It's the '90s all over again: Apple repeats mistakes as low-cost tablets pile up Apple risks repeating the mistakes of the 1990s as it sticks to a high price strategy on its iPads and other products, even as the surging tablet market heads for excess inventory in the fourth quarter. Kicking off its Asian channels forum, Canalys CEO Steve Brazier said that tablets currently took 35 per cent of the device …
Not withstanding all the crap we hear about Apple, you pick one of their tablets up and the quality is there to be seen. Regular updates for free, new operating system for free, a good life span in technology terms of at least 3 years, no fragmentation that relies on a service provider and manufacturer to provide timely fixes and hasn't looked dated from day one, resale value extremely high compared to the opposition.
What's not to like?
Eh, yes and no. Make no mistake about it, iPhones and iPads are intended to be tethered to iTunes for media consumption. Most people I know are all about their music/video library on their devices. You don't HAVE to do it, but it works better if you do. Phones in particular are a PITA to activate without iTunes. I don't own an iPhone, but I have to configure them for users at work. And work doesn't allow you to use iTunes. So I understand the process and avoid it when possible. It makes it really interesting when they want to deploy apps to the damn phones. Especially free ones that are simple if you are tethered to iTunes/the store
I recently got dragged in to "fixing" an issue on someone's macbook where ITunes wasn't syncing with their IPod. I am a windows developer and have no idea about Apple stuff but I thought I would take a look.
Well it readily became apparent that ITunes was a crock of shit. The problem with ITunes is entirely the DRM which causes ridiculous concepts like "syncing" and dialogs threatening to delete music off your device in order to do this. Some crap about maximum number of devices you can link to an library (reminds me of DVD region codes). All confusing and it's hard to trial and error when you risk accidentally deleting all the music on someone's device. Having to manually compare what tracks are in the library and what is on the device -and puzzling over what happens to tracks on the IPod that aren't in the library if you sync (howd they get there?). What a pile of crap. I am sure it would all work fine if not for DRM, so I dont blame Apple for being unable to fix it, just that they unfortunately have stuck to DRM for some reason (why?? downloading music from amazon is DRM free and mp3 player manufacturers don't try to stop you using it how you want)
I'm not a Mac or iTunes user either, but I would have thought you'd just Google for some software to copy the music off the device, allowing you to then experiment with iTunes without risk.
The first iPods and iTunes had DRM, but that was necessary to get the music publishers on board with the concept. Once iTunes was a big enough force to dictate terms they abandoned DRM, thus paving the way for other online music retailers.
I don't use iDevices, but I wouldn't deny they work well for a lot of people. Other MP3 players support DRM as an option too, everything from an iRiver to a Sansa (until you stick Rockbox on them)
My last laptop is still going strong, it is a 2004 Acer... My current laptop is a 4 year old Sony and isn't anywhere near needing being replaced.
In fact, the only one that is struggling is my 2007 iMac that creaks along (minutes to boot and 45 seconds to load Firefox. Playing a DVD alongside Firefox and the DVD player drops frames!
You get what you pay for; 2 weeks short of the warranty expiration on my iPhone5 the wake sleep button start to play up intermittently; worst kind of nightmare, no consistent fault scenario, how do they sort this.....
I booked a slot at the local Apple Store Genius Bar; Beardy Genius saw me within minutes of my time slot (on the weekend too), ran some diagnostics and immediately swapped out the handset for a new one. No questions......
Microsoft, HTC or Samsung or BB would have given me the runaround for 3 weeks and then said you are out of warranty "feck off" or pay for a new handset.
For the time being Apple have attractive, quality products with good customer service at aspirational price points that are just about in reach of a good slice of market share that sustains their business vision / goals.
The issue for them is simple do they
A: follow the mass market into a death spiral of over supply of evermore capable products that Consumers rarely use to their full extent or
B: stay at the premium end of the market which no one can touch them at, work on brand loyalty (evidenced by the recent appointment of Ahrendts from Burberry) and watch the bottom feeders devour each other or drown in the over supply product inventory.
mmmmmmmm tough choice..........
As I say for the near future Apple have my business.
Over here, we don't have an Apple Store. If there is a problem with an iPhone, they pick it up and leave you hanging for 2 weeks, when hopefully it will come back repaired. My iPhone spent 6 of the first 8 weeks of ownership at the warranty centre, where they totally failed to find a fault with it. Only after I got loud in the T-Mobile shop after the third time did they replace it - after another 2 weeks at the repair centre, where they miraculously found the problem and replaced it with a new one!
On the other hand, my htc and Samsung phones were swapped out at my place of work for new ones, no questions asked - well, they asked whether the screen was broken due to it being dropped or whether it had become wet (they still replace them, but you have to part of the refurbishing costs).
In the end, we paid for AppleCare for one iPhone, because it had been replaced 4 times in 2 years, that gave us the same level of service that we got from htc and Samsung, through the carrier, for free.
Betamax went that route back in the 90s too. Better quality all the way around. VHS still won the tape war before DVD rolled in to dethrone it. And for essentially the same reasons: sometimes good enough at half the price takes more of the market than top quality at top dollar. I've heard people say similar things about laser disk players vs DVDs, although they will usually yield on Bluray.
Tempting as it might be to assume history will repeat itself, it actually won't. There are two key differences.
The first is that Apple might have a lessening market share but they have the highest peofit margin in the industry. When all is said and done, that's the name of the game.
The second is related to the first. It's Apple'ss cash hoard. It's almost impossible to predict what a company with this much money on hand will do - they can solve almost any problem that is amenable to being solved financially.
"It's almost impossible to predict what a company with this much money on hand will do"
Actually its completely predictable. They'll carry on as they are for now while Android eats their lunch. Then they'll change CEO / board once the decine sets in. Then they'll switch from being a growth stock to an income stock. Then they'll issue a special dividend to return cash to investors. Then the cash pile will be gone.
I wouldn't include Newton in a list of mistakes, Apple learned a lot from the Newton. One of the things they learned is that people wanted a handheld computing device and were willing to pay for it. The other thing they learned is not to release it until the technology could deliver the experience people expected. Cue a few years gap and the release of the iPhone.
It could be argued that Apple have kept the same plan all along - look at the new Mac Pro as further evidence of finishing old projects :)
"And yet I thought the problem they had in the 90s was allowing others to create cheaper clones that ran MacOS."
No, that wasn't a problem. They simply drove their partners out of the business - which is a shame because it was Apple's idea in the first place, and it might have helped get PowerPC established and drive the platform dev costs down.
Like laptops, when you compare like-with-like, the iPads come out pretty well. Arstechnica have a tablet comparison chart which is very interesting:
http://arstechnica.com/gadgets/2013/10/the-ultimate-tablet-comparison-chart-with-the-new-ipads/
In the laptop arena, there's a ton of cheapo plastic grot on sale which are just plain awful when compared with high-end MacBooks. Same for tablets; even my old iPad 1 works better than many cheapo plastic grot tablets which inhabit the low-end of the market. Incredibly, that iPad 1 is probably still worth more second-hand than one can buy a new low-end tablet.
My point is that when you compare like-with-like -- retina display, computing power and speed, build quality, user experience -- there's not much which can hold a candle to an iPad, especially the new retina iPad Mini.
BTW have you ever used a tablet with a plastic screen? It's horrible!
But who needs a "retina" screen to launch malformed birds at equally malformed pigs?
Oh, yes, there are some people who use tablets to create something, but most tablets are for cheap, nasty entertainment.
Of 7-year-olds. In the back of the car. A cheapo tablet is fine for that.
I bought a 'cheapo' tablet for the kids to help with the travel experience, quote from my son 'dad, give this to my sister she can have it, I want your iPad' to which my daughter replied 'why should I have to have the rubbish'.
Even children know what's best.
Indeed, my anonymous child, when given an ipad, said "Dad, why did you pay over the odds for this underspecced piece of crap? I don't want a walled garden, I want something I can easily root and get cyanogen on." His sister then chimed in "don't give me that crap, I don't want people thinking I'm some kind of brand obsessed chav..."
My kids are obviously a fuck sight smarter than yours....
Or maybe they are a fictional response to an equally fictional original post?
A bit rich to claim I'm the one influencing my kids whilst ignoring the first "my kids love apple" post.....
(What makes you think I'm angry? Because I did a swear? Maybe that's just the way I talk when amongst adults...)
> 'dad, give this to my sister she can have it, I want your iPad'
Reminds me of what happened last summer. Our family visited an Angry Birds theme park (or more like a playing space as it was indoors) in Lapland. Microsoft had arranged a a half-dozen of their Surface pads in one corner to promote them (along with xboxes and kinects). It didn't take long for my 7-year old son to play with the Surface before declaring iPad is much better...
Kids are quite discerning these days.
>The iPad misses some hugely basic pieces of functionality, such as being able to hook up USB devices
You can connect an SD card reader or a USB A host (and thus even an external 24 bit DAC ) to an iPad if you want, not to mention a wide and commonly available range of 'made for iPad' 3rd party peripherals. What more do you want?
If you want a serial port to connect your oscilloscope then get yourself a cheap netbook.
Hmm, still not sure what USB connectivity the OP thinks is missing:
24bit 192 Khz DACs for iDevices:
http://www.innerfidelity.com/content/audiophile-play-ipad
via USB
SD card reader and USB host:
http://www.amazon.co.uk/High-Quality-digital-Connection-connector/dp/B00AXC5MBW/ref=pd_cp_computers_3 5in1 digital Camera Connection Kit USB/SD/TF Card Reader For iPad - £5.99
High quality headphones with iDevice remote controls and microphones:
http://en-de.sennheiser.com/iphone-headphones-headsets-earphones
http://www.klipsch.com/in-ear
http://www.bowers-wilkins.com/Headphones/Headphones/P5/Features.html#madeforiphone
High quality microphones for iDevices:
http://tascam.com/product/im2/
There may be valid complaints about the iPad, but being unable to connect stuff to it is not one of them. True, the USB host isn't built in, nor is a microUSB port, but then they aren't on the Samsung Tab, either. The Nexus 7 requires an adaptor to be USB host, and the Nexus 4 won't support it at all.
>I connected my Yamaha keyboards MIDI USB port to my iPad using the USB adapter in the camera connection kit.
And all iDevices have supported wireless MIDI since the first iPod, too. It does Apple no harm to cater to a group of people, like musicians, who are in the public eye.
"There may be valid complaints about the iPad, but being unable to connect stuff to it is not one of them."
OK. I'm with you so far.
"True, the USB host isn't built in, nor is a microUSB port"
Ha ha ha ha ha ha ha!
Ho ho ho ho ho ho ho!
You just lost me.
(Images coming in droves... this car /has/ got wheels. True, they're not built in...)
"A desktop dock with Ethernet was an important decider for me. At work I have Edge, at best, and no WLAN."
So let us get this straight. Your workplace has decided not to keep up with technology and fit Wifi to support the multitude of modern mobile devices and you somehow concluded Apple are the ones at fault? Apple don't give a shit if you want to glue your iPad to the desk, but that's no reason for the other 169999999 iPad users to be lumbered with an RJ45 socket.
The iPad is not successful because it's a smaller computer, it's successful because it's NOT a smaller computer. Apple make smaller computers, in fact they kind of fixed the whole smaller computer market with the Mini and the Air. They also fixed the data available on your devices issue with iCloud. The fact that you don't get their strategy is of no importance to them because you're not their market.
" if I am somewhere that doesn't have wireless coverage"
But seriously, how often do you actually visit the 80s? I mean I know the kids like it retro but the only time I've been outside coverage in the last few years was in the middle of the Irish Sea on a yacht. We didn't have the necessary wired infrastructure either. If you're somewhere with a wired network and no wireless...fit wireless don't buy a dock.
"if I am somewhere that doesn't have wireless coverage"
"But seriously, how often do you actually visit the 80s?
in my building, there is no WiFi because some people are concerned about the electromagnetic waves. Also, for security reasons, we're encouraged by the admins to use wired ethernet. Those people with MacBook Airs need the extra USB<=>ETH dongle, that they regularly forget.
Twice a day Monday through Friday. Once on my way to work, once on the way home.
It's where I use my tablet the most because I don't even want to lug the laptop. I ride the train. I once bought one of those new-fangled 4G smart phones thinking I could hot spot it to my laptop and surf while riding. No such luck. Getting 3G signal was 50-50 and there were several spots along the trek where you can't even make phone calls. Severed the contract with the phone company. Bought a tablet with the refund for my hardware.
"Apple don't give a shit if you want to glue your iPad to the desk, but that's no reason for the other 169999999 iPad users to be lumbered with an RJ45 socket."
The lumberment that's used by so many for actual work because it's more reliable and faster than radio waves?
As for Apple not giving a shit, can't argue with that.
"I bought a "cheapo" tablet on a whim because it was cheap enough to be an impulse buy."
I sense you're of the mindset that iPad buyers don't consider them cheap enough to be an impulse buy?
That's how I ended up with mine, I was in the shop and thought "what the hell, they seem popular..." but the next one will have been thoroughly thought through. It's still going to be an iPad but I respect you and your friends for finding the cheapo tablets good enough for your requirements.
Unfortunately they don't meet mine (I have tried) as I need better support than they offer such as ongoing OS updates from the vendor and the ability to get it immediately swapped out in a shop and up to the minute data restored if it breaks so I can continue working.
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"Unfortunately they don't meet mine (I have tried) as I need better support than they offer such as ongoing OS updates from the vendor and the ability to get it immediately swapped out in a shop and up to the minute data restored if it breaks so I can continue working."
So your requirements are a warm feeling, if a somewhat undiscerning and reality-challenged one?
I agree with you that iPads are very high quality kit. The problem I have with them (and I use both Android tablets and iPads) is what you can actually do with them (or not as the case may be). The iPad misses some hugely basic pieces of functionality, such as being able to hook up USB devices and having a ridiculous file system whereby no app is able to store files in a central place. The latter causes huge issues, as if like me you want to be able to do fairly simple things like send an email to a client with multiple PDF attachments, on the iPad there just does not seem to be a way of doing it, you can only push files out from one app at a time to the Mail client, and that opens up separate emails. On my Androids all I have to do is hit the Attachments button and add all the files I need to the email.
Another huge missing piece on an iPad is the ability to easy transfer files and file types from one system to another. If you want to put music or video on your pad the only way currently is through iTunes, or use a cloud storage system which takes an AGE to actually do. The other week I went on a business trip and I wanted to put a movie on my iPad for the flight. On my Android devices its just a case of plugging in a usb stick or a microSD card and away I go, on the iPad it literally took me 2 hours to put 1 movie on the device, I first had to boot up my PC, convert the AVI file into MPEG4 (which took the bulk of the time, import the MPEG4 into iTunes and then upload it to the iPad (4 steps on the iPad vs just 1 on the Android).
The big piece that apple is missing is the fact that the world is shifting to a place whereby you will want to have ONE device that does everything, i.e. a tablet that also functions as your computer. It's ok charging £400+ for a device if it is your main device but it's a pretty hard sell to convince someone they should buy an iPad when in reality they will also need a laptop or desktop as well to do what they need to do. With the latest incarnations of the Surface and Asus Transformer devices you dont need a PC anymore. I dumped my PC last year when I got my Asus Transformer and I haven't looked back since. There is hardly anything I cannot do on my Transformer that I could not do on a PC, whereas the iPad just is not in the zone to actually become a standalone device. Apple might be doing well for now but I think they will start to die a slow death unless they either become more open OR they drop their prices significantly so that people can still justify having 2 devices and 2 platforms.
I agree, I want one device. I use a Windows 8 tablet, because, FOR ME, it is the most convinient. I can plug it into a desktop dock and use an external monitor, keyboard and mouse plus Ethernet to do my normal work on multiple screens.
Then on the road I have a tablet with 10+ hour battery life, tablet friendly apps, access to all my data and also access to my desktop applications, if I need to change something "business" related on the fly. If only it had an LTE slot and I could make phone calls with it, I could dump my smartphone as well... I'd just then need a simple media player for podcasts/audio books when walking the dog.
"The big piece that apple is missing is the fact that the world is shifting to a place whereby you will want to have ONE device that does everything, i.e. a tablet that also functions as your computer."
While YOU may want this, 170 million other people have chosen to buy the iPad and countless more would buy an iPad if they could afford the price tag. Try to separate out what you want and what "people" want in future, if you were right then you'd be running the most valuable company on the planet rather than Tim Cook :)
No, it's not.
Some people are, others aren't. I'm a multiple devices guy. Not that I like a fist full of remotes, but it's what I wind up with. I have a laptop which I use for somethings, a desktop for my power user work and a tablet for play on the train. The desktop cost me about $2000 when I put it all together many, many moons back. Lenovo laptop ran me about $700 from Woot two or three years back when my previous Lenovo finally died. Tablet was $49. If you were a vendor, which one of those would you want to sell me? I think it's safe to say the tablet would not be your first choice, even if I pick up a new one every year. I have a friend who has essentially the same assortment except his laptop and phone are from work. Oh, and I think he dropped about $3K on components for his desktop.
What should Apple have done 20-25 years' ago?
The macs that came out in the late 80's and early 90's were all overpriced. Apple could have surely increased her market share with cheaper macs. However, in relation to PCs the low end macs (LCs and Performas) in the mid-90's weren't especially expensive and were quite popular.
Apple divided people then as they do now. I remember university students have clear preferences as to the macs and PCs. Both were available. Both had the same software installed. There were some faculty differences — the PCs in architecture went almost unused as did the macs in the business school.
Apple went mad with product diversication from the mid-90s onwards and also seemed to lose its focus with the plethora of new products (Newtons, QuickTakes and so on) . It lost out with Windows 95 or rather the competition was beginning to catch up then.
Another factor was the role of the Killer App. Apple had its cute OS, PhotoShop and PageMaker (and Quark and friends) up to the mid-90's and these made Macs very popular then. In the mid-90s the first First-Person-Shooters started appearing and they were released initially for DOS. Doom, Quake, Unreal would follow and with the introduction of Windows 95, the PCs had their own Killer Apps and mac sales suffered as a consequence. I switched from macs to PCs on account of games — Half Life, in particular.
So, back to the question — What should Apple do? licence iOS to third parties as they were encouraged to do back in the early 90s? That almost killed them when they did it with System 7.
Develop a plethora of barely indistinguishable products? That didn't help them either.
Apple occupies the upper end of the market. They can't stay as they are and be all things to all people. Competition and diversity eventually kick in. Besides the upper end of the market is a nice place to be, as they long as they don't annoy their current users and drive them away.
"It lost out with Windows 95 or rather the competition was beginning to catch up then."
The same competition that had 90+% of the market vs. Apple's 5%? And most of the 5% were the sort of people who believed that they were creative(s) because they boasted a logo.
Plus ça change, plus c'est la même
Not sure about Apple's market share in the 90s. Maybe it was 10-12% in the US, but in Europe I knew of 2 people who had Apple kit. One was a PC developer who was interested in playing with HyperCard and bought a Mac specifically for that. The other was the sales director of STC (the company formerly known as Standard Telephone Cables), who bought an Apple II for his son, discovered in short order that it wouldn't run any of the games his son wanted to play, and discreetly swapped it out for an IBM PC-AT from the company.
As far as 'creative' types were concerned, the studios I worked in back then were far more likely to have an ST or STFM than anything from the fruity end of the market
Don't forget about the years the Fanbois all want to memory hole:
When fortunately for a nearly bankrupt Apple, the hated Bill Gates was so desperate to avoid being regulated in the US as a monopoly that abused its power he was willing to loan them enough money for a long enough time period that they could turn the ship around.
Well, I believe the actual story was that Steve presented Bill was absolute, unequivocal evidence that MS had indeed copied a piece of Apple software. However, instead of suing MS, Steve offered Bill an "honorable" alternative, to wit, the famous 150m investment etc. It was an excellent investment for MS/BillG. MS remain one of the largest software vendors on Mac.
Nonsense. The iPhone broke out of its ivory tower long ago. Carrier subsidies have made both iPhone and iPad (mobile-data models) available to just about anyone, whether they can afford one or not.
The reason that iOS still commands the most revenue is that to date, the spendthrift early adopters have stayed with the platform. But this is a fickle market, very image-conscious, and if they start seeing their precious Apple logo too often in dole queues and on the wrong street corners, then they'll start looking for something more exclusive.
Apple's hiring of former Burberry CEO Angela Ahrendt shows an awareness of this issue: Burberry is the classic example of brand erosion, and Ms Ahrendt did a very good job of pulling Burberry out of the mess they had dug themselves into.
You beg quite a few questions.
That Apple would have done better by pricing to increase share. In the PC market these days it does very well in terms of profit with only 5% share.
Apple never was the leader in share. Businesses mostly bought IBM and later IBM compatible pcs. The significant reason for your next choice of computer and os is two-fold: what applications you have and, if Windows-based applications, what's Microsoft current version of Windows. Apple could not have ever had an iPod or even iPhone level win in the 80s and 90s pc market. All computers were expensive until the late 90s.
And look at the PC market, every couple of years the price of the good-enough pc drops a hundred dollars. And Windows remains the same price. What you see is a better deal for consumers and Microsoft and a worse deal for the OEMs. Take a look today, as the total volume of pcs sold declines, the quality manufacturers are posting sales growth. This contradicts the essential position that those who succeed in the quality sector of the market are doomed to erosion from below. It doesn't invalidate the position, the contradiction suggests that something more complex is at play.
Did you notice in the figures cited that Windows had better share than Apple? Yet Apple is the one run over by the Android juggernaut. Seems as though the hypothesis would suggest that Windows couldn't possibly gain.
Today file formats are fairly interchangeable and a native app frequently is a portal to networked information, the os is an implementation detail. The fundamental problem for Apple, say 1996, was that it was not in the running. Today, it's that it is easier to switch platforms. The more comparable player of the 80s to Apple today is not Apple 1984 but IBM 1987; after a 25 year run, it sold its pc business to Lenovo. Do the above models suggest that dooooom is Apple selling the iPhone business to someone else in 2032?
Here's my take. The internet/world-wide-web made the pc a consumer electronics item. It was priced too high at the outset of that era, but by the time broad-band became widespread, costs had come down. Apple was not prepared for this. Microsoft got on board with ethernet rather than its proprietary LAN solution (vines). Apple was not prepared for this. Microsoft got its act together with Windows and added value to the DOS users of the world who upgraded. Apple wasn't prepared for this. Microsoft got its act together with regards to NT. Apple was not prepared for that. Intel had fierce competition with AMD and processor speeds got a lot better real fast. Apple was on Motorola's architecture and its processor was good enough for most of Motorola's customers. MacOS required the users to have too much knowledge about memory sharing for applications. The os that was for the rest of us became the os for those who do math and have an aesthetic.* Their internal projects to bring MacOS into the 90s failed and probably over the sticky problem of making it modern and compatible with customer's applications.** Apple was beset on many sides.
Licensing the os, in retrospect, looks like a classic case of someone tragically believing their press releases.
Apple came back, but not buying share. They embraced the processor as the heart of a consumer electronics device and fully-voiced said "We're the brand for your quality time." Most of the competitors, today, even though it's absolutely clear what Apple did, still say "You need us for work."
(* That might be me, and I bailed from Mac in 1996. Started leaving Windows in 1999 and after a not unpleasant journey through Linux and FreeBSD on home-built machines came back to Mac in 2001 with OS X 10.1.)
(** The interim period of Classic and OS X was a fair compromise, but hardly pleasant for those who needed to do things wanting to use Cocoa apps side-by-side with applications that were MacOS 9.2 bound.)
"Develop a plethora of barely indistinguishable products? That didn't help them either."
it did with the iPod: from the Nano to the Shuffle, the Touch, the Classic ... why wouldn't that work for tablets ? Especially as a 5 inch iNote with a pen would be very popular with business-men, and would go pack to the original Newton. Except that Samsung did it first, and they couldn't paint themselves as "innovators" with that.
@AC: right, the sentence is bad english : Samsung makes the Galaxy Note with a pen, and because of the lawsuit where Apple accuses Samsung to only copy and not innovate, Apple can't now make an iNote with a pen because that would invalidate the Samsung-are-copying-us argument (imagine how silly they would look in the court). Even though Apple did the Newton 15 years ago, and even though many people would buy it.
No she means Enterprise Management. HP like IBM are moving away from the low end commodity market and into the service market. Agnostic about platform, selling knowledge more than hardware, but grabbing profitable hardware opportunities if they are low hanging fruit.
The Apple "brand" is known to be high price, high status. If it tries to introduce cheap products, it will devalue the whole line and lose its cachet. (Just as you don't see a budget-priced Rolls-Royce).
The solution would be for Apple to open a second line: extolling the virtues of "It's still an Apple", but with its own branding, style, lower prices and possibly less ornamental value.
If they did that skillfully, it wouldn't canabalise their premium offerings as it would address a different market. After all if Unilever can manage to market both Persil and Surf, you'd think that Apple could work out how to sell iPads and <some-other>Pads.
The only question is: would it have to start suing it's own arse off for patent infringements?
"The Apple "brand" is known to be high price, high status."
High price, yes.
High status?
You're not including the bemused mockers?
A few years back there were many who considered shell suits and gold medallions to be the sort of high status they aspired to.
iChavs on iPhones fill the streets and bars these days. Hadn't you noticed?
"Mercedes also has a wide range of cars and trucks and their top end sales remain quite strong thanks."
Well, I tend to view Mercedes as a company with too much diversification, and, as such, assume they don't do anything very well. A company that makes (relatively) small hatchbacks (A-Class), a range of saloons that are used as taxis in many countries, executive mile-munchers, luxury models, Chelsea tractors, genuine off-roaders from car size to serious beasts (Unimog), vans, trucks and buses strikes me as jack-of-all-trades, and master of none. I think they may be the only company with such a spread of interests under the same badge, thought there are others with the same impression (Renault, for instance), and I wouldn't buy one of those, either.
As another commenter pointed out, Apple occupy the high end of the market.
The problem with being there is that it's not an unassailable position if you remain static, people will copy your style, they'll make their own quality products to rival yours and they will eventually out innovate you if you don't continue to create new product for new markets.
Unfortunately Apple now seem to be chasing the lower end of the market and cheapening the brand instead of adding more value or creating new. They need a visionary to inspire them, a new Jobs and they've not got one.
I foresee some very tough times ahead.
Apple are still making a great deal of money, perhaps as much as a 40% margin on every item they sell. At the moment only those commenting see them hurting, perhaps from carrying the cash to a non taxed bolt hole.
There may come a time when the market model does not work but at the moment it continues that way with some people happy to buy almost anything (except an expensive cheap iPhone an oxymoron!) with an Apple price tag and an Apple name badge. I am not sure Apple need to change.
Apart from Apple there are a range of other niches, yes there is the land fill end of the market and a wholesale range of layers in between.
Surely this is simply a market with choice?
Frankly I like market choice it allows me to chose what to buy or ignore.
So far I have ignored all pads, tablets, slates, etc. as useless to ME.
Choice, its a personal thing..
None of the market segments is staying still all are still evolving and some have further to evolve than others.
As for children 'knowing what's best', my 5 month old grandchild loves to play kick with the 25 year old makers shiny tag on a pram, often preferring it to a new toy. I am not sure that this is a good test of what is best.
Perhaps when she goes to playgroups she will be told by peer group pressure that this label is good and that bad but is peer pressure a prime arbiter of anything more than playground fashion?
What if little Jonny says its cool to carry a knife, will that also make knives a must have accessory?
God I hope not!
"What if little Jonny says its cool to carry a knife, will that also make knives a must have accessory?"
Yes! cause people are idiots! The proof can be seen on a daily basis.
NEVER under estimate the stupidity of the great unwashed. How do you think Apple got so rich, and will lose the cash just as quickly.
Apple do charge too much for their products, but people buy the iPad because they know it's going to work. I've tested several cheaper tablets and with the exception of the Kindle Fire they've all performed poorly. Little things like apps taking a while to open, or laggy text input etc all add up over time and they become painful to use.
I was using a Nexus 7 over summer to dip my toe into Android development, and after using the iPad I just found the whole experience lacking. The screen isn't as bright, the colours look a little washed out and on the whole it just felt slower.
I'm not saying Apple are the only company making good tablets, but the others who do are charging similar prices to Apple.
"Apple do charge too much for their products, but people buy the iPad because they know it's going to work. - So how does this explain those who RETURN their iPad? And yes there are plenty of people who do!
I've tested several cheaper tablets and with the exception of the Kindle Fire they've all performed poorly. Little things like apps taking a while to open, or laggy text input etc all add up over time and they become painful to use. - Want a faster processor and more memory, pay for it! There is no compasrison between devices of differing specifications (but you knew that already, didn't you?)
I was using a Nexus 7 over summer to dip my toe into Android development, and after using the iPad I just found the whole experience lacking. The screen isn't as bright, the colours look a little washed out and on the whole it just felt slower. - What are you comparing? Were the devices of same spec? Just "BOO HOO"!
I'm not saying Apple are the only company making good tablets, but the others who do are charging similar prices to Apple. - Do you think that the "others" would offer their wares for less money? Which planet are you on?
"
Of course people return iPads - all products have a certain amount of problem units. I don't think anyone would claim otherwise.
The Nexus 7 actually outspecs the iPad mini and the iPad 2 - the two iPads I'm most familiar with. It's cheaper, and yet it still doesn't match for performance. Specs mean very little when comparing iOS to Android because Android works in an entirely different way. If iOS used the same Java-based app platform as Android then specs would be an issue, but Android is outperformed by just about every other mobile OS, even on "inferior" specs.
What I'm saying is that you can buy an iPad and get a product that 99/100 times will work and perform very well. Spending a similar amount on something like the Galaxy tab or a Nexus 10 won't get you that same performance. Maybe if they ditched Android there'd be more competition, but until they do (or Android ditches the Java/Dalvik combo) there's no question that the iPad is the best tablet on the market for performance.
I think there is a serious threat to the iPad. Not the iPhone, as the other top-end competition is just as expensive. They're all around £500 - ish. Sure Apple don't compete at the bottom end of the phone market, but there's not much profit down there, so who cares? While the Galaxy S4 is about the same price they're safe. And Samsung also like to make huge margins at the top end.
Google could seriously kick arse with the Nexus phones, but they haven't shown the will to do that. They've not made them in the numbers, and with the distribution, required to do so, and I'd imagine that's deliberate. If Samsung ever decide to dump Android (or fork it), then the gloves might come off, and Google could unleash Motorola to make millions of high-end devices at very low profits - that could really hurt Samsung and Apple. And Nokia and HTC as well. But there's a lot of 'if' there.
In tablets however, the top-end stuff is getting cheaper. Apple were dead clever to set the iPad price at £400. Even though if you use it a lot you need at least 32GB of memory (so that's £480), plus the £100 premium for sat-nav and 3G/4G, plus as a heavy user another £80 to go up to 64GB. So the top of the tree iPad is now £739! Admittedly I see they've just gone up to 128GB.
Compare that to top-end Androids at £400 and the cheaper ones around £300. Sure the £400 model doesn't look expensive, but as the Samsung Galaxy Note 10 has both a stylus, and a memory card slot, and is rather good, suddenly the iPad is looking quite over-priced.
Actually putting the iPad Mini price up was a bit of a shock too. And the iPad 2 looks horrifically over-priced at £329.
Maybe the profits will continue to roll in. But I think they've gone over the tipping-point. My next tablet will not be an iPad at those prices. It'll be a Galaxy Note 10 I think. Although the temptation of a £250 Nexus 10 is also pretty high.
@I ain't Spartacus
As you point out, pricing is clever like the unbelievable +£80 for the pretty much essential nowadays 32GB model (Google charge £40 for same upgrade for Nexus 7 and that's a large margin profit). While the cost of NAND goes down year on year, Apple seem to think we are too daft to notice the high delta.
I was waiting for the new Mini announcement but at £479 for the 64GB model (yes I do need more storage for my applications) I'm even looking at Windows tablets now (though will probably still go Android).
Ancient iPad 2 still on sale for £329 wtf?
Tipping point? Not there yet IMO but approaching quickly if Apple continue taking customers for granted next year.
The problem appears to be that analysts only understand one business model, the one where you have the most "market share".
Apple are using one of the other options, the one where you make the most money.
I'm not an analyst, but I can predict with some certainly that at some point in the future Apple will be in financial trouble, it's not rocket science, it's what happens in normal business cycles. We've seen it with Dec (who went to the wall), IBM (who narrowly missed the wall), HP (hit the wall and are now in plaster casts), we're seeing it with Microsoft (just realised they left it too late to stamp on the brakes) and in the future we'll see it with Apple and Google.
The trick is to keep churning out these "OMG, they're going to fail if they don't follow my advice" stories in the hope that you're the one who calls it at the right moment and so reaps all of the glory and reputation for being the person who correctly predicted the collapse.
> The problem appears to be that analysts only understand one business model, the one where you have the most "market share".
If they are selling computing devices that depend on mind share with 3rd party software developers, then that's the right model to fixate on. Without 3rd party content producers, your platform will go nowhere. Microsoft is currently experiencing this problem.
When it comes to platforms built on vendor lock based on an "ecosystem", then market share matters.
What a load of bluster from Canalys....when world and dog has stopped buying iPads, and next year Tim Cook announces that they've only sold 171million iPads, i might believe him.
But right now, if people want a tablet that they know that works, they buy Apple. Even my stubborn mate who refuses to buy the best, and always goes for the underdog (leading him to buy a Samsung S3) has been offered one for christmas by his auntie...but her stipulation is "it has to be an iPad" and even he is thinking of taking the offer.
So basically, non story...
"and always goes for the underdog (leading him to buy a Samsung S3)"
Which is a perfectly fine phone, no problem. And not silly money.
"has been offered one for christmas by his auntie...but her stipulation is "it has to be an iPad" and even he is thinking of taking the offer."
Why would his aunt do that? Would she prefer to spend money on Christmas presents that the person is sort-of OK with, rather than spend less money on something the person wants? Sounds like a dickish move.
@Moeluk Well asking me for an extra £160 for the 64GB model over the entry level 16GB Mini has lost them one sale, there is a difference between selling a premium product and taking your customers for idiots who don't know what they are buying. Apple have now crossed that line for me and, I suspect, are playing a dangerous game with the public at large.
No you see thats the point, they aren't taking them for idiots...they are pricing according to demand.
I would guess that well over 80% of the market could not give a rats arse about how much storage the tablet has. I don't use the entirety of a 16gb iPad...if you need 64gb, then thats your prerogative, but with streaming from iTunes with homesharing, and the ability to hold enough music and movies for 2 flights and a week on a sun lounger with headphones on...I really don't see the issue.
As for the auntie not wanting to buy him something thats cheaper, well thats her stipulation...she knows her iPad works, and she also knows that Nick very rarely buys anything that 'just works' it's fiddle with this, fiddle with that...
Well, lots of things, but, for me, I'd say they are known for design innovation; certainly in the last 15 years or so that Jony Ive has been instrumental in their product design. The resurgence of Apple can be traced to a resurgence in the quality of their designs. I remember when the original 'Bondi Blue' iMac came out and, shallow though this may be, how it was the look of the thing that made it such a draw. Same too with the iPod, iPhone and iPad. If they want to maintain their differentiation and prices then it is the quality of their industrial / product designs that will be critical.
Agree, I was blown away by the MacBook Air (2011 model), iPhone 4 and iPad minis' solid construction and lightness. Then in use there are many little details, like the MacBook Air's high quality keyboard and trackpad, the iPad mini's great battery life, the breadth and quality of apps for all these devices. Same with the AppleTV (yes the hockey puck device is no big deal, but this is hidden under the TV so who cares), just feel the quality of the remote and the responsiveness of the menu.
There are issues, the iPhone and iPad minis' lack of file system is my biggest issue, but I can live with that when the hardware and day-to-day operation is this good.
This classic is from 1997: Wired's '101 Ways to Save Apple'. I remember reading it at the time in a, gasp, dead-tree copy of the magazine.
http://www.wired.com/wired/archive/5.06/apple_pr.html
Wired's first two ideas?
1. Admit it. You're out of the hardware game.
2. License the Apple name/technology to appliance manufacturers and build GUIs for every possible device - from washing machines to telephones to WebTV.
Some do seem prescient, though:
14. Do something creative with the design of the box and separate yourselves from the pack.
19. Get rid of the cables.
39. Build a laptop that weighs 2 pounds.
52. Return to the heady days of yore by insisting that Steve Jobs regrow his beard.
How can any credible business analyst can compare the technology markets of 2013 with those of the 90s simply beggars belief. The services and requirements of all technology users, be they conglomerates or the domestic housewife simply cant be compared between then and now.
The www didnt begin to take hold in the developed world until 1995, and arguably wasnt of real worth until the first search providers launched, circa 1997.
Mobile phones were the preserve of the moneyed and business communities upto 1994, only reaching the masses from 1995 onwards, and they were anything but 'smart', or secure.
In the 90s. personal technology, and internet access specifically, simply wasnt a necessity for the vast majority of us. We didnt budget for it, like we do fuel, food and clothes. Now we do. A smartphone tarriff is attached to millions of bank accounts. Ditto home broadband. Apple attempt to bring the best internet and communication experience to the masses. You'll pay for it of course, but for many thats a price worth paying.
> The services and requirements of all technology users, be they conglomerates or the domestic housewife simply cant be compared between then and now.
Sure they can. Your hardware requires 3rd party software. It doesn't matter if it's a PC from 1984 or a game console from 2013. The same principles apply today. We just give these things different names. You use terms like "ecosystem" but it's really the same thing.
Anything that can turn Apple into a minority player again will threaten it's "ecosystem".
Although Apple benefits from being an established player. Although they could be relegated to niche status again just like they were in the 90s.
That's why all of the Microsoft attempts at non-x86 platforms have been pants: no "ecosystem".
"Apple risks repeating the mistakes of the 1990s as it sticks to a high price strategy on its iPads and other products, even as the surging tablet market heads for excess inventory in the fourth quarter"
Of course they are! Listen to (or at least believe a word) a fanboi and iChav devices would become MORE expensive in order for them to (falsely) feel smug about the fact they own over-priced tat. This fallacy of "premium" or "luxury" keeps their little lives sustained.
Of course EVERYONE else can see that it's all lies and bullsh*t.
"noting that Walmart was pushing tablets at $49, saying “We have no interest in chasing all the way down to the bottom.”"
Funny...you could have fooled me with some of the absolute crap that you push out in your PC line. Being a screw turner with computers I see loads and loads of HP's coming across my bench and they all are obviously chasers to the bottom.
My wife's HP Touchpad notwithstanding...because that thing with Android installed on it just SCREAMS with speed snd smoothness.
Apple is more profitable than companies that sell Android devices.
- Apple products are overpriced.
Apple phones are not made of crap plastic.
- Apple phones come with a Faraday cage to reduced signal strength.
Apple devices are fashionable.
- Apple purchasers are not critical thinkers.
etc...
I do see some problem with Apple's current high end pricing model going forward.
* As some people have pointed out the build quality is very good and even an old Ipad 1 can do as much as a new low end cheap tablet, the bad points for Apple don't sell the old ipad 1's anymore and where they do sell the older Ipad 2 its twice the price of these lower priced tablets. So people wanting to save money are either going to buy a second hand ipad or a cheap Android tablet, neither of which make Apple any money. (except perhaps a few pounds on app sales on a second hand ipad)
* There is going to become a saturation point with tablets just as there has become one with PCs and laptops, sure some people will always want shiney shiney but others will be happy to stick with their ipad 1 or 2 unless it breaks especially with prices of £400+ to get a new ipad
* Apple have no low end range to compete with the cheap Android tablets and this will become a problem in emerging markets like India and China where £400 for an iPad is over a months wage for most people so a tablet at £100 is a lot better option in those market, and once they have become used to using Android they are more likely to stick with it on their next device.
As others have pointed out a low end range does dilute the Apple brand some what so perhaps they should consider releasing iOS devices but not branded as Apple, perhaps they could resurrect the Newton brand for the low end devices?
Price wasn't the only thing that differentiated Apple and Microsoft back in the 90's: software had quite a bit to do with it. Microsoft was able to improve on Windows 3 with Win95 as a stopgap while the long-term WinNT bet played out, while Apple was stuck with an OS that had more in common with Windows 3. The truly amazing thing was how much mileage they were able to get out of an OS with no protected memory; sloppily-written apps like Netscape Navigator made the whole OS look unstable as it locked up all the time. Not that they didn't try their own Win95 trick with "Copeland" but we all know how that turned out: they had to look outside the company for a new OS to save their bacon, resulting in the return of Mr. Jobs.
Now the tables are turned. NextStep has been leveraged into an incredibly flexible platform running on desktops, phones and tablets and allowing for accelerated innovation and great stability. Microsoft is still trying to catch up, and Android is playing the "good enough" card. Ignoring the software in the equation makes this analyst's opinion worth about as much as the paper it's printed on.
Like most supposed commentators he sprouted B/S.
Apple may not have the market share now all the cheapo's are out there, but sales continue to grow, as do profits. The basic definition of success. There is ZERO correlation between now and the 90's. I was there as CEO of an IT company. Where was he?
If 5c sales have been below expectation, why is it outselling the S4 in most US telcos? It's in the top 3 of sales in all of them. On the first week, the 5s sold significantly more than the 5c (everyone wanted gold), in the past weeks the ratio had dropped to 1.9 times. If you can sell almost 50% of the fasted selling phone of all time, you've a damned successful phone. Numbers HTC. Nokia, LG, and even Samsung would kill for. His problem like many others is he wants Apple to wallow in the low end where even Samsung make no profit.
As with most of the analysts they sprout BS, then try to hide their mistakes behind dubious "supply chain" rumours, and weak "analysis" that begins with their desired answer, then fudges the "facts" to suit.
Comments re Notebook longevity. Our corp has had agreements with HP, Toshiba, Dell, Apple. Our Apples CONSISTENTLY have a lower TCO than the others. They last FAR longer. We even run Win on Apple kit and it runs faster than on most other brand notebooks, either in bootcamp or parallels. My MBPro is about to be replaced, 5 years old and nothing other than a replacement DVD drive after falling off the X-ray conveyer at Shannon airport. It still runs just fine, needs a new battery and will be used as a spare.
It sure as hell isn't the tablet market, because Microsoft would be lucky to have 2.3% of it, let alone the 23% they have of whatever this market is (compared to Apple's 17%!)
I automatically ignore anything an analyst has to say about the market if he defines it in such an obviously bogus way.
You cannot force a company to install wireless... And if you are visiting, they won't want you on their network - and guest networks are still a rarity over here due to the legal position - if you provide a guest network, you are an ISP and if you don't log each MAC address and keep a protocol of what exactly they do online, then any illegal activity is automatically the responsibility of the company providing the connection, so it is little wonder that wireless is rare.
There is more than one strategy active in this sector. Apple, Google, Microsoft - and all the little fish have different needs. The market seems to allow several strategic approaches to deliver success at the same time.
Apple's packaged Hardware+Software (supported by a high margin) with a flourishing Apps Ecosystem; works for them. Apple offer just four iOS devices; but lots of people keep buying them. The High Margin approach has made Apple stinking rich.
Google's Free OS, with key Apps and services, plus a flourishing Apps Ecosystem; works for them.
You can choose any device that runs Android (including Google's Nexus devices). But as long as you stay in the Google environment, they have access to you. That "locked in access approach" has made Google stinking rich.
Microsoft still have Windows and Office, they still make LOTS of money. WP is slowly gaining traction; it has an Apps Ecosystem and that is slowly improving. Microsoft is buying Nokia to insure that good Windows Phones WILL be made. We all know that Surface RT has been a flop, but both RT and Surface Pro were a marketing ploy. The Microsoft approach may be "work in progress" - but it is FAR from finished.
Both Google's little fish and Microsoft's OEMs are still going. Some are doing better than others - but it was ever thus. Of the three BIG players, the Microsoft situation is the more "confused and confusing. But no single player has total dominance or is expiring on the shoreline - - yet.
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