What will iPads grow up to be?
We talk about how measurements of the market show an unprecedented growth in mobile computing and how that leads to a new context for computing along axes of non-consumption. That could result in devices becoming powerful enough to allow most people to be creative and reach self-realization.
I truly believe, and many others in the company believe, that there will come a day that the tablet market in units is larger than the PC market.
Tim Cook Discusses Q1 2012 Results – Earnings Call Transcript – Seeking Alpha
Question is when?
I began by projecting growth rates of various market participants including the leading Windows PC makers (HP, Acer, Dell, Lenovo and Asus), the combined “others” and the Mac. I also added the iPad, Samsung’s tablets, other Google sanctioned Android tablets and Amazon. I also projected a split between traditional and tablet Windows shipments.
The underlying assumptions are:
Building the platforms combined growth bottom-up gives the following forecast for the next two years (and historic growth shown for perspective.) Continue reading “When will tablets outsell traditional PCs?”
When cellular phones emerged in the 1980’s wireline phone service was excellent. Penetration was at 99 percent in the United States and prices had never been cheaper. The industry was deregulated and phone companies were competing fiercely over long distance calling plans. In contrast, the new cellular phones were not “good enough” on the basis of what was considered necessary for making critically important phone calls.
Sound quality was poor, coverage was spotty and battery life measured in minutes. But they allowed a whole new consumption model of communication to emerge. They allowed a caller to call a person not just a place. Over time, this simple value proposition caused a powerful profit formula to emerge. That formula led to extremely rapid improvement in the quality of the network and devices that connected to it.
It caused such a cataclysmic change that twenty years hence it became possible (even natural) for consumers to “cut the cord” and abandon wireline communications altogether. The “excellent quality” wireline industry was dead to be replaced by the “good enough” wireless industry.
One consequence of mobile telephony was increased consumption. Voice call minutes increased dramatically because calling could happen anytime from any place. While overall consumption increased, landline use decreased. Then came messaging of various types. Forms of communication enabled by cellular networks that simply did not exist before with landlines.
As a result there were vast pools of profits available to telcos that seemed to appear out of nowhere. SMS and data plan income was beyond anyone’s ability to forecast in the 1980s.
The same phenomenon is happening with smartphones. Consider a proxy measure: operating profits from mobile phones since the iPhone launched, illustrated below.
The latest data from Google shows that the Android activation rate is increasing at a relatively steady rate (i.e. acceleration is constant). The data provided so far is in the blue circles below. The green line is the interpolation and extrapolation of that data.
As the graph is projected forward we get an activation rate of one million per day by mid August of this year. If it continues then we could see 1.5 million per day by end of 2013. Continue reading “When will Android reach one billion users?”
In January I noted that there were more iPads sold by Apple than PCs from HP, the largest PC vendor in the fourth quarter. Including all tablets, this is the distribution of market shares by units shipped.
Note the different color palettes for Windows and non-Windows.
By the metric of tablets+PC’s Apple appears to be the leading vendor. However, if we consider only the Mac, Apple is still well behind. The historic unit volumes of the two is shown below: Continue reading “The value of the OS X monopoly”
Last week I made an attempt to measure the iPhone’s manufacturing cost given new data points from the Foxconn field trip. The post generated a great amount of new knowledge and the feedback was very valuable.
The main value to me came from stepping back and looking at the entire cost and value structure for the iPhone. Putting costs into perspective is as valuable as knowing what they are.
The following diagram shows my estimates for this cost structure for the fourth quarter given both bill of materials estimates and the other parts of the cost of goods sold and operational expenses and even ancillary sources of revenue.
Source for BOM estimate: iSupply.
There are several observations easily made from this view: Continue reading “iPhone sine qua non”
This is a summary view of Apple’s income statement for the fourth quarter of 2009, 2010 and 2011. The full size is 999×893 pixels. Click on image below for full size bitmap.
The convention used is to show revenues in the first column, cost of sales in the second followed by operating expenses, taxes and net income in the last (dark green) column.
Continue reading “A three year view of Apple's fourth quarter”
Registration for Asymconf opened one week ago and about 42% of the available capacity has been reserved. For those who have registered and those who are considering registration, this is a brief introduction to how the event will be conducted.
The method of presentation and participation was originally designed as a teaching method[1]. What we’re going to do is a very simplified approach of the case method first introduced in the teaching of law and later adapted to the teaching of business administration. The key difference in this method vs. the classic lecture is that there is no assumption that a right answer exists and hence that there is no greater value placed on the lecturer vis-a-vis the audience.
The event is therefore performed by three key components:
The diagram shows the venue and rough placement of the components (to scale and with reserved seats highlighted in green).
The facilitator’s role is similar to that of a conductor of an orchestra. It’s primarily to help the individual instruments working together but not to make the music himself.
The “music” is primarily produced by the case team. This will be a group of about 30 persons arranged in a semi-circle around the facilitator. They will “debate” a case that will be published as a blog post in advance of the event. They can put forward information, agree and disagree and generally try to uncover meaning or truth.
The case team, like an orchestra, should be diverse. They are not expected to be subject matter experts but to bring their particular expertise to a common problem. In fact, subject expertise in one member can be seen as a problem since it could discourage others from also participating.
The case team will be pre-selected from the pool of spectators and will change from case to case.
The reason we ask your area of expertise during registration is so that we can create diverse case teams, not to assign you to a team that has a particular experience.
This episode is sponsored by AppsFire and MailChimp.
Asymmetric Competition