60 Comments

Summary:

Companies were afraid of Microsoft in the 90s. If they decided to enter your space, you’d be out of business, if you weren’t lucky enough to be bought by them. That’s not the case anymore. In this sense, Apple is the Microsoft of this decade.

iphone_beats_torch

For 2009 and 2010, the clear winner in consumer electronics is Apple. Its mindshare among analysts and consumers is far beyond any other company. I’d even go so far as to declare Apple the most successful tech company of this decade. That’s why I feel sorry for every other company in this space.

No matter what your company did in the past two years, Apple did it better. It reminds me of Sony in the 80s and Microsoft in the 90s. Companies were afraid of Microsoft in the 90s. All Microsoft had to do is decide to enter your space and you’d be out of business, if you weren’t lucky enough to be bought by the company. That’s not the case anymore. In this sense, Apple is the Microsoft of this decade.

Let’s take a look at RIM’s BlackBerry Torch, just released last week. Gizmodo had a great post on why the Torch launch was an utter failure, with only 150K units sold in the first week. In that article, they said:

The hordes are proclaiming the Torch a massive failure, and they’re right — but not because of how many units they sold. 150,000 handsets is a lot of phones. In fact, it’s totally in line with other major launches of the last couple of years: Sprint sold that many Evo 4Gs in its first three days, and it’s three times as many as the Palm Pre managed at launch.

Who it didn’t compete with, of course, is the iPhone. The 3GS and 3G both moved a million over their opening weekends, and 1.7 million people took home an iPhone 4 at launch. And that’s where RIM got into trouble.

They’re right. 150K units is a great number, but it doesn’t compare to Apple’s 1+ million numbers every time a new iPhone comes out. That’s the point. The Blackberry Torch, HTC Evo and Palm Pre all look like complete failures when measured against Apple.

Recently, Asus said they’re lowering production of netbooks due to a lower sales forecast. Nowhere in that quote did their CEO say Apple’s iPad is to blame, but it didn’t stop every blogger from making that causal link. What about the fact that netbooks have had the same Intel Atom processors, same form factor, same low-resolution monitors and same version of Windows XP on them since 2006 as the reason for lower sales? Maybe it’s time for Asus to actually innovate instead of putting the same stuff inside a different color case and throwing a $299 price tag on it.

The specifics of how other companies are doing doesn’t really matter. The issue is that, no matter what any tech company does, they’ll be compared to Apple in some way. Tech companies can’t release a mouse, display, keyboard or television-connected device without being compared to Apple. I’d like to see Microsoft release a battery charger at this point without drawing a negative comparison. Wait, never mind, they have one of those.

My point is, Apple is the yard stick by which all others are measured. There are better products out there with zero visibility and meager sales. In fact, the next Apple is probably out there somewhere. Let’s hope manufacturers don’t just throw up their hands and scale back in the face of stiff competition from Cupertino, and as consumers let’s keep an eye out for the next little guy swimming bravely upstream.

Related GigaOM Pro Research: Apple Company Analysis

  1. Unfortunately everything good will sometime end.

    Share
  2. Why feel sorry for the other companies? If you produce crap, it will sell like crap. Apple is achieving such great sales numbers because they know how to produce products that people want. Sure, there are some people who don’t do well with cutting edge products. These people like the clunky, plastic slide out keyboards. Apple was very wise eliminate the physical keyboard, and not give former Blackberry users the security blanket of having a slide out keyboard. Microsoft wouldn’t have been so dominant if Apple had not canned Steve Jobs in 1985, and also if they hadn’t clung to the Apple II. Apple didn’t get behind the Mac full force as they should have, and they axed the driving force behind the company’s creativity, and innovation. Fortunately, Steve went on to found NeXT which became Apple’s OS savior. The OS innovations pioneered at NeXT are in every Mac, every iPhone, iPad, and iPod touch. In a way, Apple didn’t take over NeXT. NeXT took over Apple.

    Share
  3. you forgot about the google in the room

    Share
    1. What about Google? They just copy everything Apple does and give it away for free.

      Share
      1. Mark, how about sharing some of that Kool-Aid that you are drinking.

        Share
      2. +FREE Spying…

        Share
    2. Hamranhansenhansen Saturday, August 21, 2010

      I second that. What about Google? What have they done in the past 5 years that didn’t suck? How have they improved upon the stuff they did before that such as Search and ads and Gmail? Why hasn’t Search evolved to become more consumer-friendly? Why doesn’t Google Docs look like Word v5.1, which is what everyone wants from their word processor? Have the benefits of Android been good enough to offset Apple and RIM and Nokia (who collectively take 95% of the profit in phones) getting their own ad networks because they don’t want a competitor doing their ads? That is the opposite of what Android was supposed to do.

      > Kool-Aid

      Kool-Aid is what they are drinking at Google.

      Share
      1. Dammit, now I want some Kool-Aid for realz.

        Share
      2. Of course search has evolved, so well you don’t even notice it. I has gotten a lot better, a lot less spam, but it is a big area. You can’t compare it to a revolution like the iPad, but google is making big improvments. And android is amazing and very popular. To deny that is stupid. Sure, they give it away free, and don’t make anywhere near the return that Apple does (partly since they only do software).

        Apple is king, but that doesn’t mean all other companies are crap.

        I think the big mistake a lot of people made was just going with Microsoft, and people are getting sick of Windows now. They want something that works, and Apple products do. They do not want a virus scanner slowing their machine down. They do not want an inferior OS with a fancy GUI. Lets hope this continues.

        Share
  4. The reason why netbooks have been so stagnant is Intel. Intel forced the hand of every netbook manufacturer to not include any other CPU or graphics card besides theirs. Why do you think EU fined them and they had the same kind of trial in USA, too?

    At this point I don’t think there is anyone left who actually makes chips for netbooks besides Intel. They took everyone out of the market. This is why I hope Intel will never have any significant share in the mobile devices market.

    Share
    1. Hamranhansenhansen Saturday, August 21, 2010

      ARM tried to get into netbooks, which would have meant iPad-type size, weight, and battery life, but netbook makers resisted because Adobe FlashPlayer did not run on ARM. So it is not just Intel’s monopoly practices, but also Adobe’s and others that are ruining the PC industry.

      Share
      1. Oh please. The vast bulk of netbook sales after the initial round of Eee PC’s still use some form of windows based OS.

        The lack of uptake of arm processors is because they don’t run the operating system the consumer is familiar with.

        Share
    2. Wow, you are really wrong. Intel were fined by the EU and the US for other misbehavior, relating to unfair tactics to AMD, nothing to do with netbooks. If there is an investigation into Intels tactic, look for it in the next few years. These sorts of things do not happen so fast, it takes years.

      Share
  5. Well well said I couldn’t have said it any better , to be sure ignoble fall of palm , blackberry seems to be heading down the same path , if nokia doesn’t do something ultra radical it’s not a matter if but when they will be usurped, Microsoft will remain in the business no matter what they have the money to burn , I think it’s too late in the game for Microsoft to matter any more

    Share
  6. You know you usually have some great posts, but the Apple love affair is a bit much sometimes…I gotta say.

    The fact that Android activates 200,000 handsets a day means nothing or the fact that HTC has several other handsets selling very well also means nothing?

    Lets take a look at it from a 10 year olds perspective before you start saying you can only compare 1 phone to another 1 phone.

    1. Kid A has a Lemonade stand with Type A Lemonade and sells 100 cups in 1 day.
    2. Kid B has a Lemonade stand with Type A, B & C Lemonade and sells 50 cups of A, 50 cups of B and 50 cups of C in 1 day.

    – Now you tell me, which kid made out better for that day?

    Ya…it’s pretty straight forward

    Share
    1. Well put, Ed.

      Share
    2. Android is a platform with dozens of phones on multiple networks. The iPhone is one phone. Compare apples to apples. The point is, no one android phone can compare from a sales standpoint. I’d argue that most consumers don’t even know who HTC is at this point. They know android is an alternative to the iPhone and there are a host of reasons to not switch to AT&T given a usable alternative which Android presents.

      It seems every article published not raving about android or talking about some apple weakness gets a host of negative comments screaming bloody murder, “what about android?”

      I get it. The only thing more appealing than a hero is a fallen hero. Are these the same people people that said the iphone would never succeed without a qwerty keyboard? Strange how all the top android devices are using touch screen keyboards a la iPhone. That’s ok. The vocal minority is just that, the minority and I hope apple continues to filter out this noise.

      And to your lemonade stand comparison. If kid A has 50% of the overall market profit, but 3% of market share, who wins? If Kid B has to start 2 for one sales to gain market share in a demographic that doesn’t really want to pay for lemonade who won?

      Guess which kid Apple is…

      Share
      1. Apple is the kid using forced child slave labor to keep their 800% margins on $1.50 products with massive design flaws. Apple is the master of marketing. They suck at making products though.

        Share
    3. Hamranhansenhansen Saturday, August 21, 2010

      You left out profitability in your lemonade stand. This is the profitability in phones:

      – Apple: 50%
      – Nokia: 25%
      – RIM: 15%
      – other: 10% (including Android)

      So which kid do you want to be again?

      > 200,000 handsets a day

      There is a carrier in China that uses the Android kernel in their own non-Android operating system. They account for a very large part of that 200,000 per day but their phones would not be recognizable to you as Android, and do not run Android apps, and do not even have Google apps on them.

      Actual Android phones are a much smaller number, and almost all Android phones are on the closed US carriers, Verizon and Sprint, where they don’t have to compete with open phones, which is more than 90% of the world’s phones.

      But even if you take the 200,000 number at face value, that is fewer than the iOS units per day. You forgot that kid A has 2 other lemonade stands that sell the same lemonade: iPod and iPad. Android and iOS are operating systems, comparing Android to iPhone is a cheat for Android.

      Another problem is Android has been sued by Apple, Oracle, and Microsoft over patents. Microsoft settled and now collects royalties on Android phones. Microsoft has made more money on Android than Motorola, which isn’t hard because Motorola has made $0. If even one of Apple’s patents wins then no Android hardware, and if even one Oracle patent wins then no Android software. So Google took but can’t necessarily keep.

      So it’s not nearly as straightforward as you think. Android has had very little impact. The most significant thing it has done is to inspire the profitable handset makers to start their own ad networks since Google is not an unbiased ad partner, which is very bad for Google.

      Share
    4. I think Kid A is Apple and Kid B is… everyone else, right?

      If so, you have to divide all those sales that Team “Kid B” made amongst all the team members.

      Kid A is doing the best. I’d much rather be Apple than any of the members of Team “Kid B.”

      Share
    5. InnocentEd is right! I mean the innocent part.

      As others have alluded to, Android is open-source and Google doesn’t make the hardware in most cases. So there are really lots of different Kid Bs selling variations of the same thing, dividing up it’s own market. Apple makes their own hardware AND software AND are the gatekeepers of their own app store. That means Kid A is cleaning house while the others are groveling for scraps.

      As a New York Times article suggested a while back, Steve Jobs doesn’t want to dominate the market, just THEIR market, and Apple is doing that just fine.

      Share
      1. Oh, I didn’t notice that he qualified his assessment as “a 10 year olds perspective” [sic]. I can see that.

        Share
    6. “Lets take a look at it from a 10 year olds perspective…”

      Poorly constructed analogy.

      Try this. Kid A sells 100. He also has a couple of partners also selling his lemonade and the price is the same at all locations. We won’t count those other outlets.

      Kid B has some lemonade concentrate which he gives away to Kid C, Kid D, Kid E. These three kids dilute it as they feel and and use a pitcher of their choice and add as much ice as they feel. The three kids now decide to share a lemonade stand and have to compete. Kid C sells his lemonade 2 for the price of one. Kid D sells his lemonade at 75% of the average going rate of lemonade in the area. Kid E splits his lemonade into two pitchers adding raspberry juice to one and tea to the other. Since he considers both actions to be a lemonade upgrade, he sells full price, near Kid A’s price. Kids C, D, E sell 50 cups each.

      Now which kid made out better?

      Kid B did not get any money.

      Kid C sold the equivalent of 25 at full price.

      Kid D sold 38 (or so) at full price.

      Kid E sold 50 at what was essentially full price.

      Kid A sold 100 units without any discounting.

      “Ya…it’s pretty straight forward”

      That’s what I thought!

      Share
    7. InnocentEd,

      At least you proved the author correct in one major respect: no matter how well a competing product does, it ultimately gets held up for comparison against an Apple product.

      All iProduct bashing aside, that’s saying something. There are scores of competing phones out there that may or may not be great, but a new phone on the market is always branded a potential “iPhone killer” by iPhone haters. When was the last time you heard “HTC Killer”, or even “Android Killer” for that matter?

      Thompson

      Share
    8. If Kid A sold 100 cups at $1 a cup and Kid B gave away 150 cups to Kid C, D & E, on the hopes that customers of C, D & E would somehow return the revenue someday, I’d rather be Kid A.

      Share
    9. You are all missing the point.
      Firstly he was comparing sales #’s, not revenue and how much money they were making.

      I was simply speaking to the way the market is shaping out. Android handsets will easily take over Apple in units in the market in the next 6 months and there is no looking back.

      I don’t care that Apple margins are huge and that their stock is rising.

      Android will own the mobile market, go ahead and keep trying to deny that.

      Share
    10. Thanks Ed. http://theappleblog.com/author/adamjackson/

      That’s a link to all of my posts. The two prior to this were very skeptical of Apple’s tactics in marketing batteries and the future of iPad. People there gave me hell for being too anti-apple. I try to keep it balanced. I can’t love / hate apple all of the time.

      Thanks for reading.

      Share
    11. But Kid B made $0 selling all that lemonade.

      So how could they possibly be doing better than Kid A?

      It ain’t nearly as straight forward as you make it out to be.

      And looking at Google’s most recent earnings call, they spend billions on Android and have said they will increase that spend which will affect their profits. That’s NOT what investors want to hear hence their plummeting share price.

      Share
    12. It’s not that straight forward Ed. What did Kid A sell those cups of lemonade for and what did Kid B sell them for? Don’t buy into the “I’ll make it up in volume” myth. The other phone companies may sell more phones, but Apple is making way more profit.

      Share
    13. Problem with yoru analogy is that you forgot to mention that Kid A offers better lemonade so charges $1.00 a cup. Kid B lemonade all looks the same to the onsumer so they can only complete on price so charges 1 cent a cup. Looks like Kid A made out better for that day.

      Share
  7. Hamranhansenhansen Saturday, August 21, 2010

    Apple doesn’t have any special magic, they are just one of very few companies that are trying to make the best products for users, that is why they are appreciated by users. Other companies are trying to make platforms for hardware makers (Microsoft) or platforms for advertisers (Google) or settling for being a customer of those platforms, even if that means making lousy products (HP, Dell, Lenovo, Asus, Motorola, HTC, others) so they make terrible products and they are not as appreciated by users.

    Share
  8. What’s notable is all the companies that see what Apple has done, but can’t get over the ‘stickiness’ of their own corporate culture. Innovation, design for the user experience, continuous improvement, be the best in class– are all bywords, but Apple seems to be the one that actually does all of it.

    Share
  9. Isn’t this a bit Apples vs Oranges? For example, you compare Apple vs. Asus Netbooks instead of Apple vs. plain whole Asus which has several other product lines. The netbook issue is not just about iPads but other netbook manufacturers too and the peculiarities of that market (a market that Asus invented and became a worldwide phenomenon, so kudos to them, really).

    Also, you compare Apple, a consumer electronics-oriented company to others that have important Enterprise business units and sometimes vertical markets ones. Their diversification makes it impossible to be so lean and mean and focused in a single market.

    I’ll admit that brand value-wise, comparing Apple’s with Sony’s, Philips’ and such is perfectly fair, though.

    Share
    1. Yes, but Apple, not matter what it says, is prevalent throughout the stack. They design hardware, OS, laptops, desktops, mobile devices, software applications, streaming, TV, rentals, cloud computing, etc., etc.,. And they are leading (or seriously competing) in just about every area. Most other companies are stuck in one or two layers of that stack of technologies. Apple has a hand all the way up and down the line, so they don’t have to rely on innovation or total dominance in one area. Apple wassn’t worried about an iPod killer when they first released the iPod because THEY MADE the iPod killer – the next iPod. Then they make the iPhone killer, by creating the iPhone4. I don’t have a particular love for Apple, but love ‘em or hate ‘em…they’re dominating the stack by controlling or seriously influencing the culture and technology all the way up and down the line.

      Share
  10. David Finnamore Saturday, August 21, 2010

    My favorite blog title of the month.

    Share

Comments have been disabled for this post