Analyst: Apple’s iPhone may end last smartphone standing in terms of price, profitability

The Return of Black Friday Blowout “The iPhone may end up as the ‘last man standing’ amongst smartphones in terms of holding onto profits and prices, argues Needham & Co. analyst Charlie Wolf,” Electronista reports.

“In the long term though, smartphones based on either platform may become commodities, no longer able to pull a special premium,” ,” Electronista reports. “The iPhone is said to have a brand equity advantage, allowing Apple to retain high prices and profits.”

Electronista reports, “The company notably controls both the iPhone platform, iOS, and its hardware design, meaning that the only competitive pressure comes from alternate platforms as a whole.”

Full article here.

MacDailyNews Take: Always nice to see that some people do get it.


  1. “The company notably controls both the iPhone platform, iOS, and its hardware design, meaning that the only competitive pressure comes from alternate platforms as a whole.”

    No $HiT Sherlock!

  2. Apple’s strategy and why iPhone is still exclusive to ATT in the U.S. market is becoming more clear. Just LET Android take over as the “other” platform. Have Android do the dirty work of marginalizing Apple’s REAL competition, such as Palm, RIM, Nokia, and brands that use Windows Mobile. Stay exclusive to ATT, while the industry “experts” groan and moan…

    Less “anti-competitive” scrutiny for Apple, all while Apple still sold as many iPhone 4’s as it can make on ATT. You cannot sell something faster than you can make it; something else must fill the void left by “not enough iPhones to go around”; it might as well be Android phones made by an uncoordinated bunch of Google’s “partners.”

    Why is this good for Apple? Because Steve Jobs knows Apple can manage and manipulate a competing platform where Google make no direct profit from phone sales (only indirect advertising revenue) and the “lazy” brands that use Android are mostly competing with each other for the low-profit “king of commodity smart phone” status.

    Once Android becomes the only viable choice for Apple’s competition (some say it has already happened), Apple no longer has to worry about competing with the “non-lazy” brands that also integrate hardware and software, such as Palm (already gone unless HP makes something out of it), RIM (on the way out), and Nokia (still strong worldwide but not in the U.S.). I don’t think Apple would mind too much if Windows Phone became a secondary option, but it would not be as good because Microsoft DOES profit directly from a phone sale through a licensing fee.

    So the timing of the current Verizon rumors means that Apple believes this strategy has run its course and (at least in the U.S. market) Android has become the only meaningful “other” platform.

    Well, I don’t know if the above is actually Apple’s strategy regarding Android and Verizon, but if not, it sure is a clever “accidental” outcome.

  3. Gruber had a nice take on today. In short, the iPhone is where developers will make money from selling apps, while Android will be where developers license apps to carriers to add as to phones as freeware supported by advertising. Google has the “eyeball” in terms of volume, Apple has the quality and polish.

  4. I predicted this when the iPhone was launched. I stated that it was the OS not the iPhone that was the real gold mine as it had already proven its worth by driving Macs, iPods and then the iPhone. I predicted that because of the nature of OSX, it would be possible to adopt it for what ever gadget Apple wanted whilst still retaining compatibility across all products.

  5. @ken1w

    Interesting take. A couple friends have the Verizon Droid X and what concerns me is that they’ve grown to really like it 🙁

    I asked them if they’d switch over to the iPhone if/when/should Verizon get it. And both said, no. But then I think they’re secret Apple haters ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    I just hope the Verizon rumors are real this time as I’ve been waiting a long time and my Palm Treo 755p is on its last legs and I’m tired of having to manually sync (Missing Sync) while watching my iPad miraculously sync perfectly and almost instantly using MobileMe, which the article fails to discuss the importance of in the equation.

  6. What makes me suspect that Verizon may actually be getting an iPhone soon IS the fact that they aren’t discrediting the rumors. Analysts, though not always very credible, are reporting that Android’s sales are stunted due to the rumored arrival of a Verizon iPhone. Wouldn’t Verizon be pressured by it’s phone makers to dispel the rumor if it weren’t true?

  7. Google hopes to do what MS did: Let the OEMs beat each others brains out while they reel in the profits. But the cell phone market is very different from the PC market. OEMs will switch OSes to the highest bidder/subsidizer and consumers couldn’t care less which OS their smart phones run.

    Ironically, the one thing that could tie consumers to Android—high powered, highly optimized, customized Android apps—is the one thing Google doesn’t seem to care about with their fragmented, unfocused OS/hardware strategy.

    MS achieved monopoly because they had lock-in from corporate IT departments, the OEMs and after a few years, Office suite and MS servers and Outlook.

  8. I have an iPhone 3GS. My grandmother has a Droid. Today, she used my iPhone. The first thing she remarked was, “This is a REALLY nice phone!” I was like, “Yeah, it’s an iPhone.” Now if I could only convince her to switch to Mac. Then I wouldn’t have to deal with her tech issues all the time!

  9. The latest I’ve heard is “the iPhone is not a SmartPhone”. Nor are the Android models. These phones have all surpassed the e-mail reading smart phones and stepped up to a new, more desirable, level … App Phone. I guess, and this is reaching, the new Windows phones are also in this category.
    This, I guess, does leave RIM in charge of the smart phone segment … as if that’s something to brag about. It does validate what many people – especially here – were saying about the iPhone being so far ahead of everything else (this was before Android and Win Phone) … the anal-ists have finally caught on.

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