These numbers are never official and based upon best guess scenarios, but Apple owns a pure monopoly on smartphone industry profits. It used to be more than 80-percent and a recent report puts it at more than 90-percent. In other words, Apple makes most of the industry’s profits, Samsung survives on table scraps, and all other smartphone makers– Chinese included– are left to break even or dig deeper into their investor’s pockets to keep the doors open.
Microsoft has not officially exited the smartphone business but the handwriting is on the wall and the future is bleak. It’s a two horse race, and Microsoft is a dog. The Surface notebook-cum-tablet seems to have improving sales and that might allow Microsoft to keep Windows Phone around awhile longer, but even the Office maker’s bean counters know what happens if the beans don’t add up. And they’re not.
Google’s Android ecosystem has become an economic nightmare for manufacturers, developers, and even advertisers as Google mobile ads depend upon Apple’s iOS devices to remain relevant.
That brings me to Apple’s latest flop. Watch.
The problems with Watch are multiple but not necessarily growing. What is Watch? The first thing to remember about Watch is that it’s not a standalone product. It’s an accessory to iPhone, so sales numbers cannot be compared to previous Apple products, including Mac, iPhone, or iPad. It’s an accessory and needs to be treated as such until it reaches a point whereby it can stand alone as a new product category.
What’s the compelling reason to buy a Watch?
Remember, it’s an accessory, more akin to chrome wheels, or 28-speaker stereo on a car, than it is a car or truck. People live on their iPhones but that won’t happen for Watch. As an accessory, though, Watch is pretty slick and still in its infancy. With watchOS 2.0 coming in a few months we’ll see many thousands of native Watch apps hit the market, with more functionality and capability. For me, Watch is great as a filter for all the noise emanating from my iPhone apps.
Maybe Watch will prosper more in the future when it can handle more iPhone-like functions (cell phone calls, Wi-Fi connections, etc.) but for now it relies on the iPhone, not iCloud. Regarding iCloud, I wonder if Apple even looks at iCloud as a worthy service. Yes, we all use it, but not many like it or depend upon it. Apple just does not manage cloud services very well, and I suspect that’s by design, or, at best, lip service, which makes me wonder why there is still a 16GB iPhone on the market.
First, 16GB is not enough, but it’s attractive to customers who just want cheap and are not sufficiently far-sighted to understand the ramifications. Second, a 16GB iPhone customer could better utilize iCloud for storage, but that type of customer isn’t the iCloud management type, so they’re the ones who suffer the most when 16GB gets filled two months after buying the iPhone.
If Apple really is all about user experience then selling a device which provides a less than stellar experience should be a sin, but Apple takes the money from 16GB iPhone customers with as much pleasure as the 128GB customer. Apple can afford to price the 32GB iPhone as the entry level model, but one can argue that with iCloud services and capability expanding, and the customer base becoming more cloud savvy and experienced, will there ever be a need for a 256GB iPhone or iPad?