Apple’s sinking share in France and Germany may be fueling patent wars | Hacker News Reader

Apple’s sinking share in France and Germany may be fueling patent wars

bgr.com

28 pointszacharye13 comments

One of Apple's defining characteristics as a business has been its unfailing disinterest in market share in and of itself. So why on Earth would anyone assume that an expansion of a legal mess started in the larger markets, into the smaller ones, is driven by a sudden intense concern about market share? Particularly when the larger markets are where Apple sales and growth is strongest? If their legal goal was to protect market share, their strategy is exactly backwards.

Now is it more likely that: A. Apple has suddenly not only change its tune on market share, but is pursuing this new obsession ineptly? Or, B. that Apple is simply doing what every single large company does in patent concerns: starting in the largest markets and then expanding into the smaller ones?

Further, looking at market share without regard to overall market growth is somewhere between innumerate and intellectually dishonest. And the regularity of this oversight in tech reporting makes it difficult to believe it's an honest mistake.

There are no honest, repeated, mistakes. Flawed reasoning, confusing correlation with causality, and outright mis-truths seem to be the hallmark of "business journalism".

Pretty par for the course with BGR.

Inputs:

(1) press release or wire repackaging of press release that is about Apple.

Outputs:

(1) complete rewrite with no blockquotes.

(2) but uses every piece of data in the original.

(3) vaguely reference the source 3/4 of the way down.

(4) 10 other links all to BGR articles.

(5) increase wordcount 45%

(6) increase linkbait with terrible speculation.

How long til the inevitable AOL buyout?

I think your response is a bit short-sighted. Look at market share as an indicator, not a means to an end. Apple might not care that its market share is 10% or 70%, but it does care that it just launched a new smartphone and sales are slowing while its rivals are picking up steam.

If you want to believe that it's a coincidence that Apple is hitting its competitors the hardest in two countries where it seems to be losing the most ground, that's fine. Others might not share your opinion though. Germany and France are key markets — remember, the 4S launched in each of those countries at the same time as in the US.

Don't focus on market share, focus on what it might tell us.

> "but it does care that it just launched a new smartphone and sales are slowing while its rivals are picking up steam."

Again, Apple's sales may not be slowing in those regions. They could be enjoying fairly large year-over-year sales increases and still be losing share if the overall smartphone market is growing faster than they are and others (Android) are capturing most of that growth. We simply do not know. What we also do not know is: what kind of profit those other phones are generating and who they're selling to. If they're glorified feature-phones with razor-thin margins (as is often the case in other regions with explosive android growth) every indication is that Apple simply would not care about that market any more than they care about the lower-margin segments of the markets for laptops, desktops, media players, tablets, etc.

So, yes, market share could be part of an interesting larger story. But we have absolutely nothing to give context or larger meaning to the market share number. So the number itself is simply useless. Particularly as justification for some assertion that based on that number alone Apple is going to change its long-standing and very-profitable approach.

Why would Apple care about profits or margins its rivals are achieving? What matters is what Reuters is suggesting: For whatever reason (they suggest pricing/economy) people are buying not-iPhones instead of iPhones in what appears to be an increasing number of cases. Market share is an indication of that. Apple may not care about market share as a metric per say, but the company absolutely cares about people buying not-iPhones instead of iPhones. This, of course, is why they're suing every single one of their biggest competitors to begin with.

> "Why would Apple care about profits or margins its rivals are achieving?"

Because not all smartphones are in the same market segment.

If competitors are selling expensive phones, it's relevant to Apple's interests. It means they're legitimately getting beaten in the segment they're actively targeting. (The subsidized/$400+ segment)

But if competitors are selling cheap phones, then those sales don't represent any sort of loss to Apple as those customers were probably not going to spend 400+ on a phone and Apple has no (apparent) designs on the low-margin market. They would seemingly rather cede the $200 phone segment entirely than compete in it.

And whether those $200 phones are running Symbian or Android or whatever else is largely irrelevant to Apple.

And again, this is not unlike the way they've ceded the low-margin segment in every other market they compete in.

"So why on Earth would anyone assume that an expansion of a legal mess started in the larger markets, into the smaller ones, is driven by a sudden intense concern about market share?" It makes more sense if you assume the declining market share is a result of consumers buying competitors products. I can't imagine anyone delivering a sales report at Apple in which they say market share is shrinking in Germany and France,and have that report well received.

When looking at overall worldwide market growth, the next logical step is to look at sub market growth by country, it is the next smaller logical unit. Each country is it's own market. Just because the larger markets are where the growth is strongest doesn't mean you abandon the smaller markets and allow your competitors to run wild. When looking at the small markets together they are one big market.

I've assumed their choices of venues was tactical and based on regional legal quirks, not related to market share.

As evidenced by the patent claims already fought and lost, they might prevail on a little but not I don't think it will be much in the end. It's not really some tiny android using brands they need to sink but rather Samsung, HTC and other giants. Even if they prevail in 1 or 2 of the 10 or so claims they are making these guys will be able to eat up the costs (and one or two might be able to force a cross-licencing with their own patents). So in the end, nothing is going to stop the current trajectories where Apple will be relegated to fighting with second place in the market with Microsoft.

To my mind this is as it should be. Smartphones can only be a screen 3 to 6 inches in a thin form with a slightly modified desktop metaphor (icons on a background), and are based on a wide infrastructure that is not Apple owned. Free code initially (BSD, Linux and Webkit). SSD research, gorilla glass, AMOLED, camera chip manufacturers and ARM CPUs. Apple is more or less just another PC company, and smartphones are now pretty much just small PCs. Apple has a good music and app market which they can leverage to make sure they have a larger slice of the phone market than on the PC market, but it's not manifest destiny that they should own it. They also have to consider the public relations costs compared to prevailing in a few corner patent cases and looking (rightly so) like sore losers who don't want any competition.

Apple should stop whinging and fire 80% of the legal department and use the money to acquire another company like the one that produced Siri. Then again, perhaps the PR department is behind this to create another "stabbed in the back" mythology, like their dubious claims to stratospheric innovation on the desktop.

There doesn't seem to be any evidence for this hypothesis, or for his one that slow growth is lowering market share. But something makes a difference, and English speaking countries seem to be more Apple oriented, could be a factor. France and Germany are stronger open source markets than say the uk, could also influence arly adopters. Would be interesting if there is more data about phone choice.

Are you sure its not driven by Steve jobs and I quote "I'm Going to Destroy Android, Because It's a Stolen Product".... "I'm willing to go thermonuclear war on this."?

Seems like analysts are trying to find an economic reason for something that may well be an emotion driven thing.

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