Thundering herd: iPhone edition

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    Posted: 18 October 2011 02:53 PM

    Even the clueless punditry acknowledge that the iPad rules the tablet universe. Despite unrelenting dollar sales supremacy, the iPhone doesn’t get that same level of respect. The Moronic Media? continue to be blinded by activation numbers and spec sheets proffered by Google and its hardware partners. They fail to acknowledge that millions of consumers are willing to pay over $1 billion each week for the best overall smartphone experience.

    It would be impossible to keep up with every new Android phone introduced. There’s a lot of cheap junk out there. However, there are top-of-the-line Android phones arriving every month. Motorola just introduced one today and Samsung will unveil one tonight (~8pm PDT).

    The hardware specs (but not quality/fit & finish) of these high-end Android phones is arguably on par with that of the iPhone. The main drawbacks continue to be the overall user experience and battery life.

    Motorola Droid Razr
    Introduced Oct. 18, 2011. Pre orders Oct 27. Online and in stores Nov.
    Price $299 with 2 yr. contract
    Hot specs: thinnest smartphone, dual-core, 4.3” display, 4G/LTE, Android 2.3.x (still Gingerbread)

    Motorola Droid Bionic
    Introduced at CES Jan. 6, 2011. Released Sep. 8th. (that’s an 8 month lag)
    Hot specs: dual-core, 4.3” display, 4G/LTE, Android 2.3.4
    * headphone jack problems

    Samsung Galaxy S2
    Introduced at MWC Feb. 13, 2011. Released May 1st in S. Korea & UK.
    Release in U.S. delayed a number of times. Available on AT&T, T-Mobile & Sprint.
    Hot specs: dual-core, 4.3” or 4.5” display, 4G/LTE, Android 2.3.4

         
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    Posted: 18 October 2011 08:54 PM #1

    Today’s quarterly results of 17 million iPhone sales shows 1) iPhone 4S (“5”) anticipation was high and/or 2) people are tight with their money.   

    For case 1, this bodes poorly for iPhone competitors.  The pent-up demand is obvious.

    For case 2, people may spend have less (duh), but they are still looking at Apple products as a bright spot.

         
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    Posted: 18 October 2011 10:58 PM #2

    Slightly different reasons.

    (1)  iPhone 4 was way too old.

    (2)  Oppenheimer committed an Osborne-like mistake (which even WS analysts may not have been paying attention to, but I was!)

    Had iPhone 4S launched with, oh, 5 days to go in the quarter, iPhone sales probably would have been in the 20-21 million range.  But it was iOS 5 and iCloud, hell or high water this quarter.  Will the hardware be forced to wait for the software train next year?  Without a damn good reason, or without a new iPhone model - I’m thinking no.

    iPhone 4S will sell very well through fiscal Q3 anyway.  No need to worry about that again for a while.

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    Posted: 19 October 2011 05:05 AM #3

    Mav - 19 October 2011 01:58 AM

    ... (2)  Oppenheimer committed an Osborne-like mistake (which even WS analysts may not have been paying attention to, but I was!) ...

    Other than TC and PO, you should include Scott Forestall in your executive watch.  He may be the one who convince the executive team to delay the launch of iPhone 4S.  If anymore executives resigned, may have to raise red flag.

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    Posted: 19 October 2011 05:36 AM #4

    He’s not on it yet.  Siri required iOS 5.

    He’s on the Advisory for Watch list I just made up.

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    Posted: 19 October 2011 03:13 PM #5

    The Droid Razr had it’s few hours in the spotlight and was unceremoniously booted by…

    The Galaxy Nexus
    Introduced Oct. 19, 2011. Available “sometime in November”. No pricing yet.
    Hot specs: dual-core, 4.65? display (1280 x 720 resolution), 4G/LTE, Android 4.0 Ice Cream Sandwich

    In terms of weight, the Galaxy Nexus surprises by being quite a bit lighter than one might expect from just looking at it. This is likely down to the all-plastic external construction ? which sadly didn?t impress us too much ? though Samsung has installed a metallic inner frame to ensure the phone?s frame is rigid enough.

    http://thisismynext.com/2011/10/18/galaxy-nexus-android-ice-cream-sandwich-pictures-video-hands-on/

    We?ve added a gallery of shots taken with the 5-megapixel camera to the bottom of the post ? as you can see, the still shots aren?t all that impressive, but the panorama shot is pretty awesome.

    As to overall performance, we saw a good deal of stutter in the Galaxy Nexus before us. Taps were not always recognized and there were occasional delays in performing an instruction, though in Google?s defense, it was a phone fully loaded with running tasks and the software is being continually improved and optimized (i.e. it?s not yet fully baked).

    Once again, we’ll have to wait for full reviews to find out if battery life for these large screened 4G Android phones is better than horrendous.

         
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    Posted: 19 October 2011 03:29 PM #6

    Drew Bear - 18 October 2011 05:53 PM

    ... The hardware specs (but not quality/fit & finish) of these high-end Android phones is arguably on par with that of the iPhone. The main drawbacks continue to be the overall user experience and battery life ...

    So, why do folks buy Android?

    a.  Everything except Apple?
    b.  Android represents freedom of choice?
    c.  Low end Android is cheap?
    d.  New model every few weeks/months?
    e.  Easily hackable?
    f.  Massive push by handset makers for survival/ carriers to avoid lock by a single handset maker?

    Given above, should Apple license its iOS 5?  Is having iPod touch and three models of iPhone in the market is sufficient variants to cater to different needs* of the consumer?  *except geeks.

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  • Posted: 20 October 2011 11:52 AM #7

    Mace - 19 October 2011 06:29 PM
    Drew Bear - 18 October 2011 05:53 PM

    Given above, should Apple license its iOS 5?  Is having iPod touch and three models of iPhone in the market is sufficient variants to cater to different needs* of the consumer?  *except geeks.

    this would be huge boost to stock price. Current low evaluations stem partially fro the fact that apple is considered hardware manufacturer.
    They don’t get easy money from licencing / adds / software sales

    ( see AMZN,GOOG) for comparisons and evaluations.)

    AAPL is at PE closer to IBM and INTL then any of the high flying services / software com

    my 0.02

         
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    Posted: 20 October 2011 12:30 PM #8

    Mace - 19 October 2011 06:29 PM

    So, why do folks buy Android?

    a.  Everything except Apple?
    b.  Android represents freedom of choice?
    c.  Low end Android is cheap?
    d.  New model every few weeks/months?
    e.  Easily hackable?
    f.  Massive push by handset makers for survival/ carriers to avoid lock by a single handset maker?

    IMO, in order would be:

    1) Cost! - Android phones are cheap and/or its what their work provided them
    2) Its not Apple (this covers a wide variety of meanings to different people geeks it means one thing normal people it means another)
    3) Its better than an iPhone because the screen is BIGGER (I hear this one a lot)

    However, I’ve *never* heard anyone say that Android is a better OS.  At best, I’ve heard folks say it integrates with their Google services better than an iPhone.

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  • Posted: 20 October 2011 12:41 PM #9

    Mace - 19 October 2011 06:29 PM

    So, why do folks buy Android?

    a.  Everything except Apple?
    b.  Android represents freedom of choice?
    c.  Low end Android is cheap?
    d.  New model every few weeks/months?
    e.  Easily hackable?
    f.  Massive push by handset makers for survival/ carriers to avoid lock by a single handset maker?

    Given above, should Apple license its iOS 5?  Is having iPod touch and three models of iPhone in the market is sufficient variants to cater to different needs* of the consumer?  *except geeks.

    In France

    f :Massive push by handset makers for survival/ carriers to avoid lock by a single handset maker

    is obviously the main drive of Andoid sales to the average joe..

         
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    Posted: 20 October 2011 02:11 PM #10

    AT&T just reported that they sold 4.8 million smartphones last quarter, including 2.7 million iPhone 4 & 3GS. That’s 56% iPhones vs all other smartphones, which include Android, Blackberry & Windows Phone devices.

    Remember that AT&T made a big push towards Android phones once the iPhone 4 was offered by Verizon. They had well over a dozen Android models ranging from subsidized prices of $0 to $199. On the high end they had the best Android phones from Samsung, HTC, Motorola, Sony & LG.

    The old iPhones still outsold all those phones combined. AT&T now says they activated 1 million iPhone 4Ses during the first 4 days. The 3GS is now $0 subsidized. This quarter will be the first time iPhones are represented across all price points. What percentage of AT&T’s smartphone sales will the iPhone represent this quarter? 60%? 70%?

         
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    Posted: 20 October 2011 02:31 PM #11

    Drew Bear - 20 October 2011 05:11 PM

    AT&T just reported that they sold 4.8 million smartphones last quarter, including 2.7 million iPhone 4 & 3GS. That’s 56% iPhones vs all other smartphones, which include Android, Blackberry & Windows Phone devices.

    Remember that AT&T made a big push towards Android phones once the iPhone 4 was offered by Verizon. They had well over a dozen Android models ranging from subsidized prices of $0 to $199. On the high end they had the best Android phones from Samsung, HTC, Motorola, Sony & LG.

    The old iPhones still outsold all those phones combined. AT&T now says they activated 1 million iPhone 4Ses during the first 4 days. The 3GS is now $0 subsidized. This quarter will be the first time iPhones are represented across all price points. What percentage of AT&T’s smartphone sales will the iPhone represent this quarter? 60%? 70%?

    70% is a good number. 

    As a note, we ordered our Iphone 4ses on Saturday, the day after the original lauch. We will not have them delivered until Friday of this week. Many, many people must be in this position. The order is in the sales count made by Apple but the number is not in the activation number given by AT&T?

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    Posted: 20 October 2011 02:33 PM #12

    Drew Bear - 20 October 2011 05:11 PM

    AT&T just reported that they sold 4.8 million smartphones last quarter, including 2.7 million iPhone 4 & 3GS. That’s 56% iPhones vs all other smartphones, which include Android, Blackberry & Windows Phone devices.

    Remember that AT&T made a big push towards Android phones once the iPhone 4 was offered by Verizon. They had well over a dozen Android models ranging from subsidized prices of $0 to $199. On the high end they had the best Android phones from Samsung, HTC, Motorola, Sony & LG.

    The old iPhones still outsold all those phones combined. AT&T now says they activated 1 million iPhone 4Ses during the first 4 days. The 3GS is now $0 subsidized. This quarter will be the first time iPhones are represented across all price points. What percentage of AT&T’s smartphone sales will the iPhone represent this quarter? 60%? 70%?

    The more important question IMO is wether Apple can achieve these kinds of numbers on Verizon & Sprint or for that matter other carriers around the world.  I think overall penetration rates at ATT are about as high as we can expect even with three price points.  Look at what happened when the new device was delayed.  Sales tanked.  The good news is that based on the 1M already sold we are back on track for ATT sales.  Additionally we added two new carriers(Sprint & KDDI) which increase the addressable market.  The world wide smartphone market share for Apple is still in the 16-20% range yet on ATT we are at 56%, this tells me that we still have room to grow share in smart-phones by adding countries/carriers in addition to the continued growth of smart phones compared to feature phones.

         
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    Posted: 20 October 2011 02:53 PM #13

    pats - 20 October 2011 05:33 PM

    I think overall penetration rates at ATT are about as high as we can expect even with three price points.  Look at what happened when the new device was delayed.  Sales tanked.

    But even with “tanked” sales, the iPhone dominated smartphone sales that included new Android devices. I think what is interesting about AT&T’s percentages is that it comes close to revealing how well the iPhone might do on an even playing field.

    The world wide smartphone market share for Apple is still in the 16-20% range yet on ATT we are at 56%, this tells me that we still have room to grow share in smart-phones by adding countries/carriers in addition to the continued growth of smart phones compared to feature phones.

    Absolutely! I’m very interested in how the $375 unlocked iPhone 3GS does in overseas prepaid market.

         
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    Posted: 20 October 2011 03:01 PM #14

    Just saw this on AT&T: iPhone 3GS sees sellouts, more new subs than rivals

    AT&T is seeing an unprecedented uptake of the iPhone 3GS after price cuts and just recently going free on contract, the company’s wireless head Ralph de la Vega said during a call discussing summer results. There was still “tremendous demand” for the now two-year-old phone to the point where inventory was being sold out. It was also the phone of choice for more new customers than any non-iPhone device.

    The executive went so far as to see it as a launching point for the future of the company. Like Apple, he saw every cellphone becoming a smartphone. He estimated it would take two to three years before every AT&T cellphone was a smartphone, up from about two thirds today. This was a “huge opportunity,” he said.

    The fall launch of the iPhone 4S and the now-free 3GS pricing were poised to lead AT&T to its best smartphone sales ever in the fall, de la Vega added. His network always saw more first-time smartphone adopters going into an iPhone launch, but there was anticipation that “greater numbers” would be moving either from a basic phone or a messaging phone.

    He also dropped a hint that there would be “more tiered data options” in the future to help accommodate what customers wanted. These are more likely to cater to the high end than the low end, particularly as the company just switched on its LTE 4G network and plans to add LTE smartphones soon.


    http://www.electronista.com/articles/11/10/20/att.gets.rush.of.demand.after.free.iphone.3gs

         
  • Posted: 20 October 2011 03:14 PM #15

    Mace - 19 October 2011 06:29 PM

    So, why do folks buy Android?

    a.  Everything except Apple?
    b.  Android represents freedom of choice?
    c.  Low end Android is cheap?
    d.  New model every few weeks/months?
    e.  Easily hackable?
    f.  Massive push by handset makers for survival/ carriers to avoid lock by a single handset maker?

    Given above, should Apple license its iOS 5?  Is having iPod touch and three models of iPhone in the market is sufficient variants to cater to different needs* of the consumer?  *except geeks.

    In the listing above, a, b, d, and e are the reasons why hardcore geeks who are not Apple fans buy Android.

    C and f are the reasons normal people buy Android phones.  C, so much so, that even in today’s era of smartphone amazingness, feature phones (or as we used to call them, “phones”) still outsell smartphones overall.

    I have a friend who is not what one would call “in funds.”  He likes Apple products and wants an iPhone quite fervently, but the subsidized price AND the plan prices on the three carriers are all out of reach for him.  He was able to get an Android sh*tblock on Virgin Mobile for fifty bucks down and less than that, total, per month, for unlimited everything.  Tough to argue with that kind of pricing if you can get it, even in the face of missing out on iPhone’s richer and better user experience.

    This outlook lines up credibly with the tablet situation, where (pending the Kindle Fire’s arrival) the Android slabs couldn’t compete with Apple on price at par specs, so mainstream buyers DID adopt the iPad, and the only buyers for Android tablets were the hardcore geeks who hate Apple or who have a compulsive need to root all their gadgets, or both.