AAPL - Apple Inc.

[Guest valueInv]

Oh I also don't like Tim cook. At all. He's uninspiring, not funny, and also had a big crush on lance Armstrong.

 

That's a lot of credibility right there. ;)

[txlaw]

Let's address the iPhone first.

On 1 - ASPs have been more or less stable..How do you know that competition is eroding margins? How do you know that it is not costs?

 

Lets say ASPs decrease going forward. Is it because competition is forcing prices down? Is it because Apple is entering lower priced segments as the higher priced segments saturate? How do you know?

 

Apple is "entering lower priced segments" (iPhone product line consists of both high-end iPhone 5s and lower-end iPhones) because of competition, which is taking away iPhone unit sales.  Just take a look at Galaxy sales (as pointed out by VAL) and the "overwhelming demand" for the S4 in order to understand that the high-end of the market is not "saturated."  That's wishful thinking on your part.

 

Note that AAPL is smart to mitigate this loss of market share (and concomitant loss of unit sales) at the high end by continuing to sell the lower-end iPhone models at great margins.  However, what affect does that have on total GM dollars from the iPhone product line when unit sales growth is slowing?

 

Here's what Peter Oppenheimer and Tim Cook said on the CC about iPhone ASPs:

 

The iPhone ASPs were down sequentially about $28 as you noted. And this was driven primarily by mix. The largest factors were an increase in the iPhone 4 mix, which resulted from or making the iPhone 4 more affordable in many markets. And also mix within the iPhone 5 as it was in its second full quarter.

 

And then on iPhone margins:

 

Toni, we don’t provide margins by product or within product line. But I talked about two factors that were impacting gross margin on a sequential basis. The first is leveraging, that’s largest of the two on the lower sequential revenue. But we also expect to see a different product mix and that’s primarily related to iPhone.

 

If fixed costs (not just component costs, but other costs incorporated within COGS) are going up faster than unit sales (and therefore revenue growth), that is loss of leverage.  Note that Tim Cook said that last year costs were historically low.  On top of that, you have a "different product mix" where gross margin dollars per unit is likely smaller.

 

Your man Horace Dediu believes that iPhone margins are crazy large and contribute a huge amount to Apple's overall gross margin dollars total.  If gross margins per iPhone unit are shrinking and iPhone unit sales growth is slowing, then that translates to reduced earnings for the iPhone product line and reduced Apple earnings, as we saw this quarter.

 

If you think iPhone GM dollars will go up substantially more from here, you are likely betting that a new iPhone launch will save the day on ASPs -- and maybe it will, but that's not necessarily a great bet. 

 

Keep the faith, though!

 

Where does Cook mention that he is going to lower priced segments because of competition? oh wait, thats just your assumption.Could it be that he is going to those segments because of saturation? Here is a barometer for the entire industry:

http://files.shareholder.com/downloads/QCOM/0x0x656391/d99b37a5-1299-4146-ba3a-a0894adfa0c8/Q2FY13%203G-4G%20Devices.pdf

 

Funny you should mention Horace, he seems to agree with me on component costs:

 

http://www.asymco.com/2013/04/25/margin-call-2/

 

The global market for smart phones has not reached saturation.  That's really the market we're talking about here, and most folks would agree that there's a long runway for smart phone sales.  And remember, when it comes to getting a smart phone, a consumer has the choice of going for hardware on the high end, low end, or somewhere in between, and then he also has a choice of OS. 

 

So let's take China, for example.  Here's Tim Cook on the CC:

China has a unusually large number of potential first-time smartphone buyers, and that’s not lost on us. We’ve seen a significant interest in iPhone 4 there and have recently made it even more affordable to make it even more attractive to those first-time buyers. and so we’re hopeful that will help iPhone sales in the future.

 

That doesn't sound like market saturation to me. 

 

Instead, what it sounds like is that in order to keep iPhone unit sales (with iOS 6.1 licenses embedded into the price) growing in the face of stiff competition from Android device manufacturers, Apple has to sell their OS in the form of lower end hardware.  These are disguised price cuts that are starting to show up in ASP.  In fact, as I pointed out in my last post, management specifically noted that iPhone ASP decline was driven primarily by product mix. 

 

So the question to ask is whether Apple will need to continue to lower ASP to keep iPhone unit sales growing and whether iPhone GMs will stay constant or go down.  ASP and gross margins are connected because of the operating leverage associated with selling iPhone. 

 

I don't disagree with you that component costs have probably had an effect on gross margins, especially since Apple is reliant on people like Samsung for components (e.g., displays).  But take a look at the CC transcript again.  Management is guiding for lower GMs next quarter despite having better costs next quarter.  How can that be?  They told us this would be the case because of: (1) "loss of [operating] leverage on sequentially lower revenue"; and (2) "a different product mix."  Sounds like we could see further ASP decline next quarter and that GM on a unit basis is declining due to product mix.

 

I'm gonna go with Apple management over Horace Dediu.

[Guest valueInv]

The global market for smart phones has not reached saturation.  That's really the market we're talking about here, and most folks would agree that there's a long runway for smart phone sales.  And remember, when it comes to getting a smart phone, a consumer has the choice of going for hardware on the high end, low end, or somewhere in between, and then he also has a choice of OS. 

 

So let's take China, for example.  Here's Tim Cook on the CC:

China has a unusually large number of potential first-time smartphone buyers, and that’s not lost on us. We’ve seen a significant interest in iPhone 4 there and have recently made it even more affordable to make it even more attractive to those first-time buyers. and so we’re hopeful that will help iPhone sales in the future.

 

That doesn't sound like market saturation to me. 

 

Instead, what it sounds like is that in order to keep iPhone unit sales (with iOS 6.1 licenses embedded into the price) growing in the face of stiff competition from Android device manufacturers, Apple has to sell their OS in the form of lower end hardware.  These are disguised price cuts that are starting to show up in ASP.  In fact, as I pointed out in my last post, management specifically noted that iPhone ASP decline was driven primarily by product mix. 

 

So the question to ask is whether Apple will need to continue to lower ASP to keep iPhone unit sales growing and whether iPhone GMs will stay constant or go down.  ASP and gross margins are connected because of the operating leverage associated with selling iPhone. 

 

I don't disagree with you that component costs have probably had an effect on gross margins, especially since Apple is reliant on people like Samsung for components (e.g., displays).  But take a look at the CC transcript again.  Management is guiding for lower GMs next quarter despite having better costs next quarter.  How can that be?  They told us this would be the case because of: (1) "loss of [operating] leverage on sequentially lower revenue"; and (2) "a different product mix."  Sounds like we could see further ASP decline next quarter and that GM on a unit basis is declining due to product mix.

 

I'm gonna go with Apple management over Horace Dediu.

You were the one who brought up Horace.

 

There are typically three price segments: High-end, mid-range and low-end. Apple today plays only in the high end. The only other player with traction in the high end is Samsung. High end users are also adopt technology earlier that other price segments. It is the high-end that is saturating.

Most people who could afford a $600 phone have already bought one. Saturation of the high end segment is likely to cause a slow down in the overall growth of smartphones. That is what you are seeing in the Qualcomm numbers. People who ship 3G/4G phones need to buy licenses from them.

 

What Cook is talking about is entering the lower priced segments. Guess which segment first time buyers in China belong to? As they enter lower priced segments, you are going to see ASP decline. However, that is not the same as pricing pressure due to competition. They are two different things. If Prosche decided to enter the mid-range market, their ASP will decline too. That does not mean they are under pricing pressure from Ferrari.

 

If you ship or manage products, you will understand segmentation.

[Palantir]

I think the Porsche analogy is good. Being the premium product at the low end is a good strategy. Think 3-series v 5-series v 7-series for BMW.

 

 

Furthermore, I don't think declining margins are really all that bearish. Sometimes they will go up, sometimes they will go down, let's think about the long term health of the firm.

[Guest valueInv]

One more thing on Cook's comment on making phones more affordable: It does not necessarily mean dropping prices. It also means providing financing for Apple devices as they have recently done in China and India.

[Viking]

One of the risks to Apple of offering a lower priced phone is that it cannibalizes a large chunk of current sales. This would hit margins (percent and total). This looks to be what is happening with the mini (it will take a year for the business to calendarize and total profit should be off and running again). This is also the correct business decision. Over time this strategy should, among other things, maximize total profit (and market share, revenue etc). I think it would be a mistake to limit the business to the high end segment. The more people Apple brings in to their ecosystem with multiple devices the more money Apple will have to invest to improve their moat. We are still in the early stages.

[Guest valueInv]

One of the risks to Apple of offering a lower priced phone is that it cannibalizes a large chunk of current sales. This would hit margins (percent and total). This looks to be what is happening with the mini (it will take a year for the business to calendarize and total profit should be off and running again). This is also the correct business decision. Over time this strategy should, among other things, maximize total profit (and market share, revenue etc). I think it would be a mistake to limit the business to the high end segment. The more people Apple brings in to their ecosystem with multiple devices the more money Apple will have to invest to improve their moat. We are still in the early stages.

 

The problem with the iPad mini is that it is better than the iPad. Which is why when I played with it the first time, I posted here that the mini is the future of the iPad.

 

Apple can minimize iPhone cannibalization by differentiating the devices. Think fingerprint sensor.  ;)

[txlaw]

The global market for smart phones has not reached saturation.  That's really the market we're talking about here, and most folks would agree that there's a long runway for smart phone sales.  And remember, when it comes to getting a smart phone, a consumer has the choice of going for hardware on the high end, low end, or somewhere in between, and then he also has a choice of OS. 

 

So let's take China, for example.  Here's Tim Cook on the CC:

China has a unusually large number of potential first-time smartphone buyers, and that’s not lost on us. We’ve seen a significant interest in iPhone 4 there and have recently made it even more affordable to make it even more attractive to those first-time buyers. and so we’re hopeful that will help iPhone sales in the future.

 

That doesn't sound like market saturation to me. 

 

Instead, what it sounds like is that in order to keep iPhone unit sales (with iOS 6.1 licenses embedded into the price) growing in the face of stiff competition from Android device manufacturers, Apple has to sell their OS in the form of lower end hardware.  These are disguised price cuts that are starting to show up in ASP.  In fact, as I pointed out in my last post, management specifically noted that iPhone ASP decline was driven primarily by product mix. 

 

So the question to ask is whether Apple will need to continue to lower ASP to keep iPhone unit sales growing and whether iPhone GMs will stay constant or go down.  ASP and gross margins are connected because of the operating leverage associated with selling iPhone. 

 

I don't disagree with you that component costs have probably had an effect on gross margins, especially since Apple is reliant on people like Samsung for components (e.g., displays).  But take a look at the CC transcript again.  Management is guiding for lower GMs next quarter despite having better costs next quarter.  How can that be?  They told us this would be the case because of: (1) "loss of [operating] leverage on sequentially lower revenue"; and (2) "a different product mix."  Sounds like we could see further ASP decline next quarter and that GM on a unit basis is declining due to product mix.

 

I'm gonna go with Apple management over Horace Dediu.

You were the one who brought up Horace.

 

There are typically three price segments: High-end, mid-range and low-end. Apple today plays only in the high end. The only other player with traction in the high end is Samsung. High end users are also adopt technology earlier that other price segments. It is the high-end that is saturating.

Most people who could afford a $600 phone have already bought one. Saturation of the high end segment is likely to cause a slow down in the overall growth of smartphones. That is what you are seeing in the Qualcomm numbers. People who ship 3G/4G phones need to buy licenses from them.

 

What Cook is talking about is entering the lower priced segments. Guess which segment first time buyers in China belong to? As they enter lower priced segments, you are going to see ASP decline. However, that is not the same as pricing pressure due to competition. They are two different things. If Prosche decided to enter the mid-range market, their ASP will decline too. That does not mean they are under pricing pressure from Ferrari.

 

If you ship or manage products, you will understand segmentation.

 

There is a difference between market segmentation and market saturation.

 

The market for smartphones, generally, has not been saturated.  I think we might be able to agree on that.  However, I also contend that the market for "high end" smart phones hasn't been saturated either and, in fact, will not be saturated due to the nature of the consumer electronics industry.  (I explain below.)  Therefore, I do not attribute Apple's focus on older iPhone models simply to high end market saturation.  Instead, it's a direct result of the commoditization of the OS layer.

 

I have yet to see data showing that "high end" smart phone sales are flat.  Instead, analyst reports are showing that growth in that segment of the market is slowing, while growth in the lower priced segments is accelerating.  That is not because of saturation in the high end, per se.  It is because of commoditization of the product (bundled OS and hardware), where there is a blurring of functionality in the price segments.  (Clayton Christensen's worries appear to be coming true.)

 

What that means, I think, is that we will continue to see increased sales of "high end" smart phones going forward, especially since ASP decline will make these "high end" devices more within reach as time goes by.  However, because there won't be as much difference between the high-end phones and the mid-range (or even low-end) phones, most sales will be made in the low-end and mid-range segment.  Or we could even see segmentation by high-end, mid-range, and low-end effectively go away.

 

For example, iPhone 5 now has to compete with the HTC One, the Nexus 4, the Galaxy S4 and S3, Lumias, Z10s, etc.  Arguably all of these are considered high end phones, but some would say that the Nexus 4 and S3, for example, are not high end phones and, instead, are mid-range phones.  Either way, all these devices are substitutes for each other, and the price points vary greatly among them (16 GB Nexus 4: $350; 16 GB iPhone 5: $650; 32 GB HTC One: $575).  So, again, what we're seeing, IMO, is a blurring of the price segments, where eventually everyone will be able to afford the high end features because there won't really be many truly high end features left on the device/OS level.  Instead, software and services is where the money will be made.

 

This is standard fare in the consumer electronics space.  With consumer electronics, the distinction between low-end, mid-range, and high-end becomes much less relevant over time as ASP quickly declines and you reach an appliance-like level of functionality across the range of options.  Take a look at the PC market, and you'll see what I mean.  We're going to be seeing Haswell laptops/hybrids coming out this summer at awesome price points for consumers.  And that will be true of the "high end" as well, which will make those high end computers within reach of most people (if they want them).  But very few consumers care about the "high end" of the PC market now days because there is very little functional difference between high-end hardware and mid-range/lower-end hardware, which includes tablets. 

 

So what do we see Apple doing?  They are engaging in market segmentation. 

 

You're partially right that they are engaging in market segmentation because they have topped out in market share at the high end.  But they also have to engage in market segmentation by getting people into their OS ecosystem sooner rather than later, before commoditization (from the increased competition) screws them over.  I see their segmentation as price cuts where they are focusing on getting buy in to their OS and ecosystem for a future where software and services matter, rather than an embedded license business model. 

[blainehodder]

https://plus.google.com/+Scobleizer/posts/ZLV9GdmkRzS#+Scobleizer/posts/ZLV9GdmkRzS

 

 

Seems Ive should be able to work his magic on some of these no?  Lots of room for design improvement.  Huge demand.  Huge excitement.

[Guest valueInv]

https://plus.google.com/+Scobleizer/posts/ZLV9GdmkRzS#+Scobleizer/posts/ZLV9GdmkRzS

 

 

Seems Ive should be able to work his magic on some of these no?  Lots of room for design improvement.  Huge demand.  Huge excitement.

 

I expect Google Glasses to fail to get mass market adoption. I hope Apple does not waste time on stuff like this.

[Palantir]

^I think you're just jealous.

[blainehodder]

I expect AAPL will pursue the glasses.  I think Scoble's 6th point is worth noting:

 

There is a total generational gap that I found. The older people said they would use them, probably, but were far more skeptical, or, at minimum, less passionate about the fact that these are the future, than the 13-21-year-olds I met.

 

The social factor is a big problem with these...

 

Gargoyles represent the embarrassing side of the Central Intelligence Corporation. Instead of using laptops, they wear their computers on their bodies, broken up into separate modules that hang on the waste, on the back, on the headset. They serve as human surveillance devices, recording everything that happens around them. Nothing looks stupider; these getup’s are the modern-day equivalent of the slide-rule scabbard or the calculator pouch on the belt, marking the user as belonging to a class that is at once above and far below human society.

 

- Neal Stephenson – Snow Crash (Chapter 15)

 

But, while I a probably wont wear them, I somehow doubt younger people will care, particularly if they look more like Raybans than safety goggles.

[DCG]

But, while I a probably wont wear them, I somehow doubt younger people will care, particularly if they look more like Raybans than safety goggles.

 

Seems like it could be the ultimate tool for cheating on tests.

[Guest valueInv]

^I think you're just jealous.

 

Read my post on the innovation thread. Apple is more about user experience. Google seems to be more about science fiction.

[Guest wellmont]

https://plus.google.com/+Scobleizer/posts/ZLV9GdmkRzS#+Scobleizer/posts/ZLV9GdmkRzS

 

 

Seems Ive should be able to work his magic on some of these no?  Lots of room for design improvement.  Huge demand.  Huge excitement.

 

I expect Google Glasses to fail to get mass market adoption. I hope Apple does not waste time on stuff like this.

 

even if it doesn't the work they are doing on them will be valuable. at least goog is innovating. I would rather wear these than a watch. :)

[Guest valueInv]

https://plus.google.com/+Scobleizer/posts/ZLV9GdmkRzS#+Scobleizer/posts/ZLV9GdmkRzS

 

 

Seems Ive should be able to work his magic on some of these no?  Lots of room for design improvement.  Huge demand.  Huge excitement.

 

I expect Google Glasses to fail to get mass market adoption. I hope Apple does not waste time on stuff like this.

 

even if it doesn't the work they are doing on them will be valuable. at least goog is innovating. I would rather wear these than a watch. :)

 

You should read what Eric Schmidt had to say about them. And he is a uber nerd. :o

[Guest valueInv]

Parsad: what is your take on short term Apple price movements? It is rising too quickly. I am hoping for more buying opportunities over the next quarter but it looks like the window is closing.

[LC]

 

The problem with the iPad mini is that it is better than the iPad. Which is why when I played with it the first time, I posted here that the mini is the future of the iPad.

 

Apple can minimize iPhone cannibalization by differentiating the devices. Think fingerprint sensor.  ;)

Maybe...I still plan on getting an IPad because it's so much easier to read PDFs on it. Reading a 10-K or investment write-up on an IPad Mini is too much to bear, at least for me.

[Parsad]

Parsad: what is your take on short term Apple price movements? It is rising too quickly. I am hoping for more buying opportunities over the next quarter but it looks like the window is closing.

 

Can't predict market prices, but I think with the buyback and dividend increase, the stock will move back closer to intrinsic value...$500-525.  We'll see though...markets do crazy things.  Cheers!

[compoundinglife]

"S4 Samsung Style", to the tune of "gangnam style"

 

http://www.youtube.com/watch?v=ZJs7N3aM75Y

[Guest valueInv]

"S4 Samsung Style", to the tune of "gangnam style"

 

http://www.youtube.com/watch?v=ZJs7N3aM75Y

 

Of course, their launch is going to be based on ripping someone else's creation  ;D ;D ;D

 

They've caught up with Apple alright ::)

[Guest valueInv]

There is a difference between market segmentation and market saturation.

 

The market for smartphones, generally, has not been saturated.  I think we might be able to agree on that.  However, I also contend that the market for "high end" smart phones hasn't been saturated either and, in fact, will not be saturated due to the nature of the consumer electronics industry.  (I explain below.)  Therefore, I do not attribute Apple's focus on older iPhone models simply to high end market saturation.  Instead, it's a direct result of the commoditization of the OS layer.

 

I have yet to see data showing that "high end" smart phone sales are flat.  Instead, analyst reports are showing that growth in that segment of the market is slowing, while growth in the lower priced segments is accelerating.  That is not because of saturation in the high end, per se.  It is because of commoditization of the product (bundled OS and hardware), where there is a blurring of functionality in the price segments.  (Clayton Christensen's worries appear to be coming true.)

 

What that means, I think, is that we will continue to see increased sales of "high end" smart phones going forward, especially since ASP decline will make these "high end" devices more within reach as time goes by.  However, because there won't be as much difference between the high-end phones and the mid-range (or even low-end) phones, most sales will be made in the low-end and mid-range segment.  Or we could even see segmentation by high-end, mid-range, and low-end effectively go away.

 

For example, iPhone 5 now has to compete with the HTC One, the Nexus 4, the Galaxy S4 and S3, Lumias, Z10s, etc.  Arguably all of these are considered high end phones, but some would say that the Nexus 4 and S3, for example, are not high end phones and, instead, are mid-range phones.  Either way, all these devices are substitutes for each other, and the price points vary greatly among them (16 GB Nexus 4: $350; 16 GB iPhone 5: $650; 32 GB HTC One: $575).  So, again, what we're seeing, IMO, is a blurring of the price segments, where eventually everyone will be able to afford the high end features because there won't really be many truly high end features left on the device/OS level.  Instead, software and services is where the money will be made.

 

This is standard fare in the consumer electronics space.  With consumer electronics, the distinction between low-end, mid-range, and high-end becomes much less relevant over time as ASP quickly declines and you reach an appliance-like level of functionality across the range of options.  Take a look at the PC market, and you'll see what I mean.  We're going to be seeing Haswell laptops/hybrids coming out this summer at awesome price points for consumers.  And that will be true of the "high end" as well, which will make those high end computers within reach of most people (if they want them).  But very few consumers care about the "high end" of the PC market now days because there is very little functional difference between high-end hardware and mid-range/lower-end hardware, which includes tablets. 

 

So what do we see Apple doing?  They are engaging in market segmentation. 

 

You're partially right that they are engaging in market segmentation because they have topped out in market share at the high end.  But they also have to engage in market segmentation by getting people into their OS ecosystem sooner rather than later, before commoditization (from the increased competition) screws them over.  I see their segmentation as price cuts where they are focusing on getting buy in to their OS and ecosystem for a future where software and services matter, rather than an embedded license business model.

 

So I am in the market for a TV and a sound system. I looked at Amazon and I can get both for about $700. These are both commoditized consumer tech markets. So I figure that you could get me a Samsung 4K TV and a Bang & Olfsen system for the same price? I'll pay for shipping to California, of course.

 

BTW, I have a Rolex I bought from this guy on the street in NYC. Could you exchange it for me for a one from Switzerland? I'm sure that will be fine, since they look exactly the same and have the same features, no? It should be cheaper than my Casio which has more features.

 

I was also looking to buy a Nissan z 370. But since cars have been around for so long, the market must have commoditized. A Porsche 911 Carrera has the same features, I'm sure you can get me one for the same price as the Nissan, no?

 

Funny thing, desktops and laptops are commoditized too. And what extra features do Macs have? I wonder if Mac ASPs increased last quarter even though Apple had a lower drop in unit sales than your favorite company - Dell??? Hmmm......

 

The book I recommended for VAL9000 is probably very apt for you too:

 

http://www.amazon.com/Marketing-High-Technology-William-Davidow/dp/002907990X/ref=sr_1_4?ie=UTF8&qid=1367300563&sr=8-4&keywords=High+tech+marketing

 

I am sure you can find it for very cheap. After all, the only features it has are paper, dried ink and glue.  ;)

 

 

 

[Guest valueInv]

The market for smartphones, generally, has not been saturated.  I think we might be able to agree on that.  However, I also contend that the market for "high end" smart phones hasn't been saturated either and, in fact, will not be saturated due to the nature of the consumer electronics industry.  (I explain below.)  Therefore, I do not attribute Apple's focus on older iPhone models simply to high end market saturation.  Instead, it's a direct result of the commoditization of the OS layer.

 

Weren't you the guy arguing about how RIM was going to build a wonderful business selling QNX to all sorts of applications and devices?

[Guest valueInv]

If you think that 1, competition is eroding Apple's margins

2, Apple is not innovating

3, Competition has caught up with Apple

 

then you do not understand Apple.

 

I think 1) & 3) is happening as we speak...yet those margins will still be higher than its peers, even though they will come down.  On 2), I also think Apple is still innovating, but so are its competitors. 

 

Nothing worse than someone falling in love with a stock.  I highly recommend you not do that...whether it is Apple, Fairfax, Berkshire, Google or any other stock.  Market prices are there to serve you...that is the only thing you can control, as management and companies (even the best) will falter at times.  Cheers! 

 

Let's address the iPhone first.

On 1 - ASPs have been more or less stable..How do you know that competition is eroding margins? How do you know that it is not costs?

 

Lets say ASPs decrease going forward. Is it because competition is forcing prices down? Is it because Apple is entering lower priced segments as the higher priced segments saturate? How do you know?

 

On 3- If you understand Apple, you will understand that they sell simplicity and ease of use. That is their secret to their success. The iPhone was simpler than the BB, the iPad simpler than the laptop. And on and on. There's even a book about it:

http://www.amazon.com/Insanely-Simple-Obsession-Drives-Success/dp/1591844835

 

Now lets see the reviews for the latest Android flagship device:

http://allthingsd.com/20130423/galaxy-s-4-is-a-good-but-not-a-great-step-up/

http://venturebeat.com/2013/04/23/samsungs-galaxy-s4-a-crowd-pleaser-without-much-taste-review/

http://www.theverge.com/2013/4/24/4257254/samsung-galaxy-s4-review

 

There is a common underlying theme. They keep stuffing more gimmicky features, making it more complex and unusable. They even had to introduce an "easy mode". And in the next release, they'll have to add even more features to "keep ahead" of Apple.If you work in the tech industry, you know this disease very well - its called featuritis - adding more and more features for competitive reasons until your product becomes big, slow, complex and buggy. Resisting it takes a lot of discipline and Apple is one of the few companies I have seen which has that discipline. That is why Jony Ive took over the UI - to simplify it. 

 

The competition just took two steps back. You think they're catching up?

 

Read those reviews and read this:

http://9to5mac.com/2013/04/29/jony-ive-paints-a-fresh-yet-familiar-look-for-ios-7/

 

Like I said, Apple sells simplicity. Apple and Samsung are headed in opposite directions. Apple is making its products simpler, Samsung is adding layers of complexity. But they have the same features, right?  ;)

 

This is just the first step. Like I said, keep watching...

[txlaw]

So I am in the market for a TV and a sound system. I looked at Amazon and I can get both for about $700. These are both commoditized consumer tech markets. So I figure that you could get me a Samsung 4K TV and a Bang & Olfsen system for the same price? I'll pay for shipping to California, of course.

 

BTW, I have a Rolex I bought from this guy on the street in NYC. Could you exchange it for me for a one from Switzerland? I'm sure that will be fine, since they look exactly the same and have the same features, no? It should be cheaper than my Casio which has more features.

 

I was also looking to buy a Nissan z 370. But since cars have been around for so long, the market must have commoditized. A Porsche 911 Carrera has the same features, I'm sure you can get me one for the same price as the Nissan, no?

 

Hmm . . . and what is the market share of Rolex in the total watch market?  Market share of Porsche?  Market share of Bang & Olufsen?

 

Why don't you marinate on that for a while and then come back to me with some answers -- or some more snide comments instead, if you wish.  ;D

 

Funny thing, desktops and laptops are commoditized too. And what extra features do Macs have? I wonder if Mac ASPs increased last quarter even though Apple had a lower drop in unit sales than your favorite company - Dell??? Hmmm......

 

And what's the market share of OSX, pray tell? 

 

What about iOS? 

 

Could market share have anything to do with how ASPs are changing?  Hmmm . . .

 

The book I recommended for VAL9000 is probably very apt for you too:

 

http://www.amazon.com/Marketing-High-Technology-William-Davidow/dp/002907990X/ref=sr_1_4?ie=UTF8&qid=1367300563&sr=8-4&keywords=High+tech+marketing

 

I am sure you can find it for very cheap. After all, the only features it has are paper, dried ink and glue.  ;)

 

Thanks.  And here's a rec for you as well:

 

http://www.amazon.com/The-Innovators-Solution-Sustaining-Successful/dp/1578518520/ref=la_B000APPD3Y_1_6?ie=UTF8&qid=1339574940&sr=1-6