Of course, as long as we don't count all the TVs, fridges, boats and skyscrapers they build...
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iOS and Android Combined for Record 99% of Smartphone Sales Last Quarter
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You have yourself a lovely evening my friend.
Apple doesn't deal in the used iPhone market, so any lost sales won't impact Apple either way.
It's not the first year Apple is going up against cheaper android smartphones, and you are not the first person to claim that Apple needs to make cheaper iPhones either. For whatever reason, iPhones have proven to be fairly price-inelastic. There will be consumers who get tempted by a cheaper android smartphone which they feel is good enough, but by and large, the people who want an iPhone will still get one, whatever the price (within reasonable limits).
I am not going to pretend to be some expert in this subject, but cheap android handsets have existed since the beginning, and Apple has continued to prosper in the face of said competition. I don't know exactly what the reason is, but I think that as Apple realizes that growth of the iPhone market plateaus, they will actually start to charge more for their devices in order to maintain their margins, instead of going down the path of profitless market share many before them have fallen trap to.
Of course, consumers are not going to be paying extra for nothing. Apple is clearly making the Apple ecosystem more sticky, as well as positioning the iPhone as the hub of your life so as to make it seem as indispensable as possible. Whether Apple will succeed or not, we shall see.
The difference is that the "cheap" Android handsets are beginning to offer better hardware over all. The OS are becoming better and it is easier now to switch to Android and have a comparable experience than it ever has been. Apple has to due something and fairly soon as the days of promising products in the pipeline isn't going to work forever. Apple must do more than just rest on their laurels.
The new phone is do next month and time will tell how it goes. But Apple isn't 6 months behind as people suggest more like over a year. Remember Apple will come out with a phone next month but early next year the ball is back in Samsung's court. If this phone is nothing special it means Apple can only hope to tread water. Samsung will probably be making the oled screens Apple is promising in 2017 and 2018 anyway. Imagine where they are in that field by then.
The new phone is do next month and time will tell how it goes. But Apple isn't 6 months behind as people suggest more like over a year. Remember Apple will come out with a phone next month but early next year the ball is back in Samsung's court. If this phone is nothing special it means Apple can only hope to tread water. Samsung will probably be making the oled screens Apple is promising in 2017 and 2018 anyway. Imagine where they are in that field by then.
Actually, a lot of tech savvy customers stop buying iPhones when they realize $60 Android phones are equivalent to a lot of iPhones.
Here's a $40 ZTE Zmax Pro that competes with the iPhone 6S.
I'd say that most people buying an iPhone were really only in the $50 to $200 market.
That's because the overwhelming majority of sales of iPhones over the past eight years were in subsidized regions, where the buyer only really saw the upfront cost.
Indeed, many of those people actually thought the deposit was the full price, because the true cost was hidden in their monthly contract.
Now, many more people are confronted with the actual price, and are having to decide if it makes sense to spend two, three or more times as much, for basically the same functionality and features.
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And the one thing that tech savvy users seem to forget is that the world by and large doesn't consist of tech savvy users. Notice how the criteria for an "iPhone killer" invariably boils down to specs and features (of which I take price to be a subset of).
More features can mean a more complex device, which is at odds with the consumer who wants his product to just work. Better specs don't always guarantee a better user experience. Just ask all the android smartphones sporting 4 or 8 cores and how they still lose to the iPhone in terms of single-core benchmarks.
And as a personal rule of thumb, I have no qualms spending more on a product I know I will enjoy using, than spend less on a product I won't like as much. But maybe that's just me.
There are many more factors which appeal to a buyer beyond specs and price. Customer support. Timely updates. A thriving App Store. Integration with the rest of the Apple ecosystem. iOS-only apps such as GarageBand and iMovie. Yes, I can buy more than ten of those phones for the price of one iPhone, but can ten of those android phones do the things that I do on my iPhone? Not necessarily.
Sure lets compare refrigerators to mobile ecosystems. Apple to Apple comparison unless the refrigerator runs android. Have a great day mate.
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Until it breaks and support is needed, then an iPhone is a bargain. Or you want to keep your phone for more than a month.
I hear you about what you are saying, but just because in the past competing on price wasn't necessary, doesn't mean that Apple can ignore the competition's price. Cheap android's have existed, but there has never been a $60 android that can run 6.0 smoothly before. That is a crazy price. Can Apple really sell smartphones in huge volumes at more than 10x the price? Apple certainly can't sell laptops at $6,000 when decent PCs are available at $600.
And it isn't just this $60 phone. Except for Samsung, all the top android phones are coming in at $400. The OnePlus3 is by all accounts an excellent phone and it is $399. The Nexus 6P is $399. That is the price now. They will both be cheaper in 2017. In fact, I'd guess the OnePlus 4 when it comes out in 2017 will be cheaper as well. And the Nexus 7 or whatever the call it might be cheaper as well. The Honor 8 with Dual Cameras just launched at $399. That is the price for a top of the line Android phone. These phones go head to head with iPhone with ease.
As for margins, I actually don't think Apple will ever need to raise prices of phones to protect margins. Not unless they decide to cram in something really expensive into these phones. The business with the potentially for really high margins is the App store. Apple just has to support the servers (not a trivial task, but still not that expensive) while the developers do the work preparing the Apps. Apple takes its cut and I suspect it works out to a very high margin. Growing the App store may be equally important with protecting hardware margins on the iPhone.
I've never been in the Apple must cut prices camp. And I've been a user for decades. But I just don't think the base line iphone can start at $649 this Fall, not if Apple wants to hold the line on that price on that phone until Fall 2017.
I must admit to being shocked by these numbers and the huge market share of Android. It seems that 3 out of 4 people I see around town (at least here in the SF Bay Area) are using iPhones. (And it's been this way for years.)
Is that why a year old iPhone outperforms brand new android flagships?
I would pay $700 for a 6S than get a note 7 for free.
I've got a nice oceanfront home in North Dakota if you're interested.
That's the reason you're buying Android? Not it's features, but the lack of Apple's innovation?
I'm selling an old Bridge in London If you are interested.. lol
I disagree. People have been buying iPhones forever, but what you now get compared to last years is becoming ever smaller. There is a bigger gain from an iOS upgrade, which is free
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Fair points, but iPhone sales are clearly declining. As most iPhone sales are from iPhone owners, its just aint worth it no more.
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Or the lack of innovation means a larger feature gap in favour of Android?
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The US share is much higher, US company vs non US company is probably a huge reason, loyalty. When you compare non loyal customers, thats a better guide, they buy what they prefer. Off course Android covers all price ranges, but iPhone sales growth is dropping, thats a real fact
Indirectly they do! Sort of... Such a large used iPhone market means I can get more money for my used iPhone, which means I upgrade more often which means Apple sells more. Their upgrade every year program depends on a used market to sell those phones to, they don't just disassemble all those year old phones (do they?!?).
I really enjoy using iOS and the ecosystem it has so I'm willing to pay a premium. Having top end hardware is not enough. I've played that game so many times in the past and I'm always left unsatisfied. What's funny is that Android doesn't have the highest end hardware. So it's a win win with the 6S
Iphone sales were off the charges for 10 record breaking quarters and two down quarters any business would give their eye-tooth for. To say it is dropping is incorrect. It is off from the record breaking quarters, and some felt the record breaking quarters, weren't even record breaking enough.
It is fair to say, sales are off for two straight quarters.
Here are some more of my thoughts on the matter.
1. Apple is one of the few companies in the smartphone market actually making any money. This means that Apple has the resources to engage in meaningful R&D to improve their products and ecosystem and continue to offer their customers value for their money. For example, how many other companies have the capital to invest in their own music streaming service and bid for exclusives? What can the other competitors offer to meaningfully differentiate their products beyond boosting hardware specs and lowering price? I honestly can't see these companies sticking around in the long term.
2. This in turn leads to a virtuous cycle of sorts. Apple rakes in the profits, which in turn gives it the resources to continue improving their products in ways the competition can't hope to match, which in turn gives consumers a legitimate reason to pick their products, and the cycle repeats. Kinda like a "rich get richer" scenario.
3. I would argue that these cheaper Android phones pose an even greater threat to Samsung than to Apple. Samsung (who actually sells a flagship more expensive than the iPhone) still uses Android, so it is easier for users to switch. The iPhone uses ios, so there remains compelling reasons to remain.
4. For many people, the smartphone is the most important device in their lives, and so there is no shortage of people for whom "good enough" simply doesn't suffice. They are willing to pay a premium for the best, which in this case means the iPhone.
5. Most iPhone users continue to upgrade to iPhones. Barring me waking up to a huge defection one fine day, I don't see this dynamic changing anytime soon.
6. The iPhone is still seen as a status symbol by many.
Basically, I see no compelling reason why the iPhone would be doomed anytime soon. Numbers might fluctuate a bit here and there in the short run, but I see the iPhone continuing to enjoy a bright future for many good years to come.
1. Apple is one of the few companies in the smartphone market actually making any money. This means that Apple has the resources to engage in meaningful R&D to improve their products and ecosystem and continue to offer their customers value for their money. For example, how many other companies have the capital to invest in their own music streaming service and bid for exclusives? What can the other competitors offer to meaningfully differentiate their products beyond boosting hardware specs and lowering price? I honestly can't see these companies sticking around in the long term.
2. This in turn leads to a virtuous cycle of sorts. Apple rakes in the profits, which in turn gives it the resources to continue improving their products in ways the competition can't hope to match, which in turn gives consumers a legitimate reason to pick their products, and the cycle repeats. Kinda like a "rich get richer" scenario.
3. I would argue that these cheaper Android phones pose an even greater threat to Samsung than to Apple. Samsung (who actually sells a flagship more expensive than the iPhone) still uses Android, so it is easier for users to switch. The iPhone uses ios, so there remains compelling reasons to remain.
4. For many people, the smartphone is the most important device in their lives, and so there is no shortage of people for whom "good enough" simply doesn't suffice. They are willing to pay a premium for the best, which in this case means the iPhone.
5. Most iPhone users continue to upgrade to iPhones. Barring me waking up to a huge defection one fine day, I don't see this dynamic changing anytime soon.
6. The iPhone is still seen as a status symbol by many.
Basically, I see no compelling reason why the iPhone would be doomed anytime soon. Numbers might fluctuate a bit here and there in the short run, but I see the iPhone continuing to enjoy a bright future for many good years to come.
Uhm, Google? You know, that little company behind Android?
And yet, iOS' market share keeps falling. I don't see that changing unless Apple greatly steps up the pace of innovation and increases the attractiveness of their products faster than the competition again. Sadly, it looks like the opposite is happening.
Mind you, I really hope I'm wrong, since I much prefer iOS over Android for various reasons.
Why does market share matter to you as a consumer? Apple's Mac market share is so small, yet they're doing fine. Apple is focused on great products not market share.Uhm, Google? You know, that little company behind Android?
And yet, iOS' market share keeps falling. I don't see that changing unless Apple greatly steps up the pace of innovation and increases the attractiveness of their products faster than the competition again. Sadly, it looks like the opposite is happening.
Mind you, I really hope I'm wrong, since I much prefer iOS over Android for various reasons.
Google doesn't make phones, at least not in any significant volume. Their lack of control over vendor hardware also makes it harder for Google to implement features that rely on any sort of hardware / software integration. Just look at the hoops Google has to jump through to push through any software updates to a phone that isn't a Nexus.Uhm, Google? You know, that little company behind Android?
And yet, iOS' market share keeps falling. I don't see that changing unless Apple greatly steps up the pace of innovation and increases the attractiveness of their products faster than the competition again. Sadly, it looks like the opposite is happening.
Mind you, I really hope I'm wrong, since I much prefer iOS over Android for various reasons.
You can argue that it's not Google's fault here, but it was Google who made the conscious decision to give up control of their OS to drive adoption in a bid to fight with Apple.
iOS market share is falling, but it's not necessarily because they are selling fewer phones, but that more people are buying cheaper android smartphones. I don't find it alarming that you have 5-6 people buying a cheaper Android phone for every 1 person who does buy an iPhone.
Mind you, I am not saying Apple is infallible, and maybe people have been claiming that Apple is doomed for so many years that I have grown numb to all that doomsaying, but if you ask me, people here are getting their panties up in a bunch over nothing.
I was just responding to the claim that people didn't switch from iOS. The shrinking market share shows that they do.
That said, at some point a deteriorating market share will have an effect on the ecosystem. For example, just recently Android was, for the first time, named as the primary target platform by a majority of professional app developers:
http://www.fiercewireless.com/tech/android-primary-platform-for-most-pro-developers-study-shows
I really hope they find a way to not let it slide much further.
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Well, you gave a music subscription service as an example. Obviously Google has no problem financing such a service (and indeed they did). You are right that there are benefits to tighter software/hardware integration, but does it really hold back Android's service ecosystem as you wrote? Doesn't look like it to me. If anything, Google's services are ahead of Apple's in many ways.
This!!! Many people seem to miss the secondary market and how, for years, it helped justify people getting a $650 phone every two years. The upper end of the market will suffer, no doubt
Apple know that btw, the SE is the biggest deviation in pricing they have ever had; you pay $50 less than the 5s you would have bought earlier this year, you get a device with specs from two years later
Google doesn't seem very interested in developing and promoting their music streaming service. Available in only a few countries, and they aren't pursuing content the way Apple is. It's like Google is doing just the bare minimum necessary to keep the service afloat so they can claim they have a streaming music service.
Google's services are also available in iOS, and Google even pays Apple more than a billion dollars a year to keep Google search as default on safari. And I get to use both Apple Maps and Google Maps on my iphone, so it's really the best of both worlds here. So iOS users continue to benefit, rather than be harmed in this way.
I am reminded of how the carriers held back Google's attempt at mobile payments for many years as the carriers wanted to promote their own services instead. Conversely, look at what Apple can do thanks to their ham-fisted control over their OS. No carrier bloatware, branding, timely software updates.
If you ask me, Google's strength is also its biggest weakness. They have excellent services no doubt, but very limited control over their own platform, precisely because Google has close to zero hardware presence and are reliant on 3rd petty vendors. Android's huge market share is impressive no doubt, but Google seems to have very little to show for this victory.
Lol, are you suggesting that the 6s is a higher end piece of kit than the note 7 lol, that's the funniest thing I've read all week. 720p screen in 2016. Brilliant.
Have a nice day sir.