Caught in the Crossfire

January 14, 2013

Apple Can Compete, but It Would Rather Just Win

This article originally appeared in the Dec. 2012 issue of Next Gen Mobility Magazine.

It’s been an interesting turn of events. Apple (News - Alert) is the dominant brand in most people’s mind, and certainly has mindshare. However, as IDC recently pointed out, 75 percent of the smartphone market was Android (News - Alert), while Apple owned a little over 12 percent. The iPad product line dominates the traffic, and as Tim Cook points out, these devices represent more than 90 percent of the Internet traffic – indicating either the other tablets are dismal failures, or the graphic does not include Wi-Fi connections.

Regardless, the tablet market has a number of interesting additions over the last year, including Archos, Asus, Samsung (News - Alert) and Sony. Samsung, in particular, continues to blur the line between tablets and phones with its Note and Galaxy III (which sold 30 million units).

While it has been rare to hear a discouraging word about Apple, the lack of a 7-inch tablet was considered an oversight. Generally people said that a smaller device, convenient for the purse, was a winner for women. The last few releases of Apple products have revealed a pricing problem.

To review, Apple has launched:

  • the iPhone5 at $199 plus contract
  • the iPod Touch at $299
  • the iPad Mini at $329
  • the iPad at $499

Apple’s iPad Mini is priced in-line with the rest of the product line, but it was designed to compete with the other tablets. As other tablets go, it’s overpriced. With more than eight tablets under $300 and half of those swarming at $200 you have to ask the question: Is Apple pricing so as to not hurt its other sales? It indicates some presuppositions about the company’s products.

Profit, not market share, is still the basic objective.

If all products are about the same cost to build, Apple software has to remain proprietary to accomplish No.1.

If Apple is relying on the display hardware to be the differentiator, then the retina display pixel density has to be noticed by the consumer.

The App Store then is the canary in the coal mine. Apple App Store dominates the market of mobile development with more than 275,000 apps built for Apple specifically and another 500,000 apps that work on iOS devices.

But just like the reality check of numbers in comparison to the total market, the Web puts these numbers into check very quickly. Furthermore, as HTML5’s adoption grows, the grim reality is that making money on Apple is hard. GigaOm reports that the majority of the people make less than $500 a month with apps in the App Store, and the advertising-based models make less than $100 monthly.

In my humble opinion, app development is coming back to the web. Development strategy will treat mobile OS as optimization requirements and in many cases be about post production by third parties. (Based on the stats, there are a lot of developers who would welcome the income.)

The point is that Apple, at the end of the day, seems to be the same old Apple, content to be the high-end market leader and not everyman’s device. The company has chosen to win based on the old model, and not to compete.

Carl Ford (News - Alert) is cofounder of Crossfire Media.

Edited by Braden Becker

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Meet the Editorial Team

Rich Tehrani,
Since 1982 Rich has led TMC© in many capacities. Rich Tehrani is an IP Communications industry expert, visionary, author and columnist. He founded INTERNET TELEPHONY® magazine...Read More >>>
Carl Ford,
Partner and Community Developer, Crossfire Media
Today as a partner at Crossfire Media, Carl is developing programs that bring to light an understanding of the issues required for delivering broadband wireless Internet...Read More >>>
Erik Linask,
Group Editorial Director, TMC
Erik oversees the editorial content and direction for all of TMC. Erik has contributed literally thousands of features during his 5-year tenure, with a focus...Read More >>>
Paula Bernier,
Executive Editor, IP Communications Group
Paula oversees editorial content and operations of INTERNET TELEPHONY and Next Gen Mobility Magazines. Bernier is...Read More >>>
Paula Bernier,
CTO & Executive Technology Editor
om is executive technology editor for TMC® Labs, the industry’s most-well known and respected testing lab, and ...Read More >>>