The world is in such a state today that irrational thinking is more prevalent than common sense. No sector of the population is immune. From politicians who speak without thinking first to technology analysts who have yet to understand the basics of business, common sense and math seem to have lost the respect of most people.
Either that, or people publish and speak such outrageous crazy just to see what kind of response they can get.
The perfect example comes from VentureBeat’s Vivek Wadhwa who was inspired by his editor to write the most comical, nonsensical historical piece possible, but make it relevant to 2016.
Here we go.
Apple reported lackluster earnings on Tuesday as the company’s iPhone sales continued to slide.
Earnings were only lackluster compared to behemoth earnings of a year ago. Apple made almost $8-billion in profits. Name another tech company that did the same thing last quarter and tell me it’s ‘lackluster.’
The numbers make it clear that the future of the consumer products behemoth is no longer in its consumer products.
That’s crap. The vast majority of what Apple does is what Apple has always done. Sell hardware. And despite massive profits, that needs to change? What numbers support that?
The fix? Apple should release a version of iOS for non-Apple devices.
No, Apple should not license iOS for non-Apple devices. Why? Apple is a hardware company. iOS on other manufacturer’s devices would cut sales for Apple’s devices, and the amount of profit coming in from licensing would be paltry.
Apple would kill itself.
First, why would a smartphone maker want to pay a license to Apple for iOS (which would increase the device’s cost) when Android OS is free? Differentiation. Fair enough. Now, how would iPhones then be differentiated from Samsung Galaxy iOS?
See the problem?
Wait. It gets worse.
Imagine those Samsung, LG, and Xiaomi smartphones having an original Apple operating system on them rather than the imitations they are presently running. Offered the choice, users would upgrade in droves. And those users would download new applications and sign up for Apple’s subscription services, giving the company a cut of everything they purchased, as well as valuable data and marketing opportunities. Google’s Android business would finally have a formidable rival.
Forget the fact that Apple tried to license the Mac OS back in the days before Steve Jobs second coming and it was a dismal failure. Forget the fact that the only business model example Wadhwa could use is Microsoft’s Windows Phone, and that’s been a disaster for everyone; Microsoft and manufacturers.
In fact, just forget facts and math altogether because they don’t work in the parallel universe constructed by Venture Beat’s pre-eminent astrologer. Google’s Android business has one rival.
So, Apple, piss that business goodbye in the hopes that additional licensing fees and services revenue might overcome the losses as Apple’s own iPhone customers leave the platform and start buying less expensive smartphones made by Samsung, LG, Xiaomi, et al, that run iOS.
If Apple made iOS available on other phones, it would not only multiply the markets for its service businesses but would also allow the devices to become a platform for all sorts of new products and subscriptions that other companies would develop.
Uh, no. The Android marketplace does not function as well– by a large margin– as Apple’s iOS marketplace. What products and subscriptions would come about that would benefit Apple in any way other than incremental increases to the Services group (which, by the way, is not as profitable as selling hardware)? Where are they? Where’s the spreadsheet?
Apple has reportedly been working for years on developing video-streaming services that act as a version of Apple Music for TV and movies. If the company opens its platform, these could potentially be made available to billions of people.
Because Android customers who buy a non-Apple iOS smartphone are going to buy a $169 Apple TV? Isn’t Apple’s customer base of a billion or so massively more profitable in every way than Android’s customer base of 1.5-billion or so? And Apple now needs to be more like Android?
Where’s the problem Apple faces again?
Without expanding its operating system, the future looks bleak for Apple. Full-featured smartphones can be purchased for as little as $50 in China and India today. That price will fall to less than $25 over the next three or four years, and billions of people will be purchasing them. But these will be Android-powered devices. Apple will find that its market share has shrunk to the low single digits and that it has become even less relevant in the consumer space.
Marketshare, marketshare, marketshare. Yes, you might be able to buy an Android-based smartphone for $100 or less, but who makes money on those devices? Nobody. Not even Google. The only reason to play in that ballpark is marketshare. It’s not revenue, and it’s not profits. If Apple owns 2-percent of the smartphone industry’s marketshare, but 90-percent of the industry’s profitshare, which smartphone company would not be happy to switch with Apple’s position?
Making iOS available on other devices will remove a critical competitive advantage that the iPhone enjoys, but it will create many new revenue streams and will be better for Apple’s long-term survival.
Honestly, my hair is on fire. In product marketing, differentiation is a key component for success. Smartphone makers running Android on their devices can only compete on price. Apple does not. But somehow a bunch of new revenue streams will magically arrive for Apple if only it would be bold enough to destroy the highly profitable revenue stream it enjoys now.
How does that even make sense, President Trump?
Apple’s innovation machine has largely stalled; the iPhone was the company’s last major product invention.
Stalled? Are we talking incremental disruption or revolutionary disruption? I ask because they are different. What revolutionary disruption since iPhone has Apple missed?
Declining market share may be just what it will take to jolt Apple’s hardware designers and product developers out of their complacency and get them aspiring to deliver products as imaginative and groundbreaking as the iPhone once was.
Let’s be honest. With the exception of the temporary iPod outlier, everything about Apple has been about declining marketshare. iPod aside, Apple dominates profits with low marketshare. That’s what Apple does. It dominates profits.
Vivek Wadhwa is Distinguished Fellow and professor at Carnegie Mellon University Engineering at Silicon Valley and a director of research at Center for Entrepreneurship and Research Commercialization at Duke. His past appointments include Stanford Law School, the University of California, Berkeley, Harvard Law School, and Emory University
And not a lick of common sense or understanding of how businesses work, and certainly no ability to offer insightful analysis.