Apple Death Knell #57: Android Will Eat Apple’s Lunch

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Believe it or not, it’s time for another Apple Death Knell! Writing for Investor’s Business Daily we have one Brian Deagon, a self-described “journalist who’s covered tech since the dawn of the PC era.” He tells us that in 2012, the jig is up for Apple.

The Apple Death Knell Bell

The Apple Death Knell Bell

Mr. Deagon put together ten predictions for 2012 that include Google+ going nowhere, Twitter “tottering” (simply because the company continues to do what it has always done), Steve Ballmer being ousted as CEO of Microsoft (that one seems at least possible), and Groupon losing market share (ditto).

He also predicts that BlackBerry will go the way of Palm, that Ultrabooks will be a big deal, something about cloud computing, and a couple of other things that you can go check out if you really want to.

Number one on his list, however, is the prediction that, “Apple will lose its cool factor.”

As with most of the entries in our Apple Death Knell Counter, Mr. Deagon’s reasoning is all but non-existent. To wit:

With the iPod, iPhone and iPad, Apple (AAPL) redefined markets and defined cool. But what’s left? The iPhone is boxy, flat and feeling stale. The Samsung Galaxy smartphone seems cooler. With Google’s (GOOG) Android platform now the fastest-growing mobile OS, Apple’s software advantage will diminish. Smartphones and tablets will become commodity items and Apple will be eaten by the collective Android gang. Apple’s next big hope is the TV market, a tough nut to crack and where Samsung is king.

To recap, he argued that Apple defined cool with three products and therefore has nowhere to go. In addition, the iPhone is old hat—yesterday’s news, even—and Apple has ceded the design high ground to Samsung.

The first point is specious, at best. I’d personally call it embarrassing. If you want to make the argument that Apple has designed itself into a corner, feel free, but you should probably offer a few facts, or at least some anecdotal evidence for making that argument.

The second point, however, requires denying reality. The iPhone 4S is a hot ticket item and demand still outpaces supply almost three months after it was introduced. While “boxy, flat, and stale” are subjective, we have objective proof that many, many people don’t share that subjective opinion.

Moving on to his other points, we’re told that because Android’s platform is growing faster, Apple will lose its software advantage. There are three aspects of this statement that I found very annoying.

The first is the notion that Android being bigger means that developers will abandon iPhone. Android has been bigger than iOS for a while now, but there are still more iOS apps out there. And, despite the fact that Android is the bigger platform, iPhone owners download more apps. More importantly, they buy more apps. That will keep a disproportionate amount of developer effort on the App Store as long as it remains true.

The second is that both iPhone and Android have enough apps for both platforms to be more than viable. My personal opinion is that iOS apps have higher quality, but even assuming that’s true, there are lots of great Android apps to keep people happy. As long as developers make money, they’ll make apps for both platforms, and there is zero chance of either of those platforms undergoing a significant enough upheaval to change that in the foreseeable future.

The third thing that annoys me is this: Apple’s App Store has had more apps from the get go, yet Android was able to gain share to become the largest smartphone platform on the planet. Should the day come when there are more Android apps than there are iOS apps, will people stop buying iPhones? Of course not.

The lack of apps didn’t stop people from buying all those Android devices in the early days, and despite being behind all these years, it hasn’t stopped them since, either. Why would it spell the end of the iPhone if and when the balance of app power flips? It’s an absurd argument for Mr. Deagon to make.

And then we come to the Death Knell itself, “Smartphones and tablets will become commodity items and Apple will be eaten by the collective Android gang.”

It’s this kind of in-the-box thinking that lands most people in the ADKC.

Let’s start with the flippant commodity comment. A quick show of hands: who can name another commodity industry where Apple competes profitably?

It doesn’t take a rocket scientist to name two of them: PCs and MP3 players. In both markets, Apple has shown that it can hold its own. Sure, it might be different for the smartphone market, but with no supporting reasons, I call balderdash on anyone making this kind of argument. Apple has shown that it can compete profitably in commodity markets with quality products that people want.

Will Android continue to be bigger than iPhone? Of course. But will “the collective Android gang” eat Apple? No. It’s absurd. Both platforms will continue to do very well, and for the foreseeable future. And while they are doing well, I believe that Apple will continue to earn the lion’s share of cell phone hardware profits and that Google will do well selling ads on all those Android devices (and a lot of iPhones, too).

I’ve been arguing for years now that Google and Apple are not competing in a zero sum game. Apple’s goals and business model are different from Google’s. Both companies can win without the other losing.

The worst thing about this article is the title, which is: “Apple, Google Seen Stumbling In 2012; Amazon, IBM Up.” It’s an editorial, and the person doing the “seeing” is the author himself. The title makes it appear as if the author is reporting what others are saying. That could have been his editors, of course, but I’d be pissed about that title if I were Mr. Deagon.

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41 Comments Leave Your Own

N8nnc

Spot on analysis.

He has a strange notion of commodity to apply it to personal music players (isn’t iPod so much easier to say, and more accurate?) and iPads (I can’t bring myself to say there is a tablet market). A commodity is something bought with little to no concern of its origin. Commodities can have premium versions (think Starbucks bean coffee) but when the market in so dominated by the premium brand it doesn’t make sense to label it a commodity. I wonder if anything with a(n intellectual property) protected user interface can be commoditized?

nc10t

Another Android vs Ios, as if they were neck n neck for the prize.

Android 47% - iOS 29%

There is no “lack of apps” on this Acer Iconia A500, only a complete lack of any kind of ORGANIZATION!  There are some lack of flashlights, probably due to the huge differences in Android camera lights.

Some idiot was bragging about how much more revenue Apple apps made in another pro-Apple, but not Apple specific pub.  I replied those hundreds of thousands of dollars came from the USERS, the reason it’s Android 47 - iOS 29, at the moment…

Lee Dronick

Well that didn’t take long, we should have a few more drop in for a visit.

Arbold herlim

The fact remains that android is a clunky

Shogunthemagnificien

Come on.  Don’t you get the real purpose of that writing.  Mr Deardong or whatever his name is, simply want to get noticed.  Nobody heard of him before, but now we are discussing the product that his puny brain was able to put in some form reminiscent of the language.  So, please mr Deardung, just go away.  Take refuge at the trailer part, where you were conceived and let loose by your mother.  Impress her with your flight of non-existent intellect, and spare us from your rambling.

Karvin

C’mon, you need to know what commodity means.
Any Tom, Dick & Harry knows that apple product are luxury.
Samsung exists for decades now but what it has “invented”!???
always a smarter way to copy others idea product. Personally, Samsung products are glossy junk. I have used mobile and other products of it, high end model. They are not even near to what apple standards are. Take it hardware or software.
Your prediction of Stev Balmer and Blackberry seem realistic, but that something most of people know since long.

RonMacGuy

Well that didn?t take long, we should have a few more drop in for a visit.

grin  Yes, unfortunately there will never be a shortage…

Lee Dronick

Samsung products are glossy junk. I have used mobile and other products of it, high end model.

Before I got my iPhone I had a Samsung “feature phone” or whatever you call a generic cell phone. It was pretty good, reliable. I don’t know about their Android devices, I have never owned one. On the home appliance side I have a Samsung refrigerator and it is very nice and reliable.

Smartphonelvr

C?mon, you need to know what commodity means.
Any Tom, Dick & Harry knows that apple product are luxury.
Samsung exists for decades now but what it has ?invented?!???
always a smarter way to copy others idea product. Personally, Samsung products are glossy junk. I have used mobile and other products of it, high end model. They are not even near to what apple standards are. Take it hardware or software.
Your prediction of Stev Balmer and Blackberry seem realistic, but that something most of people know since long

Apple standards and Samsung standards homologous.  Remember who makes hardware for apple wink

Takster

C?mon, you need to know what commodity means.
Any Tom, Dick & Harry knows that apple product are luxury.
Samsung exists for decades now but what it has ?invented?!???
always a smarter way to copy others idea product.

You’ve got to be the worst type of poster on the internet, honestly. Specialists in FUD. Apple was granted 563 patents for the year 2010, Samsung had 4518 patents passed. But hey they don’t invent anything at all right? Just imitate?

So tell me, did apple invent the touch screen interface or just patent the way you use your finger on it, _or is it all smarter way to copy others idea_ ...aka a PHONE.
How innovative of them.

I own a iphone as well, and some droid thing… the fact is a phone is a damn tool of convenience, like any phone, not a luxury. If you define luxury as a particular shape or rehashed OS I have a designer couch in my shed from 1970 I will sell you for $2000. Obviously luxury must mean cool according to you, or did you buy the gold plated iphone that comes with a personal masseuse, private jet and a tropical island?

Karvin

Obviously luxury must mean cool according to you, or did you buy the gold plated iphone that comes with a personal masseuse, private jet and a tropical island?

Luxury means some standard. Price of the products stays constant, career of US finds it difficult to operate with iPhone, people stand in line for products. Tell me one samsung name which has any of above ?

Patents, I agree, Samsung has more. But when I said innovative, it means really something out of box. who imaging a music player with just one button and who dreamed a phone without dial pad! 
Anyway,  going back to subject of the article, I still say it’s baseless.

Karvin

I own a iphone as well, and some droid thing? the fact is a phone is a damn tool of convenience, like any phone, not a luxury

—This sentence would have been true before 2007.

Takster

Luxury means some standard. Price of the products stays constant, career of US finds it difficult to operate with iPhone, people stand in line for products. Tell me one samsung name which has any of above ?

Patents, I agree, Samsung has more. But when I said innovative, it means really something out of box. who imaging a music player with just one button and who dreamed a phone without dial pad!?
Anyway,? going back to subject of the article, I still say it?s baseless.

Your confusing luxury with consumer demand, product appeal, design, function and the marketing forces driving it all. Luxury goods never stay at a fixed rate, if they do I’d like to know where you shop. Also condensing a system down to one button is very innovative but I don’t consider only using one finger where others use two as a luxury. It’s more a end users benefit. I agree both Samsung and Apple have tons of patents, but you cant really accuse a decade old company that makes what, US $220 billion dollars a year of lacking inventors. Pretty sure iphones contain samsungs mini capacitors, and they also contributed to the creation of 4g.

Both companies have made leaps and bounds from others work through the decades, bottom line. No need to take sides or become involved in their little wars, we’re just the consumers in the end.

Takster

“I own a iphone as well, and some droid thing? the fact is a phone is a damn tool of convenience, like any phone, not a luxury”

?This sentence would have been true before 2007.

Are you telling me I wouldn’t be able to run my business in 2007 from my phone? I wish I had of known back then when I had my nokia e70 ssh into my servers, do my emails etc. Sometimes, I used it to call people. It was all pretty convenient.

Karvin

Both companies have made leaps and bounds from others work through the decades, bottom line. No need to take sides or become involved in their little wars, we?re just the consumers in the end

Well, I’d agree here

Tim

“....and who dreamed a phone without dial pad!
Anyway,  going back to subject of the article, I still say it?s baseless.”

Answer: IBM Simon in 1993

Karvin

Are you telling me I wouldn?t be able to run my business in 2007 from my phone? I wish I had of know that when I had my nokia e70 ssh into my servers, do my emails etc. Oh that?s right, you?re the GUI luxury guy

GUI was present since long. Don’t forget iPhone and others are trending only because of good and convenient GUI, not due to ssh to server. I am in IT/Server industry for years and knows very well how mobile/networking works. I didn’t comment about hardware earlier just like that. I personally know how apple products lasts and works as it is for year. If you have first generate iPod, I’m it would be still working good. So you were running your business in 2007 by ssh to server, you were one of rare people and market belongs to other kind of people who likes GUI.

Good night now. and enjoy product, Let me re-iterate, I still think this article is baseless.

Takster

I didn?t comment about hardware earlier just like that. I personally know how apple products lasts and works as it is for year. If you have first generate iPod, I?m it would be still working good. So you were running your business in 2007 by ssh to server, you were one of rare people and market belongs to other kind of people who likes GUI.

My old nokia still works too after all these years, but it’s outdated junk these days, which is why I’d be cautious with the word luxury around phones. Todays iphone = tomorrows dinosaur. Luxury and people perceptions of it is a fickle beast, a luxury BMW for the early 80’s is cheap junk today, but a rolls royce from the same period has a price tag that looks like a third world countries GDP. Phones don’t hold value, so they’re just a innovative product I’ll use. Never a luxury I cant afford.

Craig r

Samsung doesn’t do software, they have no chance in the long run…

Tiger

Apple could dump and walk away from the mobile phone business right now and it will take Android years to catch up. Why? Because they sold a premium product at a point of high demand and made what, $35B?

Nice roll to be on. And they’re not walking away. As it stands, Android wouldn’t exist if Apple hadn’t rolled out iOS. Everybody was too afraid to take on RIM in that market before Apple came in and created a whole new Pie and left RIM sitting in the corner skulking and floundering (seen a stock price lately?)

Deng

I agree that it’s not a zero sum game. I don’t think Apple wants more than 30 percent of the market. I think they’d prefer to make substantial profits. On the low end I think they just want enough market share that they don’t become irrelevant. I think they’re doing a good job.
  Android is where the action is though. It’s been better for a long time. Better to me is not smoother or shinier. Android does more and has been much more innovative. Apps are silos on iOS. It makes sense that the separate app experience is richer; it had better be. And it makes sense that more development effort goes into them. But their experience in aggregate is worse than on Android.

Intruder

In your opinion.

RonMacGuy

Interesting article about the need to virtualize android.

android has a long way to go before providing a consistent experience across hundreds of phones. Severe fragmentation exists. android updates take way too long. So google creates the ‘android Update Alliance’ in May 2011 and the writer of this article states that “Six months after that alliance was formed, absolutely no progress has been made, and many in the industry believe that the idea to try to coordinate android software updates on phones was doomed from its inception.”

Additional quotes:

“In contrast to both Apple and Microsoft, Google hasn?t even managed to get version 2.3 ‘Gingerbread’, the previous stable smartphone version of Android rolled out to all phones that were released in the last two years.”

“And it seems that even fairly recent devices might not get the latest Android 4.0 ‘Ice Cream Sandwich’ either, although it looks like OEMs like Samsung may have to capitulate on this issue despite the real possibility that the update might not be able to accomodate their ‘value add’ software modifications on some of their models such as the Galaxy S line due to a lack of onboard memory.”

In my opinion, it is pretty pathetic that you may have a great phone that you want to upgrade when it gets too old but you have to research and be careful not to upgrade to a phone that can’t run the android version that you’ve been running on your existing phone, or have to figure out which phone you should buy based on the probability that it will be able to run a yet-released version of android or not. Very sad in my opinion.

Lee Dronick

?In contrast to both Apple and Microsoft, Google hasn?t even managed to get version 2.3 ?Gingerbread?, the previous stable smartphone version of Android rolled out to all phones that were released in the last two years.?

?And it seems that even fairly recent devices might not get the latest Android 4.0 ?Ice Cream Sandwich? either,

They are naming their operating systems after food! Foods that while they may be tasty are not that good for you? What is the next one going to be called, “Buffalo Wing” or “Pork Rind?” Are the Android users the kind of person who goes to the County Fair mostly for the dining experience? smile

RonMacGuy

They are naming their operating systems after food! Foods that while they may be tasty are not that good for you? What is the next one going to be called, ?Buffalo Wing? or ?Pork Rind?? Are the Android users the kind of person who goes to the County Fair mostly for the dining experience?

Food that may start off tasty but tends to go stale or even rotten after a while. Also, food that once you’ve had a steady diet of it, you get sick to your stomach and maybe even vomit a little!! Plus, food that is unhealthy long-term and may cause health deterioration. Very appropriate for android, don’t you think? wink android - the diabetes of smart phones!!

Bryan, am I allowed to reference vomiting in relation to android? Or is that not playing nice enough? grin

I do bow my head in shame though - over the holidays I probably had 5 or 6 ice cream sandwiches!! Leave it to google to ruin the name “Ice Cream Sandwich” forever!!

Ross Edwards

They are naming their operating systems after food!

Actually, even as a non-Android user, I don’t see a problem with their “dessert” naming scheme.  It’s just as arbitrary as, say, naming operating system versions after jungle cats.  And it’s a heck of a lot easier to compartmentalize and discuss than “Did you get the new 5.1.2 update?”  “Wait, isn’t it the 5.2.1 update?”  “Who the hell knows?!”

...aaaanyway, I think Karvin’s comments are right on target.  Apple just doesn’t care about certain market demographics.  They’re chasing the market segments to whom their offerings are the best possible fit.  That includes people like me, who do depend on our technology to make a living, but don’t have time or desire to tinker with it—give me a computer and cell phone that Just Work and that integrate seamlessly together.  I’ll pay for that.

Lee Dronick

Actually, even as a non-Android user, I don?t see a problem with their ?dessert? naming scheme.? It?s just as arbitrary as, say, naming operating system versions after jungle cats.? And it?s a heck of a lot easier to compartmentalize and discuss than ?Did you get the new 5.1.2 update??? ?Wait, isn?t it the 5.2.1 update??? ?Who the hell knows?!?

Yes a catchy name is easier to hold. Just that they are not named tiramisu or something classy, something with a cachet such as Lion or Snow Leopard. It seems a bit self-depreciating.

give me a computer and cell phone that Just Work and that integrate seamlessly together.  I?ll pay for that.

Same here.

B9BOT

Let it also be known Android Apps are unsafe, full of malware and probably bad code. Nothing is checked by anyone, it’s a free for all.
This is what got Windows in trouble and the same thing is happening with Android. Sure it’s open, wide open, and that’s the problem. There’s no standardization so every app you get has no familiarity to how to get it to work. Apple’s never had stale products, Apple is the innovator of everything we see out there. Android is a copycat of IOS and everyone knows it, be it a cheap, unsafe copy. Just because Steve Jobs is gone doesn’t mean Apple can’t continue as it already has for the last 2 years.
FUD editorial from start to finish.

Karvin

pple is the innovator of everything we see out there. Android is a copycat of IOS and everyone knows it, be it a cheap, unsafe copy.

100% agree. I tried to say it earlier but someone described me as worst poster smile

Brian Deagon

Hey Bryan,
I enjoyed reading your post and the following comments. I certainly tweaked the Apple fan boys, where Apple is king (but no longer king of the hill).
It seems that Samsung is now teasing Apple with its new commercial, seen here: http://bit.ly/zCmrUA
It reminds me of the long running Apple commercial years ago that made Bill Gates into a total nerd while Steve Jobs was super hip. This Samsung commercial seems to have borrowed a page from that.
Apple fans are generally viscous when someone taunts their leader, with hurricane force, as evident by the numerous comments from the many blog posts attacking my prediction. I welcome the debate and feedback.
As a long-time follower of Techmeme one can see how supremely excited Apple fans get over even just minor tweaks - as if nothing else exists.
But a sober look at the market numbers show Apple is decelerating while Android is accelerating. One can’t remain hot forever. And the loss of Steve Jobs as their mystical leader is a big negative. Several people I trust think Apple will lose its cool, but not until 2013, as Jobs likely left enough in the pipeline.
Apple will remain highly popular but the market has caught up in smartphones, and will do the same in tablets. Apple is suing Samsung all over the world because Samsung is giving them major headaches. And the Amazon Kindle Fire did very well over the holidays, apparently stealing some iPad thunder.
Is there something the iPhone can do that no other phone can? Siri? That technology has been around for a very long time. It’s a neat gimmick.
Apple has almost 590,000 apps on iTunes while Google Android has about 320,000. Android is catching up but, truly, does one more app really make that much of a difference?
Perhaps Apple has some more tricks up its sleeve and will redesign its flat, boxy and stale iPhone. But Apple will be just one of several options people will consider when buying a phone or a tablet.
In the end most people will gravitate to the price/value proposition. Perhaps Apple will be the BMW, but a lot of people like the Lexus, or Honda, or even Ford. The iPhone is a tool, not some magic wand.
Be well,
Brian
P.S. - yes, I’m a real journalist!

wab95

Bryan:

Well reasoned argument. Given the plethora of responses, many with which I either agree or sympathise, I will just focus on one of the gems in your rant thesis.

You state:

Let?s start with the flippant commodity comment. A quick show of hands: who can name another commodity industry where Apple competes profitably?

It doesn?t take a rocket scientist to name two of them: PCs and MP3 players. In both markets, Apple has shown that it can hold its own. Sure, it might be different for the smartphone market, but with no supporting reasons, I call balderdash on anyone making this kind of argument.

The key phrase here is ‘no supporting reasons’. The people who make this argument will differ with you and cite precedent: MS did it to Apple in the past using this model with Windows, ergo, history must repeat itself; Google will do it to Apple using this same model and with equally one-sided marketshare gains.

Indeed, there are two categories of argument oft-cited in this regard.

The first is that Apple, in effect, is foredoomed to perpetually re-enact this almost Sisyphean tragicomedy of starting an enterprise, taking the market by storm, rising to near top of the heap and then watching its marketshare roll downhill to single-digit ignominy. And the proof that this will happen is that it has happened before, and the fate as decreed by the gods of conventional wisdom is that conventional wisdom will not be denied, and ergo must repeat itself in perpetuity. A circular reasoning, if reason at all.

A small wrinkle in this argument, inconveniently tossed in by empirical observational science, is that things can only repeat themselves if you do not change the variables of the system. If you change any one of the variables, the outcome, however marginally, will be different.

Not only is Google not MS, Apple 2012 is not Apple 1984. But the most glaring omission amongst changed variables these folks consistently overlook is we, the consumer. We have changed. Substantially. No longer the tech-naive innocents who flocked, out of fear and uncertainty, in whatever general direction this brave new world was headed for fear of being left behind, we are now beyond tech-savvy. We play OEMs off of each other to obtain the best products. We communicate and conspire in real time and publicly tweet aloud our praise and condemnation of the offerings of manufacturers and service providers. And they respond with attempts at appeasement (Netflix, Verizon, AA, RIM). 1984 it is not, because we are a new race of consumer.

The other group who make this argument include those who suggest a moral imperative to Apple’s inevitable demise - Apple is bad because they use a closed model and closed is immoral, therefore the gods of conventionality will not allow this, and Apple will be punished by fate and by Zeus for their immorality. Again, like Sisyphus, Apple’s punishment will come for having offended the prevailing powers of conventional wisdom and the collective milieu of mediocrity, which cannot, must not, be contravened.

The upshot of such dithering delusion is that it ignores the reality standing right in front of it. While Apple may not be permitted to have an outsized lead in any specific field for long if ever, it is neither necessary nor even desirable for its goals, for it possesses that rarest of ambrosia desired by all the gods and goddesses - mindshare, devotion and that ultimate of je ne sais quoi: ‘cool’ all by which it dominates and leads not only single markets but multiple industries. It consistently defines then redefines the technology and the services that support it. The company epitomises leadership without ever having to even utter the word.

Oh, and that doesn’t hurt its bottom line. Not one iota.

And while we snipe, quibble and clamour about who has the biggest marketshare, wax weak in the knees over software or get a hard-on over the hardware, Apple will have already moved on to the next insanely great thing. And whatever it is (and you know it’s coming), it will become the new centre of mass to which all industry will inexorably be attracted.

zewazir

To continue wab95’s analysis, another factor that ha changed significantly is the market itself.  In 1984, people followed industry in order to be compatible with work, and industry followed cheap. Apple’s consumer model did not work well in that environment.  Today, with factors such as cross-platform compatibility, the fact that, if necessary Apple computers can run Windows as well as Mac OS, and the entire market of consumer products that need not be tied to a specific computer platform, and Apple’s consumer model works - and works better than anyone from 1984 dreamed of at that time.

And one other little item when it comes to predicting Apple’s demise: while dominating a market is certainly good for profits and shareholders, working with a smaller share of that market dos not equate to zero profits.  Even 20% of a multi-billion dollar market (something I do not see happening) is still a LOT of money. (were I to have even one DAY’s worth of 1% of that market….) It’s admittedly not a much as 90%, but well and over enough to keep ANY reasonably run corporation well into the black.

RonMacGuy

But a sober look at the market numbers show Apple is decelerating while Android is accelerating. One can?t remain hot forever. And the loss of Steve Jobs as their mystical leader is a big negative. Several people I trust think Apple will lose its cool, but not until 2013, as Jobs likely left enough in the pipeline.

Hello, Brian Deagon, and welcome to the discussion. I would like to understand how you can make the statement that Apple is decelerating. Across what time frame?

According to Apple’s last quarter performance as reported mid-Oct 2011:

“The company announced Tuesday that it logged $28.27 billion in revenue and $6.62 billion in net profit for the three-month period ended on September 24. That?s an increase of 38 percent in revenue and 54 percent in profit from the year-ago numbers. Apple earned $7.05 per diluted share, up 52 percent from year-ago earnings of $4.64 a share.”

Sure, this was driven primarily by Macs and iPads, but iPhones still “enjoyed solid gains for the quarter” as compared to same quarter last year. And, iPhone sales were obviously down in anticipation of the new model coming out in Oct (one of those ‘Apple effects’ that will cause spikes in sales due to expectations of new product releases). And, the 4S is selling like crazy.

So tell me, where is the deceleration? Sure, it is easy to come in and toss the typical Apple fan insults our way. I would have expected far more from a respected “real journalist” (as opposed to a fake journalist?!?) grin So explain this “sober look at the market numbers” of which you speak.

RonMacGuy

Very well said, wab95 and zewazir. zewazir, you touch on a key point - long-term viability is tied to profit and shareholders. Even with a small fraction of the entire mobile phone industry (not just smartphones, but all mobile phones), Apple brings in the highest share of the handset profit, and will continue to do so.

Brian Deagon

Hello RonMacGuy,
I am not referring to Apple?s financial performance. Their business model provides healthy margins across the board and investors have been well rewarded. Some analysts still have them as a top pick for 2012.
I?m referring to Apple?s deceleration primarily in iPhone market share, where Apple makes most of its money. A reading of reports from Canalysis, comScore, IDC, Gartner, Nielsen, etc. over the past year or more all show that Apple?s growth is slowing (and in some cases falling), while Android has been booming.
Android became the No. 1 platform by shipments one year ago and it hasn?t slowed yet. Android?s Q3 market share, for example, doubled worldwide to 53%, says Gartner, while in the same period Apple fell 1.6 points to 15%. Apple has done remarkably well in that it?s Apple vs. Samsung, HTC, LG, Motorola, etc. in the OS wars. And Apple will likely look good in Q4 with 4S sales. But it?s been overtaken as the leading smartphone device in the U.S. (currently by HTC and Samsung) and worldwide. It is no longer the leading smartphone, and it?s going to get tougher.
There is a perception that Apple has the best smartphone. But it?s not entirely true. My son, a third year student at UCLA studying electrical engineering, dumped his iPhone after 3 years and got a Samsung Galaxy SII Skyrocket ? which he says is awesome. So when I say ?Apple will lose its cool factor? I mean that people will come to recognize that the iPhone is not the best phone on the market, and that there are many other options worth exploring. It?s already happening; it?s just not readily evident to many. I think Apple is a great company. They have redefined consumer expectations and for that they get a standing ovation. They currently dominate in tablets but I think that will change as well. The Kindle did very well over the holidays. It mostly comes down to software and Apple has no big advantage in this area, as Android has effectively caught up. iTunes serves Apple well financially. They have cloud stuff and so on, but much of this is an attempt to lock in customers, which may not go over well with many. Brand loyalty will fade, forcing manufacturers to compete on features and price. There was a time when the Motorola RAZR was tops. It stumbled and consumers fled. Apple may or may not stumble, but it is no longer tops and if it loses the cool factor there will be rougher waters ahead.
Lastly, perhaps I shouldn?t insult Apple fan boys, but they sure haven?t hesitated in attacking me. I?m enjoying the debate.
Brian Deagon

zewazir

The bottom line is that as long as Apple continues to sell a few tens of millions of iPhones world wide each year, Apple will continue to be a player in the smartphone market, no matter what the Android fans have to say about it, be they market analysts, “real journalists”, or flamebaiting trolls. That is what prompted this particular article - some “analyst” claiming that Apple is doomed because they are losing market share. It’s a BS claim, period.

IF commanding a majority of a market is all you care about, have fun with your number games. As I said before, competition is good for everyone, especially consumers. So when other manufacturers come out with their idea of smart phone, and if it is better than the current iPhone, good for them. That will simply push Apple to do even better in their next iteration. That is what competition does.

Meanwhile, all the anti-Apple rhetoric about how Apple is losing market share - SO WHAT? Apple still sold more iPhones last quarter than the quarter before, than the quarter before going all the way back to the first iPhone. Losing market share in a market that is expanding is hardly the harbinger of doom.  But, if it makes you feel good focusing on Android OS driving the larger number of smartphones, well, I guess we all need to find those things that make us feel good.

Brian Deagon

Zewazir,
I’m not sure what “anti-Apple rhetoric” you are talking about. Interestingly, my one paragraph that Apple will lose its cool factor generated numerous Apple blog posts followed by large volumes of commentary and leading to more than 37,000 clicks to the story.
I certainly did not claim Apple would be doomed or no longer be relevant but I did touch a nerve with Apple fans, such as yourself. Why is that?

wab95

A reading of reports from Canalysis, comScore, IDC, Gartner, Nielsen, etc. over the past year or more all show that Apple?s growth is slowing (and in some cases falling), while Android has been booming.

Except, that is not exactly what the comScore data show; rather that
Android’s growth rate has slowed relative to that of the iOS, as explained by Philip Elmer-DeWitt.

No attack, BTW. You will find varied opinions on this site, and yours is as valid as anyone else’s. I agree wholeheartedly with much of your analysis and reasoning, by the way. Where I part company is in areas that I consider over-reach, such as asserting that “‘Apple will lose its cool factor’...because people will recognise that the iPhone is not the best phone on the market…”.

Leaving aside issues of reference frames, as I am not sure which market you’re referring to, but the emerging markets in Asia, where I spend much of my time, have a strong appetite for Apple and regard Android as what you get when you can’t get Apple’s iOS, let’s just look at the statement on the device. Not the best on the market? That’s news? People have known that from the day the iPhone was released in 2007. Even the BBC made that point on ‘Click’. The iPhone has been out-spec’d on its specific features by one or another, in some cases on every feature by a single handset, since its birth. That fact has flummoxed more than one real journalist and many a pundit, who predicted the iPhone’s flop and flagging sales over four years ago. And if we wait long enough, that prediction will come true - just as it has for the iPod, which some predicted would decline in sales (we won’t discuss the interaction with iOS device sales).

The iPhone, I would argue, for the majority of those who expressly want an iPhone, is not about the specs. Never has been. It’s about an integrated solution to a problem that most people didn’t even realise they had until Apple pointed it out. Digital management. Apple’s ecosystem was in position before the iPhone’s debut. The competition was outflanked and the leadership at MS even admitted so when iTunes debuted. That system has only become further defined since then. For many of us, a spec-heavy and feature-rich device in isolation is a curiosity, a toy, but not a valued tool for work and play. In my line of work, I need my data, be it photos, X-rays, contacts, music, what-have-you, across all my devices, and I need this without the time-tax of a learning curve. They need to work out of the box. This is where Palm, RIM, MS and HP failed my international team and me, and lost our business to Apple. And the haemorrhage has continued, particularly for RIM and MS. Having now looked at this from a professional use point of view, I don’t see an equally integrated competing solution from Google’s Android, and neither do my data security people. Hardware specs be damned.

So the ‘cool factor’ for me is that the integrated data management works at work and at play, and so long as that continues, it will continue to be ‘cool’. Another OEM’s superior spec-sheeted device doesn’t alter that fact.

My point is simply that it helps to know something of the behaviour of a community, and the rationale for it, before predicting how it may change. You might even guess correctly as to outcome (e.g. specific device sales), while failing to understand the reasons why, which is one of the worst outcomes for an investigative mind - or a business venture. Just ask RIM and HP about the tablet market.

zewazir

@Brian Deagon
When I comment, it is rarely aimed in response to any single other poster, and when I do (like now) I do so in a manner that indicates I am directly responding to a particular person and/or comment.

My commentary here has been mostly aimed at the original theme of this thread: an analyst predicting the marginalization or outright downfall of Apple based on current market share trends.  And, yes, much of that type of rhetoric comes from an anti-Apple POV.

What commentary I did have that was prompted directly by your comments had to do with my views of competition - that it is a good thing when Apple competitors come out with devices which outperform Apple.  It keeps the design boys at Apple on their toes.  Though I also agree with wab95 that the “cool factor” of Apple devices which you refer to has more to do with the “whole widget” than with the tech specs of the physical device - and in that, Apple’s competitors are still significantly behind the power curve. In short, yes there are better smartphones out there, but when you toss in the information environment the smartphones operate in, the better smart phone loses a lot of its comparative cool factor to Apple whole widget approach.  “It just works” is not an empty catch phrase.

archimedes

It mostly comes down to software and Apple has no big advantage in this area, as Android has effectively caught up.

Or it could come down to user experience, which benefits greatly from the kind of vertical integration Apple and Amazon have with iOS and Kindle, respectively, ensuring that hardware, software and infrastructure work together seamlessly.

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