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Federighi, Cook, and Ive  (Source: Bloomberg)
Cook, Jony Ive and Craig Federighi talk about the new iPhones, market share and the competition

Only a week after the big iPhone 5S/5C reveal and a day before their launch, Apple CEO Tim Cook says he isn't worried about iPhone market share, and even managed to throw a few stones at the likes of Nokia and Google's Android. 

Bloomberg BusinessWeek's Sam Grobart sat down with Cook to talk about Apple's place in the mobile market, and whether Cook is worried that competitors like Android will continue gaining market share in various areas as Apple continues to offer luxury-priced phones that appeal to only certain markets. 

“There’s always a large junk part of the market,” said Cook during the interview. “We’re not in the junk business. There’s a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers. I’m not going to lose sleep over that other market, because it’s just not who we are. Fortunately, both of these markets are so big, and there’s so many people that care and want a great experience from their phone or their tablet, that Apple can have a really good business.”

Apple recently announced the expected high-end iPhone 5S, which has a starting unsubsidized price of $650. The iPhone 5C, which was believed to be a budget version of the iPhone for emerging markets like China, was expected to be priced at a "budget" range. However, its unsubsidized price is only $100 less than the 5S. 

While Apple is working hard to make deals with China Unicom, China Telecom and China Mobile, many wondered if Apple would be able to sell to this market considering the still-high price of the iPhone 5C. 

iPhone 5C

“We never had an objective to sell a low-cost phone,” said Cook. “Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost.”

Google's Android is a good example of an operating system that spans both high and low end smartphones, offering a vast price range for those looking to shop on either side of the spectrum. This gives Android the ability to reach various markets, and continue gaining market share. In fact, IDC said nearly 80 percent of the world’s smartphones run Android. It also said the average unsubsidized price for a smartphone fell from $450 to $375 last year. 

But Cook brushes this off, saying that customers tend to buy Android devices and dump them in a drawer while an iPhone is the smartphone they truly use.

“Does a unit of market share matter if it’s not being used? For us, it matters that people use our products. We really want to enrich people’s lives, and you can’t enrich somebody’s life if the product is in the drawer.”

Cook added that he doesn't see Android as just one entity competing against Apple. Rather, the operating system is so fragmented that many users are running versions as old as Gingerbread from three years ago. 

Here's a breakdown: About 45 percent of Android users are on Jelly Bean, the latest version of Android, while 31 percent are still on Gingerbread and 22 percent are on Ice Cream Sandwich. Apple says 93 percent of its users were on iOS 6 at the end of June.

iPhone 5S

“And so by the time they exit, they’re using an operating system that’s three or four years old," said Cook. "That would be like me right now having in my pocket iOS 3. I can’t imagine it.”

Apple's idea is that having one company work on both the hardware and the software makes a big difference when it comes to user experience, instead of Google's method where Android is given out to various hardware manufacturers like Samsung. 

Jony Ive (senior vice president of Design at Apple) and Craig Federighi (senior vice president of Software Engineering at Apple) -- who also took part in the interview -- agreed that the new iPhones marry hardware and software better than other smartphones. And while the iPhone doesn't receive new OS versions or updates as often as Android, they said that Apple doesn't just push out new features for the sake of having them; they take the time to perfect them, and make them better than anyone else. 

“New? New is easy. Right is hard,” said Federighi.

Cook also addressed the Apple/Microsoft comparison of the 1990s, where Microsoft licensed its Windows operating system to hardware makers like Dell and Hewlett-Packard while Apple only used its operating system on its own Mac hardware line. This allowed Microsoft to gain a ton of market share at that time while Apple's plummeted, and many wonder if Apple is making the same mistake in its competition with Android. 

Speaking of Microsoft, Cook said the recent $7.2 billion purchase of Nokia's devices and services unit shows that more companies are trying to follow Apple's lead. He also took a jab at Nokia, saying that it's failure to innovate led to its end as a mobile leader.

“Everybody is trying to adopt Apple’s strategy,” said Cook. “We’re not looking for external validation of our strategy, but I think it does suggest that there’s a lot of copying, kind of, on the strategy and that people have recognized that importance.
"I think [Nokia] is a reminder to everyone in business that you have to keep innovating and that to not innovate is to die.”

The iPhone 5S and iPhone 5C hit store shelves tomorrow, and while iPhone market share sits below that of Android and Apple stock has taken a dive since its $700+ high last September, Cook believes that the company is doing the right thing.

Source: Bloomberg Businessweek

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RE: Man
By Solandri on 9/19/2013 2:05:40 PM , Rating: 5
Beyond the bullshit is a bit of truth. Android is outselling iOS nearly 4:1 but in browser usage statistics the iPhone is being used nearly twice as much as Android. Read those numbers again. Nearly 4 times as many devices but half as much usage?

That is incorrect. It's a common mistake made by Apple fans because they're being fed only a small slice of statistics favorable to their fandom which mischaracterizes what's actually going on.

There are three big web usage measuring companies: StatCounter, W3Counter, and Net Applications. StatCounter is by far the biggest of them, counting visits to 3 million sites, while W3Counter measures about 70,000 sites and Net Applications about 40,000. Net Applications' sample (which is the one most frequently used by Apple fans) is actually so small they do statistical corrections (massage the numbers) to correct for biases caused by having an incomplete cross-section of the web.

W3Counter and Net Applications are the measures which show iOS with a 2:1 (used to be 3:1) lead over Android. But the important thing Apple fans aren't told is that they only count unique visitors each month. That is, someone who visits a site just once in a month because he followed a link in a news article counts just as much as someone who uses the site every day.

StatCounter doesn't count unique visits. They count page hits - actual web usage. When you do that, you find that:

Surprise! Android has a nearly 2:1 lead in web usage over iOS, and its lead is growing. In other words, more people use iOS to access the web. But most of those are just random and infrequent page visits. The hardcore web users who do a lot of frequent surfing are on Android. If you combine the overall site visits and unique visitor stats, yes nearly twice as many iOS users browse the web as Android users. But the average Android user who actually uses the web browser does almost 4x as much browsing as the average iOS user.

So if you divide smartphone users into three categories, those who never browse the web are mostly on Android, those who occasionally browse the web are mostly on iOS, and those who browse the web a lot are mostly on Android.

RE: Man
By retrospooty on 9/19/2013 2:27:17 PM , Rating: 2
LOL... They do love to skew stats those Apple people. ROFL.

RE: Man
By Tony Swash on 9/19/13, Rating: -1
RE: Man
By retrospooty on 9/19/2013 6:08:18 PM , Rating: 2
I am not sure your point with that... I have always said a cheaper iPhone model made sense and was a smart move by Apple. I totally agree. I think a larger screen higher res model would be even bigger, so to speak... But that isnt the topic at hand. What was being discussed is Apple's skewed web usage stats and the fact that this is closer to reality. Android over IOS 2 to 1.

Not that it matters, as 10 million other people's web usage doesn't affect yours or my web usage. I just find it funny how stats are skewed.

RE: Man
By retrospooty on 9/19/2013 6:10:03 PM , Rating: 2
Or perhaps you prefer a bar graph. I think it illustratesthe point even better. ;)

RE: Man
By KiwiTT on 9/19/2013 2:29:36 PM , Rating: 2
Well measuring website hits are also not enough. I use apps to mainly to access my internet info. And I am sure many others do as well. How are they measured?

RE: Man
By troysavary on 9/19/2013 6:29:10 PM , Rating: 2
Which matters not one bit. To the Web server, a request from an app and a request from a browser look the same. It still counts as a hit.

RE: Man
By tayb on 9/19/13, Rating: -1
RE: Man
By Rukkian on 9/19/2013 4:10:48 PM , Rating: 4
I know you wont grasp this, cause it may not be all rosey for apple, but he was actually spot on from the metrics. He is not taking one metric to make a judgement, he is putting them all together to make a complete picture.

Two metrics (W3Counter and Net Applications) only track unique visitors each month, which is what apple quotes as to why the usage is higher. From this, it shows a 2:1 advantage to IOS users.

Now look at the other metric (stat counter) which shows page hits, and Android has a 2:1 lead.

When you put these together, you can get a better overall picture. It seems that IOS with 1/4 the market share has 2x the amount of people that use the web (lightly). That more than likely means that there are a bunch of Andoids that dont surf the web, but then you combine that with 2:1 web traffic, which shows that 1/2 as many unique vistors use the web 2x as much, showing a 4x difference, hence the fact that for the ones that do use it, use it more than an average IOS user.

Most people dont care either way, but this just shows that anybody can get a stat that shows pretty much anything they want if they format it right.

RE: Man
By retrospooty on 9/19/2013 4:19:39 PM , Rating: 3
That, and other people's web habit really don't effect yours, nor does it affect your user experience.

RE: Man
By Reclaimer77 on 9/20/2013 10:19:40 AM , Rating: 1
Lol my god you're retarded, aren't you? You are so blind you cannot grasp the significance of what's right in your face.

RE: Man
By KoolAidMan1 on 9/19/2013 6:46:52 PM , Rating: 3
This doesn't explain why Google's ad revenue from iOS is higher, nor does it explain developers making more money on iOS. iOS usage is higher because it is on more high end devices while Android is on more low end devices.

People who have a GS3 or GS4 use it like someone uses an iPhone, Cook is wrong there. The number of high end Android devices is outnumbered by iPhones and low end Android phones, resulting in Android's lower overall usage share. It's simple

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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