> Apple in time will need to move away from the iPhone and iPad, as they will become a commodity.
As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a commodity, I bought my N4 for half what an iPhone 5 costs.
The only thing that keeps Apple even remotely price comparable on the iPhone is that people mostly buy a smart phone on contract so they see roughly the same price per month (but the carrier takes a much bigger cut with Android).
For someone old enough to just remember the 80's and the Mac vs PC wars it's like watching history repeat itself again, the completely backwards commodity platform vs the well engineered but more costly platform except this time Google is in IBM's place and they aren't doing it by accident like IBM did they know exactly what they are doing (look at the nexus line, top of the line hardware, always the newest version of the software and price that hurts other companies using Android, they risk hurting their own suppliers to drive the price of high end hardware down as rapidly as possible) the problem is that the commodity platform gained ground very very quickly and something like the Nexus 4 at 200 quid with Android 4.3 is now the equal of the iPhone 5 at 500 quid.
The next 5 years is going to be fun to watch whichever side of the divide you are on.
> As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a
> commodity, I bought my N4 for half what an iPhone 5 costs.
Good for you. Premium products are not for everyone. Part of the Apple premium products is for example that I can simply walk into the next Apple Store to get support in case of any problems. From my home, I can reach two Apple Stores by public transport in about 30 minutes, form my office, it's a 10-minute walk to one of the two Apple Stores.
Last year for example, I dropped my iPhone 4S and the screen was broken to uselessness. A stupid mistake on my side. I immediately scheduled an appointment with the local Apple Store and 2 hours later, I was talking to a 'genius'. The offered to replace my iPhone 4S with a new 4S for about 280 USD; I had bought the iPhone 4S for about USD 960. OK, perfect, so I walked out with a new 4S 10-15 minutes later and thanks to my iCloud backup, my new iPhone 4S was up and running a few hours later.
> Good for you. Premium products are not for everyone.
Ouch, you are off course right, my nexus 4 only has 1280x768 screen vs the 960x640 screen in your 4S and as a non-premium product owner I only get 110% the talktime and a piddling 200% standby time plus your premium product has a full 512Mb RAM vs the miniscule 2Gb in my non-premium product and the 0.3 megapixel front camera vs the 1.3megapixel camera in mine is just outstanding luckily though your 800Mhz dual core A9 will annihilate my quad core 1500Mhz Krait.
Luckily you will be able to upgrade to the 5S which will then have a glorious 1136x640 screen vs the 1280x768 in the current (and about to be replaced) N4.
> my iPhone 4S with a new 4S for about 280 USD; I had bought the iPhone 4S for about USD 960
Good customer service, so you paid 1240 for two 4S's, I can buy 6 N4's for that and still have 40 change (though this is disingenuous as they just dropped the price so call it 4 and a good night out).
Better hardware, less than half the price, more open platform and I can run it on giffgaff so for £200 plus £15 a month payg I get state of the art hardware plus 400 minutes, unlimited internet, unlimited texts and I can upgrade whenever I want.
I own a new Nexus 7 and its interface still feels gummy and slow compared to my 3 year old iPhone 4S. The iPhone 5 is in another league. It's amazing that Google really hasn't figured out scrolling. I don't know what good specs are when they don't seem to translate to performance.
The Play Store is alright, but it's like going from HBO to cable - it literally looks like the iOS store a year ago. Games and music creation are particularly behind.
I like some things about Android, and if Apple went out of business I wouldn't lose much sleep, but there are still things about the iPhone worth paying a premium for.
I've played with an iPhone 4S and I found the fluidity of the interface excellent at the time and better than Android (back then) but since Project Butter I've not noticed the N4 or N7 feeling gummy or slow.
It's interesting how subjective this stuff is, I find the interface on Mac OS-X (which my business partner uses) slow and counter-intuitive while he finds the interface of Mint XFCE the same, I wonder if lack of familiarity plays a part perhaps.
That's OK, of course, your mileage may (and apparently does) vary.
Service is very important to me. As described in my example: I destroyed an expensive smartphone and Apple allowed me to replace my smartphone for 30% of the original price on the same day.
I need a working smartphone all the time, I don't have to know the exact technical specifications. I don't need an open platform with only theoretical advantages and I'm willing (and able) to pay for a premium product. Again, there's no right or wrong in my opinion.
BTW, when I checked the N4 prices, I didn't find a 64 GB version. That makes a price comparison between your N4 and my (now former) iPhone 4S of course difficult.
Google doesn't make any money off their Nexus devices. They sell them close to cost. Unless Apple is planning to convert itself into an advertising company (like Google), I don't think holding out the Nexus branded devices as an example to follow is reasonable. Samsung is really the only player making significant money in the Android space. I think it makes more sense to look at what they are doing.
It's now written on the wall for everyone to see that devices will fall in price in the next decade and with it will go profit margins, money will be made by volume of sales, Samsung is just where like Nokia once was in this place, Google just want to accelerate that because it makes business sense to them.
Apple already realized that as their recent announcement demonstrated.
I didn't said it was, but if you think their high margins can be sustained forever then I think the discussion is over and you're just cheering for Apple, nothing wrong with that, but it's not what I think is sensible for people to do, cheer for Apple, Google, MS or whatever.
My point is that Apple is going to struggle to compete against commoditized devices precisely because Google doesn't care about profit on the actual device, Samsung are making money with Android but largely by using the Apple model (high quality hardware, tightly integrated software and a butt-load of advertising).
While Samsung is a threat to Apple they are largely on a level playing field, Google with the Nexus devices isn't even on the same playing field and that was my whole point.
As Apple how do you compete with a Nexus 4 (for example) (which is about get refresh again and the rumour is 1920x1200 screen, stupid fast hardware yada yada).
You can't compete on price as you have to make money on the device and a price war when you are at £500 and your competitor is at £200 is going to hurt (plus Apple is seen as a luxury marque and ironically dropping the price may make the product less desirable to the type of consumer who wants to spend £500 on a mobile, that is why the 5C is interesting).
You can't compete on advertising, Google is the worlds largest Internet advertising platform.
You can't compete on hardware features, you will go ahead perhaps briefly but the Android manufacturers will catch up or leap-frog past again almost immediately (iPhone 5S is impressive hardware but anyone want to bet that there won't be a faster Android device by Christmas?).
So what you have left is reputation (Apple does really well here) brand loyalty and perceived value all of which Apple does well with but the problem with these is that they will get you the percentage of the market that cares about these things (http://tech.fortune.cnn.com/2013/09/05/apple-smartphone-loya... is interesting for example, people are far more loyal to their carrier than they are their hardware manufacturer) and the people who identify with your product and that to me sounds like Mac vs PC all over again and Mac ended up with what 10% of the market (admittedly a very profitable 10%).
All this is of course my opinion and I'm not saying the sky is falling on Apple (it's clearly not) but I will be really curious to see what they do over the next few years.
This, so much. It really does feel a lot like the Mac vs PC wars again.
I just wonder if Apple can learn from their mistakes in the 80s. Perhaps they are, and are trying to avoid the fate of 1990s Apple with some of the strategies mentioned in other comments.
All analogies are imperfect, so I don't want to harp on this too much since there are parallels, but consider things like Apple's supply chain, existing app and content ecosystem, interoperability of modern digital services and desirability of the App Store from a revenue perspective, and pure scale.
Apple has already evaded 95% of the pitfalls of the PC wars.
Also, don't get me started on IBM serving up 20 years of absolute digital dominance to Microsoft on a silver platter. No analogies to be made there as far as I can see, I don't think Samsung is going to eat Google's lunch.
As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a commodity, I bought my N4 for half what an iPhone 5 costs.
The only thing that keeps Apple even remotely price comparable on the iPhone is that people mostly buy a smart phone on contract so they see roughly the same price per month (but the carrier takes a much bigger cut with Android).
For someone old enough to just remember the 80's and the Mac vs PC wars it's like watching history repeat itself again, the completely backwards commodity platform vs the well engineered but more costly platform except this time Google is in IBM's place and they aren't doing it by accident like IBM did they know exactly what they are doing (look at the nexus line, top of the line hardware, always the newest version of the software and price that hurts other companies using Android, they risk hurting their own suppliers to drive the price of high end hardware down as rapidly as possible) the problem is that the commodity platform gained ground very very quickly and something like the Nexus 4 at 200 quid with Android 4.3 is now the equal of the iPhone 5 at 500 quid.
The next 5 years is going to be fun to watch whichever side of the divide you are on.