3
Oct

iPhone 6 and iPhone 6 Plus consumers are not likely to maintain an insatiable appetite for these devices

On Thursday, September 25, 2014, Barrons ran an article by Tiernan Ray. This short piece, Apple: ‘Bendgate’ Irrational, Says Cantor; Apple Comments via CNBC, which was included in Ray’s Tech Trader daily feature amounted to a quote from an analyst at Cantor Fitzgerald, Brian White, along with some comments from Ray.

White’s quote speaks to the current controversy about these new smart phones, and points to what he refers to as an “insatiable appetite” for these devices on the part of Chinese consumers. No product has ever, or, in this writer’s opinion, will ever stimulate insatiable consumer appetite. Anyone with a keen interest in the fortunes of these newest smart phones from Apple should maintain a skeptical stance about the usefulness of any comments like White’s.

If readers are skeptical about the veracity of our take on White’s comment, we simply point to the fate of Apple’s stock in market activity on Thursday, September 25, 2014. The stock dropped over 3% precisely around the set of concerns White calls “irrational”. If these concerns are, in fact, “irrational”, then why the deep dive on Apple’s stock price?

In this writer’s opinion, consumer concerns about these new smart phones are not irrational. As we have published earlier in this blog, and some other people (who we consider to be astute) have also written, the price of these devices will fall out of the range of the “average” smart phone consumer by a substantial amount. So, with the very high end of the consumer market not only targeted for these products, but, even more, already rapidly consuming them, the market reaction is entirely understandable.

Folks shopping at Burberry’s expect perfection. Sure they are willing to pay for it, but, in return, they are the most demanding of consumers. So market dissatisfaction with Apple’s mistakes and, perhaps, PERCEIVED trickery (why would an affluent consumer throw away a perfectly functional iPhone, albeit a previous model, for a slick new entry, which, nevertheless is “bendable”), should be entirely acceptable.

Further, an analyst who looks at market reaction and attempts to DENY its legitimacy is an analyst whose words will likely receive a lot of careful scrutiny.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

26
Sep

Global Smart Phone Market, at the Low End Trumps the High End for the US, Western Europe and Japan

On Friday, September 19, 2014, Curt Prins (a mobile strategist) posted his thoughts, which were distributed by LinkedIn, on the comparative impact of the launch of the Android One, in India to Apple’s recent, highly publicized debut of the iPhone 6. Prins titled his post Apple just lost the global smartphone war to Google. This writer has written several posts to this blog to voice similar opinions about whether or not all of the media accolades about Apple’s new smart phones really amounts to much, at all. My concern is whether or not Apple will be able to maintain its enormous market capitalization just on the appetite of consumers at the very high end of the market, or not.

But Prins is to be commended for supporting his contention with metrics. I didn’t take the time to put together supporting data for my position, choosing, rather, to articulate it based on my gut instinct about markets and where all the frivolity surrounding the September 9, launch of the new iPhones might be headed.

A quick look at the Android One home page exposes some additional information worth noting: Samsung is noticeably absent from the set of OEMs committed to manufacturing the devices. The same set does include several businesses located in India, including Karbonn, and LavaOne to name just two.

The features of the device can be reviewed on the Android One web page. The quad core processor, all day battery life, and dual SIMs are more typical of smart phones targeted to the high end of the market than the low end. So the $105.00 price Prins claims for the Android One represents a significant move, on the part of Google and its Android OEMs, to lower the cost of entry for emerging markets (with India being the first) to the world of mobile online computing. Further, the actual consumer costs Prins presents, in contrast, for the iPhone 6, etc., lend accuracy to my own comments, earlier this week, on the actual street price for the iPhone 6, “after the emperor has shed his clothes (meaning the carrier subsidies applied to create an artificial consumer price of $199.00)”. Is yet another Apple smart phone, unlocked, worth $649.00? After the rush of the last two weeks, I don’t think so.

The Android One is also some bad news for Microsoft’s efforts to introduce low cost smart phones to the same markets. Ditto for Blackberry. But the real story, likely in the making, is precisely the change in leadership for the smart phone industry Prins alludes to in his post.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved