Technology and market charlatans have predicted Apple’s demise for many years. That’s nothing new and dates back to Apple’s early years, highlighted by the famous Wired Magazine Pray issue, and certainly not forgotten by today’s new age journalism which values eyeballs and ad revenue over common sense and facts.
Red Is The New Black
Analyst Horace Dediu, who tends to let numbers do the talking, sans sensationalist link bait headlines, is the same guy who predicted BlackBerry’s demise years before it became obvious and official.
His latest attempt to promote numbers as a real thing has to do with the so-called switcher rates; customers switching from Android smartphones to iPhones. Basically, Android growth numbers, like the BlackBerry and Windows phone numbers of yesteryear, have begun to stall, while the iPhone as a platform continues to grow, largely at the expense of Android.
Does that not defy common wisdom which says Apple is doomed because the company can’t keep up the growth rate and is too dependent upon the iPhone?
In essence, Dediu’s latest missive points out the obvious. Apple converts Android customers to iPhones, while first time smartphone users are converted to Android customers, and while most Android customers stick with what they’ve got (smart feature phones), the upwardly mobile migration favors Apple’s iPhone.
In other words, when smartphone customers gain experience and desire a more premium product, they don’t look to Android, they look to Apple’s iPhone. The Android platform may have the most numbers of users and a wide variety of manufacturers, but they all leak customers, and most of those are leaked to Apple’s iPhone, which is perceived as the premium brand, the product to aspire toward.
First time car buyers might prefer a lower priced car, but once they have owned a few vehicles, many of them upgrade to more premium brands and models. Among smartphone makers, Apple is the brand they want the most.
What about HTC’s line of highly regarded Android smartphones, some with fit, finish, and materials which rival the iPhone? HTC’s fortunes are fading fast; market cap is about $1.5-billion while cash on hand is about $1.5-billion which means the stock market values the company’s non-cash assets as zero. Microsoft has been forced to sell anemic smartphones for less than $100, mostly in impoverished, or less developed countries, and continues to lose money in the mobile arena. Where will those customers migrate when they’re done with cheap devices?
Likewise, Google’s Android One initiative plans to launch a $50 smartphone to customers in emerging markets. So far, the program has met with little success because Google does not like to sell products to customers– face to face– opting instead for online sales which limit market penetration. Google won’t make any money on a $50 smartphone for emerging market customers, but it will set the stage for an eventual product migration that is already underway elsewhere in the world. From Android smartphones to iPhones.
Despite the handwringing and the criticism of Apple’s future, why are not analysts and market prognosticators looking at the demise of Apple’s competitors, of which only Samsung seems capable of turning a profit, and even that has diminished as smartphone buyers migrate away from premium Android models in favor of the iPhone.
Nokia is no more. BlackBerry is a shell of its former self. Windows Phone is clinging to life support. HTC is worth the cash it owns and nothing more. Google cannot figure out how to make a substantial profit on Android, and has yet to reap a return on the tens of billions invested in the project. This is merely more evidence of a mobile technology world gone mad.