The iPhone was revealed five years ago today, although it would be another six months before it was made available to the public. That’s a very unApple way to do things. Typically, the company keeps its cards very close to its vest, right up until a product is ready to ship, or very nearly ready. In this case, Apple apparently figured the months-long FCC approval process was going to lead to leaks anyway. So why not tell everybody exactly what was up, then make them wait for it?
At the time of the big reveal, RIM was caught flat-footed:
The BlackBerry maker is now known to have held multiple all-hands meetings on January 10 that year, a day after the iPhone was on stage, and to have made outlandish claims about its features. Apple was effectively accused of lying as it was supposedly impossible that a device could have such a large touchscreen but still get a usable lifespan away from a power outlet.
The iPhone “couldn’t do what [Apple was] demonstrating without an insanely power hungry processor, it must have terrible battery life.”
Word is, the folks in Redmond thought the same thing at the time.
So here we are five years later, and pretty much every smartphone looks and works like an iPhone. The only significant changes to the original iPhone were the additions of GPS and the App Store. The former is a very nice convenience. The latter changed the way we use our phones, buy our software, and think about computing. iOS has gotten some lovely upgrades over the years, but nothing to really compare with the two biggies I just mentioned.
No, the iPhone screen hasn’t gotten any bigger or smaller. Nor is it likely to. If Apple thought a bigger (or smaller) screen worked better, then that would be the size they’d make. (Same goes for the 9.7″ screen on the iPad.) The form factor has hardly changed at all. In fact, the iPhone 4 and 4S aren’t merely indistinguishable, they look more like the iPhone 1 than the iPhone 3 & 3GS did. Materials determine the form, and for the moment, there’s nothing better out there than machined aluminum and Gorilla glass. When that changes, so will the phone.
In other words, Apple scored a home-run in its first at-bat in an industry filled with entrenched incumbents — who spent the next two years trying to copy Apple’s success. And they did it by copying Apple’s… everything else. Today, there is a report that by 2013, each Android phone sold could earn Apple $10 bucks a pop, due to copyright infringements and licensing fees.
As I’ve said before: Google makes Android, but Apple makes money.
The unanswerable question is: What comes next?
Apple believes — I won’t say “at its core” — in demolishing its own platforms. Steve Jobs famously said, “If you don’t cannibalize yourself, someone else will.” Apple introduced the iPhone at a time when iPods accounted for nearly half the company’s profits. And yet, iPhone included “the world’s best iPod” on it — for free. Just another feature of the phone. iPod sales have been in decline almost since. Meanwhile, Microsoft was launching the ill-fated Zune to compete with the iPod, while Apple was destroying the iPod from within.
So what does come next? How will Apple upend — I won’t say “its own applecart” — the iPhone? It hardly seems possible, but the platform is five years old now. That’s how old the iPod was when the iPhone was revealed.
Something tells me change is coming yet again, sooner rather than later. I don’t know exactly when. I certainly don’t know what. But I fully expect to be amazed and delighted by the magic of something insanely great.
I really hope they come out with a prepaid version of the iPhone. Even though it wouldn’t be totally radical, it should be a helluva lot cheaper, and considering that the prepaid Android options are pretty terrible, it should sell like hotcakes.
Iphone sells better than hotcake. Try to get a 4S. You can order yours at Apple’s site not earlier than 9:00 p.m keeping your fingers crossed that you’re not too late. Then you’ll have to wait in line to pick up your phone at the Apple store that your order is sent to not later than 6:00 pm the next day. You feel so lucky to get the phone for $200 plus a 2 years contract that you’ll shell out an additional $100 bucks to buy a warranty to get a new 4S in case yours is damaged by accident. The replacement costs $50 bucks.
A no contract 4S costs $645.
If Apple sold a prepaid iPhone, how would it be cheaper?
It’d be more expensive, since they wouldn’t have a carrier kickback and/or guaranteed income stream for two years.
Apple knows better than to sell like hotcakes at a razor thin margin.
Prepaid’s usually cheaper if your Canadian, as we have the worlds worst (and also most profitable) service providers.
Collusion, price-fixing, sketchy contracts, 3rd rate service, super low bandwidth caps, overcharging, hidden fee’s and sudden price increases are the standard business practices of the better Canadian providers.
If you like feeling not-raped and you’re in Canada, go with prepaid.
You can buy an iPhone from Apple and activate it with a pay-as-you-go-style plan from all of the major carriers.
The phone isn’t going to be any cheaper as it’s actually worth something, unlike every prepaid blister pack phone.
I’m not so sure it’s quite so close on the horizon, Steve. Look at the iMac. The current form-factor, essentially, has been in place since 2004. Yes, there have been some minor changes, but the main all-in-one form-factor hasn’t changed in almost 8 years. And there are no indications whatsoever that anything new is coming. It’s still a hot seller.
The iPhone’s form-factor is, as you’ve pointed out, just about flawless. It Just Works. Why mess with it? Besides, it’s not the external features that are important. The important upgrades are the power of the CPU, the radio chips (i.e., moving to 4G when the new power-efficient chips are released), and maybe Bluetooth.
Everything else is driven by iOS.
I could see a couple of innovations in the form-factor. If they can find a way to transmit pinpoint audio through the glass, and come up with a different form for the home button, then Apple might go with an edge-to-edge screen. I don’t know how realistic that is. Also, I think they may very well release a slightly larger overall phone. Combining ever-increasing pixel densities and a bit more overall real estate could make for an intriguing matchup. The only real issue with that is that it increases the workload on iOS programmers to account for different screen sizes. It’s amazingly easy to handle iPhone/iPod touch vs. iPad. Apple has done much of the heavy lifting to make turning an iPhone-native app into a universal app. But they’ll have to keep their eye on the ball if they want to increase the number of fundamental device types.
To get back to Bluetooth for a bit–I would love to see Apple drive a new standards process for making Bluetooth more effective. I’ve actually done a little programming that uses Bluetooth for data transfers. The ease with which it works is fabulous. But the reliability of the signal is pathetic. And I’m sure we’ve all experienced (daily!) the hassle of speaking to someone on the phone while using a Bluetooth earpiece. It’s a miserable and immensely frustrating user experience.
I would love to see someone invent a better mousetrap, or improve on the current one, and make near-area wireless communication a reliable process. As it stands, it sucks.
Direct brain implants. iPhones/Pods/Pads can get lost or stolen or dropped and broken. But with a direct brain implant (iPlant?) you don’t have to worry about those. And the materials used would be less, improving the margins on each one sold.
iPlant, it just works. ;-D
1. Apple buys a large multi continent based Telco ( or perhaps – a satellite
telco).
2. Apple remodels the Telco for one purpose – optimized for Apple platform only.
3. Apple pushes most of its platform to run within a cloud rather than the end user device.
4. Apple announces micro-thin device made of a flexible mylar like fabric which uses new Telco for both signal and power. No batteries, screen can be rolled up into a pen sized device and unrolled for maximum viewing pleasure in HD format. Uses Bluetooth connection only for sound. Weight – half an ounce. Connects the user to the new “Apple-web” anywhere on planet earth with T1 speeds for real time video connection.
5. Siri interface improves to the point that it becomes the primary interface for user access,fully eliminating the keyboard.
Hell, if Siri improves enough, we might be able to eliminate the user.
Intel predates Apple. Officially, it’s called water falling their products. But internally, it’s known as eating their young. Which got me thinking about operating systems. Parent processes spawn off child processes and then wait for them to die or outright kill them after a while. We are a gruesome bunch in the computer business…
Hey! I just noticed–what happened to the opt-out checkbox for the daily update? That pain-in-the-ass thing that I had to check every single freaking time I wanted to comment!
Is it gone? There were meetings about, but I usually reply to comments from within WordPress, so I rarely had to see the thing.
Seems to be gone everywhere on PJM.
Thank G-d.
The relative form factor size isn’t going to change much as a phone. Apple did extensive research into average thumb reach for single handed operation. Bigger screens mean bigger devices, means more distance and an effect on usability. At Apple’s core is usability. So I would never bet on them making something LESS usable (though it has happened… Look at the latest Newton models compared to their earlier brethren).
I’ve recently picked up a Samsung Galaxy Note. It has a 5.3″ display. It’s the best phone I’ve ever owned. My tiny little iPhone 4 is going to a niece, I can’t stand to use the little thing anymore. And, I should mention, I have “average” sized hands and somewhat short fingers.
So no, Apple is not always right about dimensions, not for everyone.
There has only ever been one model available. This is a problem for Apple.
I want that phone …just waiting for biz to pick up a little.
“I’m not dead yet!”
“Oh shut up, you’ll be stone-cold in a minute.”
iPod is 10 years old now, but you can still order one from apple.com.
p.s. Happy Bloggaversary, Stephen!
Happy blogiversary, you dawg!
Apple’s next magic trick is probably going to be a TV. It’s the only major consumer electronic they don’t do yet. TV’s are low margin business, but with iTunes to sell you the shows and movies and games, Apple will continue to print money.
Wait, did I say computer games? Yup. The newest mobile chips have the polygon pushing power of an Xbox or PS3. They can double that for a wall-plugged device for hardly any real money and now you’ve got a wall mounted unit that just needs a power outlet (because the video is streamed wirelessly from the router – no coax cables.
So that kills both TVs and game consoles for Sony. Sucks to be them. And Comcast is just a data pipe.
I don’t know that anything will replace the iPhone any time soon though. People like to call, text, and check Facebook while on the move. And the device they do that on needs to fit in a pocket. Pretty much the iPhone. I only expect processor improvements and minor software updates. They might come out with a cool feature or two though. Maybe your phone will recognize your face and voice and handle passwords for you. Siri will get better. The screen might get bigger. But more or less the same.
Happy Blogiversary, Esteban! It always gives me the warm fuzzies to see another OG blogger reach another milestone.
Steven, I love ya but as a tech analyst you make a great political writer. Your account of smartphone history could have been written by Apple marketing – its relationship to actual fact is tenuous at best. You’ve been *had*.
The iPhone, itself, copied design tropes from the Blackberry and (even more) from the Danger hiptop, what you might have known as the Sidekick if you had been paying attention around 2002. Apple innovated very little; most of what they brought to the party was slick industrial design and Steve Jobs’s ability to convince roomfuls of otherwise intelligent people that up is down and the Moon is made of Apple-branded Bondi-blue yogurt.
When Apple unveiled the iPhone in 2007 Andy Rubin and his crew had been working on Android for four years. Several of them, including Rubin, had been on the Danger design team and would have had good cause to complain that Jobs had plundered their ideas without credit just as thoroughly as he plundered Xerox Parc in the early 1980s.
But instead of getting mad, they got even.
Eric, and I say this with love, but you know better.
Prior to 2007, Android was a copy of Blackberry. The iPhone itself started off as a tablet design platform, until Jobs decided it might make for a good phone, if shrunk down. That goes back to 2003-04.
Google stole, and it shows.
In any case, Google makes Android, and Apple makes money.
In fact, Google’s position is so cripplingly defensive that it just spent $12 billion to acquire a second-rate Android OEM, just to keep a wedge on defending its search margins. Meanwhile, Apple is sidestepping Google in mobile search, by going to Yelp and W-A through Siri. Siri, still in beta, has me using my smartphone as… A smartphone.
Meanwhile, where is the killer Android app? Where are the huge developer profits? And what, pray tell, ever happened to openness? As we speak, the bestselling Android tablet is a sooped-DOWN 2.3 model sold by Amazon as a loss-leader. The Kindle Fire has some nice merits, but it exists mostly as an Amazon shopping device.
Back to the mobile space, for a moment. Judging by browser stats, the vast majority of Android buyers aren’t smartphone users — they’re price-sensitive touchscreen feature phone users. And that, in a nutshell, is why Google doesn’t make money with Android, and why Apple commands desire, profits, developers, and even more profits.
Apple stole, and it shows.
I guess you never saw a Danger device. It’s really irritating how thoroughly Jobs rewrote history.
Please, Eric — stop. As one of Android’s own developers revealed not too long ago, the GUI was grafted on at the last minute after the iPhone 1 reveal. That’s why, even with quad-core gigahertz CPUs, Android still can’t frickin’ scroll properly.
I’ve got to agree with Eric. Those of us who are not johnny-come-latelies to the computing world remember buying apps for our Palm devices on Handango twelve years ago. No, it wasn’t slick or “cool”, but decent 3rd party apps could be purchased cheaply. Pretending that the App Store is some great innovation is just plain silly, yet I see this mantra repeated in a lot of cultish Apple articles. Apple creates devices with marginal improvements to the user interfaces and slick packaging and can generate huge sales, no doubt. When the masses finally take notice, Apple is credited with “innovation” in an area that has been slowly evolving for many years with the help of many contributors. What a pretty package it finally came in.
Same thing happened with the iPod. I remember using a Diamond Rio MP3 player for a few years before the first iPod came out. All the time I was wondering why no one else but techies were listening to music that way. Then Apple created the iPod. It was better–easier to use–no doubt, and I preferred it to anything I’d owned before. But people were saying it was “innovative” and I couldn’t figure out why. I started researching. Finally it read that it was the “click wheel” that made it innovative. Uh… what? But the myth stuck. Kudos to Apple’s marketing department. Let’s hope the US can keep its edge in this regard.
To compare an unusable, POS Rio — as determined by the market — to the outrageously successful iPod — is to reveal a fundamental ignorance of What. People. Want.
There was no competitor to the iPod — none — until Apple itself undercut its own giant profit center by turning the iPod into a free app for anyone buying an iPhone.
Same goes for all these little features which happened to predate the iPhone ecosystem. Somebody got this little thing right, somebody else got this other little thing right — but nobody was able to put it all together. Nobody.
“…as determined by the market.” I am glad we are at least conceding the power of good marketing. People will buy filtered tap water if the bottle it comes in is pretty and says something about mountain glaciers and springs. My dentist tells me that tap water is failing. People drink it less, preferring the bottled kind, and he sees increased cavities from lack of flouride (it’s filtered out). I suppose it’s failure is also “determined by the market”, but that doesn’t make tap water any worse.
If I remember correctly, my Rio did everything the iPod did except show pretty pictures and protect copyrights with some weird new file format that was incompatible with our existing devices. The iPod was more expensive. Rio’s packaging wasn’t so pretty. And it’s true that the Rio didn’t have as much storage space. I guess we should classify the addition of storage space to any device as “innovation”. Call the Marketing Department! In a few years when we’re measuring storage in TB instead of GB, we can scoff at those dinosaurs who couldn’t put it all together.
Regarding the “free” iPod, I’m not sure that any company with Apple’s huge profit margins is really offering anything for free. Seems that people pay a pretty penny for these devices. But if the Marketing Department says you’re getting it for free, well then, I guess it must be true.
I have yet to see anything truly innovative that Apple has done. But I will concede this: There is something they are doing right with regard to software development and testing. Their stuff is more straightforward and definitely less buggy than other software I’ve used. The screens are prettier and simpler. But not groundbreaking. Someone in their organization is a stickler for details, and it shows. If there is true innovation, I bet you would find it in their internal business processes.
It’s late and all I really want to do right now is go to sleep. So I’m willing to concede that you have won. You and Rio and iRiver (I’m pretty sure that was a thing) and Network Walkman and PlaysForSure and Zune and that mostly-hypothetical competitor to the iPod Touch have all won, fair and square.
Happy now?
Sweet dreams.
This kind of spurious logic leads me to believe that Avatar must be the best film ever made.
“What people want” is often defined as “What other people want.” Apple’s key innovation is positioning their products as products that other people want. Classic exploitation of the hedonic treadmill.
However this type of emotion-driven “want” is largely resistant to contradiction by mere evidence, as we see here. For example, several years ago I purchased a cheap $50 MP3 player with an SD card slot. Amazingly enough, this little guy has outlasted two iPods (given as gifts by clueless relatives). It also stores more music than an iPod 4x its price, is smaller, lighter, and is much more convenient to add music to (I don’t need to install special software). Every vendor has a device that is far superior to an iPod in a price vs. features comparison, but clueless consumers just want the shiny status symbol.
Adjusted for inflation, the highest-grossing movie of all time is still Gone with the Wind — released when the American population was less than half the size it is today.
Now, we might argue whether GWTW is the best movie ever made — I’m partial to The Godfather, myself — but there’s no denying it is a very high-caliber film.
I rest my case.
I have an original 10gb iPod, click wheel, all that good stuff. There are no “pretty pictures” (as all that came on later models) but rather a brilliant and yes innovative interface that allowed the user to easily work the device with only your thumb, all in a slick package the size of a slim deck of cards.
And, like most Apple products I’ve owned, my iPod still works (granted I’m on the 4th battery); how’s that Rio holding up?
“I rest my case.”
What case is that Stephen? No one was arguing about which movie in the past 50 years earned the most money (and surely it’s nothing more than deceptive to point to ticket gross alone for movies that are as different as GWTW and Avatar, especially considering the entertainment market has changed so much in the time frame between then and now).
Of course your non-sequitur masquerading as an argument speaks to nothing when you’re comparing apples to apples, oranges to oranges, contemporary films, or handheld computer gadgets to each other. Which is exactly the point I was making — There are better options out there than Apple products, but they simply don’t have the marketing behind them that Apple products do.
1. Blackberry Storm, Nov 2008, which had a genuine ‘click screen’, which was acknowledged to be TIMM’s answer to the iPhone. Had one been current at the time, one might have remembered it’s arrival.
2. Andrew Rubin is at Google/Android, before that he ran Android, before that he was at ‘Danger’, before that he was at Apple (during the last days of the Newton). If one shops around, one can find explanations of the design decisions made for the original Android phone, which had to be ‘modified’ when the iPhone turned out to be not-the-same-thing. ICS may be the first functional Android release, if these problem have been repaired.
3. In the interests of posterity, the GridPad was and interesting and innovative piece of kit, but technology in hardware and software made it a bitch to use.
Cheers
Boeing stole the Wrights Brothers’ airplane.
CORRECTION:
“each Android phone sold could earn Apple $10 bucks a pop, due to copyright infringements and licensing fees.”
.
should read
.
“each Android phone sold could earn Apple $10 bucks a pop, due to [patent] infringements and licensing fees.”
.
Copyright and patents are fundamentally different although both are IP.
It is kind of like getting cricket & rugby mixed up.
You’re right, of course, and I appreciate the correction.
“Something tells me change is coming yet again, sooner rather than later. I don’t know exactly when. I certainly don’t know what.”
Did you get paid to write that? How prescient! How savvy!
Well, take a couple of line out of context and you do certainly sound like the Earl of Snark.
And yet, those couple of out-of-context lines are still more than you’ve contributed to the discussion.
But, ah — keep rockin’.
As you noted, Google makes Android, and Apple makes money. While that remains the case Apple need do nothing more than incremental improvements to iPhone. When the Android platform shows signs of being almost ready to encroach on Apple’s rice bowl, then Apple will release its next Insanely Great Thing.
I’ve got a feeling that, like Henri Seldon, Jobs had the next couple of gotcha products mapped out before he passed.
Not so sure about iPhones. Got one this last summer, and having a bit of buyer’s remorse. Probably my biggest complaint is that it is a closed platform. That means that you do things the Apple way, or take the highway. Plus, you need to take the iPhone into an Apple store if much goes wrong – like having 1/4 the battery life that my Blackberry had. Fine, if you live in a big city, and if you are willing to lock yourself into an appointment.
So, I wanted to have a telephone keypad with different colored keys so that someone who is sight impaired could dial with it. No go with iPhone, but relatively easy with Android. Ditto with changing the appearance. And, this last weekend, I was trying to help a 90 year old friend deal with her new iPhone. Her grandchildren had given one to her for Christmas. No go.
My point is that in the long run, I think that an open platform is going to win over a closed one.
We shall see.
With Jobs gone (again, and this time permanently) the era of “insanely great” is over. Look what happened the last time Jobs left Apple to its own devices (teehee, I made a pun!) : the company went very close to bankrupt, bailed out by Bill Gates. We shall see what the future holds when Apple is Under New Management.
Written on a Samsung Galaxy Tab 7, which I’ve compared to an iPad and found every bit as convenient.
What many people – and you, by my reading – fail to understand is that this is fundamentally a software business. This makes form factor and usability a short-term advantage that is often overcome in the next cycle by the competition. You said it yourself: “So here we are five years later, and pretty much every smartphone looks and works like an iPhone.” This is true except in one regard: Android is much more open and flexible than iOS. The possible reasons for this are easy to list: if you believe Apple, it’s tied to providing the best user experience. But at the end of the day so much of it is tied to defending Apple’s profits, or enforcing Apple’s anti-competitive policies (remember when Apple outlawed code generators because they didn’t want devs to re-use Flash code?). Apple will lose to Google (in market share, maybe not $$$-per-copy-of-the-OS-sold) for the same reason that they lost to Microsoft: because their policies are fundamentally restrictive, in a market segment that thrives on freedom.
There are things that these phones are technically capable of that the old-guard – the carriers, Apple, but NOT Google – are keeping us (users) from doing simply to protect their business models. The carriers want to sell you services – minutes, texting, data – when at the end of the day it’s all data. Do the math some time on the VoIP data usage for that ~500 minutes that AT&T will sell you for $40/month…if it was data, you’d be spending less than a dollar. When Verizon called me to discuss the first bill for my Galaxy Nexus (after having every iPhone on AT&T) the guy remarked that I had only sent 3 texts in a month, and I laughed. I had sent thousands of texts…after porting my phone number to Google Voice. I didn’t even have to tell my friends&family that I had a new phone.
I work in telecom as a software developer, and many people see flashy hardware with a flashy logo and think it’s a hardware business. It’s not. Apple’s losing the market share fight for the same reason that they lost it the last time, which should be hilarious to anyone with a proper view on the history of this industry.
What amazes me is that anyone views this battle as anything remotely like the Microsoft/Apple wars of the ’80s and ’90s. The differences are so profound that I won’t bore myself listing them yet again.
That’s only true if you think about this as a hardware business, but it’s not. From the software perspective: one vendor has a closed OS and a secretive approval process for 3rd party apps running on proprietary hardware, and the other vendor has an open OS that anybody can code for in any way that they like that can run on any hardware. Just because Apple’s profits come from selling you $180 of iPhone parts in a $600 box doesn’t mean that they can keep doing that just on the merits of the hardware. Make no mistake, Google is already winning the market share ware (just as Microsoft did) because their platform is more open and developer-friendly, not because the hardware makers that use Google’s OS used to make inferior hardware.
To solidify my point:
http://daringfireball.net/2010/04/iphone_agreement_bans_flash_compiler
“3.3.1 — Applications may only use Documented APIs in the manner prescribed by Apple and must not use or call any private APIs. Applications must be originally written in Objective-C, C, C++, or JavaScript as executed by the iPhone OS WebKit engine, and only code written in C, C++, and Objective-C may compile and directly link against the Documented APIs (e.g., Applications that link to Documented APIs through an intermediary translation or compatibility layer or tool are prohibited).”
There’s no valid technical reason for for an OS company to dictate programming practices, except that company A (who owns the OS) hates company B, who would like to use these processes to get some of their software on company A’s OS. Do you have a software development background? Do you know how this kind of thing reads to somebody who writes code for a living? Do you know how this philosophy biases developer types against this platform? And for what…just because Steve Jobs hates Adobe?
Apple used to have a clear lead on hardware innovation but they dropped the ball with the iPhone 4S – whose main new feature is a software innovation…that the iPhone 4 can run, but Apple doesn’t allow it to because that would keep people from buying 4S’s (surprisingly, not the first time that Apple limited previous-model functionality to satisfy the new-model marketing gods). The DPI for Samsung’s AMOLED screens is on par with the iPhone 4/4S, and the screen is a full inch larger. The iPhone 4S also doesn’t support 4G, which is a big marketing loss for them (any soccer mom with a brain knows that “4G > 3G”). And because of Apple’s product design cycle, they’re tied to the inferior 4S platform for a full year.
The iPhone’s days are numbered, but for much different reasons than you stated.
The “4″ is the case and the screen. The “S” is everything else. You mistake the case for the phone — but you’re not the first.
Anyway, Apple’s calendar Q4 call is January 24. And since we’re quoting Gruber, let’s file your comment under “Claim Chowder” until then.
“The “4″ is the case and the screen. The “S” is everything else. You mistake the case for the phone — but you’re not the first.”
Look at Apple’s marketing materials: the main marketing drive of the 4S is Siri (software). The 4 can run Siri – jailbreakers have proven that – but Apple doesn’t allow it to…because they’d sell less 4S’s. Screen DPI is unchanged, screen dimensions are unchanged. Camera resolution is up, storage is up (both standard things to increase in a new product cycle). The 4S now has a dual-core chip…like every Android phone released in the last 3 months. It’s still running 3G when every carrier is advertising their 4G networks and phones, and will be for a year. The 4S was not revolutionary from a hardware perspective, it was evolutionary, and their main new feature was software.
Once you start to understand that this is a software business, you will easily see where Apple is making the mistakes that will cost them this market segment in the long run.
C’mon back on the evening of the 24th, and we can talk all about dying platforms.
Oh I’m sorry, I thought this article was about Apple’s future and the changes that they need to make to improve their market share. If you’re going to use the “but look at their current sales figures and stock price” defense as maintaining the status-quo, I’ll switch to reading Yahoo Finance. I hope Apple’s board over-relies on the financials too, because nothing has historically motivated Apple to change software policy like a crashing market share.
Where did I mention market share? Apple makes money — more than half of all smartphone profits. You can’t engage in R&D with market share. Market share won’t secure materials or production lines. No employees will take market share instead of a paycheck. Profits determine whether a business survives to fight another day — and Google is billions in the hole with Android, shelling out $12 billion in a defensive play for a second-rate Android handset maker.
This is why the MS/Apple comparisons fall so flat: Apple makes money. They didn’t in the ’90s, and their turnaround since then is one of the great American business stories.
Dasani’s Q4 profits far outpaced those of the Metropolitan Water District. This is concrete proof that their product is superior and more innovative. Right. Would you like some Kool-Aid with your water?
One thing that remains constant in this discussion is that people with a technical background see innovation very differently from the layperson. I suppose part it lies in the fact that technical people are often early adopters, taking notice of new gadgets before the masses see them. I think it also comes down to our having some understanding of what the man behind the curtain is doing, while everyone else sees only the wizard.
I stopped reading when you compared high-tech wireless communications devices with water. Fortunately, that was just in the first sentence, so I was spared the rest.
Merci! Er… mercy?
It’s all good.
Wow, it was just a comparison to illustrate how starry-eyed people can get when they look at things superficially. Or is the term “starry-eyed” irrelevant because stars are exclusively the domain of astronomy and not high-tech gadgets?
If you are losing an argument, you should defend yourself, concede, or just bow out gracefully. Putting your fingers in your ears and yelling “nyah nyah, i’m not listening” is beneath a good blogger.
“Where did I mention market share? Apple makes money — more than half of all smartphone profits.”
You’re citing Apple’s financial success to augment your fundamental lack of understanding of this industry, as a way to dismiss any criticism of Apple’s policieis. How can Apple charge $600 retail for a new iPhone, but only $500 retail for a new iPad (a device that is 6 times the physical size, but functionally equivalent)? Do you think this has anything to do with the additional cost of the cellular components of the device? The entire iPhone costs ~$180 in parts, so that’s not it. This is how Apple makes those crazy profits: by selling you $180 of parts in a $600 box, subsidized by the wireless carriers. Is it any surprise that the iPod Touch – also functionally equivalent to the iPhone minus a few chips, but the same size – only costs $200?
Don’t equate profits to good long-term business practices. This is my fundamental point. The future of the wireless industry is this: converting everything you do – voice, texting, browsing – into data means that your phone could easily function within the ~$30 data plan that you’re purchasing now. I bet you pay a lot more than $30, don’t you? The technical capability is there, but the carriers are scared of it. Over the last 20 years, when have you ever paid less than $40 for a minutes plan on a major carrier? It’s just that in 1995 it was 30 minutes, in 200 it was 200 minutes, in 2005 it was 300 minutes and now it’s 500 minutes. The carrier still wants their $40, but the shift to bandwidth consumption – not service consumption – is going to kill the ~$70 cell phone bill.
Apple makes the vast majority of their money on hardware. When their hardware starts to become less desirable or innovative (I dare you compare the features on my Galaxy Nexus to the iPhone 4S), they will lose sales. The 4S was a disappointment of epic proportions: same small screen, no 4G support, and Apple’s going to have to live with that for a year. Android was already winning the fight by the time the 4S came out, it will be interesting to see the 4S sales numbers over the next 9 months.
But that isn’t what is going to cause Apple to lose, it’s their fundamental business approach. Our software, tightly controlled, running on our hardware. It’s a great way to preserve hardware profits…and a terrible way to grow your user base. It’s the same way that they lost to Microsoft in the early 90′s – PC’s were cheaper and arguably just as good, and a more open OS made Microsoft easier to develop for.
If your only argument here seems to be that past success is a predictor of future gains, then best of luck with that approach. I’ve cited several legitimate concerns in Apple’s hardware lineup and software policies, and you’ve attempted to argue knowledgeably against exactly zero of them. Have a drink, enjoy your profits call and sell your Apple stock, because their rise from 2000 to 2010 will look like the glory days compared to their fate for the next 5 years.
Favorite commercial:
String of Apple fanboys and fangals waiting in line outdoors at an Apple store for the newest gottahave release, distinctive and elitist white wires dangling from their ears. One guy is on his Macbook, preparing his “unboxing video.”
The crowd spies a woman at a nearby bus stop with a different phone and finds out it’s a Samsung that has 4G speed and a bigger screen.
The guy making the “unboxing video” says he could never use a Samsung phone because “I’m creative….”
Another guy in line says to him, “Dude, you’re a barista. You bariste for a living.”
Full disclosure: my wife and I both have an iPhone 4 and love them. They cost a bloody fortune to buy and operate, however, and the 3G network sucks. Then my nephew showed me his Android OS phone, matching me feature for feature (and then some, like an HDMI output and a kickstand.) There really are less expensive and very capable alternatives out there.
Totally agree with Koblog, re: the commercial and the hype/expense ratio. I’m also a techie who has been around long enough to watch the Xerox/PARC lawsuits, and to fiddle with MP3 files when NO ONE had heard of Linux, much less Android. I remember enjoying the anti-Orwellian 1984 commercial, but since then the company has acted every bit like Big Brother and co., and it continues to be a mystery to me what is the deal with the Apple koolaid drinkers. I was renting a car a couple months ago in Oregon, showing the agency’s employee my beautiful Samsung Fascinate. I told her it is mystifying why people go for something so expensive (especially these days), kind of like buying a limousine to go to the store around the corner. I noticed later there was a couple near me who both had the requisite white earbuds, standing ramrod straight and making sure they didn’t look in my direction. Sigh