In times gone by, I’d get a kick out of watching any local band play live.
If they were good, I loved it. If they were bad, well — I also loved it. It was strangely entertaining to watch a group try so hard and sound so terrible.
In much the same way, I got a kick out of a Business Insider article over the weekend with the catchy headline The iPhone 6 Had Better Be Amazing And Cheap, Because Apple Is Losing The War To Android.
I hope you enjoy bad bands too.
Kudos to the Business Insider editor, who, in the site’s well-established tradition, has molded a headline that’s simultaneously brain-dead and inflammatory.
Singing lead is writer Jim Edwards. Do watch closely, because Jim is the guy who will give you the most bang for your entertainment buck.
A few bits of his insight and logic:
Is [Apple] boxed in as a brand and a platform that merely serves the richest 15% of the world, while everyone else uses Android?
Absolutely. Apple is “boxed in” — earning only 60-80% of all smartphone profits.
Can a mobile device that serves such a small minority of the planet stay relevant in the years to come?
Let’s see … the Mac has remained relevant for the last 15 years with a small market share. BMW has remained relevant with only 3% market share. And months before its launch, iPhone 6 is already generating a huge amount of buzz. (Including positive articles written by the same Jim Edwards, as noted further down.) Clearly a device doomed to irrelevancy.
Apple is holding on to a sizeable chunk of the market. But Android is eating the rest.
Oh, so Apple is actually holding onto its share, despite Android’s ravenous appetite. Sound the alarm!
Note that the average Android price is heading toward $200 and the average iPhone price is heading toward $600. Apple is asking the question, do you want to pay three times as much for our phones? Thus far, 80% of the market has answered “no.”
And 20% have answered “yes” — which has been more than enough to give Apple that absurdly large share of the profits.
Branding and quality are important, of course. Apple usually wins there. And Apple’s business model is to only do the most profitable thing, not the most widespread thing. So loss of share may not bother Apple CEO Tim Cook. It may, in fact, be good for both margins and shareholders.
Yes, yes and yes. So, what’s your point again?
But the history of computing has one iron-cast lesson for us all: Devices get cheaper over time, and better over time. The high-priced seller usually loses. This is why nobody uses $8.8 million Cray computers anymore.
Maybe I woke up on the wrong side of the universe today. I could have sworn that the high-priced seller — Apple — didn’t lose with iMac, iPod, iPhone and iPad. In fact, it pretty much beat the crap out of everyone.
Further, Cray is not only still around — it’s doing pretty darn well.
Other than that, I’m with ya.
If this article weren’t enough, we must also deal with Jim’s Multiple Personality Disorder, as presented in his personal production of “Four Days In May.” In four successive days, he ricocheted between the positive and negative view of Apple with these headlines:
May 28: This Smartphone Pricing Chart Shows Apple Is Fighting An Unstoppable Force
May 29: This Simple Statistic Shows How Apple Will Get A Gigantic Boost In Sales From iPhone 6
May 30: Apple Stock Is Going Through The Roof As People Figure Out Just How Massive The iPhone 6 Launch Will Be
May 31: The iPhone 6 Had Better Be Amazing And Cheap, Because Apple Is Losing The War To Android
I know it’s confusing. So let me clarify Jim’s position for you.
Apple, which is fighting an unstoppable Android force, will get a gigantic sales boost from iPhone 6, which will in turn drive the price of AAPL through the roof — but only if Apple heeds Jim’s advice, because clearly it is losing the war.
Alright, then for Jim’s benefit, let me clarify Apple’s position:
Market share has never been, and will never be, Apple’s goal. Apple sells a premium product to those who believe that certain things (simplicity, design, quality, ecosystem) are worth the premium. This business model is the reason why Apple rose from the ashes to become the world’s most valuable company. If it ever strays from that approach, I would fear for its future.
I do wonder why Jim chooses to focus on imagined Apple crises when Samsung itself has confirmed its slowing growth and declining profits. Then again, why ruin a perfectly good story with the facts?
I know it can be difficult to see vapid opinions like Jim’s presented as legitimate news. But since you can’t change Jim’s outlook, it might help if you change yours.
Just remember, this isn’t journalism. It’s a badly performed mash-up of news and opinion.
Seen in the right spirit, it can be good for hours of entertainment.
Tags: apple business insider