Henry Blodget was wrong; Apple knows exactly what it’s doing with its iPhone business

“It really feels like 2013 was a down year for Apple as it reset itself to launch new product categories in the next five years or so. If ever there was a year for Apple’s rivals to leap past the company, it was 2013, and it didn’t happen. (Although, these things don’t happen over night. If Apple really screwed the pooch in 2013, we’ll probably realize it in 2016),” Jay Yarow writes for Business Insider by way of Yahoo Finance. “Another big difference for Apple as we enter 2014 is that it seems much more clear that the company really knows what it’s doing with the iPhone business , despite the various cries from the pundit class.”

“Ever since Android started making noise people have been warning Apple that the iPhone was in danger. There is, of course, no louder proponent of this notion than our own Henry Blodget,” Yarow writes. “For the last three years Blodget, and people like himself, have been pounding the table that Apple was about to get smoked by Google, just like it got smoked by Microsoft.”

MacDailyNews Take: Apple takes roughly half of all profit in the traditional “PC” market, yet they got “smoked” by Microsoft? Yeah, okay. Microsoft’s smoking something, but it certainly ain’t Apple.

“In November, Blodget wrote another post admonishing Apple, and it supporters, saying, ‘Come on, Apple Fans, it’s time to admit the company is blowing it,'” Yarow writes. “I think Blodget’s wrong, and it’s actually never been clearer that Apple’s decision to stay the course with its iPhone business has been the exact right decision… The iPhone generated $19.5 billion in revenue for Apple in the September quarter. It sold 33.8 million iPhones, which was ahead of expectations, and up 26% on a year-over-year basis. Now lets put that in context: Google’s total revenue for the quarter was $14.9 billion, a 12% jump year-over-year. (If you just look at Google’s ad business revenue was $12.5 billion, up 15% year-over-year); Microsoft’s total revenue was $18.5 billion, a 7% jump; Amazon’s total revenue was $17.09 billion, up 24%.”

“Apple’s iPhone business is bigger, and importantly, growing faster than Microsoft, Amazon, and Google, the three giants Apple is competing against in mobile,” Yarow writes. “Apple is the more lucrative platform for an app maker. (And there is no reason to think Android draws more ad dollars since IBM and Adobe both say there is significantly more commerce happening on iOS. Advertisers spend where the dollars are spent) …Market share doesn’t matter. This is year six of the App Store, and despite all the Android market share gains, developers still love iOS because people pay for, and use, iOS apps. The developers aren’t leaving… Carriers like iPhones because iPhone users spend money on data. As we enter 2014, things look bright for Apple and its iPhone business, despite the doomsayers of 2013.”

Much more in the full article here.

MacDailyNews Take: As we explained way back in November 2012:

Android is pushed to users who are, in general:

a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.

Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.

Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong. Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.

iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.

[Thanks to MacDailyNews Reader “Ellis D” for the heads up.]

Related articles:
Henry Blodget blows it: ‘Hey, Apple, wake up, it’s happening again’ – January 5, 2010

Christmas 2013 proved Google’s guilty secret: Android basically used as dumbphones – January 2, 2014
Test proves Apple iPhone users are smarter than those who settle for other handsets – January 2, 2014
Apple’s iOS is clearly winning the battle for mobile consumers’ time and money – December 10, 2013
Apple’s iPads won Black Friday 2013 – December 3, 2013
Roughly 40% of Black Friday Apple iPads purchased by Android phone users – November 30, 2013
Black Friday: Shoppers snap up deals and Apple iPads – November 29, 2013
Apple iOS developers earn five times the revenue per download of Android developers – November 29, 2013
Are Apple users are savvier shoppers? iOS devices account for disproportionate number of Black Friday searches – November 29, 2013
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
IDC: Android worldwide smartphone market share passes 80% – November 12, 2013
Apple Maps makes killer comeback as Google Maps loses access to world’s most desirable mobile customers – November 12, 2013
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Unsurprisingly, survey says Apple’s iOS is highest priority among mobile developers – January 23, 2013
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
iPhone owners more likely to pay for digital content – November 26, 2009
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple iPhone users buy many more apps, surf the Web much more than other ‘smartphone’ users – March 27, 2009


      1. I’d agree, but I’d have to point out he’s found a way to make a lot more money than most of us here at doing what he does, being wrong and all.

        At the end of the day, we keep score by $$$. 😉

        1. And Blodgett got busted by the Feds along the way. He was charged with civil securities fraud by the U.S. Securities and Exchange Commission and agreed to a permanent ban from the securities industry plus he paid a $2 million fine.

        2. “Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful… that’s what matters to me.”
          – Steve Jobs

    1. No need to say a word… history has already proven Apple right in many ways… And besides, nothing beats having these guys clam up than not saying anything…

      2014 will be an incredible year for Apple…

      Really, all they has to do is add a larger screen iPhone (for those that left Apple for just that reason) and continually improve their Maps/Web services… while protecting their users from malware/viruses.

      BUT we know they will come out with stuff we never thought of by the holidays.

  1. In 2002, then New York State Attorney General Eliot Spitzer published Merrill Lynch e-mails in which Blodget gave assessments about stocks which allegedly conflicted with what was publicly published.[5] In 2003, he was charged with civil securities fraud by the U.S. Securities and Exchange Commission.[6] He agreed to a permanent ban from the securities industry and paid a $2 million fine plus a $2 million disgorgement.[7]


  2. It really feels like 2013 was a down year for Apple

    No, it really DOESN’T. Apple had a brilliant year, yet again. Please take all the Apple Bear Bullshit and shove it. Thank you!

    Apple was about to get smoked by Google, just like it got smoked by Microsoft

    And yet I’ve been living Microsoft-free for two full decades now. What are you smoking, Jay Yarow who writes for Business Insider by way of Yahoo Finance? It smells like Apple Bear Bullshit to me. What do you roll that with?

    I think Blodget’s wrong

    Yeah! Really? That finally sank in eh? The entire HERD of Apple Bear Bullshitters was wrong. They turned out to be nothing more than a lot of mooing cows. Why did that scare anyone?

    “MOOF!” <– Now THAT is sCaRy! Clarus the dogcow has fangs and eats meat; Wall-Nut Street AnalCyst meat. 😈

  3. Henry Blodget and Jay Yarow are some kind of retarded Simon & Garfunkel. Blodget is only capable of banging the drum he thinks will bring in the hits using hilariously misplaced hyperbole, much like he attempted to manipulate the Stock Market before the FCC slapped the taste out of his mouth. Yarow comes off as the rational one, but everyone knows they’re slapping each other’s asses at the BI keggers, thinking their routine comes off as actual journalism.

    No BI article has lacerated my eyeballs in over a year. Why would you bother?

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