“On Wednesday after the markets closed, Qualcomm reported earnings. Buried in Qualcomm’s results is bad news for Apple, BlackBerry and Nokia,” Nigam Arora writes for Forbes. “Qualcomm is a blue chip in the mobile technology space. As of this writing, the stock is down $3.79. The real reason behind the fall is the concern that smartphone prices are falling much faster than expectations. Of further concern is the number of new entrants in the smartphone market. Somewhat shocking was a statement by Qualcomm that some of its customers are able to launch their devices in as little as 60 days from start to launch. These customers are using Qualcomm Reference Design (QRD).”
“The 60-day time to launch is in stark contrast with the traditional time of nine months to a year.,” Arora writes. “This is real bad news for Apple. Growth is in emerging markets as the developed markets are mostly saturated. In emerging markets, disposable incomes are not high enough for the masses to afford existing Apple products. Apple has already ruled out a $99 iPhone. The indications are that Apple is hard at work on a low end phone. Nobody knows the price of the future low-end iPhone. Most of the informed speculation centers around a price in the range of $300 to $400 in contrast to the $613 average selling price of the present iPhone.”
Arora writes, “The strong inference from Qualcomm’s earnings report is that smartphone prices are falling so fast that the new low end Apple iPhone is not likely to be competitive.”
Read more in the full article here.
I know the world is full of idiots, but looks like Forbes attracts disproportionate amount of idiots. If anyone need to worry about the low-end smartphone erosion, it is copy-cat Samsung. Look at what happens in PC market, who are mostly impacted by low-end PC? HP, Dell, etc. Stupid Forbes.
There will always be a market for mobile devices that work together, seamlessly, with a vast eco-system supported by the users of those devices.
Apple doesn’t need the volume of a cheap, throw away handset maker to survive. Apple’s customers USE their handset for more than making calls. While you could probably do that with Android as well, the OS isn’t as strong, isn’t as secure and is fragmented beyond belief (making App availability questionable).
Even with lower margins, Apple survives, where the competition does not, because Apple mobile devices control the majority of mobile profits.
Cheap handsets are going to end up eating its young in a fight for unprofitable sales to a market that doesn’t use SMARTPHONES as SMARTPHONES.
The handset everyone wants, whether they can afford one or not, is an iPhone. As long as that remains the case (Android manufacturers have no way to differentiate themselves from all others, other than price), there should be no cause for alarm.
yes we agree,
but what if, iWatch was this lower priced scaled back dedicated phone capable device?
The brilliance of Apple; they may not advertise NOR position the product as a low end cheap phone – STILL – the new device may have telephone capabilities – a different type of watch – the campaign being:
Watch the Difference
For an iWatch to have the capabilities of an iPhone, it would need to be nearly as big as an iPhone, but with a wrist strap. It is more likely that, IF there is an iWatch, it is a bluetooth/NFC, device that works in conjunction with not independent of an iPhone.
Dick Tracy’s Watch: The Most Indestructible Meme in Tech Journalism 😉
I don’t I wish to misrepresent Samsung – I believe thay have wronged but without Android, Samsung was almost harmless.
It is Android which has allowed upstarts to use the freely distributed OS clone of Apples iOS to propel competition. Google has disrupted the honourable yet natural process of research and development. The solution is, Android must be eliminated – Destroy the robot before its too late. Too late means the legality of Android is slipping into years now where Apple still is posed to defend its rights and is far too slow to its rightful victory.
anti-android
pro apple
it couldn’t be any clearer Derek Currie
The only way Apple is going to get at Android is to attack Google’s core search engine business. Apple truly needs a search engine of its own that runs on every Apple device available. Apple could afford to make it ad free and just undermine Google’s ad business just like Android undermined Apple’s mobile business.
This is what I really want to see Apple do to break Android’s grip. Google itself needs to be severely weakened by strong competition. Make Google cry uncle. Android would be less than useless to Google. Every time I think of Eric Schmidt laughing at Apple, I want to see Google take a serious financial hit so it will never get close to $1000 a share. I agree that Android must be completely eliminated as the free and dirty virus that it is. It was an unfair Google tactic being passed off as a magnanimous gift to hardware vendors.
Hi WaterLilly OS11! Thanks for the shout out!
Android must be eliminated – Destroy the robot before its too late 😆
I personally don’t know how Apple is supposed to sue an ‘open source’ project. Then again, Google can’t really defend Android as truly ‘open source’. Trained legal minds will have to tackle that one.
More FUD. Where are all of the headline news reports of SamDungs S4 delays?
Bloggers and analysts attribute Samsung delays to demand where Apple delays are due to supply chain problems.
So now that you’ve qualified the unqualified desperate spin, can you make a real connection between Apple and cheap?
That’s only thing desperate is your writing skills. No wonder nobody understands you!
After reading your sentence I couldn’t write anymore. It’s infectious.
When you’re thick, you’re think…😳
lol – amazingly insane
when you are thick, you sink – no?
Yet how can it be demand when it isn’t yet available? I think they just realized its too buggy and are trying to fix it before release.
Precisely.
Didn’t they say this basically when Apple introduced the original iPhone. Apple doesn’t have a chance, not competitive.
We don’t even know if Apple is introducing a low cost iPhone yet, so how can Apple be competitive or not just because a chip manufacturer had a bad quarter? The between the line readings from these idiots is like going to someone who says they have a crystal ball and tell you your future. B.S.!!!
Follow the money. Let other companies chase market share while Apple makes a healthy profit in all of its products.
Oh. A product that doesn’t exist will have a tough time in the market? These dorks have a time machine?
None of these idiots foresaw Apple blindsiding the entire market. None of them know what Apple, a company that plans years in advance, has up its sleeve. It’s high time they stopped pretending they have predictive powers.
“informed speculation” – contradiction in terms.
Apple’s smartphone sales are up, and last time I looked they hadn’t reduced their prices and still had 75% of the profits in the industry. So who’s taking the profitability hit? Who’s the next biggest player? Samsung, anyone?
And BTW, yes, it only takes about 60 days for Samsung to reverse engineer and copy Apple’s designs, and tack on a few ill conceived, useless features that people won’t use.
“The strong inference from Qualcomm’s earnings report is that smartphone prices are falling so fast that the new low end Apple iPhone is not likely to be competitive.”
What new Apple low end phone are they talking about? This article is complete crap….
In other startling news, Mercedes is quaking in its boots as rusty bicycles flood emerging markets.
Apple has never joined the race to the bargain-basement and isn’t going to do so now.
yes – the Chinese are buy more bicycles then ever before…
rusty bikes chains and all are all the fad – included is a free oil change kit and a sweet manual ringer bell – oh the joy of tech
There is a bell curve. We have seen it play out countless of times. We are at the top of this bell curve. Apple should have had their budget model and larger model out by now. Better late than never, but they must now more than ever bring new value into this category and new product categories. Apple has been complacent by not opening up their Apple TV to apps years ago. Going the same route as Microsoft and Blackberry with a myopic view focusing on today’s hot seller instead on the next thing. Apple TV could have been a major gaming and internet device by now. Maybe better late than never.
Every time you open your mouth stupid falls out.
Apple makes 70% of the profits in smart phones. Apple makes money on every App purchased, every book downloaded, every song purchased. They have a thriving ecosystem and unlike other phone manufacturers they have tablets (that people actually buy) and computers and software that they sell. NO they should not be focused on selling low margin, cheap ANYTHING you idiot. Apple makes premium products, not Dell style throwaways.
They are NOTHING at all like Microsoft or RIM. (ATTN: dummy, blackberry is a trademark, the company name is RIM)
Apple TV is a fantastic product, unlike the google and Logitech wannabes. The hold up here is also simple: Content owners are greedy and scared shitless of Apple taking over their space. Once broad agreements are struck, watch the platform explode. The app issue is all about screen size and development hurdles. it is coming sooner than you think.
Apple is focused on more than you will know for years to come, to suggest otherwise is to ignore history and is just you making shit up.
Android is a propped up failing platform. The one company making money on Android phones is actively and openly developing their own OS so they can dump it. Guess what happens to it then? It dries up and blows away in the wind pal. Apple is doing just fine, you however need to stop listening to shitty pundits and shorts. You spout more FUD than fact from what I’ve seen.
lol, grow up.
There are free books.
Hey dummy, the company name is now indeed Blackberry.
LOL !
Coin that truth, that has to qualify for quote of the year:
“Every time you open your mouth stupid falls out.”
LOL indeed. Two infamous characters here at MDN battling it out for stupidness supremacy. I don’t know what you call that sort of argument and I don’t think I want to know.
Stupreme😕
Ooh. Now I have to forget that word.
The “no cost” iPhone is the iPhone 4, and the iPhone 4S qualifies as “low cost.” These two models still provide a great user experience when compared to other phone on the market, despite their release date.
Yeah but, as has often been hammered at me, these phones are ‘free’ and ‘low cost’ if you sign a phone contract. There’s a contingent that wants ‘cheap phones’ that are cheap without a contract, or something. I’ll let them explain it.
I have a different view on this but one I feel is very analogous to Apple. I manage and invest my clients money. I could go out and find thousands of clients in a very short amount of time that have 10k or less in their IRA or brokerage account and help them invest it. The problem is, a hundred clients with 5K, is the same to me as one with 500K. The quality of service cannot possibly be the same when servicing 50 vs. 1. The product would greatly suffer and experience of the client would be bad. Much like the low end PC and Smartphone markets today. So as a business decision it is far more intelligent to focus on 100-200 clients with say 100k or more then to focus on 10 times that amount for the same or often less return. It’s not about not wanting to help every single person, it’s about being able to provide a quality product to those that can both afford it and see the value in it. It’s funny that you never hear of Goldman Sachs being asked to go target local barbershops for their business loans, or mom and pop stores looking to merge. I mean that is where the majority of the people are so why is there not an outcry for Goldman to stop ignoring small business. BECAUSE THAT IS NOT WHERE THE MONEY IS!!!!!!!!
The problem with your argument is that Apple makes mass market consumer items that depends on economies of scale to be able to offer it’s gadgets at reasonable by Apple standards prices. And if it focuses solely on the top end, then it has already maxed it’s growth potential. There is no such thing as perpetual growth.
So like you and others are saying, that it should just be complacent with what they got, then it’s just history repeating itself. The world does not stand still.
Apple has better economies of scale than ANY other manufacturer, including Samsung.
Exactly, and you can only achieve that by making high volume products that appeal to the largest possible market.
Apple should worry about a cheap piece of crap that some unknown developer knocks out in 60 days? Ridiculous!!!
What does ’60 days’ say about these phones? Cheap tossed together clonal phones.
And Apple is supposed to care about that market? I don’t think so. Stupid article alert.
This is just a brainstorming idea, where there are no bad ideas. I just want to toss out some thoughts for argument’s sake.
Why couldn’t Apple hedge their bets? Form a new company, and make cheap non-apple phones. No one has to know. They would do it just to suck up some air on the ground. It’s a break even venture.
The point, is they wouldn’t be competing with their own brand,
Then to tie it all up, maybe offer a low price point Apple branded phone, a sub $100 phone, that only has features that merit the price, just like the iPod Shuffle. It might not have to run any apps. Or if it does, audio only, no display. Voice control only…. “Call Betty” You would have to add everyone’s info, through iTunes. It would have Siri’s voice, but not tie into the Siri system, much like early iPhones. It would come with 1GB to 4GB of storage and essentially be the “iPod-phone” like they had originally considered, but didn’t roll with.
Why am I saying this? The first iPod I got was for my wife, and it was the shuffle. At first I went in to buy the 1GB model, I think it was $59. Then instead I bought the 2GB model, for $79. It was that easy to make the step. It was a painless entry point to make a new customer out of my wife.
People all over, love Apple. They just don’t have an entry point for customers who are uncomfortable spending $199, or $600 on a new phone.
I would get two iPhones for my in-laws, if there was an iPhone that had no data plan to worry about, and was $0 to $39 on contract.
Incongruous:
1) Apple has already ruled out a $99 iPhone. Therefore, no low end phone.
2) The indications are that Apple is hard at work on a low end phone. Therefore, a low end phone.
Therefore, what?
This is real bad news for Apple.
What is? Cheap phones that Apple refuses to make? Or is Apple making a cheap phone?
This article reminds me NOT of someone high on coke or crack, but someone high on a hallucinogen.
I’m not trying to imply anything or denigrate anyone or troll for a lawsuit! I’m just saying it is my very strong and consistent impression that a vast amount of the stock analcyst crap I’ve read over the last year reminds me of people with severe drug abuse problems. This article furthers that hypothesis. Only their drug dealers know for sure.
Great book title:
THE DRUG ADDICTS OF WALL STREET
I think Nigam Arora is wrong. This article is written with a negative mind set. Everything he brings up as bad for Apple is actually good for Apple relative to the competition of course.
Apple have not ruled out a $99 iPhone. In fact, they are selling a $0 iPhone now with a 2 year contract. That is the cheapest iPhone. I have no idea what he means by that 60 day window. That they build a phone and launch it in 60 days? Can’t be a quality device I’m sure. I agree with that the smartphone prices are falling because if commoditisation. That will hit Apple but it will hit Nokia, Samsung, HTC, Blackberry harder so in relative terms its not that bad for Apple. Apple will not engage in a war for market share as all the analysts are hoping for. They are hoping for a cheap iPhone and at the same time hate the idea of a cheap iPhone because it will impact margins, ASP, revenue. They are funny clcreatures analysts. Apple will not engage in a race to the bottom. It would be disastrous for Apple. So I don’t understand why they want Apple to do it. Apple is much better served continuing to focus on the high end market. It is also ridiculous to suggest that Apple is not competitive when they bring in 75% of the profits in the smartphone space. As Apple’s latest earnings call states they are still selling allot of phones. The only other player making some kind if profit is Samsung. Everyone else is fighting over scraps. That is why there is commoditisation because Nokia, HTC, BlackBerry are not competitive, Apple are!, so the other have to lower their prices to survive and to get some market share. That is driving the commoditisation. It may impact Appple but its far more damaging to the other players. There is never iPad good idea to engage in price war to gain market share. It will put you in a very bad position. I think Samsung needs to be more worried. They are closer to the competition and is feeling the pain for HTC. And others and must keep to bring out devices in an increasingly rapid phase to stay relevant. No other smart phone player is investable but Apple. Not even Samsung… The chip makers may be but you have to be care ful. I think that says something. Apple may be getting hit but is still the nicest house.
I have no idea how iOS auto correct changed it to “There is never iPad “. It should read “There is never a good idea”…