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Premium Android hits the wall (theoverspill.wordpress.com)
20 points by bdcravens on Sept 7, 2015 | hide | past | web | favorite | 33 comments

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.

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.

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.

They offer basically similar services that use data in very similar ways to Google. That claim by them always seemed more like an attempt to put a positive spin on their much less successful cloud offerings. They have iAds etc, but it hasn't really taken off like Jobs obviously hoped.

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.

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.

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

I've had great luck so far with the Moto X and G line (Via Republic Wireless). Not too expensive and fits my use cases pretty well.

On the development side, my preferences are actually pretty flipped: I'm pretty comfortable with both at this point, but I'd much rather work with iOS/Cocoa touch than Android. I don't know if I'd go so far as to say the iOS dev process is "better", I guess I just feel that its a bit more thought out and predictable.

Also their willingness to ship a crippled UI "improvement" and other types of crapware

One of the reasons I don't even look at Sony's offerings

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).

> 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.

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.

> bought a second-hand (...) Potential sale for Samsung lost.

Not necessarily a bad thing in a grand scheme of things. Apple's hardware for example is famous for commanding rather high price on a second-hand market. This trend helps a lot in justifying high price point for a new unit, further strengthening margins.

I agree. The Nexus 5 from my experience is the best Android out there. Now they're going to release a completely new model, instead of supporting/updating the current model, which is basically going to kill the phone for me.

strongly agree that, another problem is that even "premium" manufacturers don't make quick rom releases. minor android versions skipped and major updates come really late, more than 3 months at least.

Apple still gives support to 4 year old iPhone 4s. though it's lagging a bit. but after a year buying such premium device, you start to get updates late or no at all.

Sony supports their older model. As late as last year every Z-series could be updated to the latest Android.

Also they are waterproof and generally good. I love mine and sometimes walk around like a living advert for them - hoping they can stay in business for many years.

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

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!

> 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.

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

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).

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.

I think the remark is about the missing 'm' after '114.7'. It would indeed be a drastic reduction if sales plummeted by over 99.9999%

D'oh. Proof that it's always good to have someone else read. Thank you - updated.

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.

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).

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.

How is that example related to the point you're making? Your local news have made an app that doesn't support android 5.1(!?) and it's an android problem?

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?

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 -> The proper solution

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

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.

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

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.

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