While its indeed not an zero-sum game where we have a clear good guy and a clear bad guy, there are some clear good outcomes. Lets call them mini-victories.
The patent fight is one of them. Rounded corners, button less interface, menu areas outside the screen. All those are of practical purpose and should never have been allowed to be design patented. Same goes for basic iconic figures for applications, a table view interface, slide to unlock and any "natural" gestures. Then there are FRAND patents, where a clear model for deciding prices would help in making the market more predictable for new ventures.
If we look at DRM, lockdown and DMCA, we also have a mini-victory that we need to fight over. Here we have a moral argument that the device owner should be in control and not Apple, Google or Samsung. Consumers need to get a win here.
I could mention that some actors in all this are behaving worse than others, and if one had to pick one evil over the others then I know where I would lean. But that is just a secondary issue in all this. Primarily, consumers and new actors on the phone market need to win. Those are the true "good guys" in the fight.
What he and the Gruber peice he references (did he seriously say Gruber isn't an Apple Cheerleader?!) fail to mention is trend.
The trend is your friend, one of the first things anyone who's suffered a trader learns. It's not a case of how high or low something is, but where it is going to be relative to it's current place.
Press and Markets get this (the former to a lesser extent true) but the fear is that Apple have had their Halcyon days. Originally Apple didn't need to worry about such issues as apps, they had the first phone device with a web browser that people really spoke about liking. Heck they didn't even have GPS dispite most feature phones in the UK having it with maps.
A lot of analyists are asking, rightly so, why is Apple able to keep making such money, now the market is cramped. Want a better camera, buy the 920, want a better screen? Buy the HTC, want a larger phone, buy the S4, want a smaller phone buy the. Hell I don't even know, but you get where I'm going with this.
The brand of the iPhone people fear to be falling. In the old days of Windows 3.1 domination, the software took months to years to write. Most of them now adays have little if anything more than weeks of platform specific code. The alternate marketplace is huge, due to the size of the global market place. Hell a friend was just telling me how he thinks he'll make a profit porting to the new blackberry, despite it having very low uptake here in London.
These notions lend people to conclude that what is currently happening with Apple might not be sustainable. Gruber has been consistently wrong the last few months (in fact he is always as he predicts little but Apple growth) with regards to the decrease in share price and failure to develop new market share.
tldr; It might not be Apple vs Google. But neither are expanding their userbase rapidily, without encrouging on the other.
It is the ecosystem that Apple sells, not the hardware. People buy Apple because they know the handset will be supported for a specific period of time, that every developer wants to sell on iOS and works hard to be there, and that they can walk into an Apple store and get support any day they want.
For the hacker, most of these things are irrelevant, but for Joe-Schmo who wants to put minimal effort forward when managing their digital life, the iPhone is the pinnacle of abstraction.
Apple makes money because they sell the promise of a long, comfortable relationship and they fulfill it time and again. Even with Samsung, will I be able to update my s4 beyond Jellybean? The answer is a firm "maybe", but I know 100% that my iPhone will get updates for years.
That's why Apple makes money, because they sell peace of mind.
Exactly. When I was 20 I'd happily spend my weekend building PCs or compiling Linux kernels. In general, my time/money ratio was skewed heavily towards time.
Now I'm in my 30s and have a demanding career it's very much the other way. Spare time is rare and incredibly precious.
Actually if you look at the market share figures, they're both expanding their market share without having to really go for each other due to the growth in smartphone usage (that is them picking up users from feature phones or new phone users) and those migrating away from BlackBerry, Windows Mobile and so on (between Samsung and Apple they're currently squeezing everyone else out of the market).
As things stand globally both are growing share of market, revenue, activations and total installed user base.
In terms of trend however there are a few interesting things happening. Over the past couple of months Android actually dropped overall US market share for the first time since if started taking off. In absolute terms it still grew, but less than the market as a whole.
The market got bearish on Apple sometime last year. What's really interesting though is it was about the same time that, in the US at least, the iPhone started growing faster than Android, a trend that has not only continued since then but has actually been increasing: http://twitter.yfrog.com/oe7etlp
The TL;DR version: Most investment funds, run by the same organisations who employ / fund / listen to these analysts, under perform the market. While what they say is interesting, the fact they don't get something might not be that big a deal.
I'm not going to say he isn't pro-Apple, but he does at least attempt to find the nuance in the story. I was merely saying I don't dismiss him out of hand as some do.
Regarding the trend, I concur and I somewhat covered the excellence of most of the handsets now in the market certainly means a much more competitive marketplace.
I don't necessarily think Apple have stopped growing (their last quarter would seem to refute that[1]) but it wouldn't be a surprise if they are peaking.
>These notions lend people to conclude that what is currently happening with Apple might not be sustainable. Gruber has been consistently wrong the last few months (in fact he is always as he predicts little but Apple growth) with regards to the decrease in share price and failure to develop new market share.
Apple wasn't priced as a growth stock, though. If a non-tech company had their kind of growth, the P/E of the stock would be well above 50. Apple, at their highest profit growth, had a P/E of 18. That's basically a normal P/E.
Is Apple's growth going to slow? Sure, that's inevitable. But Apple wasn't priced to grow to begin with.
I don't want to run in to a discussion on economic theory, but P/E has to be taken with a pinch of salt when looking at large firms.
Risk is the important thing for investors, P/E is normally a measure of value vs Growth expectation, but the Price will always be waited by the risk.
No matter how you cut it, people expected something from Apple with the stock valuation of last year. People are worried there is a trend of Apple loosing its ground, even loosing its after sales prodcuts things like music for example for Spotify.
I'm not suggesting that everyone assumed explosive growth, and $1400 a share by 2014, just that share prices are based on future expectation, not present state.
People (well the market) obviously that to be something more than they do now.
When it comes to growth, it depends on how you look at it, as much as I've said trend, the question is which trend measure. That is to say, which derivative of the underlying performance indicator. Whilst they are still growing, the rate of growth has slowed, this is at a time everyone is jumping up and down to sell more to the BRICs, most importantly China. A Vietnamese friend of mine has a really bloody good Andriod device, I forget the brand name, good specs, good construction (argably more robust than iPhone 4 lets put glass with glass) and it cost penuts, about $100 including sales taxes.
So this is why I'd say, it depends on the idea of a high end device. There are plenty of bloody good phones at 4" and below, but many suffer from cameras that are poor, not expandable memory etc.
In fact I'd dare as far to say as someone who doesn't want a good camera, can't go wrong with the Nokia 620 at £140, sim free, no contract in the UK.
However Nokia should be aware bottom pickers get sticky fingers as they say.
What I do think has changed, from a UK mobile phone buyers perspective is market differentiation. In 2008 there was huge competition in the £100-200 range, but not much above. Each firm had a 'flagship' but little effort really went it to it, they didn't expect to sell many. the iPhone 1, which I stand by saying was a turd with a web-browser (buggy, short battery, no games, and ultimately no GPS - as a Londoner cardinal sin) came in at £1200 tco minimum. This was a massive game changer. If you had the cash, or didn't because it was on credit via a contract, there was nothing else near it. It's not just a choice between a Lambo and Ford, its a Lambo or a bicycle.
Within about 2 years the others jumped to arrange themselves, and here 5 years on samsung has shown you can have a diverse range, something that can max out each persons budget, but still sell something to the person that only has £100.
Apple isn't doing that fast enough, the iPad mini is a good example of them adapting to the competition, but sitting in with a one offering, at one price point, which doesn't have: The Best Camera or The Best Games or The Best Web Browser or The Best Design, isn't going to work. Sure some people are bought in, trapped on the ecosystem, but people fear that they are loosing product share to competitors. This year will be a tell. I think its unlikely Apple will be 450 come year end, much more likely 600, if they crack this mid end or 350 if they don't. imho.
Sure there is no good-guy and bad-guy here. But there is a better guy, and a worse guy, and that largely depends on what you value most.
For me, the tactics of Apple using legal methods to try to squash competition are a huge red flag, because I happen to think that the consumer is going to pay for that.
You can think that Apple defending its rights is going to benefit the consumer long-term by allowing Apple to provide innovation. But my viewpoint is that Apple can not compete anymore, and is resorting to legal tactics to fight competition. And that (if they had won) they would have a lock-in in a growing and very important market segment (high end smartphones).
> For me, the tactics of Apple using legal methods to try to squash competition are a huge red flag, because I happen to think that the consumer is going to pay for that.
Because nobody ever heard of a mobile phone company suing the competition to limit their ability to compete before right? I mean before Apple V Samsung it was unheard of.
I do agree with you that competition benefits the consumer. A vibrant Android ecosystem is in the interests of iPhone users like me. But the Apple lawsuit was never going to stop anyone else making modern smartphones. That's not what it was about, which is why despite a (currently) $0.5Bn settlement in their favour Apple hansn't gone on to sue anyone else. Apple were very clear about the reasons why they sued Samsung and their objectives, and their behaviour has been consistent with that.
Sure, but those are not design-related patents, or natural-gesture patents, or for that matter designs based on principles being part of human society for centuries ("slide to unlock" anyone?)
"Nokia finally claims multi-million dollar victory over Apple for breaching up to 46 patents"
"Camera maker Kodak has said it will sue Apple and Research In Motion (RIM), the makers of the iPhone and Blackberry, over technology used in their handsets."
And yes, Microsoft is an even worse bad-guy (but largely irrelevant in the smartphone sector), that is why I have not (directly) spent a penny on their products in over 15 years.
In which way a market can truly be split between (ideologically) better and worse players (this is a sincere question, no rethorics)? My point of view is that all the companies involved in this mobile-market dance happened and will happen (sometimes willingly) to turn out evil or good based on what better suits them in a particular point in time. I'm confident it will take just time for Samsung to show they're just a company (no deontology involved). Same goes for Google, HTC, LG, whatever. Apple, they chose the wrong juncture and now are paying that by (deservingly) facing endless bad publicity. So, no, I don't think the "good guys" won (let alone the fact that profit-wise they're actually all winning right now), I can't even think about them being good guys... just companies.
Well, this is hair-splitting, but I'll bite. A company can be considered (by me) a "good-guy" if:
1 - they do not want to steal from me (by using legal tactics to shut down competitors)
2 - they are not making my life difficult (by actively fighting standardization of protocols/formats)
Bonus points for improving life for everybody by releasing quality open source software (which Apple has done, in a limited way)
I have yet to be disappointed by Google. I am sure I will, sometime in the future, but not yet (lots of open source software, little legal activity - mostly retaliation - data liberation, open formats)
I have systematically been negatively affected by Microsoft (I am still waiting for a universally accepted document format, which Microsoft largely destroyed with their back-room tactics against ODF; I am also fed up that most laptops on the market are only offered with Windows tax - which I attribute to Microsoft abusing their OEM market power)
And Apple has tried to reduce my choice on the Smartphone market (it has failed); they are trying to destroy a truly open applications market on the web (by offering "Apps", same applies to Google, following suit); and they are largely responsible for the trend in locked-in content (iTunes, books, whatever)
Given the web is so wide open and been available for over 20 years to the public, I fail to see how Apple is responsible for this lock-in trend.
Rather Apple has aptly uncovered an untapped desire among the public, which the web failed to provide.
Yes, you can say Apple started it, so they're responsible. But this desire was ready for the pickin's. I don't fault Apple for picking it up. It must have been obvious to them.
Yes, but a 30% cut gives them all incentive in the world to further destroy the open marketplace (html). I do not have evidence that it is happening - but this must be an Apple goal. Simply because of how they are profiting from this arrangement.
Or, to put it another way: the financial incentives for Apple are not at all aligned with my personal interests.
Whereas I can not say the same thing about Google. I do not see how their financial incentives are colliding with my personal interests. Yes, privacy is a concern, but I am not - that I know - affected by that, and there are worse players here (Facebook).
So you're claiming that the company who initially pushed web apps as the iPhone API but caved under pressure from developers, the same company who developed webkit. You're claiming this company is trying to destroy the web?
> Nokia (with Microsoft) make beautiful hardware and Windows Phone is lush, but for some reason is not getting the market love its quality deserves.
Two points here:
First, it pains me to see MS lumped with Nokia. I'll be clinging to my N9 for a very long time yet (and probably only move on when Ubuntu or Firefox phones are compelling). I miss Maemo/MeeGo.
Second, the reason which MS doesn't get the love which its quality deserves (let's accept that it deserves a lot of love for the sake of this argument) is that Microsoft owns Skype. Telcos aren't huge fans of Skype, as a rule--it doesn't quite jive with their values. For Windows Phone, which integrates Skype by default, to really take off in the marketplace, we need to see the founding of a telco which doesn't do anything BUT data as their subscription model. With no voice fees to compete with Skype's inclusion on the phone, there will be no reason for telcos to marginalize the platform.
First, it pains me to see MS lumped with Nokia. I'll be clinging to my N9 for a very long time yet (and probably only move on when Ubuntu or Firefox phones are compelling). I miss Maemo/MeeGo.
Same here: I'm still clinging to my 2 year old N900, which I still consider a great phone. When I bought it I knew that the patform is in a dead end, but I got it anyway and never regretted it.
In fact I still have a brand new N9 in a box in reserve. That's in case that the current phone moves into a state beyond repair.
What is most interesting is that my pretty ancient clunker feels much more snappy then more modern smart phones after 6 month, apart from a couple scratches on the screen it looks and feels still rather fresh.
Google Voice still uses regular old phone calls, unlike pure VoIP setups like Skype. A carrier agnostic phone number and free data-based SMSes must rankle carriers, but it does at least require voice minutes.
>For Windows Phone, which integrates Skype by default, to really take off in the marketplace...
If only this were true! I can't install Skype on my new Nokia 920 (maybe they'll give us the tomtom version eventually?). But Skype isn't really a good deal for anything but international calls....I'm guessing you are in Europe.
> Values? You make it sound as if it's ethical values.
One could make the point that I mean ethical values. Telcos' ethics are certainly at play here. The values to which I refer can be summed up as, "prioritize profit over a robust network and user experience, avoid empowering other entities to compete on even ground."
> How is Skype more integrated with WP, than say iOS or Android?
My understanding (disclaimer: as I stated above, I use an N9 primarily. I do own an Android and iOS device, but they aren't my primary handsets. I don't own a Windows phone) is that Skype (a) comes pre-installed on Win8 handsets, and (b) has its functionality integrated into the OS similar to the way SMS and cellular-network-phone applications are.
Feels a little bit as if it should be filed under "yes but obvious".
When you can find large groups of people who will tell you how much they love their Android phone and other large groups of people who tell you how much they love their iPhone, it should be obvious that this isn't a one size fits all situation.
The one thing he doesn't say (possibly because it's also obvious) is that whatever side you're on, you should probably celebrate the situation as the many and varied levels of competitions that exist are driving innovation and we're all benefiting from that.
True, but there are equally large groups of people who 'hate' the 'opposition' blindly. The majority of the analysis seems to reflect this less enlightened viewpoint.
I don't think that's necessarily the conversation telcos are having regarding Skype, Facetime, etc. Skype probably is hated because of bandwidth issues but that is not the reason for the hate.
Look, Telco love for Android is around the fact that Android handsets are virtually under their control. They can do with it as they please - bloatware, ads, etc., Android also filled the lower end market with cheaper phones retaining the same functionality while Apple only caters to certain segments.
Telcos don't love iOS. iOS is popular with customers and iOS sells. Hence, Telcos are left with no choice but to support Apple and show their love for Apple.
Microsoft on the other hand is treated like a step child essentially because they want to go with the Apple way in not letting Telcos control their handsets while not having the customer love as of now. The only single reason why MS is still in the game is because Nokia stepped in to save their butts with beautiful hardware. Yes, it's a chicken and egg issue for MS as of now but I think if they hang in there, they will eventually start getting respectable number of apps and succeed as a platform. Not to mention, Nokia releasing cheap phones as well.
Please! Saying "Apple vs Android" is nonsense, you are comparing two things that are completly different! It's either "iOS vs Android" or "Apple vs Google".
While I can see the argument here (and yes, it's valid), how is it any different from them promoting either Android or Apple, where with just a few taps you can download Skype?
Same scenario really - just slightly less convenient.
What happens if a telco doesn't want Skype in the version of the Apple App Store or Google Play Store their customers see? It's simple and straightforward. They make a phone call and it's done. Maybe some grumbling if the other store doesn't have the same restriction.
Now what happens if they want to call Microsoft about Skype in the Windows Phone store? I don't know, but I do know that the conversation wouldn't be straightforward or simple.
In the same way that Droid is a Motorola brand. Officially, Droid is a Verizon brand, and Nexus is a Google brand, but other companies make the phones. In the case of Nexus, half of the models were made by Samsung.
>By profit share, on the other hand, according to Canaccord Genuity analyst T. Michael Walkley, last year Apple took 69 percent of the handset industry’s profits; Samsung took 34. For just the last quarter, the numbers were 72 percent for Apple, 29 for Samsung. You will note that both the annual and quarterly numbers total more than 100 percent; that is because all other handset makers, combined, are losing money
>That’s a statement of fact, in a Reuters news (not opinion) story, about a company with 70 percent (and judging by last quarter, growing) of the industry’s profits
I would love to see such a narrative written about Microsoft's server platform.
How much profit does Windows Server take in the server OS market? How much IIS take in the web server market? What about ASP.NET vs. Java, Ruby or whatever? Or Visual Studio vs. Eclipse and the rest in the IDE market? They're beating free(as in beer) tools and making a huge profits. Their revenue from the Server & Tools division is about 20 billion a year.
If iOS is beating Android, why can't Windows Server be considered beating Linux by the same metric?
Because both Samsung and Apple are hardware companies making a physical product with a price from which they aim to make profit for their shareholders. Essentially they have the similar aims therefore using that aim as a measure seems reasonable.
Linux and Windows and those involved in producing and marketing them on the other hand have different aims and different business models. The reason it's not right to say MS "wins" in the server market based on profit is that Linux isn't trying to compete on profit, it has other aims (which are as varied as those who develop and promote it).
If he'd said Apple and Google it might have been a fair comparison, but while their execution is different (and while in some ways they complete quite indirectly and it's not a zero sum game, even without the other competitors) Samsung and Apple do have broadly similar goals.
>If iOS is beating Android, why can't Windows Server be considered beating Linux by the same metric?
If you're going to talk about iOS vs Android, you should look at what Gruber says about iOS:
> The same company that runs the best and most popular app store (including the most successful handheld gaming platform), and whose media entertainment ecosystem has, by far, the best reach worldwide. The same company whose platform disproportionately dominates usage statistics.
He says iOS has the best and most popular source for third party software, an opinion supported by all of the iOS-first or iOS-only software that is out there (Vine is a recent example). The iTunes music, movie and TV stores reach many more people than any other store [1][2], giving iOS more of the market for these things by default. The disproportionate usage share suggests iOS is a more valuable target for apps, reinforcing the favorable position of Apple's App Store, and for advertising. Google makes more advertising money from iOS than Android [3].
As Gruber argues, it sure seems like iOS is winning in every metric except the number of devices being sold that use it.
The comparison is an interesting one. I guess the differences are that A) Apple and Samsung are both classic for-profit firms and B) they're shipping hardware.
Whether fair it or not, Microsoft has become an anachronism in people's minds. We heard about their greatness constantly for a decade and a half. It's enough. By comparison, IBM still had some very profitable and relevant products like AS/400 back in the early nineties, but the narrative was invariably about the dinosaur. That brand was tired then too.
>You will note that both the annual and quarterly numbers total more than 100 percent; that is because all other handset makers, combined, are losing money.
The patent fight is one of them. Rounded corners, button less interface, menu areas outside the screen. All those are of practical purpose and should never have been allowed to be design patented. Same goes for basic iconic figures for applications, a table view interface, slide to unlock and any "natural" gestures. Then there are FRAND patents, where a clear model for deciding prices would help in making the market more predictable for new ventures.
If we look at DRM, lockdown and DMCA, we also have a mini-victory that we need to fight over. Here we have a moral argument that the device owner should be in control and not Apple, Google or Samsung. Consumers need to get a win here.
I could mention that some actors in all this are behaving worse than others, and if one had to pick one evil over the others then I know where I would lean. But that is just a secondary issue in all this. Primarily, consumers and new actors on the phone market need to win. Those are the true "good guys" in the fight.