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back to article So, Apple won't sell cheap kit? Prepare the iOS garden wall WRECKING BALL

It’s that time of year again, when Apple’s annual iPhone launch is looming and the mobile chattersphere becomes entirely dominated again by one handset maker. In 2007 and 2008, that was completely justified. Since then, there have been progressively fewer reasons to define the whole smartphone sector by Apple. New models have …

Oh no

Apple is dead again already? Have I seen this article before somewhere? No industry re-defining products, market share slipping, rise of the east, no 9" screen phone. Sell sell sell!

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Re: Oh no

Market share is I think poorly understood by your typical journalist... possibly deliberately to make a statistically meaningless point which suits their own biases?

In the same way Aston Martin don't make a sub-£10k hatchback, Apple don't make a phone for the low-end mass market. I wouldn't say that Aston Martin is failing because it's market share of all cars is (I guess) a tiny fraction of 1%. Equally I wouldn't say that Apple is failing because it's market share of all phones (or "smart" phones) is, what, 15-20%ish these days? I'd say that in its target market, luxury /performance cars, Aston Martin is doing very well. In its target market of high-end phones, Apple equally is doing very well, and shows no sign of stopping, no matter how much journalists might want to find some numbers to make it look like that's the case, because that makes for an interesting headline (apparently).

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Re: Oh no

However, it would be interesting to know if Aston Martin is actually a profitable business and would survive on their own.

Currently they are probably just a nice prestige brand and handy tax write off for their larger corporate owner/owners.

Novelty value basically.

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Re: Oh no

It is independently owned, not part of a larger group, and yes it is profitable.

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Re: Oh no REDUX

>whether IBM should try to play seriously in the low end PC market in order to drive volumes (the PS2 does not count as a serious low cost strategy);

>how it can address the move to the PC in a way that generates new revenues and profits and maintains a distinctive user experience;

>and how far new growth will come from PCs and how far from new product categories.

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Re: Oh no

In that case I stand corrected. Thank you.

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Re: Oh no

Ye standard Aston Martin retort: nobody has to make petrol specifically for Aston Martins. They just work on the same petrol as the £10k cars. Somebody has to make apps specifically for iOS. iPhones/etc don't just work on the same apps as sub-£100 mobile phones.

Which isn't a perfect analogy because petrol is somewhat more fundamental to cars than apps are to mobile phones given that they're probably used just as much for the web, for photography and for texting, but apps are definitely used more often than oil is put into a car, etc, so forgive me?

That being said, I'll consider Apple to be in serious trouble when the market stops supplying apps for iOS as abundantly as it does for Android. If, say, the iOS Facebook app (no, I don't use it; yes, it's the most popular app) started lagging the Android version by a year or two then I'd be likely to think that Mac-level relevance was pending.

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Re: Oh no

Ye standard Aston Martin retort: nobody has to make petrol specifically for Aston Martins. They just work on the same petrol as the £10k cars. Somebody has to make apps specifically for iOS. iPhones/etc don't just work on the same apps as sub-£100 mobile phones.

=======

Except to stretch that analogy (but not break it) due to Androids fragmentation, stranding of old OS's on models not much more than a year or so old, and their users reluctance to spend money, you can make petrol for any Aston Martin model and rake in about 4-5x compared to any other, because you would have to make different petrol for each Ford Fiesta, Ford Escort, Ford Mondeo etc and the same for every other Vauxhaull, Citroen etc model, any one of which individually has a tinier market share than AM's range overall, *and* and whose users spend less.

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Re: Oh no

One shouldn't forget that Apple has almost died at least once. They're so stubborn that they won't stop doing something wrong until there's nobody left at HQ to do it. The iPhone, to me, is an unfriendly device that wants to gather up my data and never let it go by any means. My Android phone has 144 GB of storage and I do use it. It's my modern day briefcase for things that aren't suitable for "the cloud". When I do use "the cloud" it's my own rather than a 5 - 10 GB novelty toy. Cloudy competitor Google hates microSD cards and file browsers as much as Apple but hasn't locked down the hardware and software to banish them (yet).

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Re: Oh no

@Dave, Portsmouth

The thing is Aston Martin are high end and low volume. They are not trying to sell a vantage to your average Joe, who is quite happy with there Ford Focus, or whatever

Apple are trying to be high end and high volume, it is questionable whether they can do both. Don't get me wrong Apple make great products but the innovation gap has defiantly closed over the years and you start to wonder whether it is a case of the emperors new clothes.

In you dig behind the hype and showmanship the recent iPhones have not brought much new to the party. 64bit was interesting, but the jury out whether it has really that much of an effect. They shaved a few mm off the case, but how far can you go down that route and still charge a premium?

I think a better analogy is the PC market. Apple and IBM PC's were pretty much neck and neck, but PC's became ubiquitous and cheaper and eventually there seemed little point in paying the premium especially when the software manufacturers followed the market. It can happen, just ask Nokia

Don't get me wrong. iPhone will always be there because too many people are tied into the Apple walled garden, especially in the States. But can they win the emerging markets and can they maintain the price differential.

Or do they become a Aston Martin? A niche product and rich man's play thing.

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Re: Oh no

You're missing the point. It is that the low and the high end are not fixed. What is happening to Apple is that its high end premium features are moving down into cheap stuff, so there is basically no difference but the brand. What they should do is license the OS at the right time, as they should have done before. But they will not, and the result will first be falling share, and then falling volumes.

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Re: Oh no

android fragmentation is often raised yet rarely understood.

http://www.androidcentral.com/android-fragmentation-seemingly-impossible-conversation

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Re: Oh no

Actually, they do make petrol specifically for Aston Martins - it' called High Octane Premium Unleaded and Fuel companies (developers) are more than happy to supply this additional fuel choice for the smaller number of high performance vehicles around the world (iOS devices) as it brings in much higher revenue from a much more lucrative user demographic (iOS users).

Of course, both the Aston Martin and your average Hyundai share the same roads (the Internet).

However, iOS device numbers and active iTunes/App Store users are both approaching 1 Billion (with a quarter of a Billion more iOS devices sold each year and growing) compared to Google's 1 billion active Android users.

Thus, in the car analogy, Apple is actually equivalent to Aston Martin, Lamborghini, Audi, Mercedes, Porsche, Volkswagon, Honda, BMW, Lexus and Ferrari all put together in terms of installed base but bringing in vastly higher profit margins.

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Re: Oh no

I'm not sure the Aston analogy holds. iOS and Android are the fuel which powers the hardware. They are pretty similar. iphones may be slightly better built than S5, but S5 has better functionality. Slightly nicer curves vs more boot-space and room for the kids in the back.

Apple is obsessed with doing what they like. It could quite easily ruin them, as it almost did in the original Mackintosh vs PC days but I wish more coporates had the guts to do that. What I don't like is the more recent obsession with locking things down. Being the best is a worthy aim, lock-in is not. In the past, lock-in to the Mackintosh was a by-product of what they did, now it appears to be the aim - corporate efficiency at its worst.

As far as I'm concerned the Apple's download vs cloud model is good. Local execution is more reliable and much of the cloud apps don't need to be cloud apps. GPS/Maps is a prime example of the nuttiness of cloud where it isn't needed, as is music streaming over a WAN. Plus if there is a failure, its only for one person and you generally don't get bad headlines for it. That's simpler and better, and for the vendors' benefit, will drive CPU/new model requirements. Even better for Apple, driving tablet-based (or phone-WiDi) apps could give them a proprietary hardware edge where the bloat of MS Office fears to tread.

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Re: Oh no

Mind you, anybody can make motor fuel, provided it meets the standard, in computing somebody makes the operating system and it isn't compatible with any other brand in quite the same way. You can upmarket fuel with additives, but that's a very difficult and expensive road to follow with marginal benefit for the end user, not usually reflected in the price difference. Get your additive wrong, and it has happened, and some engine systems start failing. Linux is the closest that our industry gets to the fuel analogy.

Using car analogies for IT is dangerous, we are far less tolerant of vehicle failure than we are of software failure, for good reason. What's the apocryphal story about a computing executive telling an auto-maker executive that they needed to be more like the computer industry, and being told by the auto-executive that if cars were developed like computers, you would have a car that went from 0 - 1,000,000 mph in 6 seconds with no steering wheel or breaks.

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It's the Apps Stupid!

"Market share is I think poorly understood by your typical journalist... possibly deliberately to make a statistically meaningless point which suits their own biases?"

I remember when Android was struggling against Apple. The reason was not price, not cool but fewer apps. Only when it got to near parity did the reason not to buy Android disappeared.

Those market share figures are important to the app market. They don't quite match the percentage revenues to the App makers but a majority and increasing share of revenue is coming from Android. Now if I produce an App it is going to be both Android and Apple. I might consider Windows but is it worth the effort in support & development - especially for the smaller companies (still responsible for the width of app offerings for each platform).

If Apple goes lower than 10% and my development/support costs are appreciable higher then the Apple variant may be late (when Android has amortised the development cost) or even not at all.

If 'premium' Apple costs you Apps you may not buy. That could herald a Blackberry/Nokia tumble. It can happen inside 18/24 months. Aston Martin is not a business model. They wouldn't sell many if it could only use motorway or A roads.

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Re: It's the Apps Stupid!

App Annie reports that Apple's App Store generated 85% more revenue globally than Google Play last quarter and Nanigans reports that iOS users generate 1,790% greater advertising ROI so Android app net income is a long way from getting near parity with iOS at this stage.

As such, iOS's "Premium Unleaded high octane" fuel is not only available at just as many gas stations as Android's "Unleaded" fuel (iOS app download numbers are similar to Android), it is bringing in vastly more revenue for the Oil companies (developers).

iOS runs on all the same roads (The Internet) so that's not a problem but with a built-in GPS (iOS Security architecture and App Store curation), drivers are kept away from minefields, dodgy fuel stations and broken bridges (malware) which Android users far too often stray onto.

As such, developers would be foolish not to continue developing apps for iOS first unless this revenue and profit disparity reverses.

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Innovation...?

Innovation is something that comes up a lot in discussion about phones - that it's missing, that companies (particularly Apple) don't innovate anymore, etc. But why do you think we need more innovation? Where? There are lots of little new features coming through in all of the phones every few months (or annually, for Apple), none of which are massive in themselves, but represent useful progress and refinement. Isn't that good? I'm not sure I want something completely re-invented every year or two, because what I've currently got already does the job fine. Yes, make it a bit thinner, lighter, faster and with a longer battery life - and improve the camera, improve reception and call quality, make it more scratch / water resistant ideally... but fundamentally I'm (and I think this applies to most people) aren't looking for anything massive.

It might be boring for journalists writing about it, but for the consumer steady progress that refines something rather than flitting around all over the place is a good thing!

Incidentally, I'm also surprised to see Chromebooks selling so well. Do people really use them? Last time I looked people were only buying them as a cheaper way to get a larger netbook, and immediately reformatting them and sticking Linux or Windows on them! Maybe it's all changed and they can work usefully offline now, keeping copies of everything local so you can use them out-and-about without worrying about your web connection?

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Re: Innovation...?

Chromebooks have a lot of uses. Amongst those peers that we, commenters on a tech news site, discuss tech purchases with they're almost certainly just for use as something other than a Chromebook.

One anecdote: I know a teacher who has recently kitted out her entire classroom with them. All her students need is access to certain web-based educational resources. They're the easiest to administer and cheapest to buy (safely*), reasonably large thing with a keyboard that doesn't end up tied to any particular desk and can do that.

(* Android laptops seeming to require a gamble with the supplier, being overwhelmingly obscure off-brand imports)

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Same old market share mantra....forgetting that iOS users just spend more time and money on their devices.

There's a lovely lady on our local market, she makes and sells goats cheese. Her cheese is simply divine. It's also £25 per kilo. Doesn't stop people queuing up to buy her cheese and she makes a really decent living out of it.

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The same could have been said for BlackBerry users at one time. Your example is not comparable as she is not listed on NASDAQ employing thousands.

Apple has become a fashion brand and in that sense it has no competitors in the IT Fashion space (HTC came close and then fell away). IMHO it will not be about the technology, it will be about the perceptions from it's user base - it's new product need to have that premium look and feel ?

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jai
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But... didn't Blackberry then start chasing the marketshare strategy and producing cheaper phones to supply to kids? and we all know how well that strategy worked out for them...

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I recall four companies who went to replace their Blackberry sync systems - and handsets - with exchange and iPhones/Android handsets once Exchange ActiveSync was good enough, because they didn't need the full device encryption, end to end encryption of content, encrypted remote wipe capabilities, nor the added complexity and micromanagement that the BB systems required. Nor their awful management interface.

EAS (or Kerio mit EAS extensions) and an EAS compatible smartphone was more than good enough, and cost less as it meant they could be more agressive sourcing their handsets, rather than being locked into RIMs platforms.

RIM didn't catch up to those who just needed a basic remote comms platform, and they crashed and burned as a result - it was halfway through the burning they started churning out phones to kids, Playbooks (which, hilarious, required a RIM handset for email) not before, as I recall.

Anyone remember it any differently? Just me?

Steven R

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Megaphone

"Playbooks (which, hilarious, required a RIM handset for email)..."

Actually, they did not require a BB handset, but the first PlayBooks did not have any e-mail client whatsoever...or calendar application. Wasn't until the first major upgrade that both these items were added. And being that RIM made its reputation on messaging & calendars...what ever were they thinking? Obviously...not much.

That was the first of many huge mistakes RIM made with the thing. Along with virtually no advertising of the product...EVER.

I was able to connect my LG 3g & Motorola 4g phones to it either through Wi-Fi or Bluetooth. Worked just fine, but the e-mail program was poorly written.

The PlayBook had/has a fantastic screen, and great sound as well. Far superior to any other tablet on the market...even now. But...and this is one huge "but"...RIM simply promised the world to owners in regards to the new OS... for nearly TWO YEARS...then hung them out to dry.

I know...I own one...and it now sits quietly on a shelf next to my copies of Microsoft Bob.

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Anonymous Coward

Goat Cheese

If I remomber correctly, goat cheese is white and has rounded corners.

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Anonymous Coward

Where do they find these people?

So some stockholders disagree with the way Apple's share price is moving, and that somehow is forcing Apple's leadership to come up with new products? Where do they find these kind of authors? The Muppet show?

If there is one thing that can be gleaned from Apple's history it is that they don't give a hoot about their shareholders (and rightly so, imo). As for "revolutionary" or "innovative" products, look at how well those kind of things have served the competition. Microsoft came up with some pretty good ideas, but they weren't supported by a long term-strategy. Apple builds one thing on top of another; the iPhone would not have been a success if Apple hadn't had the SSD supply locked down; without the iTunes store; without Mac OSX. Same thing for the retina display for the iPhone 4, oh wait, that wasn't an "innovative" design, right?

I like reading articles on El Reg, but please, no more Jasper Hamill and his buddies, mmmkay?

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Re: Where do they find these people?

As a stockholder in Apple, I am very satisfied with the current price. There again I bought my first batch of shares at $35 many years ago. My holding in Apple shares makes up a good proportion of my Pension Fund.

The likes of Ichan can go take a hike for all I care about him and his views. The price at $100 after the 7:1 split if far higher than many so called experts predicted after the split. Ichan is not there for the long term. 2-3 years and if he does not get 25% return then is it a failire as far as he is concerned. Totally unrealisting IMHO.

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And yet another 'Apple is dead!' moment

I'll let the good people at http://www.macobserver.com/tmo/death_knell/ know that #66 has arrived...

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Paris Hilton

One Trick Pony

Apple II

Mac

iMac

iPod

iPhone

(Though all good ideas let's not consider Pippin, Newton, Lisa)

It could be a few years till the next "trick".

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Re: One Trick Pony

Maybe my maths is off, but that's at least 5 different tricks (and "Mac" is actually Macbook, iMac and Mac server, so it's really 8), and *all* still very profitable (although iPhone and iPad have cannibalised the iPod market). To that one could add iTunes as well, makes 9. And OSX makes 10, but that's not directly generating profit but more creating a good reason to buy the Mac in the first place.

Sorry, I got distracted. Your point was again?

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Re: One Trick Pony

One at a time. for example the any Mac is tiny volume compared to iPhone and iPod is nearly dead.

There is no breadth of product range.

OSX is essentially free. It's not a real product like MS Windows, never has been.

IiTunes is a service to monitise the iProducts.

The Mac Server line is dead. Mac OSX will be replaced by ARM based iOS iBook Mac Air look alike as soon as they decide that gives more control (iTunes only source) and profit.

Apple have no loyalty to users. Apple fans really don't get it. I'm familiar with Apple since the original Apple II.

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Re: One Trick Pony

Is this a joke? Did I not get the sarcasm?

iTunes sells Music, TV, Movies, Applications and even the occasional eBook and makes good money doing it. The AppleTV is one of the most successful streaming boxes on the market even though it is over due for an update. The Mac has outpaced the rest of the industry in like 32 of the last 33 quarters. iPods, iPads, and iPhones continue to dominate their product categories when it comes to profit.

Developers still make more money selling on iOS than Android as do advertisers so there is little concern that market share numbers will cause Apple any problems in the near future.

Speaking of the future, Apple has it's fingers in Health Care, Automotive, and point of sale. Things like CarPlay, iBeacons, HealthKit, TouchID, and others, put Apple into position to take advantage of many of these feature profitable areas.

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Anonymous Coward

Re: One Trick Pony

Actually, I forgot about the AppleTV.

So that makes it an 11 trick pony, and I'm not counting the freebies that make buying a Mac interesting (not a fan of Pages, btw, but Keynote is an absolute Powerpoint killer IMHO).

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Re: One Trick Pony

I'm familiar with Apple since the original Apple II

Familiar <> using it.

I *built* an Apple II, but I actually intensely disliked OS 9 when I had to use at C&W which put me off Apple as a desktop. I was using Linux and Windows since, until I had to buy a Macbook to do some research for a book I'm writing. I bought an iPhone because it was a good concept (I had a Sony Ericsson P1i), but only when I started using OSX did I realise just how seriously *crap* Microsoft interfaces had become (I did have a hint of that when I had to use Visio post Microsoft - they totally butchered the user interface).

More and more people have discovered this because of what MS did to Vista, and to Office - they had to find other ways to remain productive and once you're using OSX, going back to the pain MS inflicts on you seems positively masochistic.

If you want to comment on something, USE it first. For at least a month. Otherwise you're not really having an opinion, you're having an assumption.

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Re: One Trick Pony

Are new tricks with apple like large prime numbers?

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Holding it wrong

If you don't let everyone see the logo when making a phone call you really don't deserve to own an iPhone.

Follow them rules, not the dropped calls Troopers.

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Re: Holding it wrong

errm.... my iPhone lives in a case. And not one from Apple. And there ain't a hole to show the logo. And there ain't a logo on the case (and if there was a logo on the case, it wouldn't be Apple's, 'cause the case ain't from Apple...) I suppose that I don't deserve an iPhone, eh?

Hint: a whole lot of people have reasons to buy iPhones which do NOT include wanting/needing to be seen with something fashionable... my iPhone does what I want, unlike my Android, which is going to be replaced Real Soon Now(tm) precisely because of its problems, which include freezing randomly. And, no, it's not a manufacturing defect, unless it's a common manufacturing defect as this one is the _third_ example of that particular handset I've had, all under the warranty, and all in less than nine months, and all of them have had the same problem. (Yes, it could be that this particular handset is a less than stellar example of Android phones. However, I am disinclined to repeat my experiment with another Android. This phone will be replaced by a iPhone 5c once the iPhone 6 comes out and the price drops on the 5cs. And I won't care what colour the 5c is, as it'll be in a nice black case, just like the one on my current iPhone.)

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Anonymous Coward

Re: Holding it wrong

You're still living in the days of Trigger Happy TV and the 5ft tall Nokia. I've got an iPhone because it's proven to be by far the least pain in the arse of a handset and platform to use. I couldn't give a shit if anyone sees it, and, given how ubiquitous they and other device are, I would be amazed if there was anybody so devoid of friends that they would remotely care. You're not the one, are you..?

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History catching up again.

There is another issue with smartphones in that the tech is now pretty mature like it has for several years with PCs and laptops.

Those 2012 spec quad core ARM CPUs are still plenty good enough to run today's apps and probably will be for another 18 months+.

No need to buy a new smartphone every year if you look after it.

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Re: History catching up again.

There is another issue with smartphones in that the tech is now pretty mature like it has for several years with PCs and laptops.

Actually, the tech was already maturing when Apple created the iPhone (the last missing component was IMHO ActiveSync because SyncML didn't seem to deliver). Apple didn't invent the smartphone, they just made it very usable - if there was something not mature, it was the smartphone UI. Apple's design and non-geek audience focus was absolutely perfect to address that gaping hole in the market, and the rest is history. Nokia had its chance to do something sensible with Symbian, but they blew it.

No need to buy a new smartphone every year if you look after it.

Absolutely agree. I still have a 4S and it works well, although I suspect the battery will eventually fade as any slab of lithium seems to do except for the one in my Motorola v3i (still IMHO the best ever mechanical form factor, even if the shiny keyboard sucked about as much as the OS). My phone has a case and a screen protector, and that seems to be all it needs to survive.

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Re: History catching up again.

I don't know about you, but my smartphone is still slower to display web pages (in my case I notice it most with "My Yahoo") than a desktop (both over wifi). Given how responsive games are on these phones, I've got to believe that it's got to be some limitation in the networking rather than CPU or graphics abilities.

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Re: History catching up again.

I will probably get the iPhone 6 in October, I will drop back to my old iPhone 4 sell the iPhone 5s and use the money to buy the 6.

My reasons are simple, resale value of the 5s is good, therefore it costs less to keep up with the latest iPhone. This effort, affords me(normally) a little better battery life, a slightly faster phone, a slightly more reliable phone, a phone in warranty and lots of other little bits.

Waiting until October, is to ensure, those little bits I mention are true, smartphones are smartphones, the brand you choose is, just the brand you choose, for the reason you choose. For me the differentiator is resale value and the iPhone and Mac products in general are clear winners in that. The buy in cost is higher, but once in, the running costs and feature set are about the same as any other product on the market, if not, well whats another year, did not miss them before, so the wait is no big deal.

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Re: History catching up again.

I have to agree with you there.

There is something adrift somewhere with web on mobile devices as I still find web browsing painfully slow and problematic. I use the web on my smartphone only as a last resort. If there is a specific app for getting that info its always much quicker than using the web on it.

I have at home a A/C/N router capable of pushing 600Mbps wi-fi and it's still pretty slow to serve up webpages whether I use Firefox or Chrome on my Nexus 4.

I don't think its a CPU issue, it lays somewhere else in the chain.

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Anonymous Coward

Re: History catching up again.

There is something adrift somewhere with web on mobile devices as I still find web browsing painfully slow and problematic

I realised the difference when I installed the Kaspersky safe browsing app on my iPad. That is positively lighteningly fast compared to Safari..

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Cloud

Why is Cloud listed? It's not a thing or product. Just marketing speak for remote hosted services such as:

iTunes

email

Instant Messaging

photo hosting

So called social media

Real Websites

Collaborative documents (like Google Docs)

Hosted storage (you're mad to rely on it as sole copy, Amazon, Dropbox, Google Drive etc, or your own private hosting.)

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Anonymous Coward

Apple could never compete in a race to the bottom

To suggest otherwise is madness.

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jai
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Re: Apple could never compete in a race to the bottom

To suggest otherwise is just a lame exercise in click-bait to try and get some free advertising for some research newsletter that no one's ever heard of...

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Great article, for 1-2 years ago!

"As a result, Apple’s stock price has disappointed recently, at least by its usual high standards, and a new mood of caution has set in."

Apple valuation is close to it's highest ever. This whole article reeks.

You can to better than this. Talk about WHY Apple continues to dominate cellphone profitability, and WHY that might fail in the future.

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