clone merchant is in with a shot of rivalling Apple's success because all it is, is a board and a screen that can be purchased wholesale from Samsung. I don't understand why anyone would want to describe you with the label "loser" when your insight is so profound and you clearly superlative powers of analysis. Honestly, it's enough to make you wonder how the iPad can be the most successful consumer product launch in history isn't it?

[Anonymous Coward]

The next fight will be in the cloud

Once we get the servers back up after yet another outage

[Drew Scott]

It's always interesting to look at the source of these articles.

These people seem to have a big hate on Apple by the looks of the source link. I quote from the tablets article on their website:

"Already we’ve seen a less than stellar quarter for iPad sales, only 28% up on its first quarter of sales at 4.2m units. This was due to new product launches from Samsung and Dell and pre-launch publicity for RIM, along with a host of low end copy-cat designs. There are more tablets on the way."

I always wonder about the motives of people that make declarations like that. In their own article they talk about rival launches being the cause of (and lets put this in perspective here) a smaller increase. Also they compare financial results to the festive quarter, which makes little sense at all for any company.

Are they short on AAPL, or have some financial interest in seeing Android succeed? Or perhaps they know a controversial stance on a popular product will get them noticed a bit more. Either way, I don't trust them.

[Fred Flintstone]

Second option

"Are they short on AAPL, or have some financial interest in seeing Android succeed?"

The second option, I think. You should see just how much money Google is throwing at ads for all its free stuff, I suspect creative adjustment of Internet searches and and astro turfing cannot be excluded. Getting favourable press isn't exactly hard when you have money - remember all those glowing reviews of Windows Vista, which turned out to be a complete turd? Astonishingly few mea culpas afterwards..

I think the aim is reach. Google is getting more and more problems with its privacy violations, so it is desperate to put other backdoors in place to keep the data coming. Android replaces the WiFi scanning, Chrome looks over your shoulder when surfing without ad blockers getting in the way of revenue - it's quite a big picture. And more and more questions arise about what Google actually means when it terms something "open", because it doesn't appear it means Open Source.

The problem with becoming a monopoly is that you have two choices: become even better or spend your time watching over your shoulder and built walls to consolidate your position. I fear Google has moved to the second option. This may seem right for shareholders, but it signals to me that they consider themselves no longer to be innovators. Shame.

[SuccessCase]

Interesting but is it real analysis?

Yes, Apple are at or near the top of the curve. But this article is filled with wishful thinking rather than hard analysis. The below expected results this quarter for iPad sales are in no way a reflection dissappointing performance in the market. Nor do they reflect an over-estimation of the value or attractiveness of the post PC tablet Market. They reflect only supply chain logistical constraints and (at worst) planning failures and it is churlish to attempt to present the iPad as anything other than the runaway success it is. So using that to support the picture of Apple desperate and rounding the apex of the curve is wishfull thinking on the authors part rather than a reflection of a true weakness. Yes resorting to patents can be viewed as desperation, and certainly that has been the case for other companies in the past, but without independent indicators of desperation, that too reveals a picture the author would like to see rather than what he knows to be the case. It can also just be Apple leveraging money invested in filing IPR.

The other "indication Apple are struggling" the author uses is Apple's current "failure" to deliver a cloud music play. But this analysis lacks wisdom or insight, as there are compelling strategic partnership reasons why Apple would want to be second to the party. In summary, their form on strategic partnership indicates that while they push out technologies that unlock the market, they never rub their content partners faces in it. So they contractually ensured unlimited data (probably at the cost of a exclusivity deal with AT&T) because they saw the strategic value of ensuring the iPhone was used without data constraint. But they then didn't do Internet Tethering or allow Skype calls until after their competitors (even though they could have allowed both from the outset) because they saw the value of keeping their carrier partners (globally and not just in the US) on board. Similarly they have very strong reasons for being second to the Cloud Music Streaming party to avoid annoying their iTunes partners. Amazon is currently drawing very strong legal fire from the record labels, while Apple can now fairly say to their partners, we need to also move into music streaming to compete. Apple purchased a functioning music streaming service some time ago, so there is circumstantial evidence adding to the strategic form-book, supporting the position that the delay is a matter of policy.

The author indicates Apple are "desperate" on the basis their competitors are planning to launch new cloud based services now and implies Apple are failing to reply. Yet Apple (unlike their competitors) have consistently shown discipline in avoiding either revealing or "bigging-up" future product launches and the strategy works very well for them. It's highly unlikely, with their cash pile and history of delivery, that they have anything but a very rich and queued up pipeline of new launches.

Also the criticism of Apple as a "one trick peony" couldn't be further from the truth. Compare with their arch-rival Google and there you really do see - on the key criterion of revenue generation - a one trick peony. Everything, including their reported revenues for Android and YouTube (which are still proportionately very low) stems from their core advertising business. And no doubt much of the revenues that should really be attributed to search advertising are re-classified as YouTube and Android advertising success (e.g. when the ads in-situ in YouTube and Android are hit one step on from a Google search). I don't want this response to sound like a slanging match placing Apple over Google but it is important to reflect the mis-analysis inherent in the use of the "One trick peony" label. Google are making a strategic play, but they don't yet have real diversified revenue streams. Apple have multiple distinct product lines (iPhone, iPad, Mac, iPods and Mac Computers, Software) albeit united by a single ecosystem (which is a strength) and all contribute to earning real share of revenue (and notice I didn't need to resort to including iTunes or App Store).

I do agree with the author that Apple are at or near the top of the curve. However not for the reasons the author has given. I believe it for the simple reason it is difficult to see how they can continue to have an uninterrupted line of successful products that keep them as far ahead of the competition as they have been over the past three years. So my reasoning is based on respect and the slight cynicism we all as human beings have. I respect the success Apple have had. I wonder how it can continue, but equally I don't rule out further successes being launched this year or next (the Apple product secrecy point remember). I suspect the Author actually agrees with me too but rather than finding solid indicators Apple have reached the Apex of the curve, he/she has sought to write a post seeking tap in to our natural cynicism and play on the incredulity we most of us have, pretty much in equal measure. It makes for a good headline but doesn't make for insightful analysis. But then TheRegister majors in cynicism and there's always a place for that.

[Conner_36]

Nice

I enjoyed this post more than the article.

[Player_16]

I noticed...

...that you didn't include the 'brick-&-mortar' Apple Stores.

[Ian Davies]

Agreed

It had more rationally thought-out arguments, too.

[42]

Phew

Fanboy writes long post

[Scorchio!!]

Re: Fanboy writes long post

Indeed. I cannot quite understand the emphasis on 'one trick peonies', and rather prefer one trick primroses myself, though I can understand that Apple's smoke and mirrors marketing of a very small product range does rather restrict both them and their future, and I know that successful companies diversify. Will they disconfirm the so called 'laws' of economics? Will they hover above the ground in the way that flying yogics do not? I somehow doubt it. Every successful company has its' turn in the doghouse.

[Anonymous Coward]

One tricky peony

Is that a bit like a one trick rose?

[Scorchio!!]

Re: One tricky peony

"Is that a bit like a one trick rose?"

One is not sure old bean, but one is going out to ride one's peony this afternoon, what, what. ;-)

[Bill B]

'one trick'

I was a bit bemused by this article. One of the things Apple has demonstrated is that in PC, in music player, in mobile and in tablet that it can produce a product that people will want and which will make a profit. Usually its a premium product, but its a product that people will buy. Apple is rarely the first into the market (in all the items I've quoted there have been existing or previous products) but it tends to do something and do it well.

So when the authors say that Apple could be a 'one trick' on mobile .. are they talking about the same company? Apple isn't the first into the cloud? They weren't the first to create a tablet either .. or the smartphone .. or the music player. Not being first is not necessarily a problem for the company. It has a chance to study the market and then 'if' it is true to form provide something that does things sufficiently differently to make a product people will want and buy.

[JEDIDIAH]

Apple can't out compete MS-DOS

> One of the things Apple has demonstrated is that in PC, in music player, in mobile and in tablet that it can produce a product that people will want

...except this is not entirely true.

Most notable in your list of "successes" is the "PC".

This was something where Apple failed to compete against MS-DOS of all things.

Now their "mobile" success is being threatened by Android.

If Apple really can compete based on merits then why does it have to engage in dubious legal nonsense and dirty tricks. Why does Apple need to take the Tivo approach to competitors?

[Anonymous Coward]

"...why does it have to engage in dubious legal nonsense and dirty tricks"

If Samsung were confident that their products are better than Apple's, then why did they so flagrantly rip Apple off? Forget the rounded corner bollocks, the look and the feel of the Galaxy S devices is done deliberately to mimic the iPhone. HTC's Sense and the vanilla Android UI don't borrow too heavily form the iPhone, so why does Samsung's mimic Apple's so heavily?

[Bizlaw]

Uh, wrong

Apple isn't using "dubious legal nonsense and dirty tricks." Apple has filed lawsuits to protect its IP. Whether the courts agree remains to be seen, but such is the state of our current patent systems – they simply weren't designed for software and technology advances. If you have ever read a patent, it states in somewhat general terms what the innovation is designed to do. Often that doesn't seem terribly different from what other patents do, and the subtle difference can have wide-reaching effects.

And therein lies the problem. Almost all of these patent disputes involve patents which describe "a method of delivering text messages to mobile devices", or "a method of managing power systems", etc. The devil is in the details, but most of these patents are so broad that it is almost impossible not to violate someone else's patent when building a mobile phone, computer, developing software, etc.

Apple is also legally bound to protect its IP, otherwise it becomes public use and Apple won't have a leg to stand on. Apple has a duty to its shareholders to protect its IP, so it really has to file these suits.

[Anonymous Coward]

Apple is also legally bound to protect its IP

That's true of trademarks but not of other forms of IP.

Most companies with a large patent wallet prefer NOT to go to court because the court can invalidate the patents in question and they become useless. They are much more valuable out of court, ironically.

[Anonymous Coward]

Ahahah desperation?

I wish I was as "desperate" as Apple :-)

This is one of the worst link-bait article if I ever saw one.

Nice one El Reg it keep up with this sort of brilliant analysis. I'm not even going to bother driving a huge piston through it.

[Eponymous Howard]

Thanks...

...for putting the "Wireless Watch" tag on these. It's saved the trouble of reading past the headline.

[Anonymous Coward]

The media and plagiarism

I'm constantly surprised at the media's willingness to embrace plagiarism outside of its own domain. After all, writing is "just" a collection of ordinary words that people use every day. Why should a particular work be protected, such that anything sufficiently close to it is deemed to be unlawful?

But writers (in particular) understand that, although they use the same language as everyone else, they have poured effort and creativity into that particular work. When another write reproduces that work (albeit with trivial modifications), they recognise that the plagiarist is benefiting from another's efforts. It is much easier to reproduce a work than it is to create it from scratch.

But recognising plagiarism is a difficult - often subjective - judgment to make. For example, J. K. Rowling was recently accused of basing one of the Harry Potter books on the work of another author. While it's true that both works contained common elements of 'wizards', 'witches', and 'magic', the case was dismissed because her work clearly told its own story.

When I look at Samsung's recent efforts, I see plagiarism. Images of its phones can easily be mistaken for an iPhone (before taking a closer look). It tells the same story as an iPhone in its form, detailing, and user interface. I don't see a single scrap of inspiration, innovation, or creativity. Yes, all these phones contain common elements (just as books contain common words and expressions). But Samsung is is riding on the work of others and Apple is well within its rights to call them to account. But I'm disappointed the media is so keen to criticise Apple when all forms of media are amongst the most proactive in preventing copying of its own work through legal action.

And now we have this dreadful piece that suggests that not only does Apple have no right to protect its design/R&D, the efforts are actually an act of desperation. Would you be so happy if another news outlet started cloning all your news articles (or other works) under its own branding? I doubt it.

[Getter lvl70 Druid]

Life Imitates Art - All IP Slapfights to Date:

Monty Python and the Holy Grail

Scene 5: 'Burn the witch!'

MONKS: [chanting]

Pie Iesu domine, dona eis requiem.

[bonk]

Pie Iesu domine,...

[bonk]

...dona eis requiem.

[bonk]

Pie Iesu domine,...

[bonk]

...dona eis requiem.

CROWD:

A witch! A witch!

[bonk]

A witch! A witch!

MONKS: [chanting]

Pie Iesu domine...

CROWD: A witch! A witch! A witch! A witch! We've found a witch! A witch! A witch! A witch! A witch! We've got a witch! A witch! A witch! Burn her! Burn her!

Burn her! We've found a witch! We've found a witch! A witch! A witch! A witch!

VILLAGER #1: We have found a witch. May we burn her?

CROWD: Burn her! Burn! Burn her! Burn her!

BEDEVERE: How do you know she is a witch?

VILLAGER #2: She looks like one.

CROWD: Right! Yeah! Yeah!

BEDEVERE: Bring her forward.

WITCH: I'm not a witch. I'm not a witch.

BEDEVERE: Uh, but you are dressed as one.

WITCH: They dressed me up like this.

CROWD: Augh, we didn't! We didn't...

WITCH: And this isn't my nose. It's a false one.

BEDEVERE: Well?

VILLAGER #1: Well, we did do the nose.

BEDEVERE: The nose?

VILLAGER #1: And the hat, but she is a witch!

VILLAGER #2: Yeah!

CROWD: We burn her! Right! Yeaaah! Yeaah!

BEDEVERE: Did you dress her up like this?

VILLAGER #1: No!

VILLAGER #2 and 3: No. No.

VILLAGER #2: No.

VILLAGER #1: No.

VILLAGERS #2 and #3: No.

VILLAGER #1: Yes.

VILLAGER #2: Yes.

VILLAGER #1: Yes. Yeah, a bit.

VILLAGER #3: A bit.

VILLAGERS #1 and #2: A bit.

VILLAGER #3: A bit.

VILLAGER #1: She has got a wart.

RANDOM: [cough]

BEDEVERE: What makes you think she is a witch?

VILLAGER #3: Well, she turned me into a newt.

BEDEVERE: A newt?

VILLAGER #3: I got better.

VILLAGER #2: Burn her anyway!

VILLAGER #1: Burn!

CROWD: Burn her! Burn! Burn her!...

BEDEVERE: Quiet! Quiet! Quiet! Quiet! There are ways of telling whether she is a witch.

VILLAGER #1: Are there?

VILLAGER #2: Ah?

VILLAGER #1: What are they?

CROWD: Tell us! Tell us!...

VILLAGER #2: Do they hurt?

BEDEVERE: Tell me. What do you do with witches?

VILLAGER #2: Burn!

VILLAGER #1: Burn!

CROWD: Burn! Burn them up! Burn!...

BEDEVERE: And what do you burn apart from witches?

VILLAGER #1: More witches!

VILLAGER #3: Shh!

VILLAGER #2: Wood!

BEDEVERE: So, why do witches burn?

[pause]

VILLAGER #3: B--... 'cause they're made of... wood?

BEDEVERE: Good! Heh heh.

CROWD: Oh, yeah. Oh.

BEDEVERE: So, how do we tell whether she is made of wood?

VILLAGER #1: Build a bridge out of her.

BEDEVERE: Ah, but can you not also make bridges out of stone?

VILLAGER #1: Oh, yeah.

RANDOM: Oh, yeah. True. Uhh...

BEDEVERE: Does wood sink in water?

VILLAGER #1: No. No.

VILLAGER #2: No, it floats! It floats!

VILLAGER #1: Throw her into the pond!

CROWD: The pond! Throw her into the pond!

BEDEVERE: What also floats in water?

VILLAGER #1: Bread!

VILLAGER #2: Apples!

VILLAGER #3: Uh, very small rocks!

VILLAGER #1:Cider!

VILLAGER #2: Uh, gra-- gravy!

VILLAGER #1: Cherries!

VILLAGER #2: Mud!

VILLAGER #3: Uh, churches! Churches!

VILLAGER #2: Lead! Lead!

ARTHUR: A duck!

CROWD: Oooh.

BEDEVERE: Exactly. So, logically...

VILLAGER #1: If... she... weighs... the same as a duck,... she's made of wood.

BEDEVERE: And therefore?

VILLAGER #2: A witch!

VILLAGER #1: A witch!

CROWD: A witch! A witch!...

VILLAGER #4: Here is a duck. Use this duck.

[quack quack quack]

BEDEVERE: Very good. We shall use my largest scales.

CROWD: Ohh! Ohh! Burn the witch! Burn the witch! Burn her! Burn her! Burn her! Burn her! Burn her! Burn her! Burn her! Ahh! Ahh...

BEDEVERE: Right. Remove the supports!

[whop]

[clunk]

[creak]

CROWD: A witch! A witch! A witch!

WITCH: It's a fair cop.

VILLAGER #3: Burn her!

CROWD: Burn her! Burn her! Burn her! Burn! Burn!...

BEDEVERE: Who are you who are so wise in the ways of science?

ARTHUR: I am Arthur, King of the Britons

_______________________

I changed the names to protect the innocent company(ies).

:)

[Dimitri]

Excellent analysis

Fascinating article with well balanced analysis and great insights into the current state of the mobile market.

I particularly appreciated the discussion on the importance of patents vs. IPR.

More of this please!

To add my two bits, I tend to think that patents become more important when markets mature, simply because there's less innovation happening so most players focus on locking down the value of the prevailing ideas.

I think we have a huge way to go in how mobile technology is deployed but I believe this will increasingly be in the application rather than hardware space, making the patents for wireless technology understandably valuable.

On the other hand, Apple is well positioned to take on the application space but their strategy after iTunes, has been geared more towards refining and locking down the user experience than innovating (the article's last paragraph sums this up well). Pity since iTunes proved they could change the world.

I have a hard time seeing Samsung challenge them in applications, and even Google is not that strong (they seem too unfocused, just throwing services out hoping something catches on).

But companies like Amazon excel at customer interaction and service design, and I suspect Infinite Loop is taking their challenge very seriously.

[Vincent Rice]

Cobblers

Self-serving rubbish to provide a cuddle blanket for this company's clients - while they try and work out how the fuck to compete. The law-suits are a side show. An automatic function at any tech company. It slows down the competition for a while and tests the legal boundaries of your IP. Little effect on sales. The only sign of weakness at Apple would be complacency in product development and that simply isn't happening.

[Martin Hill]

Actually, it is Android that has peaked

"Apple itself is hovering precariously at the top of the curve"

Actually, it is Google that is now "hovering precariously at the top of the curve" as Android sales growth in percentage terms is plateauing (thanks to bigmig for the analysis):

May-June 2010: +60% per month

June-August 2010: +12% per month

August-December 2010: +11% per month

December-April 2011: +4% per month

Part of the plateau is because total sales have grown larger. However, even in unit terms the growth rate has slowed considerably:

May-June 2010: +60,000 daily units per month

June-August 2010: +20,000 daily units per month

August-December 2010: +25,000 daily units per month

December-April 2011: +12,500 daily units per month

In contrast, Apple sold 18.7 million iPhones in Q1 2011, up 15% from the previous quarter which is impressive considering the post Christmas quarter has in the past been flat at best for iPhone sales.

-Mart

[scarshapedstar]

Math win!

Wow, Apple sold 18.7 million iphones, whereas android only sold... 12,500 daily units... per month... or 4% over the last quarter... which works out to, carry the one... well, either way, 18.7 million is a much bigger number than whatever the total number of android devices sold was (which bigmig apparently kept secret)

[John Molloy]

Math lose actually.

That Android figure is made up of a lot of companies... Some giving their phones away... Takes the count way up but remember, it is not the best Android phones which are leading the count. If it were then you'd be seeing 18.7 million figures for whatever the Droid of the month is. You don't.

Apple basically have 2 phones. The iphone 4 and the iPhone 3gs. One company shipping 18.7 million phones and the greater part of the profit in the smartphone market is NOT to be sniffed at.

[Francis Vaughan]

A curious take on the situation.

The article seems to take a very odd position on the reasons behind the patent activity, and Apple's various actions. And yet the article contains the critical point, but ignores it.

"Ownership of patents is vital to being a real power player in wireless, where licensing of IPR still relies primarily on bilateral tit-for-tat agreements rather than pools or the "reasonable and non-discriminatory" principles of other standards. "

Apple are not part of the club, and have been banging on the door for ages demanding entry into the cross licensing club. All of the current spat can be trivially explained as an ongoing part of this. It is very unlikely that Apple is trying to gain market advantage through patent actions. Indeed the manifest lack of gaining any by stopping imports might be a clue. What they are trying to do is demonstrate that their exiting patent portfolio is big and important enough to be invited in. They are making life difficult enough for the other layers that we will probably eventually see a sudden dropping of all actions involving Apple, and an announcement of mutually satisfactory cross licensing.

Apple's lack of ability to sync iPads via a cloud or other Internet service is hardly a technological limitation that they need to catch up from. IOS is built from the same code base as OSX. Any features that the iPad lacks are lacking due to an explicit decision by Apple to remove them, not through lagging development. It isn't that Apple are behind on the cloud, it is that Apple don't want the users to have the capability. Yet. Apple will have their own timetable and own reasons. The pace with which they unveil new features is the clue as to how pressured they feel by the competition. That will be interesting.

[Jurassic]

Apple's competitors wish they could be that "desperate" ;-)

The writer of this article is either ignorant of the facts (and reality in general) or he/she/it is just trolling for hits and will do anything ridiculous to accomplish that.

Starting with the article title "Apple's record sales are signs of desperation"... What!?!

Record sales increases (while all other competitors are losing sales) is a sign of desperation? If that's desperation, Apple and its investors must be hoping it can be more "desperate" in the future.

"And the iPad... is not yet proving that the category itself is a winner". You can't be serious. Is this meant as a joke? News flash: April Fool's Day was 3 weeks ago.

You base your premise on this nugget of ___ : "The iPad sold 4.69m tablets, fewer than the 6.1m predicted by analysts or the 7.3m of the holiday quarter."

Hello!?! The quarter reported on ended March 26, 2011. The iPad 2 which purchasers were holding onto their money for, only went on sale in the US on March 11th (the first shipment sold out nation-wide in 24 hours!), and it only went on sale in select other countries on March 25th (the day before the quarter ended).

Most intelligent people realized that the numbers would be low for this quarter even before the iPad 2 went on sale, but apparently you did not understand this.

The iPad 2 sold over a million units in its first day on sale (in the US only). By comparison, the original version of the iPad, crossed the one-million mark 28 days after its launch.

With the iPad 2 selling 28-times faster than the original iPad (which was the fastest selling consumer device of all time) this, to you, bizarrely is an indication that the iPad "is not yet proving that the category itself is a winner". ???

Next you write that Apple is displaying it's "vulnerability' by suing companies that steal its intellectual property. That is insane! Any company will rightly sue another company that steals rather than licenses its patented IP.

You try to support this ridiculous notion by using FUD to understate the situation, by saying Apple "allege copying of the colors and rectangular shape of the Apple products." Either you again do not have any understanding of why Apple is suing Samsung, or you are intentionally trying to mislead your readers.

You only need to look at the side-by-side comparison photos on the Web, to see that Samsung blatantly copied both the hardware design and the user interface design of the iPhone in the Samsung Galaxy phone.

Your article continues with other similar misleading information.

You might be hoping that your readers are buying all of this nonsense, but most people are more intelligent than that, and the result of your article is that you have lost any credibility as a writer.

[Random Handle]

@Jurassic

>Apple and its investors must be hoping it can be more "desperate" in the future.

You've both hit the nail on the head and entirely missed the point. It isn't just about turning a healthy profit and maintaing a degree of growth amidst the onslaught from much larger companies and consortia. Apple needs to justify its market cap and nothing short of spectacular growth will do that.

[John Molloy]

Except that...

"Apple needs to justify its market cap and nothing short of spectacular growth will do that."

Well Apple have had pretty spectacular growth for a while now and it doesn't appear to move the needle much. Pretty low P/E ratios and if you back the cash out, ridiculously low P/E ratios. Meanwhile we get Amazon and other trading well above their earnings - 73.5 or so as of this morning.

Apple doesn't have to justify it's market cap at all. That is what the market does. The market cap of the company is what the market thinks it is worth... and Apple are very underrated.

[Anonymous Coward]

You can be a priest without believing in god / Moses' tablets of stone

But not an Apple investor without believing in the Jesus Phone / Tablet.

Because Apple don't pay dividends, the only way for investors to make money is if the share price rises. Of course they believe, they have to!

It's going to be fascinating to see how far the share price falls when Jobs dies / retires on medical advice.

[Anonymous Coward]

Highly Speculative & Irrationally Pessimisic

For this author, and perhaps the Register, the present clear, sunny sky is proof of upcoming thunderous clouds and showers.

The well-written but hyperbolic and extraordinarily speculative passages in the article can be dismissed as typical fear-mongering from an admirer of the Don Quixote world view; There is no proof that Apple has misstepped.

[Ian Davies]

Quite possibly

the biggest pile of steaming doo-doo I've ever read on here. And that's saying something.

[scarshapedstar]

That IS saying something

Since here is where I read Lewis Page's daily insistences that he'd drink water directly from the Fukushima reactor, and he'd pay for the privilege, and you should too, because everything is under control.

[James Katt]

Much ado about nothing

Apple has always been the most sued company in the world. It attracts lawsuits because it make so much money and has the most savings in the bank - 65 billion dollars and growing.

Lawsuits are nothing. Apple does a great job at winning lawsuits and minimizing its risks. Apple has a very deep patent portfolio. Apple also punishes those it sues.

[Anonymous Coward]

Who's got the popcorn?

It is beautiful watching the fanbois frantically posting and upvoting their drivel! Don't even dare to suggest that their church might have peaked! Lol, I love the fanbois and their reality distortion field!

[honkj]

""" For Apple, there has been disruption to its supply chain""""

""" For Apple, there has been disruption to its supply chain""""????

so basically you just said Apple lied about it's supply chain???? because Apple themselves said that amazingly all of their suppliers were able to shift production if effected, and there was ZERO fall out to manufacturing during the first calendar quarter, and also they could tell that there was ZERO issue for the 2nd calendar quarter, but could not guess the 3rd and 4th due to it's possible that Japan could experience other problems...

did you just miss the conference call? or are you just a hack?????

[Nick Collingridge]

The long game - a complex subject for a simpleton?

Why not do an article on how Apple are totally in control of the smartphone marketplace. They are by a very great distance the company making the most profits out of smartphones, and it has been achieved through smart (that's SMART) positioning and strategy. No-one else has the triple whammy they have of premium product, successful media store and successful app store.

Not to mention the many other synergies that they have created between their products. That's why the sum of their sales will always be greater than other players who are only present typically in one space.

As a result they control the market - all they would have to do is shift their pricing slightly and, while still being enormously more profitable than any other player, they could increase their market share dramatically at the expense of the other players who are already on wafer-thin margins due to the number of players that are all competing for a slice of the (effectively non-differentiatable) action.

Look at them all - Samsung, HTC, Acer, LG et all - all continuously pumping out multiple products that are only differentiated on hardware features when most people couldn't give a rat's arse about these aspects of the products. All of these different hardware products cost a fortune to develop but they can't get any great economies of scale because each individual product only commands a fraction of the market size that the iPhone has. What commercial sense does this make?

These companies are squeezed every which way - and the author of this article is naive enough to believe that it is Apple that is getting desperate. Give us a break! Grow up a bit (a lot) and go and do a degree course in marketing strategy before you foist such total and utter tripe on us again. Please - for all our sakes - unless maybe you just like giving people an easy laugh at your expense. It's all about the long game, and no-one in their right mind would suggest that Apple are being anything other than extremely canny in playing it.

[scarshapedstar]

um

"All of these different hardware products cost a fortune to develop but they can't get any great economies of scale because each individual product only commands a fraction of the market size that the iPhone has. What commercial sense does this make?"

So true. I mean, Apple assembles their phones from the same Samsung parts that Samsung puts in their Samsung phones, but the little bits of plastic that go around the phones cannot possibly be mass produced.

[Phormic]

Another Commoditised Market

I'd be fascinated to hear why the author feels that Apple is more vulnerable than Android in the commoditisation of the smartphone market, especially when looking at another market that is well and truly commoditised – the PC market. That would be the same market where Apple just had a 47% leap in sales in the US and a 28% jump overall.

It must have been an incredible challenge to reach those conclusions written in that article despite all evidence pointing to the complete opposite. Kudos to the author for his dogged determination.

[Ian 55]

If you start from a tiny base, it's easy to get a high pecentage rise in sales

I have just sold my second PC, so my sales are 100% up.

[Destroy All Monsters]

Vanilla title for iPhan baiting.

iPhans here seem seem to think that not being "copied" is Apple's God-given right.

They also seem to be under the illusion that the concept of "Intellectual Property" is meaningful in the first place. But that's another discussion.

They miss the irony that with hard-core IP protection, Apple would have been in a troublesome situation back during the Apple-Microsoft "look-and-feel" spat due to its "reuse" of a few Xerox Park ideas. Luckily, IP fascism coupled to an entitlement mentality had not yet become the powerful force that it is today, and the full outbreak of "software patent" retardation had not yet been achieved, so Xerox was sent packing, Apple didn't win its case, the GUI idea was set free and we are all the better off for it.

So Apple is being "copied"? So big deal. This means that its product is well-established and that the time of premium pricing is coming to end. This means that it's time for the pony's next trick. With several deca-billion in the bank and sales going strong [as iPhans are not loth to emphasize again and again], Apple should be able to handle this and innovate its way forward. Or maybe not. Patent law being what it is, who knows what will come up.

[Anonymous Coward]

Research is your friend

(1) Apple bought the technology from Xerox for $100Million of Apple stock - That is why Xerox failed to successfully sue Apple

(2) Apple and MS had a cross licensing contract that Apple interpreted as limiting MS to only using the Apple derived GUI stuff on one product (I believe it was one of the original OS2 offerings) - MS and the courts disagreed based on the simple fact of actually reading the contract which stated no such thing.

(3) It is Xerox PARC not Park - Paolo Alto Research Centre - P.A.R.C

(4) You can't copy things just because it is well established and at the end of it's premium pricing (whatever that means) - you try to release an album of Beatles covers without paying Paul McCartney and see how far you get - or write a new Harry Potter book and then try telling JK Rowling to fuck off and mind her own business.

[Jolyon]

Boy wizard

A new Harry Potter book would be trouble but no one has passed off their non-Apple phone as an iPhone, they've just made a device which uses the well established features of the genre.

I don't see Rowling successfully suing someone who writes a book about a young boy in somewhat undesirable surroundings who, it turns out, is not only special but is in fact very important to some chain of events of major significance.

She'd certainly be a dreadful hypocrite if she did.

[Tom Kelsall]

What a...

...complete waste of fucking money this whole patent battle is. How much cheaper would a HTC Desire or an iPhone or a Nokia Nxx be, if all this wasn't going on in the background?

I have to say though that I agree with the bulk of the writers above - this agency writing does nothing for The Register's reputation and should be dropped.

[slhilly]

Patent costs are insignificant fraction of expenses

There's a reason that Legal isn't the third major category of reported expenses in company accounts alongside R&D and Marketing & Sales -- it's just not that significant. I doubt that it amounts to even 1% of the total costs of development for the iPhone.

[Gilbert Wham]

Pony

It's 'one trick pony'.

[Synthmeister]

Silly prattle

This article is full conjecture and speculation and zero basis in actual facts.

If you start flipping the subjects around, it makes much more sense, i.e. "Behind Samsung's/RIMs/WinMo's/HPalm's "success" are signs of desperation.

1. "For Apple, there has been disruption to its supply chain--no there hasn't, you apparently didn't read their quarterly report.

2. Apple itself is hovering precariously at the top of the curve--You're not hovering when you're the 2nd largest company in the world and your profit goes up 95% y/y for the quarter, you're blasting off, incinerating everything to dumb to stand close by. Again, did you actually read their report.

3. And as Google's own results indicated the company has only just begun in the mobile market,--Android's unit "activations" have soared--but Apple makes more money from mobile than all of Google put together.

4. Apple's quarter beat records as usual, but did not convince that the firm is more than a one-trick pony in mobile--Google is the one-trick pony here--selling your eyeballs to advertisers. Meanwhile Apple now has three distinct mobile product lines--iPhone, iPod touch and the iPad and the AppleTV is not far behind with 2 million sales since its introduction. GoogleTV and tablets are just a mess.

5. the iPad, though dominant in the nascent tablet category, is not yet proving that the category itself is a winner, or will be more than a niche form factor in the wave of new, cloud-focused products that will appear over the next few years--Except that it is beating the crap out everything and anything in its path and single-handidly made the category successful. iPad is selling now, everything else is completely missing an ecosystem, even the proposed "cloud' products.

6. The iPad sold 4.69m tablets, fewer than the 6.1m predicted by analysts or the 7.3m of the holiday quarter. It remains to be seen whether this is a short-term supply issue or an indicator of limited demand for the form factor.--so in other words, you don't know squat. You might have mentioned that the iPad 2 was introduced on March 2--freezing iPad 1 sales--and didn't go on sale till March 11 and the quarter ended March 26. Current quarter will show the strength of the iPad. Most analysts are predicting 40 to 50 million sales for 2011. It's everyone else that has nothing to show for the tablet initiatives. The mythical "cloud" solution won't fix that. The iPad can play in the clouds as well as any other tablet.

That's just the nonsense on the first half of the first page.

[kpbpsw]

Why is the Register's Apple coverage so poor?

Most of the Register's coverage is great, but when it comes to Apple you don't seem to know what you are talking about!http://www.theregister.co.uk/Design/graphics/icons/comment/fail_32.png

Google does not have much of a mobil business other than advertising.

They GIVE A WAY Android, and have no direct income form it. They are not starting or peaking, they are playing. And the are increasingly coming under pressure fro the markets to decrease the rate that costs are rising ahead of income.

Android is all cost and no income. It is a poor eco-system no media (itunes music, video etc.) fractured marketplace, fractured user base 1.8 2.1 2.2 2.3. But growing very fast in the mid range smartphone market.

As of now not one is really making money other than possibly HTC and Samsung - Motorola's sales are slumping and margins are still bad and will probably not make it 18 months now that they are off the Verizon Droid life-support.

Android and RIM and MSFT have so far failed to offer real mass adoptable products in the compact wifi tablet (iPod Touch) or the larger iPad market place. And according to comscore this puts them 595 behind iOS!

Apple does have a lot of issues to keep their current market share and growth rates, but Apple has executed almost flawlessly for more than 4 years now, and none of the competition has been able to do this yet.

It now seams that Apple has the deals to beat Amazon, Google, MSFT and others in the cloud music space.

And one only has to play with iOS versions of iLife and IWork to see that they are years ahead of MSFT and Google in terms of web/app based cloud systems. If they can bring the datacenter support online in the next 6 months they will stay years ahead.

I think you writer should look at the real facts and assets of the players, and tell the real story Apple is not only leading but is investing and developing the parts needed for a ecosystem that no other payer can match in the next few years.

Apple is not a one product company they are a constantly expanding tech eco-system that no one can match, with content, creation tools, delivery systems and amazing branding.

Google on the other hand is still a one hit wonder that is spending like a drunken sailor trying to prove otherwise.

[scarshapedstar]

Cloud media?

Do people actually pay for mp3s? Ever since I downloaded Tinyshark, I barely even use the 20 gigs of music on my SD card, because I can stream damn near any song ever made, for free. If worst comes to worst, I can always connect to my own FTP server with my Android phone and download those hard-to-find albums. Can also run Hulu, but don't tell Hulu that. Also, too, Cloud Print, although I have to admit I've yet to find a legitimate reason to print anything from my phone.

When I listen to Apple fans describe the awesome apps of the future, it sounds like what I've been using for the past year.

[slhilly]

Classic example of a nerd's misunderstanding of Apple's offer

Apple's offer to consumers has never been "we'll be the first to bring out Feature X" (eg printing from phones). Its offer has been "we'll be the first to implement this feature in a way that most folks will find easy and worthwhile". Did you really not know that?

[Robert Baker]

And why does the Reg forget that there's more than one Apple?

I mean to say, I shouldn't have to read a sizeable chunk of an article before I can work out which Apple is meant.

On seeing the words "Apple" and "record sales" in the same headline, being of the '60s generation I naturally assumed that the article was about Apple Corp (the Beatles' management company), which is far, far older than Apple Computer.

Maybe Apple Computer should comply with the terms of the 1980s injunction and change their name to Orange -- then they can start slugging it out with a French telecom company, rather than a British music company.

[Anonymous Coward]

Dumbass

>I mean to say, I shouldn't have to read a sizeable chunk of an article before I can work out which Apple is meant.

BECAUSE THE REGISTER IS AN IT BASED WEBSITE - NOT A MUSIC BASED WEBSITE.

Gees.

[Kristian Walsh]

Did the point of that post...

... ruffle your hair when it flew over?

[Robert Baker]

Dumbass, indeed

That title describes you quite accurately -- I suppose you've never heard of MP3s, for a start. :-)

Music has been high-tech ever since the mid-'60s, when Abbey Road Studios started replacing 4-track tape decks with 8-track ones. And it can't be denied that Apple Corps is in the business of *selling records* (which, like everything else these days, is heavily dependent on IT) -- hence the confusion.

[Henry Wertz 1]

Apple's always been big on lawsuits

""Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple's valuable intellectual property rights," the complaint reads."

A lawsuit over look and feel huh? Surprise surprise, from Apple. Anyway, Apple has ALWAYS been heavy on the lawsuits, cease and desist orders, and so on. They just have an excellent PR firm that seems to successfully keep this out of the mainstream media (and low-key in the IT media, so it's easy to forget how often Apple hassling someone comes up.)

[Jedit]

Samsung slavishly copying Apple technology...

... like the iPhone's ARM processor, a licensed technology that Apple had nothing to do with the design of and which Samsung manufacture for them.

Oh, wait.

[Anonymous Coward]

*sigh*

"...like the iPhone's ARM processor, a licensed technology that Apple had nothing to do with the design of..."

You do know who the 3 founding companies of ARM Holdings (originally Advanced RISC Machines) were? That's right. Acorn was one and so were VLSI Technology, and the other was..? Apple! Apple had been involved in the design and the use of RISC processors (PowerPC, the G3, G4 and G5) for a *very* long time. They have also bought 2 pretty spiffy chip designers; PA Semi and Intrinsity, both with links to ARM technology. "Oh, wait." Indeed...

[Rex Alfie Lee]

Hubble...

If I were to look through the Hubble telescope right now, I wouldn't be able to find my care for Apple's torment. I agree it's sad, very very sad that I could feel this way & disregard Apple sad just another failed monopoly but threw truth is I love watching them fail. Sucked in Apple...

[Nigel R]

just a good repackager?

The UI bits that Apple is claiming infringement of could have been thought up by a creative group of 6th formers with the right leadership. It is the difficult deep tech technologies where Apple has few claims but Samsung more. Is Apple just a very smart repackager of other co's tech and a great UI designer?

[John Molloy]

Except it wasn't...

"The UI bits that Apple is claiming infringement of could have been thought up by a creative group of 6th formers with the right leadership. "

Yes the same can be said about Rothko's or Jackson Pollack's artwork.

The point is that it wasn't thought up by 6th formers and the look and feel of touchwiz is as close to the iPhone layout and design as you can get.

The only thing about that phone that is original is that the home button is an oblong instead of a circle and that isn't saying much now is it?

[Thomas 18]

Apple invents the rectangle

"They also allege copying of the colors and rectangular shape of the Apple products"

I hear Egypt are considering a suit against Toblerone

[Doug Glass]

Comedic Pause

Damn, I love reading the IT take on the financial world. Brings a whole new meaning to the phrase "Men Behaving Badly". Maybe there's another TV sitcom here.

[Wang N Staines]

@all those eejits who ...

can't tell the difference between a Samsung & an Apple phone.

[shaunhw]

Apple's products or the baggage that comes with them ?

"can't tell the difference between a Samsung & an Apple phone."

I can tell the difference between a HTC desire HD phone and an Apple 3GS phone though.

I've had both (and a 3G before that) and the HTC Droid wins hands down for me. Oh and er, I don't have to have the permission of Apple to run certain software on MY phone, or browse Flash based web sites or certain emulator programs which might use MY battery and electricty up a little faster.

In my opinion some people including myself are fed up with Apple, because:

1: They paid top wack for an Apple product which is then treated for all the world as if Apple still owns the wretched thing. At least that's how I felt.

2: Apple won't allow/implement standard connections such as memory cards and usb ports and other devices on their iPhone/iPad hardware

3: Everything has to go through that infernal iTunes software, (which I completely detest) which is almost impossible to understand for a first time PC user as the interfaces so Apple like (on a PC), rather than using standard Windows gadgets understood by Windows users. I am amazed how many none computer literate people have iPhones. However all those I have asked tell me that they needed a lot of help to get started with iTunes, often from the kid next door. Even I had to ask my son how to get my music on the things and I've been programming for 25 years!!!

I don't doubt that Apple hardware is superb. It's everything else which goes with it, that irritates me.

I'd like an Apple iPad with external (micro)SD card slot, USB connecter and Android Honeycomb installed on it please. Now that would be something and could sell in vast quantities. I'd have had one already I think.

Otherwise for me, the higher end Android phones/tablets win hands down.

[Anonymous Coward]

Face the facts...

It's most amusing to see all the down-votes from people who don't like the truth. They WANT Apple to fail, even though all the evidence points to the opposite.

Every single one of the well-argued posts here rebuts the assertions of the article with rational and informed points. Yet there are still anti-Apple fanbois who don't like the fact that maybe Apple are actually delivering what the market likes and being very successful in doing so, and they are prepared to down-vote posts even though they speak the truth.

It just looks childish to anyone who is reading the posts here with any degree of rationality. Just because you might want something to be the case doesn't by a long way make it true! Face the facts - Apple are now the driver of the smartphone market, not to mention the other coupled product categories, and even if it hurts it really shouldn't be denied.

[Mike G]

Haters

What's childish is long cry baby posts whining about free thinking individuals who happen to not like your stupid cult

[Anonymous Coward]

Great response...

Mike G! No, really! Very balanced. "...who happen to not like your stupid cult". And which cult do you subscribe too? The Stalmanian one? The Chocolate Factory one? Or are you a fan of the Beast of Redmond? Either way, none of them make you particularly "free thinking"...

[jotheberlock]

Err

Since when is Meego a 'cloud-based operating system'?

[Anonymous Coward]

Neanderthal responses

@ Mike G: When did "not liking" something turn into a valid and objective criticism of it? I really want to know - or is it that some parts of our society are simply reverting to neanderthal levels of intelligence at an ever-increasing pace?

The lower the levels of aspiration to rationality the more the threat to our society. Nazi Germany is one example of what happens when irrational dislike takes over.

[Dan 101]

Small Minded Homo

... sapien.

Do you have evidence that Neanderthals were thick, or is that just your bigotry showing through? I guess derogatory comments like that are alright as long as the victim is too extinct to fight back. Anything to help prop up your opinions as fact. If Neanderthals were with us today, would you be among those rounding them up for the concentration camps?

[Anonymous Coward]

@ Dan 101

(1) We are all homo sapiens together - either homo sapiens sapiens or homo sapiens neanderthalensis

(2) I suggest the evidence that Neanderthals have gone extinct and we have not shows a level of thickiness must have been present. I mean, how fucking stupid do you have to be in order for your entire species to die off? Talk about Darwin award winners.......

(3) Concentration camps? seriously?

[Anonymous Coward]

signs of desperation

The only signs of desperation are elReg hacks desperately trying to find something negative to say about Apple

[Bizlaw]

iPad sales misrepresented

http://www.theregister.co.uk/Design/graphics/icons/comment/fail_32.png This article significantly misrepresents iPad sales for the quarter. While the numbers are correct, the implication that Apple's iPad sales are disappointing is stupid. People waited to buy iPads because they knew the iPad 2 was coming out, likely with cameras and other upgrades. Plus, Apple can't come close to keeping them in stock and can't build them fast enough.

Meanwhile, Samsung and Motorola can't even sell what they can build. That's a far cry from claiming that Apple is losing sales or feeling the pressure from competitor's tablets. The only reason Apple's iPad sales weren't higher is that they didn't have any more units to sell.

[Anonymous Coward]

"Google plans to add a further 6,200 staff to its 23,300-strong workforce..."

Busy little beavers all dedicated to sucking up your private information.

[Anonymous Coward]

Yawn

Usual stuff, ignoring the elephant in the room, which is 'Apps' - the far larger Android install base hasn't created an equivalent sized application market, and at current growth rate, it looks like it will be several years before it becomes as viable as iOS.

So far, Android lacks any 'killer' software exclusives (other than the platform itself, and hence the concentration in marketing on openess and Flash support). The position in tablets is even worse - there's nothing that showcases the form like Garageband, or The Elements.

Personally - I think a lot of this analysis is like betting that Sony were doomed with the Playstation by comparing it with the PC. Which ignored the fact that despite the developer restrictions, the console firms put effort into developing profitable markets for games developers.

Focusing on hardware misses that point.

[D. M]

This is laughable and unreasonable beyoned any logic

Even I'm one of the people who "hate" Apple, I can see there is nothing could touch Apple's money making machine. Sheep still wait outside shops overnight to be the first to buy what ever iCrap Apple is selling. iDiot still defend Apple blindly regardless how Apple is wrong. Apple is still making more money than anyone else.

And what they are doing right now, is nothing more than act of evil (crashing anyone else no matter how evil the act is).

[alex dekker 1]

Imaginary Property

"...the rising tide of lawsuits in smartphones shows the level of competition..."

I think this is more an indication of the parlous state of the patents system in general. They seem to be more of a tax on innovation and favour the status quo, rather than a way of protecting inventions, and they're well past their sell-by date when it comes to software.

[a cynic writes...]

What I find particularly strange...

...is so many of you actually care. You can't all own shares in the companies involved.

It's almost as though everyone feels the need to defend to the death their purchasing decisions.

Totally mental.

[D. M]

@a cynic writes

So you don't care anything that is no direct relation to your pay?

Some people care about things that matter for the good (or bad) for humanity. Some people care about things they believe is right/wrong. Some people care about things their religion said was true (Apple is a religion).

After all, people care about things for many different reasons.

[DannyAston]

The title is required, and must contain letters and/or digits.

Utter shite.

[G C M Roberts]

Big Bird must be shitting it

"They also allege copying of the colors and rectangular shape of the Apple products."

I can envisage the text books of the future:

"There are 15 colours in the 24bit palette which we can name and use freely to draw with and 3 basic geometric shapes. Those of you who wish to draw a window or rectangle please speak with your IP licencing assistant"

[a cynic writes...]

D.M.

I understand that people do care - I'm just at a loss to understand why.

Perhaps I'm just lacking the religious impulse, the urge to post purchase rationalization or perhaps it's that I don't need to use brands to construct an identity.

[Anonymous Coward]

Rationality not prejudice

@a cynic writes: Some people just care about the truth and get very frustrated when people believe what they want to in the face of the evidence. Let's face it, Apple have executed extremely well over the fast few years - no rational person would attempt to take that away from them. It can only be blind prejudice that causes people to reject the evidence and believe otherwise.

Obviously the future is the future and anything can change, but there is no reason at present to believe (unless you WANT to) that Apple are not going to keep on innovating and managing their strategy intelligently for the next few years.

There are also plenty of other unexploited or poorly exploited opportunities out there for them to go after if they want to such as TV, home automation, car computers, and the whole raft of consumer media devices which are pretty much stuck in a rut at present.

[Anonymous Coward]

pot meet kettle

"They also allege copying of the colors and rectangular shape of the Apple products."

Of course, no other mobile in history was "rectangular" or "black" pre the iphoney!

Apple produced 2 decent products (the phone and the Mac), that weren't just hype'd up, but were sold as a way of life. Of course thats going to sustain them, isn't it?