Uncle Miltie

While Rivals Jockey for Market Share, Apple Bathes in Profits

On Nov 11 01:11 PM Shaftsinker wrote:

> It's just brilliant marketing really.

Not really. It's providing a end-to-end ecosystem that makes it dramatically easier for the end user to do what they want instead of fighting to get the technology to do what it should do. This is the point that so many missed in the iPod story - and it sounds like you still don't understand it.


> The iPod is another example of something sleek and
> elegant that provided no advantages over existing products (actually
> provided a disadvantage due to the proprietary nature of iTunes)
> despite a vastly superior price. But nobody had dominated that industry
> yet and cultureally penetrated it... and so people buying iPods had
> never even heard of MP3 players.

The iPod was easier to use and easier to manage your music on. iTunes was easier to manage your music on your computer on. And iTunes Music Store was a brand new concept that again worked seamlessly with your iPod. It was a vastly superior ecosystem that allowed Apple to dominate the MP3 player market - one that none of their competitors has yet to approach 8 years later.

Ease of use is a significantly important feature. It completely explains the Flip Video phenomenon - low tech, but ultra easy to use. When you see hundreds of YouTube videos of 2 year olds using an iPhone because it is that easy and intuitive to use, it's a HUGE competitive advantage.


> Nothing goes through an Apple product without Apple
> getting a cut. But nobody complains because they don't want Apple
> to have competition.

Wrong. A) there are people who complain all the time (mostly tech geeks and journalists). B) most Apple users WANT Apple to have competition so that it keeps them from getting stagnant with their product. But Apple users are also so satisfied with their products that they would rarely consider moving away from them.


> A lot of you guys here focus on quality quality quality of the product
> to explain these margins but it's really not that simple. Maybe the
> adult Apple usebase is different, but being removed from college
> I got to watch this Apple culture exploded amongst my age group first
> hand over the past several years.

It's ease of use. It's lack of frustration. It's technology that doesn't interfere with you doing what you want to do. This is what sets Apple apart, far more than quality.

Is There Room for All Smartphone Makers?

As bullish as I am on Apple, I don't see RIM going bankrupt any time soon. They have a sizable moat in the IT departments of most major corporations. Due to the ability of RIM devices to be securely administered remotely, and all the existing infrastructure dedicated to RIM devices in the enterprise, they have the necessary moat that Apple is still trying to overcome. My iPhone is much improved over the last 2+ years, but it's still not as easy for an IT department to administer as my wife's blackberry.

Also, don't count out RIM for people who primarily use their device for e-mail and text messaging. For those people - and there are a lot of them - the BB is still much easier to type on than an iPhone.

There is in my opinion room for both companies products, and both products have significant owner loyalty and satisfaction. They don't call them Crackberries for nothing. As much as you'd have to pry my iPhone out of my cold, dead fingers, you would have to do the same to my wife's blackberry.


On Sep 28 07:14 PM JamesApple wrote:


> Rim has its root as a pager maker. The blackberrys and BES are just
> pagers and paging devices and services with eMail attached. blackberrys,
> blackberry OS and BES are dumb products with severe limitations and
> restrictions which are extremely hardwired and mechanical. It is
> impossible for anything Rim to become smart.
>
> Rim is going to go bankrupt no later than year 2012.

Motorola Looks Far Better than Other Mobile Internet Players

Also there is this...

> "It is completely and utterly foolish to whine about Nokia being clueless and then say that Motorola at least knows what they're doing when Motorola is trying to do EXACTLY the same that Nokia has been doing for years"

Try changing the name from Motorola to Palm and going back to January and stating the same thing. Motorola unveiled their new Android platform, and basically everyone who saw it agreed that Moto might have finally "gotten it", similar to the same kind of sentiment with Palm when they unveiled WebOS. That was the driving element of the article and analysis.

Motorola Looks Far Better than Other Mobile Internet Players

Kevin - the phone game is no longer just features, it's usability. Nokia still excels at making great hardware with lots of features, but their user interface is horrible, making it nearly impossible for normal people to use those great hardware features. THAT is what iPhone, WebOS, and Android have been focused on, and that has allowed those handsets to gain significant market share in the smartphone segment. Until Nokia understands and corrects their problems with their UI, they will continue to lose market share. It's that simple...

Has Nokia Developed an iPhone Contender?

While I love my iPhone, I also would love to see a real competitor emerge to force Apple to keep innovating. Past Nokia phones have offered great specs, but suffered greatly from a nearly impossible to navigate menu system. If Nokia has finally redesigned their OS and made it easier to actually use all the functions they have, they could emerge as a viable option to the iPhone. I'll hold off judgment until I see evidence of what their OS actually accomplishes.

Nokia: Profit Down While Aiming at Apple

Somehow, the economics of "Comes with Music" need to make sense for this to work for Nokia. And I'm not sure it does.

Assuming that Nokia receives a similar deal to the other on-line distributors, they will have to pay about 75 cents per song back to the music companies. Since downloads are unlimited, they might see a typical user download 250 or more songs a year - similar to the old Napster days. Since the user gets to keep those songs, Nokia will have to pay the entire royalty. That adds a significant cost to their music service that will eat into profits. Their hope then would be that users sign up for a second year of the download service, so they can recoup some of the cost (and of course users would keep downloading more songs which would have to be accounted for again).

I'm not sure how this can result in a profitable venture for Nokia, other than to possibly try to win marketshare. It will be interesting to see how this plays out...

Revisiting the iPhone's Browsing Market Share

Dig down a little into that report (page 4), and you'll see why this is meaningless. 4 of the top 6 devices are Motorola phones which have no web browsing capability - only a severly limited version of the mobile web. The top individual handset for market share? The Motorola RAZR V3.

Based on that flawed data, the report and this blog post are also meaningless...

Consumers Will Benefit From Smartphone Battle

The problem is that out of your 200 million Symbian phones, only a small portion can actually run applications due to a lack of memory and processing power. Add in the multiple different controller interfaces (keypad and buttons), different screen resolutions and different versions of Symbian, and it's a fragmented market at best. Newer devices will surely benefit from the newfound freedom, but unless they have a more common configuration, it's still a crapshoot.