[besson3c]

I know this is not a huge surprise, but I suspect that some of us thought that the iPhone would remain the dominant smart phone vendor from here on out. Not so, Android based phones are now number one:

Slashdot Mobile Story | Android Sales Surpass iPhone Sales


This is always going to be the case so long as Apple makes boutique type speciality products like the iPhone. Perhaps offering the iPhone on different networks will help though!

[boy8cookie]

Could this, in part, be a result of the leaked deets on the upcoming iPhone? People holding off for the new version?

[ort888]

They should just make it free. The upfront cost is peanuts compared to the cost of ownership anyway.

Anyone who is scared off by the $99 price of a smartphone is a nincompoop who doesn't think things through.

Originally Posted by boy8cookie 

Could this, in part, be a result of the leaked deets on the upcoming iPhone? People holding off for the new version?

Most people have no idea. I know a few people who have bought iPhones in the last month or two... part of you wants to say something, but a bigger part of you knows better than to spoil someone's fun.

DEAR WORLD... WAIT! NEW IPHONES COME OUT EVERY SUMMER. ALWAYS WAIT! THAT IS ALL.

[JMan09]

It's not the price that is keeping me from getting an iPhone. I have a Motorola Droid now which was about $299 or when it came out. Its the network thats keeping me from switching right now. But when my contract expires next June I will probably switch anyways, since everyone I talk to has AT&T and my phone bill will be a lot less since I could have a lot less minutes.

[ort888]

I want the iPhone to go to other carriers just to get half these yahoos off the network I use.

[turtle777]

Originally Posted by besson3c 

This is always going to be the case so long as Apple makes boutique type speciality products like the iPhone. Perhaps offering the iPhone on different networks will help though!

Do you keep a straight face when typing that kind of stuff ?

"boutique type speciality products" like the iPhone and iPod ? LOL

-t

[imitchellg5]

Originally Posted by boy8cookie 

Could this, in part, be a result of the leaked deets on the upcoming iPhone? People holding off for the new version?

No, especially since the first quarter was mostly before the leak. And the average person isn't going to care. There are just more Android devices as well as more affordable Android devices.

[OreoCookie]

@imitchellg5
I think it goes beyond affordability, it's also about availability: AT&T currently is the sole provider that offers the iPhone. To my knowledge, AT&T has a marktet share of ~30 % (please correct me if I'm wrong, it's too late for me to do research ). This means ~70 % of customers cannot buy an iPhone without switching providers.

[besson3c]

Originally Posted by turtle777 

Do you keep a straight face when typing that kind of stuff ?

"boutique type speciality products" like the iPhone and iPod ? LOL

-t

They are. Joe Walmart goer is not going to buy a phone and plan this expensive, this is not Apple's target audience, they have never gone after companies like Dell that cater towards the low end of the market.

The high end of the market = boutique products.

[mduell]

Originally Posted by OreoCookie 

To my knowledge, AT&T has a marktet share of ~30 % (please correct me if I'm wrong, it's too late for me to do research ).

NPD today:
AT&T 32%
VZW 30%
Tmo 17%
Sprint 15%

[imitchellg5]

Originally Posted by OreoCookie 

@imitchellg5
I think it goes beyond affordability, it's also about availability: AT&T currently is the sole provider that offers the iPhone. To my knowledge, AT&T has a marktet share of ~30 % (please correct me if I'm wrong, it's too late for me to do research ). This means ~70 % of customers cannot buy an iPhone without switching providers.

True. The iPhone however only has a 20% market share of the smartphone market, and while people are certainly moving towards AT&T because of it, I don't think it's in number significant enough to pad their market share of 31%; it's important to remember as well that the largest number of AT&T's sales are featurephones. As far as smartphones go, AT&T is really pretty bland besides the iPhone, which has 20-25% market share depending on who you ask. If your contract is up though, it's really not a huge deal to switch providers anymore. What I was directly referring to however is the availability of Android devices across a spectrum of carriers, especially versions of the HTC Hero, Nexus One, and Motorola Backflip.

[Eug]

Yeah, in retrospect Apple seems to have limited itself by sticking with AT&T exclusively.

That said, I'm sure AT&T gave up a lot for that exclusivity. It will be interesting to see who is considered to have gotten the bigger advantage in the future, but in any case, both have done relatively well with the relationship.

I guess the good news for Apple is that the regulators might cut Apple slightly more slack now with the regards to the anti-competitiveness threat.

[Spheric Harlot]

Originally Posted by besson3c 

They are. Joe Walmart goer is not going to buy a phone and plan this expensive, this is not Apple's target audience, they have never gone after companies like Dell that cater towards the low end of the market.

The high end of the market = boutique products.

A world where 70+% market share (iPod) is "boutique specialty" stuff is a strange one indeed.

That's like people calling blockbuster movies "cult".

[downinflames68]

Duh. Most people are morons. They will say "hrm, gee, well iPhone doesn't have X, therefore this is a better deal since it is only 49.99!!!" and never once consider user interface, experience, reliability, resale value, etc.

[Spheric Harlot]

dp.

[Stogieman]

Originally Posted by besson3c 

I know this is not a huge surprise, but I suspect that some of us thought that the iPhone would remain the dominant smart phone vendor from here on out. Not so, Android based phones are now number one:

Slashdot Mobile Story | Android Sales Surpass iPhone Sales


This is always going to be the case so long as Apple makes boutique type speciality products like the iPhone. Perhaps offering the iPhone on different networks will help though!

Are the "buy one get one free" deals counted in the Android sales? I know Verizon has been doing that with the Droid for some time.

[besson3c]

Originally Posted by Spheric Harlot 

A world where 70+% market share (iPod) is "boutique specialty" stuff is a strange one indeed.

That's like people calling blockbuster movies "cult".

The iPod is different, there are several lower price point models available targeted at Joe Walmart.

[Simon]

Besson never mentioned iPod. Turtle and SH did when they misquoted Besson. So let's leave the iPod strawman for what it is.

Besson makes a good point. The reason Apple can dominate the music player market with the iPod is because they cover almost all of it. With the smartphone market they don't. They have a high-end device in a single form factor (plus maybe the leftover 3G as an 'entry-level'). Even if the iPhone were to run on all networks, it would never reach the same type of market share as the iPod because Apple has chosen not to offer several types of smartphones that are still very popular.

Two important things need to be added though:

- The fact that Apple as a single company can, with a single device and on a single network, actually achieve 21% smartphone share (which is just a bit less than Android which is sold by many manufactures on many devices and on several networks), is outright remarkable. 1 in 5 smartphones in the US is of this exact type on this exact network. If that does not strike you as a testament to the iPhone's extreme popularity, I don't know what does. Note also that this is coming from a company new to the business with no prior cell phone experience or presence. The previous major players like Nokia, SE, Moto. et al. are still recovering from that massive blow they received when Apple peeked in through the door.

- The iPod wasn't always at 70%. When Apple started the iPod it was also very much a boutique product in a very narrow niche. An expensive device sold to very few people. It was in fact Mac-only at one time. Apple started to cover different device types only once they had established a firm market presence. Something that could still follow with the iPhone. Though I do expect iPhone development to be different from iPod development and I also don't expect to see Apple come anywhere close to the iPod's market share with the iPhone.

[Big Mac]

I haven't gotten an iPhone yet because I don't like the high monthly fees attached to them. Even at this point in my life I'd rather get by with a dumb cell that doesn't cost an arm and a leg to own.

[Railroader]

Better sell your APPL. Apple Computers is going out of business. Apples are toys, get a real phone. MACS are only good for graphics anyway. Since they aren't open source they will fail eventually.

Did that cover it all?

[turtle777]

Originally Posted by Simon 

Besson never mentioned iPod. Turtle and SH did when they misquoted Besson. So let's leave the iPod strawman for what it is.

Wrong. Besson made a general statement:

Apple makes boutique type speciality products

and followed it with one example.

like the iPhone.

Moreover, he did NOT object to dragging the iPod into it, but rather, tried to apply his logic to even that.

Bottom line: Apple does NOT make "boutique type speciality products" in any sense of that phrase.

-t

[Simon]

Originally Posted by turtle777 

Wrong. Besson made a general statement...

Why don't we let Besson speak for himself. I can read what he said. No offense, but I don't need a translation of what he supposedly thinks.

Moreover, he did NOT object to dragging the iPod into it, but rather, tried to apply his logic to even that.

Actually, he specifically pointed out that the iPod and the iPhone are two very different issues:

Originally Posted by Besson3c

The iPod is different, there are several lower price point models available targeted at Joe Walmart.

Let me say it again: other people dragged the iPod into this discussion. Besson never mentioned it in his OP.

Bottom line: Apple does NOT make "boutique type speciality products" in any sense of that phrase.

Call the products whatever you want, but he makes a valid point that Apple doesn't attempt to cover the smartphone market the way they cover the music player market. And therefore to me it's no surprise they have nowhere the same market share.

That sounds like a fairly simple and level-headed statement to me. I fail to see what's so outrageous about it.

[Simon]

The really interesting point to discuss IMHO is if/why Apple should change their strategy.

So now Besson, tell me. Assuming this is the case, "...so long as Apple makes boutique type speciality products like the iPhone.", do you think they have a reason to change that? Is it desirable to have more than ~1/5 of the market share if that means having to lower your margins?

What I'm asking is essentially if Apple can make a huge profit from their "boutique type speciality iPhone", why should they change the strategy? Do you think selling huge volumes of razor-thin margin products like Dell is a strategy Apple should pursue in the smartphone market? I'm guessing you don't, but I'd like to hear what you believe Apple needs to change. After all we know the iPhone has been a smash hit for them. Why change a winning team?

[Doofy]

We're missing something here. There's two types of cell phone users:
1) Those who don't give a toss and buy the cheapest in the shop (I fall into this category).
2) ADHD-addled early adopters.

Since type 2 peeps swap their cells out every three months for a new model and always go for the newness to keep their ADHD fuelled, Apple are going to lose out. iPhone is old and boring now. ...until the next model.

[sek929]

Originally Posted by Doofy 

1) Those who don't give a toss and buy the cheapest in the shop (I fall into this category).

Me too, except I usually go the free phone route.

[Doofy]

Originally Posted by sek929 

Me too, except I usually go the free phone route.

I go "pay as you go" (prepaid?) rather than contract, so no free phone (just a really crappy ~$15 Samsung one). IPhones (3GS) are ~$800 "payg" here, but can be had free if you're on contract. Three carriers.

[Paco500]

To be fair, the study did count all phones sold as 2 for 1 deals and did not include any sales to business. I'm guessing there are more iPhones sold to businesses than there are Android, which could wipe away or at least lessen the lead Android has.

[imitchellg5]

Originally Posted by Stogieman 

Are the "buy one get one free" deals counted in the Android sales? I know Verizon has been doing that with the Droid for some time.

A sale is a sale...

[imitchellg5]

Originally Posted by Simon 

The really interesting point to discuss IMHO is if/why Apple should change their strategy.

So now Besson, tell me. Assuming this is the case, "...so long as Apple makes boutique type speciality products like the iPhone.", do you think they have a reason to change that? Is it desirable to have more than ~1/5 of the market share if that means having to lower your margins?

What I'm asking is essentially if Apple can make a huge profit from their "boutique type speciality iPhone", why should they change the strategy? Do you think selling huge volumes of razor-thin margin products like Dell is a strategy Apple should pursue in the smartphone market? I'm guessing you don't, but I'd like to hear what you believe Apple needs to change. After all we know the iPhone has been a smash hit for them. Why change a winning team?

You're comparing a phone to a computer, which isn't really fair at all. So why should Apple change their strategy? Because markets dry up. Sooner or later, Apple will have to simply branch out. That's an idea that certainly isn't new to Apple. Even though the adoption rate for the iPhone is quite high, it won't always be. Thus it would behoove Apple to get the phone on other carriers in the US, as it have overseas. IMO, AT&T was the best carrier for Apple to choose (notwithstanding service issues) simply due to AT&Ts size. But now, as the technology has matured, let's get it out on other carriers.

[Spheric Harlot]

Originally Posted by Doofy 

We're missing something here. There's two types of cell phone users:
1) Those who don't give a toss and buy the cheapest in the shop (I fall into this category).
2) ADHD-addled early adopters.

I waited two years before getting an iPhone (was in a contract and wanted 3G), paid €50 for a 32GB 3GS, and am saving €25 per month, on average, over what I was paying before at my old provider. I thoroughly appreciate having a phone I actually WANT to use.

Which category am I?

[The Final Dakar]

Miscellaneous.

[imitchellg5]

Yeah I think those categories are completely wrong. If there are only two types of cell phone buyers (which there aren't), it's people who just want to make calls, and people who want to get things done on their phones.

[analogue SPRINKLES]

Originally Posted by Eug 

Yeah, in retrospect Apple seems to have limited itself by sticking with AT&T exclusively.

Apple got away with things that no other cell company in the world would ever been able to get from a cell company.

1) No branding on the phone or box
2) No custom OS skins or crippled hardware from provider
3) System upgrades for Visual Voicemail
4) Reasonable data plans
5) It's own iPhone kiosks at the front of Cell stores
6) Accomplished all these things with no formal announcements on the iPhone or previous experience/products.

With all that Apple is making a killing on just 1 provider in the US and raking in the cash. Seems Apple got the much better end of the deal.

[Doofy]

Originally Posted by Spheric Harlot 

I waited two years before getting an iPhone (was in a contract and wanted 3G), paid €50 for a 32GB 3GS, and am saving €25 per month, on average, over what I was paying before at my old provider. I thoroughly appreciate having a phone I actually WANT to use.

Which category am I?

Category 2: Early adopter.
There can be no other type of iPhone user until 2012.

[mduell]

I don't see the price of the phone being the primary influence. Total phone cost over a typical 2 year contract is $1500-3000. $100 for a 3G iPhone isn't going to push people away, but the extra $1000 for an AT&T plan will.

[Doofy]

Originally Posted by imitchellg5 

Yeah I think those categories are completely wrong.

Well you're wrong.
From a marketing perspective, there's only "cheap" or "newness". That's it.

- "Cheap" lasts until your competitor produces cheaper.
- "Newness" lasts until your competitor catches up or overtakes. At which point you have to go "cheap" or take a sales hit until the next time you introduce "newness".

Basic marketing cycle here boys. Apple ain't immune to it.

[turtle777]

Originally Posted by Doofy 

Well you're wrong.
From a marketing perspective, there's only "cheap" or "newness". That's it.

- "Cheap" lasts until your competitor produces cheaper.
- "Newness" lasts until your competitor catches up or overtakes. At which point you have to go "cheap" or take a sales hit until the next time you introduce "newness".

Basic marketing cycle here boys. Apple ain't immune to it.

You are right about the categories, but wrong that all Newness buyers will swap every three months.

But I know that you really were painting two extremes, not too concerned with getting some of the "buy newness and hold" guys factored in.

-t

[Phileas]

Originally Posted by Doofy 

From a marketing perspective, there's only "cheap" or "newness". That's it.

No.

[Spheric Harlot]

Originally Posted by Doofy 

Category 2: Early adopter.
There can be no other type of iPhone user until 2012.

I mildly suggest that you forgot category 3:

The convinced majority. Slow in uptake, but ready to gladly fork over money for products that will make everyday aspects of their life easier/less annoying/more fun.

This, historically, is the market Apple has always aimed at ("The computer for the rest of us"), and that the iPod was such a success at.

- Incidentally, the iPod's success coincided with the release of the "high-end" iPod photo with the color screen in time for the Christmas season 2004. The mini had already been available for a year, and the shuffle didn't come until later.

[SSharon]

Originally Posted by analogue SPRINKLES 

Apple got away with things that no other cell company in the world would ever been able to get from a cell company.
...
2) No custom OS skins or crippled hardware from provider
...

Where do things like no tethering, no MMS, and no bluetooth file transfer come into play?

[Spheric Harlot]

They come into play at least partly as utterly standard Apple modus operandi:

Get the basics right and omit all features you can get away with for the time being while polishing up what you have.

Then, wait until the dust settles and see which of the omitted features are *really* necessary; then add them back in once you figure out the best way to do them.

Tethering and MMS were supported in other countries for a while before AT&T customers got them - those limitations weren't within the phone itself.

[analogue SPRINKLES]

Originally Posted by SSharon 

Where do things like no tethering, no MMS, and no bluetooth file transfer come into play?

That's one of the downsides sadly. Although there is no saying that going with another provider would have prevented that as if they felt the data load the iPhone puts on the network they night have done the same in the US.

In canada we are lucky to have those features before you guys but our network is very different and we had to wait a YEAR for the iPhone.

I dunno what you mean by bluetooth file transfer though.

[Doofy]

Originally Posted by Phileas 

No.

Yes.
We're talking cell phones here, not sugar.

Let's face it Phil, you wouldn't run a cell campaign on a "tried and tested even though we haven't got blah de blah new feature" ad platform. Wouldn't work.

Originally Posted by Spheric Harlot 

I mildly suggest that you forgot category 3:

The convinced majority.

The majority are now not buying iPhones (as pointed out in this thread).
The newness is wearing off.

Us chaps here are an anomaly. We're Apple fans, for better or for worse. So we don't count.

[Doofy]

Originally Posted by Spheric Harlot 

They come into play at least partly as utterly standard Apple modus operandi:

Get the basics right and omit all features you can get away with for the time being while polishing up what you have.

Originally Posted by Baltasar Gracián, 1647

170. In all matters, keep something in reserve.
You'll preserve your usefulness. Don't use all your talents or deploy all your strength at all times. Even in knowledge hold something back : you will double your perfections. There must always be something you can use in a pinch. An opportune rescue is valued and honored more than a bold attack. Prudence always steers a safe course. In this sense also we can believe the piquant paradox : the half is much more than the whole.

[Person Man]

Originally Posted by Doofy 

They had internets in 1647?

[mduell]

Originally Posted by Spheric Harlot 

They come into play at least partly as utterly standard Apple modus operandi:

Get the basics right and omit all features you can get away with for the time being while polishing up what you have.

Then, wait until the dust settles and see which of the omitted features are *really* necessary; then add them back in once you figure out the best way to do them.

Tethering and MMS were supported in other countries for a while before AT&T customers got them - those limitations weren't within the phone itself.

His point wasn't w/r/t the original iPhone OS limitations, but the AT&T limitations after iPhone supported them. AT&T iPhone users still don't have tethering.

[besson3c]

Originally Posted by turtle777 

Wrong. Besson made a general statement:



and followed it with one example.



Moreover, he did NOT object to dragging the iPod into it, but rather, tried to apply his logic to even that.

Bottom line: Apple does NOT make "boutique type speciality products" in any sense of that phrase.

-t

Sure they do, the iPod is pretty much the only exception to Apple's whole product line of boutique type speciality/niche products...

- Mac Pro: high end desktop
- Macbook Pro: expensive laptop
- Macbook: reasonably priced, but Apple is also not going after the crowd that wants the cheapest laptop they can get or else concessions would have been made in the design in order to offer it at a lower price point
- iMac: same sort of thing, also a bit of a niche product for those that want an all-in-one computer
- Mac Mini: niche product, but you can probably get a low end computer for $500 including the monitor
- iPad: also niche product, so far

[besson3c]

Originally Posted by Simon 

The really interesting point to discuss IMHO is if/why Apple should change their strategy.

So now Besson, tell me. Assuming this is the case, "...so long as Apple makes boutique type speciality products like the iPhone.", do you think they have a reason to change that? Is it desirable to have more than ~1/5 of the market share if that means having to lower your margins?

What I'm asking is essentially if Apple can make a huge profit from their "boutique type speciality iPhone", why should they change the strategy? Do you think selling huge volumes of razor-thin margin products like Dell is a strategy Apple should pursue in the smartphone market? I'm guessing you don't, but I'd like to hear what you believe Apple needs to change. After all we know the iPhone has been a smash hit for them. Why change a winning team?

This is the interesting question, and one that Apple will have to deal with more and more should they start to feel zealous about making even further inroads in increasing their market share.

Apple is not setup to be Dell, nor is it setup to sell utilitarian software that gets the job done and little else, they are setup to sell shiny, new, innovative, and exciting products. You can't really do that and simultaneously make the cheapest stuff available, because in doing that you usually have to make several decision concessions.

If Apple changes this formula which has been the essence of their business model for years, they risk tarnishing their brand. People want and expect Apple to make really flashy products. They could also make real low end products, but these would still carry the Apple logo and would hurt the company of these products were duds. Plus, their profit margins would be razor thin, they'd have to rely on selling stuff at great volume similar to Dell, and Apple is not really setup to be a high volume, low profit margin sort of company either.

The only time I've ever been aware of Apple straying from this formula was with their iPod product line. I can see them trying this with their phone line as well, but only so far as the cell companies are willing to be bold about this. If a cell company was willing to subsidize the phone even more and reduced the cost of the data plans (which, I would imagine, will naturally start to fall once the bandwidth becomes less of a semi-limited commodity), they might not make huge direct profits from this, but they'd bring a whole bunch of customers to their network. How this balances out in the long run for them, I don't know. I don't sense that people are terribly loyal to any cellphone carrier, so switching is not out of the question for most people, although I would imagine that these sorts of subsidized deals would also lock people into contracts.

Once the contract is up, the impulse to buy an iPhone might not be there the same way, or it might be even stronger. I don't really know whether the people that buy iPhones are still impulse shoppers. I'm pretty sure that a good percentage of, say, iPad and earlier generation iPhone buyers where pretty impulsive shoppers, perhaps largely upper middle class, but I would imagine that these long term contracts are the enemy of impulse shopping.

I guess I haven't really answered your question Simon, but these are the sorts of variables that seem important in my mind.

[turtle777]

Originally Posted by besson3c 

- iPad: also niche product, so far

With 1M units sold in 30 days, this hardly qualifies as a niche product.

At least not when you look at the TOTAL tablet computing market.

-t

[besson3c]

Originally Posted by mduell 

I don't see the price of the phone being the primary influence. Total phone cost over a typical 2 year contract is $1500-3000. $100 for a 3G iPhone isn't going to push people away, but the extra $1000 for an AT&T plan will.

Isn't the cost of the phone itself and the cost to use the phone the same thing in the minds of the customer?