Apple's iPhone Advantage -- Profit, not Volume (Plus, Friday Dell Fun!)
Yeah, yeah, Michael Dell once said Apple should be shut down and the money returned to shareholders. We all know the can of whupApps Steve Jobs has unleashed on the industry since then. These days, Apple's profits look as good as their products and Dell's... likewise.
So it's with no small amount of trepidation we notice WMExperts noticing the world noticing Dell might just be making an entry into the smartphone market...
What's wrong with that picture is pretty much what's wrong with the exhibit in general. While Apple holds a fairly small percentage of the global cellphone market (as it does the global computer market), it happens to enjoy among the largest percentage of profit in the market (also, as it does with computers).
MacDailyNews highlights that while Apple ships an insignificant number of units compared to a behemoth like Nokia, it makes DOUBLE the profit of Nokia. Likewise, while rivals such as the Palm Pre are getting some much deserved attention, their finances (and thus ability to pay talent and fund much needed R&D) are on the brink -- while Apple has nearly $30 BILLION in the bank.
So, while carriers are increasingly desperate for "hero" phones to make a splash and attract high-spending customers, according to mocoNews.net, current performance is showing few -- if any -- can currently match either the return on investment, or user experience, of the iPhone.
Sure, the smartphone market in general is continuing to grow, and may even be recession proof according to Forbes, but is anyone outside of Apple really poised with enough creativity, cash, and cunning to leverage it?
[Thanks to Jeremy and Dieter for source links!]
There are 10 comments. Add yours.
Rene, here's some support for you. iSupply, the folks that looks breaks open handsets to see what they're made took a look at the Blackberry Storm. They found that it costs $202.89 for the components versus $174.33 for an iPhone. Assuming that the carrier's subsidy is the same at the $199 price point then you can see why, before the purchase of music or apps, Apple has the margins they do.
Link: http://www.reuters.com/article/marketsNews/idCAN2913159520090129?rpc=44
Dell is good at manufacturing and at managing costs. Their PC business will give them purchasing power. However, are they going to be able to get people to pay more for their products that are based on Win(Vista)Mo and Android when the only true differentiator that they will have is form factor? I'm not so sure. Time will tell.
Yeah, Apple has much better margins coz thats what it went after to begin with! No free on contract phones, that could have wonders for its marketshare figures though! Nokia/ Samsung/ Motorola etc have so many low/ zero (?correct me if I am wrong) margin phones that were just aimed at taking the marketshare.
This certainly doesnt mean that any other serious couldnt bring out a good phone, it just doesnt look like many phone companies have the intentions, Palm looks promising with its Pre, which if half as good as it is being made out to be would be success (I am hoping it will be).
Apple somehow appears to be better at designing winning products be it the PCs(!)/laptops/phone(s, I havent seen many designs in any of these product lines matching/ beating Apple's product (software/ hardware).
I hope Dell/ Palm/ Others do come out with better products, I believe in "past performance doesnt garantee future performance(good or bad, either way)"!
MMS FTW!!!!
COPY/PASTE FTW!!!
VIDEO RECORDER FTW!!
DELL/PALM/OTHERS FTW!
I have a 3G Iphone that I would like basic features on.
PS. DUDE I AM GETTING A DELL
@Greg Iphone User:
Regarding the Dell, Think Different ;)
@greg
Get a Blackberry - FTW
I would be surprised if Dell competes effectively with Apple, RIM, and perhaps Nokia, who seem best positioned as laptop and cell phones converge. I am skeptical given Dell's previous forays into MP3 players (the "Ditty"), printers and PDA's. Diversification is not new for PC companies, whether one cites Gateway's foray into consumer electronics earlier in the decade or Dell's recent moves. Only Apple has really met success as far as I can tell. However, I believe the diversification wave is only natural and should continue given a merging of laptops and wireless devices. As these devices converge, new pressures on margins could emerge for PC players.
It will only be yet another HTC OEM device. Nothing more, nothing less.
LMAO! When you order the Dell you'll probably just get the phone... then you'll have to choose each feature you want at additional costs. It'll end up costing $1,200 by the time you customize it to your liking. Ooops, I almost forgot.... then you'll need to add another $80 if you want a keypad. :lol:
What a joke!
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