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Steve's Jobs; successor Tim Cook has faced fire for his company's slipping margin.  (Source: Reuters)
Apple no longer commands the "cool" clout it once did

Apple, Inc. (AAPL) under Steve Jobs established itself as perhaps the most coveted OEM in the smartphone industry.  The late Apple CEO and cofounder, and his trusted legion of executives squeezed suppliers tighter than perhaps any company before boosting Apple's margins to gaudy heights.  And on the carrier side, carriers like Sprint Nextel Corp. (S) were willing to spend billions ($15.5B USD, to be precise), mortgaging their future to get access to the iPhone.

But Apple's ability to squeeze partners on both sides of its product chain may be coming to a close.  After a quarter of record profits, but a disappointing slip in margins, investors have sent Apple stock on a humbling plunge from a height of $705 USD/share to around $450 USD/share in recent weeks.  And Apple's partners are taking note.

A year ago, Apple enjoyed a 44.7 percent margin, but in the last quarter that figure had slid to 38.6 percent.  Apple managed a record profit, but only by growing sales volume.

The biggest threat to Apple's empire may come from carriers moving away from a model of subsidies.  Due to the iPhone popularity, carriers are willing to pay Apple a subsidy of around $400 USD per iPhone, plus a small cut of on-going monthly service revenue.  Other premium phones from Apple's rivals typically command around $250 to $300 USD.

But the last American carrier to get the iPhone -- T-Mobile USA -- will be phasing out subsidies just as it begins to carry the iPhone.  T-Mobile USA's deal with Apple has not been made public, but is rumored to be more favorable for the carrier than similar deals with AT&T, Inc. (T) and Sprint -- and less favorable for Apple.

T-Mobile wide
T-Mobile won't be subsidizing the iPhone. [Image Source: Flickr]

An entry-level 16 GB iPhone 5 costs $649.99 USD without subsidies.  Flagship Android phones and Windows Phones cost hundreds less unsubsidized.  Some fear customers will bail on the iPhone once carriers start passing the costs on to the consumers by cutting subsidies.

Both AT&T and Verizon Wireless, America's largest carriers have warmed to the idea of unsubsidized handsets after initially scoffing at the idea.

Comments AT&T CEO Randall Stephenson, "That's something we've looked at on several occasions. I kind of like that idea.  It's something we're going to be watching."

And Lowell McAdam, CEO of Verizon Wireless -- a joint subsidiary Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD) -- seemingly went back on previous comments, remarking, "[The strategy is] very intriguing."

Interesting, indeed.  Carriers may be experiencing a bit of envy that T-Mobile is not suffering the same exploitive terms they agreed to, to get the iPhone.  Down the road they will likely look to renegotiate more favorable terms.

Harvard Business School Professor David Yoffie, who specializes in corporate competition, warns that while Apple's is coming down to Earth, it's still a power player.  He tells Reuters, "Even though they're not gaining share, they're such a large piece of the market and such a driver of customer volume into their stores that people can't walk away yet.  Over the longer term, clearly there will be more and more pressure on Apple if they don't find new ways to innovate."

In other words Apple may be feeling the heat, but it's still got more cash than any other phone OEM, has superior contracts, and the biggest single-handset sales in the industry -- for now.

Source: Reuters



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RE: Get ready 4 it
By Reclaimer77 on 1/29/2013 8:39:02 PM , Rating: 1
Riiight, cause taking some ancient discussion a billion light years out of context is proof someone is lying lol.

Do you see how absurd you are? Anyone who doesn't kiss Apple's ass is treated as the enemy by you.


RE: Get ready 4 it
By TakinYourPoints on 1/29/2013 8:48:05 PM , Rating: 2
What is out of context? Your statements are absolute in both cases. You can't say "Apple forces separate purchases for iPhone and iPad apps" without being called out on it. That is absolutely false since pricing is in developers hands, plus apps are mostly universal now since those sell better. Its even worse considering that the sequels to the apps you used in your ancient link are (drumroll) universal.

You definitely can't say "I called OS X a 'walled garden', sure, so have others. I never implied app restrictions" when you previously said "Not just anyone can write apps for OSX and sell them, as is the case with Windows."

Context doesn't help you. You didn't imply anything, you were quite explicit.

Again, keep dodging. Why did you come back anyway?


RE: Get ready 4 it
By Reclaimer77 on 1/29/2013 9:04:30 PM , Rating: 2
Uhhh I never said "Apple forces" that did I? I said "you have to". Which you then corrected "not all the time". *jackoff hand sign* wow you really hit that out of the park didn't you?

So when you make absolute statements about Android not having tablet apps, a false statement, it's fine. When I make an absolute statement about iOS apps behaving a certain way, then the knives come out.

quote:
plus apps are mostly universal now since those sell better.


So what? The situation still existed. Do you not get the point? God who the hell taught you to argue. You can't wipe out history just because parts of it didn't match your world view.

quote:
"Not just anyone can write apps for OSX and sell them (on the iTunes store), as is the case with Windows."


Again, context. Anyone who wasn't a crazy iTard with a kneejerk reaction knows what I meant. Microsoft doesn't have to "approve" the sale of Windows programs. Apple does. That's just how they roll.

So if that's not a 'closed garden', fine. But it's not exactly an open field. What the hell do you call Gatekeeper by the way?? It's just another way Apple is moving OS X to a totally closed garden.

http://www.theverge.com/2012/7/27/3186875/mac-app-...

Oh look another "liar" and "dodger"! Go flame him!!


RE: Get ready 4 it
By TakinYourPoints on 1/30/2013 8:50:34 AM , Rating: 2
You from earlier:
quote:
Having to buy the same app twice is just another money whoring scheme by Apple.


Way to backpedal, and no it isn't, its an option that developers have, and nearly all of them sell universal apps by now. Why do you hate options?

quote:
You can't wipe out history just because parts of it didn't match your world view.


And you can't invent history, especially since most apps were already universal to begin with. You're trying to invent a reason why rescaled phone apps on Android tablets are a good thing, and really stretching logic in the process.

I also didn't go far enough in the example I gave with Infinity Blade 2 being universal. I checked and some of the apps in the ancient link you posted like Infinity Blade 1 actually went universal, not just their sequels. Funny.

Are you actually in favor of a restrictive policy where developers are forced to sell their apps either universal or not? Apple is hands off, developers choose how they want to price their applications. Most are universal since it leads to more sales, despite the fact that creating two different and optimized UIs with much higher resolution assets is extra work for them. The market spoke and they priced accordingly.

Are you a socialist?

quote:
So when you make absolute statements about Android not having tablet apps, a false statement, it's fine.


Its fine because it is objectively true, the number of tablet optimized applications for Android is demonstrably low. How many aren't just rescaled phone apps? How many take complete advantage of the Nexus 10 2560x1600 resolution? Not even a tiny fraction compared to iPad apps that are built specifically for 10" and 2560x1536, which is all of them.

Are single column phone applications resized for a tablet acceptable when you can have two or three panes that take advantage of all that extra space?

Even cross-platform apps like Netflix or Yelp are completely different between iOS and Android on tablets, night and day difference in UI and quality. Its like talking about the difference in quality of applications for Windows and Ubuntu.

On the other hand, Apple enforcing multiple purchases of separate tablet or phone apps on iOS is demonstrably false. Again, its all up to the developer. Apparently you hate developers having any choices at all because you don't believe in capitalism.

quote:
Microsoft doesn't have to "approve" the sale of Windows programs. Apple does. That's just how they roll.


No they don't. Like, not in the slightest, not ever.

The app store is one method to install applications, and it is far from the only one. I have exactly two purchases from the Mac app store, the rest of them I've downloaded straight from developers or from other storefronts like Steam. It isn't even the most popular method of buying applications, for most people its mainly a way to install OS X updates.

As for Gatekeeper, its just a whitelist for developers that anybody can get on, it isn't just for applications sold through the Mac app store. If you ship an application with malware then you get taken off Gatekeeper, that's all. Nothing else about the application matters (content, purpose, etc) in terms of getting whitelisted.

And if you want to skip Gatekeeper it is really simple, it works just like UAC in Windows where you click a dialogue box to install and you're done. Hell, you can turn it off completely in settings as well, just like UAC. If you want to download and deliberately install a known trojan for whatever reason, you're free to do so, nobody is stopping you.


RE: Get ready 4 it
By TakinYourPoints on 1/30/2013 9:54:19 AM , Rating: 2
And look, what is passe on iOS is happening with Android apps right now: https://play.google.com/store/apps/details?id=com....

Oh no, developers are deciding to charge more for an HD tablet version! Quick, time to enforce your personal pricing standards!

For a tea partier you sure don't seem to respect the free market very much.


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