Why Apple is not in the volume business

“The smartphone industry is growing really, really fast,” Michael Comeau writes for Minyanville. “But it’s also a mess.”

Beside Apple and Samsung, “the industry is in rough shape, with a few bright spots here and there — namely the Chinese players like Huawei and ZTE that are moving big units in emerging markets,” Comeau writes. “What’s the culprit? Simple — there are too many darn phones out there.”

“If the 5C had been a super-cheap phone, maybe Apple could have grown iPhone units by 50-60% (assuming no supply constraints), but Apple is not playing the market-share game. If it were, there’s no way the new iPad mini with Retina display would have been priced at $399, a $70 premium to last year’s model,” Comeau writes. “It wants to protect its brand and its profit margins and will sacrifice current growth and market share to get there. Last quarter, its iPhone ASP fell by just 6.5% — which is incredible relative to the 22.8% drop seen in phablets.”

Read more in the full article here.

Related article:
Apple is Samsung’s worst nightmare – November 14, 2013

25 Comments

  1. “It wants to protect its brand…” Really?! that’s funny, I could have sworn Tim Cook said during the last keynote that they don’t care about quantity, but customer sat[isfaction]. In fact, Tim has tried to repeatedly emphasize “what it means to Apple”. Making great products for people, which comes at a price. “If consumers like our products, they’ll buy them. If they don’t, they won’t! It will all work itself out!” – Steve Job’s words at his last AllThingsD appearance. To prove a point, Jony Ive risks an awful lot by changing the iOS 7 design. Sometimes Apple will get it wrong, and hopefully more often, get it right. SJ has said many times over the years that markets, stock price, etc. are out of Apple’s control. Apple focuses on what it can control – trying to make great products for people (at a price people are willing to pay).

    1. The android market is very much like the windows of 1990s/early 2000. Fighting among themselves to differentiate their products while the Mac was somewhat a niche(a large niche).

      But now Apple and Msft have their own platforms to themselves, while android is flooded with similar phones/similar specs but with more cheap phones than premium priced ones.

      Apple and even MSFT have a market to grow into. While android OEMs fight against Samsung.

    1. Apple’s profit share has won for awhile. They keep growing in that aspect… They still have china and india’s markets to grow revenue.

      Amazing what a gold iphone is doing for them.

    2. Hey shit fer brains. Fuck market share. Please re-read that if you can read. PROFITS!!! Look it the fuck up lip service. I was gunna call you a but plug but didn’t want to offend butt plugs.

  2. No matter what anyone says, Wall Street believes Apple is in the volume business and is valuing it accordingly. In other words, if Porsche and Toyota were in iOS and Android’s place, Porsche would be expected to sell just as many vehicles as Toyota because they both have four wheels and hold passengers. It’s as simple as that.

    To Wall Street, a smartphone is a smartphone is a smartphone. They are all seen as being created equal and the one that sells in the most quantity wins the gold. Second or third doesn’t count for diddly-squat.

  3. Any company who makes mobile phones by the million is in the volume business whether they are willing to admit it or not. It would seem some here love to delude themselves otherwise.

    1. But not by making junk, pricing it so low that it can’t afford to innovate, or any other of a myriad of reasons that most of these handset assemblers will go bankrupt in the next 3-5 years or get out of the business altogether.

  4. Apple would like to have 100% of the market but are getting their ass kicked by android and Samsung. They screwed up.. Now they are 20% of the market. Nobody wants that.

    1. You can’t be getting your ass kicked when you make far more profits selling less products.

      It’s the same with PCs – Apple may only have 7% or so market share, but makes more profit in computers than any PC vendor. That’s a great problem to have. You’re left with maximum growth potential and have the OPTION of accepting lower profits should you want to use it.

      If Apple WANTED to, they could drastically cut prices with 5%-10% profit instead of >30% while grabbing huge marketshare. I trust they know what they’re doing more than you. The billions in cash are a good indicator.

  5. Don’t know what’s so difficult to understand Quality vs. Quantity. Quality should be the focus if you are a company that cares about your product’s reputation. Quality means repeat customers and long time loyalty to the brand.

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