Apple's App Store Still Number One in Revenue Despite Google Play Growth

Michael Scrip said:

Apple sold every iPhone they could. They made as much money as they could.

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The market disagrees and so does Apple. the 5C is proof of that. Of course they "didn't hold anything back" but there's clearly an argument they could have been more agile and more quick to adjust their product offering to be more budget conscious (largely Chinese) consumer.

The US market wasn't saturated, they were very successfully drinking from the fire hose. Now it's saturated and the market is expanding into areas where Apple is less competitive.

Of course you're seeing the same thing happen in America too, just to a much smaller extent.

absurdamerica said:

The market disagrees and so does Apple. the 5C is proof of that. Of course they "didn't hold anything back" but there's clearly an argument they could have been more agile and more quick to adjust their product offering to be more budget conscious (largely Chinese) consumer.

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Of course there's an argument to be made. Doesn't mean it's the right argument!

The US market wasn't saturated, they were very successfully drinking from the fire hose. Now it's saturated and the market is expanding into areas where Apple is less competitive.

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And, coincidentally, now that it's "saturated", Apple is coming out with a lower cost model. Seems almost like they planned it that way.

Of course you're seeing the same thing happen in America too, just to a much smaller extent.

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What are you referring to? I don't see much that the US market has in common with the global market.

absurdamerica said:

The market disagrees and so does Apple. the 5C is proof of that. Of course they "didn't hold anything back" but there's clearly an argument they could have been more agile and more quick to adjust their product offering to be more budget conscious (largely Chinese) consumer.

The US market wasn't saturated, they were very successfully drinking from the fire hose. Now it's saturated and the market is expanding into areas where Apple is less competitive.

Of course you're seeing the same thing happen in America too, just to a much smaller extent.

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We're still waiting to see if the iPhone 5C is actually a "budget conscious" phone.

It may sell for $399.... but that's still nowhere close to the smartphones that sell for $79 around the globe.

The iPhone 5C may be the cheapest iPhone ever sold... but it will be far from the cheapest phone on the market.

The smartphone market is from $79 to $799

Apple only chooses to focus on the top half of that. Is that wrong?

There are plenty of crappy $79 smartphones being sold... but they're not making any money. There's a reason Apple avoids that particular market.

The iPhone 5C, if a real product, is still not down in that market.

BaldiMac said:

Of course there's an argument to be made. Doesn't mean it's the right argument!



And, coincidentally, now that it's "saturated", Apple is coming out with a lower cost model. Seems almost like they planned it that way.



What are you referring to? I don't see much that the US market has in common with the global market.

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The US market was saturated a half a year ago. That's a long time in Smartphoneland.



Apple's marketshare and share of profits are declining in the US as well I believe.

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Michael Scrip said:

Apple only chooses to focus on the top half of that. Is that wrong?

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If you want to continue to grow your business and there aren't any new customers left in that price range, yes it is.

absurdamerica said:

The US market was saturated a half a year ago.

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That's an amazingly arbitrary statement without evidence to back it up.

That's a long time in Smartphoneland.

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Combined with a platitude.

Apple's marketshare and share of profits are declining in the US as well I believe.

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Nope.

http://www.comscore.com/Insights/Pr..._2013_U.S._Smartphone_Subscriber_Market_Share

If you want to continue to grow your business and there aren't any new customers left in that price range, yes it is.

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And yet Apple has continued to add new customers at that price range.

iphone is the most popular phone in the world, iphone is the most selling phone in the world, how can you expect it's app store revenue to fall below android's

Klosefabrinio said:

iphone is the most popular phone in the world, iphone is the most selling phone in the world, how can you expect it's app store revenue to fall below android's

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Sure. Keep it up buddy! Just keep it up.

absurdamerica said:

If you want to continue to grow your business and there aren't any new customers left in that price range, yes it is.

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Until every person in the world has an iPhone... Apple will always have new customers.

I would be curious to know this: out of the over 200 million smartphones that were sold last quarter around the world... how many were $450 and above?

There's still plenty of money to be made in that upper-tier price range. It's not like all of a sudden people stopped buying $600+ flagship phones.

Michael Scrip said:

Until every person in the world has an iPhone... Apple will always have new customers.

I would be curious to know this: out of the over 200 million smartphones that were sold last quarter around the world... how many were $450 and above?

There's still plenty of money to be made in that upper-tier price range. It's not like all of a sudden people stopped buying $600+ flagship phones.

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Of course not, but many of those people are repeat customers upgrading which is fine as those sales are just as real as new customers. It's the reason Apple has done as well as it has in America, people spend more on their phones here, especially with the subsidy/contract model in place.

Human beings will spend 450 20 dollar at a time no problem but 450 out of pocket is a lot different psychologically speaking so it make sense that Apple is struggling in places where phones are bought out of pocket.

absurdamerica said:

Of course not, but many of those people are repeat customers upgrading which is fine as those sales are just as real as new customers. It's the reason Apple has done as well as it has in America, people spend more on their phones here, especially with the subsidy/contract model in place.

Human beings will spend 450 20 dollar at a time no problem but 450 out of pocket is a lot different psychologically speaking so it make sense that Apple is struggling in places where phones are bought out of pocket.

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My preliminary math shows about 9 million iPhones sold in America out of the 31 million sold in total around the world last quarter.

Apple's iPhone sales have increased each year... so it's not just repeat customers.

2010 iPhone sales: 39.9 million
2011 iPhone sales: 72.3 million
2012 iPhone sales: 125 million

I wouldn't necessarily say the iPhone is "struggling" in places where phones are bought out of pocket. It only makes sense that phones below $450 (and many well below $200) will sell more than the iPhone.

Yeah Apple won't get the unit sales trophy... but whatever phones they do sell will earn them a pretty penny. You can consider Apple a low-volume, high-margin vendor.

Going back to one of your earlier comments... I believe Apple does look at the industry around them.

I'm sure Tim Cook is well aware that you can buy a smartphone in some countries for $150

But that's not a market they want to be in.

Remember Steve Job's "we can't ship junk" speech? Link

Steve basically defines Apple's product strategy: "Our goal is to make the best [products] in the world and to make products that we are proud to sell and would recommend to our family and friends"

"There are some products in our industry that we would not be proud to ship. We can't do it... we just can't ship junk"

That's actually a refreshing philosophy. Apple acknowledges certain types of products and chooses not to make them.

So does that mean all these other companies knowingly make crappy products? That can't be good...

Michael Scrip said:

You can consider Apple a low-volume, high-margin vendor.

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Yes, but that's changing. margins have dropped off for them recently. The iPad Mini is continuing this trend as well, but my guess is they will make up for it dramatically in volume just like they will with the 5C.

Everything you have said is spot on. I don't expect Apple to sell a 150 dollar iPhone just like I don't expect BMW to sell a 15,000 dollar car, but just like BMW has gone down market with Mini and the 1 series, Apple will carve out a niche somewhat below its current bottom to attract new customers.

Android was working from a large deficit in user experience for quite a while. They have caught up. Apple needs features that will keep customers with iOS, the ecosystem is sticky, but only to a point. Of course Apple can drop prices to make up for that or they can innovate further, or a combination of both.

GoodWatch said:

Sure. Keep it up buddy! Just keep it up.

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no problem