neutrino23

While Rivals Jockey for Market Share, Apple Bathes in Profits

Gartner just released a report saying that Apple's world wide share of the smart phone market reached 17.1% just behind RIMM at 20.8% and further behind Nokia at 39.3%. No one else was in double digits.

So if you look at the smart phone market (not all phones) then Apple also has quite good (and growing) share.

I read a similar item a while back claiming that Apple had the lions share of over $1,000 laptops in the US.

This is Apple's good fortune. The message is not that they don't compete in the sub $600 market, it's that they have little competition in the over $1,000 market. Which would you rather be in?

Probably Sony should have been their natural competitor but Sony never really got established in the computer business. I think they didn't have a clear vision of what they wanted to be. Some time back I visited their sales office in Japan and we saw Unix workstations as well as all sorts of windows towers and laptops. So they definitely had their chance at that business.

Why Android Is Gaining Ground on Apple

Android will have its place but it does not compete directly with the iPhone. My guess is that a couple years down the line Android phones will largely supplant Nokia phones in the low end, low margin market. RIM will survive but lose share. The iPhone will own the high end, high margin business. Watch for Nokia to drop Symbian OS and adopt Android on some phones.

I think the Android world will be too chaotic to develop much in the way of a useful App Store.

Does Palm's Pre Have Anything on the iPhone or Storm?

What if an asteroid falls on Palm headquarters? Would that improve Nokia sales? What if three comets hit the earth simultaneously and land on Palm, RIMM and Nokia headquarters? Would that be good for Apple? What if, what if, what if. Sheesh.

By talking about Apple selling as a fad or trend you display your lack of understanding of this market. You can like Apple or not but at least understand their strengths and weaknesses properly. The same goes for RIMM and Nokia and Android.

Personally, I think Pre is in an extremely difficult position. Pre might be a good phone. The problem is it has to be an extraordinarily good phone to overcome the lead established by RIMM and Apple. If they had come out with this three years ago they would have walked away with the market. Now they are an also ran.

Yes, they can quickly get some share from the technically oriented people who follow this market, but it doesn't sound like Pre will add a must have feature not offered by RIMM or Apple. This is not a knock on Palm, it is just how it is.

I recall having this discussion with a broker promoting the stock of a company pushing a technology to compete with hard disk drives. My point was that it would have to be hugely faster/cheaper/bigger than hard drives in order to gain a foothold. Just like magnetic bubble memory before that. Bubble memory was interesting but could never develop fast enough to catch up to hard drives so they ran out of development money before the hard drive developers ran out of money. Apple has almost $30B in reserves. If they decide there is something missing from the iPhone that is needed to keep market share you better believe it will appear very quickly.

I think Palm will make a short term splash then disappear from the headlines. Apple/RIMM will capture most of the headlines. What is Palm going to do? Build up several hundred stores in malls across the US where trained technicians can help people with questions? Build a huge on line music and video store like iTMS? Get thousands of developers to write tens of thousands of apps for the Pre? Develop a simple way for developers to get paid for developing apps? Find a way for the Pre to synchronize with your iTunes collection on your computer? Somehow get the whole country talking about Palm so that when they think touchscreen phone they think Pre and not iPhone?

Perhaps I don't know enough about Pre (mea culpa), but I think they should have gone after a specific niche rather than the general market or in addition to the general market. For example, they might have worked out a scheme to develop the digital hospital. EMTs in the ambulance could forward diagnostic information to the hospital. Doctors and nurses and other techs would receive this on their phones. Each would begin the necessary preparations and would send updates about their progress to the others. Once the patient arrives information about medications, treatments and diet would skip from phone to phone so everyone is always up to date. For all I know something like this exists. But if Palm did something like this, perhaps in another field, they'd have a secure toe-hold from which to expand. As it is they seem very exposed to intense competition.

Palm's Pre: Likely to Break

I think Palm is facing a very steep hill in front of them. If they had come out with this device two years ago they would have a much better chance of success. The problem is now Apple and RIMM have firmly established themselves as market leaders. Android is also around collecting some interest. Apple has been very disciplined. They came out with the basic iPhone and have gradually added features since then. They now have two years experience and something like 30 million customers (including iPod touch). In June they'll come out with version 3.0 software and a new phone. Palm has to jump into this with something substantially better in order to get much press. No knock on Palm, I wish them well, but I am very skeptical that they can succeed.

The best thing they have going for them is that the iPhone is not available on Sprint.

Nokia Gets No Respect Against Apple, RIM

Nokia and RIMM didn't see Apple coming. By now they've figured it out and it must be scaring them plenty. OS X/Next has been in development for something like fifteen years not counting UNIX itself. This was the key to their success. They had all this time out of the limelight to work on their technology and get it right. There are now probably more than 25 million computers running some flavor of OS X. OS X has acquired multiple layers of technology for handling audio, video and graphics. To put this technology into a small device like a phone is astonishing. Apple is just scratching the surface with what the iPhone can do. Every June, if not more often, for the next several years Apple will release a new iPhone with major new capabilities. This year it was the Apps store, 3G and GPS. Next year what? Built in video projector? 32GB memory for movie storage? Much faster processor? A digital signal processor for enhancing the reliability of the phone connection? To think that Nokia or RIMM can cobble something together in a year or two with Linux or Symbian is just not realistic. Yes, they and LG can come up with a price competitive phone, but not an iPhone. You can talk about battery life or pixel density but it is hard for newcomers to get their minds around the amount of IP condensed into OS X.