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PostPosted: Thu Mar 12, 2009 5:08 am 
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Charbax wrote:
Apple's iphone and itunes are niche products. They are paid for only by a certain type of middle-class to upper-class rich kids segment who like to show off more than anything tangible. In fact, that market segment of people who could afford an iphone is shrinking now constantly over the last 9 months and if you look for numbers I am sure you will find that iphone sales have been constantly slowing over the last several months. The market for such gimmick phone is definitely drying up. There are only so many Apple fanboys on this planet.

The bulk of itunes sales is to people who think it's the only way to get music on the Internet cause they want to put music on their ipods and iphones. The itunes revenue size might be bigger than Amazon Mp3 and whatever other miserable attempts there has been made for legal music online, but that certainly doesn't mean anything.

Even though itunes might represent some few billions in overall revenue over many years, that still is less than peanuts compared to the actual digital music consumption of people in society. Even most ipods and iphones used on the market mostly have illegally copied music on them in the Mp3 format, by a factor of over 95%. In fact, basically 99% of every teenager and young adults which comprise the largest majority of ipod and iphone owners know how to copy Mp3 files to it for free or knows someone who can do it for them.

The iphone may have a certain market share for smartphones in the USA, but that doesn't mean much, the current smartphone market is basically nothing more than a high end mobile phone segment. Basically it is the market segment of people who want to spend a lot of money on a shiny looking mobile phone. So far, it has very little to do with people looking to actually use any of the potential features of such a large screen data centric device. The features of the iphone are just a secondary treat that comes after the main usage, which is, for people to own an expensive looking piece of gadget to show off for voice and SMS use. Basically that is what all smartphones have been about so far.

Only Google can change that. Now having a Google phone will be about getting a better tool for navigating all the possibillities in society, for easily meeting new people, for significantly increasing business opportunities, for faster bookings and better managment of events, for better monitoring of health, for saving significant amounts of money on such expenses as voice/sms, shopping, travel, taxes, entertainment and information. Each of those new features are really huge and worth much more than the purchasing price of a Google Android based device, which since it's open source and free means you WILL find Android devices starting below $100 pretty soon without any type of subsidy through long term voice/sms subscriptions.

I can guarantee you that Linux can be in most phones and laptops starting this year. This is not revenues shifting from Microsoft/Intel/Apple/Nokia to other companies, these are revenues mostly disapearing from the grip of Silicon Valley cause Linux and Android means cheaper and better devices to more people made by more companies all around the world, which means lower margins, much much higher volumes. The old way of doing business is being cannibalized.


Nice conjectures. Do you have anything to back this up. In mobile and consumer devices, I'll admit that Linux has a much better shot at market dominance that int he laptop business. I seriously doubt that the majority of smartphones will be linux based within 1 year. If you think so show me the numbers to support every phone manufacturer will be overhauling their entire product line in just one year's time. Or alternatively that they new devices they introduce will be so overwhelmingly popular as to replace all of the hundred's of billions of existing phones. That's not the way that product lifecycles work. I can't recoup my development costs that way even with the shortened product lifecycles in the phone business.

I'm not advocating one phone or another, I'm saying that I think you are being very optimistic in your predictions. History doesn't support the best product always winning. It doesn't even guarantee the company with the best business plan and product always wins. Predicting Android will not only do well but replace over 50% of all existing phones in the world in 1 year, seems folly or did you mean just new phones. FYI a quick scan shows Android expected to only have 4% of T-Mobiles market so far or about 9mil total sales this year. Hardly even close to the 130mil total worldwide sales. The iFart app for iPhone alone is nearly outselling all Android apps to date. Note only about .5% of users have bought any apps so far based on those stats.

http://www.froogloid.com/android-news/a ... statistics
http://www.shoemoney.com/2008/12/18/app ... app-stats/

FYI, I don't consider any product that has a 27% penetration of the US market and is now the number 3 manufacturer of smartphones with one exclusive supplier a niche product. That suggests Apple would have a very large slice of the smartphone market if the they were not tied exclusively to AT&T. Apple may have lost it's opportunity to expand though by tying itself to AT&T alone. Also software development costs amount to only 20% of smartphone development costs. If the average price of most smartphones is $200 dollars today from only with a subsidy, then removing 20% of the costs means $160 with a subsidy still. Since the manufacturers and phone companies will still customize the software, the savings will be even less. The software cost figure came from an interview with Androids founder I believe. I can't find it again. Today Linux of all varieties accounts for only 5% of all mobile device operating systems. Symbian has 65% and Apple 7%. Hardly looks like they'll take over the market this year.

http://www.canalys.com/pr/2008/r2008021.htm
http://www.engadgetmobile.com/2008/06/0 ... -the-rise/

Give it more like 2 to 3 years or about the same years as the iPhone and I'll believe they will be possibly over 30% of world market.


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