back to article iPhone 6: The final straw for Android makers eaten alive by the data parasite?

Today's long overdue update to Apple's iPhone line - which had been moribund for years - look set to squeeze some rival manufacturers to death. New iPhones at last means that Android, Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets. The problem, in a …

  1. Anonymous Coward
    Anonymous Coward

    Uneducated toss.

    Sony's problem is nothing to do with Android, or it's products, both of which are fine. Their problems are quite simply:

    1. The US market is controlled by the networks, if networks don't carry your handsets, you don't sell handsets.

    2. China and India are emerging markets, and Sony only make mid and high end phones.

    1. Anonymous Coward
      Anonymous Coward

      Re: Uneducated toss.

      Your point 2 is valid. Point 1 however is not - haven't you noticed (by sales volumes, and by phones not coming to the States) that the US market is becoming irrelevant for anyone but Apple?

      1. Anonymoist Cowyard

        Re: Uneducated toss.

        ... because of network deals....

        That premium price tag that comes with the iphone. Part of that money goes to keep the networks sweet, part of it goes keeping the media sweet.

        Sorry to say, when you buy an iPhone, you are directly funding press jollies, fine dining and all sorts of other perks.

        1. Anonymous Coward
          Anonymous Coward

          Re: Uneducated toss.

          Maybe the networks are just suppling what the customers are demanding and the want Apple smartphones not 2nd rate Sony handsets.

          1. Anonymous Coward
            Anonymous Coward

            Re: Uneducated toss.

            The problem is of course, the Z3 isn't a "2nd rate Sony handset", it totally destroys pretty much every phone on the market, in every area. It's got a better camera than anything out there (including the iPhone6), and it's fast fluid, it's waterproof, much better battery life than anything Apple has.

            If you were one of the mugs that lined up for an iphone6, just because you assumed it must be the best product out there, as there are other people also queuing, then sorry, you just joined the queue of mugs.

            1. Frank Bough

              Re: Uneducated toss.

              If it's so great why doesn't anyone want it?

            2. Graphsboy

              Re: Uneducated toss.

              Are you sure the Z3 is the best?:

              The Telegraph reviews Apple’s 64-bit iPhone 6 Plus: ‘It’s peerless’

              TechCrunch reviews Apple’s 64-bit iPhone 6: ‘The best smartphone available’

              USA Today’s Baig reviews Apple’s 64-bit iPhone 6/Plus: ‘Smartphone stars’

              Walt Mossberg reviews Apple’s 64-bit iPhone 6: ‘The best smartphone on the market’

              The Wall Street Journal reviews Apple’s 64-bit iPhone 6: ‘The best smartphone you can buy’

              These guys certainly don't agree with you

            3. danbi

              Re: Uneducated toss.

              ... the Z3 isn't a "2nd rate Sony handset", it totally destroys pretty much every phone on the market,...

              I had not noticed the existence of the Z3 had any impact on my iPhone, or any of the numerous other phones from various manufacturers I own.

              So it basically destroys nothing, but Sony's cash reserves.

            4. Stretch

              Re: Uneducated toss.

              My new shiny Z3 is in my hand. It is awesome. It kicks the Shix into next week.

          2. Anonymous Coward
            Anonymous Coward

            Re: Uneducated toss.

            > Maybe the networks are just suppling what the customers are demanding...

            Ha ha,,, perfect troll (possibly unintended?). You know that el reg commentards are religious when it comes to free markets ? And they also hate apple. You just trolled them into the perfect conundrum - to chose between their religion or heart!

            IMHO, Americans are simpletons addicted to consumerism, who fall far the huge Apple marketing budget and literally stand in lines for 15 days of bliss...

        2. sleepy

          Re: Uneducated toss.

          Not true Cowyard, your post is fantasy. The premium price tag pays for a better product, and for Apple's enormous profits. If Apple were bribing the carriers with money, they wouldn't be making the profits. It's Samsung that spends $14Bn on marketing, including spiffs; when you buy a Samsung, you're directly bribing the channel. Apple does not pay the networks to keep them sweet; they deliver the subscribers who have the highest ARPU by far, because they make the products those subscribers want. The networks don't like it, but they have to offer iPhone, or they will lose their best subscribers to churn. And they have to push iPhone hard, because Apple won't let them have it unless they commit to high volumes calculated by Apple to stress them. Carriers would love not to need iPhone and have to be bribed to take it, but that's the exact opposite of the truth. The customer relationship belongs to Apple, and the networks need the customers.

          Press jollies and fine dining would show up as marketing expense too, and Apple don't do it that way. Again, it is discipline in controlling the information disseminated that gets the media eating out of their hands, not "press jollies". That would be so last century.

          1. illiad

            Re: Uneducated toss.

            It all depends what you want...

            - got loads of money, want the latest 'designer' phone (to be dumped next year when a better model comes out.. :/ ), that all you need is to take pics, make phone calls and stuff??? - oh, and no clue what this other stuff the geeks are talking about, the apple guys tells me its the best, pass the bolly!... :P

            - you want something that is a lot more functional, that will keep going for years, keep 100's of gigs of your movies/ music/ pics etc on, and just swap out a memory card if you want a change...

            That a lovely pic, mate, can I have a copy? sure, switch on yer bluetooth, right? ok sending now! :)

            when will apple be that simple...

            1. Anonymous Coward
              Anonymous Coward

              Re: Uneducated toss.

              My 3GS still works just fine, running iOS 6. It's ailbroken and I have tweked the interface a bit.

              I think I can safely say that Apple kit "keeps going for years", not the opposite as you imply.

              My Gen1 MacBook Air 11" is getting long in the tooth now, but it is running 10.9.x and has performed faultlessly and shown itself to be very rugged...

        3. cali

          Re: Uneducated toss.

          Riiiight....

          that's why Apple spends 14B on advertising. Oh wait.

        4. danbi

          Re: Uneducated toss.

          ... when you buy an iPhone ...

          When you buy an iPhone, you actually pay up-front for future services by Apple or their subcontractors.

          Nothing more, nothing less.

      2. Anonymous Coward
        Anonymous Coward

        Re: Uneducated toss.

        The US market was always irrelevant. Nokia was (pre-Elop) selling more than 134 million smartphones a year and yet the US barely registered on the graph.

        1. Bobber

          Re: Uneducated toss.

          As a Ex-Nokia person focused on the Americas from 1996-2010 I can tell you that even in the lowest market share days the US always mattered. Nokia's global standing was made with the AT&T One rate and the Nokia 6160 in 1996. Nokia lost the golden relationship with US operators because they were too reliant on Nokia (sound like anyone today?) and they actively promoted the competition. There is NO operator in the world who wants to be dependent on only one or two manufacturers.

        2. danbi

          Re: Uneducated toss.

          ... Nokia was ....

          Their reign ended the day they went to bed with Microsoft. Sadly... Nokia had some good know-how of GSM technology.

      3. kb

        Re: Uneducated toss.

        Actually as someone living in the states that talks to a lot of folks I can tell you the biggest trend here is NOT iPhone, which is still seen as a hipster brand for the coasts, but ditching the wallet raping contracts completely and going with one of the many growing prepaid or pay as you go providers like Straight Talk, AT&T Go, and Ting.

        The problem is these companies like Sony are trying to play in the high margin arena when any retailer here will tell you the $200 and under phones are outselling the $400+ phones by a good 4 to 1, again thanks to those ditching their contracts. BTW guess who makes the best phones at this price? The Chinese companies listed in TFA, as all you find from the likes of Sony and their ilk is refurbs or seriously outdated tech.

    2. big_D Silver badge

      Re: Uneducated toss.

      Almost... We bought a cheap (100€) dual-SIM Sony Android phone (running Android 4.3) recently.

      Point 1 is about right though.

    3. Anonymous Coward
      Anonymous Coward

      Re: Uneducated toss.

      Sorry, but if you can't make money with free software then you shouldn't be in business at all.

      The thousand pound IPhone is in no way superior to an Android in any way.

    4. Tom 35 Silver badge

      Re: Uneducated toss.

      "The problem, in a nutshell, is this. Why should you continue to make something at all if you lose money doing so?"

      That would seem to affect Windows Phone more then Android.

      What is this, Windows phone fan sees Apple as the enemy of their enemy?

    5. SFC

      Re: Uneducated toss.

      No, Sony's problem is the same it's always been. They let their "media" division dictate what everyone else can or can't do. Sony has throughout the years made brilliant hardware after brilliant hardware, only to cripple it with some back asswards DRM to "prevent piracy" at the expense of user experience. They spent so many years alienating their customers, that it's tough to win any of them back. I literally don't care if Sony produces the greatest Android phone ever created. After their XCP rootkit debacle, I won't be buying anything from them for a LONGGGG time.

  2. MrWibble

    So you didn't notice that Silver is reportedly dead:

    http://arstechnica.com/gadgets/2014/09/googles-rumored-android-silver-program-is-reportedly-dead/

    1. Andrew Orlowski (Written by Reg staff)

      I've been hearing "Silver is scrapped" since the Silver details first emerged in the Spring. Not surprisingly.

      1. SuccessCase

        Very good article Andrew.

        Perhaps now more will begin to understand why profit, far from being evil, is a necessary thing. Without profit business stagnates, innovation nosedives and quality suffers. You have to maintain margin as it is a margin of safety. No one sensible goes for a swim in the sea with the aim of using up all energy supplies right up to the limit just before getting back to land. Android is fast becoming like the laptop business at the time low end netbooks were popular. It was dreadful. There had been no innovation for years unless you count "inventing the netbook" as innovation. It was just such economics that saw PC's loaded with difficult to remove crapware/adware and indeed it was only by doing such that most manufacturers got any margin.

        When the economics of a business is driven purely by ads, you get the kind of travel guides you once found in hotel rooms. 3/4 low rent advertising with sparse poorly edited "meat" for the rest. Google have done a remarkable job resisting allowing their services to collapse and become low rent faire, but there are now ominous signs. Take You Tube. Fine that adverts are included, Google have to make their money, but video ads, overlaid simultaneously by clashing low quality, graphically anomalous banner ads with horrible little deliberately imprecise "click to dismiss" target buttons; argh.

        1. awood-something_or_another

          No one sensible goes for a swim in the sea.......

          ......"with the aim of using up all energy supplies."

          Except the energy companies. OH, you said sensible. My bad. And when they started. the seas weren't polluted with their supplies.

          [Though I hate them, that was my Greenpeace moment. :) ]

          1. Anonymous Coward
            Anonymous Coward

            Re: No one sensible goes for a swim in the sea.......

            Downvoted for using the phrase "My bad" :-)

        2. Stevie Silver badge

          Bah!

          "Perhaps now more will begin to understand why profit, far from being evil, is a necessary thing."

          Profit is never an evil thing. Excessive profit often is, or did you miss the slash-and-burn of the 1980s? I remember the quote by an AT&T executive who said that throughout that era he was terrified some corporate raider would realize how much copper AT&T had, and would acquire the company to strip mine the phone infrastructure for short term profit.

          Shareholder profit quite often is, as it is all-to often the altar on which the core business of the public company in question is sacrificed. Only this morning yet another radio commentator was surprised at the number of private companies that outspend and outperform their larger publicly-held rivals in R&D.

          As with all "isms", capitalism works well until it is allowed free rein, when the wheels come off alarmingly quickly. You must have noticed the events of 2008 (including the snouting-at-the-public-trough that went on in bonusland).

          The key to profit != evil is the invisible qualifier *reasonable*. The problem is that in the new something-for-nothing millennium, people's definition of "reasonable" is "whatever I think I can get away with".

          1. Anonymous Coward
            Anonymous Coward

            Re: Bah!

            "I remember the quote by an AT&T executive who said that throughout that era he was terrified some corporate raider would realize how much copper AT&T had, and would acquire the company to strip mine the phone infrastructure for short term profit."

            That would never happen as PUC's (Public Utility Commissions) across the country would have blocked that move. As soon as someone tried to rip the copper out, PUC's would be asking what they will be replacing the copper with. If thsy said nothing, then you have fines being levied and laws being broken. So there would have been no short-term profit.

            1. Stevie Silver badge

              Re: That would never happen as PUC's (Public Utility Commissions ...

              ... across the country would have blocked that move. As soon as someone tried to rip the copper out, PUC's would be asking what they will be replacing the copper with.

              Possibly. I have little faith that any laws would protect the public against the Great God Profit during the heady days of the late 1980s and early 1990s though. Everyone was distracted for some of it by the catastrophic failure of the Savings and Loan industry for one thing and the corporate raiders seemed unstoppable at the time.

          2. Anonymous Coward
            Anonymous Coward

            Re: Bah!

            > As with all "isms", capitalism works well until it is allowed free rein..

            You.. you.. anti-free-market-tree-hugging-gun-hating-climate-change-alarmist-free-loader,

            you are j..j..jjust j..j..j..jealous of my freedom, aren't you ?

      2. Anonymous Coward
        Anonymous Coward

        Or maybe not..

        http://www.android.com/one

    2. Anonymous Coward
      Anonymous Coward

      Are we talking Android Silver? (never heard of it) or Android One? (pretty big deal in emerging markets)

  3. Joe Harrison Silver badge

    Really can't get this

    What's the difficulty? The manufacturers design a phone which costs 50 to make and they sell it for 100 (or 90 or whatever). The software is not their problem as Google has done it all for them. Ungrateful bastards. Meanwhile more importantly I can avoid having to spend 600 quid on an Apple phone.

    I searched my memory but I don't recall traditional PC manufacturers saying phew it's lucky Windows is not free otherwise we would be out of business.

    1. Anonymous Coward
      Anonymous Coward

      Re: Really can't get this

      But it appears that it doesn't actually cost only 50 to make, hence the losses.

    2. Lusty Silver badge

      Re: Really can't get this

      "costs 50 to make"

      You're confusing manufacturing cost with the cost of producing a device. The R&D budget required to produce a top end phone is enormous, and those costs must be recovered alongside the component costs. For example, the iPhone has two custom designed processors and custom memory chips (to reduce size) with a unique flash and custom designed camera. The people designing these things didn't do it for fun, they did it because they get paid to, and because Apple, Samsung etc. pay for the very expensive machines they need to design, prototype and produce them. In addition to those, someone needs to design the exterior of the device, the packaging, write documentation, support end users and many other costs. Every single phone design also needs to go through costly approval processes in every region it will be sold, otherwise it wouldn't be legal to sell them.

      but yeah, they only cost like 50 bucks to make so why do they cost so much...

    3. Frank Bough

      Re: Really can't get this

      They are now out of business, of course, while Mac sales keep edging up.

  4. hammarbtyp Silver badge

    lets look at this in another way..

    The article makes some good points, but the argument can be turned on its head.

    Why buy a $700 Apple device when a $100 android version will do 99% the same? And if the West's market is saturated with smart phones, where does that leave Apple? Trying to sell expensive hardware into a market like China and India which just cannot support that price point?

    Of course Apple will survive, because as has been shown there is a value in the cachet of owning a Apple product, but can it still grow and maintain the same margins?

    1. QXL

      Re: lets look at this in another way..

      I asked myself the very same question this week when looking to replace my iPhone 4s. I got the new Moto G for £150 and it's more than a match for the 4s which I'm only replacing as I wanted a bigger screen and a new battery. I can't be the only one who's seen the prices of the new iPhones and thought they are poor value.

      1. Steve I

        Re: lets look at this in another way..

        If switching to Android from iOS was so easy for you, then I'm assuming you have no investment in the iOS/Apple ecosystem (iPhone/iPad/MAx datasharing etc) nor any iOS apps, iTunes films etc.

        Which begs the question - why have an iPhone? Someone at work asked me if he should get an iPhone or Android so I asked what apps he wanted. "Apps?" he replied. turns out he just wants email, web-browsing, phone calls, messaging etc so I told him it didn't really matter what he bought.

        1. Ian Watkinson

          Re: lets look at this in another way..

          "If switching to Android from iOS was so easy for you, then I'm assuming you have no investment in the iOS/Apple ecosystem (iPhone/iPad/MAx datasharing etc) nor any iOS apps, iTunes films etc."

          Just done this so:

          iphone some apps, none that I can't do without, or aren't already on android.

          Ipad, yup got one, can share data via dropbox/box/google drive etc fine.

          itunes films...do people buy films from itunes?

          about the only thing I'm missing so far, is the choice of cases. You can get everything for the iphone, 90% for a Samsung Sx, but about 10% for a Sony Z2 :-(

        2. big_D Silver badge

          Re: lets look at this in another way..

          I switched from iOS to Windows Phone 7 to Android to Windows Phone 8.

          All the apps I used were available on all platforms. I had to reinvest a few quid in apps, but other than that, it was fairly painless - I currently run a Galaxy S3 with KitKat and a Lumia 1020 with Windows Phone 81. Update 1 - the Galaxy is a company phone and doesn't have any additional apps installed, the Lumia is my private phone and I have the apps installed on that.

          I would say that Android and Windows Phone are about even on features and ease of use. There aren't as many apps for WP, but everything I need is there. Both of them are ahead of where the iPhone was with the 5S and iOS 7. I'll wait and see what iOS 8 and the iPhone 6 bring; we have one on order here for the CEO, so I'll get a look-see when it arrives.

          So far, I haven't seen anything that would make me want to trade in my Galaxy or Lumia for an iPhone 6.

          One of the nice things with the Lumia and the Galaxy is I can use my YubiKey NEO (NFC enabled) OTP generator to authenticate with.

          1. Anonymous Coward
            Anonymous Coward

            Re: lets look at this in another way..

            Having a Windows work phone makes you realise how many apps are missing.

            I appreciate for your usecase, you might have all the apps covered, but many are still missing with no plans for them going there.

            Official Youtube app? (You don't watch any youtube?)

            Many countries train apps - netherlands for example are ios/android only.

            Strava for cycling/running.

            google keep. ( still miss notesync)

            google authenticator for anyone that uses gmail and wants 2 factor auth.

            most new games...gave it to my kids to have a look at, they'd rather a 100 quid android device than the 1025 or 9xx lumia...

            multi platform password apps like msecure and 1password

            Credit card and banking apps, santander/lloyds, amex etc.

            multi platform to-do lists, ala wunderlist.

            music apps like 8track/sonos...

            As a phone, it's not too bad, as a smart phone....it still lacks the apps.

        3. alwarming
          Joke

          Re: lets look at this in another way..

          > Someone at work asked me if he should get an iPhone or Android so I asked what apps he wanted.

          Seriously ???? Do people still ask sincerly "others" what is a good phone to buy ???? I thought only reason to discuss smartphones with co-workers is to troll them...

      2. Arctic fox
        Thumb Up

        ".. I can't be the only one who's seen the prices of the new iPhones..........."

        No, amongst those of us who bother to examine and compare properly, either because we are professional techies or (like myself) are self-educated amateur techies, the prices concerned (unless one is wholly committed to the Apple ecosystem, which is fair enough - each to their own and all that) are in fact eye-watering and you are definitely not alone in that opinion.

        1. Anonymous Coward
          Anonymous Coward

          Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

          Well I look at the SIM free price of a Galaxy S5 at around £420 and the iPhone 6 at £539 - so yes it's about £120 more which over 2 years is £5 a month. Then at the end of the 2 years the iPhone will still be worth about £250-300 and the Galaxy S5 perhaps £100 if anything.

          Look at the build quality and support wit the iPhone and you can see what you are paying a bit extra up front for. Or on a contract the difference is likely to be around £5 per month or less and you have a phone that has some value at the end of the contract which probably negates the extra cost.

          Yes you can compare a £500 iPhone to a Moto G - it's not that the Moto G is a bad phone (it's not) but it's like comparing (and pardon the car analogy) a Vauxhall Astra to a Mercedes.

          1. John 110

            Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

            @AC

            "Yes you can compare a £500 iPhone to a Moto G - it's not that the Moto G is a bad phone (it's not) but it's like comparing (and pardon the car analogy) a Vauxhall Astra to a Mercedes."

            Which one is which again?

          2. Novex

            Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

            "Yes you can compare a £500 iPhone to a Moto G - it's not that the Moto G is a bad phone (it's not) but it's like comparing (and pardon the car analogy) a Vauxhall Astra to a Mercedes."

            I prefer to think of it more like comparing a decent spec Skoda to a Mercedes - The Moto G (I have a first generation one) is a well built, good quality phone that does what it set out to do and can be enhanced with apps from Google Play for pennies to do pretty much anything the iPhone can. Admittedly it's lacking a few of the bleedin' edge bells and whistles like NFC and a micro SDXC slot (even the latest Moto G is only SDHC - why?) but I've even got round the SDXC issue with a USB-OTG device, so it's doing the job nicely thank you. It just doesn't have an Apple badge.

          3. sisk Silver badge

            Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

            Look at the build quality and support wit the iPhone and you can see what you are paying a bit extra up front for.

            Good idea. I've never had a phone last less than 5 years, and the one that only lasted 5 years (a Moto Droid) met its end at the hands of a toddler and a bathtub, not really an indication of its quality. My current phone, a Galaxy S2, is 3 years old and I expect to have it for at least another 3-5 years.

            How old is your iPhone?

          4. Ashl

            Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

            I'd say it is more like comparing the top end Skoda to the more expensive VW but with the same features, they are effectively the same chassis just one has a slightly prettier badge.

            The only difference in this case of course is that the top end Skoda is a quarter of the price and does more! Yet in reality for most people who are taken in by the badge does the same thing.

          5. P. Lee Silver badge

            Re: ".. I can't be the only one who's seen the prices of the new iPhones..........."

            >at the end of the 2 years the iPhone will still be worth about £250-300 and the Galaxy S5 perhaps £100 if anything.

            If your primary aim is to get rid of the thing then that might be helpful.

            Personally I like features such as being able to download and store arbitrary files. I like being able to treat my phone as a disk drive over usb. I use linux a lot and booting into windows or buying a mac so I can use my phone is a drawback. I want to actually use the thing for what I need to do with it.

            Perhaps I need to run a wifi hotspot for much of the time, so replaceable batteries are a bonus and a solid unibody frame a drawback.

            And if I were a newspaper editor, I wouldn't jeopardise Apple (or Samsung) advertising dollars by saying I didn't like the way it looks.

            People on view live by how they look. I'd get a mac air because it is partially marketing for the success of my company. I'd also keep a dell quad-core i7 on hand to do the heavy lifting if required. One isn't better than the other - they just have different uses.

      3. Ian Watkinson

        Re: lets look at this in another way..

        Slightly more up to date, but same sentiment - 5 to Z2.

        Over the next 2 years, the choice not to go iphone 6, is going to save me, £700 x 2, approximately.

      4. Russell Hancock

        @QXL Re: lets look at this in another way..

        I was exactly the same, having killed my One X with one to many drops (broke the in call speaker this time) i looked at what was available - i wanted the One (M8) until i saw the SIZE of it... Looked at Samsung, Sony, LG etc the only one close was the Xperia Z1 compact but did not like my last xperia... Looked at Apple - 5S but it was just too(oooo) expensive for what it is.

        I wanted something smaller than the One X with a good camera - so that only left one option - Nokia and windows phone! I got the Lumia 1020, brand new, full guarantee, boxed, etc for £190 (No contract)... so far, call quality is amazing, camera is great and battery is pretty good...

      5. Lusty Silver badge

        Re: lets look at this in another way..

        @QXL I'll be interested to hear your comments after using the software on that phone which matches the specs of your iPhone. Hardware specs are very easy to replicate and improve upon but user experience is a whole other ballgame, and the reason Nokia used to be king of phones in the feature phone times. Many of us fell for the specs of competing models and regretted that we had to spend a whole year with a POS phone that had great hardware but couldn't use it. For instance, my Samsung D900 could take 1GB SD cards, yet their software only allowed me to play a maximum 20 MP3 files in total spread over a maximum 4 playlists.

        That's not the only example of my poor purchasing decisions with phones so these days I'm much more careful about jumping ship. Luckily work have given me Android and Windows phones so I haven't needed to use my money to realise what I prefer for a while.

        1. sisk Silver badge

          Re: lets look at this in another way..

          Hardware specs are very easy to replicate and improve upon but user experience is a whole other ballgame

          Indeed it is, but there's a large factor of personal preference in user experience. I love the UX on Android. I have an iPad at work that I've been forced to use for the last 2 years. The UX on it makes me want to pull my hair out. On the other hand I know a lot of people who can't handle Android.

          To paraphrase Steve Wozniac: if you are willing to take the time to learn how to use it you'll get far more out of Android. If you're willing to settle for less and just want to pick it up and go, get an iPhone.

    2. Thomas Wolf

      Re: lets look at this in another way..

      Google makes most of Android's functionality available as apps on iOS. Apple does not do the same. Therefore, I find it hard to believe that an Android phone can do 99% of what an iPhone does.

      And Apple continues to add to the functionality/services that are "Apple only" - including some that require tight integration between the hardware and OS (something Android phone makers may find hard to duplicate) - e.g. Apple Pay.

      1. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        @Thomas Wolf You might find it hard to believe, but it's true. Ask any Apple owner if they prefer Apple's services to Googles, and most of them will reply Google's.

        In other words, Android phones have the best of Google's services (there are many that Google DON'T offer up to Apple), and they have the best of the rest too. There is no need for apple's services, in a world where they aren't forced upon you.

        The reason Apple don't offer their services on Android, is why would anyone want them, when they have natively Google stuff.

        1. Anonymous Coward
          Anonymous Coward

          Re: lets look at this in another way..

          You might find it hard to believe, but it's true. Ask any Apple owner if they prefer Apple's services to Googles, and most of them will reply Google's.

          Define "services". Apps: Apple, because I don't have the time to inspect every app for either authored data theft, Google data tapping or simply grabbing much more then it needs (not to mention that I have granular control over that in iOS - let's not forget that Google's business is YOUR information, not hardware (which may explain why the iOS idea of granular and post-install permission control never made into Android features other than by 3rd party apps). Internet search: Apple now puts Duckduckgo in as engine, which I have been using for ages on other platforms. Google search is good, but I found that I can handle a bit more work for no privacy exposure whatsoever. Data protection: device data space encryption and per-app encapsulation is a default in iOS8.

          It depends on what your needs are. I am keen on my privacy but I don't like having to fight for it, so as long as I avoid iCloud, Apple is quite OK. If you like to tinker a lot, Android is the way to go, but you get less done.

          The reason Apple don't offer their services on Android, is why would anyone want them, when they have natively Google stuff.

          .. which you won't be able to use unless you either root the thing, or accept Google's T&Cs. If you have any understanding of what you're signing up to, this is worth avoiding. "In perpetuity" is actually a very long time.

        2. Anonymous Coward
          Anonymous Coward

          Tin hat vrs Cloud

          I got a sonyZ1 compact, the best phone I have ever had yet then disabled all the Google services (including search) then used internet standard stuff IMAP for email, CalDav, CardDav and WebDav.

          Work forced me to have a Iphone 5S and it just sits in the desk draw doing nothing, a horrible device and horrible operating system.

          You know my music fits on the SD card and I don't need a cloudy thing or an internet connection to access it. Camera very good too.

      2. Michael Wojcik Silver badge

        Re: lets look at this in another way..

        I find it hard to believe that an Android phone can do 99% of what an iPhone does.

        My Android phone can do 100% of anything useful I've ever seen anyone do with an iPhone, except be unsufferably smug about my choice of phone. And I don't need a phone to be unsufferably smug.

        1. Anonymous Coward
          Anonymous Coward

          Re: lets look at this in another way..

          I don't need a phone to be unsufferably smug.

          I noticed...

          1. Michael Wojcik Silver badge

            Re: lets look at this in another way..

            I don't need a phone to be unsufferably smug.

            I noticed...

            Thanks! Would you be interested in blurbing my autobiography?

        2. Lusty Silver badge

          Re: lets look at this in another way..

          "My Android phone can do 100% of anything useful I've ever seen anyone do with an iPhone"

          Try looking on fitness/running/cycling forums, there are quite a few happy Android users shouting the exact opposite of what you said there. Compatibility is the issue, with many and various bits of third party hardware. Primarily because until a few months ago Android didn't support Bluetooth LE at all, and so fitness hardware manufacturers have been slow to port any of their apps across.

    3. sisk Silver badge

      Re: lets look at this in another way..

      Why buy a $700 Apple device when a $100 android version will do 105% the same?

      Fixed that for you.

      Honestly. The only thing iPhones can do that Android can't is connect to iTunes and iCloud, neither of which we need because there are other stores and clouds we can use. There are, however, things Android can do that iPhones can't. We can customize our phones for a start. All you can do on iOS is change the wallpaper. We can also do things like install Linux to get access to the full range of Linux ARM software on our phones or install terminal emulators (which, surprisingly, I've found to be very useful).

      Yeah, it's geeky as hell, but let's be honest: who but a geek is really going to fully explore the capabilities on any smartphone? Normal people stop at installing apps and browsing the web, regardless of the platform. For those things one smartphone OS is as good as another.

      1. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        No need for iTunes and iCloud.

        Google's clouds offering totally destroy anything Apple has, just like Google Music destroys iTunes. But don't tell anyone, it's our secret. Let them pay 40% for their music...

      2. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        > There are, however, things Android can do that iPhones can't. We can customize our phones for a start

        No, for a start, you can transfer a pic, file, or contact, via Bluetooth¹ to any bugger who's got a non-Apple phone.

        ¹ Yes, I know Bluetooth is hideous as hell, but it is very occasionally useful.

        1. sisk Silver badge

          Re: lets look at this in another way..

          No, for a start, you can transfer a pic, file, or contact, via Bluetooth¹ to any bugger who's got a non-Apple phone.

          Ok....you're kidding, right? iPhone's can't talk via Bluetooth to non-Apple products? My disgust with Apple just rose a couple notches. Believe it or not pushing things around via Bluetooth is something I do all teh time.

          1. Anonymous Coward
            Anonymous Coward

            Re: lets look at this in another way..

            ... but it streams music to my BT speaker on the desk just fine. YMMV

            1. Anonymous Coward
              Anonymous Coward

              Re: lets look at this in another way..

              now try sending the mp3 to the computer so you can play it there....

          2. Frank Bough

            Re: lets look at this in another way..

            iOS can do various things with BT, but Apple keep a tight rein on it to prevent in becoming a security issue. Apple also has a history of adopting the latest BT tech first.

        2. Frank Bough

          Re: lets look at this in another way..

          Have you heard of the Internet? That's what the i part of iPhone stands for! Fun fact, there.

      3. peter_dtm
        WTF?

        Re: lets look at this in another way..

        But it is normal people NOT geeks who make up the market

        as has been shown time & time again geek sales != profit (quite often geek != sales | geek = give away)

        so geek sales are either niche; marketing or supported by volume sale to normal people

      4. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        "Honestly. The only thing iPhones can do that Android can't is connect to iTunes and iCloud, neither of which we need because there are other stores and clouds we can use. "

        Yes, agree totally. I have an iPhone 4 which to be honest was a mistake. In many ways it is inferior to an old palm pre I got when hp had a fire sale. The camera doesn't take as nice a picture and the music player is a faff. I don't actually connect to iTunes on my pc very often because well - that's what my iPod was for, and I spend half the time juggling apps and content to free up space. But now of course apple have killed the iPod Classic and I can't help but wonder (seeing as they were making plenty of money on them) that it was to push people to their £500 jesus phones. So what way to jump - do I just get a cheap droid or a cheap lumia.

    4. Anonymous Coward
      Anonymous Coward

      Re: lets look at this in another way..

      "Of course Apple will survive, because as has been shown there is a value in the cachet of owning a Apple product, but can it still grow and maintain the same margins?"

      Looking out the window at the iPhone 6 line wrapping around the block I'd say:

      yup.

      But that could change tomorrow! Err...well, perhaps not tomorrow, maybe once this weekend is over. Or next month, or maybe probably next year sometime. The iPhone has only been around for 7 and a half years, so people will probably snap out of this fad soon.

    5. Karlos4272

      Re: lets look at this in another way..

      If Android is so much better why is Sony, HTC and Samsung loses so much money. I live in the Caribbean and here we don't make the kind of money UK or US people do but we all want to get the Apple device because it is better.

      1. Rob 44

        Re: lets look at this in another way..

        Its not better though. To claim it is shows a total lack of knowledge on the subject. Apples products aren't sold because they are good, they are sold because they are desirable. They are nothing more than a status symbol.

        1. Steve I

          Re: lets look at this in another way..

          You really should stop feeling so smug and superior. Some people genuinely prefer the Apple ecosystem and buy an iPhone after an informed choice. Why else would peopl buy them if, as you say, it's just a status symbol yet everyone else despises them thus robbing them of any status?

        2. Anonymous Coward
          Anonymous Coward

          Re: lets look at this in another way..

          Whether an iPhone is a status symbol or not may be location dependent.

          I live in the States (although I travel internationally regularly) and an iPhone here is just another phone. The cost of smartphones is mostly still hidden by 2 year Operator contracts so the 'out the door' cost is not much of a factor in decision-making once you leave the very low end (free-phone) market.

          Note also that UK buyers are saddled with a lot more tax and supply chain hassle that pushes up pricing. If an iPhone 6 is really the 1000 GBP posters here are quoting that is well above the 398-520 GBP (approximately) US-equivalent price.

          ($650-$850, 16GB-128GB, unsubsidized US price * 0.611 GBP/$ exchange rate)

          That may explain a lot of the cross-pond angst if the 1000 GBP price for iPhone 6 is actually true.

      2. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        "but we all want to get the Apple device because it is better."

        And how do you know that it's better? Because a man on the television said so? You do know that Apple spend $14bn each year paying those men on the telly, man in the newspaper, man that runs a website....

        Anyone that thinks Apple makes the best products, just because of what they saw on the television, newspaper, internet, is frankly an idiot, and deserves to own an iPhone crammed full of 2 year old Android tech for a premium pricetag.

        1. Anonymous Coward
          Anonymous Coward

          Re: lets look at this in another way..

          Anyone that thinks Apple makes the best products, just because of what they saw on the television, newspaper, internet, is frankly an idiot, and deserves to own an iPhone crammed full of 2 year old Android tech for a premium pricetag.

          Anyone who assumes that people reading a tech site like this take their decision AT ALL based on marketing needs their head examined. I cannot say that people here take decisions entirely based on merit because I keep reading to much unsubstantiated crap from both sides to make that a plausible argument, but there is enough difference between Android and iOS to make one better suitable for a situation than the other. Frankly, I get sick of people slating "the other site" - it just shows a worrying level of immaturity.

      3. Anonymous Coward
        Anonymous Coward

        Re: lets look at this in another way..

        "If Android is so much better why is Sony, HTC and Samsung loses so much money. I live in the Caribbean and here we don't make the kind of money UK or US people do but we all want to get the Apple device because it is better."

        No, you want it because it's more expensive which by extension you think makes you look cooler, gives you higher social status, and makes you more attractive to girls. Same reasons you want a BMW/Audi/Mercedes. That you think it's better shows you actually have no idea what you're talking about. Fact is, phones are so powerful now that they're all pretty much the same these days.

    6. Anonymous Coward
      Anonymous Coward

      Re: lets look at this in another way..

      The numbers don't support your point about China:

      http://www.dailytech.com/Apple+iPhone+Sales+Rise+Nearly+50+Percent+in+China+for+Fiscal+Q3+2014/article36278.htm

    7. Bobber

      Re: lets look at this in another way..

      Except the don't. My kids have been through 5 different Android phones and are all asking me to buy the iPhones next. Too much frustration with RAM/flash/internal vs external memory issues. App incompatibility (while on the same baseline) and PC syncing that requires USB driver education (Samsung, HTC and Sony). My four year old iphone 4 still is the phone they want to use.

  5. The Original Steve

    Emerging markets

    And low priced devices are coming under attack by the Lumia range, particularly budget models by the unknown smaller ODM's. (Loads are coming out at the minute since MS ditched license fees).

    Personally I see iOS at top end, Samsung have the lions share of mid and high end outside of iOS, with HTC taking the leftovers at mid-market and Lumia taking a decent chunk of the budget ene, particularly in emerging markets. Sony are mad carrying on as they are, and Sammy would be nuts to drop their devices (which are excellent).

    I wouldn't discount WP in the BRIC's and other emerging markets and the West's budget segment, seems to be a lot of traction currently.

    1. Anonymous Coward
      Anonymous Coward

      Re: Emerging markets

      "And low priced devices are coming under attack by the Lumia range"

      No, Lumia is stillborn. Android One program put stop to that.

      http://www.theverge.com/2014/6/26/5845562/android-one-google-the-next-billion

      Who is going to buy a Lumia that's buggy and has no apps, when you can get a reasonably good Android handset for the same price? Only a fool is the answer.

      There is no place for Windows Phone at any part of the market, which is why it's marketshare is dropping and no close to zero.

      1. Joe Harrison Silver badge

        Re: Emerging markets

        There might be a spot for Windows phones, in corporate enterprises that are all-Microsoft. What if a Windows phone is the only one that works with your sharepoint, your Exchange, your AD, your Lync...

        1. Bleu

          Re: Emerging markets

          Agreed, but only after they are fully over their stupid error in trying to push the same UI model onto the desktop. Business buyers don't want to upgrade from Win 7.

          The tiles-only interface of Win 8 for phones should be great for addicts of twitter, facebook, & c., should get them some market share at some stage, once they get it into the right physical package.

          Not that I care for Microsoft.

        2. Anonymous Coward
          Anonymous Coward

          Re: Emerging markets

          There might be a spot for Windows phones

          There is, it even has its own dictionary term for it..

        3. StooMonster

          Re: Emerging markets

          Good has got that market nicely sewn up.

      2. Russell Hancock

        Re: Emerging markets

        Has Mr Anonymous Coward tried a Lumia? i got one recently and so far - no bugs, no crashes and every app i had on my android that i used is now on my Lumia - Amazon Kindle, London Underground Maps, Train Times, Sat Nav, Tide Times app, etc etc...

        So same apps, no bugs and better call quality (nokia make good phones)... looking good from here!

      3. DaddyHoggy

        Re: Emerging markets

        My dyslexic (teenage) daughter loves her Lumia 630, the layout helps immensely, she informs me, and she likes the commonality in interface between it and her Windows 8.1 laptop.

        We (and by 'we' I mean she went 50:50 on the cost with us) also only paid £100 for it (SIM and contract free - now on a sub-contract off my wife's Three contract) when she declined the use of my wife's perfectly serviceable HTC Desire S.

        I also noticed that in the new TV show "Glue" all the teen kids on that have Nokia Lumia phones - so I think the Lumia will find it's own market but it will be mostly amongst the teens - but teens eventually become money-earning adults...

        1. Destroy All Monsters Silver badge

          Re: Emerging markets

          I also noticed that in the new TV show "Glue" all the teen kids on that have Nokia Lumia phones

          But this be just product placement, innit?

          1. Frank Bough

            Re: Emerging markets

            Geeks aren't sophisticated enough to understand that, and astroturfers know only too well.

        2. Anonymous Coward
          Anonymous Coward

          Re: Emerging markets

          I also noticed that in the new TV show "Glue" all the teen kids on that have Nokia Lumia phones

          Ever heard of product placement? Joking aside, I'm intrigued by its ability to support people with dyslexia - I'm still waiting for a phone that can accept a special font for its interface such as Open Dyslexia and also helps with UI layout.

          1. DaddyHoggy

            Re: Emerging markets

            The tile layout helps her find stuff quickly she says, the bright colours and geometric patterns remain stable as she scans the screen*. - Android icon and (names) move around when she tries to read them she tells me - which is classic dyslexia.

            And yes, I've heard of product placement (I presume the down votes were because people thought I wasn't?) what I was trying to indicate (without writing an essay) was that, as a father of an easily impressionable teen, seeing other teens (on a TV show) using Nokia Lumias sets their little minds a whirling with possibilities...

            I presume Nokia/Microsoft got their product placement for exactly this reason.

            And at the Uni where I work, I see more students with Android devices (I lecture on a tech heavy degree course) than anything else, but since the start of term I've notice more Microsoft/Nokia handsets than Apple ones for the first time.

            Purely anecdotal observation of course - but I find it interesting - if anything it's nice just to water down the Apple v Android flamings a little bit.

            * It took us forever to find a laptop where the keyboard didn't move around when she tried to type on it - all to do with spacing of keys relative to the size and shape of the typeface on the keys it turned out.

          2. Martin Maloney
            Trollface

            Re: Emerging markets

            Have you heard about the support organization MDA -- Mothers Against Dyslexia?

  6. Pete 2 Silver badge

    Thinning the herd

    But isn't this what happens in every industry? Consolidation.

    When cars were new, there were hundreds of manufacturers. Now there are a few. When aircraft stopped being an expensive way to kill yourself and went commercial there were lots of manufacturers. Now there are a few. But in neither case does the reduction in the number of makers lead to a reduction in the number of units made: the opposite is true.

    As for New iPhones at last means that Android, Google's smartphone middleware, will soon look attractive only for budget vendors I'm not convinced that the mobile device market splits neatly into "Apple" and "budget" and if Google really want to keep sucking on the data-collection teat, then surely IoT and embedded smart data sources is the direction they should be looking in.

    1. Bleu

      Re: Thinning the herd

      There are many aircraft manufacturers.

      What you refer to as consolidation is more akin to monopoly.

      Take, as recent examples, the Airbus A-380 and the Boeing 'Dreamliner'.

      While the Airbus was running a little late, the US mounted a massive propaganda attack, attack articles were repeated or echoed in Japan, all english-speaking countries, europe, doubtless other places.

      The 'Dreamliner' ended up much further behind schedule, had serious technical and production problems, but the articles were all 'Aw, can't be helped, it's gonna be just the GREATEST PLANE EVAR!!!'

      Check for yourself if you don't recall.

      Apple is similar.

      1. Preston Munchensonton

        Re: Thinning the herd

        It might help to take a look at basic economics. Mature markets will naturally have a revenue/customer threshold beyond which the market as a whole will not support without external forces at play (e.g. regulation, technological advances, etc). The market can become monopolized by one competitor, but most governments don't permit true monopolies and haven't for many decades. Instead, the best competitors either force the lesser competition out of business or buy them out (i.e. consolidation).

        Apple is not and never will become a monopoly. Their business model will have to change significantly for this to happen and I suggest that it would countermand the relationship with their current target customer base (i.e. fanbois and the like).

        If I were Sony and HTC, I would look for someone to buy that part of the business first, so you can get some value back from the investments already made. Simply exiting the market by way of layoffs and production stoppage is too painful from a financial point of view.

      2. Frank Bough

        Re: Thinning the herd

        How is Apple similar, again?

  7. John Robson Silver badge

    Once some players drop out then....

    ...the others will be able to sell more devices, and so will make be able to recoup the cost of the devices they sell?

    Isn't that the principle of supply and demand - at the moment supply is way too high, meaning no-one get's to leverag economies of scale, so some companies will fail and/or quit and the others will get a larger slice of the pie, and be able to make it work?

    Or maybe I'vce missed something.

    1. Andrew Orlowski (Written by Reg staff)

      Re: Once some players drop out then....

      "Slice of the pie" doesn't butter any parsnips - or direct capital. Profit does.

      1. tony72
        Thumb Up

        Re: Once some players drop out then....

        Congrats on making it though an Android article without using the "landfill Android" slur though Andrew, you almost managed to sound balanced there.

        Just like the transition the PC business went through when PCs became mainstream, the smartphone business will transition from a high margin business to a predominantly low margin business, and there will be casualties along the way. My first laptop was a 100MHz Pentium Olivetti with 8MB of RAM and Windows 95, I hate to think how much that cost in today's money. Olivetti, like many others, isn't around any more, but there are still plenty of people making fantastic Windows PCs, and I am pretty sure there will be plenty of companies making money out of Android smartphones in the years to come, even if they aren't all the same companies in the business right now.

        1. Anonymous Coward
          Anonymous Coward

          Re: Once some players drop out then....

          Congrats on making it though an Android article without using the "landfill Android" slur though Andrew, you almost managed to sound balanced there.

          AFAIK, the "landfill" crown has been taken over by Microsoft :)

      2. Steve Hersey

        The excluded middle

        As I read your article, the thing that jumped out at me, threatening to seize my morning coffee mug and drain it dry before I could reach it, was this: If Apple owns the high-priced end of the smartphone market, and Android phones are only profitable in emerging markets, just who will occupy the midrange? Not Apple (their kit is just too expensive unless you've become addicted to the Kool-Aid), not Blackberry (alas, there's some seriously good kit there), and not WinPhones (the two hundred people using them in the world don't count). It's Android or nothing, then; there's no other contender. Someone will sell those phones and profit, there's a serious demand.

        Your piece doesn't address this factor. What would you predict when you take it into account?

        Me, I expect Samsung and a flood of cheap Chinese Androids to fill the bulk of the market.

        1. DougS Silver badge

          @Steve Hersey

          I think he's implying there would be no middle market. If you can buy an Android phone for $150, and an iPhone for $600, there would seem to be room for $300 phones, but what justifies a phone running identical software costing twice as much?

          Samsung has been able to sell Galaxy S and Note for a premium based with a combination of massive marketing spending, specs (bigger, higher resolution, more cores, more MHz, more RAM, etc.) and features (face unlock, eye scrolling, etc.)

          They can't market any harder than they are now, it is already starting to become a joke to even their fans with stuff like the staged selfies during big events, or fails like when they pay celebs to tout their products and that celeb tweets from their iPhone the next day. They've reached a point of diminishing returns in specs (does anyone care about getting a 4K phone or 8 cores, has anyone ever run out of memory on a 3GB phone?) and their last few generations of features have been seen as gimmicks even by the Android faithful.

          Apple has a "monopoly" on selling iPhones, if you want one you go to them and pay what they ask if you think it is worth it. Samsung is just another Android OEM, they are trying hard to differentiate with their S-xxxx names of existing Android features but is it working? Why should someone pay much more for a Samsung phone versus a no name brand if they run the same software and do the same things? With each revision Google reduces the ways in which OEMs are allowed to differentiate their offerings, so the noose grows ever tighter.

          1. John Sanders
            Holmes

            Re: @Steve Hersey

            OEMs could differentiate their phones if they were willing to improve their GUI/UI skins, if they were to produce less models and if they were willing to produce timely software upgrades.

            It will also help if they tried do things like qwerty keyboards on a phone that doesn't suck.

            Everybody in the industry is obsessed with the iPhones, its like if suddenly all perfume manufacturers became obsessed with Channel n5, and all their products were "inspired" to smell the same.

            Obviously whoever likes Channel n5 will buy just that rather than a very expensive perfume from the competence which is not the one they want.

            This is very funny when you think that Chinese OEMs are mostly busy making Samsung knock-outs.

          2. Mark 65 Silver badge

            Re: @Steve Hersey

            There are ways in which an OEM can differentiate its product. For example, given you generally have the phone with you all the time, a point of differentiation could be the quality of the camera on the phone. Phones are generally butchering the low end compact camera market (despite what many think they cannot butcher all of it due to quality issues and the laws of physics) and so a phone that clearly produces much better photographs (less fringing, better low light response etc) can therefore make a difference. My money would be on Sony in this department for the Android crowd given their constant innovation in the camera sector. Their A7 and A6000 lines for replacing typical DSLRs and the RX100 MKIII for the pocketable (ish) high quality compact market.

      3. Alistair Silver badge

        Re: Once some players drop out then....

        doesn't butter any parsnips - or direct capital.

        Wall street might disgree with you on that one - although profit is the principle driver, when profits in general are low, the target with the largest market segment gets the pip, usually since it has the greatest chance of ticking the profit box.

        1. Captain Queeg

          @Alistair - Re: Once some players drop out then....

          So still profit then, just expected rather than current?

  8. Steve Davies 3 Silver badge

    Samsung's Business model

    spend $14B marketing to make $6.9B profit. Unless the $6.9B is calculated after the $14B is taken out then this model is just not sustainable.

    1. VinceH Silver badge

      Re: Samsung's Business model

      The $6.1B profit must be after the $14B is accounted for, or it wouldn't be a $6.1B profit - it would be a $7.9B loss.

      Though the way Andrew phrased that part of the article didn't quite read correctly to me - it seems to read that a $6.1B profit is only enough to cover a $14B marketing budget, which seems to be suggesting the $14B somehow comes out of the $6.1B.

      I don't know - perhaps numbers work in a different, magical way beyond a certain point. Or maybe there's a variation on Hollywood accounting at play. Or copyright maths.

      1. Andrew Orlowski (Written by Reg staff)

        Re: Re: Samsung's Business model

        Samsung's margin is enough to see it stay in the game for now.

      2. daldred

        Re: Really?

        Samsung's $14Bn marketing budget is for its whole product range - there's probably a significant chunk there for smartphones and tablets, but there's also going to be considerable spend on marketing TVs, dishwashers, memory cards, cookers.

        And so is its profit: the article is simply incorrect in saying the $6.1Bn profit comes from smartphones. It's the whole reported corporate profit, so obviously stated after advertising costs. $4.4Bn came from their 'Internet and Mobile' division, which would include mobiles.

        And the advertising budget is annual. The $6.1Bn profit figure is for the second quarter of 2014: you can't just multiply by four, of course, but approximating that way would indicate a profit for a year of about $24-25Bn. Annual revenue for 12013 was around 30Tn Korean Won, which is $218Bn. On that turnover, a $14Bn marketing budget is not unreasonable, in a sector that competitive.

        Source: . http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/financial_highlights.html

        1. Anonymous Coward
          Anonymous Coward

          Re: Really? - @daldred

          Well put. Don't you just love it when people quote non-compatible statistics to try to make a completely misleading point? It's like comparing Apples to Samsungs.

          1. VinceH Silver badge

            Re: Really? - @daldred

            Indeed. Thanks for seeking out that - more meaninful - information, daldred.

    2. Rampant Spaniel

      Re: Samsung's Business model

      I read it (and as I understand it from elsewhere) as the 14 billion covers all their products wheres the 6.9 is just the profit from one area of business.

      I would love to see what happened if they spent the entire marketing budget on r&d.

  9. A Non e-mouse Silver badge

    PC Market

    I feel the mobile market has become like the PC market. The money is made by the software companies (Microsoft/Google) and the hardware companies are in a suicidal race to the bottom for cost, hoping wafer-thin margins will mean something if they sell enough of them.

  10. Pascal Monett Silver badge
    Trollface

    "a parasite that's so successful it's killing its host"

    So, Google is the Ebola of mobile marketing then ?

    I rather like that image.

    1. Nigel 11

      Re: "a parasite that's so successful it's killing its host"

      A successful parasite doesn't kill its host. In fact the greatest success is to become a symbiote, such that the host cannot survive without the (former) parasite.

      Methinnks I've just over-extended the analogy.

    2. Anonymous Coward
      Anonymous Coward

      Re: "a parasite that's so successful it's killing its host"

      Hmm - if I had any design talents I'd have a go at drawing this - there must be a way of bending the Ebola virus shape into something that spells Google. It's mainly to see how many micro-seconds you'd be able to search for that image after Google's management spots that online.

  11. Permidion

    Jolla

    get one, it's worth any Android/iPhone/Winphone and without having to sell part of your soul

  12. timrichardson

    An unsually poor article

    Firstly, Apple's pricing is very high and leaves a lot of margin room. Apple simply can't make the volume to change this; or rather, it would be too risky to do it. Apple doesn't need to change strategy, but there is a lot of volume which means a lot of money left on the table.

    Secondly, OEMs don't need to command such high margins as Apple since their costs are much lower. It's a different business model. PC manufacturers don't have anywhere near the margins of the Macintosh, but there are a lot of PC OEMs. Thirdly, wearables are a new high-growth sector. Apple's watches don't work without an iPhone, which means they have left the very large Android installed base to Android manufacturers. If the rate of innovation in wearables and mobiles continues, Google's added-value will be important. The undeniable fact is that if you want to make mobile hardware, you need Android, unless you are Apple. Microsoft will spend a few more billions dollars before it is forced to concede this; everyone else has worked it out already (vale Tizen).

    Fourthly, how does this theory explain the rush of PC OEMs into Chromebooks, which are low-priced, low margin and also run a free Google OS? Because OEMs make money on low margins. This is what they are good at. The idea that only Samsung and Apple make money from smartphones is wrong. It may be that some manufacturers can't move with the times on this, but plenty will rise to take their place. At this point in the lift of microcomputers, Dell, Asus and Acer didn't exist yet.

    Fifthly, you gloss over the middle of the market as if this is a bad place to be, but in fact it is where most of the money is.

    1. Andrew Orlowski (Written by Reg staff)

      Re: An unsually poor comment

      "The idea that only Samsung and Apple make money from smartphones is wrong."

      Huawei et al make money from smartphones - and if you had read the article, you would know this. But in mature markets, the numbers don't lie. Ask Sony, HTC.

      Basically, you're rejecting all the evidence you do not like - so you can reject the arguments that follow. This is not the strongest position from which to construct an argument.

      1. Twilight Turtle

        Re: An unsually poor comment

        So, what you're actually saying is that Android handset makers are doomed because Sony and HTC are losing money hand over fist? I don't really think that's a fair conclusion given that they're hardly representative of the entire Android handset maker market.

        Are LG losing money on their phones? Are ASUS? Huawi and the like are now selling in Western markets. What about the smaller, newer niche providers selling high-end products like Amazon, Xiaomi, Hisense, Sharp et al?

        There are a myriad of reasons why Sony and HTC are in trouble, not least of all their failure to compete with Samsung and LG at the top end of the Android smartphone market and their lack of mass appeal.

        1. Frank Bough

          Re: An unsually poor comment

          Yes, all of those are losing money on their Android phones.

      2. Anonymous Coward
        Holmes

        Re: An unsually poor comment

        Andrew - I'll bet you predicted the sky was falling when Dell decided to cut its losses and get out of the mobile phone business? When Blackberry stopped making the PlayBook tablet? Were you scared when HP couldn't survive in the mobile phone market? When the HP Slate didn't take the world by storm?

        Just because a "big name" loses money in a fast-changing market doesn't mean there is anything particularly wrong with that market. It speaks more about the inability of a monolithic company like Sony to compete against younger, more nimble competition.

    2. NogginTheNog
      Meh

      Re: An unsually poor article

      Fourthly, how does this theory explain the rush of PC OEMs into Chromebooks, which are low-priced, low margin and also run a free Google OS?

      Perhaps because Google made some cushy backroom deals with them that made them enough money to make adapting an already existing ultrabook design worthwhile? Don't forget Chrome is only of any use to Google if others create some hardware to sell it on.

    3. Charles Arthur

      Re: An unsually poor article

      >>"Firstly, Apple's pricing is very high and leaves a lot of margin room. Apple simply can't make the volume to change this; or rather, it would be too risky to do it. Apple doesn't need to change strategy, but there is a lot of volume which means a lot of money left on the table."

      Apple isn't trying to be Nokia, although last year it had about 10% of all mobile phone sales (not just smartphones; all mobiles). Yes, there is a lot of volume available.

      >>"Secondly, OEMs don't need to command such high margins as Apple since their costs are much lower. It's a different business model. PC manufacturers don't have anywhere near the margins of the Macintosh, but there are a lot of PC OEMs."

      Low-cost OEMs have lower costs (by definition), but their problem is getting enough scale (= volume) to make the margins work. The comparison with PC OEMs is apt: Sony has got out of PCs, and Toshiba said yesterday it's cutting back on consumer sales (jobs going too) to concentrate on B2B sales. The rest of the PC market is concentrating towards five big Windows PC OEMs, and Apple (6th biggest), of which Apple is the 3rd or 4th biggest by revenue, and probably biggest by profit. I call this the "value trap" and wrote about it at http://www.theguardian.com/technology/2014/jan/09/pc-value-trap-windows-chrome-hp-dell-lenovo-asus-acer

      The PC business, when everyone makes something quite similar, drives commoditisation, and that drives smaller companies to the wall. The same happens in the smartphone business.

      >>"Thirdly, wearables are a new high-growth sector. Apple's watches don't work without an iPhone, which means they have left the very large Android installed base to Android manufacturers."

      That assumes that there will be a useful "attach rate" of Android wearables to Android phones. That's not certain. Also, wearables are high-growth but very low volume at present, so remains to be seen.

      >>"If the rate of innovation in wearables and mobiles continues, Google's added-value will be important. The undeniable fact is that if you want to make mobile hardware, you need Android, unless you are Apple. Microsoft will spend a few more billions dollars before it is forced to concede this; everyone else has worked it out already (vale Tizen)."

      Microsoft is offering Windows Phone licences free, though those OEMs face the same problem: without scale, you're stuffed.

      >>"Fourthly, how does this theory explain the rush of PC OEMs into Chromebooks, which are low-priced, low margin and also run a free Google OS? Because OEMs make money on low margins. This is what they are good at. The idea that only Samsung and Apple make money from smartphones is wrong. It may be that some manufacturers can't move with the times on this, but plenty will rise to take their place. At this point in the lift of microcomputers, Dell, Asus and Acer didn't exist yet."

      PC OEMs are rushing to Chromebooks I think because they can charge roughly the same as a PC, but need fewer components. That means more profit. At least you'd hope so. They aren't high volume though (a few million per quarter total) so again, not dramatically helpful. And if they do take off, everyone will pile in and drive the price down and you'll see a few making money, and others forced out.

      >>"Fifthly, you gloss over the middle of the market as if this is a bad place to be, but in fact it is where most of the money is."

      It's actually where the money is not. Samsung and Apple have pretty much all of the high end; HTC and Sony are getting badly squeezed because you can get products that do much the same as them for much less from Motorola etc. The market is going "dumbbell shaped", in the words of a Qualcomm executive - flight towards the high and low end. The mid-market is the worst place to be, because you don't know whether to cut prices (to attract customers) or emphasis features (to undercut high-end players). The latter hasn't worked for HTC because Samsung and Apple have more marketing money. Cutting prices is a short cut to losses.

      It's a deep problem. In the end, in a commoditised market, you get a few winners, some more small players ekeing out an existence, and many more licking their wounds and looking for the new thing.

    4. Ian Watkinson

      Re: An unsually poor article

      "Apple simply can't make the volume to change this"

      Really, but they have more volume than almost anyone else, except Samsung. They are going to sell approx 210 million iphones in the next 12 months.

      Care to come up with how many Galaxy S5 (or S6 if it arrives) Samsung will sell in the same period?

    5. Anonymous Coward
      Anonymous Coward

      Re: An unsually poor article

      Agreed. look at history. Who makes all the DVD players/TV sets now? The OEMs. The output is then rebranded to make it appear that a past Manufacturer with a good product is the source. This is happening with smartphones. The only way to make money from manufacturing is to have very high volumes, good reliability and low overheads. At some point, the price premium will disappear and there will only be a small market for a fashion product. Not many people buy Chanel perfume compared to the size of the smell market.

  13. ElNumbre
    Meh

    Duracell vs Energizer

    Apple will survive because of the bling factor,

    AN Other in the Android space will survive, because they're good products (I'd bet on Samsung here)

    and then you'll get a smattering of small brand or no brand companies filling out the bottom of the market. Like the home battery market, there'll be a couple of big distributors who will spend a little bit of time fettling their products and a lot of time promoting that they have better product than the competitor, whilst the bottom of the market is filled with elcheapo variations on a theme.

    N.b. Microsokia I think may replace Blackberry at the Enterprise (for those below C level), simply because of Windows penetration level, but you're never going to see massive market share.

  14. Anonymous Coward
    Anonymous Coward

    What?

    "Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets."

    If you consider the United States an emerging market, I would agree with that statement, but obviously its not. A new iphone like that isn't the savior to kick android out of the US. It was a move by apple to actually catch up to android with most of what they did. Apple doesn't have such a huge lead in the States anymore, and its because samsung,htc,lg, and moto are consistently producing high quality handsets that people want. Iphones still don't look all that attractive to me, and that speaks for a big portion of the 51.7% of the smartphone users in the country. (They have android.)

    1. Mike Moyle Silver badge

      Re: What?

      Market share doesn't help the individual companies, except in the indirect "a rising tide lifts all boats" sense.

      What you SHOULD be noting is that 51.7% of the smartphone users in the U.S. are split among a half-dozen manufacturers, while ONE manufacturer, Apple -- even WITH significantly higher prices for a given feature set -- has northwards of 40% of the market to itself.

      AND Apple has higher margins than Android handset manufacturers can generally claw out while trying to differentiate their offerings from the Android handset on display next to it at Best Buy or Wal-Mart. And it's MARGIN, as has been pointed out, that gets money-men wet.

      Now, none of this means that Apple will ALWAYS have that sort of market share to itself, or that it will ALWAYS be able to make those sorts of margins, but as with any war of attrition, they only have to do it long ENOUGH to drive a couple more of the mid- to large- companies out (vis. Sony) and watch the Android market fragment further as smaller companies try to fill the (perceived) gap left by the big boys' exit. If Apple ends up with 30% of the market but keeps their margins up, while a dozen or more companies are splitting Android's 60% and driving their own profits (and, hence, their attractiveness to investors) down to do so, then, even -- with loss of market share -- Apple wins.

    2. Ex2bot

      Apple Grub Mobe Micro-Slabs Get the Chips, But Not the Blips

      Apple never did have a huge lead in the US. When "pundits" state this "fact," they forget that Blackberry was dominant at one time. Apple never, ever had a huge majority of the US market. They just had (and have) most of the $$$. Android makers: "Oi! $$$$ is overrated."

      Android cos win by losing $ and winning in volume. And still losing money. (Except S. Korea's Prodigal Sons)

  15. Bert 1
    Devil

    Missing the point

    Does the market not split into "Do it my way, PC mangler" and "Do it any way you like, NOT PC mangler"?

  16. Nezumi
    Facepalm

    Stop wasting money on 'user experiences' that nobody wants then!

    I wonder how much of that already razor-thin margin is eaten up by all the 'added value' that manufacturers insist on thinking I want.

    Sell me a phone with stock Android. I don't want your skins and bloatware. Differentiate on spec and the quality of materials.

    Also, if you could stop trying to rob me blind for accessories that cost a couple of quid to make I might actually buy some. I might even buy more than one!

    1. The Real SteveP

      Re: Stop wasting money on 'user experiences' that nobody wants then!

      "Also, if you could stop trying to rob me blind for accessories that cost a couple of quid to make I might actually buy some. I might even buy more than one!"

      Sorry for a moment I thought you were talking about Android, and then afetr the above I knew you MUST be talking about Apple!

  17. simmondp

    You've missed the apps factor

    Critical mass on content (apps) is critical, which is why there are only two OS players in town, Android and IOS. Outside of the emerging markets, no one will buy a high end phone unless it runs all the apps they want. So in the west it's all Marketing, marketing and more marketing either to pay a huge premium for an apple badge, or to differentiate my Android from their android.

  18. BenR

    Premium Android

    There will always be a requirement to have a 'premium, top-end' Android device, and claiming this comes from Samsung doesn't cut it for me. I've never picked up a single Samsung mobile device - be it phone or tablet - and been as impressed by the build quality as i am by the build of an iPhone, my own Xperia Z1 (which I adore) or the HTC One M8. Samsung sell well because of the range of devices, and the more pragmatic approach to encrypted bootloaders etc. Surely there has to be some money to be made here?

    Sony are currently going down the incremental update route that has fared so well with the iPhone... the Xperia Z to the Z1 was a big leap. Z1 to Z2 and subsequently Z2 to Z3 are much smaller steps. Now they have a working formula, they can carry on with incremental updates. i wonder how much of that reported loss is down to historic events that they're paying down or writing off?

    1. Salamander

      Re: Premium Android

      Well, there is Vertu if you want something seriously premium. I have never seen one being used my self, but the company stays in business so people must use them.

      1. DougS Silver badge

        Vertu

        I thought Vertu just takes existing phones and blings them up with some gold plating and gemstones? Certainly that's what they used to do for high end Nokias, and do for iPhones. Do they make their own Android phones, or just bling up a S5 or M8?

        1. pepper

          Re: Vertu

          The Z1 to 3 line seems very populair, I see that phone pop up everywhere in the past few months.

    2. Britt

      Re: Premium Android

      Even if Sony went 1 high end phone a year I would be happy.

      They do seem to have a strong high end line up with the current Z2 (which I have and also adore) but the Z3 seem to have nailed it and the Z3 mini is the perfect form factor tied with features that could steal a few unhappy (with the new sizes) iPhone users.

      I would love a more stock Android experience across the range though. One of the reason I have the Z2 over the S5 is due to being less bloatware. (As well as being a sexy beast...)

    3. Paul 135

      Re: Premium Android

      " i wonder how much of that reported loss is down to historic events that they're paying down or writing off?"

      You have it in one here -- most of that loss was related to some obscure accounting voodoo around "goodwill" relating to the purchase of Sony Ericsson, rather than being a pure operating loss. Something that has been completely ignored in this doom-mongering article.

      Sony are here to stay, and are producing excellent products with the new Z3 Compact occupying a niche that puts the iPhone 6 to shame with a huge battery life, much smaller dimensions for similar scree and waterproofing and half the price. Yet I hear little in the press, where the reality distortion field maintained with all those brown envelopes in the back pocket and free wining and dining (though given El reg keeps moaning about not being invited to such affairs, I wonder why they are even complicit on giving coverage to the reality distortion field at all?)

      1. Anonymous Coward
        Anonymous Coward

        Re: Premium Android

        The latest Zed is indeed a fine piece of kit. Sony's phones are generally very good in fact, plus I happen to like Sony's design language, so they appeal to me visually as well as the hardware itself.

        Sadly, the phone is encumbered with Android :(

        1. pepper

          Re: Premium Android

          The Sony Z2 was on my to be considered list for a short while until I realized that I havent forgiven Sony yet for the Other OS fiasco on the PS3. I went with a LG G2 which is a damn fine phone!

  19. Destroy All Monsters Silver badge
    Holmes

    iPhone - not yet dead as disco, but the undertaker is taking measures

    New iPhones at last means that Android, Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets.

    As Trevor Pott would say: "It may be a niche market, but it's the only niche that counts!"

  20. Bleu

    Shallow analysis?

    I enjoy Mr. Orlowski's analyses most of the time, but cannot agree with this on the whole.

    For one thing, I like the old bricks, never had a clamshell, the only reason I switched from the brick was not being able to use the broken USB port for charging.

    ... but bought a new charging cradle, it lives, albeit limited to camera, IRDA port (still important here), and easily accessible SD card.

    Sure, Google is a data parasite, I don't like them, but if you have an Android phone, nobody is forcing you to log into all of their services or to turn geolocation on and then use their maps.

    I never do.

    It irritates me no end that if you click on any program or upgrade to download, you are automatically thrown to the google shop. Why can't I download my upgrade for Opera mini from Opera's site, etc.? Opera sure isn't 'spyware is us!'

    That might be a carrier or local manufacturer thing, would appreciate comment on that from any fellow reg. commentard.

    It's a great shame that nothing much but android and iOS is available for touch-screen phones, windows 8 models, blackberry remnant aside. Nice if webOS was still on phones, nice if our micro-iTron had a souped-up version for touch-screen phones (companies were pushing touch-screen dev kits for micro-iTron well before the Jesus phone, only they required a stylus). Bricks and clamshells here are micro-iTron, many Android devices also have a micro-iTron segment. Mine does.

    Apple of now is a rapacious company, like Google and Microsoft a US national champion, and their top people can visit the president and get whatever they want.

    Apple is also so associated with a certain type of poseur that I will never buy one of their products, was tempted by the mini when it was still powerPC, the nano with a decent camera (or not, never tried it), the pod Touch because they are dirt-cheap second-hand, but then you have to sign up to their shop to run anything on it.

    No thank you.

    Mr. Orlowski, a meandering piece from you, I am surprised.

    1. Adam 1 Silver badge

      Re: Shallow analysis?

      >Why can't I download my upgrade for Opera mini from Opera's site, etc.? Opera sure isn't 'spyware is us!'

      Check on Settings / security / allow apps from unknown sources.

      Then you or an app can download APKs to your heart's content. I personally like the all updates in one spot rather than having each vendor produce their own auto updater, and I find Google's rules for submitting an app for approval far less arbitrary than certain fruity competitors.

  21. Dick Emery

    Desirability and ecosystem

    iPhones adhere to the golden rule of 'desirability'. Most people are not technically minded. Most people who buy iPhones are 'herders' who see that Posh Pete has one (Keeping up with the Jones's syndrome). iThings are all about the ecosystem and saying something about who you are (be that a prat in a suit, black polo neck and skinny jeans or 'bling' and baseball cap casual wear).

    iPhones are not sold on how much geek factor they have. But how much you want to be like your peers.

    1. Ex2bot

      Re: Desirability and ecosystem

      I live next to Posh Pete, and I hate to tell you but he runs Windows Phone! Why? Beats me.

  22. Jonathon Green
    Thumb Up

    I seem to have voted with my wallet on this one.

    I *did* have a very nice, very shiny (well, it was at the time I bought it...) Samsung Galaxy S2, and when that got stolen the obvious thing to replace it was the current equivalent from the Samsung Galaxy range.

    What actually happened was that I looked at the price, gulped, took a long hard look at what I actually do with my phone, and ended up buying a generic "landfill" Android handset (ONN Only K7) from Chinavasion which has a bare-bones, bloatware free, vanilla Android image, runs the apps I actually use pretty well the same way the S2 did, has a large enough and good enough display, is well enough put together and looks nice enough not to be embarrassing, and cost me 35 quid...

    1. Joe Harrison Silver badge

      Agree. Not long ago I found a top-end phone at a conference and luckily was able to return it to its owner. When I located her she was just about having the screaming habdabs at the thought she had lost something worth 500 or more.

      Losing or breaking a phone is easily done so I don't understand why anyone would risk an expensive one purely for the bling factor or social status. Of course I don't want to lose my own (cheapo) phone but if it unfortunately happened I would just buy another one and forget about it.

  23. Yugguy
    Stop

    You CAN stop google

    I've disabled all the excess bloatware off my Samsung S3. All the pointless little Samsung and Google daemons, even shit like voice recog that I'm just not interested in.

    Google Play won't let me update to the latest Android version because of all this but as I haven't found anything that I can't do because of this I couldn't give a toss.

    I could update by rooting but I can't be arsed frankly

  24. Salamander

    I have to be honest, I found Andrew's analysis easy to understand. Apple sells a unique system. If you like that system, then you must pay the Apple price and clearly a lot of people are willing to do so. Android is available on a plethora of handsets. This makes most of the handsets functionally identical and hence it can be difficult to justify premium prices. Hence the bulk Chinese manufacturers and Samsung can make money, but Sony and HTC cannot. The only way for these manufacturers to survive is either stop making smartphones or find a way of differentiating their smartphones from the masses. This is not an easy thing to do and it can be a good way of losing money.

    1. Fred Flintstone Gold badge

      I think you have pretty much the heart of it here. For those that like the Apple eco system (for whatever reason), the delta with the features that Android was offering may have kept them outside the walled garden. Now they are indeed functionally roughly equal, other factors come into play.

      What I see play now is the very big difference between Apple-the-hardware-vendor who uses services to sell more kit and Google-the-data-grabber who couldn't care about the profit in kit because it's really after your data, and Apple has now started to aggressively throw that in Google's face. It's a good play on market sentiment by Apple, and indeed a rather big problem for Google. Especially the upper segment of the market knows that personal data has value, and is willing to pay to keep it safe.

      Not only can I see that becoming a problem for Google - it will also become a problem for high value resellers of Android such as Vertu. Oops..

  25. Irongut

    Sony, which makes beautiful gadgets

    Thanks for the Friday comedy article. That one will keep me laughing all day.

    Sony, like Apple, makes overpriced garbage. At least Apple's products tend to be reliable though.

    1. Ex2bot

      Re: Hold the Phablet!

      Not wanting to pick on you, Mate, but you can't say that Apple makes overpriced garbage and then end by saying their kit are reliable! Garbage aint reliable.

  26. William Donelson

    "Samsung makes money from Android - the only manufacturer to consistently do so - but at a huge cost. Samsung buys its success with $14bn a year marketing budget, allowing it to put out saturation advertising, pay sales staff to push its products at retail, and hype indifferent offerings in emerging markets. "

    So true. Market share does not matter if you are losing money.

  27. kurian<>yogi

    Alien alert.

    Its like an alien from another planet landed in cupertino and met with Steve Jobs Ghost and wrote this article.

  28. Anonymous Coward
    Anonymous Coward

    "New iPhones at last means that Android, Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets"

    I really don't see Android disappearing. Most of the so called innovation in the Iphone 6 (such as bonk to pay) has been in Android phones for years. The main selling point is that it is trendy to have a new Iphone. Perhaps Google should sue Apple over it stealing ideas from Android. Just my thoughts

  29. JohnA 1

    Sony and HTC - It's not android.

    Sony never had any sort of reputation for building phones people want. It had nothing to do with android.

    HTC alienated their customers with poor service, poor software, and few updates. Again, nothing to do with Android.

    They have both failed due to their own faults. Using any other operating system would not have made them successful.

    1. mrwenni

      Re: Sony and HTC - It's not android.

      "HTC alienated their customers with poor service, poor software, and few updates. "

      hmmm... dunno about service and updates (compared to other manufacturers), but I actually like the software (HTC Sense). I'd buy a new HTC if it wasn't for the fact that my HTC Desire refuses to die :).

    2. Sean Timarco Baggaley

      Oh for f*ck's sake...

      "Most of the so called innovation in the Iphone 6 (such as bonk to pay) has been in Android phones for years."

      Apple's innovation wasn't the inclusion of NFC support in their phone (and watch). Apple's innovation was in the software that works with it, integrating it into the OS. Apple also went the extra mile in sorting out the back-end too. They got MasterCard, Visa and Amex on board.

      Did Google bother doing that for Android phones? Did they feck.

      While Android manufacturers scream "FRIST!" at every opportunity, they rarely bother with the much harder job of making sure each shiny new feature is actually useful. There's a vast chasm between fitting a component and a basic driver, and the far more difficult task of integrating it properly into the user experience.

      El Reg readers really do need to stop viewing software and hardware as if these were two entirely separate domains that should always be treated individually. It's a bloody stupid way of approaching product design and always has been. The two components are of equal importance in producing something that is genuinely usable and meets the needs of the customer.

      The reason Apple have been running away with all the cash isn't because they're really good. It's because their competitors have been so spectacularly bad.

      And this is despite Apple literally spelling out exactly what their business model and philosophy in damned near every cheesy corporate identity advert they make. (Including, please note, the "not caring about being first" bit, which they explicitly state in that linked example.)

      1. John H Woods Silver badge

        Re: Oh for f*ck's sake...

        @Sean Timarco Baggaley - nail on head. I'm not even nearly a fruitchomp fan, but this is absolutely where Apple come out on top. I'm convinced their hardware is excellent, I'm fairly convinced their software is over-rated, but where they always score is moving the *business* rather than the product.

      2. jojo90

        Re: Oh for f*ck's sake...

        Except that this isn't really a useful feature.

        Unless every retail outlet and purchase point in the UK starts to accept this as a form of payment then it's useless. I'd rather just pull out my card and pay. It's not like a credit card is particularly big thing to carry around. Most people would continue to carry a wallet (you can't keep cash inside the iPhone, the back isn't removable) even if this payment method became ubiquitous.

        This isn't something that is genuinely useable and meets the needs of the consumer. It's a manufacturer running out of ideas and looking for gimmicks.

        Put it this way, contactless payment has been available for some time in the UK however I'd wager for 95% of your transactions you're still inputting the PIN.

        Perhaps the killer usecase is buying the next iFondleslab from the Apple Store :). Saving 2 seconds on checkout for one transaction will be well worth the x minutes / hours to set up this payment method :).

        GIMMICK!

  30. hairydog

    Is this 1st April?

    The Android market is a competitive one, so margins are tight, value for money is good.

    The IOS smartphone market is a monopoly so margins are huge and value for money is poor.

    There will always be fools who pay a premium price for shiny stuff, fools who buy the cheapest rubbish they can find, and a range of people in between who balance value and quality. Some of them will buy Apple, some will buy Android.

    Apple has targeted a userbase that is willing to pay a lot for attractive products. They have persuaded them that the missing features are unnecessary. Apple is good in this market. When they tried to do down-market, they failed big time.

    The best Android smartphones are easily a match for anything Apple makes, but the lower-end ones are not. They're cheaper, probably better value and unquestionably more successful than Apple's downmarket offerings. But they are less profitable.

    That proves nothing except that Apple only does well in one slice of the market. And although Apple dominate the US smartphone market, most of the world is NOT the US, and Apple does much less well almost everywhere except the US.

    All these are facts that you know already, but they do not sit easily with the article. So why is such a misleading article published? April Fool or something more sinister?

    1. Anonymous Coward
      Anonymous Coward

      Re: Is this 1st April?

      "When they tried to do down-market, they failed big time."

      AFAIK Apple has never attempted down market (except in the demented minds of a few analysts and Apple haters who tried in vain to make something so, which palpably, was not)

  31. Ossi

    Andrew, Andrew, Andrew...

    ...you really need to go back and learn some GCSE economics. A market doesn't simply die when there's no profit to be made. What happens is that loss-making producers leave the market, reducing supply so that prices increase to the point where the remaining suppliers start to make sufficient profits to stay in the business ('normal' profits in economics speak).

    It is possible that the high end Android market will come down to just one surviving business which still won't be able to charge enough to make a profit - but I sincerely doubt that will happen - there's simply no precedent for that.

  32. Charlie Clark Silver badge

    What's missing

    Is the suggestion that the market for high-end smartphones might be limited for everybody. Including Apple. Could fanbois ever get tired of the upgrade cycle?

    This one of the reasons why the consumer electronics companies are trying the spraygun approach with new products like wearables but also media add-ons like Chromecast or home automation, POS devices, vertical industries. Apple is very coyly and stylishly playing me too here as well. If all goes well then they will be hailed for the getting the Apple Watch right. If it doesn't go well then Apple's PR will make sure that nobody's talking about it a year from now.

    That manufacturers are still throwing so many resources at the market and iterating so quickly suggests they might be onto something. The next generation of Android is going to make their lives a lot easier. I hesitate to use the word "game-changer" but Android L certainly looks very impressive to me. Find the right market (and we should be looking beyond the customer markets for where the real added value is). What if someone gets a contract to supply tablets and associated services to hospitals?

  33. jbelkin

    Google basically played for short term games while Apple is playing chess and going to win in the long term. In the beginning, Google realized that they needed to create a mobile path - Apple could dump them at anytime, Nokia didn't like them and obviously MS was not going to choose them. BBm was neutral but BBM users weere not huge internet surfers. And of course, they built a business of giving the OS (in search) and making money on ad clicks - so of course, android followed their game plan. Google's main mistake was pissing off Apple - first by copying too closely and then not agreeing to update MAPS with Siri so while they made short terms gains like with MAPS, now 3 years later, they are down to 33% market share on iphones (and will continue to drop), Apple no longer has to pay Google for map searches and now safari has added other search choices, google searches will continue to drop across all apple devices. So whiel Apple creates not only world class hardware design but the only integrated softwareOShardware phone (and 64bit), Android is further splintering apart. As Google has no official presence in China, no google search on android phones sold by makers there and no google store. Amazon has their own android also ... as you note, samsungs slumping smartphone profits are dropping plus the fact no other android manu is making money, it's a breakeven business - of course, gaining maretshare is important if there was no APPLE ... Apple will continue to take 80-85% of ALL THE PROFITS in the smartphone segment so they do not care about overall marketshare. Android's main growth in developing countries - does that actually help or hurt google?

  34. PaulR79

    Less handsets per year

    Apple produced, until recently, one size iPhone. It allowed all third-party accessory sellers to maximise their profits without having to design more sizes. That has slightly changed now with the new iPhone and even the change to 4" prior to the new phones. Still, that's only two phones that they have to build accessories for right now.

    Look at other manufacturers such as HTC who, despite saying they'd reduce their product numbers, still pump out way too many phones in a year. If they stuck with the original One lineup (X, S, V) but with better specifications they would have a device for each price point. Instead they have the One M8, the One mini 2 (really great name..) and a bunch of Desire (9 at last count) phones at various specs for sale. Throwing a bunch of crap and hoping something sticks is not a way to succeed when you don't have a large budget. Samsung can afford to do it, HTC and many others cannot.

    1. Anonymous Coward
      Anonymous Coward

      Re: Less handsets per year

      I suspect the Samsung approach is like the HP printer approach, and that's why they use plastic.

      Plastic tooling has a certain life, while tooling for metal shells requires constant regrinding. Once you are making metal shells in high volume, you have a production system that you don't want to change; there is an awful lot of capital invested in the end to end cycle with the offline processes and the metal finishing. Although it's not quite as simple as that, with plastic moulding the machine goes bonk and there is a chassis that might just need a quick paint process before assembly.

      With plastic, there comes a point at which the moulds are beyond economic repair, so at this point you might just as well release a new model with new moulds. You can add in a few design optimisations you thought of since last time, a bit more memory, a faster CPU and that OS update; bingo, a new model.

      HTC is trying to do it with metal cases and, by all accounts, rather complex internals. I suspect they can't compete on the model release cycle, but because they are in the Android market, they can't just sell one model for an entire year and that's it.

  35. a53

    I just despair

    If you want an Apple device buy one, if you want someone else's, buy it. Why flame the one you don't want ? Utterly pointless. The arguments surrounding iOS and android are well known and worn out.

  36. Anonymous Coward
    Anonymous Coward

    The Reg is rarely weaker than when it ventures out of technology and into economics.

    As others have said competition doesn't make markets die. It does drive innovation and squeeze weaker players out of the market, but it's the Android ecosystem playing the long game here.

    5 years ago you could sensibly argue that Apple had a technology lead. People might argue over the size of it, but buying an Apple device made sense for technology buffs as well as fashionistas.

    Since then, fierce competition in the Android ecosystem has led to many innovations that didn't work and a few important ones that did. Failures were discarded, successes kept and Android now does many more things much better than IOS. The tight coupling of software and hardware still gives Apple a big market, but the next phase of development is where it's going to see problems.

    In the next phase of competition, feature overload has become relatively dull and R and D shifts to user experience and to improving the quality of low-end, low margin devices. In order to play here, Samsung need to work hard to make their feature-overloaded devices more iPhone-esque to remain a viable high end alternative. It's clear from the Galaxy 3 onwards that more and more features won't maintain the momentum they've built.

    Similarly, Apple need to maintain the exclusivity and desirability of the phone in the face of ever more competent low margin products and, critically, in the face of a commoditizing market where whizzy new features are much less of a draw than they were when Apple built its mobile empire.

    As we've seen from commoditization in the laptop market it's a tough task and it's one that the Chinese will be very confident of doing well in. Android is their weapon of choice and it's here to stay.

    1. Rainer

      > As we've seen from commoditization in the laptop market

      > it's a tough task and it's one that the

      > Chinese will be very confident of doing well in.

      > Android is their weapon of choice and it's here to stay.

      People line up to buy Apple laptops. too. At two or three times the prices of other manufacturers' products.

      They own almost all the profit in that market - and they have done so since a very long time.

      Moves of Intel et.al to get out of that situation have only further cemented that lead (Netbooks -> MacBookAir -> UltraBooks -> ?)

      Android may well be winning the market-share crown - and the "preferred by geeks and people who don't buy Apps"-title.

      But even Google is finding out that this is not a large enough niche of the market to make targeting for it a successful long-term business strategy....

      1. Anonymous Coward
        Anonymous Coward

        The 'market share crown' corner of the market is, by definition, not a niche.

        OS X accounts for about 10% of the computer market at last count from The Register. They're the niche player, and you're 100% right that they're in the niche everyone wants to be in but the idea that the people who account for 90% of the market are suddenly going to give up and go home (which is the point Orlowski appears to be making) is absurd.

        Apple have done exceptionally well to define their markets and build a moat that is very tough for others to bridge which is how they can reap their super-normal profits, but in order to stay there they're going to need to keep taking risks in redefining their products to stay ahead and my contention is that that's going to get harder as mobile technology matures and $100 phones become good enough for most people.

        As for the idea that Google find the current situation unpalatable. I see no evidence that they do. Google's search product is by far their priority number 1 and keeping the 'market share crown' niche (sic) protects them in the new world. Making money on Android directly would be nice, but it's not their priority.

        1. Anonymous Coward
          Anonymous Coward

          "as mobile technology matures and $100 phones become good enough for most people."

          $100 phones are already good enough for most people and most people who want a phone already have one.

          You need to adjust your understanding of the facts.

          1. Aitor 1 Silver badge

            $100 phones.

            wrong.. for 90$ I can get a quad core, 1GB RAM, 8GB Flash, Sd card, 5" IPS screen, scratch resistant mobile. android 4.4

            That is more than good enough, and even cheaper.

            If you need good quality GPS/Glonass and 8 cores, and 64GB internal flash, you can get that for 300$.

          2. Anonymous Coward
            Anonymous Coward

            I'm not really sure what this means. If you were right then Apple and Samsung wouldn't ship millions of phones and make the lions share of the profit.

            They're the clear leaders in the Smartphone market. My contention is that they'll have a tough time staying there as commoditisation overtakes feature innovation as the key driver in the market.

            My 'understanding of the facts' has the clear advantage of being based on the facts.

            1. Anonymous Coward
              Anonymous Coward

              "I'm not really sure what this means. "

              Probably because you don't understand what "most" actually means.

              http://www.oxforddictionaries.com/definition/english/most

              See: 1.1

              "If you were right then Apple and Samsung wouldn't ship millions of phones and make the lions share of the profit."

              This is illogical and provably (in a mathematical sense) wrong.

  37. cali

    Fandroids in denial

    Fandroids on this site downplaying Apple while using an iPhoney and crying about Apple's long lines is music to my ears!!

  38. Frankee Llonnygog

    I am in favour of X therefore Y cannot succeed

    Fanbois, fandroids, fandoze, fanberrys - perhaps some educated person can tell me the name of this logical fallacy?

    One observation - phones are consumer technology. A good barometer of what will succeed in the consumer market might be - the opposite of what El Reg readers favour. We are the sort of people who enjoy taking things to bits and 'improving' them. That's the opposite to most consumer behaviour.

    1. FrankAlphaXII

      RE: Logical Fallacy

      Name calling would be argumentum ad hominem, as it is an insult to one's character with no real substance behind it. Its not really a logical fallacy, its an intentional fallacy to provoke a reaction out of people.

      1. Anonymous Coward
        Anonymous Coward

        Re: RE: Logical Fallacy

        Argumentum ad hominem is this:

        <Insert name here> believes that the theory of evolution is correct

        <Insert name here> is a convicted murderer / is frequently wrong about things

        Therefore the theory of evolution is wrong.

        Name calling is not argumentum ad hominem, as it is necessary that both parties agree on what <Insert name here> is like for the fallacy to work. Generally speaking it is a fallacy that works better, the more accurate the description of <Insert name here> is known to be, because it is intended to deflect from the actual beliefs being discussed.

  39. Unicornpiss Silver badge
    Flame

    The author draws a lot of unfounded conclusions

    It's clear the author is a Fanboi. Nothing wrong with that, as we are all partial to what we like.

    "Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets." --Wow, that's a leap that defies logic.

    Does the author really think that all of us unwashed Android users were just waiting and praying for the 6 to come out so we can cast off our chains and go to where life is warm and fuzzy? It will take a bit more to make me switch to Apple than a phone that now has most of the capabilities that I've been enjoying for years on my last several Android phones. Oh wait, no SD card slot on the Jesus phone? Oh wait, no file system access? Oh wait, I have to use iTunes as an arbitrator for my interface with my phone's files? What, I can't change my battery without taking apart the phone? Bleah.

    I think it's a much more reasonable conclusion that a lot of Android smartphone makers are doing badly because there's so many of them doing the same thing, much like the PC Clone explosion in the late 80s and 90s. So the market is glutted and few prosper. Apple has a monopoly on Apple stuff. If Apple's OS was available to manufacturers to put on their own hardware, how well do you think it would fare compared to Android OS? Do you think it would still "just work"? (and trust me, if you've supported hundreds of Apple devices, you know that this is a smokescreen anyway) Android developers have gone through the pain of making sure that it does a pretty fair job of supporting all the crazy hardware that's out there. Apple would be playing catch up for years, if they could even manage it. Which is not to say that iOS doesn't have some benefits. Because you're in a walled village with Apple's ecosystem, apps are better vetted for malware and iOS is inherently more secure, which also means it is less flexible for users unfortunately.

    Now let's flip it around--if Apple opened up its hardware and let you buy an iPhone with Android OS, how many would do this? Apple does make pretty devices, and now that its hardware specs are up to snuff (except for the aforementioned lack of an SD card slot), I'd consider buying an Apple phone if I could get Android OS on it. Maybe not enough to give up my S5 though, which has a better camera, better processor, and is likely a bit less fragile than the 6.

    If iTunes was revamped so it was more about functionality and less about marketing, that would help a bit. Why does iTunes think that all I want to do in life is play music/video or buy things from Apple? If you want to back up your device, you have to dig for this function. And if you have multiple iTunes accounts in your household, it's truly an ugly mess. With my Android device, I have multiple options, including an excellent cloud-based backup that rivals anything I've seen from Apple. At my last phone upgrade it even remembered the wireless networks I'd connected to.

    Sorry, just not buying the observations and subsequent conclusions drawn by the author.

  40. Anonymous Coward
    Anonymous Coward

    Too much magic mushroom powder in your diet

    Its all irrelevant chaps, soon the sun will start emmitting electromagnetic pulses that will make tin cans and fine quality string the in thing in communications...

    The end is nigh, repent ye sinners whut brought Blackberry to its knees!

  41. Camilla Smythe
    Coat

    Fucking PhoneTard Wars

    Mine will be the one that connects via the 'land line' and has its ring switched off.

  42. tempemeaty

    Each for it's purpose and in it's place.

    And if it hasn't already happened, the tablet market will follow the same pattern and every market will saturate. When this happens then it becomes apparent that they are not PC replacements. Each device has it's purpose and it's place.

  43. Dieter Haussmann

    Grim reading for Apple-haters.

    Guffaw.

  44. Ted Treen
    Facepalm

    I'll say it again...

    If what you've bought does what you want, and it's reliable and at a price you're happy to pay, then it means it's a good product, and bully for you for buying it!

    It does not mean that anyone who chose & bought something else is an idiot, a dickhead or a moron.

    Neither does it mean that you're a superior being because of your choice.

    Whether you've bought Android, iOS or Windows Phone just enjoy what you have, and accept that others might have different criteria - all equally valid to them.

    Enough with the intolerant arrogant fan factions of all types, already!

  45. David 138

    It would be a sad world with Apple in power. Mobile development would stall. PC hardware development would stall if not completely stop. Everything would be an in app payment, everything would come from over priced App stores. We would all be, "Writers", "Musicians", "Graphic Designers" or "Web Professionals". This would mean that websites only worked on firefox because someone told us it was good 12 years ago. "Responsive Design" would become standard on all websites meaning that no one could actually use the web effectively anymore for anything and there would be no way to turn it off. On the upside everyone would quickly die of cancer from having to use iTunes.

  46. Magnus_Pym

    iPhone vs ?

    Our office moved over to IPhones this year. Some of the toys you can get for it are great but I still miss features that were standard on my Symbian phones years ago. It certainly doesn't hold a call so well in poor reception areas either. As a hand held computer device it is peerless as a mobile communication device, not so much.

  47. Martijn Otto

    Don't forget wave

    The iPhone 6 will support Wave from the moment of unpacking, providing lightning fast charge cycles!

    http://i.imgur.com/TX9dbK6.jpg

  48. Lost in Cyberspace

    Ecosystem is king

    I think the Ecosystem is easily as important as the device itself. Google needed the manufacturers in the early days to gain market share, and the manufacturers needed Android to attract customers (I don't want a smartphone with no App Store, that would be like going back to Windows Mobile 6).

    But Android is huge now, and can easily compete with iOS. Google could probably shut out all the others and start making money. I'm not sure that's a good thing for consumers though.

  49. Anonymous Coward
    Anonymous Coward

    If that is the case then Apple should be afraid because all they have to increase sales is a fading image of Jobs to keep the fans coming back for more and that will soon end as well.

  50. jojo90

    I've gone from HTC Windows CE > iPhone 3G > iPhone 4 (stolen) > iPhone 4S (replacement) > HTC One M7

    iPad 1st Gen > iPad Mini (still own) > Samsung Galaxy Tab S

    In my experience transition from Apple > Android and running two at the same time isn't an issue. 95% of the apps I use are available on both devices. There are some I use on Android that aren't on Apple, and some on Apple that aren't on Android. Some Android apps are better implemented (for example RAW developers) and some better on Apple.

    The thing is I'm getting upgradeitus on my M7 at the moment however a year and a half on there isn't anything compelling enough out there. Aside from the camera the M7 is still better than the iPhone 6; Higher resolution display, more RAM, better speakers, etc. I've been enjoying (and tiring of) these features for quite some time. Personally I think the M7 looks better than the iPhone 6. That things just FUGLY! You can pick up a used M7 for £150-180 on eBay now! Crazy.

    The things the iPhone can do that Android can't I don't really care about. The iPad is going on eBay and I never ask to use the missus's iPhone for anything. The things Android can do that iOS can't I DO CARE ABOUT;

    -Downloading Torrents

    -Downloading from Newsgroups

    -Playing downloaded content (in almost any format) without faffing about with iTunes

    -Connecting the SD card from my camera to Android and being able to properly catalogue and file the images

    -Connecting a high capacity USB key to Android allowing me to backup said images

    -Having various background process running backing up specific folders to Dropbox & Google Drive

    -Ability to expand the storage by up to 128Gb at a FRACTION of the cost of apple.

    --Ability to eject and plug in said storage to my Macbook :).

    -Streaming content via Chromecast for minimal hardware outlay.

    -Not essential but live wallpapers keep things fresh. I've got the doom guy playing away on my phone background right now :).

    Sure Apple devices are OK to look at (except the iPhone 6 and Apple Watch) but they seem to lag a couple of years behind Android & are lacking some key features.

    I'll probably stick with the M7 for another couple of years :).

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