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Year 2011

Interactive Smartphone Platforms Data

Warning: This requires Flash.

Try the following settings:

  • Bar Chart
  • Set X-axis (Order) to Alphabetical.
  • Set Y-Axis to Share of all Phones.
  • Set Color: Unique colors.
  • Press Play or use scroll bar to scrub through time.

Visualizing Mobile Phone Vendor Performance Through Motion Charts

Warning: This requires Flash.

Try the following settings:

  • Set y-axis to Profit (units: $ Billion)
  • Set x-axis to Volumes (in Millions/quarter).
  • Set Size: Revenues in $Billion. (Scroll within gadget to see Size selector).
  • Set Color: ASP (Average Selling Price in US Dollars)
  • Press Play or use scroll bar to scrub through time.

Note the “Vendor data” tab where you can see the source data and options for different chart types (upper right of chart).

Visualizing Global Telecom Markets

Warning: This requires Flash.

Try the following settings:

  • Set y-axis to Mobile Cellular Subscriptions per 100 Inhabitants
  • Set x-axis to Fixed broadband per 100.
  • Size: Inhabitants. (Scroll within gadget to see Size selector).
  • Hit play.
  • Discuss

How many iOS devices will be sold in 2012?

There are several methods I turn to when estimating device sales.

Top-Down Demand analysis

The first is to look at so-called top-down views of the demand. This method takes a view of the overall phone market and assumes share for smart devices and, further, shares for individual platforms. There are several estimates out there. The most recent is Ericsson’s Traffic and Market Data Report, released November 7 2011.

It concludes that in five years’ time mobile subscriptions will reach 8.4 billion of which smart devices (incl. tablets) will total 6.2 billion. As iOS has approximately a 250 million install base at end of 2011 and as the total base from Ericsson’s estimate for 2011 is 1.44 billion then Apple’s share is approximately 17%. If we assume that Apple will be able to increase smart device share to 20% (3 percentage points in five years) then by 2016 Apple will need to have 1.24 billion iOS subscribers.

Assuming that half the installed base upgrades every year and Apple adds devices required to reach the install base necessary (1.24b or 20% share) leads to the following unit sales projection (I’ve added 2008 through 2010 actuals and 2011 estimates based on my own current Q4 projections).

 

This Approach yields an estimate of

5by5 | The Critical Path #14: The Super-platform ecosystem

The Critical Path show switches format for this week’s episode. I interview a guest.

5by5 | The Critical Path #14: The Super-platform ecosystem.

The idea is that rather than just telling stories and interpreting the world from my point of view, I should also ask others to teach from their experience.

In this case I discuss the disruptive potential of cloud computing with Randy Bias. Randy is the CTO of Cloudscaling, a designer of infrastructure cloud systems and a vast knowledge of the challenges and value of what we now call cloud systems. I’ve consulted for Randy in the past and I thought he could add a lot to the understanding of super-platforms. Super-platforms, you may recall, is a term I used to describe the coupling of Web Services and Devices in a mutually inter-dependent business model. I introduced the concept as a way to think about Siri and iCloud and potentially the Kindle and Amazon in general.

In this show I ask Randy to comment on the thesis that devices and cloud systems as a coupled system are a potential disruption to both the device-only model of computing and the cloud-only model of services. In other words, is the new ecosystem the coupling of devices with backend cloud APIs? We also touch on the scope of Apple’s data centers and the way we can calibrate the investment.

I think this is a ripe area of research and thinking about the future of computing. It will require learning a new way of measuring “performance” of solutions and the businesses built around it. It will take a multi-disciplinary approach to ferret out the key value propositions.

Apple could buy the mobile phone industry | Updated

The last time I did this comparison (Apple could buy the mobile phone industry | asymco) was in June after the end of the second quarter. The following chart is an updated look.

 

Here is a discussion of the changes since the last analysis:

The AMP Index for Q3

The Asymco Mobile Performance (AMP) index is an unweighted average of:

  1. Share of all handset units sold (global)
  2. Share of smartphones
  3. Share of value (revenues)
  4. Share of profits

For major phone vendors. The raw data for each share is shown in the following charts (note change of vertical scale: each gridline represents 10%).

Note that the vendors are arranged in a particular way:

Where is Microsoft's growth going to come from?

Microsoft is a stable business. Apple isn’t. The following charts compare the two. The two charts on top show revenues, subdivided into product lines. Microsoft is on the left and Apple on the right. Note that the vertical scales are the same (zero to $30 billion/quarter).

The lower two charts show operating income by division/product line.

Sponsor: CaptureNotes redefines taking notes

In March I wrote about how the iPad 2 was comparable to a “real computer” of five years ago by looking at the “feeds and speeds” of the two.

One thing that notebook and desktop computers had more of was screen resolution but the iPad has more sensors and communication options. An iPad 2 has built-in cameras, accelerometer, ambient light sensor, magnetometer and gyroscope. It also has a microphone. It can communicate using 3G and has GPS for location services. In meaningful ways the bigger iPod touch does a lot more than a notebook or desktop from five years ago.

As one would expect, these new communication and sensory functions are accessible to apps and developers are taking advantage of this access by creating new ways of interaction and gaining uses for the iPad well beyond what we might expect from a more powerful but less capable computer.

Case in point is this week’s sponsor. CaptureNotes 2 is more than just a note-taking app for the iPad. It lets you record audio while you type. Because the iPad is likely to be used in new contexts like meetings or classrooms it makes sense to capture more than keystrokes. The innovation does not stop with the combination of text and sound. CaptureNotes 2 brings an entirely new feature to the experience: Flags.

Flags are intelligent bookmarks, allowing you to place specific marks in time during a recording to follow up on in later review. For example, if you were using CaptureNotes in a class, you could mark things like test questions, text references, follow-up requests, or even make your own custom flag set. In a meeting at work, you could mark action items to follow up on.

When it comes time to study for your test or compile your to-do list, you can sort notes by flag type, taking you back to that specific piece of audio recording and notes.

Note-taking is also available on imported PDFs and email sessions. Taking advantage of iPad’s constant connectivity, CaptureNotes lets you store your binders and notebooks on Dropbox.

CaptureNotes 2 was recently selected as “app of the week” at TiPB, and in celebration, it’s on sale. Capture everything at school, work, or home with CaptureNotes 2.

Is Innovation Valuable?

I began thinking carefully about Apple in 2005 when the stock was priced at around $55/share. I remember that the events which made me consider Apple in a different light were the launch of the iPod shuffle and the launch of the Mac mini. Both moves signaled to me that the company was serious about competing with non-consumption. At that point I thought that the company was a potential opportunity as an investment.

But I also remember that many people at the time thought that the stock price was too expensive. At $50, the company was much more expensive than the year before. The stock started 2004 at about $11/share. The reason it had climbed so much was that the iPod began to be a real world-wide growth phenomenon. Buying Apple was buying into the iPod and many said the price was unsustainable given such a strong dependency on fickle consumer tastes. It was a much riskier proposition than that of competitors like Dell and HP which made product for reliable buyers like enterprises.

Indeed, by 2006, the shine was off. In the first half of 2006 the stock collapsed from $85 a share to $50, a fall of 40%. It was becoming clear that with mobile phones taking on more music playing features, the iPod was not going to be a big story for long. What’s more, Apple had just announced that they were switching to Intel for the Mac product line. Investors saw just how vulnerable the company still was and considered that the Mac brand was in jeopardy as it transitioned to becoming a Windows-friendly machine.

However, in 2007 the company’s value recovered with the introduction of the iPhone. Suddenly there was a new product to drive sales. Nobody knew by how much or how but there was a sense that the iPhone was enough to keep Apple from oblivion.

Yet, again, in early 2008 the company lost 40% of its valuation. In a rather inexplicable period following the launch of the MacBook Air, the company’s shares went into free fall. Inexplicable because the company continued to deliver solid growth with 2008 calendar quarters showing between 32% and 155% EPS growth.

Then the recession came. It caused another 40% share price collapse. Growth slowed to a range of 11% to 61% during 2009. As the marco “headwinds” blew over, by the end of 2009, with the help of a lukewarm response to the iPad, the company’s value recovered to its 2007 level. In the mean-time its earnings more than doubled.

It may not appear to be the case, but throughout this volatile period, the investment thesis remained fairly constant: