Apple never set out to make the most smartphones, it just kind of happened.
They set out to make the most money. Samsung are a fair distance from achieving that.
They set out to make the most money. Samsung are a fair distance from achieving that.
It really worries me that there's a new breed of Apple fan that actually believes this.
In reality they set out to build the best device (for affluent, white, middle-aged, American males with a taste for minimalism) and semi-accidentally became fashionable status symbols.
The crowing about making the most money was just fanboy bragging because every other stat they bragged about was slowly being eclipsed by Android. Fanboy rule number one is to make far too big a deal about anything unique about you or your enemy. Some people seem to have latched onto profit margins and run wild with it. This has gotten to the point where I'm half expecting, even here on HN, someone to come along and claim that Samsung "isn't making any money" from selling these phones.
How more simple could their model be? Exploit human greed.
Regardless I hate it when people act and support the cynicism that all companies are the same, they all work for profit, there can never be a do no evil company. May all such thinkers stick to their dogma lifelong and suffer from it.
That sounds backwards to me.
I can honestly say that their profits have never been something I've been impressed by, and indeed, for most of that time they didn't have impressive profits, so if I was impressed by profits I would have bought and recommended Windows PCs instead.
> > > they set out to build the best device
Surely it's equal parts of both: Apple try to make the best products (in order to) make the most money (in order to) make the best products (in order to) make the most money (in order to) make the best products (in order to) etc etc...
In the sandpit where Apple plays, you can't have one without the other. A beautiful symbiosis of business and craft.
I hope people don't lose their sense of surprise that Apple is "winning" with nice products or start to think it's inevitable, history tells us otherwise.
For example, Windows Server makes billions per quarter and probably is the Server OS that makes the most money for it's maker. But you won't find that argument on HN to say that Windows Server dominates the server OS market. In fact some believe that Windows has no viable presence in servers.
Sure MS might not have a viable presence in servers, but if they are making more money doing it than anyone else... by definition, they are winning. They aren't going to pack-up a billion-dollar-per-quarter sector of their company because they don't have the market share numbers they'd like. If anything, having such a successful business with such a small market share represents potential growth.
So what do you reckon, what would a perfect smartphone for black, middle-aged American males look like?
Recently, I've seen a lot more high end Android devices, but a few of my friends have gone back to flip phones surprisingly.
http://blog.nielsen.com/nielsenwire/consumer/among-mobile-ph...
And this suggests that "Demographically, Android phones are especially common among young adults and African-Americans, while iPhones and Blackberry devices are most prevalent among college graduates and the financially well-off."
http://pewresearch.org/pubs/2054/smartphone-ownership-demogr...
Blackberry seems to win, probably through being an early provider of group messaging to a young, early-adopter demographic on one side and a business staple on the other and the twin lock-ins that provides.
Though note that "white people" are about 10-15 years older than other categories on average so white, middle-aged, and affluent kind of go together and can be hard to tease apart.
I don't really see the problem with claiming a company sets out to make money. But Apple's achievement in this area is nothing short of phenomenal. They've driven component costs down to the point that there's _hundreds_ of dollars of margin on every device. Then they've got the app store. The only firm I can think that does it this well is Nintendo, who even in the days they weren't fashionable were nonetheless very profitable.
But the drift amongst consumers in general from discussing things like "Apple makes great phones!" and "Android phones really empower me to do things I find useful!" to arguing your phone is superior to someone else's because of the supply chain management involved or the profit margin is utterly baffling. These things have no bearing on the consumer experience.
Even the sales stats are ultimately a pretty silly thing to argue about. If you have a device with the limited ecosystem of a WebOS phone, then market share matters, because at that level, not many people will write apps for your phone. But both iOS and Android phones are tremendously successful, and both have pretty much all the third party apps anyone needs (plus or minus something new enough that it hasn't been ported or knocked off on the other platform).
I can't believe that Gruber (for example) would claim with a straight face "Money is how you keep score" after years of attacking Microsoft who massively won on both marketshare and profitshare on the desktop. (They've fallen slightly behind in profit the last year or so, but take any longer period and they murder Apple. By Gruber's own metric this means Apple's computers sucked, and in that case why should we be excited about their phone?)
The most vocal Android proponent I know carps on about market share incessantly as a measure of it's superiority despite having spent the best part of two decades reacting to Window's dominance with the old "eat shit, a billion flies can't be wrong".
The truth is that both sides have some interesting challenges ahead.
Google have just bought a device maker (who just posted a significant loss) which could very realistically harm it's relationships with other manufactures (including Samsung). Meanwhile Samsung - the best Android phone manufacturer right now - are also now signed up to provide Windows Phones and are investing in Bada. And pretty much all Android phone manufacturers are operating on pretty thin margins because of the competition.
Plus Kindle and others are starting to fragment what Android means - are app developers going to be held back by having to keep things running on the far older Fire version if they want to access what is likely to be a massive market? Oh, and those pesky little patents suits aren't going anywhere in a hurry and are likely to be, at the very least, expensive. On the upside it now has a mass market advantage and a lot of people betting on it.
Meanwhile Apple's previous unrivalled dominance in terms of product quality has significantly eroded (if not disappeared altogether) and it's iPod -> iPhone upgrade path is dropping away as the iPod ceases to be a big seller (though the Mac is now becoming mass market which at the very least boosts the Apple brand and awareness).
The iPad is still the undisputed king of tablets but that's likely to at the very least come under more sustained pressure than it has so far as further iterations of Android tablets improve. Plus the potential for a post-Jobs psychological hit exists and, those patent suits aren't just running one way.
And both of them are going to be threatened by Nokia and MS getting their shit together with a couple of nice looking phones, a billion dollar marketing budget and a shed load of brand recognition in the mass market space.
Bottom line - I don't think anyone should carp right now, this thing is a long way from playing out.
"And pretty much all Android phone manufacturers are operating on pretty thin margins because of the competition."
... simply isn't true, and the only reason you think that is because it has become an accepted truth in the Apple echo-chamber? (Mostly by intentionally fudging between mobile phone and smartphone numbers depending on whichever makes Apple sound better).
http://www.asymco.com/2011/07/29/apple-captured-two-thirds-o...
Morotola Mobility just posted another loss in the last few days, LG have been losing money for 2 years now with no sign of turning it round. HTC margins are "disappointing" and their share price has dropped considerably in the last few months in large part because of the competition in the market (source: http://www.marketwatch.com/story/htc-profit-up-68-on-demand-...). HTC are making good profits but their margins aren't great.
Samsung are doing well but I'm not seeing anyone else wooping it up but I'd love to see anything that contradicts that (I own no Apple stock and I'm really not that vested one way or the other).
I don't consider Asymco an independant source, indeed, they are a key part of the Apple echo-chamber that created this myth. (I mean what kind of pseudo- mobile-phone market analyst gets everything about Android, Symbian and Windows Phone wrong? He even fluffed the iPhone numbers last time, so he's not even a one-trick-pony).
I think you need to look closer. While Apple don't break profit data down by product line (I don't believe) he's not that cack handed. If you read through the comments you'd see that he won't use the Samsung telecoms unit figures as these are meaningless in this context so it seems unlikely that he'd use an even more crass approximation for Apple (and this can be confirmed by checking the number he uses against the number Apple publish - they're not the same. If you wish to confirm this remember Apple's Q2 is not calendar Q2).
> I don't consider Asymco an independant source [...]
You may not like his views but he shows data, he shows his working, he answers questions in the comments and on twitter about why he's done something a certain way. Hell, when he messes up public predictions he even rakes over his own errors publicly in more detail than anyone else would.
In the face of this level of openness simply saying you don't consider him an independent source isn't a good argument if you don't show that his data or working is wrong, or provide contrary evidence.
Please show some numbers that show that right now someone other than Samsung is getting anything close to Apple level profit margins on handsets.
> Mostly by intentionally fudging between mobile phone and
> smartphone numbers depending on whichever makes Apple
> sound better)
Gruber is not saying that Apple makes more money than X, therefore X sucks. He is saying Apple makes more many than X, therefore Apple is winning.
No one has ever claimed that Apple won the PC war.
.
--http://arstechnica.com/apple/news/2009/01/iphone-passes-1-pe...