
Premium Android hits the wall - bdcravens
https://theoverspill.wordpress.com/2015/09/01/premium-android-hits-the-wall-the-q2-2015-smartphone-scorecard/
======
fabian2k
When I bought my first Smartphone, the first one of the Samsung Galaxy series,
there was a very notieceable difference in features between the lower end
smartphones and the flagships. Buying a cheaper one would have meant half of
the 840x400 resolution my Samsung had.

Now I have a Moto G, which is simply good enough for my needs. The
improvements a flagship phone would grant over the Moto G are not worth 3-4x
the price for me.

~~~
Tepix
The curious thing is that the very good medium priced Android phones (200-300€
/ $250-$350 unsubsidized) have not had an effect on Apple.

I hope one of the reasons is Apple having publicly stated that using their
customers private data is not their business model.

~~~
soylentcola
I think another part of that (in the US at least) is the dominant framework of
carrier contracts and subsidies. This is starting to change in theory but up
until now, the norm has been for a person to finish a 2-year contract, walk
into a carrier storefront, and choose from several phones with ~$200-250 price
tags.

When you see an iPhone next to a Galaxy or an HTC variant with carrier logos
plastered all over it, the iPhone seems like the most "premium" option and the
price difference is either minor or nonexistent. Besides, the iPhone, through
a combination of legitimately good track record and expert marketing has an
excellent reputation.

But if you're buying your handset outright, those other devices with less (or
essentially no) marketing like the Moto X or the Nexus 5 start to stand out a
little more if you're not married to one platform or the other. The difference
between $200 and $250 isn't much to the person buying subsidized but the
difference between a $350-400 handset and a $650-800 one is obvious. You can
almost buy two Nexus 5's for the cost of an iPhone so the glass and metal
"industrial design" may start to matter less. At least that's what happened
for me.

When I stopped doing the contract-and-subsidy thing to switch over to a $30/mo
prepaid plan, I considered an iPhone 5S (the current iPhone) and the Nexus 5.
The iPhone was maybe a little bit more capable and had nicer construction but
if I got the Nexus, I'd save enough to pay for 11 months of service.

Maybe I'm just a compulsive bargain shopper and spend a lot of time looking
for the best bang to buck ratio. Maybe I'm just a cheapskate. Either way, my
concern wasn't about targeted ads based on my search and navigation history.
It was about not necessarily getting the absolute "nicest" thing out there,
but rather something that did everything I needed it to do without spending a
premium for that last 10% of quality/reputation/etc.

------
digitalzombie
I don't buy premium because the companies track record for upgrading android
is atrocious.

Nexus is the line I buy.. unfortunately the lack of sd slot is a bummer.

~~~
adzicg
I used to buy premium android phones until a few months ago and switched to an
Iphone exactly because of this... The upgrades go through carriers in the UK
and EE couldn't be bothered to follow security patches, so I figured it's
better to go somewhere that I can at least download updates as soon as they
come out.

~~~
reitanqild
Did you consider Sony Z-series? (Full disclosure: I have one but other than
that I am unaffiliated : )

------
bobajeff
The problem is nobody sees these phones as premium they're just expensive.

The solution is to release fewer phones, give timely updates and support them
longer (Like Apple).

~~~
dingaling
> The solution is to release fewer phones

My wife went into the EE shop ( UK mobile company ) recently to see what was
on the market as her old Galaxy S2 was dying.

She came out with a list of six Samsung phones alone and a couple of Sonys.
_Is a Galaxy Alpha better than an S6? What 's a Galaxy Mini?_ So bewildered by
the permutations that she just threw away the list and bought a second-hand
Galaxy S4 on eBay. Potential sale for Samsung lost.

Android vendors might think they're satisfying all possible market
requirements but actually they're confusing potential customers. As you say,
probably easier just to go to the Apple store and choose between two.

~~~
toyg
That's just a throwback to the featurephones of old, which were bewildering
but somehow made Nokia and friends quite a bit of money.

Nobody seems to have picked up on the fact that Apple's success was also based
on extreme simplicity: they sold just one model with a variable amount of
memory. That's it. They didn't diversify their line until very recently, when
they started to feel a bit insecure ("will people really like such a big
screen? Fuck it, let's ship both") -- IMHO this simplification helped
tremendously in selling to demographics that would have otherwise steered
clear of "those nerdy gadgets".

Featurephone-like strategies make sense for upstarts looking for "a market,
any market" and small players trying to carve niches; I would have thought
Samsung was big enough to play smarter these days.

------
ZeroGravitas
Alternative headline: something vaguely like free market competition has
effects roughly in line with what theory would predict.

~~~
_0ffh
Like iPhones being massively subsidized by the carriers (at least in the US),
at the cost of Android offerings, because "We NEED to be able to offer
iPhones!"?

Like the abysmal messing around of the carriers everywhere in Android phones'
software, crushing any hope of a good, speedy upgrade system for any of them
from the very beginning? A thing nobody would ever dare ask of Apple, because
"We NEED to be able to offer iPhones!"?

Nope, sorry! At this point, the reason for the iPhone being big is first and
foremost the iPhone being big. ~90% of the profits at ~15% market share?
Please!

------
stefs
> A year back, in the second quarter of 2014, the combination of Samsung, HTC,
> LG, Sony, Motorola and Lenovo together shipped a total of 129.4m
> smartphones. (...)

> In the second quarter of 2015, the combination of that same group shipped a
> total of 114.7 devices.

This is drastic indeed.

~~~
charlesarthur
I can't tell if you're being ironic (I suspect you are), but the figure needs
to be seen against the market context: in 2Q 2014, total smartphone shipments
were 301.4m devices [1]; in 2Q 2015, they were 337.2m [2]. That's an 11.6%
growth. Apple's shipments grew 34.9% [2]. So why did none of those "premium"
Android OEMs see an increase in sales, yet Apple, with much pricier devices
and fewer models, did? This is the key question.

(Disclosure: I'm the author of the linked post at the top.)

[1]
[http://www.idc.com/getdoc.jsp?containerId=prUS25037214](http://www.idc.com/getdoc.jsp?containerId=prUS25037214)
[2]
[http://www.idc.com/getdoc.jsp?containerId=prUS25804315](http://www.idc.com/getdoc.jsp?containerId=prUS25804315)

~~~
ZeroGravitas
Surely, given the growth of Xiaomi, Hauwai and "Others" in your own links the
answer is obvious? Apple is, to a degree, insulated from competition, since
you can't buy a cheap equivalent from a competitor that runs the same OS and
apps as your current phone.

I'd also question whether every device sold by Samsung and the other "premium"
Android developers you mention, could be considered "premium".

Certainly there's a lot of Samsung devices that are aimed further downmarket
than some of those from Xiaomi or Huawei (and vice versa). And even within a
single manufacturer, you've not presented any evidence to suggest that people
haven't shifted from non-premium Samsung to premium Samsung. (You could argue
that would inevitably lead to higher profits, but I'm not sure that high
profit is synonymous with "premium", so if that's the assumption then it's
worth spelling out).

~~~
charlesarthur
Some argue that Android is itself "a competitor that runs the same OS" \- look
how many UI/UX features are common to both.

"I'd also question whether every device sold by Samsung and the other
"premium" Android developers you mention, could be considered "premium"."

Of course, they aren't. But one can deduce what has happened to sales of the
high-end models from those manufacturers by comparing previous handset totals,
and ASP (average selling price). Samsung has said that the S6 + S6 Edge sold
about as many as last year's S5, which itself was a disappointment in sales
compared to 2013's S4. ASPs have fallen (by my calculations from $350 in Q2
2014 to $317 in Q2 2015 for Samsung; from $331 to $319 for Sony; from $237 to
$235 for LG [not much of a fall]; HTC from $388 to $237. Motorola/Lenovo isn't
exactly comparable because it spans a takeover period.

(One can calculate the numbers from publicly available figures, but I can't
point you to a specific place for them - I just looked them up.)

If ASPs are falling, then generally you can infer that fewer top-end phones
are being sold. You can easily think up scenarios where that's not the case,
but all the indicators are down: fewer phones, lower ASPs, lower revenues.

"Certainly there's a lot of Samsung devices that are aimed further downmarket
than some of those from Xiaomi or Huawei (and vice versa)."

But that's always been the case, even before Xiaomi or Huawei were contenders.
However before them, there were few choices for premium features as you can
get cheaper from Xiaomi and Huawei and OnePlus and so on.

"And even within a single manufacturer, you've not presented any evidence to
suggest that people haven't shifted from non-premium Samsung to premium
Samsung."

I think you mean that the other way round? (From premium to non-premium.) I
haven't presented that evidence because it's impossible to extract from the
available data. You'd need a giant consumer panel, like that run by Kantar
ComTech, to see those shifts. But we can say with clarity that the companies
that used to define "premium Android" are selling fewer phones at the premium
end - which is told through lower ASPs, revenues, handset sales and profits.

"(You could argue that would inevitably lead to higher profits, but I'm not
sure that high profit is synonymous with "premium", so if that's the
assumption then it's worth spelling out)."

Yes, it is generally my assumption - one I think is accepted more generally
than just in smartphones - that premium products attract higher gross margins.
Other things being equal, that should feed through to higher operating
profits.

------
sliken
Sadly the android market is moving to prettier phones at the substantial cost
in functionality. So sure there are many phones that look like a premium
handset, but they they have an epoxied battery inside and often lose updates
in a year or so. Normally you'd expect a nice aluminum and glass phone with
top cpu/ram/gpu/storage specifications to last a long time. Except when they
expoxy in a disposable battery or no longer gets OS upgrades.

What I find even more baffling is that it's becoming fairly common to offer
custom removable backs (at the cost of complexity and thickness) and still not
allow for a larger battery or replacement.

Take any 2 year old phone that's seen daily use and it's likely that one of
the primary complaints about it's functionality is poor battery life. Normally
that could be fixed with $15-$25 on ebay.... only if it's replaceable.

Sad, planned obsolescence strikes again.

------
j_s
Is there any mid-range 4G Android phone that you would recommend? My
priorities are battery life, camera, tethering, and GPS signal acquisition
time (only had a problem with this on one phone long ago but super annoying).

------
korginator
No one I know associates Android with a premium experience, thanks to the
fragmentation and the abysmal levels of support from the vendors or carriers.

Case in point, I was trying to download a local news app on my Nexus 7 running
stock Android 5.1, but it wouldn't, because "this version of Android is not
supported", so even the Nexus line is apparently not premium enough for some.

~~~
StavrosK
I was trying to copy some files over to my iPhone and couldn't. Just plain
couldn't. You had to use iTunes, which doesn't run on Linux, so apparently
you're shit out of luck. Want to copy files from Linux to the iPhone? Get an
Android, apparently!

How's that for a premium experience?

~~~
j_s
iTunes is required to manage the metadata db on the device for music and
videos; "any device with DBVersion > 4 does NOT work"[1].

Copying files to/from the device is supported (works well for photos; music
and videos won't appear in the native apps):
[http://www.dedoimedo.com/computers/linux-
iphone-6.html](http://www.dedoimedo.com/computers/linux-iphone-6.html) -> The
proper solution

[1] [http://www.libimobiledevice.org/](http://www.libimobiledevice.org/) ->
Status

~~~
StavrosK
Thanks, but I ended up getting an android device. I'm sure there's some way
for Linux to jump through Apple's hoops and do this, my point is that the
experience was not premium at all. I had to fight the phone to transfer some
files, whereas android just let's me drag and drop them in.

------
tempodox
Am I the only one who feels that “Premium Android” is a contradiction in
terms? Naturally, its success would be more wish than fact.

~~~
StavrosK
Ugh, it's an _operating system_. Why would "Premium Android" be a
contradiction in terms? What's so great about iOS that makes it so "premium"?
Jeez, with these apple fans and high horses.

