Why Apple Will Get Rich While Losing Market Share

Apple operates as if it were the centre of the universe and does a lot of business. Apple is its own bottleneck. The business-plan does not scale:

  • they still have only a few stores in China,

  • in the UK they starved their “partner” sales-channels while selling direct to all the early-adopters, and
  • the OEMs they are cutting out of the pie (most of them) are only too glad to ship Android/Linux.

    Chart: Worldwide Media Tablet Shipments Split by OS Historical and Forecast* 2010 – 2016 (Units in Millions)Description: Source: Worldwide Quarterly Media Tablet & e-Reader Tracker, March 12, 2012Note: IDC’s Worldwide Quarterly Media Tablet & e-Reader Tracker provides total market size and vendor share for both the Media Tablet and eReader markets in 46 countries. Detailed historical segmentation is provided by CPU type, operating system, connectivity type, screen size and resolution, storage capacity, distribution channel, and customer segment. Measurement for this tracker is in units, value, and end-user price. For more information, or to subscribe to the research, please contact Kathy Nagamine at 1-650-350-6423 or knagamine@idc.com. Further detail about this tracker can be found at:http://www.idc.com/tracker/showproductinfo.jsp?prod_id=81Tags: IDC, Tracker, Worldwide, Media Tablets, Media Tablet, OS, Android, iOS …Author: IDCcharts powered by iCharts

While Apple struggles to scale, the world can make its own smart thingies and leave Apple’s behind. Of course, it’s their own business to decide their own limits but they continue to claim superiority with their condescending attitude to consumers, competitors, and just about everyone. “Come to shop. Return to learn.” insults their customers. Perhaps they will be content with a 5% share like they have with desktops.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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10 Responses to Why Apple Will Get Rich While Losing Market Share

  1. Well, Apple has hundreds of shops around the world but only a few in China… There’s a reason for that. They are not even trying.

  2. Phenom says:

    Pogson, do you have reading comprehension problems?

    The keyword in Yonah’s post is “official”. Officially, you can’t purchase an iPad in China, and in many other countries. But, you can buy one in many shops there. That goes for many east-european countries as well, and is valid for many other brands.

  3. Apple’s list of stores in on their site. If they had more than 5 stores, you can bet they would boast about it.

  4. Yonah says:

    Off the top of my head, 西直门地铁站 (XiZhiMen Subway Station) enter the shopping mall, North-side of the building on the first floor next to the escalator, booth selling Apple products from iPods to iPads. Official? Nope, but that’s not a problem here. You can’t get a truly accurate picture of what’s happening here or anyplace in the market from browsing articles on the Internet.

  5. New roto-tillers of similar capability cost $600 to start and my labour is free. The engine, a Briggs & Stratton is superb. Probably I will make an emergency pump or generator out of the frame and engine when the transmission dies. There’s no point to sending stuff to the scrap yard before its time. Also, unlike PCs which seem to get better in manufacture with time, they don’t make them like that old thing any longer. For instance, my old lawn tractor weighs three times what a similar tractor these days weighs. That’s not necessarily quality but durability. I like durability. I want my next purchase to be my last. I might as well hit all the stones with the current machine rather than with its replacement. One of the uses of my new wagon will be to make the last round of stone-picking before the lawn is seeded. There is method to my madness.

  6. oldman says:

    To put it bluntly Pog:

    Just because you are willing to do the technological equivalent of taking a welding torch to a broken 23 year old roto tiller to keep it going doesn’t mean that the rest of us want to.

  7. Clarence Moon says:

    Apple can fool …

    That sort of says it all about your view of things, Mr. Pogson! Apple would say that they are setting the standard for product excellence and you say you can get by with a lot less expense and so they are “fooling” the world. You have to understand that there are misers and then there are wastrels and the latter outnumber the former, particularly where personal satisfaction and peer-peer prestige are involved.

  8. Every other business on the planet looks at 1 billon customers in China emerging into a modern industrial economy and sees an opportunity. Apple has five stores there… Dell has 200. Apple is its own bottleneck, too busy selling elsewhere to expand to new markets. They have the cash. They don’t have the bodies. They don’t have enough products to cover diverse markets.

    The late leader said he did not know how to make money on a device that sold for less than $500. That’s a flawed business plan in a consumer society. Revenue = units X price. There’s more than price involved. Profits = sum(units X (price – cost)). The only reason not to sell in China is that they cannot lower their costs. They are already manufacturing in China. What’s the reason they cannot lower costs? Too many unproductive people on the payroll? Too many perks? Too many lawyers? The hype is that Apple has “high quality” and therefor costs more. The reality is they have been using COTS parts for years. The same suppliers who supply Apple supply the rest of the world. Apple makes nothing by itself.

    Apple can fool a tiny percentage of consumers all of the time, and a larger percentage some of the time but they cannot fool all of the consumers all of the time, more likely. Android/Linux smart phones and tablets are going to kick Apple’s butt. Apple knows this. That’s why they are not building tons of new stores in China.

  9. Phenom says:

    Apple never, ever cared about marketshare. Apple always cared about money.

    Here is a lesson, Mr. Posgon. Big Marketshare does not translate into Big Cash.

  10. Clarence Moon says:

    I guess that it is only natural to feel able to criticize Apple’s business plan if you feel capable of criticizing Microsoft’s product marketing plans. I think that you are too mesmerized by the notion of having ALL of the business available, though.

    You talk about Microsoft losing their monopoly and therefore being on the wane, unable to last long without it. But the reality is that a company only strives to be a market leader in a relevant (and lucrative) segment of some market.

    Microsoft’s one segment, namely “personal computer OS software” became a huge success and was declared a virtual monopoly by the courts in USA vs Microsoft a decade ago, it is true. However, Microsoft was a robust going concern long before they dominated the market for their products to that degree. It was just the nature of the product that resulted in the effective monopoly position, along with the incredible growth of personal computers that was fostered by that dominance.

    Apple has set the standard of comparison for upscale PCs, personal music players, smart phones, and now tablets with the iPad. But they never have and never will have anywhere near 100% of those product markets as they mature. They are not even trying to do that, I would believe. It is a nonsense strategy and they are not fools.

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