Tag Archives: android

Buying Market Share

Android’s Market Share Is Literally A Joke | Tech.pinions – Perspective, Insight, Analysis: “The company that buys market share must inevitably go out of business or reverse its course and fight its way back up to profitability. The company with the value and the profits, on the other hand, has the advantage of holding the high ground and can choose to take market share at will.”

(Via John Kirk for Tech Opinions.)

This, in a nutshell, is what’s wrong with developers on the App Store trying to get to the top of the charts at any cost. They’re buying market share by maximizing downloads instead of profits. And most end up making little money as a result.

Kirk’s piece here is examining iOS Phones vs. Android, but the same concept applies to the software sold on these devices as well. Having more users is actually a bad thing when the cost per user is higher than the profit per user. 

People like to cite Microsoft when talking about the value of market share, but they always seem to forget that Microsoft never sacrificed profit margin to get that market share. It was the hardware manufacturers—Dell, Sony, HP, Gateway, etc.—who were caught up in the pricing wars. Microsoft pitted them against each other and sat back on a pile of gold as they tore each other to pieces. 

Google? Not so much with Android.

It’s an iPad mini, Not an iPad Shuffle

Reading the Twitter and App.net reactions to the mostly positive reviews of the iPad mini today, I’m left with the impression that many people wanted

  • $199 price point
  • Retina display
  • 10-hours of battery
  • aluminum case, and all the fit and finish you expect from Apple

And anyone who doesn’t criticize Apple for not having all of these is a shill.

But design is about compromise, remember?

There’s no physical way Apple could have kept its “legendary” battery life (Tim Cook’s word, not mine) with the mini without sacrificing the Retina screen. And there’s no way it would have that beautiful aluminum fit and finish for $200. So choices were made. And if you follow Apple at all, you know why they made the choices they did.

Now, you can say that you would have preferred the Retina display in a cheap plastic case, or that you could live with five hours of battery instead of ten. But you have to make choices yourself in your imaginary preferred device. No one can currently make a device with all four of those things.

That’s not to say that Apple doesn’t deserve to get dinged in a review a little for having a screen that’s sub par compared to its competition. But from what I’ve read, the mini has been getting that ding. Most reviewers, even those who tend to be Apple positive, are wishing the mini had Retina.

(I’ll agree that rationalizing, i.e. “most people don’t care about Retina” is silly. Of course they care. And they will notice. But I’m betting the mini will still win most of them over.)

Apple operates on the “all or nothing” principle when it comes to resolution. It’s quadruple the pixels, or it’s not. There’s no in-between resolutions, where none of your apps work right or everything is fuzzy. Obviously I’d rather have a Retina screen on my mini, as I think that would be my ideal iPad. And by next year, when that’s physically possible, thanks to more advancements in battery technology and power management in iOS, I’ll have that. But in the meantime, I absolutely think Apple made the right choice to go with non-Retina before sacrificing battery life or making it even more expensive. And I certainly wouldn’t want a screen with 1200 x 900, or some other in-between resolution that made my apps look like crap.

As far as price goes, I’m also hearing a lot of talk about how Apple could “crush” its competition if it just made the mini $200. Sure. It could crush it even faster if it made the mini $100. Or heck, why not give it away?

Take a look at Amazon’s latest earnings report if you want to know how the cheap tablet market is doing. I don’t think Apple needs to crush anything. Those cheap tablets are money pits. Wall Street may give Amazon a pass for losing money on everything they sell, but when Apple warns profit margins will be lower than their usual 35%, the stock takes a nose dive. I think Apple is right to wait it out until it can make a profitable tablet at that price.

Are people still seriously thinking Apple needs to get into the razor-thin margins game? Because that’s how Apple got to be the world’s largest company, right, by competing on price?

Didn’t we learn anything from Netbooks?

I was as surprised as everyone else when I saw that $329 starting price. But mostly because it’s such a goofy, Marketing un-friendly number. Once I thought about it for a minute, I figured, “Well, that must be the compromise that went along with the manufacturing process.” This is what Apple does. Rounded corners, when squared corners are cheaper. Aluminum, when plastic is cheaper. Glass, when a plastic screen is cheaper. They build a great product, then price it as cheap as they can, not the other way around.

Anyone who takes a look at an iPad mini and a Kindle Fire will immediately know why the mini is more expensive. And they’ll choose according to what suits them best. Apple is happy to let them make that choice. They don’t cater to cheapskates.

But what about the iPod? I can hear some arguing. What about it? It was several years before Apple made an iPod that was cheap enough to not leave the “price umbrella” under it, and that iPod didn’t have a screen.

I have no doubt the umbrella will be gone in a few years. But that will take time, technological advancement, and a lot more creative thinking. Remember, this is the iPad mini, not the iPad shuffle. That’ll come later. In the meantime, let the competitors lose money for a while. Market share is not remotely important compared to making profits and keeping your reputation for best-in-class products.

You can’t beat Amazon in a pricing war. Why would you pick that fight, knowing you’re going to lose?

Jordan Rudess on Developing for Android vs. iOS

Phil Simon: Dream Theater’s Jordan Rudess Talks Music Apps: “There are so many people out there with Android, and I know that it’s a really good system. Personally, I’ve had some problems with it — and that’s why I took so long to get into it and am not anxious to keep working on that platform. First, there’s been an inherent issue with the audio on Android, which has been frustrating to a lot of developers. When you touch the screen to play a sound, there’s a delay, which destroys the reality of the musical experience. It’s a latency issue. Obviously the people in charge of Android’s release overlooked this. It’s a problem that’s definitely preventing some of the music developers I know from wanting to create apps for the platform.

The other problem with Android is, as far as I’m concerned, that the systems aren’t set up to allow for a solid business. Android piracy is rampant. For example, we put out a really cool Android version of MorphWiz Play (even better and easier to use than the one on iOS). But, according to the numbers coming back to our company, it’s being ripped off right and left. Android employees need to create a system that’s fairer to developers.”

(Via huffingtonpost.)

But Android is winning, right?

People think the details don’t matter. But they do. It’s not just about iPhone vs. Galaxy whatever. People say “who cares?” when I talk about how much smoother and responsive scrolling is on the iPhone. Well, here’s a perfect example of why cutting down on latency is extremely important. 

And don’t get me started on the App Store vs. the Android Marketplace. It wasn’t easy to make the App Store a place where both customers and developers could make out well. But that good balance makes all the difference, and it’s obvious when you try and find a good app on the Android Marketplace.

I love all of Jordan’s apps. Love that musicians are finding more and more innovative ways to create music with technology. And I’m happy that he can make some extra bucks on the side from building quality apps. His experience with Android is the reason most of us never bother trying to write an app for Android and probably never will. 

My Thoughts on a Larger-screen iPhone

Clearly, something is going on with the next iPhone. The rumors of big screens have been floating around for ages, but there’s a lot more smoke this time around. So I have to think this is at least a possibility.

Personally, though, I’m still not feeling the need for a larger screen. The notion that Apple “needs” to do this because of all the Android phones out there with big screens is preposterous. Android is coming apart at the seams. The big screens were an attempt to differentiate the Android phones from Apple. This wasn’t something most users were clamoring for, and many users who get these devices pushed on them don’t even like the larger screen. They aren’t an improvement, in other words. People in general don’t want larger devices in their pockets. They like their phones small. I think Gruber is right that if the iPhone gets a larger screen, it doesn’t necessarily mean the phone itself will be larger. There’s room for a larger screen without going nuts and making a Galaxy Note hunk of junk. In fact, the screen could be 4 inches without making the footprint of the iPhone any bigger.

(I really don’t think Apple needs to worry about Android in the long run at all, by the way. Maybe that sounds nuts, but watch the numbers carefully. Android’s golden age is already over. It’s peaked, as far as growth rate relative to others is concerned, and it’s nowhere in the tablet race. Google has never gotten the app ecosystem off the ground, and now with all the viruses plaguing Android there’s even less trust from the users, which means even fewer developers are going to make apps. Every OEM making Android devices except for Samsung is losing money. They will jump ship to Microsoft, or whoever else offers them a better deal down the line. And the users will buy whatever the kids in the carrier stores push on them. This is a fickle market. Android will self-destruct without any help from Apple.)

But again, I’ll ask the question none of the nerds seem to be asking. How does a bigger screen make the phone better? More icons on the home screen? Really? That’s it? Widescreen videos a little bigger? Ok. I guess. I have yet to read any compelling argument for how this would improve the iPhone experience. That doesn’t mean there isn’t a compelling argument; I’m just saying that no one seems to be focusing on the only reason Apple would pull the trigger on this.

As far as third party developer concerns, that’s a bit ludicrous, too. Apple ultimately doesn’t care if we developers have to work to get our apps updated to match the new screen size. If they think a bigger phone screen would be better, than they’ll make the phone with a bigger screen, and the developers will fall in line. What choice do we have? They may provide some tools to make the transition easier, but basically, what the developers need or want is the lowest thing on Apple’s hierarchy of concerns. Apple does what is best for Apple, what is best for the customer, and then what is best for developers, in that order. Anyone who has ever opened Xcode knows this.

Now, if Apple announces this new phone, but no apps support it on day one, that’s a problem. And clearly, some apps won’t ever get updated, because their developers have abandoned them long ago. So Apple will need something equivalent to what they did on the iPad with iPhone apps. There will have to be some default way that this new phone adapts older apps to work correctly on the new screen. It doesn’t have to make for a perfect experience—iPhone apps on the iPad are a pretty lame experience—but it does have to work. A stop-gap measure until the developers do the correct enhancements. Other than that, Apple doesn’t need to be concerned about third-party apps at all.

I do worry about the long-term health of the App Store ecosystem, but that’s a subject for a separate post. Right now, Apple is in the driver’s seat, and they can get away with pretty much anything, making us all jump through hoops to be in the Store. But ultimately, it would probably be in Apple’s best interests to start thinking a little more about what kinds of developers are successful in this market. If they’re not careful, they could easily end up in a position where only big corporations like Adobe are back in control of the software side of things. And that’s not in Apple’s best interest.

As soon as someone can tell me why a bigger iPhone screen would be better, I’ll get more excited about this. Whether or not it happens is much less interesting to me than the why.

Coffee Time: Market Share vs Profit

Coffee Time: Market Share vs Profit – journal – minimally minimal.

Have to love his last set of images, comparing Apple’s product line to Samsung’s. Thanks to John Gruber for linking to this.

Apple doesn’t counter anyone. They lead; everyone else follows.

Spurred by the recently announced Amazon Kindle Fire and its $199 price, Apple is rumored to be exploring a new low-cost iPad for release in the first few months of 2012.

Analyst Brian White with Ticonderoga Securities has been touring China and Taiwan and meeting with component suppliers, where he has heard rumblings of a so-called “iPad mini” arriving next year. The “mini” name doesn’t necessarily refer to the size of the device, he said, but a lower entry-level price.

He said such a device is expected to arrive in the first few months of 2012, allowing Apple to tap into a “more price sensitive consumer segment,” and also fend off the Amazon Kindle Fire, the retailer’s first entrance into the touchscreen tablet market.

via AppleInsider

This sort of thing is so stupid I don’t even know where to start.

Or maybe I do. First and foremost, Apple doesn’t build new products because it’s “spurred” by someone else’s products. If there were a lower-cost iPad coming next year, it would have been in development for some time.

Knee-jerk reaction is what other companies do.

Second, rumors like this always assume that price is something that companies simply pluck out thin air, as if making things for less than you sell them weren’t important. Believe me, if Apple could make the current iPad cheaper without sacrificing quality, it would. But it can’t, so it won’t.

The Fire will sell quite well, I’m sure, but not because it’s any threat to the iPad.

Amazon can make cheap tablets until it’s blue in the face, because Amazon is fine with losing money on every tablet sold. They make it up on the content you buy. While Apple makes a small profit on the content, its main source of income has always been on the hardware itself. It can’t afford to lose money on cheap iPads in the hopes that you buy lots of iBooks and music. And it wouldn’t want to, because that would mean selling cheap crap, which is antithetical to everything Apple is.

So, maybe, maybe, we could see a small price drop on the entry level iPad next year. Maybe they’ll continue to sell the iPad 2 at a cheaper rate when they release the iPad 3, like they do with iPhones. But don’t expect a $199 iPad from Apple next year. It’s just not in the cards. And it doesn’t have to be, because Kindle Fire buyers aren’t going to take away any sales from potential iPad owners.

The only companies that will suffer from the Kindle Fire are all the other Android makers. (And suffer they will.)

The phone screen size lab experiment

Vendors are trying to figure out what works when it comes to screen sizes, according to Geoff Blaber, analyst at CCS Insight.One of the big product trends at IFA was screen sizes between 4.5 inches and 5.5 inches, which include the LTE version of Samsung Electronics’ Galaxy S II, HTC’s Windows Phone-based Titan, Samsung’s Galaxy Note and the Tablet P from Sony, which has two 5-inch screens.

via Macworld

It’s fun to watch all these other companies just now get around to performing the research that Apple did prior to its 2007 launch of the iPhone. Only, instead of testing all these screen sizes in the lab, making a clear determination on which one they felt people would find most useable, they are simply releasing every size of screen imaginable on the general public, hoping one of them will hit it big.

What they’re going to find is what Apple found out four years ago. 3.5 inches is where you want to be. Sure, a 4.5-inch screen might be a bit easier to see for people with poor near sight, but it makes the device harder to pocket, hurts battery life, and most importantly, is harder to manipulate with your hands, unless you have gigantic hands.

Om Malik gets more details about the Motorola acquisition

The high-level talks between Google and Motorola started about five weeks ago. Google CEO Larry Page and Motorola CEO Sanjay Jha were talking directly, and only a handful of executives were brought into discussions. Our sources suggest that Android co-founder Andy Rubin was brought into the talks only very recently.

Like I said earlier, this move was more about defense than any sort of long-term mastermind plan, as suggested by the delusional Dan Lyons.

The short span of time suggests that this was a REACTION to losing the Nortel bid, not part of the Nortel original plans. And the fact that they didn’t even bring in their key Android executive until late in the process suggests that it was, as I said before, a gut reaction, rather than a well-considered tactical move. They are panicking over there, and it’s starting to show. Honeycomb 3.0 was a disaster. Google is gaining no traction in the tablet space. Mobile phone market share growth—the only stat where Google was clearly winning—has slowed (even after rigging the numbers by counting cheap Chinese knockoffs as Android phones.) Microsoft is clearly still trying to muscle its way into the space, and could even still carve a niche for itself, especially if it keeps trying to buy more of Google’s partners. And even with strong market share, Google is still making little money with the Android initiative.

This Motorola purchase could very well backfire on Google, or it could turn out well, if they play their cards right. The problem is, Google has never been any good at the cards.

So it all depends on whether Google is ready to take Android into the territory of a “walled garden” as so many like to call the Apple approach. Drop the other partners, start making “Google” phones for real. Didn’t work for the Nexus series, but then again, the most dedicated Android fans all say that the Nexus phones were better than anything else out there. Maybe they can pull that off, but I doubt it. Not without a retail strategy in place.

That does seem to be the eventual plan, though. The question is, what happens in the short term to Google’s numbers if HTC, Samsung, etc. see the writing on the wall and jump ship before Google can get a decent line of Motorola Android phones going?

And what will all those Google fanboys say when Android suddenly becomes available on only one brand of phones?

The most important thing we can take away from all of this is that Google is not playing on its own turf. It no longer controls Android’s destiny, if it ever did. Apple is still the only company in tech playing offense.

Dan Lyons is delusional—but you knew that already, didn’t you?

And today it all makes sense. Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay. Today, with the Motorola deal, Google picks up nearly three times as many patents as AppleSoft got from Novell and Nortel. More important, Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.

Better yet, Google got its rivals to spend a few weeks defending the practice of using patents to attack other companies. Apple fanboys bent over backward to say that Apple was doing the honorable thing here by suing everyone in sight. All this slimy patent warfare that is so despicable when others do it becomes magically noble when Apple does it. Teaming up with other companies, including the evil Borg, to gang up on Google is all perfectly legitimate, par for the course, smart business practice, blah blah.

So now Google fires back, makes a huge acquisition, gets into the hardware business, buys up the best IP portfolio in the mobile space — and can position itself as a victim that’s just trying to defend itself against this gang of bullies.

And people say Apple fanboys drink the Kool Aid.

Let’s start with “nearly three times the patents.” Yes, Google acquires nearly three times the patents in this deal than they would have from Nortel. They also paid nearly three times as much. (12.5 billion vs. 4.2 billion. AND they wouldn’t have been on the hook for that entire 4.2 billion; they could have joined the consortium and paid a fraction of that.)

Next: “Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.” Huh? They’re playing catchup here. Nothing more. Our broken patent system and the recent influx of patent troll companies raised the stakes over a year ago, and Google was losing—badly. Remember, this is the company that claims to not believe in patents; in order for Google to “win” on its own terms, or to “raise the stakes” it would have had to do something that made patents irrelevant, not just drop a bomb of cash to play along by everyone else’s rules.

I’m not faulting Google for playing along, mind you; they really didn’t have any choice. But to say this is some brilliant maneuver is silly. It’s defense, plain and simple. And it’s a risky defense at that, considering how it will certainly strain Google’s relationships with other hardware partners.

Next: “Apple fanboys bent over backwards to say that Apple was doing the honorable thing.” NO ONE, and I mean NO ONE has said that any of Apple’s behavior when it comes to patents has been “honorable.” I’ve seen lots of defenses along the lines of “well, the system is broken, and Apple just has to play within the confines of the system” type arguments. But that’s a long shot from calling any side in the patent war “honorable.”

And finally: Google can “position itself as a victim that’s just trying to defend itself against a gang of bullies.” Yeah, that, or they can position themselves as a bunch of whiny hypocrites who once claimed that patents were evil, but now are going to start using the very evil they once denounced to kill off smaller competitors like Microsoft, HP, RIM. Once again, Google does what is best for Google, and everyone else can go stick it. “Don’t be evil” my ass.

My guess is that most Apple fans will see Google’s move as interesting, albeit unimaginative. They lost HUGE in the Nortel thing, so they turned around and made a somewhat bold and probably not completely well thought out acquisition to remedy their mistake. They dropped a lot more money and added baggage to already strained partner relationships because they don’t know how to play the game properly.

It fits into Google’s usual pattern. Smart people, lousy at politics. The question is whether the long-term benefit of having better legal defenses will outweigh the strain this move will put on partners like HTC, Samsung, etc.

Remember, not too many people were suing Google, anyway. Most of the suing has been between Apple, Microsoft, and Google’s partners. This acquisition doesn’t protect HTC or Samsung at all. If Google starts filing motions to intervene in those lawsuits, than I’ll be happy to call that move “honorable.” Somehow, I don’t see that happening, though.

On the lockdown of Android Honeycomb

During a keynote presentation at Google’s IO developer conference last year, Google VP of engineering Vic Gundotra proclaimed that the search giant created Android in order to bring freedom to the masses and avoid a “draconian future” in which one company controlled the mobile industry. Looking past the self-congratulatory rhetoric, Android’s poor track record on openness is becoming harder to ignore.

The company revealed Thursday that it will delay publication of the Android 3.0 source code for the foreseeable future—possibly for months. It’s not clear when (or if) the source code will be made available. The decision puts Android on a path towards a “draconian future” of its own, in which it is controlled by a single vendor—Google.

I think the mistake everyone is making here is assuming that this is some sort of change in Google’s intentions. Google is only “headed toward” a less open platform if you think that they ever intended the platform to be open in the first place.

For-profit companies are only open when it suits them to be open. Apple, for instance used the open AAC format in iTunes because it knew a proprietary format would never be able to compete with the open MP3. It gave away Webkit as an open platform, because it knew no one would adapt web sites to suit the Safari browser if it used a proprietary engine. The same goes for adopting USB, DVI, Display Port, and Thunderbolt. Apple could use open standards in these cases because it makes its money elsewhere.

Open is what you do when you’re the underdog and you need to get your product into as many hands as possible. And when using the open standard doesn’t interfere with your ability to profit from your own intellectual property. There’s nothing wrong with that, in practice, as long as you are clear when you are being open vs. when you are not.<p>

What Google has done is dupe the open zealots into cheerleading the platform by making elaborate speeches about the free exchange of ideas, the need for standards, etc. All the while keeping its own search algorithms, Gmail, etc. locked up tight. The whole thing is a ruse. A sham.

And the open fanboys fall for it every time.

“Don’t be evil is marking bullshit.” Right as usual, Steve. He wasn’t criticizing, so much as pointing out the obvious.

Now that hardware manufacturers are taking advantage of the “open” Android by adding their own user interface tweaks, and more offensively, cutting deals with Microsoft to add Bing search instead of Google search, Google is clamping down Android 3.0. Suddenly the pure numbers game isn’t working out so well. After all, a world full of Android devices that make more money for Microsoft than for Google doesn’t help Google much.

So this move should not be surprising at all, if you’ve been paying any attention. Google will open anything so long as that openness helps it make money. Otherwise, it’s closed, closed, closed. And that’s no different from Apple, or Microsoft, or RIM, or anyone else. So I’m not even knocking Google for that.

Being a hypocrite, though. Well for that, I’m happy to knock Google quite a bit.