Why doesn't Apple cut its prices and sell more iPhones?
May 25, 2013: 8:04 AM ETThe market share vs. profit share debate rages on.
Source: Horace Dediu "Measuring Platform Churn."
FORTUNE -- Android's Market Share Is Literally a Joke, John Kirk's provocative analysis of the smartphone wars, has caused quite a stir since it was posted Thursday on Tech.pinions.
"Scoring by market share alone and ignoring profit," he writes in one of several sports analogies, "is like saying that a baseball team won because it had more hits when the other team scored more runs."
Lines like that infuriated market watchers who have been scoring the smartphone game by hits rather than runs for years.
The angriest response came from Jay Yarow at Business Insider, a publication that likes to describe Apple's market share as "dead in the water."
Yarow posted a piece Friday called Apple Fanboys Are Crazy To Celebrate Apple's Tiny Smartphone Market Share (since dialed down a notch to read "Apple Should Be Furious That It Has Such A Tiny Sliver Of The Smartphone Market").
"If you work at Apple, or you love Apple's products this should be burning you up," Yarow writes. "You should be furious that Android, which you believe to be an inferior product, is on more phones than iOS, Apple's software."
The solution, Yarow believes, is obvious: Apple (AAPL) should lower the price of the iPhone. "It's great that Apple's über profitable. It would be even greater if more people could afford its phones."
That misses the point, Benedict Evans argues in On Market Share.
"There is no such thing as a 'smartphone market,'" he writes. "The whole mobile phone market is converting to smart. Apple is taking the high end and Android is taking the rest."
The result is a chart that looks like this one ...
Source: Benedict Evans "On Market Share."
... which shows Apple and Samsung capturing between them nearly 100% of the operating profit in the global market for all cellphones -- smart or otherwise.
Weighing in from Daring Fireball, John Gruber singles out the one paragraph in Yarow's piece that he agrees with:
"The goal for Apple shouldn't be to be the company with the most money in the bank. It should be to make the best products in the world, and get them in as many hands as possible."
That's exactly what Apple is doing, writes Gruber.
"No one, or at least no one with a clue, is arguing that making the most money should be Apple's goal. (Nor is anyone arguing that market share is irrelevant; the argument is whether market share alone is of primary importance.) Apple's profits are the result of having achieved their goal: making the best products and getting them into the hands of the most people. The and there is very important. In simple terms, iOS is what you get when you try to make the best products and maximize the number of people who use them; Android devices are what you get when you try to maximize the number of people who use them."
I guess that's where I end up. Making the best phones is an expensive business, not just because the aluminum casings cost more or the devices are harder to assemble, but because of everything else Apple pours into its products -- the design work, the warranties, the telephone support, the over-staffed retail spaces, the Genius Bars, the online stores, the developer conferences, the long-term investment in capital equipment and the R&D on new products -- R&D whose happy beneficiaries in the past have included Samsung, Google (GOOG) and all those Android users.
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Horace Dediu has four questions for Apple's Tim Cook
In advance of Cook's appearance at D11 next week, a deep dive into Apple's business.
FORTUNE -- For the second year in a row, Apple (AAPL) CEO Tim Cook is scheduled to be the opening night speaker at the annual D: All Things Digital conference, an invitation-only event that prides itself in assembling the people that really matter in the world of high tech.
Asymco's Horace Dediu was not invited.
More's the pity, MORE
Philip Elmer-DeWitt - May 24, 2013 5:10 PM ET -
Web-like analytics are coming to brick-and-mortar stores
A company called Placed is applying some of the methods used online to the real world.
FORTUNE -- Foot traffic at bookstores rose by 27% in the first quarter of this year, according to a report issued this week by Placed, a Seattle-based company that aims to bring Internet-like marketing analytics to the offline world.
That seems like a surprising number. It's hard to know for sure how accurate it is, or MORE
Dan Mitchell, contributor - May 24, 2013 12:07 PM ET -
Apple's defenders count the errors in Microsoft's anti-iPad ads
Did Microsoft stretch the truth in spots promoting a tablet that runs Windows?
FORTUNE -- You'd think Microsoft (MSFT) would get some credit for running a couple light-hearted TV ads that -- unlike those awful 2008 Jerry Seinfeld spots -- aren't cringeworthy.
But in the Windows tablet ads that debuted this week, Microsoft used Siri to badmouth the iPad, and some Apple (AAPL) aficionados were not amused.
AppleInsider's headline set the tone: Microsoft caught lying about MORE
Philip Elmer-DeWitt - May 24, 2013 11:43 AM ET -
U.S. Judge in e-book antitrust trial says Apple is likely to lose
It doesn't start until June 3, but the judge is already working on a draft of her decision.
FORTUNE -- This does not bode well for Cupertino.
Asked during a preliminary hearing Thursday to share her thoughts about the Department of Justice's case against Apple (AAPL) in the long-awaited e-book antitrust trial, U.S. District Judge Denise Cote said this, according to Reuters:
"I believe that the government will be able to show at trial MORE
Philip Elmer-DeWitt - May 24, 2013 8:05 AM ET -
New Apple TV ad series: Every day, more people ...
First, take photos. Second, enjoy their music. What's next?
FORTUNE -- With the release Thursday night of the second "Every Day" spot for the iPhone, it's now clear where Apple's (AAPL) new series of TV ads is headed.
With Samsung nipping at its heels in the U.S. -- and leaving it in the dust in overseas markets -- Apple is capitalizing on studies that show that despite diminishing market share, more people use MORE
Philip Elmer-DeWitt - May 24, 2013 5:58 AM ET -
Apple, Android and a truckload of watermelons
Looking at market share vs. profit share every which way to Sunday.
FORTUNE -- "Have you heard this one?" asks John Kirk in Android's Market Share is Literally a Joke, a Tech.pinions piece posted Thursday.
It starts like this:
Two farmers bought a truckload of watermelons, paying five dollars apiece for them. Then they drove to the market and sold all their watermelons for four dollars each. After counting their money at the end MORE
Philip Elmer-DeWitt - May 23, 2013 3:04 PM ET -
Mercedes is perfecting the autopilot
The German car giant's new S Class sedan drives itself. Starting price: $100,000.
By Doron Levin
FORTUNE -- The race to build an everyday car equipped with autopilot that can prevent accidents and take over from a driver about to fall asleep or make a catastrophic error is inching closer to reality with the introduction of Mercedes-Benz's 2014 S Class sedan.
Last week Daimler AG engineers unveiled the new S Class in MORE
May 23, 2013 1:29 PM ET -
Disaster recovery turns to crowdfunding
A new outlet for one of technology's fastest-growing sectors.
By Jennifer Alsever
FORTUNE -- Shortly after a devastating tornado ripped through Moore, Okla. on Monday afternoon, Robyn Rojas posted a photo on Facebook of a pile of rubble that was once her home. The student advisor at the University of Oklahoma then added one comment, "This is a nightmare."
The next morning, her coworker Jacque Sexton Braun saw the post and within MORE
May 23, 2013 1:08 PM ETPosted in: crowdfunding, Crowdrise, disaster relief, Fundly, GiveitForward, GoFundMe, GoFundMe.com, Indiegogo, YouCaring -
Jon Stewart on Tim Cook, Apple's taxes, and the subcommittee
"Who are those people? What is the opposite of a Genius Bar?"
FORTUNE -- You knew The Daily Show wasn't going to pass up a chance to comment on a hearing as unintentionally comical as the Senate subcommittee's probe into Apple's (AAPL) taxes.
Apologies for the fuzzy YouTube clip. There's a better version on Comedy Central's Daily Show site.
Philip Elmer-DeWitt - May 23, 2013 1:01 PM ET
