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back to article 'Tablet' no longer means 'iPad': Apple share PLUMMETS below 30%

Apple's fondleslab market share falls below 30 per cent for first time IDC says iPad shipments stalled in Q3 as Samsung and Lenovo surged Pundits partial to peak Apple prognostications have new data to fuel their ideas: IDC's newest report on global fondleslab sales has Apple's market share slipping markedly. The analyst does …

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Holmes

Isn't this exactly the way Blackberry crashed and burned?

By getting forced into an ever-narrowing corner of the market?

I don't see why Apple doesn't offer a much broader array of devices, and even license out their OS to other manufacturers. There are so many recent examples of companies that ruled the market, and then died quickly when they couldn't keep a high enough percentage of market share - Blackberry, Palm, Nokia, Sun - just to name a few.

Once your market share erodes and you become a bit player, you no longer get the broad ecosystem of support you previously relied on to claw your way to the top.

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I think you need to see what happens when they release the new products, I think the retina mini will prove popular, this breakdown of Q1 Q2 etc is a red herring. Micro analysis is all well and good but the annual figures are more important.

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Re: Isn't this exactly the way Blackberry crashed and burned?

Not exactly.

First of all Apple didn't really have any competition before Android, so didn't have to "claw" all that much. Yes, other slabs existed. but none with the same marketing and support ecosystem. Therefore I suspect the "market" will find a balance, in a similar way to the MAC/PC balance. People, of a certain type, will always buy Apple products.

Additionally, I'd be willing to bet that the profit margin per device is much higher, for Apple, so they can sustain a loss in market share, especially since the market is growing, without effecting their bottom line.

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Anonymous Coward

Re: Isn't this exactly the way Blackberry crashed and burned?

It's that and more. Everyone seems to forget the app developers. They are also interested in profit. Not much point in supporting a platform witth a high market share if you can't convert those users into paying customers. Developers will continue to support Apple's ecosystem because the user base has disposable income to spend on apps.

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Re: Isn't this exactly the way Blackberry crashed and burned?

I don't usually agree with The Register on their Apple analysis. I think they misunderstand the market dynamics, and how Apple fares in the market of interest to them - e.g. the market where there is a healthy margin. I think they lack sophistication in their understanding so fail to see the extent to which when companies competing downwards on price, it can, paradoxically, end up being bad for the consumer (far better to compete upwards on quality of produce and service). In that context iPhones have actually been doing rather well.

However there is little doubt this is bad news for Apple. The iPad is the new category of device they pioneered. Forget market share as that, for the above reasons, is to a large exert something of a red-herring (Apple don't want market share that is only available when margins are low - other than Samsung previous few others in the phone and tablet market are making any substantial profit). Sales growth should simply not be nearly flat. Not yet. Tablets are still a massively growth market.

Many people will jump to the "It's too expensive" conclusion. However that's too easy an analysis and I don't think it's right. Apple have maintained prices successfully in almost every category in the face of cut price competition. It can be done.

I think what this this shows is they have failed on another metric. When charging premium prices, it is essential there is no "non-premium" message or chink in your armour in any area that really counts when users are making their purchasing decision. In my view a significant reason for sales flattening is because the iPad mini failed with regard to screen resolution. For the most part, on Apple's philosophy, specs don't matter so much as visceral experience. But the screen does relate, very directly, to visceral experience. It was simply not good enough to launch a mini tablet with premium pricing, that did not match the competition in this key regard. It inserted the message in the buyers head - "premium prices for less not more" and destroys the inverse meme that is an absolute requirement for Apple's success "greater than the sum of it's parts"

This would work as a reverse marketing ladder (a marketing ladder is where product ranges are designed such that a small extra outlay gives you an extra feature you want - it should actually be renamed a market rack, as it makes you feel you are being stretched out). User's considering an iPad purchase, whether big or small size, will have been thinking about portability and considering the mini as well, and finding it falling short on a key quality metric would introduce uncertainty into the buying process (let me compare with others just one more time) and serve to call the next level into question also.

There are, for sure, likely other factors at play also (and Price is of course one, but just not in my view one that is as important as most think). But I think the above is a significant one.

It will be interesting if the iPad mini retina reverses the trend. However for many purchases some damage will have been done and the message is already out where it seems new premium buyers have been trying other brands.

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Re: Isn't this exactly the way Blackberry crashed and burned?

Additionally, I'd be willing to bet that the profit margin per device is much higher, for Apple, so they can sustain a loss in market share, especially since the market is growing, without effecting their bottom line.

It is affecting the bottom line, it was in the latest earnings call. The price adjustments for the I-Pad have been most marked over the last 12 months:

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Re: Isn't this exactly the way Blackberry crashed and burned?

@ Andy Prough

Apple makes its money from hardware not software. With Google able to provide Android to vendors for minimal fees (free for some) Apple would need to come up with a different business model to be able to charge significantly for the OS.

The experience with the clones of the 1990s was a salutary one, though I suspect that if it had gone to doing software only things might have been different.

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Anonymous Coward

Is anyone surprised in the months before a new release of both iPad (Air) and iPad Mini (Retina) if people were waiting - let's look at the market share for the 3 months including Christmas.

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Re: Isn't this exactly the way Blackberry crashed and burned?

@Ashton Black - >"First of all Apple didn't really have any competition before Android, so didn't have to "claw" all that much. "

You could say the same for Palm, Blackberry and Sun - each of them made strong early sales into a relatively undeveloped market niche. Each of them also thought their "brand" was unassailable, but their devices lost broad support as their market share tumbled.

Apple itself has been in that position before - it wasn't that long ago that Cupertino was on life support from loans from Redmond. If Microsoft hadn't floated funds to Apple in the late 90's because of MS's need for competition to help settle anti-trust allegations, Apple probably wouldn't exist today.

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Re: Isn't this exactly the way Blackberry crashed and burned?

No, RIM had only one market, cell phones. They did have Blackberry server as well, but they were exclusively a cell phone maker. Apple has diversity as in the tablet market, the phone market, the laptop and desktop computing market, software in all above categories and not to mention, one of their biggest money makers, iTunes. iTunes covers prtable and desktop apps, music, movies, etc. Apple also has more cash in the bank than most countries in the world, so no, they aren't following the same path as RIM.

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Anonymous Coward

Re: Isn't this exactly the way Blackberry crashed and burned?

". If Microsoft hadn't floated funds to Apple in the late 90's because of MS's need for competition to help settle anti-trust allegations, Apple probably wouldn't exist today."

Not actually true

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Re: Isn't this exactly the way Blackberry crashed and burned?

Apple of the 1990s is why Apple no longer thinks it is safe to try to fence off one corner of one market.

Given that the company is very good at product launches, it has usually followed a strategy of expanding into neighbouring markets rather than expanding its range within a market. From computer to MP3 player, from MP3 player to phone, from phone to tablet. It probably helps that it's so bad at the other idea: witness the cheap Mac (starting at only US$599!) and the cheap iPhone (only US$99 on a contract!).

They'll probably be healthy with 10% of the high end of three markets. If they want to expand they'll find some other market to try to muscle into.

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Re: Isn't this exactly the way Blackberry crashed and burned?

"From computer to MP3 player, from MP3 player to..."

Now you make me want to send hate letters to the MPEG. But you're right, mp3 was Apple's fire escape, the mobile phone just rebuilt their burned out building.

BTW, let's don't forget that Apple did try other markets. It wasn't that they didn't try, it was simply that they were horrible with their lock-in efforts.

https://en.wikipedia.org/wiki/Apple_Bandai_Pippin

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Re: Isn't this exactly the way Blackberry crashed and burned?

@AC 19:23 - "". If Microsoft hadn't floated funds to Apple in the late 90's because of MS's need for competition to help settle anti-trust allegations, Apple probably wouldn't exist today."

'Not actually true'

=====================

Except it is actually true, and is exactly the way Bill Gates and Steve Jobs portrayed it in their joint press conference to announce the $150 million dollar MS investment in Apple in 1997:

http://news.cnet.com/2100-1001-202143.html

Some hilarious quotes from the press conference:

"This deal strengthens Apple's viability. It's a new era in terms of Apple and Microsoft working together," said Apple chief financial officer Fred Anderson

"We have to let go of a few things here. We have to let go of the notion that for Apple to win, Microsoft has to lose," Jobs told the crowd soon after it reacted negatively to Gates's satellite appearance.

"Although the default browser will be Internet Explorer, it doesn't preclude the use of [Netscape's browser]...The Netscape deal will continue," Anderson said.

Davis also said that given the size of Microsoft, a $150 million commitment amounts to little more than good public relations. "Remember, they spent $450 million on WebTV. The investment still doesn't give Apple a coherent strategy for turning things around."

Oh by the way - Jobs was credited with rocketing Apple's stock up 40% because of the announcement on that same morning.

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Anonymous Coward

Re: Isn't this exactly the way Blackberry crashed and burned?

The money changed hands, the reaons were totally different. Something about a smoking gun pointed at BGs head by SJ, amicably solved by the exchange of a wedge.

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Byz

Shipment doesn't mean...

Sold, activated or used.

Microsoft shipped loads of surfaces but they didn't sell very well and even though our company has one it sits in the cupboard, so it isn't being used.

I've got friends with various android tablets (bought cheap) they used them for a few weeks and gave up (due to the horrid screen interaction), most of them now either use an iPad mini or went back to their laptops.

I'd treat these figures with a big rock of salt.

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Re: Shipment doesn't mean...

Actually, my Nexus 7 is rather spiffing. Admittedly, it might not be running Android any more, but that's the nice thing about non-Apple kit.

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Re: Shipment doesn't mean...

"I've got friends with various android tablets (bought cheap) they used them for a few weeks and gave up (due to the horrid screen interaction), most of them now either use an iPad mini or went back to their laptops."

Well I've got friends who bought an iPad, found it too limiting (sharing files anyone?), and sold it to buy an Android tablet where things are just easier.

In fact I've got more friends who this happened to than your friends, so Android is winning.

And if anyone tries to come back and say they've got more friends who went to iPad than my friends who went to Android, well, you're wrong. It's an impossibility. I have more friends who went from iPad to Android thay anyone on this whole entire planet. So there. My friends count wins. Android wins. Apple loses. Apple is for losers.

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Byz

Re: Shipment doesn't mean...

I wasn't talking about childish things like "winning" or "losing" (or "My dad is bigger than your dad").

I was making the point that shipment doesn't mean used.

:)

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Re: I wasn't talking about childish things

Per http://www.w3counter.com/globalstats.php the global web browsing market share for every version of iOS in the top ten (ie, 6 and 7) is 8.64%. The equivalent share for Android (which includes versions 2 and 4) is 5.22%.

From that we can conclude that, for web browsing, iOS is used about 165% as often than Android. But that doesn't differentiate tablets and phones so standard comments about pay-as-you-go contracts apply — because Android devices are more affordable, they're much more likely to be bought by people that don't intend to spend a lot on data. That doesn't mean they're not being used for Temple Run.

And to put the whole thing in perspective, Windows (XP + 7 + Vista) is used about 745% as often as iOS.

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Peak Apple

I'm surprised Apple's market share lead has lasted so long. What we're now seeing is to be expected. When you're at the top, there's only one way you can go.

What's disappointing with Apple is their repeated failure to 'excite' the media with their recent offerings. There has been nothing 'revolution'. It's all been 'evolution'. And the media, quite rightly, thinks that pants.

For all his personal failings, Steve Jobs was a leader who instilled unquestionable faith in his followers by delivering again and again. He was a tough act to follow and the current board look amateur in comparison.

Apple has peaked. Unquestionably.

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Re: Peak Apple

Apple has peaked.

Hmm, I'd question that.

Unquestionably.

Oh, well, never mind then.

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Re: Peak Apple

Mount Everest has also peaked, but I don't see many signs of it being broken up for crazy paving just yet

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Re: Peak Apple

Mount Everest has also peaked, but I don't see many signs of it being broken up for crazy paving just yet

Not sure about that - isn't India still moving north?

Mount McKinley, however, definitely has peaked losing about 20 m since the 1950s!

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Re: Peak Apple

"failure to 'excite' the media"

I have met and interacted wih a lot of "Media" people in my life (and sadly their Wall Street counterparts "analysts"). They were almost all, so astoundingly stupid, and incapable of a logical thought process, that it beggars belief.

There is no "intelligence test" for journalists. It is a refuge (for the most part) of the the incapable, who see it as a virtue to pour shit on anything and everyone that/who rise above the pathetic.

YMMV, but basically, I haven'y met a journalist who I would piss on if he/she burst ito flames.

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Re: Peak Apple

I believe the sub-continent is still crashing into Asia, so I suspect that good 'ol Everest has in fact not yet peaked. I could be wrong of course because ...

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Re: Peak Apple

True, I saw Everest a couple of weeks ago, looked fine, getting higher by a tiny amount I read.

Still prefer surface, may have fewer apps but I wanted the person I bought it for to use it for actual schoolwork using office etc. while being able to see Skype, fb messages at the same time on the same screen not to mention plugging stuff into the proper USB, the list is endless but pointless to Apple lovers I guess. And apps like iPlayer are simply not required, things like that and Netflix just work in the browser.

This is the so-called rubbish, slow, useless surface 1 btw. Having used it, I cannot see the rubbish at all. The build is solid and feels premium. It is not blisteringly fast but then it doesn't have a core i7 in it.

oops, slight digression I suppose...

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Anonymous Coward

But how many of the Android tablets are landfill?

There's a huge difference between those who buy a top of the range 10" Galaxy note, and those who buy a Bush from Argos, both in terms of what they're going to do with the tablet (the landfill users will probably have a tablet for a bit of living room web surfing), and also how likely they are to spend hard earned dosh on content. Oddly, Google seems go get this, hence their current TV ad campaign for the Nexus 7.

Apple isn't remotely interested in the landfill end of the market (and nor are Google and Samsung, really). At the £300+ end, I suspect Apple wins by a landslide, both in sales and in ecosystem profitability, with £200+ (plus perhaps Hudl?) devices with Google Play doing a credible job of playing catchup.

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Re: But how many of the Android tablets are landfill?

The figures quite clearly point to substantial growth at the premium end with Samsung's and Lenovo's sales. Apple is still holding its own, but as SuccessCase points outs, these sales include the less-than-premium I-Pad-Mini.

Weird thing for IDC figures no mention of stellar MS' performance is.

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Anonymous Coward

Re: But how many of the Android tablets are landfill?

People like the iPad Mini - it's no big deal. Yes Apple may make less profit per unit but they are selling more units overall and widening their user base. Apple is doing this for the long term - premium products, premium service, good cloud services etc. I know people who still have (and use all the time) the original iPad as it's still a damn good tablet. I also know people who have bought Android tablets purely because they were cheap but end up not using them.

If the average user were to compare an Apple iPad next to most other tablets and use both for a week suspect very few would give back the iPad.

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Re: But how many of the Android tablets are landfill?

Honestly? Every one of the tab users that I know, including iPads, Nexuseseses, Galaxies, one Surface, and a few no-names use them for living room web surfing, Facebook, maybe some Angry Birds for their kids, and that's about it. The majority of them could've saved a pile of money on their high end tabs and just bought a cheapo with no problems

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Re: But how many of the Android tablets are landfill?

" less-than-premium I-Pad-Mini."

Speaking as someone who has, measurably, the absolute visual accuity afforded by nature, you (and everyone else who slams the specifications for the iPad mini) are full of shit.

The average human (not me) really cannot see the difference in any real sense.

Specs are for nerds and morons, not for humans.

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Niche Product

iPads and iPhones should be regarded as niche products, not mass market. People buy what they can afford, or what they aspire to owning, and it's Apple's true genius to market their products as aspirational ones.

As the market for tablets grows Apple's market share should diminish, while numbers sold should carry on increasing, although more slowly. As long as they are perceived to be "the best", they will continue to be able to make a disproportionate profit. Not a bad position to be in.

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Re: Niche Product

Apple's sales are not increasing - < 1 % growth in volume.

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Re: Niche Product

Funny definition of increasing you have - last time I checked anything greater than 0 was an increase.

Lets see what the year on year figures look like shall we. Quarterly comparisons are far more at risk from seasonal fluctuations.

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Re: Niche Product

<1% is >0

That makes you an idiot!

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Re: Niche Product

"iPads and iPhones should be regarded as niche products, not mass market"

So all the chavs I see ostentatiously holding their 5Ss at arms length for us mere mortals to see wot they got represent a 'niche market'?

Coulda fuled me.

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"For that you need a sustainable hardware business model, a healthy ecosystem for developers, and happy end users"

I don't know Microsoft managed years without the last one of those...

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Totally unsurprising

Even my pensioner mother has known since August that there's a new iPad coming so not to buy one now. There will be a surge in iPad sales when the new models hit the shops, probably enough to put another 10-15% on those market share figures, especially if the speed increases being touted by the likes of Anandtech really are noticeable when using them.

As for the ridiculous Blackberry comparison, they fell because they were completely blindsided by something completely new (the gesture based touchscreen phone) and didn't react to it fast enough. They didn't fall because other people doing the same thing they were doing were releasing competing but similar devices, as Amazon, Nokia, Samsung etc. are doing with the iPad.. Until the next tech shift appears, the device obvious to everyone as the thing that will replace tablets, then Apple will continue to ride the market share ups and downs as their and other company's models get updates.

So, in short, no real news here. Move along.

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The missing question

I would consider a cheap Android tablet for some sorts of use, rather than risk my Nexus 7. I could use a big MicroSD card and, back home, connect it to my TV as a media player streaming over wifi.

No Bluetooth or 3G, but what do you want to do? And a cheap 7-inch might have the edge on an iPad for slipping into a pocket, though a Kindle is a better ebook reader. But is an eBook all you want?

What do you want to do today? That is the question the surveys don't ask.

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low end of the market?

Just bought a whitebox Android 10.1 inch tablet for just £170... Good quad core processor, good display, decent memory, decent storage, takes up to 32 Gig of micro SD, has HDMI output, bluetooth and USB On The Go. Also has Android 4.2 (with a promised OTA update to Kit-Kat when available) and is officially blessed in having the full suite of Google apps as well.

Apple are on a hiding to nothing and have got to seriously up their game to remain relevant or else devolve into being just a litigation machine with what patents they have... Even Samsung have got to be worried by what's coming out now and in the near future...

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Anonymous Coward

what happens....

when everyone who wants an ipad / ipod / iphone HAS one?

You're left to the gotta-have-the-latest-apple-gear people who are probably at the 10% mark if THAT.

Apple saturation. Apple stagnation. The next big thing isn't watches, it's probably a hybrid of Google Glass / Kinect technology (and that would mature in 5-10 years time). Everything else is just a gimmick and I don't only include Apple in that. The ipad's nice, but not £400+ nice.

As for their business model - just because it worked BEFORE, doesn't mean it will continue to work - the market evolves. It was easy to get a massive head start with little or no serious competition and with a great product. Look at the record companies who TRIED to preserve their old business models and tried to sue everyone out of existence. (sound familiar?)

When my iPad finally dies (a perfectly adequate ipad 2), I will be buying an Android tablet as a replacement - no contest.

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Re: what happens....

"What happens when everyone who wants an ipad ... HAS one?"

You could equally ask the same about android or anything.

The thing is we currently live in a consumer hellsociety, stuff is manufactured and sold (or people invest in the manufacturers or sell them services or fries or whatever) and 'we' have to keep making stuff - faster, shinier, more desirable stuff. If everyone got what they 'wanted' or made do with what they had there'd be a problem.

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Re: what happens....

I think you had it right with "consumer hell".

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Without Apple we wouldn't have had all the competition

Love or hate Apple, the fact of the matter is that they upped the bar for smartphones in 2007 / 2008 and really forced other manufacturers look hard at what they were doing, they made Google say "fuck, we gotta do something about this". In 2010 they released the iPad which is the first tablet to ever acquire a mass market adoption, making other manufacturers say "fuck fuck fuck, we've got to get a piece of this"

The truth is that if it wasn't for Apple we wouldn't have the diversity and choice that we have in these markets today.

I guess you could say the best thing about Apple is how they forced the competition to respond. I am unashamedly an Apple user, but quite frankly I'm relieved that there are options available to me to be able to move away from the Apple ecosystem should I so desire.

I don't buy into these pathetic Android is better than iOS, or vice versa, arguments. There is no better, but just simply what works for you.

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Re: Without Apple we wouldn't have had all the competition

"Love or hate Apple, the fact of the matter is that they upped the bar for smartphones in 2007 / 2008 and really forced other manufacturers look hard at what they were doing, they made Google say "fuck, we gotta do something about this". In 2010 they released the iPad which is the first tablet to ever acquire a mass market adoption, making other manufacturers say "fuck fuck fuck, we've got to get a piece of this" "

Wrong, in many ways. Android was founded as a company in 2003, several years before the advent of the iPhone and bought by Google in 2005, so they had a pretty idea of how the wind was blowing before Apple "upped the bar." The same is true of tablets; the concept had been around for years before the iPad and the screen interactions refined in the smartphone segment were going to lead to tablets whether Apple entered the market or not. They did get a bit of a head start in tablets as the Android team scrambled to adapt their OS to the larger screen, but that lead is now evaporating just as it did in smartphones and apps. Next, their lead in "tablet optimized apps" will tail off.

Apple's biggest fear at this point should be what we learned in the Mac/PC wars: cheap and functional trumps elegant. The Mac OS was far more elegant than anything Microsoft came up with until, possibly, Windows 95 (which, for all it's faults, was a superior operating system to any Mac OS prior to OSX primarily due to preemptive multitasking). Yet, for all that, Apple slowly sank towards bankruptcy until Jobs salvaged the company with the iPod.

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Stop

Re: Without Apple we wouldn't have had all the competition

The original Android phone was basically a BlackBerry clone. Google had to go away and reengineer it in order to make it a touch based system. Take a look at http://reviews.cnet.com/8301-19736_7-20016542-251/a-brief-history-of-android-phones/

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PJI
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Re: Without Apple we wouldn't have had all the competition

Parallel universe?

Unable to read the original post, or to comprehend it?

Tablets were a resounding miss until Apple had a go. Android or Google had shown no inclination, not a hint in the direction of mobile phones or tablets until their man on Apple's board was intelligent enough to understand what Apple were about to do and betrayed his privileged position.

Just accept it: good as the current, non-Apple devices may be, they are all built on the market that Apple finally established as a mass consumer market. One can expect the originator to be overtaken eventually. That seems to be the fate of most such, whether in cars, aeroplanes or vacuum cleaners or empires. Human organisations and endeavours seem all to go through such histories, each being replaced and eclipsed by a successor building on the ideas or achievements of its predecessor.

To be frank, it would be very disappointing if the likes of HTC and Samsung, free to devote all their energy and resources to improvement, extension and learning from Apple's experience and that of its failed predecessors, did not make ever better, cheaper mobiles and pads for the large, eager market established by the success of Apple.

None of that does you or me, as mere customers, any credit. So enjoy your gadgets and be grateful to Apple that it had the guts, design and marketing ability to kick off the wide choice of attractive, reliable and desirable gadgets now available.

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