I hope this serves as a wakeup call to Apple, that their position is not so unassailable that they can continue looking for new ways to drive away partners and developers without consequences.
>that their position is not so unassailable that they can continue looking for new ways to drive away partners and developers without consequences
I think most everyone wants more competition to keep any single company from being abusive, but your response to this is essentially "Apple is still #1!" I don't understand what you are saying here. Is it that you think Apple isn't really under any pressure? That you don't want them to make their developer/partner deals more generous?
How is Android a wakeup call? Apple's profits have been rising in that market segment, independent of who currently sells more phones and what OS phones run.
Apple now has Verizon support and is available in a lot of international markets.
Next the could diversify to different models, if that would help.
Apple lives from the focus of integrated hardware and software. But the real strength is the attention to the user.
With Android you got Google as the software sponsor, Google as the service provider, Google as the ad platform through which they drive their revenue and you got a multitude of hardware companies using their software.
We have seen similar models in the past, where the hardware companies had to pay the software provider their share for the software license. The Google model is indirect.
Apple has shown in recent years that they have no problem competing against these business models, even with a tiny market share. Apple does not sell by features or price.
My main problem with Apple is not about how their deals with developers or partners work, but that they don't allow me as a user to take full (or 'more') control of the device software. That for me as the user, I have no other choice as to get software from their store is limiting me.
Because content is more important to selling phones than better hardware and software. Right now, with the App Store and iTunes, Apple has the most and best content for their phones.
But what if they lose Netflix, Kindle and others by demanding too much, but those applications are still available on Android? At that point, how much better does iPhone hardware and software have to be for consumers to buy an iPhone over an Android phone?
With iPod, Apple had high profit margins, the most and best content, and dominant market share. They should want to repeat that model with iPhone, not the 1990s Mac model.
> But with declining market share puts those profits in
> severe danger in the future.
Can someone explain, how this got upvoted? 50% of profits with just 4% of market share, the article we ar discussing there sates that Apple's market share grew (6,4 to 7 percent in OEM, 24.6 to 24.7 in total smartphones market. Even more—Apple was the only growing besides Google), and somehow "declining market share" gets upvoted?
Add 20x revenues of App Store vs. Android market and 9,5 billions made by iPad in just nine months — all that is somehow "severe danger" to Apple's profits?
It is an outsized threat to their profits vs. what you might expect based on linear extrapolation. Up until quite recently they've basically been able to collect monopoly rent. It is quite likely they will not be able to do so by this time next year. It is entirely possible that they will lose this ability this year, with the speed this market has been moving with.
Especially if iPhone users start to migrate to Android. While Apple partisans will swear up and down this is simply Not Possible (TM), it in fact is completely possible. Broadly speaking, most Americans will choose to save money and get something "good enough" over something perfect. Even if I stipulate that Android will never be more than "good enough", a statement I would not necessarily agree with but let's go with it, you will still find a lot of not-Apple-partisans getting peeled off proportionally to the price delta between the iPhone and the Android. In which case Apple will either have to drop prices and profits or firmly entrench itself as the high-margin, low-sales player... and drop profits. There really isn't a scenario in which Apple gets to be the high-margin, high-sales player that some people seem almost desperate to believe will be the outcome, but even mighty Apple with its Steve-Jobs-powered RDF can't actually flout economic realities, only harness them.
"Even if I stipulate that Android will never be more than "good enough", a statement I would not necessarily agree with but let's go with it, you will still find a lot of not-Apple-partisans getting peeled off proportionally to the price delta between the iPhone and the Android. In which case Apple will either have to drop prices and profits or firmly entrench itself as the high-margin, low-sales player... and drop profits."
With iPod, Apple played this almost perfectly, driving down their component prices by always being the single biggest customer of their suppliers, then deciding how long they could charge a premium versus lowering prices to keep the delta with competitors prices from getting too large. They kept the prices close enough that most consumers were willing to pay the premium for the Apple brand.
I actually think they will do the same thing with iPhone. They are getting close to having the previous iPhone version a "free" throw in with new contract, and there are rumors of Apple developing an even lower version for pay-as-you-go contracts.
I think angering content providers is a much bigger risk for Apple right now.
That report you linked also says that the number of smartphone users is up 60% vs. a year ago. So the negligible decrease of 0.3% is pretty meaningless when that ~25% is now 60% larger than it was a year ago.
That report is talking about the "phone" market, as in the billions of commodity phones used to text and talk in developing nations. Apple's market share and profit share of the smartphone market is far less impressive (something like 20%/40% the last time I saw figures), and is mostly inflated by Nokia phones that most here wouldn't consider as a smartphone and have correspondingly low margins.
