Except Apple doesn't seem to care about achieving huge market share for the iPhone. They care about money, and by delaying the iPhone 5 they've managed to make even more money than usual. It must be habit that we go for the market share argument so often. A corporation's responsibility to its shareholders isn't to spread its logo across the land like a religion, but to return value (real dollars, not imaginary market share dollars) for their investment. That was slightly more ironic than I intended.
Besides, there are plenty of other "hidden" reasons for Apple to sue these Android handset manufacturers. Steve Jobs feels betrayed by Eric Schmidt, Samsung makes eerily close copies of the iPhone, Apple doesn't attack HP and RIM because this isn't about actual patent infringement but taking out the smaller manufacturers who can't defend themselves against Apple Legal.
Apple cares a lot about market share. Why do you think they keep bragging with statistics every chance they get? Being a leader in market share is very important for developers and it's important for customers, too. Also more market share means more sales - so more money and profit. Why wouldn't they want that? You don't think they cared about their market share with iPods, or their market share in the tablet market?
They may not care about market share at any cost, but they do care about it quite a lot. They may have said they don't care about market share in the old Mac days, but it's not like they could do much about it, so what else could they have said?
I'm an Android fan, but marketshare between Android and iPhone doesn't tell the whole story, at least for developers. I haven't seen numbers on it in a while, but iOS is much better for devs in terms of making money. iOS users buy more apps, and if you're developing to make money, that's pretty good deciding factor.
Of course, may not want to develop for Apple for other reasons (store policies, not wanting to get randomly rejected, etc), but I'd assume money is the driving factor for many.
Now, that isn't to say that Android won't be making good profits. It's just that Apple has a cash cow with their App Store's 30% cut (and now mandatory payments in app). Actual market share matters less, because that's not necessarily where they're continuing to make money.
I've owned 2 different iPod Touches over the past 2-3 years, and I've owned an Android phone for a year and a half. I've bought apps for both platforms.
The plural of anecdote is not data. There are apps worth paying for on Android. But for whatever reason -- maybe it's quality, maybe it's customer sentiment -- iOS users tend to spend more money in the App Store than Android users spend in the Market.
iOS may be more valuable to developers today, but if marketshare keeps developing according to the current trend, there will be an inflection point.
It's widely reported that iOS users are more likely to spend money on apps than Android users. Let's assume that the percentage of users spending money on apps for iOS vs Android is something like 80% vs 40%. For a developer this means, ceteris paribus, there need to be twice as many people on Android to make the same amount of money he would make in the Appstore.
If you look at marketshare trends, Android is slowly getting to the point where you stand to make as much money developing for Android as you would developing for iOS. In fact, if trends hold, there will be more money in Android than in iOS in the long run, making it the logical step for developers to jump ship (or at least develop for both platforms).
Apple cares about market share in two very different ways. Firstly, they care about it for the simple reason of making money on each handset sold. In that respect, those charts actually show Apple crushing every other smartphone manufacturer out there.
Secondly, they care about marketshare of the iOS platform because this is one of the determining factors in how much support a platform will get from developers. Here it could be an issue if the get swamped in volume by the Android platform. But marketshare isn't the only factor that helps developers make the choice to support a platform. Developers care about how much money they can make by developing on a given platform, and this is not determined uniquely by the marketshare. Other factors include discoverability of the developer's application by users, the demographics of the marketplace (are they users that tend to hand over money for a product, or do they prefer free stuff), and ease of development (how good is the SDK, how fragmented is the platform, how restrictive are the T&Cs of the marketplace).
In this second aspect of marketshare, Apple may end up losing out to Android overall. But firstly, that day is not yet come - when talking about platform marketshare, there are also the iPod touch and the iPad to toss into the mix, which changes the final numbers. Even when (and I do think it is a question of when) Android takes over as the leading platform, the factors outlined in the last paragraph mean that it is not an automatic given that developers will flee iOS for Android. Indeed, unless Android can claim more than 80% of the market, I would expect developers will show equal preference for supporting both platforms. We are a long way from 80% marketshare for Android, so I doubt Apple is particularly worried just at the moment.
Here's the thing, even if you grant the premise: Samsung copied the iPhone and iPad from top to bottom and Apple will win their lawsuit, I still think it looks fearful.
First, by suing, Apple has vouched for the quality of Samsung's products. It is the Windows look-and-feel lawsuit all over again. Right or wrong, Apple has just stood up and admitted that Android (or at least Samsung's take on Android) is "good enough". That's just a mistake and you only make it out of fear.
Now think about what a lawsuit says about what is going on inside Apple. Suppose Apple truly believes they have a kick-ass portfolio of next-generation products that will blow Samsung and the rest out of the water this fall. Would they really waste their time and attention on the complex, multi-theater, drawn-out, unpredictable war that suing Samsung is going to be? They aren't HTC, there is no hope of squashing them quickly (not to mention the huge supplier relationship). Or would they just say "eat our dust" and move onto the next thing (transitioning to new suppliers if necessary)?
Even beyond the lawsuit, there just seem to be so many recent examples of Apple signaling that they don't believe that they can win in the marketplace (e.g. the in-app purchase fiasco). To me, that smells like fear and a lot of it.
The Apple lawsuit doesn't vouch for Samsung's quality, quite the opposite. Their argument goes something like: Samsung is purposely copying iOS's appearance and iOS's products' appearances, creating confusion in the marketplace as to which product is the original HIGH quality product, and which is the LOW quality knock off.
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Your second argument is falsely premised on the idea of limited resources. Apple can easily have a good upcoming product portfolio AND pursue lawsuits. They are not resource-limited. They don't have to choose between lawsuits and good up-coming products.
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Being a huge multi-faceted corporation, it is difficult, in my opinion, to discern their motivation down to a simple, single human emotion.
That said, if I had to guess, or put myself into Apple's mind, I would focus on Jobs' thinking. In my opinion he isn't scared, he is offended. He views his products as acts of creation--as art--and here is someone aping his art, and poorly at that. This offends him deeply.
First, if Apple is suing Samsung over their alleged knockoffs, then they are good knockoffs, not bad ones. Apple loves bad knockoffs. Bad knockoffs enhance the reputation of their products by emphasizing how special and hard to copy they really are. Why would they even dream of shutting down the kind wonderful advertising that money can't buy?
Second, of course Apple is resource-constrained. Every company is resource-constrained, but the resources they are constrained by are not always the same.
In Apple's case, the resource that I suspect is most constrained is the time and attention of their top, strategic managers. That's why I find the Samsung lawsuit so telling. Unlike most of Apple's other lawsuits (e.g. HTC, Motorola), the Samsung lawsuit / situation drains a lot of that top-level time and attention. What are the drains?
We can start with the huge supplier relationship. What do you keep sourcing from Samsung? What do you transition? What are your contingency plans if Samsung pulls together a piece of technology you want (e.g. an iPad-size "Retina Display") before the supplier you are transitioning to does? And think of all of the negotiations, planning and so on that go on around this. These are all particularly important because one of Apple's key advantages over its competitors is how it manages and captures key parts of its supply chain.
Next, Samsung is a large, diverse technology company with a robust, complex patent portfolio of its own. You can staff out the analysis of the countersuits, but deciding what to do based on that analysis is a different kettle of fish. If there are problematic patents, how hard are they to work around technically and operationally? What sorts of unexpected legal developments affect not just the legal strategy but Apple's technical and/or business strategies as well (and what do you do about them)? What about depositions and testimony (see Larry Page and Oracle)? And by the way, Apple and Samsung don't just have a simple US legal battle going on, they are lawsuits going in something like 10 countries on 3 continents. The sheer number of moving parts in this mess is a problem by itself.
The more I look at the Samsung lawsuit, the more I see Apple spending a large chunk of their most constrained resource on it. I've drawn my own conclusions about what that means.
> Except Apple doesn't seem to care about achieving huge market share for the iPhone. They care about money, and by delaying the iPhone 5 they've managed to make even more money than usual. It must be habit that we go for the market share argument so often. A corporation's responsibility to its shareholders isn't to spread its logo across the land like a religion, but to return value (real dollars, not imaginary market share dollars) for their investment.
Citation needed. I'm just a dumb programmer but I'm pretty sure that Apple at 30% market share makes more money than Apple at 19% market share. Please edutate me if not correct.
Market is not fixed in place, when one factor changes, other numbers vary accordingly.
For example 30% of a total 100M units sold is roughly the same of 19% of a total 150M units sold. IF APU stay the same, it makes no difference financial wise to Apple. But to achieve 30% of 150M units sold, Apple may have to branch out another line of more affordable phones, it may have to give more control to the carriers, it may have to iterate on a faster pace than it is comfortable with, all of these would hit Apple's margin and equal things out.
With Nokia LG SE and Motorola in the red, Apple is now siphoning about 50% of industry profit at a market share of, what, 5% of all phones sold?
Which is not to say market share is not important, but it is not the utimate goal.
For now Apple's more urgent problem remains to be manufacturing capability, its fancy process or unique components always causes shortage upon new iOS devices launch and well into the second quarter, it almost forms a pattern (iPhone 3G/iPhone 4/iPad 2 etc). If the murmurs from Foxconn et al is to be believed the same backlog will happen to iPhone 5/iPad 3 again.
Yet reports seem to indicate Apple is planning on rolling out a "budget" price point phone [1], so they probably are worried about market share after all.
Apple is on a long term digital media dominance play. They want to be the one stop locked in shop for many people's music, software, video and books. Sure they'll continue to be interested in making good money on their hardware but their evolving iOS platform strategies clearly point to what they're looking forward to. And in that version of the world where content sales is king, market share means a whole lot.
These kinda rumors are literally a dim a dozen. I'll believe it when I see it.
Of course it is a perfectly valid strategy and Apple successfully implemented just that with its iPod line. Still the timing and implementation are everything. Handset market is clearly more competitive and turbulent, Apple is treading extremely cautiously.
A "budget" price point phone would be better understood in terms of market segmentation rather than market share; i.e. getting money from people who have a lower maximum price, now that they've gotten money from those who are willing to pay more.
If they wanted market share, they would have just led with the "budget" phone.
> If they wanted market share, they would have just led with the "budget" phone.
But Apple has a luxury brand, and a "budget" device would detract from that (even the lowly iPod shuffle fills a niche for well-off folks: it's small and sleek).
Budget in this context means pre-paid (as per the last earnings ). And I bet that iPhone will not be compatible with a post-paid plan (or vice-versa)... it will be interesting to see how Apple navigates this as they've been very deft at positioning new products in terms of their existing product lines.
If they want to maintain the same (or better) share of profits they must take market share. Smartphones are only 28% of the total phone market today. That is what the article is talking about; future growth potential.
That's not true. Expanding market share can mean selling at lower price points, which in turn means lower margins and potentially lower ROI. Moreover, the simple ways around this, like keeping older product lines longer, have risks in the technology sector not present in other areas. There's a lot of incentive to be not more than two models behind on mobile phones, not so much with cars.
I don't think the OP was saying that they'd definitely have to do so, but it's typically something companies do to increase market share generally speaking. Reduce price point means reducing profit margin, but often increasing market share because the lower price means more people can buy.
Apple typically hasn't done this (or certainly not to the extent other mfgs do) but certainly still like talking about their increasing market share.
Because you can now buy an Android phone for less than £100. If Apple want to compete with that they'll have to compromise on both quality and profit margin.
Right now Apple is only competing in the high end mid-sized slate smartphone segment. You're pointing out just 1 other smartphone segment that they could compete in, the lower priced segment. There are many ways Apple could compete. They could release 2 or 3 new styles of iPhones while retaining the same price.
Apple pride themselves on making the iPhone simple, and not fragmented. I can't see how they can do that and still release the iPhones in different styles, unless we're talking nothing more than different covers.
The massive market growth in smartphones is being caused by the smartphone becoming cheaper - if they want more of the market then they have to enter that area.
Very good question. For some reason having differentiation in the smartphone space is known as "Fragmentation" and bad.
Personally, I'd be very happy with Apple bringing out a wider mix of phones, but they seem dead against it.
Edit: Just seen your comment at the bottom of the page - I totally agree - Apple's lack of different options is probably going to go badly for them in the long run.
To make development easy and to make it easy create good user experiences across all iOS devices. None of their iOS devices have multiple versions in a single product cycle.
If you really think they don't care about market share and money or being the top dog, you're wrong and they've fooled you. That's their number one concern, they're a business.
Indeed they are the business. Business means making money not market share. That post misses one small graph: the profit share of Apple in mobile space.
But the reason they're currently able to extract the profit they are from the market is that they've been able to build an aura as the only true 'premium' quality device, in some people's mind I've no doubt the only device of its kind.
That isn't sustainable. Both awareness and quality of competitor devices (primarily Android) is rising, and if unchecked will become a truly serious competitor to Apple. Who are then left with a premium but niche device that's incompatible with the software base of the largest platform and more expensive, and they're left selling look, feel and image over functionality for a premium - otherwise known as the 1990s MacOS strategy.
This leaves them two alternatives:
* Try to remove competitors from the market to protect your position and so margins. This seems to be the current 'patent war' strategy.
* Start trying to compete on volume. Low-end devices to get customers into the iOS ecosystem, price competition on the premium devices. It's working with tablets after all, where the major competitors to the iPad are still baffling me by producing half a netbook's components for twice the cost rather than merely 1.5 times the cost as Apple have. Problem, though, is that the whole market volume strategy increases costs and workloads, decreases margins and starts chipping away at the premium image.
Short answer: I don't see how Apple's current strategy is sustainable in the long-term. If that revenue graph is accurate, I'd be shorting Apple's stock.
That's the picture today with smartphones accounting for 28% of the total phone market. If Apple's market share doesn't keep up with smartphone adoption their profit % will go down. That's simple math. The notion that Apple doesn't care about market share is absurd.
Right, but we have to limit ourselves to the upper segments of the smart phone market. If we include the cheapo Androids when talking about smart phones then Apple's relative market share may very well drop in the coming years (unless they come up with a lower-end iPhone but even a low-end iPhone would probably not exactly be low-end).
But I agree that they cannot afford to lose ground to HTC, Motorola, LG and Samsung's high-end phones.
I don't think you understand the math there. Unless competitors claw their way up to Apple-like margins, market share (or share growth) will decline much faster than profit share will. Even if profit share declines, that doesn't mean that actual profits decline.
With a market cap of 23.06 billion, Samsung isn't exactly a small company. I think Apple is going after companies where it believes it has a significant chance of winning. Whether you believe software patents are a bad idea or not (I certainly don't like them), Apple has aggressively patented a lot of key features in iOS and it seems that many Android handsets are infringing.
Apple has aggressively patented a lot of key features in iOS
and it seems that many Android handsets are infringing.
Seriously? Did you consider spending maybe a few minutes looking at the patents Apple is asserting in these lawsuits before forming your opinion?
To take the current example that drives me nuts, the 2 (of 10) patents Apple asserted against HTC that were "upheld" (air-quotes specifically intended) as part of the initial determination at the ITC are from the 90s (94 and 96, IIRC) years before anything innovative meaningfully related to iOS was a gleam in anyone's eye.
Even better, as asserted by Apple, Hacker News is infringing on one of those "upheld" patents when it turns this text into a clickable link: http://www.google.com
Apple's lawsuits have only an accidental (at best) relationship to any IP that is part of iOS and nothing to do with any key features of iOS whose related IP Android handsets might allegedly be infringing. Instead, Apple rummaged around in their archives to find everything halfway-plausible that they could throw at their Android competitors. It may be understandable business and legal strategy, but it is also deplorable and the patent system needs to be fixed so that it is not exploitable in this way (as well as many others, of course).
Well I think your figure is wrong. Samsung is huge. Samsung Electronics has a market cap of 253 trillion won or 240 billion dollars[1]. The group's 2010 revenue was 201 billion dollars or thrice as much as Apple. They aren't big, they are absolutely huge.
As a former iPhone-owner gone (Samsung) Android I resent that comment. iOS is a one-dimensional, inflexible and locked down platform which bored the hell out of me and this was the primary reason I went over to Android.
Android and Samsung's phone (the Galaxy S, which I have and which they are sueing for) is nothing like the iPhone and every single day I'm very happy for it.
The article is well written but fails to point to any one particular phone that carries all of these iPhone similarities. A customer only buys one phone at a time.
To be fair, they look like any other smartphone which is black and has a touchscreen. Apple cannot be granted a patent on being black. Not even black with rounded corners. That's not how the world works.
And if we dig deeper, behind the PR-piece which Apple seemingly is winning (here on HN at least), lets compare the iPhone to Samsung F700, introduced in 2007, before the iPhone.
I mean... It may not be all black and white, but lets not grant Apple a blanket-right to make rounded, glossy things and assume everyone else is stealing from them.
But that's the thing - Apple isn't trying to prevent anyone else from using rounded corners. Apple's claims in that suit are pretty specific, especially if you look at the similarity of the icons.
There are countless ways to represent an idea on an icon. Google, HTC, and others chose to go their own route - For TouchWiz, Samsung copied Apple's icons with slight modifications.
Also, the story about the F700 is inaccurate. SlashGear debunked it, pointing out that it was, in fact, announced after the iPhone was revealed in January 2007[1].
Nilay Patel, an intellectual property lawyer, wrote about the F700 too[2]:
> In many ways, the F700 does nothing but underline Apple’s overall contention: that there are thousands of ways to design and package a phone interface, but Samsung chose drop its differentiated interface and instead lift elements of Apple’s style for TouchWiz. I don’t think anyone would use the F700 interface and think it’s an iPhone, and I don’t think anyone using the iPhone today is thinking about the F700. But do people see TouchWiz and think “oh, that’s an iPhone?” That’s the most important thing when it comes to trade dress and trademark: what brand does the average consumer associate with certain design elements, phrases, and words?
IPhone does not have navigation elements at the bottom of the screen. It adds a text description under the elements vs. the top. It includes status information as ribbon across the top and does not plaster their logo on the screen anywhere. Also, none of the icons look similar, their screen is significantly diffrent shapes and even there buttons have different shapes. And most importantly I think the number of people that would confuse the two is tiny.
Not to mention one was released in Febuary and the other with a clearly better interface was released four months later.
Design patents and trade dress protection can indeed protect the look of a product, even a color from use by competitors, e.g. Tiffany's defends its "robin's egg blue" color used to sell jewelry: http://www.scribd.com/doc/102788/tiffany-v-ebay-III
I too think these kind of lawsuits are boring as hell, luckily there is a system to sort it out, it may not be perfect, but that's what we've got and a whole lot better than a flamewar.
It's just how things supposed to be handled, Apple and Samsung are all big boys. We as costumers really should not be bothered with their petty squabble to be honest. Nothing drastic will come out of this case.
I don't see Apple being fearful to be honest. They are still growing like crazy and they are serving a somewhat different market than Android is. You simply don't buy an iPhone because you want 'some phone'.
This is not to say that an iPhone is better than some Android phone, but this is certainly perceived to be something different than 'the rest' by most of my friends and colleagues.
They are serving a different market, and I've seen less demand since Android came out. I know at least a dozen people who have Android phones (that are quite happy with them) off the top of my head, and I can only think of two who own an iPhone. The Android people don't want iPhones, but the iPhone people look jealously at Androids.
This isn't a "techy" group either, it's mostly regular 20-somethings.
The best Android devices may be as good or even better than the best iPhones but the worst Android devices are much worse than any Apple device has ever been.
I say this as the not-very-proud owner of a Samsung Galaxy Europa in addition to my iPhone and iPad.
The Samsung Galaxy Europa is cheapest entry level Android phone I've seen - where I'm from the i5500 can be picked up for about €70-100. I have one and it cost 1/5 that of an iPhone and is a pretty competent Android phone. For the price it's great value in my opinion and as far as I'm aware Apple makes nothing in that price range so I can't see how you can make any sort of comparison.
YMMV Note that I am not comparing it directly to my iPhone but to the previous Samsung non-smart phone I had which I lost, which was just a basic phone. I'd honestly rather have a basic non-Android phone than the Galaxy Europa.
I work in software development. Almost everyone in my department has Android-phones bar a few self-confessed iAddicts (and one daring Windows phone 7 beta-tester). Despite its huge commercial success, the iPhone is among my peers considered a rather lulzy thing and a the undisputed weakest and least sophisticated of all the mobile platforms when measured on its own merits.
Not saying this is absolute truth either, but it certainly shows that your comment about what "most" people might think certainly doesn't ring true universally.
I also work in software development. Among my colleagues there are a mix of iPhone & Android users, but the divide seems primarily related to cost with the juniors much more likely to own Android.
I've played with a few Android devices and they're ok but to be honest, the whole thing seems to be playing out just like 90s Mac vs Windows, with Android users insisting iOS is a toy and iOS users berating Androids unpolished interface.
For me it always boils down to the same thing, if you're willing to accept the constraints imposed by the products designer, Apple stuff is the best out there.
> the undisputed weakest and least sophisticated of all the mobile platforms when measured on its own merits
This is fairly obviously not true. The iOS SDK is still widely considered the benchmark for people that work cross platform. It doesn't really matter that your developer friends think on the relatively technical merits if they're no more informed than the average Android user.
Just replying to say how you are confirming my point either you intend to or not: What people think about different things differ, and there is no "universal" consensus about most things.
Like there is no universal consensus on the iPhone being "better" than its Android rivals.
I guess we somehow agree even though we seemingly don't.
the undisputed weakest and least sophisticated of all the mobile platforms when measured on its own merits.
Oh my fucking God, please. I wasn't sure before, but you just outed yourself as a huge Google -fanboy.
Yeah what's Apple's platform got going for it? -It just changed the whole industry and showed How It's Done. It's also regarded as technically very solid, and pleasant to develop for.
The iPhone did change the industry and it is technically very solid. However, it is NOT pleasant to develop for.
Having developed private apps for iOS, Android and Windows Phone 7 I personally find Windows 7 to be the best platform for development, with Android a distant second. iOS is by far the most painful dev platform of the three.
Unless you really like programming like it's 1985 (a not insignificant number of people really do), in which case it's great.
It's 2011, and iOS developers are somehow persuaded to accept a crude imitation of Smalltalk and waste time on "do I need to box this int in a NSNumber?" and "did I get a SIGSEGV because I called [super dealloc] before [field release]?", when the first Smalltalk implementation handled this minutiae automatically on less powerful hardware nearly forty years ago.
It just changed the whole industry and showed How It's Done.
I may not like your tone, but if nothing else you are correct about this point. Apple was clearly the company who made everyone else understand that delivering a good smartphone involved good software in addition to hardware and that good hardware alone was worthless. For this they deserve recognition.
That being said: They created a platform, a very simple and limited platform, which worked adequately for people of limited needs. And for an initial release it was absolutely stunning.
That said, this does in no way translate into a platform which ages and evolves well. My complaints are mostly in this department and this is where I think Android is (and will remain) miles ahead of iOS.
Jobs played up the IP that went into the iPhone at its launch and (paraphrasing from memory) vowed to defend it vigorously at the time, well before a single Droid or Galaxy S or iPhone shipped. I'll dig through the WWDC transcript if someone forces me ;). They knew that they'd be copied, presumably by low-cost imitators as their products have always been imitated, and were always prepared to use IP law to defend their advantage.
I'm not agreeing or disagreeing with this strategy, but Apple saw these market pressures coming a long time ago.
I recall that as well, but I think this article is still valid, because it speaks to Apple's vigor in enforcing them, as much as anything. I'm not going to say Apple is desperate yet, but I think that Apple foresees that desperation if they don't very actively pursue anything and everything.
For once I totally agree. You must also add, that the vast majority of people are price sensitive and do not really care if they use an Apple, Samsung or HTC device. A lot of people around me bought the iPod (not iPad) because they were the cheapest and nice looking at the same time.
Look around you at people having a decent normal job, kids, a house to repay, etc. At the end of the month, not a lot of money left for the high end Apple stuff. These are not even the majority of the people.
In Europe, basically you have 30% of the people paying no taxes because no money, 30% with money but in fact nearly nothing left at the end of the month and 30% with extra (here I am generous).
The iPhone is selling good in Europe only because it is subsidized by the mobile operators.
So, if you continue following this line, this means that at least in Europe, Apple will simply not be able to grow past the 30% mark if not subsidized by the operators.
Then you hit the last problem, the iPad is seen as a "big" iPhone by people. They use it in addition to a normal computer and buy it with a contract.
Now you have Apple, depending for 60% of their income on hardware which most of the time requires the help of the mobile operators to be sold.
This is not an easy position to be in. I do not own any Apple device, but I thank them for what they do, because they drive the general quality of the smart phones up.
People have been predicting Apple's death by the commoditization of consumer electronics since before Jobs' return. It hasn't happened because their expertise in both hardware and software is unparalleled and they have a sterling quality reputation, meaning they will always come out with cool products first and sell them in quantity.
People forget that they're not afraid to disrupt themselves either. If they can create a great $500 tablet, don't be surprised if they can make a great $200 unsubsidized phone if they think the competition demands it.
In a different context, I remember "Redmond, start your photocopiers!" That's Apple knowing they were going to be copied, but being supremely confident that it wouldn't matter because they'd stay far enough ahead anyway. I don't think I've seen that particular side of Apple in a while.
I don't see the change of character. They encouraged the prosecution of a journalist for getting his hands on an iPhone before release, they sued several mp3 manufacturers for copying the iPod's look and feel (wonder why you didn't see other mp3 players with clickwheels on US shelves?), they were similarly aggressive (albeit not litigious) in blocking the non-threatening Pre from accessing iTunes, they've been fighting toe to toe with content companies since iTunes debuted, they've routinely cornered the market for critical components (small hard drives and flash memory, most notably) for the better part of a decade. This is a company that's played hardball every day for as long as I can remember.
The main difference here is that the stakes are higher.
I absolutely agree that Apple has always played hardball. There are, however, different kinds of hardball you can play. Back in the day it was laughing, confident, grinding down and humiliating the competition because you were just that much better.
Today... it looks more like the desperate, defensive hardball you play when you're backed into a corner. Throwing everything out there because you feel like you have to, rather than stepping back and focusing, first and foremost, on winning.
I think that if apple were concerned about market share, iPhones would be on every carrier, there would be more iOS phones available and the pricing would be more competitive. I think that they are more happy to be a 20-30% market share with a semi premium product than a commoditized less capable product. The reality is that apple will never be able to compete with hardware vendors that crank out good-enough phones with a cheap yet very capable OS on them. I don't think they want commodity products in their line up. I also think that they may feel similarly to what steve jobs said about Microsoft in the 90s. For apple to win, google/android doesn't necessarily have to lose.
As for the litigation, I don't know that it is necessarily tied to the fact that android has taken off so well. Like it or not, most hardware vendors use apple as a hardware benchmark, so copying their products is inevitable. I would not want to sit idly while other people make knockoffs of my products either.
As a almost exclusive Apple product user I am happy with Apple having about 20%-30% market share in major category it is competing as well. (Mac may never reach the goal, but then again as long as it is doing well.)
I'm uncomfortable with iPad's share to be honest, it's not healthy.
There we go again. Market share. Author did not even bother to consider, at whose expense Samsung and HTC are gaining said share. Apple did grow too. Now 47% of their revenue comes from the product which was launched into the market where Apple had zero marked share and was laughed at for even trying. Another 21% comes from product which did not even exist 1.5 years ago.
Um, no. He pointed out that as the smartphone market grows (at the expense of feature phones, probably), HTC and Samsung are riding that wave much better. It's not horribly surprising, since Apple's product is not likely to be immediately affordable to many of those switching from feature phones, but as the smartphone (and eventually tablet) market becomes commoditized it is not a given that Apple will be able to successfully uphold their profit margin by charging relatively high premiums for their value proposition. Of course they might do just that, but that is not something we can take for granted.
From the article, HTC's market share growth in the given interval was 4%, compared to Apple's 3%. Considering they achieved that growth on significantly lower margins than Apple (and consequently much less revenue growth), I don't think it's reasonable to claim HTC are riding the smartphone market growth much better than Apple.
Samsungs 10% growth is more impressive, but again was achieved with much lower margins. Apple could afford to cut their margin significantly if competitive pressure forces their hand, and unlike RIM they have a product which is high demand.
Percent is not the same as percentage points, you know. Growing from 6% to 10% is actually a growth of 66% percent, which sounds much more impressive. Fair point about the margins, but the fact is that Apple's entire business model is built on ensuring their margin stays high by charging large premiums for products that are clearly better than the competition. This is not guaranteed to last forever. The other companies on the other hand are used to living in commoditized markets with razor thin margins. I'm not saying Apple are doomed, but they clearly cannot just write the whole competition off, and they obviously aren't.
Sure, but by a similar logic going from 0.1 to 0.2% represents 100% growth.
But yes, I agree that Apple are very aware of the competition and the pitfalls of potentially losing marketshare. It would be silly for them to be otherwise. I just don't thing they're running scared yet in the way the original article infers they are.
There we go again. Market share. Author did not even bother to consider, at whose expense Samsung and HTC are gaining said share. Apple did grow too.
Fair point, but Apple's growth is clearly in a decline compared to earlier years.
And once the established smartphone market stabilizes at something with Android clearly in the lead (like 80% Android and 20% iOS) which platform do you think will get the attention of developers? Which platform do you think will get the apps first? Which platform do you think will get the exclusive apps?
If (and I say if) the divide gets big enough for these kinds of mechanisms to trigger and start playing in, iOS as a platform will slowly but surely lose users, and have the process reinforce itself until the platform wither off and dies.
So in that regard, while market share isn't everything, it is still important for lots of other strategic concerns which most certainly are.
> And once the established smartphone market stabilizes at something with Android clearly in the lead (like 80% Android and 20% iOS) which platform do you think will get the attention of developers? Which platform do you think will get the apps first? Which platform do you think will get the exclusive apps?
Having just built an iPhone and Android app, it won't be 80/20. It'll be 20/15/25/20/20. Our iPhone app works essentially the same way on all iPhones/iPod touches. Our Android app was a horrendous bear to test - lots of "on one device it does this, on another device it breaks" from our testers.
The author makes the mistake of equating market share with revenue - it is quite possible that Apple's 19% market share is makes more for them than Nokia at 24%, or even Nokia at 40%.
The author is arguing potential revenue and not relative revenue. From that point of view a 30% or 40% market share for apple would indeed be more revenue than a 19% market share. If these other companies are growing much faster than Apple, even if they are making less, that's revenue Apple isn't gaining.
Android's need isn't Apple's fear. Android's need is high market share, Apple's need is user engagement/entertainment (not market, as flash and so on 'badly' prove). Apple do perfectly well with low market share, I wish they wouldn't bother trying getting any further but when you make something so good you can only do so much to keep it out of the hands of some people.
What I don't get is why they aren't offering choices of different handsets. They offer 4 different versions of the iPod and 1 version of the iPhone. There should be at least 3 iPhones - the standard version, one with a 4.3 or 4.5 inch screen, and one with a slide out keyboard.
That is called fragmentation. It's hard for devs to optimize their apps to look good on different resolutions or aspect ratios. Even making your app to look & work "well" on both portrait and landscape modes is hard (by well I mean pretty, slick and sound).
Consumers have chosen fragmentation and rejected sameness. We're never going to live in a world where everyone carries around the same phone with the same resolution and all the same features. Devs, of which I am one, have to conform to reality. Apple and other platform companies have to make it as easy as possible for their developers to create applications that work on multiple resolutions (separate .xibs for iPhone and iPad is not the way), but their #1 concern is their customers, and if their customers want different styles (I think they do) then they should provide them.
It's somehow worked out for the incredibly fragmented Android environment. Their method of creating images that specify which parts of themselves can be safely stretched (NinePatch, http://developer.android.com/reference/android/graphics/Nine...) is a pretty neat technical aid for that situation.
Samsung and HTC aren't eating Apple's lunch, they're eating Nokia's lunch. The author notes that makers of Android phones are gaining market share faster than Apple, and assumes that this will eventually mean taking market share from Apple, but that's far from given.
Apple is not afraid of Android any more than Porsche is afraid of Ford. They are targeting effectively two distinct markets.
Android doesn't do a great job of competing at the high end of the market outside of tech nerds. Seriously, the one year old iPhone 4 is still outselling even the newer Android phones on Verizon and AT&T.
What Android is killing is becoming the default smartphone at every price range with every feature set you can imagine. Android covers all the smartphones that iPhone doesn't. iPhone isn't for everyone, Android tries harder to be. Android is much less focused as a platform than iOS.
Android is going to keep working hard to be upmarket, and iOS is going to keep working to go downmarket with prepaid devices, more iPod Touch type devices with 3G or GPS or both.
As a developer I just care about getting paid and in my experience people on iOS are more willing to buy my apps. Android users tend to be cheapskates. This can and will change at some point, but Apple is doing better now than they ever have. I doubt they are truly afraid of much right now. They are executing better than ever before.
You sound a bit biased. There is love for both iOS and Android in and out of the "geek" community. My dad who is far from a geek has owned an iPhone and iPad. Now my mom owns them both and he owns a Droid X and Xoom.
Come on, man. Stop riding around on your inflated high horse. There's no platform war here for you to win, you ridiculous anti-Apple crusader wannabe. These actors all in the same boat, knee-deep in shitty lawsuits coming from all angles. And, remember, Apple fervently stressed the breadth of their IP portfolio of the iPhone long before Android showed up, along with promises to defend it.
Besides, there are plenty of other "hidden" reasons for Apple to sue these Android handset manufacturers. Steve Jobs feels betrayed by Eric Schmidt, Samsung makes eerily close copies of the iPhone, Apple doesn't attack HP and RIM because this isn't about actual patent infringement but taking out the smaller manufacturers who can't defend themselves against Apple Legal.