AAPL - Apple Inc.

[VAL9000]

"We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS.  "

 

How do you figure? Wheres the evidence?

Nexus 4 is the evidence.  It's firmly mid range in both pricing and capabilities. You need to be technically savvy enough to buy it, link it to your carrier, and set it up without in store help.  It's not a mass marketed device, so you can assume that only the more technically inclined are buying it.  And they are buying it by the millions.

 

 

[Guest valueInv]

"We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS.  "

 

How do you figure? Wheres the evidence?

Nexus 4 is the evidence.  It's firmly mid range in both pricing and capabilities. You need to be technically savvy enough to buy it, link it to your carrier, and set it up without in store help.  It's not a mass marketed device, so you can assume that only the more technically inclined are buying it.  And they are buying it by the millions.

 

What is Nexus 4s marketshare?

[Guest valueInv]

People with money are more technology literate and adopt new technologies quickly. The lower end is populated with late adopters. That is why you see the high end saturated and the low end still growing. The emerging markets are low end heavy. Apple is introducing a cheaper phone to mid range customers because everyone who is on the high end has already bought a smartphone. Its 5 years since the first iPhone was introduced.

 

See the saturation now?

 

I agree that there is saturation on the "high end," at least in the biggest markets (NA, Europe, etc.).  What I don't agree with is the notion that the "high end" market will remain static.  IMO, the "high end" will become a smaller market and the "mid-range" segment will swallow up a lot of those customers who were previously on the "high end."

 

The reason why Apple generated such astounding levels of growth over the last 5 years is because people who wouldn't traditionally be "early adopters" bought the latest and greatest iPhone.  This is a testament to the value proposition that the iPhone was and still is, despite being a very expensive product.  However, as the technology becomes "good enough," the high end segment becomes smaller.  Many who bought this "high end" product will go with "mid-range" or "less high end" products on their next upgrade.

 

We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS. 

 

I had a PM conversation with another board member who is very technologically savvy, and we discussed whether or not we would pay to upgrade to iOS 7.  We both agreed that we would not.  That's not good for Apple, at least with respect to iPhones. 

 

So you concluded this based on a sample size of two? Even better, you concluded that you don't want to upgrade to a new device - even though you don't know what the device is going to be like?

 

Sound, very sound. ;)

[txlaw]

People with money are more technology literate and adopt new technologies quickly. The lower end is populated with late adopters. That is why you see the high end saturated and the low end still growing. The emerging markets are low end heavy. Apple is introducing a cheaper phone to mid range customers because everyone who is on the high end has already bought a smartphone. Its 5 years since the first iPhone was introduced.

 

See the saturation now?

 

I agree that there is saturation on the "high end," at least in the biggest markets (NA, Europe, etc.).  What I don't agree with is the notion that the "high end" market will remain static.  IMO, the "high end" will become a smaller market and the "mid-range" segment will swallow up a lot of those customers who were previously on the "high end."

 

The reason why Apple generated such astounding levels of growth over the last 5 years is because people who wouldn't traditionally be "early adopters" bought the latest and greatest iPhone.  This is a testament to the value proposition that the iPhone was and still is, despite being a very expensive product.  However, as the technology becomes "good enough," the high end segment becomes smaller.  Many who bought this "high end" product will go with "mid-range" or "less high end" products on their next upgrade.

 

We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS. 

 

I had a PM conversation with another board member who is very technologically savvy, and we discussed whether or not we would pay to upgrade to iOS 7.  We both agreed that we would not.  That's not good for Apple, at least with respect to iPhones. 

 

So you concluded this based on a sample size of two? Even better, you concluded that you don't want to upgrade to a new device - even though you don't know what the device is going to be like?

 

Sound, very sound. ;)

 

Nope.  Just providing some anecdotal evidence from two early adopters on the board who know a lot of other people who think the same way.

 

The thesis on commoditization comes from watching how tech businesses go in the past and from reading folks like Clayton Christensen.

[txlaw]

"We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS.  "

 

How do you figure? Wheres the evidence?

Nexus 4 is the evidence.  It's firmly mid range in both pricing and capabilities. You need to be technically savvy enough to buy it, link it to your carrier, and set it up without in store help.  It's not a mass marketed device, so you can assume that only the more technically inclined are buying it.  And they are buying it by the millions.

 

HTC One Google edition demand also shows early adopters switching from iPhone, although it's unclear what percentage of these people were always in the Android camp and never bought iPhones. 

 

The comparable HTC One is priced about 20% lower than the iPhone 5.  Perhaps it's not accurate to say that the HTC One is not the highest of the high end, as it has superior hardware to the iPhone, but it's certainly not priced like the iPhone. 

 

In any case, it would be very difficult for me to point to studies showing this phenomenon, as we will only get evidence of this in the next 8 quarters. 

[Guest valueInv]

People with money are more technology literate and adopt new technologies quickly. The lower end is populated with late adopters. That is why you see the high end saturated and the low end still growing. The emerging markets are low end heavy. Apple is introducing a cheaper phone to mid range customers because everyone who is on the high end has already bought a smartphone. Its 5 years since the first iPhone was introduced.

 

See the saturation now?

 

I agree that there is saturation on the "high end," at least in the biggest markets (NA, Europe, etc.).  What I don't agree with is the notion that the "high end" market will remain static.  IMO, the "high end" will become a smaller market and the "mid-range" segment will swallow up a lot of those customers who were previously on the "high end."

 

The reason why Apple generated such astounding levels of growth over the last 5 years is because people who wouldn't traditionally be "early adopters" bought the latest and greatest iPhone.  This is a testament to the value proposition that the iPhone was and still is, despite being a very expensive product.  However, as the technology becomes "good enough," the high end segment becomes smaller.  Many who bought this "high end" product will go with "mid-range" or "less high end" products on their next upgrade.

 

We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS. 

 

I had a PM conversation with another board member who is very technologically savvy, and we discussed whether or not we would pay to upgrade to iOS 7.  We both agreed that we would not.  That's not good for Apple, at least with respect to iPhones. 

 

So you concluded this based on a sample size of two? Even better, you concluded that you don't want to upgrade to a new device - even though you don't know what the device is going to be like?

 

Sound, very sound. ;)

 

Nope.  Just providing some anecdotal evidence from two early adopters on the board who know a lot of other people who think the same way.

 

The thesis on commoditization comes from watching how tech businesses go in the past and from reading folks like Clayton Christensen.

 

Yeah, the same guy who predicted the failure of the iPhone in 2007. Maybe he'll get lucky this time:)

[Guest valueInv]

"We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS.  "

 

How do you figure? Wheres the evidence?

Nexus 4 is the evidence.  It's firmly mid range in both pricing and capabilities. You need to be technically savvy enough to buy it, link it to your carrier, and set it up without in store help.  It's not a mass marketed device, so you can assume that only the more technically inclined are buying it.  And they are buying it by the millions.

 

HTC One Google edition demand also shows early adopters switching from iPhone, although it's unclear what percentage of these people were always in the Android camp and never bought iPhones. 

 

The comparable HTC One is priced about 20% lower than the iPhone 5.  Perhaps it's not accurate to say that the HTC One is not the highest of the high end, as it has superior hardware to the iPhone, but it's certainly not priced like the iPhone. 

 

In any case, it would be very difficult for me to point to studies showing this phenomenon, as we will only get evidence of this in the next 8 quarters.

 

Please feel free to show us the data on how many they have sold and how many were sold to iPhone switchers.

[txlaw]

People with money are more technology literate and adopt new technologies quickly. The lower end is populated with late adopters. That is why you see the high end saturated and the low end still growing. The emerging markets are low end heavy. Apple is introducing a cheaper phone to mid range customers because everyone who is on the high end has already bought a smartphone. Its 5 years since the first iPhone was introduced.

 

See the saturation now?

 

I agree that there is saturation on the "high end," at least in the biggest markets (NA, Europe, etc.).  What I don't agree with is the notion that the "high end" market will remain static.  IMO, the "high end" will become a smaller market and the "mid-range" segment will swallow up a lot of those customers who were previously on the "high end."

 

The reason why Apple generated such astounding levels of growth over the last 5 years is because people who wouldn't traditionally be "early adopters" bought the latest and greatest iPhone.  This is a testament to the value proposition that the iPhone was and still is, despite being a very expensive product.  However, as the technology becomes "good enough," the high end segment becomes smaller.  Many who bought this "high end" product will go with "mid-range" or "less high end" products on their next upgrade.

 

We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS. 

 

I had a PM conversation with another board member who is very technologically savvy, and we discussed whether or not we would pay to upgrade to iOS 7.  We both agreed that we would not.  That's not good for Apple, at least with respect to iPhones. 

 

So you concluded this based on a sample size of two? Even better, you concluded that you don't want to upgrade to a new device - even though you don't know what the device is going to be like?

 

Sound, very sound. ;)

 

Nope.  Just providing some anecdotal evidence from two early adopters on the board who know a lot of other people who think the same way.

 

The thesis on commoditization comes from watching how tech businesses go in the past and from reading folks like Clayton Christensen.

 

Yeah, the same guy who predicted the failure of the iPhone in 2007. Maybe he'll get lucky this time:)

 

No idea if he predicted the failure of the iPhone -- I don't see why he would have done so, given its nature as a disruptive innovation. 

 

However, his theories on commoditization and de-commoditization are sound, and we will have to see over the next few years whether the OS really does commoditize.

[Guest valueInv]

Yes, he did. Look at the link I posted on this thread a little while back.

 

And the HTC data?

[txlaw]

"We even see that the true "early adopters" who gravitate towards the latest and greatest are increasingly willing to trade the highest of the "high end" devices for what one might call "mid-range phones" or "less high end" phones.  They're also deferring upgrading their devices to get the latest OS.  "

 

How do you figure? Wheres the evidence?

Nexus 4 is the evidence.  It's firmly mid range in both pricing and capabilities. You need to be technically savvy enough to buy it, link it to your carrier, and set it up without in store help.  It's not a mass marketed device, so you can assume that only the more technically inclined are buying it.  And they are buying it by the millions.

 

HTC One Google edition demand also shows early adopters switching from iPhone, although it's unclear what percentage of these people were always in the Android camp and never bought iPhones. 

 

The comparable HTC One is priced about 20% lower than the iPhone 5.  Perhaps it's not accurate to say that the HTC One is not the highest of the high end, as it has superior hardware to the iPhone, but it's certainly not priced like the iPhone. 

 

In any case, it would be very difficult for me to point to studies showing this phenomenon, as we will only get evidence of this in the next 8 quarters.

 

nexus and google edition phones are a tiny slice of the market. the reason you even here about them is that the tech influencers tweet and blog about how cool they are. these buyers often have Multiple devices that they are using. they also have a tendency to trade them or sell them when the newest shiny thing comes out. these are the same folks that bought the HP palms that were canceled weeks after they were released. they and a few of their friends buy these niche devices. the masses go to retailers and are Sold the iphone and regular galaxy.

 

I don't disagree that the "masses go to retailers and are Sold the iphone and regular galaxy."  Val and I were referencing "true early adopters," as opposed to the masses.

 

The more relevant question is whether the masses who bought iPhone, Galaxies, and other "high end" phones at records rates will trade down to "mid-range" devices on the next upgrade cycle as the technology is getting to the point of "good enough."  Or to frame it a different way, will these devices become more appliance-like such that it almost doesn't make sense to talk about the "high end" because the current "mid-range" devices will become the majority of the market?

 

This happened with the PC.  Given that smart phones, which arguably are just PCs in a different form factor, have been adopted at a rate far greater than PCs, we could easily see the "high end" of the market being obliterated even more quickly.

 

We will just have to wait and see. 

[txlaw]

Yes, he did. Look at the link I posted on this thread a little while back.

 

And the HTC data?

 

You want data that nobody has yet?  My my, you are demanding. 

 

And the link to your post re: Christensen?

[hardincap]

"Given that smart phones, which arguably are just PCs in a different form factor"

 

you couldn't be more wrong. PCs got started by being sold mostly to corporations for business use. smartphones are very personal devices sold to individuals. PCs sit under the desk. smartphones are carried around and people care about design, look and feel. design matters with smartphones. they're even status symbols in many places.

[txlaw]

"Given that smart phones, which arguably are just PCs in a different form factor"

 

you couldn't be more wrong. PCs got started by being sold mostly to corporations for business use. smartphones are very personal devices sold to individuals. PCs sit under the desk. smartphones are carried around and people care about design, look and feel. design matters with smartphones. they're even status symbols in many places.

 

Really? 

 

A PC is a tool -- a "bicycle for our minds," as Steve Jobs used to say.  Bill Gates built one of the most lucrative businesses ever selling these tools (and entertainment devices) not just to businesses, who obviously saw the value of thee PC, but also to consumers.  It is well known -- see Intel's many presentations on this -- that when the cost of PCs get to a certain multiple of monthly income, adoption goes through the roof.

 

Smartphones and tablets are simply the next iteration of PCs.  They are cannibalizing the sale of PCs because they are PCs -- only they're cheaper, better designed, powerful enough (especially because of cloud computing and ubiquitous connectivity), and, yes, more personal.

[hardincap]

you're right, they are under the surface PCs. they have a CPU, motherboard, ram, hard drive, etc. but the package is fundamentally different - leads to different functions, customer needs and desires, usability requirements, etc. this makes the smartphone business very different than the PC business. you cannot use the history of PC sales to foretell smartphone sales, for e.g.

[Guest valueInv]

Yes, he did. Look at the link I posted on this thread a little while back.

 

And the HTC data?

 

You want data that nobody has yet?  My my, you are demanding. 

 

 

So you're making claims based on data that no body has yet. In other words, you pulled your conclusion out of thin air.

 

 

And the link to your post re: Christensen?

Not willing to do a search?

 

http://www.businessweek.com/stories/2007-06-15/clayton-christensens-innovation-brainbusinessweek-business-news-stock-market-and-financial-advice

 

Scroll to the bottom.

[VAL9000]

you're right, they are under the surface PCs. they have a CPU, motherboard, ram, hard drive, etc. but the package is fundamentally different - leads to different functions, customer needs and desires, usability requirements, etc. this makes the smartphone business very different than the PC business. you cannot use the history of PC sales to foretell smartphone sales, for e.g.

 

The design thing isn't as important as Apple makes it out to be.  Lawsuits were launched over how similar phone hardware looks.  Each iteration just gets better at approximating a glass rectangle.

 

Here's some more evidence that Apple cares more than its customers:

http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-Phone-Cases-Holsters-Clips/zgbs/wireless/2407760011

 

Right now on the best seller list for iPhone cases..  pink cases with zebra print!  Good thing they spent so much time engineering that gorgeous antenna.  Most people I see in public with smartphones have them shrouded in some hideous case or another.  How do you reconcile the need for good design and use of top quality materials with the overwhelming evidence that consumers choose such garish clothes to dress their babies in?

 

Don't interpret this as me saying the iPhone is anything but gorgeous.  It is gorgeous.  I just don't think it matters as much as Apple says it matters.

 

Yes, products need to be attractive to be sold, but the threshold is pretty low.  The GS3 is by no means great design.  It's plastic, bulky, kind of ugly..  and they sold 10s of millions of those at the iPhone price point.

 

[Guest valueInv]

The GS3 gets heavily discounted. Thats where a big chunk of Samsung's marketing budget goes - to 'incentives'

[hardincap]

this is one of areas where the "evidence" cited can be construed to justify opposing positions. i would say the entire reason for people buying cases is because people want to protect their beautiful phones. to which you'll reply with some credible sounding counter-argument im sure. we'll just have to agree to disagree. time will tell who's right.

 

i disagree on the s3 design as well; i think it looks great. 

 

you're right, they are under the surface PCs. they have a CPU, motherboard, ram, hard drive, etc. but the package is fundamentally different - leads to different functions, customer needs and desires, usability requirements, etc. this makes the smartphone business very different than the PC business. you cannot use the history of PC sales to foretell smartphone sales, for e.g.

 

The design thing isn't as important as Apple makes it out to be.  Lawsuits were launched over how similar phone hardware looks.  Each iteration just gets better at approximating a glass rectangle.

 

Here's some more evidence that Apple cares more than its customers:

http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-Phone-Cases-Holsters-Clips/zgbs/wireless/2407760011

 

Right now on the best seller list for iPhone cases..  pink cases with zebra print!  Good thing they spent so much time engineering that gorgeous antenna.  Most people I see in public with smartphones have them shrouded in some hideous case or another.  How do you reconcile the need for good design and use of top quality materials with the overwhelming evidence that consumers choose such garish clothes to dress their babies in?

 

Don't interpret this as me saying the iPhone is anything but gorgeous.  It is gorgeous.  I just don't think it matters as much as Apple says it matters.

 

Yes, products need to be attractive to be sold, but the threshold is pretty low.  The GS3 is by no means great design.  It's plastic, bulky, kind of ugly..  and they sold 10s of millions of those at the iPhone price point.

[Palantir]

 

Right now on the best seller list for iPhone cases..  pink cases with zebra print!  Good thing they spent so much time engineering that gorgeous antenna.  Most people I see in public with smartphones have them shrouded in some hideous case or another.  How do you reconcile the need for good design and use of top quality materials with the overwhelming evidence that consumers choose such garish clothes to dress their babies in?

 

 

I hate that, people take this beautiful device and wrap it up in random crap.

[txlaw]

Yes, he did. Look at the link I posted on this thread a little while back.

 

And the HTC data?

 

You want data that nobody has yet?  My my, you are demanding. 

 

 

So you're making claims based on data that no body has yet. In other words, you pulled your conclusion out of thin air.

 

Not quite. 

 

I am describing a trend (or risk factor, if you will) that I believe is occurring right now -- and that I believe will accelerate going forward. 

 

I'm basing this on:

-Business theory from the likes of people like Clayton Christensen

-Sales reports for certain phones like the Nexus 4 (which admittedly don't have granular detail on whether or not the purchasers were switching from the iPhone);

-Apparent demand for the HTC One, which is cheaper than both the Galaxy S4 and iPhone 5 and which we know has sold at least 5 million units, despite two OS refreshes (Key Lime Pie and iOS 7) looming on the horizon;

-General Android market share trends in NA (with the majority of those Android sales not being sales of the 'high end" phones)

-My own assessment of whether the "innovation gap" has closed

-Tech press/blogs re: the "innovation gap"

-Developments in the tablet market (I view what's happening in the tablet market as a sign of what is to come in the phone market)

-Anecdotal evidence

 

There's no need to fixate on this specific HTC One "data point," which I already told you isn't available at this moment.

 

Also, you should be careful about relying solely on past data points when thinking about risk factors for AAPL, which is after all a tech company.  It's a bit like how we don't necessarily have the data to definitively proclaim that a recession has started until a few quarters after it actually starts. 

[Guest valueInv]

 

-Business theory from the likes of people like Clayton Christensen

who ,of course, has a great track record on predicting the iPhone in the first place.

 

-Sales reports for certain phones like the Nexus 4 (which admittedly don't have granular detail on whether or not the purchasers were switching from the iPhone);

Which has marketshare in the low single digits

 

-Apparent demand for the HTC One, which is cheaper than both the Galaxy S4 and iPhone 5 and which we know has sold at least 5 million units, despite two OS refreshes (Key Lime Pie and iOS 7) looming on the horizon;

Which tells you little on whether those were people upgrading to higher end devices or switchers from Samsung. Further, just because it is cheaper doesn't mean it is low end. A Hyndai Equus is not a low end car because it is priced cheaper than a Ferrari.

 

-General Android market share trends in NA (with the majority of those Android sales not being sales of the 'high end" phones)

Which show the iPhone gaining marketshare.

 

-My own assessment of whether the "innovation gap" has closed

After your "accurate" assessment on marketshare saturation ;)

 

-Tech press/blogs re: the "innovation gap"

Like this guy?

http://tech.fortune.cnn.com/2013/07/07/apple-analyst-trip-chowdhry/

 

 

-Developments in the tablet market (I view what's happening in the tablet market as a sign of what is to come in the phone market)

Which are?

 

-Anecdotal evidence

consisting of two people?

 

There's no need to fixate on this specific HTC One "data point," which I already told you isn't available at this moment.

But that doesn't stop you from stating that it is stealing customers from iPhone.

 

Also, you should be careful about relying solely on past data points when thinking about risk factors for AAPL, which is after all a tech company.  It's a bit like how we don't necessarily have the data to definitively proclaim that a recession has started until a few quarters after it actually starts.

 

So you're relying on data points from the future?  :o

[RichardGibbons]

Here's an interesting data point.

 

http://www.cnbc.com/id/100870193

 

 

[Guest valueInv]

 

I'm basing this on:

-Business theory from the likes of people like Clayton Christensen

 

Here is how the 'commoditization' theory has worked out in another consumer electronics market:

 

http://news.investors.com/technology/070913-662970-us-consumers-buying-bigger-tv-sets.htm?ven=yahoocp,yahoo

 

 

In theory, theory and practice are the same. In practice, they are not. -- AlbertEinstein

 

[Guest wellmont]

when the Apple fan talks about USA market share, they conviently ignore probably over 66% of what's really going on. But invariably, you can't get an apple fan boi to talk about anything but the USA market, where Apple has the strongest position. over 50% of smartphones sold in USA are Android. And that's not changing anytime soon.  Granted Apple has gotten a tiny bump from t-mobile, which just began to sell the iphone. But that has hardly made a dent in the aggregate numbers. But here's the important thing to remember. Android is simply dominating IOS outside of N/A, and holding it's own just fine in N/A. :)

[txlaw]

-Business theory from the likes of people like Clayton Christensen

who ,of course, has a great track record on predicting the iPhone in the first place.

 

Come on.  Don't pretend like you haven't quoted from Christensen extensively when talking about how people in "the Valley" know all about the disruptive innovation model, whereas most value investors do not. 

 

I guess when the theory suits your views on AAPL, it's all good.  Otherwise, not so much.

 

-Sales reports for certain phones like the Nexus 4 (which admittedly don't have granular detail on whether or not the purchasers were switching from the iPhone);

Which has marketshare in the low single digits

 

True, and in my opinion, that's on purpose.  If GOOG had wanted to gain a lot of market share with the Nexus 4, they would have commissioned LG to make far more units, and they would have made an LTE version.  But they clearly didn't want to undercut their other partners like Samsung, especially after having said that they wouldn't use Motorola against their partners.

 

We're all still waiting for an LTE version of the Nexus 4 -- it may never come, though.

 

-Apparent demand for the HTC One, which is cheaper than both the Galaxy S4 and iPhone 5 and which we know has sold at least 5 million units, despite two OS refreshes (Key Lime Pie and iOS 7) looming on the horizon;

Which tells you little on whether those were people upgrading to higher end devices or switchers from Samsung. Further, just because it is cheaper doesn't mean it is low end. A Hyndai Equus is not a low end car because it is priced cheaper than a Ferrari.

 

Right, we don't have granular data on whether those HTC One buyers are switching from iPhone or choosing iPhone instead of Android after having considered the iPhone.  And I won't be able to get you that data.

 

However, until the HTC One and Galaxy S3/S4, there were no phones that even came close to being comparable with the iPhone.  Any sales of the HTC One likely cut into the sales of iPhone.

 

And I never said the HTC One was low end -- a couple of posts ago I mentioned that it had superior hardware and was cheaper (and is designed just as well, IMO).  That indicates commoditization.

 

-General Android market share trends in NA (with the majority of those Android sales not being sales of the 'high end" phones)

Which show the iPhone gaining marketshare.

 

Yes, recently iPhone has been gaining market share.  But why?  Could it be because of that segmentation you keep talking about?

 

Apple is probably gaining market share in NA because they're now providing low end and mid-range devices under the iPhone brand.  Apple is not just selling Maseratis anymore.  They're also selling Fiats.

 

This is a direct result of commoditization, IMO.

 

-Developments in the tablet market (I view what's happening in the tablet market as a sign of what is to come in the phone market)

Which are?

 

I'd rather not expend any more effort going into a discussion about the tablet market, which you know is commoditizing. 

 

-Anecdotal evidence

consisting of two people?

 

No, more than that, but I doubt you really want me to go into all of the anecdotal evidence I've seen, do you? 

 

There's no need to fixate on this specific HTC One "data point," which I already told you isn't available at this moment.

But that doesn't stop you from stating that it is stealing customers from iPhone.

 

I didn't make a definitive proclamation -- it was more of a new risk factor I was describing.  If we poll people after the HTC One is out for another couple of months, then we will see if people are going with it instead of iPhone. 

 

Like, when did people start to realize that people were buying Galaxy S3s instead of the iPhone?  It was after the S3 had been out for a while.

 

Also, you should be careful about relying solely on past data points when thinking about risk factors for AAPL, which is after all a tech company.  It's a bit like how we don't necessarily have the data to definitively proclaim that a recession has started until a few quarters after it actually starts.

 

So you're relying on data points from the future?  :o

 

No, I'm saying you are overly fixated on very specific (and recent) data points, as opposed to thinking about how the market may develop from a broader perspective.  When you read people like Horace Dediu and make assumptions about the future based on their extensive analysis of past data points, that's when you start to do things like buy AAPL at $700. 

 

In other words, past data points are less reliable for predicting the future in the tech industry than, say, in the chewing gum industry.  Therefore, they are only one of the tools you should look to when judging risk in this industry.

 

As an aside, how many people on the RIM thread, when it was trading above $25, were overly relying on past data points to predict RIM's future?  Remember, RIM unit sales were going up not too long ago.  If you relied on those data points to project sales in the future, you found out that you were really wrong about those projections.