The smartphone market continues to grow. 2013 saw total shipment of around one billion units (up from 683 million in 2012). In contrast, non-smartphone shipments continue to decline, with shipments around 800 million (down from 987 million in 2012).

This pattern is shown below:

Screen Shot 2014-03-18 at 3-18-12.45.12 PM

Note that prior to 2012 the non-smart market seemed to be holding steady in spite of the growth in smartphones. The notion that smartphones would become universal was widely dismissed. I certainly heard many objections to my 2010 hypothesis that not only would smartphones become ubiquitous but that it would become increasingly difficult to find anything else to buy. (This in spite of the clearly evident demand for “low-end” non-smart devices.)[1]

I also suggested that the notion of distinguishing phones with the”smart” tag would become irrelevant and that we would just call these devices “phones”. That is coming to pass, at least among the conversations I’m privy to.

So if the conversation is about “phones” and the expectation that all phones will be smart, what can we observe about the market? The following graphs provide the picture of shipments, revenues and operating margin in absolute and relative measure for the most significant brands.

Screen Shot 2014-03-18 at 3-18-12.42.08 PM

This arrangement shows the disruptive effect of adding “smart” to phones. In only a few short years[2] profits have dramatically shifted in the industry.

Indeed, since the launch of the iPhone[3] the net profits earned by the collection of protagonists shown was $215 billion[4].  60% has been earned by Apple, a newcomer to the market. That figure is also consistent on an ongoing basis, having reached 60% as early as 2011 and remained in a band around that figure since.

Screen Shot 2014-03-18 at 3-18-1.23.52 PM

The fact that this happened without corresponding dominance in units shipped shows evidence of something startling: Consistent value creation.

To earn profit is hard, to do so in an outsized way is very hard and to do so with consistency shows a defensibility of market access that is rarest of all. The only cases where this typical is in a monopoly or protected market situation (aka cronyism.) Apple’s lack of market monopoly coupled with a (near-) monopoly in profits can only be explained by disproportionate value creation.

The mystery then is how is it possible to build a monopoly in value creation.

  1. The analogy I used was that of the black-and-white TV market as color TV became increasingly popular. There probably was a market for monochrome screens for a long time after they were discontinued but that is beside the point: the old technology becomes increasingly scarce because of economies of scale []
  2. Six shown but the effect was pronounced already in four []
  3. Which I consider to be the start of the current epoch of the industry []
  4. $234 billion of positive operating earnings, offset by $19 billion of operating losses []
  • Accent_Sweden

    “The mystery then is how is it possible to build a monopoly in value creation.”

    Answer: Keep delivering on your promise of value for customers while your competitors misunderstand or dismiss what you are delivering in favor of their own “old” worldview of value.

  • “The mystery then is how is it possible to build a monopoly in value creation.”
    Dunno, not hard to be a monopoly when you are the only company in the market! Not clear if any of these companies besides Apple actually wants to create a good product…

  • Claude Hénault

    “The mystery then is how is it possible to build a monopoly in value creation.”
    Apple creates belief. Belief within the buyer that the product is worth what it costs. It does this primarily by appealing to the buyer’s intelligence through superior product appeal (aesthetics to eye, hand and mind), through uniquely treating the end-user directly as a client, and through advertising that elevates rather than demeans the potential customer.

    That’s my thinking. Now you contribute a verse.

    • graphex

      Apple has no competition who sell what their customers are buying.

    • N8nnc

      “We have made something we think is pretty cool.
      Come along and ride with us if you agree.
      Each step forward allows to see ten more.
      From making the computer personal, and now truly personal, we’ll weave technology and liberal arts into the warf of all life.”

    • you missed the most important thing that apple does — builds a quality product that delivers value. this is more important than creating belief. i would leave apple if their tools started to suck. they dont.

    • Sigivald

      Doesn’t every purchase of every product in every segment depend on the buyer believing the product is worth its cost?

      Otherwise they wouldn’t buy it.

      • Ted_T

        Not unless it is a necessary product, like clothing or food or these days a smartphone. Even if all the choices sucked, you’d still be compelled to buy one.

      • Ben

        I’d argue that in your example, the buyer has still reasoned that the product is worth the cost, *because* of its absolute necessity.

  • Luis Alejandro Masanti

    “The mystery then is how is it possible to build a monopoly in value creation.”

    (It seems this is your best phrase, ever! –according to the comments!)

    What Apple does, in my opinion, is satisfy customer’s desires and necessities, so you buy its products.
    You are just satisfying each customer needs… and gets a monopoly!

  • I wonder how Apple’s profit share looks if it could be broken down into price tiers. Mac, for example, holds about half the total PC market profit share, but 80-90% of the over $1000 tier. I suspect if the mobile phone market were broken into pricing tiers, we’d see the iPhone performing the same. Likewise, I wonder how Apple’s profit share of the under $1000 PC tier looks now with iPads factored in.

    • charly

      The average price of a PC is south of $600 so it would be more interesting what the profit share of Apple is below $600 or the market share of Apple above $1000.

      ps. I can tell you what the profit share of Apple is below $598. Zero. They are not present in half the market

      • Sacto_Joe

        “They are not present in half the market.”

        Wrong. Apple sells the 4S unlocked for $450. And while you may move the numbers and say they’re not in some lower percentage of the market, you still have to add a very important qualifier:


      • EVula

        charly was talking about personal computers, not mobile phones.

      • Sacto_Joe

        The subject of this article is mobile phones, not computers. If he wants to pontificate on a different subject, then let him go start his own equivalent of Asymco.

      • EVula

        That is a needlessly snippy response. I’ve generally thought of the discourse on asymco as being better than the average blog, but you really put a damper on that.

      • Sacto_Joe

        Charly is a well-known distracter on this forum. He was up to his usual tricks, and got called on it.

        It is interesting that you would decide to leap up in his defense though….

      • EVula

        Charly was just picking up someone else’s discussion, which seemed perfectly reasonable to me. I’m assuming from your use of ellipses that you’re guessing I’m a sock puppet of his, in which case… *shrug* Think what you will.

      • Space Gorilla

        I’ll second the comment about Charly, he (or she) is a hysterical troll. I generally avoid responding to Charly, it ain’t worth it.

      • Sacto_Joe

        No, I don’t think you’re a “sock puppet”. And you’re right: Sumocat started the digression from the original subject. However, he was generally using the PC discussion in relation to the mobile phone market (“I wonder how Apple’s profit share looks if it could be broken down into price tiers”), a slight digression that charly leaped on and you helped support, purposefully or not, and which, to date NO ONE has addressed.

        Also, charly chose to ignore the aspect of the “PC” question that was most relevant: ” I wonder how Apple’s profit share of the under $1000 PC tier looks now with iPads factored in.” Note that charly implies that iPads aren’t PC’s by saying that Apple doesn’t sell a PC under $600.

        He’s a sneaky devil and you got used by him.

      • Iain Perkin

        Apple sells the Mac Mini under $600. What percentage of the profit share I can’t guess at as I’ve never seen it broken out.

      • charly

        They sell it for $599, that is why i changed it to $598

      • site7000

        Apple is not present in that half of the market because there are no profits in that half of the market. It is amusing to watch the supposed capitalists on Wall St. consistently undervalue Apple when Apple is the premier profit-generating company of our era. The other companies have to practically give their products away at cost, yet Wall St. loves them because they have “market share.” I think the reason is that the captains of Wall St. only respect fellow thieves, so they don’t respect a company that is fulfilling the theoretical ideal of capitalism: giving the customer a great deal at an honest price. Apple is the triumph of pure capitalism over the customer-cheating nihilism that American industrialism has spread around the globe. If you don’t try to fool any of the people any of the time, the world will beat a path to your door. That’s no pie-in-the-sky theory; Apple has made it a proven fact.

      • Ben

        I’ve been enthralled by the comment thread of this article, as there is an awful lot of well-reasoned, amicably conveyed wisdom here. But I just had to reply to your comment.

        I think there is a great deal of truth to this, and it’s a vague sentiment that runs through my mind on a probably daily basis, but seeing it crystallised into a proper argument here has made me realise that, as a consumer, I have this gigantic demand that is largely going unmet.

        It seems that in almost every transaction that, as a consumer, I enter into, or consider entering into, I’m dealing with an agent of supply which is either totally inept or is out to f*** me over. And it is completely fatiguing, often to the point where I just tell whatever party I’m dealing with to forget it, and I just keep my money instead. Ground down by the exasperating inadequacy of most outfits that I seem to deal with, I often simply can’t be bothered to enter into the transaction and instead decide to simply keep my money.

        And this is really the point of your comment which elicited this enlightened feeling in me: in our model of an ideal capitalist economy, when looking to eat at a restaurant, to watch a film, or to buy some furniture, if the first vendor I approach is insufficient, and so is the second, the third, the fourth, I will always be able to express my dissatisfaction by giving my business to a well-run competitor. The rub is this, though: a) my patience is not infinite, and b) often there is no well-run competitor.

        This is why I like Apple, and is why I’m inclined to agree with your argument as to why Apple have been so successful: as you’ve eloquently put it, they’re providing “a great deal at an honest price”. It’s high-quality, thoughtfully designed gear, it’s sold with integrity, and the company is prepared to acknowledge the existence of the product and the occurrence of the transaction for more than thirty days after the fact. They’re playing this with a view to the long-term, and I, exhausted by the volume of bulls*** I encounter in most of my other dealings, actually delight in spending my money with them, if for no other reason than to revel in the contrast.

        I think this point might be well illustrated by a trip I took to Istanbul last year: after five days of battling touts, scam-artists and jobs-worths during every waking moment of our holiday there, that when my friends and I stumbled upon one of the most sublime restaurants I’ve ever had the pleasure of dining it, the experience felt like the ideal symbiosis of what you’ve termed ‘pure capitalism’. When we handed over our money, we did so with satisfaction and well-wishes for the owner and his staff. It was money that had truly been earned, and it was a pleasure to spend it.

      • pk_de_cville

        OK, and the restaurant’s name is????

      • Ben

        Ha! After digging out an old credit card statement, I’m happy to be able to tell you that the restaurant was called Eleos Gida. It was Istiklal Caddesi, and if I remember rightly it was closer to the Taksim Square end of the avenue.

      • art hackett

        Actually seeing the dilemma in your well chosen words has crystallized it and made me rather depressed. I might have to engage in extended retail therapy at an apple store now.

      • Accent_Sweden

        And this is why so many of us would like to see Apple expand to other areas, so we can once again enjoy being parted from our cash and stop having to battle all the crud of daily life that most companies offer.

      • art hackett

        Thank you. Very well put.

      • They sell the iPod Touch for $299 and the iPad 4 for $399.

      • charly

        They are not PC’s

      • Claude Hénault

        They are personal, and they compute. I personally have used both to perform work that requires a computer. They are PCs.

      • They are both very personal computers. Even more so than a beige box for many.

      • Sacto_Joe

        …and who didn’t see THAT coming form charly….

      • Space Gorilla

        charly’s comments on this thread are *incredibly* entertaining, and I don’t think he (or she) even realizes it. Hysterical *and* sincere, such a great combination.

    • Sacto_Joe

      Looks like your original question got taken off into the weeds by our resident troll-like poster, charly. Personally, I think it’s a good question. It’s also an obvious one (no offense). Which leads me to wonder why it isn’t being asked and answered by so-called “analysts”? Answer: A fair question/answer about “tiers” would show that “the emperor has no clothes” (i.e., in reality, Google is getting its derriere kicked by Apple). And we can’t have people thinking that, now can we?

  • Mani Ghasemlou

    “The mystery then is how is it possible to build a monopoly in value creation.”

    The way I see it, the how is quite simple. Apple embraces values that most humans would describe as virtuous or noble on the spectrum of morality.

    Where it gets very hard, and what took Apple years of struggle to reach, is actually embracing these values throughout the entire value chain.

    It is ironic how the very core of Apple’s being has nothing to do with making money, when you look at 5 out of 10 spots on the list of most profitable quarters in the history of modern capitalism.

    • “Where it gets very hard, and what took Apple years of struggle to reach, is actually embracing these values throughout the entire value chain”

      Yes. From its advertising, to its packaging, from its product to its customer service experience, Apple has embraced _quality_ from inception.

      Apple’s has proved to be a polarizing mission (simultaneously enchants and pisses people off). But, thankfully, Apple quality is no longer a “best kept secret”, and the scoreboard reflects this in a demonstrative way, as Horace illustrates above.

  • berult

    For heaven’s sake…

    …Jesus-phone creates a value chain out of the bard’s tale, as

    monotheistic imagery offers its whole sanctum for sale. berult.

  • Space Gorilla

    “The mystery then is how is it possible to build a monopoly in value creation.”

    I’ll take a crack at this. I believe Apple does this by dominating the ‘best customer’ segment of the markets they operate in, and leaving the other segments to competitors. Apple dominates the best customer segment by providing quality products that deliver value, the products have an ROI. Now that computing is finally consumer-facing (mobile and touch), the purchasing decision has shifted to the consumer. Plus, Apple’s prices aren’t really that much higher than competitors, certainly not when it comes to the best customer segment that they target.

    Now, the anti-Apple crowd has trouble coming to terms with all of this, for a number of reasons:

    1. They deny the existence of a best customer segment.
    2. They deny that Apple can survive while ignoring other segments of the market.
    3. They deny that Apple makes quality products that deliver value.

    4. They deny that iOS devices are computers.
    5. They deny that Apple customers are rational.

    I’m sure I’ve missed some details but that’s the quick overview.

    • charly

      The purchasing decision hasn’t shifted to the consumer but to the network operator. For the consumer it did not matter if they bought a $100 phone or a $700 phone because the price was almost the same. This era is ending and cheap (smart)phone are getting good enough so the expectation is that demand for expensive phones (including Apple) will drop hard.

      1. I don’t think anybody denies this.
      2. We will see. Smartphone are recent and i personally don’t think Apple will survive in the long term as a major phone maker

      3 Apple makes price conform quality products
      4.The walls around the garden are a bit high.
      5. No customer is rational

      • Space Gorilla

        As if on cue, #hysterical

      • N8nnc

        1. No Apple product* has been aimed at everybody, but rather a distinct slice of customers. More may grow to appreciate Apple’s design model, but the product is never weakened to offend none.

        * – except the dreaded “Performa” years.

        2. There were mobile phones, then a short-lived smartphone phase. iPhone is a truly personal computer, and is much a phone as a Ferrari is a horse. The incumbent purchaser for mobile phones was the carrier, and for computers was corporate IT. For iPhone, it is the end-user. The phone monopolies see the writing on the wall that their future is short without dramatic change.

        3 & 5. Brands survive on loyal customers, but need more to thrive. Such loyalty can seem (or even be) irrational, but the bulk of Apple customers now are not loyalists. They will switch if better alternatives are available, but the difference needs to be significant. The numbers suggest that Android isn’t sufficiently better right now. I actually think long-time Apple customers have high expectations and demands of their products.

      • I am impressed. You proved every one of his points. Just wow.

    • art hackett

      You can picture them on the floor having their little tantrums.


      • Space Gorilla

        Yes, I call this The Age of Hysteria. Apple’s success is now so large and obvious (and still growing) that the anti-Apple crowd is pretty much losing their minds. They cannot understand how this is happening and are entering a state of hysteria. I first noticed it in ‘full force’ on a post by Ben Evans, where he reported a fairly basic fact about how many computing devices Apple is now selling, and he had to close the comments because of the hysterical response.

  • John Rich

    “Value Monopoly” beautiful. The question I then ask (as an Apple cultist since the IIe) is any monopoly – even one based entirely on value – a good thing for innovation and progress? Although I continue to thrive in the Apple reality distortion field Tim Wu’s brilliant The Master Switch makes me earn for another “value” disruptor to compete with Apple.

    • Sacto_Joe

      Of course the “Apple Monopoly” is a “good thing for innovation and progress”: it is precisely because of Apple’s ability to out-innovate that they have a virtual monopoly!

      • Walt French


        The people who claim that patents impede innovation never look at the incentive of having a market guaranteed for successful R&D. That’s a relatively cheap way of financing R&D — consumers only pay for successful results. (Yes, also as a longtime Apple user, pay we do.)

      • Sacto_Joe

        I like that! We Apple users, in paying top dollar, are in effect financing Apple’s R&D effort. In return, we get to stay at the cutting edge!

        BTW, it’s also true that, assuming Apple gets the successes it’s due in court, Apple is building up a nearly insurmountable portfolio of patents. In that sense, Apple is getting close to achieving a true monopoly. But it’s done it honestly, and by dint of hard work and ingenuity. Besides, there will always be Microsoft….

      • Besides financing Apple’s R&D effort, as Apple customers we are also financing the “R&D” efforts of a large segment of the tech industry as they copy Apple.

        Microsoft, Samsung, Google’s Android team, all “Ultrabook” manufacturers, etc., etc.: You’re welcome. :-/

      • Sacto_Joe

        You’re so right! Next time we encounter an Android supporter who thinks we’re nuts for paying so much for an iPhone, we need to remind him that if it weren’t for us paying for the basic research and development that gave Google and Samsung something to steal, there would BE no Android!

      • art hackett

        Rich’s post looks suspiciously like the “I’ve owned every apple product since 1974, but…..” style. Except for the slightly improved grammar and longer words. Note the use of cult and RDF, and not actually in a self deprecating or sarcastic manner.

  • Sacto_Joe

    “The mystery then is how is it possible to build a monopoly in value creation.” I think the answer lies in the last chart. Even mighty Samsung is being forced to compete on price, some so much so that the increasingly operate at a loss. Apple is, simply put, immune to commoditization, or very nearly so.

  • charly

    Apple does not have a monopoly in “rational” value creation, but one in”irrational” value creation aka as luxury good. Look for an example at the mainstream car makers and Porsche. The mainstream car makers are not really profitable even with the much larger barriers to entry

    • Kizedek

      Your insistence on characterizing the iPhone as a luxury product is irrational.

      Yes, look to Porsche. It’s ten times the cost of most people’s cars (100k vs 10k), and arguably, it’s just faster with some drawbacks: less space, less miles per liter, more tax, more insurance, etc.

      Most people find their iPhone does more than other phones, and the TCO of iPhone is much more comparable to other phones for what you get. The value is extremely rational.

      • charly

        10k for a new car? I believe the average is more than $30k. And a new Porsche can be had for $50k so the price difference isn’t even that large

        ps. TCO and Porsche. I wouldn’t be surprised if TCO of people who own their car 30 years or more is lowest with Porsche owners.

      • kgelner

        There is a vast difference for most people between $30k for a can and $50k, especially after the amount of interest you pay over five years is factored in.

      • Sigivald

        I wouldn’t be surprised if TCO of people who own their car 30 years or more is lowest with Porsche owners.

        Do we live in different universes?

        In mine, Porsches require very expensive maintenance compared to the cars sane people buy – and a 30 year old Porsche is a nightmare if you actually try to daily drive it.

        A sensible person who isn’t pursuing luxury brand markers and positional signaling would get the Hyundai [e.g. the Genesis Track vs. a 911, throwing away .6 seconds to 60 to save $40k in 5-year TCO per Edmunds; enough to just buy a second Genesis], not the Porsche, and save a pile of money both at the dealer and in depreciation and maintenance.

        Porsches are beautiful money-pits, not sensible vehicles.

        The idea that Porsche TCO is low even over five years is untenable, but 30? I don’t even know what.

      • art hackett

        Do we live in different universes?

        You bet. As is obvious from every post. Like the challenged child that continually rants “WHY” but cannot possibly understand the answer.

      • charly

        Isn’t every 30 year car a nightmare to maintain? Buying an expensive car is for positional signaling.

    • Jeff G

      The kid that cleans my pool, and 2 of the 4 guys I polled at the car wash (who were vacuuming the car and wiping it down) all had iPhones. With consumers in that income bracket it’s truly a stretch to label it irrational or luxury. At the very least it’s an affordable luxury, which people find a very high ROI in owning.

      • charly

        Audi, BMW & Mercedes are also affordable luxury if you find Porsche to expensive. Apple is, or i should say was, only a little bit more expensive than the competition as the $300 phone have become good enough. Also a kid that cleans the pool sounds like he is still a kid and in that case he has a high income for his age

      • Sigivald

        Rational luxury car buyers buy a Lexus or – better – a Hyundai.

        Rational phone buyers buy an iPhone, if they care about UX.

        The idea that an iPhone is a “luxury good” is confusing; how is it one?

        It’s not “exclusive”; anyone can buy one.

        It’s not luxury-because-expensive, because an iPhone costs as much as a good Samsung phone or a good Nokia Windows Phone.

        So where’s the “luxury” coming from?

      • charly

        Buying a luxury Hyundai is not rational, just cheap. If you want a cheap car that doesn’t say i’m a 99% than you buy a Prius, a Leaf or Jeep or a classic.

    • Considering the enormous size of the phone market, that’s a whole heck of lot of irrationality you’re invoking.

    • site7000

      This is such an interesting point. I would say Apple has a monopoly in both rational and irrational value creation. They create a product with a higher utility value than the competition, then they wrap it in a aura of luxury. Pure marketing genius. Apple’s recent marketing hires show they are acutely aware of this. It’s not something Apple uses to fool people; it’s another feature, another angle that Apple has nailed down. Apple products have become the Mercedes that everyone can afford. As long as they can keep both of those value propositions ahead of the competition, which I believe they can, they will keep raking in all the profits.

      • art hackett

        Not luxury. Quality and style. For aesthetic enjoyment, like art for example, except relatively affordable.

    • charly

      Better example would be Coca cola compared with other cola makers

      • Kizedek

        Um, but no. It’s an example of an iconic benchmark, not a luxury. I rarely drink fizzy drinks at all because I value my health — but on the odd occasion that I drink cola, it has to be Coca-Cola.

        Now, maybe the fact that we are talking about personal tastes and preferences puts the discussion partly in the realm of the “irrational” — nobody’s tastes are “wrong”, are they?

        However, what is very real and rational is that all colas are judged against the real thing. I’m sorry, but it’s true. Similarly, Apple is often the benchmark — for MP3 players, for usability, for typography, for consistency, for design, etc. …and now for phones and tablets. Get over it.

        Is Coca-Cola a luxury? Hardly! You can find it more places than any other product on the planet. It even replaces water in some contexts because the water is unsafe. It delivers what I want from it. No, just drinking any fizzy drink at all is to me personally something of a luxury; and when I do, I want to enjoy it! I just don’t bother with other cola makers. I can take them or leave them (I leave them, just as I prefer no coffee to instant coffee). They just don’t register on my radar.

        …Same with non-Apple devices. Life’s too short to even bother.

  • nuttmedia

    Steve Jobs receives much of the adulation and credit for Apple’s second golden age, and deservedly so. But one competitive advantage that is only seldom mentioned, yet still an extremely crucial component of innovation, is in operations — and that has been the lifelong purview of now CEO, Tim Cook.

    The difficulty in scaling three breakout business lines on a massively global scale — iPod, iPhone, iPad — cannot be overstated. From supply chain management, sourcing, and manufacturing, their ability to execute, and do so strategically, has few, if any, peers in the industry. It has enabled them to box out competitors on resources and facilitates strength and consistency in the margins cited by Horace.

    A superior user experience is the engine that propels Apple forward, but operations is the undercarriage that makes it all possible.

    • kgelner

      A huge competitive advantage is also Ives. That’s what really boggles my mind, Ives has said no in the past just as much as jobs – and he is the reason behind much of Apple’s design aesthetic that everyone loves, probably more than Jobs. As you mention Cook is amazing at keeping beauty scalable, but Ives ensures that we will face a future filled with more great things in the same way that Jobs being alive would have.

      • Ive 🙂

      • kgelner

        Oops! Too much “S”

      • art hackett

        Yes, but Jobs recognized and nurtured those talents and abilities, unlike most managers that seem to be busy holding their staff back or down in case their own incompetence is exposed.

    • Big +1 on this. Even some core Apple fans seem to miss this point, Cook has created one of the most stunning supply chains around, and it gives Apple incredible advantages in pricing, speed and inventory flexibility. Rather than use these advantages to lower prices though they use them it increase quality. Apparently they don’t teach this at business school and it drives people nuts but it’s actually quite simple. Find a good price and consistently try to deliver better and better products at that price. Viola, you are delivering value as opposed to cheapness. Most customers get it, most analysts don’t, go figure…

    • Luis Alejandro Masanti

      “Steve Jobs receives much of the adulation and credit for Apple’s second golden age, and deservedly so.”

      As Gruber pointed out long ago, Steve’s most amazing creation was Apple itself, the company. The first time, with the products; the second one, with the products and the full team, the full workforce, including Cook, Ive, Cue, Federigini et al.

      Tim Cook is showing that ‘the spirit of Apple’ —or call it, DNA— is what has survived Steve.

    • stefnagel

      Operations? Absolutely. But UX is no mean thing, if we include security and Apple’s crypto engine. And we should, especially as Apple moves towards cars and health, both security minefields. As Steve Gibson suggests, without superb crypto, Apple devices would be skrewed already.

      Search steve gibson ios security 446. Great bits: “The protection Apple offers is just beautiful…. To actually close the system and to ward off what would otherwise be a massive assault … they have had to take security very seriously…. Nothing short of this is enough…. Apple’s total respect for the user’s security and privacy in the design …”

      Android? Not so good.

      • charly

        Auto and health are not really security conscious. They just use it as a tick on the feature list but have not internalised it yet

      • stefnagel

        I’m playing off comments in the last week about Apple’s need to deal with HPAA info, for example. Huge security issue.

  • stefnagel

    “The mystery then is how is it possible to build a monopoly in value creation.”

    Apple tries to make a dent in the universe; the others simply try to dent Apple.

    That is, Apple plays an entirely different kind of game than its competitors. They play checkers or chess or war, games that end with a winner and loser. Apple does Minecraft, a game that all players can pursue to their heart’s content, constructing ecosystems. James Carse calls this kind an infinite game.

    “A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play” Finite and Infinite Games: A Vision of Life as Play and Possibility.

    So Apple does not see the world in zero sum terms. In fact, Apple’s been burned big time several times when it thought partners who were creating alongside it, were only exploiting it: Microsoft, Adobe, Google, and Samsung.

    Apple, playing the infinite game, seeks to continuously recreate the game itself; the others wish only to define, limit, and control Apple as a competitor. Cheating and theft make some sense if the goal is simply winning. Cheating makes no sense to Apple. Apple seeks to make the game; it does not let the game make it.

    “The rose is a rose from the time it is a seed to the time it dies. Within it, at all times, it contains its whole potential. It seems to be constantly in the process of change; yet at each state, at each moment, it is perfectly all right as it is.” W. Timothy Gallwey, The Inner Game of Tennis: The Classic Guide to the Mental Side of Peak Performance

    • HR PuffnStuff

      WTF are you even talking about?

      • stefnagel


      • HRPuffnStuff

        Nothing. I suppose that is just the sound of my BS alarm going off.

        It was just a complete moment of awe when I viewed an extremely romanticized view of what Apple cares about, and is focused on, and for whom.

        It was just a comment which read as a battered wife’s apology to her abuser husband.

        I just don’t even know anymore. Why do I come here?

        Oh that’s right, I like seeing all manner of disturbing social dysfunction. It entertains me.

      • Space Gorilla

        It’s related (I think) to a point Stefnagel has made before, that Apple is essentially its own market now, soon to be roughly a billion users. Android and others can do whatever they like, it isn’t going to affect Apple much at all.

      • stefnagel

        I was going to add a bit on scale. Apple’s size is transformational. It has bigger fish to fry than worrying about Samsung or wallstreet. Like China.

      • Space Gorilla

        China is truly a mind boggling opportunity for Apple. The hacks who dismiss this are in denial, “Oh, Apple won’t ever succeed in China, the products are too expensive, blah blah blah.” Man, the hacks are simply not paying attention.

      • stefnagel

        Executive summary: Apple can build a monopoly in value creation because it focuses on values and creation. Samsung focuses on value$ and destruction, i.e., winning.

        I’ll take the opportunity here to add a bit about how different the infinite game is, compared to business as usual. Business is all about eliminating risk; Apple embraces risk as part of life and growth.

        “Because infinite players prepare themselves to be surprised by the future, they play in complete openness. It is not an openness as in candor, but an openness as in vulnerability. It is not a matter of exposing one’s unchanging identity, the true self that has always been, but a way of exposing one’s ceaseless growth, the dynamic self that has yet to be” James Carse, Finite and Infinite Games.

      • Sacto_Joe

        Great quote!

      • art hackett

        And there it is. NFI, just as all the posts have suggested.

    • Great, GREAT comment! Tacking onto your point (and applying a little Michael Porter theory), I think Apple tries to avoid rivalry, and zero-sum, price-based competition, by looking for ways to deepen its unique strategy re integrated hardware/software/services.

      Apple’s strategy isn’t based on what its competitors do (and Tim Cook has said as much). I think Apple tries to avoid rivalry by doing something different than what its competitors do. Apple competes to be unique by adding and refining activities and fitting them all tightly together in a way that’s difficult to duplicate, which allows Apple to avoid price-based competition. In adding, refining, and tightly integrating activities, Apple constantly creates value for the customer.

      • stefnagel

        Fortunately for Apple, its competition doesn’t care about customers much.

      • Apple integrates around the perfect solution to a job the end user needs done. The end user is the target. Apple therefore doesn’t have to make compromises to the ideal job solution for end users.

        Google has to compromise its job solution for end users, because Google also has to create a product/service that solves jobs for advertisers and OEM’s. Google has to compromise user privacy, and funnel users into Google services, because Google needs data and ad revenues. Because it has more than one master, Google can never offer just one of those masters a perfect, integrated solution to a job that needs done.

  • Walt French

    Horace Dediu wrote, “ The mystery then is how is it possible to build a monopoly in value creation.”

    First, congratulations for stimulating the lively discussion by more-or-less a rhetorical question.

    Second, I believe that most regular readers also know: this is another one of those Apple secrets hidden in plain sight. Cook has said — around the time he talked of the refrigerator/toaster, IIRC — that many customers don’t want to be systems integrators of their own computers, and that Apple’s integrated hardware/software approach exists to ensure that everything fits together just right. In the Enterprise PC market, or in the hobbyist and custom-hardware gamer markets, that integration is at best something that customers strip away, but for a mass-market consumer product, it is what 80% of customers want. (And many of the other 20% want pretty minimal customizations: ringtones, wallpapers, home-screen widgets.)

    It’s not as if ordinary, intelligent people can’t enjoy tweaking their phone or the sense of satisfaction from discovering what apps were hanging and eating up your battery. But sooner or later, enough fooling around has to deliver solid results. Most Android advocates would claim that the OS is easy enough to use, and the rest of the users probably feel that they can get what they need without much effort, and spend less money than with Apple. I, personally, and all the iPhone users I talk to, are happy to “settle” for an iPhone and getting on with their life, comfortable that if any troubles pop up, they’ll get fixed with a quick trip to the Genius Bar.

    • Jeff G

      As a long-time PC user, then Android – who finally joined the iOS revolution in 2011 with my first ever Apple product – an iPad 2, I wholeheartedly agree with your comment. And, my iPhone 4S, then 5S which followed the iPad 2 purchase, only served to fuel my Apple fire. When the iWatch comes out, which won’t actually be a ‘watch’, it’ll be a powerful wrist device likely with Siri, biometrics, and complementary to my other mobil devices, I will almost certainly buy one after the lines die down, assuming it’s less than $500 and can do what I think it’s going to do (including improve with each new software update)

    • Sigivald


      I ran a Linux home server from around 1995 until earlier this year.

      When it decided to stop handling IP forwarding and routing correctly, I decided my time had value and just set up my Time Capsule to handle being my gateway.

      Since then I replaced the old thing with a Mac Mini running Mavericks Server for my local needs, and I’m never looking back.

      The last thing I want is to dink around with my phone or computer to get it to not suck – I want it to not suck from the start. I don’t care about “free”, I double don’t care about “open source”. I care about the value of my time and effort and how much of a giant pain in the ass something is to use.

      (To be fair, Windows, in a clean install, does that pretty well too, these days. So it’s not just Apple that can manage it in desktop-land.)

  • Walt French

    There’s another interesting mystery lurking in these charts: as exemplified by the large numbers of off-brand (“Other”) manufacturers, we should be well into the commodification phase of phones. And yet, a couple of large manufacturers dominate the revenue chart.

    I guess that “Motorola” (/Lenovo) will re-grow to be one of the major sellers, at the expense of Samsung (which would suggest commodification) but more importantly at the expense of the many smaller manufacturers, which would deepen the mystery of what about the phone market drives consumers into a small number of brands.

    Whether or not Apple continues its incredible profit share, I think it’s the clue to this concentrated market: that consumers depend on brand to signal quality, support, TCO and ROI (because a phone purchase is NOT about immediate consumption but is more like an investment). You can buy great Android phones and absolute garbage Android® phones, so Android is not a reliable branding; it falls to Samsung, LG, Nokia (heh!) et al to deliver the goods.

    So far, only Samsung has built the reputation, network and JDPower results that Apple leads on; Lenovo would seem to have the wherewithal. It’ll be interesting to see whether Nokia can move quickly enough to avoid being your father’s phone maker.

    • Sacto_Joe

      “There’s another interesting mystery lurking in these charts…we should be well into the commodification phase of phones.”

      Yes. That’s the point I was trying to make elsewhere on this thread when I said “Apple is, simply put, immune to commoditization, or very nearly so”. The fastest growing marketshare category is “Other”, as you point out. And I don’t think this bodes well for Samsung, whose marketshare growth appears to have bottomed out, and may soon begin to shrink.

      • charly

        Commoditization has only been a recent effect in the Android market so the likely answer why it hasn’t hit Apple yet is because it takes time for the Android market to influence the Apple market

      • Sigivald

        Or it won’t hit it at all.

        What would commoditization look like for iOS?

        Doesn’t it require more than one vendor?

        (Why would Apple even want to enter the profitless bottom-end of the market?

        Nebulous Android “influence” is no good reason to, for sure.

        Nor is “because everyone else is doing it [and losing money doing so]”.)

        iOS could be thrown down and stop being wildly profitable, to be sure – but I don’t see commoditization happening there.

      • aardman

        The quick road to commoditization is well known. We first saw it with Windows and now with Android. An OS that is open for use by any and all comers leads to a race to the bottom which is the express route to commoditization. On the other hand, Mac OS and now iOS has shown us how to avoid commoditization. Keep it exclusive (and well made, of course).

      • Walt French

        Interestingly, Google seems adamant about preventing commoditization within the OHA (Android®) products. Devices will have to meet fairly high standards, meaning that true commodity producers who don’t have to kowtow to Google, and who can put different search etc in their Chinese or Indian or Indonesian phones, aren’t actually Android but a subset/older version.

        They may get a fair number of sales versus say, Samsung in the next couple of years, but Google has to be committed to keeping Android attractive enough, and exclusive enough, that its big partners can profit.

        So the commoditization story is very difficult. Both OS vendors are committed to preventing it. Both control enough of the IP that I don’t see how generics compete long-term, as they aren’t generating the profits to cover any R&D and they’re not part of the official Android team.

      • charly

        Windows (except maybe 8) was always better made than OSX.

        See for example its backwards compatibility

      • Windows stellar backward compatibility with Windows XP explains why 50% of our embedded development tools simply won’t work on Win7?

        Think before you tap that keyboard.

      • charly

        Compared with MacOS9 Compatibility?

      • “See for example its backwards compatibility”

        I am saying Windows 7’s backward compatibility is WORSE than OS 9 to OS X. The transition at work has been very costly and very painful.

      • charly

        No, just a near competitor. Android is near enough. Think of gas. Only Shell sells Shell secret fantastic formula gas but people will buy other gas if it is cheaper or easier. (that is if people even believe that Shell gas is better)

      • Fran_Kostella

        Only that’s not happening, go examine the charts at the top of this article again. If it was happening then Apple’s numbers would be dropping, but they aren’t.

      • charly

        There are indications that Apple’s numbers are dropping but markets don’t change overnight. See for examples Nokia or blackberry and the introduction of the iPhone.

      • Kizedek

        See for example all that Horace had to say on the matter of Nokia and Blackberry between 2007 and 2010 (it’s right here on this site).

        Their sales numbers didn’t drop. That was the whole point. They continued to grow shipments or revenue for a little while. As a result, pundits and Wallstreet remained very optimistic about them and continued to dismiss Apple (still do, strangely), up until Blackberry and Nokia fell off a cliff.

        …but, the indicators were there, nevertheless. It was other, underlying data that Horace pulled out to show that the end was already largely determined and the writing was on the wall, due to the introduction of the disruptive iPhone.

        Some of the indicators, I believe, included things like gross margins and ASP’s etc. (but check the archives here) …things that have, for Apple, remained remarkably consistent for a very long time — and that is rather unique to Apple.

      • charly

        Not all disruptions happen in the same way. Besides Nokia and Blackberry were killed by Android, not IOS.

        PS. don’t you find it peculiar that margins and ASP stay the same for a company in the electronics business?

      • Kizedek

        Ah, are you implying that various components should be cheaper as time goes on? So, your “reasoning” is that, as cost of production comes down, Apple should either make greater margins or lower the price? (I seem to remember you mentioning something like that someplace).

        All things being equal, it might be peculiar, if that were the case. But each new model of each product adds some improvement (even within same model if continued for more than one year, such as iP 4S).

        Apple has targeted particular price points and aims to improve its product at that price point year after year. Furthermore, customers are evidently willing to pay that price because of all the value Apple adds in addition to the quality and features of the hardware: support, ecosystem, interaction with other devices, software, free OS upgrades for some 3 years at the touch of a button, etc.

        In other words, Apple can still shift units without offering BOGO or other incentives.

      • charly

        I’m not implying that. Electronic components have a habit to have prices that crash.

        I doubt i said anything about margins but Apple needs to choose between high prices (and profit per unit) or a much lower prices (but still the same profit percentage). The problem in the US is that unit sales of primary mobile phones is steady so any drop in price wont be made up with increased sales but if they don’t drop prices than the fear is that the users will leave for much cheaper Android phones.

      • Kizedek

        “I doubt i said anything about margins”

        Oh, then your whole discussion of “numbers” and “indicators” is even more superficial and spurious than I gave you credit for.

        My point was that Nokia and Blackberry didn’t have the underlying fundamentals and numbers that Apple has — strong and consistent ASP and margins.

        It doesn’t matter if Android “killed” Blackberry and Nokia. The bulk of OEMs switched over night to the next free default OS that offered the only thing going that was similar to the benchmark set by the introduction of the iPhone.

        The iPhone represented a game-changer in 2007. Apple is simply not under threat from Android in the same way that Nokia and Blackberry were. Others had to follow the iPhone, or die. They still do …including the software giants at the top of the Modular FoodChain, Google and MS. So far, Google’s experiment with Motorola has born no fruit, and Windows 8 is a bit of a flop.

        BTW, which is taking the enterprise in place of Blackberry now? The iPhone, not Android phones. And barely a Windows phone in sight.

        “Apple needs to choose between high prices (and profit per unit) or a much lower prices (but still the same profit percentage).”

        Oh? Obviously, they have made their own choice — and the results have remained remarkably consistent as I pointed out, documented by Horace.

        “if they don’t drop prices than the fear is that the users will leave for much cheaper Android phones.”

        Oh? Whose fear? If you switch to a “much cheaper Android phone”, you miss all the value, ecosystem and support that comes with iPhone. All the “indicators” are that the switching virtually all goes the other way. And that has always been the case.

        Again: Android didn’t “overtake” Apple by taking share from Apple. Android merely replaced whatever OEMs had to put on a phone anyway. As others commented elsewhere on this thread: Many Android users eventually “upgrade” to iOS.

        It rarely, rarely goes the other way, because even the most price-conscious Apple users (no, especially the most price-conscious Apple users, like me) have done their homework and know the value they are receiving.

        Again: Google, MS, Samsung and others are desperately trying to find ways to add value to their products, so that they can reap anything like the kind of “numbers” (the only ones that matter) that Apple is consistently garnering, as is its due for its supreme efforts.

      • charly

        It was the introduction of “cheap” multitouch touchscreens that was the game-changer in 2007. Not the iphone, which wasn’t even the first. LG was.

        OEm didn’t switch to a free OS but an available OS. IOS was not avaialable, Windows and Symbian were not good enough. The flash based OS didn’t allow a large market for programs.

        Switching between expensive Android and expensive IOS is not the same as switching between a cheap, few year old, Android handset and IOS. Cheap Android handsets were until recently crap and most IOS handsets are so recent that they are still in working order so switching from expensive IOS to cheap android handsets hasn’t happened yet.

        Iphones didn’t compete with $200 Android handsets but they do now.

      • Kizedek

        Sigh. You really do everything you can to rewrite history in a way that excludes Apple, don’t you?

        Whether there were multitouch screens or not, Apple went went against conventional wisdom and faced constant ridicule for eliminating keyboard and stylus altogether. To make that the best experience of any touch phone (which it still is), they developed their own predictive software and behaviours. They have also developed their own technologies about the layering of glass and capacitive sensors.

        Google changed the direction of their touch phones and ditched the keyboard, not because of LG, but because of Apple.

        Yes, you are right that switching between expensive Android and iOS, and cheap older android and iOS is not same. Sadly, most of those celebrated billions of android users in the world own the latter (and even new Android phones continue to ship with older versions of Android)

      • Sacto_Joe

        Paul Franceus below speaks to one reason why commoditization is not likely for Apple. But anotherl reason is because Apple is still a moving target. It’s not possible to commoditize something that’s still changing.

        The commoditizers/ripoff artists can’t think out of the box worth a tinker’s dam and so they will continually be behind the curve. Meanwhile, Apple will be CREATING the curve.

      • Walt French

        TBF, Android advocates/partisans have been advancing the commoditization theory for about 5 years now. And Android OHA partners have been ignoring it, putting significant efforts into skinning or other differentiation efforts.

        More importantly, the large number of handsets shipped are indeed low-cost, commodity products. They’re Not Good Enough ® for developed markets, and soon won’t be good enough for low-income markets, either. The charts above show a lot of entrants, a lot of units moved, but no actual disruption of the main smartphone market, which is driven by the market leaders, Apple and Samsung.

        And, if I’m right, Moto/Lenovo and maybe Nokia. In 2015, the market-share leaders are likely to be the Big Kahunas from 2005, plus Apple and minus RIM. To the extent that prediction is right (or to the extent that you see it in the 2013/2014 data already at hand), commoditization has not begun at all. The incumbents are savvy, experienced firms with huge economies of scale, lots of brand (actual!) value signaling quality, dealer networks, happy customers, etc.

        Meanwhile, Moore’s Law type innovation is keeping the leaders out front in ability to handle voice, advanced video, quality cameras, ecosystems, etc.

        I saw a patent for Google (!) today: circular menus, pick an option written around the circumference of a circle. I’m pretty sure that while it’s a fairly trivial item, nobody will actually bother to challenge it, and it’ll show up in Google services on Android® devices, but not in AOSP (forked) versions. Google, too, is racing to differentiate Android from the commodity producers.

      • charly

        Making money with a commodity is extremely difficult so that is why they all try to skin it etc.

        I think good enough is something at the level of an S2 and that is only very slowly creeping up (My expectation is that in 2017 it will be an s3 level for good enough) So most price points in the past were simply not good enough phone’s but that is changing fast to a situation in which most price points are good enough. If you spend $500 on a phone its brand and quality is important. With a $200 phone those attributes are less important. But you could not buy a “good enough” at that price point in the past but my expectation is that you can at the end of this year

      • Sacto_Joe

        “Making money with a commodity is extremely difficult so that is why they all try to skin it etc.”

        You can’t have it both ways, charly (not that that’s ever stopped you): If it’s differentiated, it’s not a “commodity”.

      • charly


        Entering a commodity market is easy, but there is hardly ever any good profit in it

        Entering a non commodity market is difficult but it is easier to make a profit with it.

        So the smart way is to enter a commodity market and extend your product so it isn’t a commodity any longer. It has only a small change of complete failure but the upside isn’t as large as your product is often only slight different from a commodity.

      • Sacto_Joe

        “To the extent that prediction is right… commoditization has not begun at all.”

        That’s a really interesting statement, and one I tend to agree with. I call that time when commoditization starts in earnest the “End Game”, when “savvy, experienced firms with huge economies of scale, lots of brand (actual!) value signaling quality, dealer networks, happy customers, etc.” finally start duking it out with every weapon at their disposal. I’d change the names somewhat, and I’d suggest the Last Firms Standing will be iOS, Windows, for a time Android, and just possibly Chrome. Of those three, only iOS, Windows, and (possibly) Chrome will avoid major fragmentation.

      • Like Commoditization hit Apple on MP3 players? Oh wait.

      • Paul Franceus

        By all accounts the PC market is commoditized to the Nth degree at this point. Yet Apple, with < 10% market share has 45% of the profit share of a highly commoditized market ( I think there's a lesson there.

    • charly

      Your mixing stuff up. Samsung is a chip designer & fab. Apple is a chip designer (fabbed by Samsung) . TSMC is a fab, Mediatek & Qualcomm are designers

      Intel strength is their kick ass fab and their backwards compatibility. Running Win7 in a virtual engine on your phone sounds sounds to me like something great at least for some people. Their main attack is also in the tablet market in which brands are much less important because people choose tablets, not the mobile phone companies.

      • Even ignoring interface issues, wouldn’t running Win7 in a virtual engine in a phone be impractical? Wouldn’t the RAM and CPU requirements be much too high, to the point where It’d set your pocket on fire?

        How much time do you estimate before those impracticalities disappear?

      • Walt French

        It can happen — it *IS* happening — with the Surface tablets.

        It’s just that very few people want the option of extended spreadsheet or advanced PowerPoint docs on a device that’s optimized for mobility.

        Here’s a prediction: Microsoft will offer Office on the iPad Real Soon Now, and there’ll be a flurry of downloads, then hosannahs that a very nice product was squeezed into the constraints of a tablet as well as it was.

        And come renewal time, a lot of people will realize that they only tried it out, and it really wasn’t what they wanted in a tablet, and it’ll drop out of sight.

        (@Counternotions advanced this idea today, but I’ve been tossing it around for a while. Seems more likely than ever.)

      • Surface tablets running Windows have a fan and a much larger battery and run much too hot to put in your pocket. He was talking about phones.

      • charly

        I have a Windows tablet. No fan and a days use. It even has great TCO. (Mainly because i got it for an incredible price). Metro software is a problem as it doesn’t really exist. Win8.0 was not good but 8.1 is alright. Is one of those x86 without Android support but you can run Android (crappy) in a virtual engine). But i bought it as a tablet with a good browser and it works alright for that.

      • Walt French

        Theoretically, if you’re willing to tolerate slower responses, you could cool an X86 CPU with simple convection/radiation. And thanks to Intel’s continued efforts in the low-power arena, you could probably run XP-class software comfortably for a couple hours or more today. I don’t follow Intel CPUs carefully, but gosh, they have a huge amount of engineering talent and they say they want into the mobile space.

        The real issue is that it would be an awful user experience; it would convince the world that Windows was their father’s OS and it would shut down the company as people laughed (or cried) at the utter ineptitude of it all.

      • Radiation has to go somewhere. And that “somewhere” is your pocket.

      • charly

        Atoms are faster than any Arm and don’t need active cooling

      • Walt French

        I certainly didn’t mean to imply otherwise. I said “theoretically” because Microsoft decided that a fan plus bigger battery was necessary for a decent user experience in a tablet running Windows. Haven’t seen credible claims that Microsoft doesn’t understand Windows’ hardware needs, nor even a suggestion that today’s Atoms could offer anything CLOSE to a decent experience in a phone. Including anything you may have meant in talking about a full OS in mobile devices.

      • charly

        Cheap Windows atom tablet like a Dell venue 8. Microsoft doesn’t use atoms in their tablets because that would kill RT.
        Atom and high end Arm are not that different in energy use. Besides the main user of energy on a phone is the screen

      • HR PuffnStuff

        MS has been offering office on the ipad/phone, and droid for quite a while now. If only your psychic abilities worked to predict future events.

        Thank you.

      • correctioncorrection

        You’re wrong. There is only a very limited iPhone version, and I think you are unable to create documents in it, only make minor edits. Shame you were so rude in your “correction”.

      • Space Gorilla

        Yes, everyone knows about Office 365 already, that isn’t what he’s talking about.

      • Walt French

        Apparently you are under further delusions, that Office 365 works like Office for Windows. If that were true, yesterday’s rumors about Office/iPad—rumors that shot Microsoft’s market value up $15 billion—merely betray Microsoft’s clueless inability to do basic feature marketing.

        Go ahead and let us know how many Office365 users start a new workbook on a plane, put in a bunch of more advanced functions that separate it from the kiddy-car spreadsheets (macros, array functions, goal-seeking, pivot tables, …) and then email it to somebody outside your organizational unit (as I did Monday to this website’s host).

        I don’t think you’ve ever used Office 365 in any way that uses features beyond the greasy kids’ stuff.

      • Accent_Sweden

        That’s really the great Achilles’ heel of subscription software. When times are bad, what’s the first thing that gets cut? Subscriptions. Once people realize they can live without something, they stop paying and the software is useless, meaning they are no longer using the platform. And once they are off, they have no reason to return. So basically, Microsoft is cutting the Office umbilical cord for us. I believe a subscription-only model will sweep Office into oblivion for the general public quicker than anyone has imagined.

      • charly

        There is also another issue. Pirated software. Subscriptions are hard to pirate unlike normal software. How many people don’t have a pirated copy of photoshop to crop a photo once a year. But they do know how to use photoshop (Ok, they are not afraid to try to use photoshop) But if you don’t have the pirate version at home will you try the subscription version at work

      • Kizedek

        Hmm, some choice: buy PS, rent it, or pirate it…
        I took the one choice you don’t mention: bought Pixelmator on the App Store for 30 bucks and use it on 5 computers in the household.

        It’s a really lovely alternative to PS working in much the same way with layers and everything (but more modern). It even opens PS files and keeps layer information. Apparently its developers got a couple million downloads within their first week or two on the App Store.

      • charly

        Paying 30 bucks for a program to crop a picture once a year is IMHO still to much.

      • Kizedek

        Sure, if that is all it’s for (there you go changing the goal posts again when someone responds to you). Clearly, I was suggesting it as an alternative to buying, renting or pirating PS. Good grief!

      • charly

        1 GHz CPU + 1GB RAM so that shouldn’t be a problem especially if you cut some services etc. on Windows.

      • Walt French

        You’re not only going to have to cut some services, you’re also going to be re-designing exactly every dialogue box, icon, menu and etc. Make sure that the virtual keyboard doesn’t hide the context the user needs to type a sensible response. Design a useful paradigm for multi-tasking and cut-and-paste that works within that ridiculous RAM budget (that was already stretched in the XP era). Figure out a power budget for a battery of maybe 6 Watt-Hours (recalling that my graphics chip has a 30 Watt (12 minute) TDP.

        You’re basically claiming that Microsoft should have done almost exactly the opposite of every design decision that they did — opposite the decisions of Android & iOS, too.

        Total fantasy-land. Go start your own computer company and let us know how it works for you.

      • charly

        I have a x86 windows tablet. Running normal windows software is unpleasant but it is not highly unpleasant. It is a solution for software that wouldn’t be used often and for only a short time.

      • Walt French

        I don’t think Windows tablets are a problem for older software, in the scenario you lay out. What I think is strange is that you’d intentionally make that compromise when laptops will run both old and new Windows software for extended periods.

        In particular, my own work in Windows apps — I start Excel right after Office and my Bloomberg workstation — would be awful on a smallish screen, especially with controls such as menus, insertion bars (already a challenge due to the insertion i-bar not showing correctly), etc., none of which would be tolerable in touch (fat thumb) mode.

        Admittedly, my scenario isn’t everybody’s. But why would people run apps in such a kludgy fashion when ultrabooks are about the same size/portability as a tablet, and can be a delight to use? What is it about touch that is so valuable for some apps, even though the same user needs the keyboard/pointer 2 minutes later?

      • Interesting then that in the tablet market there is essentially zero successful competition to Apple in the above-9″ segment, and very little profit for anyone but Apple in the below-9″ segment.

        Also, Android’s success in gaining market share in the phone market has been heavily dependent on the carriers pushing Android devices as alternatives to the iPhone (Android phones weren’t going anywhere in the U.S. until Verizon started their huge “Droid” campaign, because they didn’t have the iPhone and were hemorrhaging customers to AT&T). If it were directly up to the customers, the iPhone would likely have not only dominant profit share in mobile phones but also dominant market share. This can be seen in the history of the iPod in the media player market.

        It’s evident from both the iPod and iPad that when end customers truly are making the buying decisions they recognize Apple’s value proposition, and they prefer it over the cut rate competition.

      • HR PuffnStuff


        (they took your choice)

        Holy cow that is such an uneducated thing to say. You completely contradicted yourself in such an inane manner.

        1. If it were up to the customers!
        It wasn’t. consumers have no mind nor choice, obviously.

        2. They were hemorrhaging customers to AT&T!
        Yeah, they didn’t have a choice. That’s why Verizon was losing customers.

        It is always up to the customers unless there is no other choice.

        How you can easily throw around terms like “value proposition” without strangling yourself is beyond me. What does that even mean? Do you even know? You act like it’s something tangible that the iPod, and the iPad had/have (let’s face it, the iPod is completely irrelevant these days), instead of an intangible ‘feeling’ and a fleeting ‘promise’.

        There were plenty of “cut-rate” competitors whose product was far stronger than the iPod, or at least as good. They played music too. They played Flac too which is an audiophile’s wet dream. Thus they were better.

        Then the iPod touch came into play. I still love my iPod touch to be quite honest… The Zune had more storage and played more formats, but the iPod touch was an Internet device as well. If only iOS had evolved since then. Anyway, nothing could compare. Except a device which played Flac.

        The above is a good example of where Apple’s value proposition is completely ruined. With experience they’ll end up doing it a million times more. They’ll do it for profit. They;;l do it for brand recognition. They’ll do it to keep people locked in their ecosystem. It’s annoying that they are so without confidence in their core product they feel the need to lock people in.

        I really do still love my ipod touch though. I wish it hadn’t broken from a 3 foot drop.

      • “How you can easily throw around terms like ‘value proposition’ without strangling yourself is beyond me. What does that even mean?”

        If you wish to find value in reading Horace’s posts and participating in the comments on them I would suggest that you look it up.

        As far as not “strangling” myself after my comments, I might say I’m inclined to wonder the same about you after your own response. “DEYTUKURCHOYS” certainly seems like something that’d be difficult to say without at least gagging on your own tongue.

      • HRpuff n Stuff

        Well, I suppose you didn’t pick up on the post-pop-culture reference there. That’s okay…

        I then went on to explain how Apple’s “value proposition” is generally inferior to it’s competition in at least one case. There’s a reason a ‘cheap knock off’ Cowon mp3 player fetches a price similar to an iPod.

        Mostly I was generally annoyed with your assertion that there’s something inherent in Apple products that makes their value proposition stronger than the competition. You assumed that it is something that Apple ‘HAS’ that the others don’t.

        The only thing Apple has going for them is a great reputation with hipsters. That is the core of their value proposition.

      • Oh, I do pop culture references…

      • HRpuffnStuff

        Haha, you can’t back the BS so you blow me off. Whatever…

      • Guest

        Got plenty to back me up, but clearly nothing could be said to change *your opinion,* so…

      • Got plenty to back me up, but clearly nothing could be said to change *your opinion,* so…

      • HR PuffnStuff

        I’d also like to point out that not even the iPad can compete with it’s own LY’s at this point. The tablet market has either already saturated, or people have figured out it’s just an extra layer of redundancy.

        The iPhone does everything that the iPad does sans larger screen, just as a decent android tablet will do everything a decent android phone does… So I think people may be figuring out they just don’t need a PC (Apple or Windows) a phone, and a tablet.

        I think the tablet market will turn into a niche market, or go the way of the netbook (to it’s grave).

        Interestingly enough, my mom has abandoned her computer for her tablet, and my brother for his phone. Which seems par for the course. It seems, though I have no evidence, that the tablet is becoming the PC of the really young (9-15), and the really old (65 and up). I am seeing far less iPad’s for business.

      • Sales figures suggest otherwise. You appear to be overly focusing on a slowdown in growth rate, and ignoring actual sales numbers.

      • HRpuff n Stuff

        Considering “LYs” or ‘Last Year’ is generally a figure that is based on growth compared to last year… Yes I am. In business it is the number that matters.

      • charly

        7″-8″ seems to be the size consumers are interested in. A bigger question is why people buy 10″ ipads.

      • Walt French

        Dang, but YOUR opinion on about everything seems to disagree with what consumers are spending THEIR own money on.

        My wife really LOVES her (large, V2) iPad, in part because the screen is good for reading full-page-format PDFs that she uses at board meetings. In fact, to read a normal page-size document, the 10″ screen (portrait mode) displays pages at about the size of my 17″ laptop screen. Especially for documents formatted in multiple columns, where you’d have to scroll a lot, that big screen you don’t have to press against your nose is a huge plus.

        My own preference is for NO tablet—between my 4-year-old laptop and a phone, I’m set. But I don’t go around claiming that people whose needs are different than mine have been abducted by aliens and their brains replaced.

      • Sacto_Joe

        By George, I think you’ve hit on it! All this time we’ve been talking to charly thinking he’s completely human, when in fact he’s had his brain replaced by Little Green Men!

      • The two sentences of your response contradict each other. One could get the impression that you’re trying to channel the spirit of Yogi Berra.

      • I don’t see the point of 7″ to 8″ tablets.

      • Walt French

        @charly, yes, I know those differences. But they all are vying for a chunk of the CPU business, a business where winner-takes-all economies have been important at the various price points.

        I’m sure a Win7 virtual engine would be great for some people, but virtually NO legacy X86 software is well-adapted for touch and the paltry Surface numbers won’t encourage many developers to port to Modern on a tablet-sized screen, let alone re-purposing the apps for phones.

        Intel simply does not have the market power to bring X86 apps to tablets. Microsoft has been throwing a LOT of resources at it for years, to very little success, and today is rumored to be tossing in the towel enough that it will port Office to iPads.

        It’s a bit sad: Intel *DOES* have some first-class technology, tech that’d be useful if more widely utilized. But they *also* want to make good profits, which they can’t do if they help tablets cannibalize their desk- and lap-top business. Classic disruption. At some point, Intel will have to jump into the mobile business with both feet, but they haven’t seen that it’s do-or-die yet.

      • charly

        Porting to Metro is not what i meant with advantage. Running legacy windows software is were the real advantage of x86 is. And yes, i know it will be crap but better crap than no software.

      • Juan

        Better hungry than eating crap, in the end, crap was already digested and you are still as hungry as before, only with the added experience of having eaten crap.

      • charly

        To hungry and you die. This is also almost completely work related in which case i have a higher tolerance

      • Juan

        What you are saying, In short, is that no one will use that software so the argument became useless for this article.

      • charly

        Individually those programs have very low number of users but collectively they have very many users.

      • Juan

        You mean enterprise software that works like crap, running in some “unsupported” hardware that makes it run even worse?

        This gives the whole story away, if it was important software it would stay in its own hardware, no way anyone will take a productivity hit just because it has to run somewhere they like, that is why cobol is still in use today, hell, i still see BBX (Business Basic) in several places, even with SCO chugging along with it.

        So this software is far away from important, from the start, you probably have few users (again, you cant hit several users with crap).
        You are also permited to DECREASE its performance, that means it has even less importance, probably something like an hour tracker or something….

      • charly

        Business is more than enterprise and Moore’s law allows incredible uglyness

      • Kizedek

        Sounds like some situations that are ripe for some form of disruption.

        And everyone acts like Apple is the only one in danger of disruption because Apple apparently “relies” on consumers liking its next product. sheesh. Probably new companies will find new ways to do things to compete with the old incumbents asymmetrically, rather than trying to compete with them head on using the same legacy products.

      • charly

        Chromebook is a definite treat

      • Kizedek

        especially if they name the versions after desserts

      • charly

        That is only a threat if chromebook was based on Android

      • Kizedek

        “treat” – “dessert” 😉

      • charly

        Android candy code names

      • Walt French

        As they say, that’s the beauty of an open, competitive market. Different vendors try out variations on themes, sensing a need for a 3-pane project-tracking app on Android, because they can’t unseat the incumbent 2-pane Windows version (or whatever).

        You’re only tied to “no software” if you choose the platform first, and only then try to see if it fits the job you have to do, whereupon you belatedly realize that you need to back up.

        The place I work still runs some command-line, and 80X25 green-characters-on-black dinosaurs in Windows. But only because they’ll never be ported to mobile for security and cost reasons (never mind that they need F-key inputs). I’ve yet to hear of any good reason why a function is so valuable on mobile devices (devices MORE mobile than laptops), but the cost or time isn’t worth it.

      • charly

        Because writing software is not cheap

      • Sacto_Joe

        “Microsoft…today is rumored to be tossing in the towel enough that it will port Office to iPads.”

        They should have done it two years ago. They gambled, and they lost. Now they’ll have to compete one-on-one against alternatives that are tuned to a touch interface.

        And you are on the money that virtually ALL X86 legacy software is now forced to migrate to the iPad if it wants to stay in business.

        This is a huge, huge win for Apple, although it probably won’t be completely obvious until we get into the Mobile Computing End Game, which is still a few years off.

      • Tatil_S

        >”which they can’t do if they help tablets cannibalize their desk- and lap-top business. ”

        I don’t see how Intel made ARM CPUs (either as a fab for others or for its own) for mobile would cannibalize its desktop and laptop business, any more than the amount eaten by existing competitors.

      • Walt French

        I was thinking about making Atom-class chips with their newest technologies, or if they brought those technologies to ARM. The more they promote the excellent (and appropriate) power/performance characteristics in tablets, the less people buy their mid- and high-range chips. And it’s not clear that Intel’s technology is so much better in terms of cycles/dollar, that they could actually compete all that well, anyway.

        But yes, now that you mention it, the current situation is not an equilibrium. I’ll be interested to see what Intel does next.

    • Tatil_S

      Intel does not have to sell its x86 based mobile CPUs, it can get into the fab business on behalf of Apple, Qualcomm, Nvidia or Microsoft/Nokia. It can also take out an ARM license and use its vast CPU design experience to compete against other off the shelf components for every willing OEM. It’s got cellular design assets from its Infineon acquisition, so it could be a formidable competitor to MediaTek if it wanted to. Among all the hardware companies, Intel is the one with the most options and possibly with the largest resources to pursue these strategies. That is why it would be the greatest blunder in tech if it is still merely a supplier for regular PCs five years from now.

      • Walt French

        Intel has the most options because it has the fewest challenges to its existing smartphone business… because it has essentially none.

        Let’s remember that Intel walked away from Apple’s 2005/6(?) to use an off-the-shelf Intel CPU in the original iPhone. Then, Intel further foreswore the industry—it sold the ARM/XScale division to Marvel.

        Intel’s already opted out of the industry once (which may not have seemed so dumb at the time, but was hardly prescient) and their recent efforts to diversify away from the PC platform (TV, Meego) have been pitiable.

        It’s not as if Intel just needs to give Apple its phone number; Apple already collaborates closely with Intel on the X86 side. Some combination of Apple wanting to keep its independence vis-a-vis suppliers, or Intel’s desire to keep the high-margin X86 business going strong as long as possible, has kept them from pursuing the mobile CPU business aggressively enough.

        Until mobiles need a LOT more processing power — as in we watch video a lot, or pipe in a virtual reality overlay to our glasses or start inverting monster matrixes on our phones — Apple’s CPU needs can be met by many firms, e.g., Samsung or TSMC, that aren’t up to Intel’s capabilities. AFAICT, Intel is still trying to figure out how it will compete against huge volume, very-low-profit technologies, with something more elegant, power-efficient and higher-end, and hasn’t volunteered to Apple that it’ll buy the business.

      • charly

        Video is done by specialized circuits, not general CPU’s. Intel owns x86, that is why they love it. Android apps run almost as well on x86 as on Arm so Intel would rather sell chips(x86) it own than chips(ARM) it doesn’t own. Intel plan is to first enter the tablet market were energy use and computational power is closer to their strength and then enter the phone market.

      • Tatil_S

        I agree, but I guess I use slightly different phrasing. Most executives are either afraid of killing their old business before the new revenue source takes off or not having resources to setup the new one. Intel has neither problem. Intel’s income from x86 PC chips is safe whether it goes into lower margin fab business or whether it starts its own line of mobile ARM CPUs. For a few years, Intel execs could argue that they were trying to push x86 mobile chips to secure high margins by staying out of ARM and letting it wither without a strong champion. Unfortunately, the industry has moved to ARM decisively and very quickly, despite Intel’s opposition and Microsoft’s half hearted interest. Execs do not have to worry about whether supporting ARM would harm the chances of its x86 mobile business or about sending mixed messages. With or without Intel, ARM is already more than viable. Intel can make money off ARM, while pushing x86 on the side until it also becomes good enough (or necessary enough) for mobile computing. If it does not start making money from mobile, it will become irrelevant, stuck in a high margin stagnant business.

        Intel has a lot of expertise on fabrication side. I am pretty sure they can produce ARM chips with lower power consumption than Samsung or TSMC, just as easily as it can make more powerful x86 chips than they can. Thus, if Intel had the will, many chip design companies would love to use its fabs. If Intel waits until the latter aspect is necessary for mobile, it may end up waiting forever.

    • Fran_Kostella

      I’d speculate that the commodification phase of mobile devices at the iPhone level has been delayed for two reasons. First, the quality of Apple products is still so far ahead that they end up being less expensive in the long run. Any non-ideological buyer who is concerned about cost is going to see that Apple products maintain there usefulness long after the less expensive alternatives. All of the Apple gear I’ve bought over the last decade is still working well and I can’t say that for any competing devices (and I’ve never had to clean unwanted software off a new Apple product, or wipe it because of malware). I’m sure one can cherry pick exceptions, but overall, Apple products are of very good quality and will last and are a better value.

      Second, I don’t think we’ve reached the end of what a mobile device can be, so there’s plenty of room for great innovation. I’ve recently been working with a team on an app for people with severe visual impairment, and have been pleasantly surprised at how much more we’ve been able to do by getting away from the screen and moving toward speech and gestures, and I speculate about what wonderful things we might do with nearby networking and sensors. Unlike desktops and laptops, which seems to have settled into some kind of optimum that has barely changed in a decade, I think we are still in a phase of great innovation in mobile device capabilities. Given that, why would I choose the cheaper device, which is likely running the older OS and lacks innovative features?

      And I’m just ignoring style, design, ecosystems and the power Apple has in scaling their process and the great technological efforts being put into iOS as a forward looking OS. I don’t see anyone getting close to them yet, and the last year has just shown how hard it is to play this game. I’m more worried about Samsung having their whole catalog eroded than Apple, at this point at least.

      • charly

        An XP computer i bought in 2002 died last year because the power supply died. I could resurrect and it would still work (for a month)

        I don’t think the same is true of any mac bought in 2002. More to the point i don’t think any mac made before 2006 is fit to surf the web. Do the first iphones still get security updates?

        Are you sure that your old Apple gear is still working because if you can’t surf the web than i don’t really think it is still working.

      • Fran_Kostella

        Which is why I said you could cherry pick examples.

        And yes, I am sure the old gear old works as my son uses most of it as hand-me-downs everyday for web browsing and doing school work. I’d happily upgrade it if it failed or if he wanted the newer gear.

        My point was that it is generally a better value. I’m delighted how, when someone says something general, you argue the specifics. And when someone argues a specific you shift to the general. And all as if we don’t notice the context shift! 🙂

      • charly

        I’m not cherry picking. There is a difference between “working”

        and in working order. Old Apple stuff is rarely in working order as they shouldn’t be on the net

      • Fran_Kostella

        I said nothing about “working order” and I’m not sure if you’re making some kind of distinction or not. I’m sure you have a point in there somewhere, but since you seem focused on making a quantity of half hearted attempts to counter anything even vaguely positive anyone ever says about Apple with any sequence of words to occur, you probably don’t have time to make a cogent argument. Lord knows we all could use some constructive pushback on our public pronouncements, but it would be so much more useful if you’d drop the cheap rhetorical tricks and make some focused reasoned arguments that address the topic at hand.

      • charly

        Apple is quick to stop patching software.
        Software with known security holes are not fit to be on the web
        The web is the reason why most of Apple products are useful.

        In short most Apple products have a short useful life because Apple stops patching them.

      • Kizedek

        Most of my household’s Apple products are older and have proved extremely useful — from a PowerMac G3 of about 12yrs, to a 6 yr-old iMac, and my main machine: a mid-2011 iMac. Plus older mobile devices (Gen1 iPad, Gen2 iPod Touch, iPhone 3GS, iPhone 4S).

        I work at home as a web developer, so I am basically online 24/7 with all my devices. Apart from the PowerMacG3, our devices are in active use most of every day. Nary a problem, not once. …oh, wait, I had a virus of some sort once, I think, back in ’96 or ’97, on Mac OS. I think I had to remove a file or two and restart the Mac, then I was good to go.

        But, thanks for the concern: “Software with known security holes are not fit to be on the web.” Good to know. I do take some basic precautions — I usually switch off Java in Safari, practice a bit of common sense, that kind of thing (never spent a penny on anti-virus, I must say).

        And I really do think I understand where you are coming from, or what amounts to wishful thinking on your part: “security holes” are all equal and equally exploitable, whatever system is said to contain a “security hole”. Fortunately, that’s just not true.

        As for your other statement (“The web is the reason why most of Apple products are useful”), you are completely out to lunch. Do you not ever wonder why you have little to no credibility on this site? Perhaps you are just “loosing it” (aka “losing it” 😉 )

      • HR PuffnStuff

        I’ll disagree with that actually. Apple uses extremely high quality top of the line parts in it’s machines. It does slightly justify the price. Compare the new iMac to an average Windows PC to see how incredibly crazy the specs are.

        Granted I’d rather put that Xeon processor in a Windows machine, but that’s not the point.

        A mac made in 2006 should be fine to surf the web. It should run better than an average XP machine of the same time frame mostly because it was better spec’ed to begin with.

      • charly

        I’m talking about software, not hardware.

        I don’t know if Microsoft will come back on its decision of stopping XP support but if not than answer me if what would happen when you visit an illegal streaming site with internet explorer on XP in juni 2014. The reason it is not happening (or is it) with old macs is because they don’t have any market share

      • How did MS do on upgrading WP7 hardware to WP8?

      • HRpuff n Stuff

        Well, bingo. That’s the reason one does not have to worry about viruses on a Mac–lack of market share.

        Mac OS has never been field tested against virii since no one (in the virus business) codes to target a niche market.

        I’d still suspect that it would do generally pretty well against virii, as it’s based off of Unix. However, if enough coders wanted to target Mac OS, something would absolutely slip through.

        Also, I hope MS burns XP to the ground, and salts the earth (PCs) it laid on. It’s time for people to get over Windows XP. It has the distinct virtue of only being better than Windows 98. That’s not saying much.

        It’s time for some people to catch up with the 21st century, and get some new computers.

      • My PowerMac dual G4 can still surf the web and still works. Besides showing a poor lack of understand of technology, what’s you’d point?

      • charly

        A car with corroded fuel pipes also still “work”. But it shouldn’t be on the road and your G4 shouldn’t be on the net.

      • Kizedek

        Are you implying that the G4 is a menace to others or the “environment” of the net? Are there cases of Macs being invaded unbeknownst to their owners and being used by third parties as enslaved spambots or something? I really hadn’t heard.

      • charly

        It is a potential menace to other users of the net. No implying needed.

      • orthorim

        All the arguments for commodification are based on software.

        They ignore that hardware does not get commodified, especially not if it carries status, and if it’s useful day to day. Phones compare with cars more than computers in that respect. Where’s the commodification of cars? Nowhere.

  • rb763

    What I don’t understand is how Apple sells any phones at all. In Canada at least, non-iPhones dominate the marketing presence at all stores except for the Apple store. I can’t help but think if Apple really needed to sell more iPhones, all they would have to do is match the other makers’ payola.

    • 2011CTSV

      Surprise, marketing doesn’t determine how good a product is.

      • rb763

        True, what surprises me most is how well customers know this.

      • Space Gorilla

        Customers learn quickly what products are good and which are not, by experience and/or word of mouth. That’s how Apple sells a ton of iPhones, the actual product experience is very good. That’s yet another thing the anti-Apple crowd denies, the quality of Apple’s products. “My Android XYZ is ten times better than an iPhone! How can people be so dumb! What a bunch of iSheep!” And so on.

        I have found that carriers will try to tell you the iPhone is junk, I’ve had it happen twice personally. Of course they’re trying to push you to whatever phone they get a kickback on. The product quality and experience of the iPhone is real and strong enough to mostly counteract this.

      • IrelandJnr

        Most have heard the sales pitch before and are used to it. When they try to label the iPhone as junk most don’t buy what they’re saying.

      • orthorim

        It’s surprising they sell any Apple devices against the will of the salespeople. I suppose it shows that your mobile is not a commodity – you’re not going to just choose the first thing you see in a shop display as if any phone would do. You know what you want and you choose very carefully, deliberately.

        Even people who choose Samsung – most that I know don’t like the iPhone for one reason or another. They didn’t choose Samsung because the Verizon guy said it’s better. They did it because they hate iTunes (as if Android had anything better but oh well…), or because they think it’s “closed”, they can’t root it, they want a bigger screen, etc etc.

        Most of the time Samsung is the “I don’t want an iPhone” choice, rather than the “I want a Samsung” choice. It’s THE ALTERNATIVE.

      • HR PuffnStuff

        No, Android does not have anything better than iTunes… You plug in your phone, and open your music folder and copy and paste your music. It’s simple, it’s quick, and it’s not confusing. iTunes is actually what turned me off of i-devices. I never knew what was going on with itunes. I tried to transfer my new songs once (more than once actually) and itunes took it upon itself to completely remove everything but the two new songs… That is unacceptable.

        I’m still trying to wrap my head around the “I don’t want an iPhone” portion of this post… I think, in general, if you don’t want an iPhone, but want a quality phone (or a phone perceived as quality) you pick Samsung. I don’t own a Samsung though…

        However, as far as droid goes these days, which other company inspires feelings of quality? HTC? LG? Huwei? There’s not a while lot out there actually. Personally I like LG phones, but that’s just me.

        I don’t know if I’ve fully conveyed how stupid I felt your comment sounded though. I don’t know if I really can…

        Maybe like this: iPhone is the I don’t want an android choice.

        That might do it.

      • Space Gorilla

        I hear a lot of people bashing iTunes, I don’t get it. I find it easy to use, handy, simple, and so on. I dig the new look in iTunes 11 as well. But that’s just me, obviously what is true for me isn’t necessarily true for anyone else.

        Apple does have a ways to go on managing multiple iOS devices via iTunes and iCloud, that’s not nearly as smooth as I would like. But iTunes with a single device, I find it works great. Apple will get there, slowly improving, I have to remind myself that whatever they do has to scale to around a billion users (which Apple is going to hit in likely less than two years from now). That’s massive, you have to move slowly at that size I think.

        Sure, Android as a whole has more users, but what single company is managing a hardware/software ecosystem with services and content, at that size, *with* a very active and engaged user base? I don’t think there’s anyone, it’s just Apple. Other ecosystems at that size are shared entities with many companies involved, or they are just one aspect of the ecosystem. I’m inclined to cut Apple a little slack as they sort things out.

      • charly

        Shared ecosystems have advantages too as you are not dependent on one company. A feature loved by entities with large switching cost.

      • Kizedek

        Until they decide to let the users bear the switching cost as they realize that happier, more productive users is a win-win.

      • charly

        The entities are in this case the consumer. Switching for consumers is easy and even cheap (just keep the old computer in storage when when you really need it) but this is not the case for even very small companies.

      • Kizedek

        Well, some FUD has to be dispelled (and I would say this is particularly true for small businesses where there isn’t a dedicated army of IT to maintain the MS facade): You aren’t truly relying on one company alone when you go Apple. And even if you were, you are relying on one that has proved the most reliable.

        After all, you can buy/use any harddrive, some RAM, monitors, printers and other peripherals, and continue to use a lot of familiar software — Office, bookkeeping systems like QuickBooks, online services, Cloud databases, back-end stuff, etc., etc. All things from other suppliers besides Apple. Many times, these things work better or more easily/intuitively with a Mac, and produce better output. And time and frustration is worth something.

        Even if you go completely modular, if you have a work-disrupting issue, you have an issue. An issue is an issue. You must replace a harddrive, re-install Windows, restore data, whatever. Nine times out of ten, this is more common on the race-to-the-bottom side; and more problematic, more disruptive, more costly, more inconvenient and more of a nightmare on the Modular, Windows side. It’s not a great consolation that you can just try a different modular brand next time. And to whom do you turn for support?

        So, with sorts of computing products from all sorts of suppliers, and with more issues to contend with, why is it sooo important that you must separate OS and PC suppliers in particular, just in order to feel soooo good that you aren’t “putting all your eggs in one basket”, or something? Isn’t this calling a weakness a feature?

        The TCO and ROI stuff is on the side of Apple in most cases. If a small business wants to survive, grow, innovate and become competitive for the long term, it’s really worth the consideration even if there is some short term pain making a switch.

      • charly

        Apple reliable? They are completely untrustful.

        Or do you mean as in keeps working. With their update policy that is a no but even their hardware is just as reliable as any other PC in their price range from a reputable brand. If you even consider that most of Apple’s hardware is All-in-One then it is obvious less reliable than modular approaches

      • HRpuff n Stuff

        This is a very confusing post… You say, if you go Apple you won’t have the same issues with hardware? Is that what I’m reading. I may be misunderstanding.

        You do realize that apple makes pretty much just the OS (which is an offshoot of Unix) and the branding, right? They manufacture almost nothing…

        LCD panels are made by samsung
        Hard drives are made by seagate/western digital
        Processors are Intel
        RAM is made by a plethora of chinese companies

        These are the same “modular” “bottom-side” parts that will get you in trouble with a “modular side”. I fail to see how an Apple solution would remedy the “bottom-side” parts that are used in all computer hardware including Macs.

        I may have missed the point though.

        FYI, things are not more intuitive, especially if you’ve never used a Mac it goes the other way as well. Perhaps if you’ve never used a computer it is more intuitive, but in 2014 for almost everyone, that is not the case.

      • HRPuffnStuff

        iTunes is 14 years old. It’s not gonna get sorted out. Yes it is 14 years old. It is mature by software standards.

        If it was any other company I’m sure you wouldn’t stand for 14 years of inept software…

        *Glares at MS Office*

      • Space Gorilla

        Hmm, iTunes has been improving and continues to improve. I’ve never found it to be “inept”. As I said I’m on iTunes 11 now and I like it. The area I see Apple needing the most improvement on is managing multiple devices via iTunes and iCloud, as I said in the original comment. And I see Apple making slow and steady improvements on that front.

      • charly

        Samsung, LG, Sony, HTC, Motorola & Google are the big international brands. Huawei, HP, Dell, ZTC, Meizu, Oppo, Pantech etc are still local but could go international. The $300 market has many more brands than the $600 market but the problem for the $600 market is that it is dying, or at least contracting significantly.

      • orthorim

        So you agree with everything I said but my post is stupid? Thanks, I guess?!

        While file based music management sucks, I have to agree iTunes would be way better if dragging music from computer to phone would be the default, and not hidden behind obscure settings. You have to choose “manually manage music”, and then the right click menu allows you to just move songs to the phone. Syncing is too complicated.

        Although you would kind of expect techies to be rather happy with regexp-like options for syncing your songs as you can do with smart playlists.

        So yes, I agree with you that iTunes sucks. We expect better from Apple. Full device backup is the only thing I really use it for (another problem with Android – Google services only sync bits and pieces and not unimportant things like your photos….)

      • HRpuff n Stuff

        I was simply remarking on assertion that ‘almost nobody seeks to buy an android phone without first considering an iPhone’.

        At least that was what was implied.

      • charly

        Saying i don’t want an iphone does not mean you don’t want an Apple but that you don’t want IOS (most likely because you want an Android phone). The difference between a Samsung and a HTC within the same price class is simply not that great and i think that it wouldn’t be so hard to sell them an Apple phone if it came with Android.

        ps. How many of the people who want an Iphone would buy a Samsung phone if it came with IOS?

      • Kizedek

        “ps. How many of the people who want an Iphone would buy a Samsung phone if it came with IOS?”

        It wouldn’t be an iPhone. People are not just buying a brand name when they buy an iPhone — standing behind the iPhone is quality, support, customer satisfaction, etc.

        If you had a Samsung iOS device, Apple couldn’t allow you to walk up to a Genius Bar in an Apple Store and still maintain the service we have come to expect. Wouldn’t be possible. That is what we are paying for.

        Who is going to service and support you with your Samsung iOS device? Samsung? The carrier? The shop where you bought the device? What a joke!

      • HRpuff n Stuff

        I think it’s more about the fact that our comments about the companies who produce our phones, and our PCs don’t read like a sleazy romance novel about a woman with abandonment issues who found the right one as she entered her mid-thirties…

        My phone is made by LG, it may very well be a one night stand. My computer is a Samsung…I hope I wore a condom. I may send a text about last night with my computer. It shall contain a smiley face…maybe two. I will never write it a full-fledged love letter though. I’ll never put a ring on it’s finger.

        God, you Apple fans scare the crap out of me…you’re almost as scary as this reply is. It takes a certain amount of mania to truly appreciate Apple’s products, I suppose. It’s just an ounce of mania I don’t seem to have in me.

        You, Apple fan, are the reason I cannot truly appreciate Apple products. It is you who would make me feel as if I was joining a cult of some kind. I see the blind devotion, and warning signs appear.

        Dear family,

        Should I ever join the cult of Mac please send help. Make them take me in the night. Take me in a black van, and submit me to be deprogrammed. Should your attempts fail, send an army and make it a pogrom.

      • HR PuffnStuff

        Well My Android XYZ is actually better than an iphone…
        1920×1080 IPS
        1.5 ghz quad core
        2gb of ram
        sd card slot
        bluetooth,NFC,RF (works as a tv remote)

        My Android is of the high end variety (eg $800 retail).The low end droids, however, are often horrible things.

        I think the root of the issue here is that real tech junkies don’t appreciate the iphone’s locked down nature. Droid is more computer-like, where as iphone is closer to a fancy feature phone. Of course that comment will not be very popular, and will initiate action from the ADF (Apple Defense League)…

        Sorry, your phone’s UI may possibly look better than mine (I disagree, I think they are extremely similar) but your iphone will never do as much as my droid even if you jail break it.

        So, it is true that the iphone is junk, from the proper perspective. Perhaps the perspective of someone who is almost completely immersed in the business of cell phones, whose day-to-day life centers around cell phones.

        I also want to say, if you like it, use it. Not everyone needs/uses all the features Android offers. Shoot the vast majority don’t even need/use all the features iphone offers… You may dispute this, but I own both, and am very familiar with both OS’s. In fact, you wanna buy a gently used iphone 5?.

        Then there’s WP8. I had the chance to use a windows phone for a few weeks. My god, I had never been as impressed with a phone’s performance and UI before in my life. It was all around gorgeous. Of course it was a Nokia. I highly doubt I’d be impressed with the HTC, or Samsung offerings.

        If WP8 was as versatile as droid, I’d switch in a second, but it’s actually IMO a tick down in usefulness from iOS.

      • You do realize that the 2GB of RAM on Android is significantly less than 1GB on iOS? It has to do with doing memory management at run time VS compile time. Most research puts run-time MM at a 6:1 disadvantage when compared against compile-time MM.

        This is the danger of making highly subjective comments like A is better than B based on simple specs without remotely understand the technology behind those specifications.

      • HR PuffnStuff

        Haha the “Less is more” never does end does it?

      • Space Gorilla

        Here is a perfect example of the misapplication of your personal experience. Your point of view simply does not apply to Apple, it isn’t relevant, and yet you believe it is and can be used to explain Apple in some way.

      • HRPuffnStuff

        Now Apple is superior in specs, and now you care about specs, or lack there of?

        You may just be a one-trick pony.

        I obviously possess at least one skill you don’t, and that is to separate myself from what I do/use/like and look from the outside.

        I’ve said it before, but if the iPhone was the superior choice, the better mouse trap, the more functional Swiss Army Knife, I’d use it. My beef is not with anyone using it, I don’t care if you do or not. My beef is when people say it’s the most powerful thing on the market. That is a false-hood. It is not, and probably will never be as powerful or versatile as a droid. If, per your previous post, it could do as many or more “jobs” as a droid it would be in my pocket. If something more powerful (I mean as in versatility) were released I’d jump ship.

        You have proven you are in fact an Apple fan-boy. You should just realize that if something better for you were to come along you’d miss out.

      • Space Gorilla

        I don’t recall saying Apple products were superior in specs. I don’t care about specs (most people don’t). I did say Apple products were of high quality. Those are two different things.

        By the way, I own a number of Samsung products.

        Your beef is clearly with Apple, their continued success seems to upset you a great deal. I’ve said this a few places, but we are now in the Age of Hysteria when it comes to Apple. The next ten years is not going to be pleasant for the anti-Apple crowd.

        I grant you the last word. Good day!

      • HRPuffnStuff

        I’ll take the last word then…

        I have no beef with Apple. My beef is more with people touting an inferior product as something special.

        My beef is with people who buy off-brand computers (Apple) and then complain about how games can’t be played, and lack of software.

        My beef is that people tote macs around like trophies, and have no idea how to use them, and boast about their superiority and wear a smug look when they announce they have a Mac.

        I’m sure it makes people feel warm and fuzzy to own a trendy brand of tech, but stow the BS.

        I don’t hate the Apple, I can’t stand their consumers.

        I’d gladly rock an iPhone daily if they would make it a modern OS. I’d absolutely buy the new iMac (god that thing’s a beast) if it were as versatile as even Ubuntu is. Ubuntu even rocks a more solid software environment than a Mac.

        The thing that really bugs me is:

        I don’t even use my iPhone daily, and I know more about it than it’s regular users. It’s really sad. Even the so-called ease of use of the iPhone is more than it’s users seem to be able to grasp.

        The best quote from an iPhone user I’ve ever gotten was “…I don’t know, I own an iPhone” (when talking about cars). Seems par for the course.

        These people are fine with being ignorant and dumb, and choose Apple because they believe Apple facilitates idiocy, and stupidity. Not even Apple can cure stupid.

        If it seems like a lot of anger, it’s not really, it’s just my attitude towards stupidity and lack of education is generally negative.

        I don’t mean to say all users of Apple’s products are idiots, I mean to say idiots seem to gravitate towards them. It’s also a different type of idiot than the average low-income mongoloids who gravitate toward droids; it’s the attitude problem, and arrogance of the Apple idiots that enrages me. It’s as if they think they are some how better than everyone else.

        However, I guess people with those personality disorders would only gravitate towards something else if Apple never existed…

        So whatever…

      • HRPuffnStuff

        I also hate it when people say ‘You’re upset with their success’. That’s BS.

        That like when someone religious is being a dick and says ‘I’ll pray for you’ because they were being an ass.

        Why the hell do I care about how successful Apple is?

        Yes it is true they innovated like hell to produce the iPhone, and the iPad; but what have they done for me lately?

        They’ve kept their OSs lacking when they could have innovated like hell to add more features, and make their device the monsters people don’t need in general, but may need and would find useful. They didn’t.

        We will truly see what the next 10 years holds. Without Jobs at the helm we’ll likely get what they’ve been selling ever since: mediocrity and coat-tail-riding-balm.

      • It can be if the more has to support a very heavy runtime and a resource hungry automatic garbage collector. You need to learn something about runtime architectures before playing.

      • HRpuff n Stuff

        I just like how you cherry-picked that out of there.

      • Space Gorilla

        The point you’re missing is your definition of ‘better than’ doesn’t apply to most people, especially the segment Apple sells to. Apple customers are looking at jobs-to-be-done, not specs. And the vast majority of consumers are not ‘real tech junkies’.

        For Apple customers the locked down nature of iOS devices is a feature, not a drawback. I would guess that is anathema to you, but many people appreciate the curation that Apple provides.

        I agree though, if you like it use it. If something is better than an iPhone *for you*, that’s great.

      • HR PuffnStuff

        You don’t seem to realize you almost completely agreed with everything I said…

        In fact, your reply was almost a copy of my original….

        The only real deviation is “jobs-to-be-done”. If we are tasking droid versus iPhone on tasks which may be completed using the OS, droid does win. This should not be new information.

      • Space Gorilla

        Yes, I expect you actually believe I agreed with everything you said, that’s not surprising. However, you have misunderstood what jobs-to-be-done means, and that makes quite a difference. You have to try thinking outside yourself and become aware of the truth that what works best for you is simply what works best for you.

        Your experience (what you know to be true *for you*) does not transfer to the segment Apple targets, thus your analysis is deeply flawed (see your spec list). If your analysis was correct Apple should sell very few iOS devices, period. But we know that Apple sells very many iOS devices, currently at (or a bit over by now) 800 million devices sold, and approaching a billion active users within probably two years or a bit less.

        So clearly there’s a large segment of consumers that do not share your truth. Humans often make this mistake, assuming that what is true for them is true for everyone. But that is not the case.

      • HRpuff n Stuff

        You do, of course, realize we can make a very tangible list of “jobs” android does that ios doesn’t?

        Shall I start? We won’t consider google play, and itunes store in this summary even I’ll admit itunes is the stronger of the two, however. Maybe we can actually consider that a point in ios’s favor…

        NFC (some devices)
        RF (for device controls, such as tvs)
        User replaceable batteries (most devices)
        SD card storage (almost all devices)
        Local file downloads (eg. download and save .pdf open with any supporting app)
        wifi file sharing (eg. samba shares)

        I’m sure I could think of more, as if there’s a “job” that could possibly be done, it can be done with a droid just as easily with a computer in many cases.

        Sometimes truth is not just a matter of opinion. When I say ios is simply just not as versatile as droid it is based on facts. ios glaringly lacks many features that make it not even a fraction as powerful as droid, and almost preclude it from being a modern OS.

        I sit here telling you again that if ios was in fact tangibly more powerful that droid, I’d jump ship in a half-second.

      • Space Gorilla

        You’ve still misunderstood what jobs-to-be-done means, and you’re still assuming that what matters to you is what matters for everyone. And you’re two weeks late, this thread is done, move on.

      • HRpuff n Stuff

        Well, considering you aren’t speaking of actual functions to be performed, or tasks to be completed, or tasks which can be completed…

        Maybe you should explain what YOU mean so I can understand?

      • Space Gorilla

        You’re lost in the weeds talking about SD cards and local files. Jobs-to-be-done for *humans* are things like:

        – Find a recipe
        – Call my sister
        – Write a letter
        – Record my kid’s recital

        And so on. The details of how those jobs are done don’t matter to normal people, only nerds care about the technical details of how these things get done and which details are superior (spec wars!). Normal humans only notice how easy it was to get the job done. Apple makes it easy to do these jobs, hence Apple is incredibly successful.

        Now cue the nerd cry of “But SD card! But local file download! But user replaceable battery!” And so on. You just don’t get it.

      • HRPuff n Stuff

        Okay then I do get it. You don’t care about features, you care about real life stuff…

        I can find a recipe on a droid.

        I can write a letter on a droid.

        I can record my kid’s recital on a droid.

        I can call your sister on a droid.

        Local download, sd card storage, and user replaceable batteries are things people only care about when they need them. Like you are on a business trip and you need to print out a file from an email at the local print shop. On an iPhone it’s extremely counter intuitive, and you don’t have the extra option of saving to an SD card so you can just plug into a computer and print.

        That should count as at least one example of a ‘job’ by your definition.

        Now, you just tell me ‘that’s one isolated example!!’. Well it is, but it casts a complete doubt of iOS’s ability to get any task done or complete any job better than a droid. So, you may scoff at my anal retentive need for an SD card slot, and shared local storage, but it IS a big deal.

        There’s all this talk of ease of use of the iPhone. The UI of droid and iOS are extremely similar (I don’t care who copied who). It’s a bunch of clicking visual ques on the screen. Tap an icon–something happens. There is not a great deal of difference between how something works on the other.

        Since I’ve been using a droid for so long the interface, especially the lack of a back button, makes me cringe. I’m sure the same is true when one goes from long time iPhone user to using a droid.

        But whatever…long drawn out comment short: iOS and droid are almost the same darn thing when it comes to the UI and generally interacting with the device. There’s no ease of use gap anymore.

        FYI, this post makes me wonder where I put my iPhone 4s… I don’t see it on my desk…

      • Space Gorilla

        “Okay then I do get it. You don’t care about features, you care about real life stuff…”

        Perhaps you are beginning to understand. Like me, most people don’t care about features, rather they care about “real life stuff”.

        Your SD card example isn’t a job-to-be-done. Printing a file from an email at a local print shop is the job-to-be-done. There are many ways that could be accomplished.

        “So, you may scoff at my anal retentive need for an SD card slot, and shared local storage, but it IS a big deal.”

        No scoffing here, I trust that it is a big deal *for you*. And for some other users. But surely you must understand the vast majority of consumers just don’t care. An SD card is a feature, not a job-to-be-done.

      • HRPuffnStuff

        The thing that you don’t seem to realize is the specs and the features speak to real life jobs to be performed. At the end of the day, when I quote specs and features, it’s not because I really care about quadcores, RAM, USB, SD, NFC, Bluetooth, or whatever. I care about what real world functions can be performed with that stuff.

        Just because you cannot interpret specs the same way that I can does not mean we weren’t originally speaking of the same exact thing.

        So, if the iPhone feature list lacked a camera, or lacked a powerful processor it would mean it was slow, and couldn’t film my kid’s recital. You’d probably still use it though. You’d probably wait until the iPhone had a camera,and the processor caught up. You’ve already been waiting 14 years for them to sort out iTunes (apologist).

        You’re really missing the point of what specs actually mean. In many cases it outlines the ‘jobs’ one can perform. In some cases they are just trophies (I’m looking at you NFC).

        So basically you’ve just affirmed why droid is more versatile: it does more (droid does…?). It is more useful in real life situations not just the nerdy BS that I’ve already said most people don’t need.

        For instance, SD card storage. I dropped my phone and it’s busted. I plug it in and it won’t sync with iTunes. I lost all the videos of my kid’s recital. I can never get that back.

        You can iCloud me (I get tired of lower-case “i’s”) all you want, but I, like many others, do not want their personal business ‘in the cloud’, and why the hell would I ever plug my phone into my computer for backup?

        I like to drop my points one at a time so you can easily brush off my concerns.

      • Sigivald

        It’s not hard for them to; they can see people using the devices, and Apple has TV ads, too.

      • Accent_Sweden

        I know the mantra is that the masses are dumb, but most consumers actually make rational choices to the best of their informed ability for anything costing more than a few dollars. At this point, there does exist a level of sophistication among the general public about what is best value when purchasing products like 500 dollar smart phones. Those who don’t have this level of informed purchasing buy a cheaper option, but quickly apply that experience to their next purchase and aim for better quality. Good enough is actually becomes unacceptable once you’ve experienced it first hand. As we learn more, we better understand the value of a better, if more expensive, products and we adjust our buying strategies.

      • Sacto_Joe

        “Good enough actually becomes unacceptable once you’ve experienced it first hand.”

        I think that’s key. And it suggests that, in effect, the explosion of low-end “not-so-smartphones” is effectively seeding a fertile field for Apple to later harvest!

      • charly

        Than it is not good enough anymore. By definition good enough is good enough.

      • Kizedek

        Charly, I’m shocked — which side are you on?!? Are you agreeing that the products from Apple’s competitors are not good enough?

        The “good enough” epithets are all about how: “just about any ‘smartphone’ for just about any low amount of money from just about any vendor is a good enough substitute for an iPhone and the jobs it can do, so what’s the value in getting an iPhone?”

        On the contrary, an Apple user, even with (perhaps because of?) his high expectations, knows there is almost always room for improvement. The death of Apple at the hands of “good enough” competitors is not imminent… because, were things ever good enough, Apple opens new vistas to be conquered — and disrupts itself like a phoenix when necessary.

      • charly

        You are loosing it.

      • Kizedek

        The dogs of war? At least I am not losing it.

  • poke

    “We’re surrounded by anonymous, poorly made objects. It’s tempting to think it’s because the people who use them don’t care — just like the people who make them. But what we’ve shown is that people do care. It’s not just about aesthetics. They care about things that are thoughtfully conceived and well made. We make and sell a very, very large number of (hopefully) beautiful, well-made things. Our success is a victory for purity, integrity — for giving a damn.” — Jony Ive

    Competition is opt-in. You opt-in every time you compromise your integrity.

    • tz

      Far, far more people can afford top of the line smart phone and computer gear than those who can afford top of the line cars or homes.

      • Ivan Reese

        Tesla is coming down in price, dramatically, without lessening quality/integrity of the product or services they offer. They might not be creating disruption in the Christensen sense (yet), but they’re certainly competing asymmetrically. Additionally, I wouldn’t be at all surprised to see the Apple Process/Priorities applied to homes.

      • r00fus

        > Tesla is coming down in price, dramatically

        [cite needed]
        Do you have a link that substantiates what you just said?

      • Ivan Reese

        Posted in 2006:

        “Without giving away too much, I can say that the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable.”

  • alj_disc

    >The mystery then is how is it possible to build a monopoly in value creation.

    Apple is, in 2 different industries (computers&phones), the sole company whose most senior executives are not salesmen nor marketing. And that change everything.

    there is on the loop an interview of Allison Johnson, the previous VP of marketing at Apple who explain, that basically her job was to never do marketing but just inform customers.

    • obarthelemy

      1- slice up the stats so that the competition’s revenue and profit only show up partially (say, compare an integrated hardware+software+services company to only the hardware part of the competition)
      2- decide that value creation = revenues or profits. No incidentals, no externalities. Value creation = smartphone profit; allowing farmers in 3rd world countries to sell their crops over texts is not value creation.
      3- edict that 60% = monopoly.

      Done !

  • Koen van Hees

    Hounted, hououountedddd – nope, “doooooomed” worked way better.

  • Even many of Apple’s happy customers still have no idea how good Apple’s phones are…. yet. The phone may come into your life as an affordable luxury, but it can take awhile to find out that, for some examples, the picture you take with your phone shows up on your iPad, your open web pages are visible on the Safari in all your devices, your shopping list syncs with your mate’s, and that if you make a facetime audio call the voice quality is better than anything you have ever heard in POTS, let alone VOIP.

    However, as time goes on, they WILL find out how good their phone is. And then? One little tipping point after another.

    • obarthelemy

      Then again, Android phones do all of that, too ?

      • Androids have facetime audio? I did not know that.

  • Deebo

    Couldn’t the outsize profit share, particularly since it isn’t supported by unit dominance, suggest that Apple has some financial, supply chain, inventory or management wizardry that keeps profits on its products high, despite their market position? In other words, if the iPhone and Galaxy S4 each sell for $600 (before subsidy), Samsung might make $100 per phone while Apple makes $250 because of superior XYZ, not necessarily consumer-perceived value.

    Not flamebait. Serious question. I’ve long been curious about the disconnect between units and profits.

    • Walt French

      Yes, Apple *IS* expert on all the topics you note.

      But I don’t think they’re uniquely expert in them. Or, its competitors recognize that they have to run their businesses differently: many more SKUs, introduced into markets on different schedules, produced with a range of features, etc. The fingerprint reader is a make-or-break feature on the 5S, but Samsung is introducing a similar feature on a small fraction of its phones. If some supply-chain glitch pops up, they’ll keep selling other models.

      As I note elsewhere, I think Apple’s edge on margins comes from its customers’ trust in the brand.

      • Sammy

        Good point about the SKUs, or many models of phone. Apple traditionally did one new phone a year, but last year did 1.5-2 new iPhones depending how you view the 5c.

        Interesting in regards to the Apple VS Samsung partial retrial in late 2013. I was following some to the twitter feeds from journalists attending the trial. (I don’t think the official transcript is available yet.)

        Anyway, someone on the Samsung side (I think a witness but maybe a lawyer) said that Samsung is working on about a phone a week, 52 phones a year (even more than 52 SKUs). Probably a mix of smart and feature phones.

        Spaghetti at the wall?

        How does a company expect to make a great phone when it is also focused on making 52 phones in a year.

        I always felt that Nokia was sacrificing quality when making so many phone.

      • charly

        Different teams and design a Young is for a different market than a S5

      • Kizedek

        No doubt. I would hope that 100 different models from one company means they are aiming at “different markets”, though any real justification from Samsung for doing so, beyond throwing “spaghetti at a wall”, seems unlikely.

        Anyhoo, back to the discussion that you seem intent on waylaying again: regardless of whether or not Samsung designs for different “markets”, imagined or otherwise, and bearing in mind that Apple doesn’t address half the market geographically, nor necessarily cater to every wallet, the relative profitability of each company’s strategy seems to be telling a tale of its own.

        You have to ignore the trend and Horace’s interpretation of the data, and adamantly persist in your belief that this is all a fluke and the data will reverse itself any day now. Others of us here have a much more reasonable belief: 1 billion out 7 on this planet will discover they like iPhones as much as we do.

      • charly

        Could Samsung be as profitable as Apple if they follow the Apple strategy? I don’t think they would be profitable at all. So Samsung is following the right strategy for them.

      • Kizedek

        Oh, I think Samsung could try all sorts of things and not be as profitable as Apple. Clearly, Apple is pretty unique. As Horace has pointed out numerous times, the strategy is perhaps the least of it (after all Google went there with Motorola and MS is going there with Nokia): then there is culture, aesthetic sensibilities, vision, focus, talent, taste, teamwork, etc., etc., etc.

        No, the issue is that pundits, Wallstreet,, clearly think Apple is following the “wrong” strategy. Forget pure profits (which are apparently going to dry up tomorrow according to those in the know): Obviously, there is cynicism about Apple wanting to produce superior products (for which they are evidently rewarded through lots of sales); there is cynicism about Apple’s vertical integration and differentiation through user experience (supposedly it’s all about “control” vs “openness”)…. etc., etc., ad infinitum.

        Clearly, many see Apple as one big lucky fluke, and not as something unique. And that is why I say that I think a belief in what Apple is doing is far more reasonable than the cynicism about Apple and the belief that only Apple is doing it the “wrong” way, since surely, surely, the figures for Apple are going to drop off a cliff tomorrow to justify that cynicism — the same old pronouncements of the last dozen years.

      • Thbf

        Samsung’s pe is 7.

      • Kizedek

        Right, I invoke Samsung there because it is supposedly the poster boy for what apparently ails Apple and places it in such a precarious position: “serious competition”. Yeah, yeah, I know: Amazon and Google have no competition (supposedly… And there’s no such thing as disruption, either).

      • charly

        Apple strategy is to only target the high end. That is not MS strategy with Nokia (they are aiming at all markets) or Google/Motorola which targeted the low to mid end of the market.

        Where did i say that Samsung can’t improve its strategy? Just that doing the Apple strategy would end up in failure. Also Apple is not unique in its strategy. B&O has the same strategy.

        The low P/E ratio of Apple is easily explained. Their main market is stagnate in unit sales, stagnate in tech (6 isn’t expected to be much better than a 5s), the price of the competition is collapsing and their price support (subsidies) is dying. The same is true for their second most important market (tablets) expect there they don’t even own the high end. Their third market is ipod so no explanation and their last major market is PC’s in which they do better than average aka bad but not really bad. Though that assumes that the mac pro is not a failure.

        Before you claim that the doom predictions are because of being an Android fan. i will give you the prediction of the Android phone market in the US. Units up, Money down which will hurt Samsung most.

      • Kizedek

        “Also Apple is not unique in its strategy. B&O has the same strategy.”

        Where did I say that? In fact, I said the opposite: it’s much more than strategy, and Google and MS don’t show the profitability of Apple when they copy the strategy alone and try and go “integrated” vs. “modular”/”open”.

        Integrated vs Modular is really the only strategy I am talking about — not so much high-end vs mid or low. But it comes out that way because the value that Apple adds by doing so, and by optimizing its services around an integrated model must be paid for: and Apple’s particular strategy is to have that paid for through higher hardware cost — it’s the value-add that you get when you buy an Apple device (vs, say, subscribing to MS’ online Office, which may or may not lend itself to being done well if MS tries to pursue both a modular/open and integrated approach at the same time).

        BTW, is B&O the most valuable company on the planet? Because that might just be one way that Apple is rather unique.

      • charly

        Apple’s strategy is more than integrated. It is target the high end with integrated solutions. Google and Microsoft didn’t copy that strategy. Motorola didn’t even make high end phones during Google’s ownership and you can say a lot but not that windows phone is targeted at the high end.

        The “personal computer war” was not the only p[lace that showed that integrated solution loose to modular. The same is true for mini computers, servers, POTS telephone, internet. To be honest i can only name one area where it isn’t true and that is cars. Also Apple ended up as just a maker of high end PC’s as the Mac today is just a PC.

        Apple doesn’t want the low end. They could design a $350 mac mini with high profits but they don’t because of the aura of exclusivity the sell.

        B&O is the probably the most profitable (semi) mainstream European electronics maker at the moment. It is also the only one i can name.

      • Kizedek

        “The “personal computer war” was not the only p[lace that showed that integrated solution loose to modular.”

        Well, again, that is all relative, isn’t it; and depends on your definition of “winning” doesn’t it?

        Again, Apple never started with high market share, so it never “lost” it …but it has the majority of the profits nevertheless. Secondly, Apple is still here, alive and kicking, while others have come and gone and bit the dust. Dell, Gateway, Blackberry, etc. are casualties of the modular approach.

        Thirdly, there is satisfaction among customers to consider. Apple is quite high in this regard. The modular approach seems to inevitably lead to a race to the bottom amongst its participants — not good for customers, not good for the participants (viz-a-vis the above list of casualities).

        So, Apple has shown longevity and consistency; it is economically successful; and its customers highly appreciate the quality and value it provides …Sounds like it should be a “winner” in anyone’s book.

        But, apparently “Windows” and “Android” (not some other company besides Apple, conveniently) are “winners” because market share is the defining characteristic of a winner, no matter how one got there; and for some odd reason when it comes to a modular vs integrated debate, the OS in its broadest definition is counted, no matter how profitable or problematic it is for its producer, nor how consistent it is for their entire user bases, nor how much they are now veering toward a modular approach like Apple! Go figure!

        Now, when a company successfully makes both OS and hardware, and both are better as a result, then no-go, we have to look at OS “marketshare” because it fits the narrative of modular being the winner! How convenient!

        I haven’t said anything new. This is all easily gleaned from reading any half-dozen articles on this site. If you are trying to compete with Horace, you aren’t doing a very good job.

        BTW, I think Philips is a mainstream European electronics maker.

      • charly

        Apple did start out with a majority of modern smartphone sales. They lost that.

        The modular approach is good for consumers. Much better price and much faster innovation. especially that last bit is a killer

        Apple survived because since around 1995-96 the purpose of most consumer PC’s is as internet appliance.

      • Kizedek

        “Apple did start out with a majority of modern smartphone sales. They lost that.”

        You mean, they started from zero, with no carrier relationships, no manufacturing or supply chain, no experience in phones, and in the face of large incumbents who had all this. Then all the sudden, everyone had to eat their words and swallow their ridicule because Apple actually sold a few million. Then sold another few million. Then kept selling even more millions.

        So now, according to the anti-Apple narrative, Apple has actually slipped from a majority of “something” (“modern smartphones”?). Apple has lost something? Like, that something that didn’t exist until Apple made it exist and others followed? What a fantastic way to spin a story! Yet, Apple’s share of profits of all phones (and all PCs) is growing, even as all phones get smarter…

        Well, many, including Horace and Ben Evans, have been over how the whole mobile market is the only meaningful metric — not some rapidly changing subset (one that is changing because everyone has to rapidly follow Apple or lose out on the new value Appel has created in the industry).

        Rather, we could say that, once again, Apple has set a benchmark — this time, what a modern phone is. Apple aimed for one percent of the worlds mobile phones; they are now around 10 percent or so(?).

        “The modular approach is good for consumers. Much better price and much faster innovation. especially that last bit is a killer”

        You are confusing loads of random choices provided by the modular community, with innovation. Apple is leading the innovation. No-one else has the focus (which includes saying ‘no’ to loads of random choices), even when modular OEMs aren’t responsible for everything to do with their product. Yeah, you’d think there would be more innovation because each one has less to think about, but there isn’t — it’s a race to the bottom with more and more spaghetti desperately thrown around.

        “Apple survived because since around 1995-96 the purpose of most consumer PC’s is as internet appliance.”

        Huh? Are you making an indictment, like Apple played dirty, or something? Though, I do suppose MS is declining because it didn’t have the foresight to notice the importance of the internet and the consumer’s needs (and is still confused about it). The OEMs have declined because, for all the theoretical “killer” benefits of the modular approach that you cite, all it really seems to lead to is an inevitable race to the bottom (again, not in the consumers interest, nor the OEMs’, nor the OS Developer’s). Your point?

      • obarthelemy

        Network effects. a 60% share of a small market is a stronger position than a 15% share of a big market, especially if you’re trying to leverage that share into other markets, such as consumer tracking, connected appliances (incl. cars).
        Apple *do* have a relevant share in rich segments of rich markets, and it can be argued that it’s enough. But in the search for growth and profit, if Apple were really about tech not image, the most obvious move is to break out of the rich+rich niche and make the tech available to a much wider market.
        As it is, breaking into other industries will be hard because Apple’s first partners, carriers, are not very happy with oversize subsidies and volume purchase commitments. Other incumbents will be leery of locking themselves into a closed, proprietary platform. I’m sure Apple can counterbalance that to some extent with “pull” and a decisiveness and focus that Google lacks, but it still feels like en uphill battle.
        Apple’s proposition to suppliers (calling them partners would be an exaggeration) was perfectly summed up in Jobs’ “we’ve got their credit card info, they’ve got money, deal with us” memo about ebooks. Apple are no longer alone in that position, and the pitch doesn’t work that well outside of content sale where the gatekeeper position is much weaker.

      • Kizedek

        “Apple’s strategy is more than integrated. It is target the high end with integrated solutions.”

        Not necessarily. You have to look at context. For example, you might think Apple targets the “high end” with the iPad, but that is only in relation to subsequent tablet efforts that can’t compete with Apple at all unless they are a fraction of the price — and even then they don’t make money or make sense!

        Rather, Apple is offering a low-end, unencumbered computing alternative to the PC with its complexity and its time consuming and costly maintenance. Computing “for the rest of us”. And the PC figures bear this out.

        BTW, I think Philips is a mainstream European electronics maker.

      • charly

        Market introduction of new products rarely happen at the low-end

        Samsung tablets have better features than Apple.

        Philips sold its TV to the Chinese and tried to sell its audio to the Japans. Its other consumer electronics only uses the brand Philips but isn’t owned by Philips. Phiips still only owns their lamps, appliances and medical. Everything else is sold.

      • MarkS2002

        Samsung tablets have better features…

        I remember when the venerable iPad2 came out and Samsung pulled its new tablet off of the market and had to innovate like heck in order to compete. I have a friend with an Acer who has great disdained for my iPad–of course, he also seems to hate everything Apple, so it is hard to know from where his judgement arises. In the end, I am still using the iPad1, complete with its unreplaceable battery and factory set memory. I do plan on replacing it with the iPad “Air,” this summer or next; but not for any operational reasons. What I don’t know, and am not game enough to want to find out, is if the superior Samsung tablet has really gone its own way, feature wise, or is still designing with one eye on Apple; and how long I could expect its life span to be. And that is something with which I am not prepared to take a chance. But do enjoy your Samsung products like I will enjoy my new iPad. Then we can both be happy.

      • charly


      • pe8er8

        I totally agree. I don’t understand why there is, and always has been such an irrational hatred of all things Apple. Even when proven wrong, they just spin success into failure and rewrite history to prove their point. And its all because Apple customers are just fanboys too stupid to see past the pretty pictures . . .

      • MarkS2002

        I know it’s annoying for the Droidster techheads, but the world is full of people who have no ability/desire to fix their cars, remodel their homes, or reprogram their phones. We are Apple’s market and are willing to compensate for our lack of expertise with a higher purchase price and profit margin (or wages to various trades persons) as long as we are satisfied with our purchases. As we figured out back in Grade Two, “names will never hurt us.”

      • charly

        Paying someone to fix something can only be really done in an open environment.

      • MarkS2002

        Right, because I certainly wouldn’t take my Toyota to Toyota mechanics if it were to break down. We buy what we expect will work best and longest within our price range. Apple has worked well for me for the last 10 years, or so. Why would I want to change to an unknown quantity? Because some troll on the Internet says so? Naaaaa.

      • HRPuffnStuff

        Samsung could easily be as profitable as Apple, actually. However, looking at their earnings you see a story of expansionism, rather than focus. Samsung is trying to be everywhere, and spending money to expand there. Hell, they’re in the iPhone…you touch a piece of Samsung every time you swipe your screen.

        Samsung could easily beat out Apple if it would simply cut costs and obtain a clear focus. Removing themselves from the television/LCD panels market and the consumer PC market would dramatically increase profit margins.

        The thing is, samsung makes EVERYTHING (almost) I think it’s a great way to maintain relevance, and secure stability.

        Sony was a great example of an Apple-like competitor who had a reputation for high quality, trendy products, but their base markets became completely saturated with competition, or became irrelevant (cameras, MP3 player, etc.) and has a talent for staying in loss and loss leader mode (Playstation, PC, TVs). To my knowledge Sony hasn’t actually posted a profitable quarter this century…

        Samsung’s strategy is, in my opinion, neither inferior nor superior to Apple’s.

        In many ways it could be seen a superior though. While it does not generate as much profit margin it generates an insane amount of base revenue ($247 billion vs Apple’s $54.5 billion).

        The superiority of it is based on an ‘if’ though. What if Apple falls back into a pre-Jobs irrelevance?

        If Samsung loses an arm they still remain poised to shift their business, whereas Apple would be boned if the next iPhone tanked (there’s no danger of that at the moment). See Apple’s Q1 1999 results of $1.19 billion in revenue vs. Samsung’s $8.5 billion (2 years after the asian financial crisis at that).

        Apple’s current superiority comes from the fact that it is just so damned profitable at the moment since it’s products are hot, and they can demand a high price for them. If they remain hot they’ll be fine. If we all get tired of hearing about Apple, they’ll end up like Pogs. Remember Pogs?

        I’d much rather vote for the continued success of an American company though. These days it doesn’t really seem to matter where a company is based since nothing is made in America (assembled is not the same as made).

        Maybe if they’d use that cash stockpile for some expansionism…

      • Walt French

        You beg the question a bit with that answer, but there’s a bigger issue: the competition keeps changing and Samsung’s moat is only a few inches deep in some markets.

        A large number of vendors have the three stars in their crosshairs. Let’s understand how that dynamic is likely to play out, OK?

      • I recall a time when Samsung proclaimed that it was launching 100 phones a year (pre-smartphone era.)

      • charly

        How many really different phones were those 100? My bet is that most were just a different coat of paint

    • Daniel1900

      If we take the complaining by the carriers seriously then the subsidy to Apple for every iphone *is* larger than the subsidy for every S5 to Samsung. ie They do not both sell to the carriers for $600, the iphone sells for $600 and Samsung would have to sell the S5 for $400 and thus make less profit. This would be *because* of the customer perceived value, not in spite of it. Their “superior XYZ” is that they can demand a larger price from the carriers.

      • HRPuffnStuff

        I think you nailed it.

        It is probably not about the actual subsidy the carriers provide, they generally make that back as part of their services markup. Likely the carriers are probably complaining because Apple sells to them for a very high price (I have to guess but I’d imagine it’s 3-5% under retail) whereas Samsung and others offer a greater value (I’d guess 8-20% under retail) plus margin funding (think of it as splitting the cost of promotional pricing).

        This may actually justify the complaining of those who say that they are paying Apple’s subsidies even when not choosing an Apple product. If the carriers aren’t making as much money off of the iPhone, but it’s still selling like hotcakes, they have to make up the difference somewhere.

        This is just guessing, but considering the scenario of TI calculators on retail shelves it probably holds true.

        Just a background on the comparison:
        TI gets to demand the retail price of it’s calculators (TI-83.84.89). and the price they sell them to retailers for. They offer zero margin funding so if a calculator goes on sales for less than what TI demands, the retailer eats the cost.

        So, there was someone saying a while back that ‘Retailers are pushing Android phones’… It may very well be true since they make more money with droid, and if you’re in business (even if you’re Apple) your core responsibility is to make money, and if you are publicly traded your biggest concern is your stock holders. So why would you want to make less money?

        So just like Apple strives to make as much profit as they can from their products, others do as well. Despite many users here having a disturbingly romantic relationship with Apple, they still are not out to save your soul. The fact that they can tear your wallet a new one and you still love them is one thing they have on the carriers (no one should have any sympathy for carriers anyway).

        Now that I got my brain working… Apple probably has provided margin funding to retailers. Most likely to Walmart during the holiday season so they could hit their sales projections (which they missed slightly). Something like that is probably rare from Apple though as iPhones are rarely “on sale” even when buying with-contract.

    • HR PuffnStuff

      Apple likely makes $400-600 per phone. The components are relatively cheap. Processors are probably under $30, screens under $50, misc parts under $100.

      This is true of almost all cellphone components. This is not to say the iPhone is not a quality product (that’s for a different time).

      • And engineering, development and support are free.

      • HRPuffnStuff

        No, but that is not a true factor when looking at base margin of an item. The R&D, support, and dev are much more difficult to put your finger on.

        See if Apple can give you their data on cost of engineering, dev, and sup., then adjust for the lowering cost of production as the technology matures, fluctuating cost of support staff, sectioned retail space per sqft., advertising, warranty claims, etc. Ad infinitum and divide that by the number of iphones sold over a period of time.

        Sounds kinda…hard, right? So instead we look at item specific profit margins, instead of incorporating COB directly into the margin on an item, generally.

        The rest of that info is released in a lump sum when quarterly earnings statements are released. In other words, that is when you get an idea of company wide expenses.

        So, if we look at Apple’s Q1 earnings we can clearly see that company-wide their products have had a margin/markup of 37-38% (much lower than the 200-300% the iPhone is likely marked up) of course we are considering services, projects that never came to fruition, future projects in development, iMacs, iPods, iPads… So figuring out how much the adjusted margin of a iPhone is a fool’s errand.

        But none of that was the fucking point in question was it? The point was, how much does Apple make off of an iPhone…

        The answer: it is likely Apple makes between $400-$600 per iPhone sold.

        But here’s an article that attempts to answer your question which was more like ‘What is the adjusted profit margin of an iPhone’:

    • pk_de_cville

      “In other words, if the iPhone and Galaxy S4 each sell for $600 (before subsidy)…”

      Have you noticed the many BOGO 50% and BOGO Free dual phone deals Samsung’s carriers offer?

      They only sell for the same price within S’s marketing/propaganda/lies fantasy world. Samsung needs to appear to be of equal quality and value; so they (and their $1B marketing chorus) lie about the ASPs of their phones.

      • charly

        So? You think AT&T pays retail for Iphones? Or that i can’t buy iphones cheaper outside the Apple store?

    • The margin comes from a higher average price not form lower average cost. If anything, Apple’s cost structure is pretty high on the manufacturing side.

      • Jeffrey Nathan

        I agree Apple has high cost products (because they have so much stuff — cameras, processors, sensors, battery — inside them) but I think what most people overlook is that this high cost actually becomes an advantage. What other company on Earth has access or experience with those advanced components, and who else has the scale to ship them at Apple’s cost structure? I think Apple has an Amazon-like scale advantage that is massively misperceived by most observers.

  • Daniel1900

    Also – totally off topic. I am disappointed to see those useless “around the web” links at the top of the comments. Seeing the “facelift secrets” advertisement for the thousandth time adds nothing to my enjoyment of this website. In fact it lowers my option of anyone who tolerates these adds on their site.

    • JonathanU

      Personally, if it helps Horace monetize this site so it can keep him writing pithy prose (which he has been doing for free for years now) then I am all for it. Actually might go click on a couple of ads now to say thanks…

      • Walt French

        I’m totally with your sentiment but have this nagging belief that over time, clicks that have a very low monetization eventually result in lower revenue per eyeball or per click, whatever the site gets. Maybe making the effort look like manipulation, which would be worse than nothing. Fer sure, don’t hold back if you’re really interested in a link, but otherwise it might be an empty “+1”.

        Maybe Horace will touch on the monetization in Part 2 or 22 of the Google Business Model. (Please!)

    • Kevin

      Then leave. You are not entitled to this website, this website doesn’t exist for your enjoyment.

      • NostraThomas

        He/She won’t leave. Horace offers “disproportionate value creation” with his unique and peerless analysis. Daniel knows this.

    • Sacto_Joe

      Maybe we should ask Horace to offer us an alternative; pay-for access: If we pay for it, we get commercial-free access.

      How much would YOU pay for such a service? I’d chip in, say, $15/year. How many of us would pay that amount? And would it be sufficient to displace the lost revenue to Horace?

      Thoughts, Horace?

      • Thinking about it.

      • It would be a no brainier if crypto currency were main stream. The pay wall could be shorter and many more would be willing.

        Until then the regulars who appreciate the value will be quick to sign up. Count me in.

      • Sacto_Joe

        So just to be clear, I’m suggesting that you have the OPTION of paying and getting a commercial-free version. If you don’t want to pay, you get the commercialized version. In effect, you’d have parallel sites, and if you pay you get a login to a site that is commercial-free.

        The negative, of course, is extra site maintenance. Plus, your advertisers may require a renegotiation of their fee downwards if they don’t get as many “eyeballs” out of it. So you’d pretty much have to have a certain level of “commitment” to make this actually pay.

        On the plus side, you’d be creating a kind of exclusive club, which is attractive in itself. Also, you might find ways to bump the subscription price by offering sweeteners of some kind, like members-only discounts when a member attends an “airshow” or purchases from the items you advertise.

        BTW, my philosophy on advertising is that it’s a good thing if you’re trying to educate people, and a bad thing if you’re trying to con people.

      • MarkS2002

        I would certainly like to see how many obarths and charlys would pay up for the option of trolling amongst the true believers. If there were a second string of comments of just the PAYGs, count me in.

      • orienteer

        Or “curated” ads, chosen for their relevance and appearance, much like Gruber does. But for what it’s worth, I’d pay for an ad-free Asymco in a minute.

  • “The mystery then is how is it possible to build a monopoly in value creation.”
    Could the answer be balls?
    Every big company create new products and generally make crucial decision using great caution, think about focus groups, polls etc…
    Jobs famously decided the new iMac (the first one) colors quickly and all by itself, he said users don’t know what they need until you show them.
    Value creation means taking risks few companies are able to do.

    • Sacto_Joe

      Yep, and that’s the ROI we get on our investment in Apple: They stay on the cutting edge and pass that on to us.

  • Tim Wouters

    “How is it possible to build a monopoly in value creation”.

    Speaking in terms of Wiersema/Treacy’s “3 value disciplines of industry leadership” (Harvard Business Review, 1993), an organisation can become an industry leader by relentlessly focusing its business model on either product leadership (e.g. Nike), operational excellence (e.g. Dell) or customer intimacy (e.g. Home Depot). By “pushing the boundaries on one of these domains while meeting industry standards in the other two, competitors usually find it hard to catch up”.

    Then there are the rare “masters of two” who manage to excel at multiple disclipines: Toyota (operational excellence + product leadership), Staples (operational excellence + customer intimacy).

    I believe Apple is one of the only — if not THE only — company to have mastered all 3 value disciplines at once. They are clearly industry-leading innovators (product leadership), they master their supply chain like no other (operational excellence) and go out of their way to meet customer demands (retail stores, Genius Bars, as well as their whole design thinking).

    That’s how you create outsize customer value. Profits follow suit.

  • obarthelemy

    Usual contrarian remarks:

    1- 60% is not really a monopoly

    2- especially with Google excluded from the graphs, which is equivalent to leaving MS out when looking at the PC industry

    3- another explanation apart from cronyism is subsidies. Customers are disproportionately choosing Apple when phone prices are subsidized, nullifying the cost savings associated both with entry- to mid- level hardware, and even with competitors’ cheaper high-end hardware (the 16GB GS4 is $100 cheaper than the 16GB IP5S off-contract, but priced the same on-contract, Amazon and Apple Store prices resp, and w/o Samsung perennial money-back promos; price differential gets even bigger with more storage since the GS4 takes much cheaper SD cards: $50 for an extra 64GB with the GS4 vs Apple’s $200 for an extra 48GB)

    • Kizedek

      Awesome: your first three words are 3 for 3!

      • Space Gorilla

        It’ll be interesting to keep an eye on this new commenting strategy obart is using. Waits a few days until the thread is tapering off, then swoops in with the usual nonsense. This accomplishes a couple things, less rebuttal, and when organized by ‘newest’ obart’s comment is at the top. Welcome to the Age of Hysteria, the trolls are changing tactics. Well, except for charly, who is proving my point about hysteria.

      • azazello

        The comment may be on the top but vey few will read it. Besides, nobody should rebut as this is merely feeding a troll. Without ANY response s/he would go away. One way to rebut is with no text but votes. Done.

      • Space Gorilla

        Agreed. The best response is no response, and I try to stick to that once someone reveals themselves to be a troll or an ideologue, spouting dogma or carrying an obvious bias, chip on their shoulder, etc. I’m old enough to know that people like that will believe what they choose to believe, no matter the evidence, discussion is pointless, a waste of time.

      • azazello

        rigth on!

  • Mats L

    What has happened with Sony data in the chart? Missing some months/

    • Well he can’t use all the numbers or he won’t be able to falsely inflate Apple’s.

  • Ah, Horace making Apple Fan Fiction again by omitting numbers to boost Apple’s. I wonder how you still have a job. You realize The Verge just got publicly humiliated for doing shill work for Apple. One would think you’d be smarter than this.