“However, it’s always important to note that market share numbers aren’t what they seem,” Bleeker reports. “Not only is Apple’s average selling price two to three times as large as its key rivals’, the amazing part is that the lead is expanding. Thanks in part to this growing ASP advantage, when comparing Apple to its rivals, it managed to grow its market share when measured in terms of revenue, a far more important metric than the usual units measurement seen in market share studies.”
“Reports continue to flow in that the Android’s momentum has slowed in the wake of the iPhone 4’s release. Research which was first published by Asymco, showed slowing growth on Verizon’s Android-heavy smartphone activation count. In fact, AT&T-only shipments of iPhones were predicted to have outsold Verizon’s Android sales by a ‘factor of 2.5,'” Bleeker reports. “Given this information, it’s not surprising to see reports of Verizon not only redoubling its efforts to get the iPhone, but also willing to make price concessions to keep the phone off both T-Mobile’s and Sprint’s networks.”
Bleeker reports, “While this news has obvious implications toward the market share battles already discussed between Apple and Android, the more important point is pricing. Apple’s move to Verizon was largely seen as a blow to its pricing power, as AT&T is widely acknowledged to have cut Apple a sweetheart deal for exclusivity. However, if Verizon is desperate enough to make wide concessions of its own, the iPhone’s pricing level in the U.S. should hold up better than expected, with the added bonus of more phone buyers to sell to.”
More info, including charts, in the full article here.
Feed the goose that lays the golden eggs.
“However, if Verizon is desperate enough to make wide concessions of its own, the iPhone’s pricing level in the U.S. should hold up better than expected, with the added bonus of more phone buyers to sell to.”
Haha, talk about everything coming up roses. Losing those sweet ATT subsidy payments was the biggest risk in allowing exclusivity to expire. Now Apple still has fat (if not fatter) subsidies from a desperate Verizon but with the expanded customer base. You couldn’t have planned it any better.
Think Different?
Falling behind is the new jumping ahead!
R2:
Ain’t that the truth?
There will beno drop in payments that AT&T will make to apple. The price AT&T is paying will remain the same. All carriers will pay the same. The exclusivity was just a thing that happened at the point wherein most carriers were doubtful of the iPhone. Now, apple can name it’s price. AT&T has no choice. Losing the iPhone will be far worse for them.
Horace Dediu at Asymco.com is THE MAN when it comes to analyzing the smart phone market. I a surprised that MDN seldom cites him directly; rather they use third parties like The Fool or Fortune.
Yes, androids share is growing. So is the entire smartphone market. So is Apple’s number of units sold. But at the end of the day, what matters is who is making PROFIT in this market. That will be Apple’s strength for some time to come.
“willing to make price concessions to keep the phone off both T-Mobile’s and Sprint’s networks”
Hope that’s not happening, that would be restraint of trade and is against the free market principles American business supposedly believes in.
As more people get an Android phone and encounter its issues, multiple versions, apps that don’t work, the word gets out, people wait for an iPhone.
While apple Is out making tons of money google and all their minions are doing good to make any profit. Google i cant see is making anything the minions are making very little and while android phones are selling well how much is each phone selling? How much is moto and htc making per phone sold? Cant be much with buy 1 get 1 and so forth.
Apple used Android to help marginalize RIM, Palm, Nokia, Windows Mobile, and the others. And it worked. Look at the number of key smart phone platforms in 2007, when iPhone was released. Look now. It’s basically iPhone and Android, with the others gone or fading.
Even if the “collective” Android market share exceeds iPhone’s share, Apple will feel very confident with competing against a single fragmented platform where Google makes no direct profit from an Android device sale, and the device makers are competing mostly against each other (not against iPhone) with “commodity” products. In such an environment, Apple ends up making most of the available profit in the industry, as noted by this report.
Apple helped make this scenario a reality by staying off Verizon intentionally (and as long as necessary), while still selling as many iPhones as it produced. Now that Android has done the “dirty work” of taking out the rest of the competition, Apple has no reason to stay exclusive to ATT.
Very soon… game, set, and match to Apple.
“willing to make price concessions to keep the phone off both T-Mobile’s and Sprint’s networks”
That IS the free market – and whatever the market will bear is A-OK.
Possible Steve Jobs conversation with Verizon:
“You want this iPhone do ya? Well, whatcha got? Mm hm… Not bad. What ELSE ya got, considering you completely dismissed my offer over 3 years ago… Oooh… That’s tempting… I’ll consider it…”
@lurker
Is it restraint of trade? I think that is a complex issue – way beyond the intellectual capacity of most Americans, who have demonstrated an increasing unwillingness to understand any issue in detail.
There is no basis for insisting that ALL products are sold “supermarket-style” by every retailer. iPhone competes with Nokia, Rim, Android et al, and consumers have many choices. While American consumers might prefer to run an iPhone on the network of their choice, lack of regulation in this sector has resulted in multiple, incompatible, network standards – you cannot run an iPhone on all US networks, unlike in “socialist” Europe, Australia, NZ and other countries who regulated a network standard.
Nice try at minimizing Android’s impact. But the bottom line is, if Android didn’t exist Apple would be selling lots more iPhones, and there’d be no clear alternative. The Apple haters would also have no “just as good for less” product to cling to.
Actually, Apple needs Android to succeed, at least in reasonable numbers of active users, not necessarily profits, so they don’t get into trouble with the feds thinking they’re stifling competition (which Verizon would be doing by paying Apple to stay off T-Mobile and Sprint.)
But let’s hope the new Verizon iPhone also is LTE 4G compatible, or all those folks who switch from ATT and all those VZ users who get an iPhone might just wonder what all the fuss about Verizon was all about. Verizon’s 3G network is already slower than ATT’s and will only get slower under the bandwidth demands of iPhone users. It would really be nice to have a choice of all the carriers for iPhone buyers… I’m thinking T-Mobile would hold it’s own, at least in areas where they have good coverage.
@byronic: (or should I say moronic…)
You can make your point without being lowbrow enough to assail “most” Americans. It only shows a typical arrogance and equally ignorant characteristic of most America-bashers. America certainly has no monopoly on ignorance and stupidity, as you so deftly demonstrated with your clichéd and intolerant comment. Peace, and out!