Another boring money post

[superfan]

Umm Super....according to Kung Fu Panda there is no charge for awesomeness....or attractiveness.

Your Kung Fu is strong.

[superfan]

Partial,

Everything I have read seems to show that while Iphone may be the single largest in phone sales, Android is clearly the most popular system, and growing faster than AAPL's.

This reminds me of the Beta/VHS battle years ago.
- the one manufacturer with the most sales used Beta.
- Beta was exclusive to the one manufacturer.
- VHS was openly licensed to anyone.
- everyone else used VHS.
- For many reasons, the techies preferred Beta, were convinced that it was superior and believed it was only a matter of time until it made VHS disappear.

But, VHS was offered in many cheaper, inferior products which allowed it to penetrate the very large market of people who wanted something but couldn't afford the more expensive products with Beta.

The smartphone battle seems to be history repeating itself. It may not end well for AAPL years from now.

Excellent analogy. There are countless other examples where technologically superior products have failed to be successful due to a variety of reasons.

One thing the iPhone may have in its favor compared to predecessors is that the most common reasons those products failed were that they were either under-marketed or poorly marketed. I can't imagine anyone would claim that Apple has insufficiently promoted the iPhone.

[superfan]

There's a lot to like and dislike about Apple. OSX was a brilliant move for the company and is far superior in every way compared to OS9 and previous offerings. I personally dislike the iPhone, but it has been an unquestioned success and changed the entire industry, for better or worse. Same goes for iPods and the digital music revolution. Their desktops and laptops made in the last 5 years or so are overall good, competitive products, but not necessarily significantly better from either a quality or value perspective than other alternatives.

My biggest problem with Apple is summed up in the paragraph below:

Apple has something that you can't put a price on. They have the cool factor. Everything they do is cool, from the bleeding edge designs (who wants to be a have a boring beige box as a reflection of themselves), to incredible marketing (while every other company is talking about flash, and how much it's better than the iPhone, Apple talks about features because the leader is looking forward, not playing catch-up), to simply incredible stores (is there ever an Apple store that isn't just beautiful and cool? How much better would life be if every retail store was as pleasant of an experience?? My life would be immeasurably better).

Android will never be cool, there is nothing sexy/risky/dangerous/unique about the design, and nothing fast/fluid/interesting about the software. It's not fashionable, it's quite the opposite, as most people think it's the smartphone for nerds. Meanwhile, Apple has created the smartphone for human beings. It's fashionable, extremely user friendly, they've created an incredible infrastructure to support it, etc.

Millions of people perceive Apple is cool in large part because Apple and their fan base have told us over and over again how cool they are. The result of what is effectively mass brainwashing is nauseating. Apple has brilliantly crafted a marketing strategy of creating such passion and a "need" mentality around their products, preying on the insecurities of consumers - need to have the latest and greatest, need to be cool, need to be accepted. The "I don't care" iPhone video that went viral illustrates this effectively. Otherwise rational people become blinded and irrational when it comes to Apple products.

For me the Apple retail stores are the worst offenders. Everything about them shouts "look at how awesome we are, you can be awesome too". I see dozens of friendly and helpful store employees feeding the propaganda frenzy to the poor defenseless sheep who can't wait to tack a few more grand onto their credit balances for a chance to join the cool crowd. Ironically, when I'm in the store I think of the Apple Orwellian "1984" ad. Except in this case the brainwashed people are the Apple customers, and the woman with the hammer is Rowdy Roddy Piper wearing the glasses from the movie "They Live", who sees past the sleek exterior to the ugliness underneath.

From an investing perspective, you can't argue with the results, and I don't see Apple falling off the cliff anytime soon. But the company and its carefully concocted culture leaves a bad taste in my mouth.

[mraynrand]

Methodology
This report is based on the findings of a survey on Americans' use of the Internet. The results in this report are based on data from telephone interviews conducted by Princeton Survey Research Associates International from April 26 to May 22, 2011, among a sample of 2,277 adults, age 18 and older. Telephone interviews were conducted in English and Spanish by landline (1,522) and cell phone (755, including 346 without a landline phone). For results based on the total sample, one can say with 95% confidence that the error attributable to sampling is plus or minus 2.4 percentage points. For results based Internet users (n=1,701), the margin of sampling error is plus or minus 2.7 percentage points. In addition to sampling error, question wording and practical difficulties in conducting telephone surveys may introduce some error or bias into the findings of opinion polls.

Is that ok?

[Partial]

There's a lot to like and dislike about Apple. OSX was a brilliant move for the company and is far superior in every way compared to OS9 and previous offerings. I personally dislike the iPhone, but it has been an unquestioned success and changed the entire industry, for better or worse. Same goes for iPods and the digital music revolution. Their desktops and laptops made in the last 5 years or so are overall good, competitive products, but not necessarily significantly better from either a quality or value perspective than other alternatives.

I disagreee. What is there to dislike? User friendly software? Beautiful hardware? Innovation? Having their software make a statement? Having their hardware make a statement? C'mon man, at the very least, one can disagree with Apple, but you certainly cannot dislike how they do things. They're opinionated and proud of it. Who else understands user experience like Apple? The thing about Apple is you don't realize how life is without a feature until you see it. Steve Jobs is reknown for his ability to skate to where the puck is going to be instead of where it currently is. Apple makes features in software that wow you and make you ask, "Wow, have did I ever live without this? Why was it designed so poorly to begin with??" where as the competition is too busy playing catch-up with Apple to be at all innovative. Windows 8 looks really great and it's the most innovative thing out of Redmond in years. Hopefully we can all use the beautiful shell. Life will be wonderful and we'll all be asking how we lived without it for so long!

My biggest problem with Apple is summed up in the paragraph below:

Millions of people perceive Apple is cool in large part because Apple and their fan base have told us over and over again how cool they are. The result of what is effectively mass brainwashing is nauseating. Apple has brilliantly crafted a marketing strategy of creating such passion and a "need" mentality around their products, preying on the insecurities of consumers - need to have the latest and greatest, need to be cool, need to be accepted. The "I don't care" iPhone video that went viral illustrates this effectively. Otherwise rational people become blinded and irrational when it comes to Apple products.

Again, I disagree. People love Apple products because they are far superior to the competition in both price and performance. There are countless articles about how the competition didn't anticipate the subnotebook trend, so they didn't lock in prices with vendors and can't compete with Apple on the price.

People like to talk about how Android has market share, but they don't account that the iPhone is the best selling smart phone, and if it were on every carrier, all statistics point to iOs making Android it's bitch. Android is such a complex system that it expects users to manage memory, something that Windows doesn't even expect the typical user to do. Meanwhile, iOs is fast, beautful and sleek. As someone who works with BOTH platforms on a daily basis, I'm considered as a trusted authority and advisor on the systems. It's crystal clear to me that iOs runs away with the crown as a result of my real world usage of both platforms, industry expertise, etc.

Apple pushes tecnology forward and for that you should be thankful. How many other companies are out there just trying to be a nice italians restaurant and earn a decent living without actually innovating or doing anything unique or to make the world a better place? Without Apple, we wouldn't have App stores. Is there any other way to get apps now? I can't imagine going away from this delightful model as both a producer and consumer (I have 9 iOs apps). We wouldn't have ever had the iPod. Smartphones would still be running the garbage known as Windows Phone 6, and Android would look like a Blackberry (They absolutely ripped off iOs, look at the early data about Android and it's startling).

For me the Apple retail stores are the worst offenders. Everything about them shouts "look at how awesome we are, you can be awesome too". I see dozens of friendly and helpful store employees feeding the propaganda frenzy to the poor defenseless sheep who can't wait to tack a few more grand onto their credit balances for a chance to join the cool crowd. Ironically, when I'm in the store I think of the Apple Orwellian "1984" ad. Except in this case the brainwashed people are the Apple customers, and the woman with the hammer is Rowdy Roddy Piper wearing the glasses from the movie "They Live", who sees past the sleek exterior to the ugliness underneath.

Informed employees who don't pressure you? Beautiful environments that focus on the product and make it the centerpoint of the store? When I'm in an Apple store, I think wow, this is how all retail should be. When I'm in Best Buy, I'm basically hating my life being pressured into bullshit products by uninformed employees (I worked there for a year, most people there are absolute idiots and their training programs are garbage) being pressured into overpriced extended warranties! Give me a break dude! Apple is everything that is good about retail. Best buy is everyhting that is bad about retail.

From an investing perspective, you can't argue with the results, and I don't see Apple falling off the cliff anytime soon. But the company and its carefully concocted culture leaves a bad taste in my mouth.

You cannot argue with the results, and they won't fall off anytime soon. They are just too far ahead of the competition to get caught in the next year or two. After that, who knows? I sure don't. It's largely irrelevant by then because most investors will have made a killing by then anyway. Funny story, a close friend of mines parents bought in at 10 dollars with 10k. They now have 400k. When it hits 600, they will have 600k. One of his parents became very ill. Thank god for Apple and the profits they have held onto from it allowing them to pay for the surgeries he's needed! Life has a funny way of working out like that!!

Apple's culture is that of user experience. I encounter tons of people every day who don't understand user experience and try to design software using Microsoft as a model. Yuck! Apple gets that users want simple and to focus on accomplishing a task instead of f'in around with that which does not matter. You would have a very difficult time naming companies that write more feature rich yet simple elegant software then they do (short of iTunes, which is horribly bloated).

[Partial]

Partial,

Everything I have read seems to show that while Iphone may be the single largest in phone sales, Android is clearly the most popular system, and growing faster than AAPL's.

This reminds me of the Beta/VHS battle years ago.
- the one manufacturer with the most sales used Beta.
- Beta was exclusive to the one manufacturer.
- VHS was openly licensed to anyone.
- everyone else used VHS.
- For many reasons, the techies preferred Beta, were convinced that it was superior and believed it was only a matter of time until it made VHS disappear.

But, VHS was offered in many cheaper, inferior products which allowed it to penetrate the very large market of people who wanted something but couldn't afford the more expensive products with Beta.

The smartphone battle seems to be history repeating itself. It may not end well for AAPL years from now.

Patrick,

Android is the most popular system because of the iPhones carrier restriction. All statistics I've read point to it crushing the competition on a per carrier basis. See data that it's the most popular smartphone on both ATT and Verizon by a mile. A crystal clear indicator of this is the iPad. It has, what, 70% market share despite being out what, 6 months longer than the competition (if that)?

Steve said that he won't make the mistake again of going for margins instead of market share. Due to Apple's superior supply chain, plethora of patents (which are BS in my opinion), etc, they are producing higher quality handsets (John Ive design) for as much money as the competition, so the issue isn't supply chain and licensing. This time around, once they're on all carriers, they'll compete head to head on level playing ground with Android and win. Does anyone really think that Android is a more polished user experience? You're kidding yourself if this is the case?? Apple understand what is it at stake monetarily and won't lose to the competition (previously Microsoft) again.

I have no doubt that Android is a high priority for Google and something they thing is mission critical to future success. Having said that, as good as Google search is, I think that Google, in general, misses on user experience. Android is not at all user friendly. It has serious issues with malware, bloatware on stock devices, fragmentation, allocation of limited resources, etc. The fact that the rom community and rooting is so common is a testament to how big of a "nerd" device it is.

The Beta/VHS comparisons are moot because you aren't looking at UX, which is the single most important factor in my professional opinion. My other professional thought is that Windows Phone 7 is the competition, not Android. Microsoft has their toe in way too much commercial software not to get into the thick of things, and their UX is incredible for WP7.

[MJZiggy]

XXXXXXX,

Android is the most popular system because of the iPhones carrier restriction. All statistics I've read point to it crushing the competition on a per carrier basis. See data that it's the most popular smartphone on both ATT and Verizon by a mile. A crystal clear indicator of this is the iPad. It has, what, 70% market share despite being out what, 6 months longer than the competition (if that)?

Steve said that he won't make the mistake again of going for margins instead of market share. Due to Apple's superior supply chain, plethora of patents (which are BS in my opinion), etc, they are producing higher quality handsets (John Ive design) for as much money as the competition, so the issue isn't supply chain and licensing. This time around, once they're on all carriers, they'll compete head to head on level playing ground with Android and win. Does anyone really think that Android is a more polished user experience? You're kidding yourself if this is the case?? Apple understand what is it at stake monetarily and won't lose to the competition (previously Microsoft) again.

I have no doubt that Android is a high priority for Google and something they thing is mission critical to future success. Having said that, as good as Google search is, I think that Google, in general, misses on user experience. Android is not at all user friendly. It has serious issues with malware, bloatware on stock devices, fragmentation, allocation of limited resources, etc. The fact that the rom community and rooting is so common is a testament to how big of a "nerd" device it is.

The Beta/VHS comparisons are moot because you aren't looking at UX, which is the single most important factor in my professional opinion. My other professional thought is that Windows Phone 7 is the competition, not Android. Microsoft has their toe in way too much commercial software not to get into the thick of things, and their UX is incredible for WP7.

Are you trying to get banned again?

[MJZiggy]

Click through to Pew and read the rest of the two pages on their methodology then. Or at least give us an actual reason for your dismissal of the sample. Because it's written in lay terms does not make it invalid.

[mraynrand]

Click through to Pew and read the rest of the two pages on their methodology then. Or at least give us an actual reason for your dismissal of the sample. Because it's written in lay terms does not make it invalid.

Do you really think I cared one whit about the stats? Don't you know when your chain is being pulled?

[mraynrand]

Funny story, a close friend of mines parents bought in at 10 dollars with 10k. They now have 400k. When it hits 600, they will have 600k. One of his parents became very ill. Thank god for Apple and the profits they have held onto from it allowing them to pay for the surgeries he's needed! Life has a funny way of working out like that!!

1) That's not really a funny story.
2) I am going to buy in now with 10K at 600, so when it gets to 36,000, I can pay for my prostate surgery.

[Little Whiskey]

I thought obamacare was going to pay for all our surgeries?

[Patler]

Patrick,

Android is the most popular system because of the iPhones carrier restriction. All statistics I've read point to it crushing the competition on a per carrier basis. See data that it's the most popular smartphone on both ATT and Verizon by a mile. A crystal clear indicator of this is the iPad. It has, what, 70% market share despite being out what, 6 months longer than the competition (if that)?

Steve said that he won't make the mistake again of going for margins instead of market share. Due to Apple's superior supply chain, plethora of patents (which are BS in my opinion), etc, they are producing higher quality handsets (John Ive design) for as much money as the competition, so the issue isn't supply chain and licensing. This time around, once they're on all carriers, they'll compete head to head on level playing ground with Android and win. Does anyone really think that Android is a more polished user experience? You're kidding yourself if this is the case?? Apple understand what is it at stake monetarily and won't lose to the competition (previously Microsoft) again.

I have no doubt that Android is a high priority for Google and something they thing is mission critical to future success. Having said that, as good as Google search is, I think that Google, in general, misses on user experience. Android is not at all user friendly. It has serious issues with malware, bloatware on stock devices, fragmentation, allocation of limited resources, etc. The fact that the rom community and rooting is so common is a testament to how big of a "nerd" device it is.

The Beta/VHS comparisons are moot because you aren't looking at UX, which is the single most important factor in my professional opinion. My other professional thought is that Windows Phone 7 is the competition, not Android. Microsoft has their toe in way too much commercial software not to get into the thick of things, and their UX is incredible for WP7.

You fail to understand what went on during the Beta/VHS war. Sony created the home video recording market when people didn't even know they wanted such a thing (sound familiar to Apple?) They had the first consumer targeted VTR, and quickly followed it with the first VCR. Many of the first new features came from Sony, things like paused recording, recording one channel while watching another, thinner and narrower tapes making for compact size, slow motion, indexing, etc.. Initially, picture quality was better on Beta. All very similar to what you now proclaim to be the unsurpassable advantage held by Apple. Sony had better features, provided a better user experience and a far superior visual package because it was much smaller and lighter.

However, the fact that multiple competitors went to the VHS format lead to competition between them, and ultimately new and more rapid development of the VHS format than the Beta format. Most importantly, VHS became cheaper. For a long time features were better on Beta, but not everyone could afford to pay for all of those features. They wanted a cheaper option with the most basic features, so they bought VHS models. Eventually, the shear volume of VHS from multiple providers simply buried Beta.

I could see the smartphone wars going the same way as VCRs. It doesn't matter if Android is the one, or something else. If one competitor is selling one thing, and most others are selling something different, the one competitor can easily lose the battle for a consumer based product.

For the time being at least, AAPL remains a very good investment opportunity. They climbed back to just above $400 yesterday, just short of their previous high of $404. I expect they will surpass that leading into their next quarterly.

[Scott Campbell]

Patrick,

Android is the most popular system because of the iPhones carrier restriction.

Except that's only one factor. Just as big a factor is that lots of manufacturers are free to build Android phones. And thus, Android provides many more choices in phones, as well as carriers.


Sony didn't license beta. VHS won.

Apple didn't license the Mac OS. Windows won.


There might be a pattern here.

[MJZiggy]

You fail to understand what went on during the Beta/VHS war. Sony created the home video recording market when people didn't even know they wanted such a thing (sound familiar to Apple?) They had the first consumer targeted VTR, and quickly followed it with the first VCR. Many of the first new features came from Sony, things like paused recording, recording one channel while watching another, thinner and narrower tapes making for compact size, slow motion, indexing, etc.. Initially, picture quality was better on Beta. All very similar to what you now proclaim to be the unsurpassable advantage held by Apple. Sony had better features, provided a better user experience and a far superior visual package because it was much smaller and lighter.

However, the fact that multiple competitors went to the VHS format lead to competition between them, and ultimately new and more rapid development of the VHS format than the Beta format. Most importantly, VHS became cheaper. For a long time features were better on Beta, but not everyone could afford to pay for all of those features. They wanted a cheaper option with the most basic features, so they bought VHS models. Eventually, the shear volume of VHS from multiple providers simply buried Beta.

I could see the smartphone wars going the same way as VCRs. It doesn't matter if Android is the one, or something else. If one competitor is selling one thing, and most others are selling something different, the one competitor can easily lose the battle for a consumer based product.

For the time being at least, AAPL remains a very good investment opportunity. They climbed back to just above $400 yesterday, just short of their previous high of $404. I expect they will surpass that leading into their next quarterly.

Sony was the hot commodity that I was searching for. Remember how hot the Walkman was? Damn Sony was on the cutting edge, weren't they.

[Patler]

Sony was the hot commodity that I was searching for. Remember how hot the Walkman was? Damn Sony was on the cutting edge, weren't they.

Ya, there was a time when Sony was the consumer electronics god. Sony TV's were widely viewed as a cut above the rest for a long time, too. Sony audio systems for quality and price as a combination. Sony gadgets too.

[Patler]

Except that's only one factor. Just as big a factor is that lots of manufacturers are free to build Android phones. And thus, Android provides many more choices in phones, as well as carriers.


Sony didn't license beta. VHS won.

Apple didn't license the Mac OS. Windows won.


There might be a pattern here.

Sure looks like one to me!

[MJZiggy]

Do you really think I cared one whit about the stats? Don't you know when your chain is being pulled?

Not at 5 a.m. apparently...

[MJZiggy]

Ya, there was a time when Sony was the consumer electronics god. Sony TV's were widely viewed as a cut above the rest for a long time, too. Sony audio systems for quality and price as a combination. Sony gadgets too.

Just make you want to buy Sony stock, doesn't it?

[Little Whiskey]

Sony was the hot commodity that I was searching for. Remember how hot the Walkman was? Damn Sony was on the cutting edge, weren't they.

bleeding edge

[Patler]

Ya, there was a time when Sony was the consumer electronics god. Sony TV's were widely viewed as a cut above the rest for a long time, too. Sony audio systems for quality and price as a combination. Sony gadgets too.

Just make you want to buy Sony stock, doesn't it?

Honestly, at the time they were on the top, sure, maybe. Same thing for Apple now. AAPL has been my single largest holding this year, but by no means my only holding. Nor does it mean that I expect to own it the rest of my life, or that I think it will be a great stock to own in 5 years, or 2 years, or even 1 year. I only believe it is good to own right now, and I will continue to re-evaluate that opinion.