Ceding the Crown
daringfireball.net
daringfireball.net
But I agree with him on the first two misconceptions he tries to correct. The iPhone was never a market share game. In 2004, the original Motorola RAZR was like $400 at launch, and three months later it came free in cereal boxes. That's what you do when you are trying to gain market share. Apple's products are effectively a luxury brand for consumer electronics, and criticizing Apple for not winning the market share game is like criticizing Lulumelon for selling fewer yoga pants than Target.
Also, the iPhone and iPhone 3G were objectively great products. It would have been great even if RIM wasn't releasing awful products by comparison. Their other product lines have continued to be popular even as other companies have learned how to make products that are just as thin or have screens just as sharp. So I agree with him on that point, that there's not much merit to the argument, "well the iPhone only sold well because everyone else sucks, and now the Galaxy is just as good so they're screwed."
But, his third point is where I diverge with him on his conclusions. "Apple is a great competitor. In the PC industry they’ve fought back from the brink of bankruptcy to become the most profitable and fastest-growing PC maker in the world. They came in and stole the music player market, and have dominated it for over a decade."
Well, look. To suggest that this is a fait accompli, without even mentioning the fact that Steve Jobs is no longer with the company so maybe they're going to struggle in learning how to 'fight back' without him, is extremely misguided to me. I never knew Steve Jobs personally, but I'd like to think that if he visited Apple now, he'd say something like, "I've been dead for two years and we're still talking about which company is better at making flat touch screen computers? That's boring now. Let's invent something new. And by the way, fire whomever thought it was okay to have 21 icons on the iPhone 5."
Like I said, I don't know Steve Jobs, and I don't work at Apple. But it would seem like if you're going to suggest Apple's still on the ball and market share is irrelevant because they're focused on 'advancing the human race,' you'd probably want to explain how they're going to do it without the one guy that coined the motto to begin with.
To believe that without Steve Apple can't compete with Samsung, is to claim that the Apple management team are less capable than the management at Samsung.
On the evidence of the misogynist clown show of a launch event for the S4, you know what? I think Apple will do just fine.
"Look at MS Windows' marketshare! Apple/FreeBSD/Desktop Linux is dead!"
"BSD is dead. Netcraft confirms it."
"Android will never have the marketshare of the iPhone. The AppStore has 100,000 apps! It will always be dominant!"
"Android will never have the marketshare of the iPhone. Apple has X% of the market!"
... etc ...
People are now using to tout Android, but look to the past to see the same(-ish) arguments for why Apple will always dominate Android.
The reason why Android won is because the iPhone is just one phone from one maker. There's a limit in market share you can reach with just one phone because you can't please everyone. Heck, even with a single brand there is a limit in the market share because you can't build a brand image that appeal to everyone (in particular you'll never appeal to the "I don't want to go mainstream" people). This is why car makers sometimes create entirely new brands - like Lexus from Toyota (luxury cars) or Dacia from Renault (low cost cars).
Android, on the other hand, is dozens of phones from dozens of makers. Just like Windows on desktop PCs. So it can reach a quasi-monopoly status. Now that Android have this market leader position, the only thing that can displace it is not a slightly different system (like Windows Phone) but a full paradigm change. That's why Linux failed to displace Windows as the market leader, but tablets are in their way to do it because they're completely different beasts.
...And by the way, for the same reason iPhone can't hold a monopoly, the iPad is losing its market leader position to... Android.
Of course Apple had the market share lead with the iPhone. But the category was not "smartphone". They had a dominating lead in the category "mobile phone with touch UI and great web browser" from 2007-2010. Nobody cared about Symbian anymore after the presentation of the iPhone. That category was left to die. The iPhone became the new state of the art for smartphone.
Apple lost the lead around 2011 however due to the unwillingness to provide more than one model or innovate faster. Android was more flexible and could address more users.
Now it may well be that Apple doesn't care about this at all. But please do not make arguments how technically Apple never led in the smartphone market.
More users, but not more users that really matter. That is, more users that generate more profits. Hence the difference between Samsung and Apple. It's similar to how Apple can have ten times the profit of Dell even if Dell ships twice the units.
The Android companies are like the PC companies: they have a commoditized OS and sell to all tiers, low and high, but mostly low and mid, and for smaller margins. Apple only sells to the higher end of the market, as they always did with their laptops and desktops.
>Now it may well be that Apple doesn't care about this at all. But please do not make arguments how technically Apple never led in the smartphone market.
Smartphone? I thought you meant "mobile phone with touch UI and great web browser".
Which is BS btw. Apple made a smartphone. Competing with entrenched smartphones. The fact that none (or few) shared it's design and particular qualities at the time means nothing.
In the smartphone market (which is a real market segment, instead of the "mobile phone with touch UI and great web browser" which is an ad-hoc thing you came up with), the iPhone was never top in market share. It was however top (and still is) in profits.
Apple does not care about the lower end (or total market share) for the iPhone. They care for the same things they do in their PC department: capturing the upper end, the more expensive, better margins and more headroom for build quality, end of the market.
That's why you have Android users be 3-1 to iOS users but iOS users still are 80% of those actively web browsing from their mobiles. Because beside the "tech-enthusiasts that don't like Apple" (a small-ish market) Android also caters to the lower end of the market, people who could not care less about mobile browsing or "computer-like phones", and just use it as a glorified phone that they get for free with their low-tier subscription.
Please stop repeating false information with no source, it makes the rest of your post very difficult to believe.
http://gs.statcounter.com/#mobile_os-ww-monthly-201202-20130...
People either get confused, or just switch to whichever number is bigger to suit their argument, but people replacing a netbook with an iPad doesn't make Android phones worse to surf the net.
Try "North America", "Japan" etc.
As I wrote explicitly above, Apple goes for the higher end of the market.
So, global stats (which include third world or relatively poor countries) wont show the same things. Those regions buy far fewer Apple stuff.
Here are the US results from the very same source you gave:
http://gs.statcounter.com/?chart_type=line&statType_hidd...
What I said is backed up by multiple sources for the US. But even Globally (which I was not speaking of), they fair quite well, given the higher margins et all:
http://gs.statcounter.com/press/apple-and-samsung-displace-n...
marketshare.hitslink.com lists that they track "approximately 160 million visitors per month" to "40,000 websites" [1][2]
statscounter.com lists that they track "15 billion page views per month" to "3 million+ global websites" [3]
This seems to imply that there is a bit of difference in which traffic is tracked by the two, and that statscounter.com is probably tracking a larger share of global traffic. I'd be hesitant to say that marketshare.hitslink.com is 'more believable' - perhaps it simply tracks a subset of websites more similar to your own?
In addition, with statscounter.com tracking page hits rather than 'unique visitors' as marketshare.hitsink.com does, it seems to imply that each Android user would use their web browser more heavily than each iOS user?
[1] http://marketshare.hitslink.com/mobile-methodology.aspx [2] http://marketshare.hitslink.com/faq.aspx#Methodology [3] http://gs.statcounter.com/faq#net-apps
EDIT: Indeed, filtering statscounter.com by USA market only gives figures very similar to marketshare.hitslink.com:
http://gs.statcounter.com/#mobile_os-US-monthly-201202-20130...
I'd argue that the global stats are far more important than the USA only ones, but you're free to disagree! And just to try and tie this back to the original point a bit: all of these stats are a very long way from 80%.
I see you've discovered the writing of John Gruber.
You're contradicting yourself, there. Were pre-iPhone smartphones not smartphones? Were Windows Mobile 6 phones not smartphones? Where's your line? And anyways, Gruber's not talking about your personal definition of smartphone, he's talking about the commonly accepted category of smartphones.
Besides, what in Gruber's piece is factually inaccurate? You said his arguments "sound logical but are just wrong" but don't actually point out any inaccuracies.
I think he's roughly right about that. They created a new experience and that experience became necessary to sell advanced phones. The article talks about how apple pioneered the 'more computer than phone' over the 'more phone than computer'. That's nonsense revisionist history, there were plenty of 'more computer than phones' out there years before and the iphone was significantly behind some of them in terms of computer-like behaviour. What Apple did was create a swipe friendly experience that became mandatory. What 'smartphone' meant changed dramatically, to the extent that people don't classify phones that can run apps, browse the web, play mp3s, ssh into servers, etc as smart phones these days unless they have a swipe friendly UI.
To be honest though, I find the whole article pointless. I don't care about whether the media is using the wrong metric to call winners and losers in the 'smartphone' market. I'm not really interested in the media's view on this matter. I am interested in which phone is right for me, and it's not an iphone.
Yes. I see how if you redefine words to mean some bizarro new concept you have made the article is wrong.
Its also worth nothing that no-one gives a damn about 'handsets' (I.e. all mobile phones including dumb phones), except Apple boosters who can use it to make Apple stats look better, or Samsung stats look worse (since unlike Rim and HTC they make both in great quantities.)
So lets not get bogged down with such minutia. Lets just look at how phones are actually used by actual users. If they are used as smartphones, then they count otherwise if they're used as dumb phones then lets count them as dumb phones. So, how do iOS, Android, Blackberry, Symbian, etc usage statistics pan out?
Well, actually, it turns out pretty badly for Android. So yes Android leads in sales, but the vast majority of those are no more used as smartphones than the old Blackberries and Symbian phones. Also, they make their manufacturers no more money either. It;s only the flagship phones where any of the action is. So ok, if you want to rewrite the rules about what counts as a smartphone go ahead. Make Apple's day.
It's ridiculous that Gruber would complain about an exaggeration because the only thing he's ever been able to do is exaggerate and rationalise.
> "Samsung had 30.3 percent of the smartphone market in 2012, up from 19 percent a year earlier. Apple's share was 19.1 percent last year, up from 18.8 percent in 2011."
Gupta's general tone is eminently reasonable:
> "That onslaught, coupled with growing uncertainty about whether the U.S. giant can sustain growth in coming years, has contributed to a 30 percent decline in Apple's stock since its September peak."
I don't see a “Oh, how the mighty Apple has fallen” narrative - Gupta is commenting on the market's bet against Apple. If the market is really knocked off 30% of their value based on media scaremongering, you've got (a) a huge market failure, and (b) a sure bet in Apple.
Gruber's only contribution to the discussion appears to be hand-wringing about the way poor old Apple is being treated.
Your post was basically all of the assumptions Gupta made without any contribution to the discussion.
The idea that Apples original aims anything at all to do with the current state of the smartphone business is laughable. Apple's stock price is not based on the relative success versus their original aim. It's very much based on the projected future success of the company.
This is called spin. There definitely is a lot of crowing about "Apple's downfall" (which is certainly not true, and definitely premature), but Gruber reads more into the article than is really there. Tilting at windmills.
- Gupta was not talking about the stock market for the entire article.
- Business is about profits.
- Gruber is talking about Gupta's article which says Apple is failing in mobile.
- The stock market is basically sensationalism in monetary form.
- Apple hasn't announced any new products and that is hurting it's stock.
- Apple never announces new products before they are manufacturing.Except when he refers to the drop in their stock price - the entire basis for the "Apple naysayers narrative". Unless you think the opinions of a few business writers knocked off 30% of their valuation instead. Like some sort of epic reverse pump & dump? Hardly.
"Business is about profits."
Gee that's deep. It's also deeply misleading. Current profit earnings and forecasts are what drives the stock price movement. The only way you or I can profit from Apple are by purchasing shares where those predictions are priced in. If their profit forecast halves regardless of their relative performance vs competitors, I'm going to suffer as a shareholder.
"Gruber is talking about Gupta's article which says Apple is failing in mobile."
And like I said, Gruber misses the point.
"The stock market is basically sensationalism in monetary form."
Ah, so you don't like what the sharemarket is doing, so you dismiss it as "sensationalist". Don't kid yourself, you're not kidding anyone else.
And I'm not sure what the last two points have to do with anything, so I won't comment on them.
So yes, the stock market is very sensationalist when prices go up and down because of a lack of information.
One of Gruber's points is that Apple never had the most market share in smartphones. So they haven't lost anything in that respect.
But Apple had, and still have, most of the profits from the smartphone market, with Samsung coming in a distant 2nd, even now, at about half of Apple's iPhone profits. And the other vendors are losing money.
Movement of stock price is the metric that Gupta's audience is interested in. Apple's current profit margin is already priced in - a reduction in profit (via an increase in margin, loss of market share, etc) is as good as a loss, from the investors perspective.
If the market has bet against Apple, how come Apple's market cap today is double that of Samsung? In what universe is pricing a company as being twice as valuable betting against it?
The see the Android market share and thing Apple is doomed.
For some reason they forget that Apple never went for market share, and only addresses the more profitable (margin wise) segments of the market.
They also forget the bloody apparent fact that the same thing happens in the PC market. Is Dell or HP "winning" because they sell more units?
Imagine you're a VP over at Microsoft right now watching everyone rave about Samsung's profit figures and their utter dominance and you just want to scream "hello?! we also made $21 billion in profit last year, except we did it on 1/3 of Samsung's revenue! does anyone care?!" No, no one cares. Microsoft has already been relegated to the dust bin of history even though it's still alive and kicking, still one of the most profitable companies in all of human civilization, etc. Sure, they've ceded much of the initiative in tech to other movers, but they're very much far from dead and far from irrelevant.
Stepping into the world of tech punditry is a bit like stepping into a Target department store, except instead of seeing advertising and merchandise for holidays 2 seasons away you see companies declared winners, losers, or dead years ahead of their time.
What really annoys me is that people are talking about dumb stuff, horse race stuff. It's like sitting at the lunch table and overhearing how Johnny dumped Erika and is now dating Michelle or some such other riveting high-school gossip.
What's that quote? Small minds discuss people (companies). Average minds discuss events. Great minds discuss ideas.
Can we talk more about the ideas relevant to this massive second revolution in personal computing going on under our noses and less about which multi-billion dollar mega-corp is the most popular kid in school at the moment?
It's not a question of fanboyism. I completely agree with everything he's saying. I just don't understand why he needs to address that Android vs Apple day after day.
Am I missing something here? Does what blog X says about Apple or what magazine Y says about Samsung have any impact on the world whatsoever? John Gruber seems like a smart guy and I'm continuously baffled by his decision to devote so much time and effort to such a trivial matter.
He does it for page views. News at 11.
Two years ago, I knew maybe 2 people who didn't want an iphone. I now, personally, know perhaps 4 people who want one.
You think that isn't a fall from grace in the public opinion?
It is. It's a colossal blunder for Apple, and "once stood the undisputed leader of the smartphone arena, but ceded its crown to Samsung in 2012." seems a fair (harsh, yes, but under the circumstances, I think pretty fair) comment.
I'm not arguing with the points in the article; they seem quite reasonable (unusually so, for Gruber), but there's more to this story than 'how commercially successful is Apple'.