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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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I take back what I said
By amanojaku on 9/19/2013 12:37:58 PM , Rating: 3
About Cook being better than Jobs. It looks like the Apple juice is fermenting his brain.

Android users do use their phones. They're also smart enough to use other devices that are more practical for particular functions. Why watch video on your phone or tablet when you can watch it on a big screen? Why would you play games on your phone or tablet when you have a more powerful console or desktop, connected to a big screen and specially crafted controllers? Why would you use your phone to play music when you have surround sound pumping 500 watts?

Mobile devices are meant to be just that: a device to use when you're moving from location A to B. They cannot, and in the near future will not, replace dedicated entertainment devices. Technology would have to advance significantly for that to happen. I have yet to hear a phone or tablet produce sound better than an old, cheap radio. You can forget replacing a TV any time soon. And people don't use phones and tablets to do real work. The most that can be said for phones and tablets is that they are cannibalizing portable gaming platforms.

Normally, I hate Motley Fool and Gartner, but this article is spot on:
quote:
Gartner conducted a survey recently of 726 tablet owners in the U.S., Australia, and the U.K., and what it learned, first and foremost, is tablet users love their entertainment. According to the study, 50% of device screen time was spent playing games; watching live or streamed TV, videos and movies reading books; or listening to music.

Using tablets and other mobile devices like smartphones for communicating -- sending emails and visiting social media sites, for example -- averaged only 26% of users' time. Being productive, which Gartner describes as editing videos or writing, accounted for a mere 15% of users' activity. And finally, searching for information like the weather or conducting research occupied all of 9% of device screen time.
http://www.fool.com/investing/general/2013/09/18/a...




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