There are currently three big mobile handset makers, Apple, Samsung and Nokia. Here I am referring to mobile handsets as a whole, not only to smartphones. Apple and Samsung are profitable, Nokia is not. But, in my opinion, Apple has the biggest risk to fall right now. Bad signs are in the air, and the fall can be really fast.
Why apple would be the weakest? Because Apple can not design devices to manufacturing in a cost-efficient way. There are many references which say iPhone 5 is the most difficult device to assemble. And that is a really dangerous position when the price-competition heats up. Apple does not have cheaper device to sell. Here I do not count the old models, because they are old. Selling old for cheap does not hold if your brand image is hurt.
Samsung has achieved excellent sales with Samsung Galaxy S III. And I bet Samsung can make it devices cheaper than Apple.
The third competitor, Nokia, is a master of making devices cheap to manufacture. Most analysts simply ignore that Nokia still improves its market share in the lower end of the mobile handset price range. These devices also generate profit for Nokia. Nokia's increasing market share means Samsung is losing the low-end to Nokia. This penny-counting culture was probably a reason why Nokia lost its smartphone dominance. However, penny-counting is a permanent advantage when manufacturing physical devices for mass market. Design to manufacture is a reason why I still believe Nokia may still have an opportunity left.
Apple just fired the iOS and retail chiefs. The plain and simple reason may be that the Apple iPhone does not sell enought. It does not sell to the partners and it does not sell in Apple stores. Five million devices at start is not an evidence to guarantee success over the coming months.
2012-11-11
2012-11-05
Apple seems to be really in trouble this time
How many iPhones Apple will sell Q4/2012? That is a really $AAPL stock-shaking question. But if the early signs are to be believed, Apple may be in trouble, at least temporarily.
The first sign of troube is the mnagement shakeup. The fight for power seems to be on, and the rumored unwilligness to apologize MAppleGate was enough to fire Scott Forstall. The articles describing the incidents also tell the tory about the fight for a new design. Apparently Apple design has stayed where it was when the first iPhone was released. Major changes have happened only on hardware side of the desing and many bloggers are now calling iOS user interface "outdated".
Also, the first news regarding the iPad Mini sales are not as great as we have heard with earlier product releses. iPhone 5 was a success, but that was easy to predict. There was a lot of demand because original iPhone 4 contracts were expired. Many of these buyers were willing to upgrade. But for me Apple's product strategy seems a bit hazy right now. Two new tablets right now was a bit surprise, as the New iPad was lauched less than a year ago.
The new products are all supporting the new Lightning connector, which seems to be the driver behind the product releases. For early adopters, it is now possible to get rid of the old hardware ecosystem at once. It will cost you, but it is possible. For those who are not willing to move on, or who have invested to the old hardware ecosystem, there is still iPhone 4S and older iPads available.
But I was expecting more from Apple. They should have coordinate the reneval of iOS interface and hardware and release thos at the same time. If the advancement in desing is too slow, Apple magic will disappear. And that is the worst thing that can happen to Apple and the brand.
The first sign of troube is the mnagement shakeup. The fight for power seems to be on, and the rumored unwilligness to apologize MAppleGate was enough to fire Scott Forstall. The articles describing the incidents also tell the tory about the fight for a new design. Apparently Apple design has stayed where it was when the first iPhone was released. Major changes have happened only on hardware side of the desing and many bloggers are now calling iOS user interface "outdated".
Also, the first news regarding the iPad Mini sales are not as great as we have heard with earlier product releses. iPhone 5 was a success, but that was easy to predict. There was a lot of demand because original iPhone 4 contracts were expired. Many of these buyers were willing to upgrade. But for me Apple's product strategy seems a bit hazy right now. Two new tablets right now was a bit surprise, as the New iPad was lauched less than a year ago.
The new products are all supporting the new Lightning connector, which seems to be the driver behind the product releases. For early adopters, it is now possible to get rid of the old hardware ecosystem at once. It will cost you, but it is possible. For those who are not willing to move on, or who have invested to the old hardware ecosystem, there is still iPhone 4S and older iPads available.
But I was expecting more from Apple. They should have coordinate the reneval of iOS interface and hardware and release thos at the same time. If the advancement in desing is too slow, Apple magic will disappear. And that is the worst thing that can happen to Apple and the brand.
2012-11-03
Google can not make money out of handsets
Google is doing well in the mobile and as a whole. But the hardware manufacturing arm, former independent Motorola, is still in trouble.
No money can make Motorola profitable. It is not possible for Moto to escape from the reality, it is permanently lost. It will be interesting to see how long Google will keep its loss-making mobile maker in tow. From Google's point of view, it may be strategically wise to keep Motorola afloat, because without Moto Android would be all-in with Samsung and a bunch of small manufacturers.
For Google, the current situation must be frustating. Samsung makes money by selling Android phones. Google makes money by delivering advertisements to these Samsung made-phones. And some of that money goes to loss-making Motorola. Apparently it woud be better for Google to shut down Motorola and keep the money flowing in from advertisements. But for some reason, Moto is still in the business.
For Google, the current situation must be frustating. Samsung makes money by selling Android phones. Google makes money by delivering advertisements to these Samsung made-phones. And some of that money goes to loss-making Motorola. Apparently it woud be better for Google to shut down Motorola and keep the money flowing in from advertisements. But for some reason, Moto is still in the business.
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