JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Sept 10, 2013 20:09:07 GMT -8
Bottom line ... Apple might be dead on with their strategy then again I lived this through the 80's and cheap won the day over quality ... I don't want to see that play out again. Really? Who won and what did they win? Might want to ask Gateway and Dell and HP and IBM and Compaq what they "won" in their race to the bottom, as Apple sits today with roughly 50% of worldwide PC profits. Microsoft "won" that one, largely through cutesy exclusive bundling contracts giving them a monopoly, not via any wonderful product, as the PC makers commodified themselves out of business. And the enterprise was happy to buy their cheap, homogeneous beige crap boxes for their worker bees at the lowest prices possible. PC's are not analogous to consumer electronics, except that a good way to go out of business is a race to the bottom; Unlike the vast majority of PC purchases in the enterprise, consumers decide what phones they want based on what is cool and life enhancing, not their cheapskate employers.
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Post by Deleted on Sept 10, 2013 20:15:59 GMT -8
Burgess, I like your list. Amazing that the perceptions of soft-headed analysts can overwhelm all the positives cited. I can't wait for Apple to disrupt TV so that CNBC becomes an app that I can give one star. Oh, I have to watch it to rate it? That's going to be a challenge.
Tomorrow? Meh, I don't care too much. Preorders start on Friday but the real show is the 20th.
The proof of demand from lines will cure near-term nellies.
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Post by Red Shirted Ensign on Sept 10, 2013 20:29:24 GMT -8
Burgess, I like your list. Amazing that the perceptions of soft-headed analysts can overwhelm all the positives you cite. I can't wait for Apple to disrupt TV so that CNBC becomes an app that I can give it 1 star. Nothing didn't happen today that I expected to happen. Pricing is elastic...lets see how it works out. As for 64 bit A7 butt kicking processing power, a great new iOS, the capabilities of which are barely glimpsed, two beautiful new phone form factors ( the 5s elegance enhanced by color choices) better security....a camera that finally makes me toss my point and shoot I'm fine. Let the dust settle and then line up starting about September 18 if you want that new 5s
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Post by prazan on Sept 10, 2013 20:32:24 GMT -8
Burgess, I don't think the primary con on the 5c pricing strategy is the analyst reaction; instead, the danger is that it is priced too high to generate demand, given how close in price it is to the insanely great 5s.
Not to be accused of a famous William Safire-ism, oft quoted to great effect by JD, but I'm not convinced there will be a big market for the 5c at this price. Better than the straight 5 as the tier 2 product, certainly, but I don't see this as expanding any more than incrementally Apple's share of the market, except through carrier additions.
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Deleted
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Post by Deleted on Sept 10, 2013 20:34:56 GMT -8
Burgess, I don't think the primary con on the 5c pricing strategy is the analyst reaction; instead, the danger is that it is priced too high to generate demand, given how close in price it is to the insanely great 5s. Not to be accused of a famous William Safire-ism, oft quoted to great effect by JD, but I'm not convinced there will be a big market for the 5c at this price. Better than the straight 5 as the tier 2 product, certainly, but I don't see this as expanding any more than incrementally Apple's share of the market, except through carrier additions. Why wouldn't the 5c be at least as popular as the 4s was at the $99 price point? Plus, the 5c is a better iPhone than the 5.
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Post by BillH on Sept 10, 2013 20:35:00 GMT -8
Bottom line ... Apple might be dead on with their strategy then again I lived this through the 80's and cheap won the day over quality ... I don't want to see that play out again. Really? Who won and what did they win? Might want to ask Gateway and Dell and HP and IBM and Compaq what they "won" in their race to the bottom, as Apple sits today with roughly 50% of worldwide PC profits. Microsoft "won" that one, largely through cutesy exclusive bundling contracts giving them a monopoly, not via any wonderful product, as the PC makers commodified themselves out of business. And the enterprise was happy to buy their cheap, homogeneous beige crap boxes for their worker bees at the lowest prices possible. PC's are not analogous to consumer electronics, except that a good way to go out of business is a race to the bottom; Unlike the vast majority of PC purchases in the enterprise, consumers decide what phones they want based on what is cool and life enhancing, not their cheapskate employers. Agreed but I've posted before that I think the whole history thing is misunderstood and somehow turned into common think. From my perspective most of it never really happened. Microsoft didn't win the PC wars IBM did. Nobody knew what the hell an operating system was nor had they ever heard of Microsoft. Apple didn't engage in a PC war with IBM. They didn't even have an enterprise sales force to speak of. Apple was attempting "to build a computer for the rest of us" but there just not that many of us that were interested in giving that kind of money to IBM or Apple for personal use. There were a great many Corporations who saw the value in it and started plopping them on peoples desks who previously might have had a Wang or a CPT word processor sitting on their desk. It then started displacing the distributed data processing guys like DEC, Data General and a few others whose names are long since forgotten. At no time was corporate going to turn their desktops over to a bunch of "hippie longhairs" from the state of California. It was a war that never took place. When consumers became more interested in the value of a computer at home they quite naturally bought something that would run the software they already knew how to use. Yes, there are many additional sub-points that can be added to the argument but I think the above captures the essence of what really happened from my perspective. It seems the pundits, analysts and a few others view the world through the lens of price. I believe that consumers overwhelmingly view the world through the lens of value. If android is installed and sold on the vast majority of handsets it tells me the vast majority of consumers either don't understand what others are selling or they don't value it. One of those two leaves a great opportunity on the table. The other...,not so much. Charlie Babbitt nailed it for me. K-Mart sucks.
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Post by Red Shirted Ensign on Sept 10, 2013 20:50:33 GMT -8
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Post by Deleted on Sept 10, 2013 20:52:07 GMT -8
Those 5c cases are probably the biggest design stinker of the show. I'm sure the protection is fine, but they look like something a third party might design. These are the second coming of "socks" for the iPod nano.
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Post by tuffett on Sept 10, 2013 20:52:11 GMT -8
Burgess, I don't think the primary con on the 5c pricing strategy is the analyst reaction; instead, the danger is that it is priced too high to generate demand, given how close in price it is to the insanely great 5s. Not to be accused of a famous William Safire-ism, oft quoted to great effect by JD, but I'm not convinced there will be a big market for the 5c at this price. Better than the straight 5 as the tier 2 product, certainly, but I don't see this as expanding any more than incrementally Apple's share of the market, except through carrier additions. Why wouldn't the 5c be at least as popular as the 4s was at the $99 price point? Plus, the 5c is a better iPhone than the 5. Better in terms of colour choice, durability and battery life (remains to be seen how significant the improvement is). Worse in terms of materials, thickness, and weight. There's a reason Apple switched away from plastic for the last three years and stayed away until now. I wouldn't say it is categorically better or worse than the iPhone 5. It depends on what people value. The 5C will be at least as popular as the 4S, certainly. Is that the intention? The sense of disappointment from some stems from the belief that Apple was going to more aggressively push for international market share while absorbing a slight hit to margins, that would be partially offset by the lower BOM (a la iPad Mini). As of right now, this did not happen, for better or for worse.
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Post by applemuncher on Sept 10, 2013 21:02:56 GMT -8
Whiskey Tango Foxtrot?!?!? Why would Apple execs brief these guys with false expectations? Gene clearly didn't get the memo on 5c pricing. As far as expectations for CM, we're the only ones talking about it here --it's not getting picked up elsewhere. Whew! I'm glad that we are the only people who noticed that Apple failed to announce a China Mobile deal. Dodged a bullet on that one.
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Post by Deleted on Sept 10, 2013 21:03:36 GMT -8
Burgess, I don't think the primary con on the 5c pricing strategy is the analyst reaction; instead, the danger is that it is priced too high to generate demand, given how close in price it is to the insanely great 5s. Not to be accused of a famous William Safire-ism, oft quoted to great effect by JD, but I'm not convinced there will be a big market for the 5c at this price. Better than the straight 5 as the tier 2 product, certainly, but I don't see this as expanding any more than incrementally Apple's share of the market, except through carrier additions. This could be an interesting discussion. One big thing is marketing, Apple appears to be putting a lot of power behind the iPhone 5C in terms of website exposure & TV advertisements etc. That has never happened before for a phone in the $99/$550 price point. Much like you say the 5S is only $100 more (I'm happy for people to be upsold to that!), the 5C should be looked at in the context of only being $100 more than the 4S. I would say the jump from 4S to 5C is a bigger value changer than from 5C to 5S (at least on par). All up I think we will see a pull up from people from the lower priced to higher priced iPhones in the US compared to the split last cycle. Looking outside the apple ecosystem, for those featurephone & android owners in the USA looking to upgrade, the $99 5C compares much more favourably next to the $99 android options than the 4S did yesterday. This will apply to a lesser extent in international markets where the iPhone 5C is priced closer to the high end android phones, but regardless it will still be a much better contender compared to the 4S at the same price point.
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Mav
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Post by Mav on Sept 10, 2013 21:36:45 GMT -8
Some much needed tonic for CM "disappointment" ginned up by some journos/pundits (tonic and gin pun maybe intended?)
WSJ China blogger, who says:
"China gives network access license to iPhone that is compatible with TD-SCDMA, TD-LTE standards used by China Mobile: tenaa.com.cn/%28S%28ruycny5…"
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Mav
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Post by Mav on Sept 10, 2013 21:39:16 GMT -8
I'm guilty of it too, but let's try and cut down a bit on the snark.
As noted, the above info is highly useful as far as China Mobile visibility/compatibility.
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Post by Deleted on Sept 10, 2013 22:52:07 GMT -8
Conclusion: A7 and/or sensor tech may be temporary holdups. Come on, get real, the problem will be the lack of ink to print the shipping labels with. Yes I'm being sarcastic. Apple hasn't started shipping, having just announced availability today, and already we're predicting problems with component supplies based on absolutely nothing. Its not hard to see where the saying, "you gotta hit a mule with a 2X4 to get its attention", came from. All you have to do is look at what is being said here.
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Mav
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Post by Mav on Sept 10, 2013 23:05:14 GMT -8
Oh? Here's what Gruber says: "This is the first year when last year’s specs remain good enough to serve as the mass market new iPhone. Take a look at apple.com today and note which new iPhone appears first: the 5C, not the 5S. Which phone did they show a commercial for during the event? The 5C. Part of this too is that the 5C is going to be available in greater numbers sooner. Apple is taking pre-orders for the 5C but not the 5S because, I have reason to believe, they expect the 5S to be in constrained supply. That’s not surprising — plastic is easier to manufacture than aluminum, and the 5C’s components are all a year old. And it makes sense to promote the phone that you can actually fulfill demand for." daringfireball.net/2013/09/iphone_5c_5c_eventBold emphasis mine. Doesn't take a rocket scientist to connect the dots of a launch-day launch with no pre-ordering until virtually the night before, if you're lucky. This isn't about ensuring iPhone 5C gets a healthy start, I would think. If Apple could prep hundreds of thousands of iPhone 5Ses in the US and other countries for shipping direct to consumers' doors, like iPhone 5 and iPads before it - wouldn't it?
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Post by yellowhandman on Sept 11, 2013 0:03:56 GMT -8
From Mozur's article that is now up on WSJ.com: "According to the website of China's Telecom Equipment Certification Center on Wednesday, Apple received a "network access license" for a handset resembling the iPhone that runs on the mobile standards used by China Mobile for third- and fourth-generation cellular services. Other licenses were given to Apple for handsets running the technology used by both China Unicom Ltd. 0762.HK +1.30% and China Telecom Corp. CHA +0.49%" Seems like CM is only a matter of time. Knowing the Chinese corporate mentality, they would want to host and control the announcement, rather than let Apple take the spotlight. Some much needed tonic for CM "disappointment" ginned up by some journos/pundits (tonic and gin pun maybe intended?) WSJ China blogger, who says: "China gives network access license to iPhone that is compatible with TD-SCDMA, TD-LTE standards used by China Mobile: tenaa.com.cn/%28S%28ruycny5…"
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JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Sept 11, 2013 0:15:37 GMT -8
Oh? Here's what Gruber says: "This is the first year when last year’s specs remain good enough to serve as the mass market new iPhone. Take a look at apple.com today and note which new iPhone appears first: the 5C, not the 5S. Which phone did they show a commercial for during the event? The 5C. Part of this too is that the 5C is going to be available in greater numbers sooner. Apple is taking pre-orders for the 5C but not the 5S because, I have reason to believe, they expect the 5S to be in constrained supply. That’s not surprising — plastic is easier to manufacture than aluminum, and the 5C’s components are all a year old. And it makes sense to promote the phone that you can actually fulfill demand for." daringfireball.net/2013/09/iphone_5c_5c_eventBold emphasis mine. Doesn't take a rocket scientist to connect the dots of a launch-day launch with no pre-ordering until virtually the night before, if you're lucky. This isn't about ensuring iPhone 5C gets a healthy start, I would think. If Apple could prep hundreds of thousands of iPhone 5Ses in the US and other countries for shipping direct to consumers' doors, like iPhone 5 and iPads before it - wouldn't it? Or maybe, Mr. Snarky Rocket Scientist, the 5C has bigger margins. iPhone 5 + 1 year of manufacture cost reduction + plastic replacing metal vs brand new metal 5S. It's clear, looking at the Website, which one they are pushing. The only question is, why? I have my theories. Edit: Just read Gruber's piece, and you buried the lede, Mav. It's about margins, not ramp-ups. Gruber agrees with my take.
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Mav
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Post by Mav on Sept 11, 2013 0:42:42 GMT -8
If you're right, JD, initial launch numbers will be fine (with China, they should), and iPhone 5S will have availability throughout the opening weekend. We'll see.
And if you're right about margins, I'd expect Apple margins to trend back towards the 38-40% level.
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