Apple's iPhone Continues to Outpace Smartphone Industry Growth

[ChazUK]

Yeah I sure will insult your nation if you insult mine, good day!

You've made me feel guilty so I've deleted the post now Goona (You may want to edit the quoted text too).

On Topic: Using Chinese labour to increase profits is wrong no matter who does it (I'd guess that most manufacturers are up to it now) but I bet the majority of consumers would all complain if prices went up.

 

[Rodimus Prime]

I don't need an excuse to show that other carriers/manufacturers are dumping free phones on the market while Apple's prices (to the consumer) remain static. No sales, no rebates, no dealios. No kidding.
I'm not talking about profit, I'm talking about market share. If Apple is getting more subsidy than RIM on each phone then Apple must be doing something right.
that's not using my logic at all.

Good for Apple. I think that's the entire point of running a business - making more money than the other guy.

I suggest you get your logic processors re-calibrated.

Perhaps we'll see some Buy-One-Get-Two-Free deals from BB soon. Yay market share!

(It is funny that the Apple bashers here are always talking about Apple's inflated prices - unless, of course, when they're talking about Apple's artificially low prices. )

English please?

Well first off before you go off talking about apple bashers and try to turn this around I might like to point out it was the hard core fanboys who brought up the BOGO excuses on why BB did so much better in market share. After that was shoved down did the defense of pointing out apple sweet heart deal get pointed out.

If you want to claim BOGO is the reason then you have to accept the fact that the iPhone is getting a damn good deal to increase sales. Having an extra $150 reduction in prices really helps. Big time when it more than likely world wide instead of limited to carry X or Y.

The entire reason it was brought up to point out the flaw in the logic of saying BOGO was the only excuse.

RIM is making sweet profit off of the BOGO deal because guess what they get 2 unit sales for that and collect double the money. It going threw and you profit argument fails because guess what RIM makes more money. A LOT more money. Carriers have to eat it.

Just figure i would point that out. You were the one that brought up the BOGO crap and the other side pointed out the sweet heart deal Apple is getting to increase it sells of the iPhone.

 

[zacman]

The fact remains that Apple was the only major smartphone company that lost market share in the holiday quarter.

 

[Rodimus Prime]

The fact remains that Apple was the only major smartphone company that lost market share in the holiday quarter.

No others lost market share. RIM lost 0.2%. Something I have noticed people not noticing but that is far cry from the 4.8% loss suffered by the iPhone.

0.2% is easy to let slide. Personally I feel comparing quarter to quarter is not a good way of looking at the numbers. Year to Year is a better way because of the release cycle of phones really screwing it up. iPhone almost always get a huge boost during 3Q but drop during 2Q.

The drop in 4Q market share I will say is really surprising.

 

[Carniphage]

Nokia doesn't rip off people and try to market cheap chinese products as a premium product worth a premium price ?

Ah, its the Apple-customers-are-too-dumb-to-know-they-are-being-ripped-off argument!
Not Again!

And not only are they so dumb as to buy the phone, they also stick around and put more money into using mobile wireless, buying software and music, and then indicating unprecedented levels of satisfaction with the device. What is it with these retards?

Meanwhile the hyper-intelligent Nokia customers loved the N95 so much that they didn't buy the N96 or the N97. In fact the N-Series sales seem to be halving with each passing year.

Perhaps Nokia customers really are smart after all!

This argument, like I said many times before, is complete bunk. As a consumer, this only serves to turn me off from the iPhone.

I have run a few businesses, and if you want to judge their success of your business, you do it in terms of profits - thats how you know your stuff is working. Thats how you judge if your product is right. If you are a monopoly you can force the market to buy a bad product. In a competitive market you can't do anything of the sort.

And this doesn't indicate that the iPhone is dominating anything at all. Market power is not defined with profits, but with unit sales, presence, and influence.

Not really - that stuff only matters to "fans".
Unit sales are seen as important because most people make the mistake of assuming that unit sales TRANSLATE into profits. But this isn't always the case.

Presence and influence is a good one! I don't think there has been a single device in recent memory as influential as the iPhone. It has transformed the expectations of consumers in how a phone should work, and other manufacturers have been all too eager to follow the lead.

To give a counter example...

Our friends in Espoo have been desperate to get games running on cellphone handsets for over a decade. I went to the launch of the original "side-talkin" N-Gage and they have been trying ever since. It was a disaster, followed by a series of other disasters, including the N-Gage service. Which customers could sign-up to to get games. There was a bizarre inability to understand what the market wanted.

The first copy of Super Monkeyball for the iPhone sold more copies in a week than the entire number of sign-ees for the N-Gage service! - That is presence, that is influence.

The cellphone market is clearly a very competitive field with many offerings. None of which are truly dominating the others.

Domination by one platform would be bad, and like you say there are a number of credible technologies - Including the promising N900. But I do fear for Nokia because they have been caught with their pants down. And it has taken them three years to pull their pants back up.

I am not certain their reaction was quick enough or big enough to undo the damage.

C.

 

[zacman]

Where does Nokia makes its phones?

The smartphones (E and N series) are being made in Finland. The other phones are being produced in other EU countries.

 

[zacman]

Last quarter it was 4M N-series phones. I'd be surprised if they shift $2M this quarter.

Last quarter sales did not include N900 or N97mini sales which are selling really nicely across Europe (not as good as the 5800 which sold >12 million in less than half a year but still very good). And Ovi Maps car navigation wasn't for free either last quarter.

 

[zacman]

So just one question:

How come Apple, selling just one, rather dull featureless phone, which has a minuscule market share... manages to make more profit from its handset sales than the entirity of Nokia.

In Q4/09 Nokia (you know almost mobile phones only!) made a revenue of 16.8 billion dollars.

Apple (you know phones AND computers AND ipods AND music AND videos AND tv shows AND...) made a total revenue of only 15.68 billion dollars....

 

[kdarling]

I don't need an excuse to show that other carriers/manufacturers are dumping free phones on the market while Apple's prices (to the consumer) remain static. No sales, no rebates, no dealios. No kidding.

Weren't Orange, O2, 3 and other UK/EU carriers offering iPhones for free?

 

[Mattie Num Nums]

Ladies and Gentleman...

http://www.vertu.com/in-en/#in-en_

This is the Ferrari of phones. Its made by Nokia and is $25,000 dollars.

Enjoy.

 

[gnasher729]

that story doesn't make any sense. Bottles sold is more important that oz sold (although oz sold is important too). A bottle sale is a single purchase; people don't care about 16 vs 18 oz, they care about pepsi vs coke for most sales. Oz sold only matter if include the party people buying 1L bottles instead of 6 packs

If you sold a million half litre bottles, and I sold 900,000 litre bottles, would you think you are the market leader because you sell more bottles? Coca Cola thought so. And PepsiCo didn't tell them they were wrong.

 

[gnasher729]

I don't know, I'm sure Toyota sells more cars than Ferrari, but does that make their cars better? No. Sales figures =/= quality of product.

Imagine a Ferrari with the gas pedal stuck on full speed

 

[aegisdesign]

Have you even used Symbian? It's a freakin smartphone OS, it did what the iPhone did long before, just without touch. Now it has touch. You're thinking of S40, which is NOT Symbian.

Arguably even S40 is a smartphone OS these days as it comes with a browser, Ovi Maps, email, media player, weather info, installable apps, Ovi store. It even does a few things an iPhone doesn't such as decent VoIP.

Nokia have pushed smartphone features into ever cheaper handsets and thus have picked up market share based on selling their smartphones into markets that can't afford luxury phones like the iPhone. By that I mean emerging markets and also teenagers who don't have rich parents.

 

[Goona]

The smartphones (E and N series) are being made in Finland. The other phones are being produced in other EU countries.

So Nokia doesn't make phones in China right?

 

[KnightWRX]

So Nokia doesn't make phones in China right?

Yes, they do. But at least they don't charge you a premium price for them and pocket the higher profit margins thanks to it like Apple does.

Or it might be because they invest a lot more in R&D that their profits are lower on similar revenues. Who knows really ?

(and before you get red in the face and pretend only Apple does R&D, I think you would want to look into what exactly Nokia does R&D on vs what Apple does it on).

 

[audiogates]

Good News

Its always good to see the iPhone moving up in the Smartphone battle, But when are we going to pass RIM, I want apple to pass Blackberry already and their outdated OS

 

[Goona]

Yes, they do. But at least they don't charge you a premium price for them and pocket the higher profit margins thanks to it like Apple does.

Or it might be because they invest a lot more in R&D that their profits are lower on similar revenues. Who knows really ?

(and before you get red in the face and pretend only Apple does R&D, I think you would want to look into what exactly Nokia does R&D on vs what Apple does it on).

LOL yeah I'm sure Nokia doesn't want to charge a premium on their phones. Yeah if people were willing to pay a premium for their phones, you don't think they would be happy about that. Yeah I'm sure they are willing to take less money!

 

[brewser]

Funny how the Ultrageeks harp on Multitasking but so much good that is doing for the other vendors, especially when a non multitasking iPhone is growing in marketshare rapidly.

Keep it Simple stupid is the rule, no one wants to have 30 apps windowed in a small screen.

Exactly!!!!
My old Pocket PC was a convoluted mess. I always ran out of memory and had to close down apps. Can you imagine having no memory left to answer a call ;-)

 

[LagunaSol]

Yes, they do. But at least they don't charge you a premium price for them and pocket the higher profit margins thanks to it like Apple does.

The iPhone, at its $99, $199 and $299 price points are equivalent in price to their direct competitors. How much does Nokia charge for their top smartphone with 32 gigs of storage? Hmmm???

Apple makes high margins because they get big kickbacks from the carriers. They get big kickbacks from the carriers because the iPhone is a device in high demand, resulting in new subscribers, resulting in more profits for the carrier. See, when you have something people really want, you're able to charge more money for it.

But in this case the consumer pays the same price for the in-demand device as they would for a device not many people care about. Typically that would be considered a good thing for the consumer.

So for some reason you're bitter that Apple sells its phones for the same price as the competition but makes more money doing so???

You either don't understand capitalism or you hate it.

 

[sjo]

You either don't understand capitalism or you hate it.

If you confuse capitalism with the government backed cartel the US carrier business is you obviously don't understand capitalism yourself.

 

[OllyW]

Weren't Orange, O2, 3 and other UK/EU carriers offering iPhones for free?

You can get free iPhones on O2, Orange, Tesco Mobile and Vodafone in the UK. And it's not just limited to the 8GB 3G either, even the 32GB 3GS is free with the most expensive tariffs.

 

[Carniphage]

In Q4/09 Nokia (you know almost mobile phones only!) made a revenue of 16.8 billion dollars.

Apple (you know phones AND computers AND ipods AND music AND videos AND tv shows AND...) made a total revenue of only 15.68 billion dollars....

Hi Zacman,
You need to take account of Apple's whacky deferrred revenue accounting.
Nokia's PROFIT on the sales of $16bn was $1.2bn.

Apples iPhone sales were 6.9M units. Which nets Apple about $1.5bn profit. On sales of about $4bn.

Apple employed accounting methods which hid this profit, by deferring the revenue over 24 months. But make no mistake, there is more $200 profit in each phone sold.

C.

 

[KnightWRX]

The iPhone, at its $99, $199 and $299 price points are equivalent in price to their direct competitors. How much does Nokia charge for their top smartphone with 32 gigs of storage? Hmmm???

569$ unsubsidized :

Nokia US Store - N900

Which is less than the iPhone 3GS unsubsidized goes for around here.

Apple gets whatever it asks for from the carriers. It's the carriers that subsidized the price. You either don't get how carrier subsidy works or you would like to pretend Apple does get some mythical profits from kickbacks.

The true fact is we don't know why Apple profits are that high (it's not because of volume or higher revenues because we have those numbers) and Nokia's are lower. It could be a number of reasons : Nokia takes lower margins on their handsets, they invest more in R&D, Acquisitions, etc...

I understand capitalism just fine.

Anyway, like I said, this is moot. Comparing profits is like comparing dick sizes. It means nothing to the consumer or developper or 3rd party partner. It's a shareholder statistic. Heck, even to shareholders, to much profit and money in the bank is bad. It means the company might not be re-investing enough in its growth or R&D which could bring in higher stock values instead of sitting idly.

The only reason profit was brought in is to try and justify that Nokia gained market share back this quarter and Apple lost some for the first time ever since launching the iPhone. Crybaby iPhone fanboys only crying that "it ain't so!" doesn't change that very fact. Apple had a crap quarter and lost ground to the market growth's (contrary to the thread title) even though they shipped the most units ever. Their 12 month refresh or their control of stock levels is starting to hurt them and this is proof of it. Christmas should've been a good time to push the 3GS out to empty stocks for the slower post-holiday season. They need to adjust to either a 6 month cycle or there will be repeats of this in the future.

I hate having to always re-iterate my points because people try to drag the conversation all over the place so that nothing negative about Apple can ever get agreed on. Apple is far from perfect and some people need to realise this.

 

[Carniphage]

The true fact is we don't know why Apple profits are that high (it's not because of volume or higher revenues because we have those numbers) and Nokia's are lower. It could be a number of reasons : Nokia takes lower margins on their handsets, they invest more in R&D, Acquisitions, etc...

It's not difficult to work out.

Apple makes about $230-$275 profit per handset. Multiply that by 6.9M units and you have quite a lot of profit.

Nokia, and others would dearly like to make that sort of profit. But with an average of $34 profit per handset, they have to sell a lot more devices.

You could of course argue that such low profits indicate that Nokia is delivering better value for money to customers.

But customer satisfaction numbers, and falling revenues do not really support the idea that customers are satisfied.

C.

 

[Rodimus Prime]

The iPhone, at its $99, $199 and $299 price points are equivalent in price to their direct competitors. How much does Nokia charge for their top smartphone with 32 gigs of storage? Hmmm???

Apple makes high margins because they get big kickbacks from the carriers. They get big kickbacks from the carriers because the iPhone is a device in high demand, resulting in new subscribers, resulting in more profits for the carrier. See, when you have something people really want, you're able to charge more money for it.

But in this case the consumer pays the same price for the in-demand device as they would for a device not many people care about. Typically that would be considered a good thing for the consumer.

So for some reason you're bitter that Apple sells its phones for the same price as the competition but makes more money doing so???

You either don't understand capitalism or you hate it.

See here is what I do not get.

You say the only reason RIM got so many sales is BOGO pushed by some carriers but RIM made a lot of profit off those BOGOs. You discount RIM sales saying that is the only reason they the sales.
Yet on the other hand you praise apple for its higher than average subsidy it gets on its phones from the carriers it is with and refuse to add that fact in it increases its sells a lot.

To throw out RIMs numbers you have to throw out a lot of apples iPhone numbers to account for the fact that its gets sales boost from higher subsidized cost. I say just count the sales because at the end of the day it all works out to be ab out the same when you add in different deals. AT&T has a history of not put BOGO on its smart phones. I want the iPhone to go to Verizon for the solo reason that it would force AT&T to start showing off its other smart phones. Mind you it is pretty clear AT&T is starting to do that already in prep for Apple doing deals behind AT&T back.