
How Apple is sucking the profit out of the mobile phone market - tathagatadg
http://tech.fortune.cnn.com/2011/07/30/how-apple-is-sucking-the-profit-out-of-the-mobile-phone-market/?utm_source=pulsenews&utm_medium=referral&utm_campaign=Feed%3A+fortunebrainstormtech+%28Fortune+Brainstorm+Tech%29&utm_content=Twitter
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Duff
Apple purposefully chose to operate in an adversarial relationship with the
telcos. They got concessions on app revenue streams (before apps existed),
stopped iPhones from being peddled by fly by night phone resellers, and
stressed out the phone companies networks.

An out of the box iPhone contains no carrier-branded crap. Period.

Apple is pushing the Apple user experience without the price premium. Everyone
else is selling a commodity with minimal desirability. The
Droids/BlackBerries/WebOS devices look and feel like knockoffs.

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sjwright
What's with the financially illiterate assumption that profit is a zero-sum
game? It's not. I'm sure that chart would look very different (and more
meaningful) if it wasn't mashed into percentages.

Even if you used this faulty logic, the chart to me says "Apple stealing
Nokia's share of profits", not the entire phone market. Were Nokia and Apple
placed together in the chart, this would be clearer.

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pedalpete
Another problem with market share percentages without having totals.

If the market has grown 200% (in dollars) and apple is taking 50% of those
dollars, than the competitors are also growing, although not at the rate of
apple.

Somebody with better math skills than I probably was able to work out the
actual numbers without much thought.

You'd think an article from a financial brand would do better than this.

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rsynnott
Very strange title; it implies that Apple is actively making it difficult for
other companies to make a profit. Of course, what's really happening is that
(a) Motorola, Nokia and Samsung in particular have big shares of the declining
dumb phone market, and (b) Samsung in particular makes lots of zero-margin
ultra-cheap (<100euro unsubsidised) Android and Bada smartphones for the
prepaid market.

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refurb
That is the most bizarre article I have ever read.

If Apple is taking a huge amount of profit off a relatively small percentage
of the market, that would actually imply the opposite of what the article
says, there is still the potential for large profits in the industry.

I'm really dumbfounded that that article could make it on cnn.com.

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imr
Perhaps the market will change to be more like the console market, where the
hardware is sold at a loss in exchange for future revenue from other sources.
I would look for phone manufacturers to start asking for a percentage of app
sales.

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MBlume
Have you bought a phone lately? The telco pays for most of the phone in
exchange for your agreement to use their service for two years.

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imr
Sure, but now phones generate other revenue than just the service contract.
You don't think phone manufacturers would want some of that?

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rsynnott
They want it, but they're not going to get it. In any case, for the time
being, app store revenue is minimal compared to device revenue; last year the
whole sector took under 2 billion dollars in sales globally, only a third
(less sales taxes etc. in some cases) goes to the operator.

