# Wednesday, July 7, 2010

Companies that had market dominance always had a golden era: a time when everything went right, market share did nothing but grow, its stock soared, and the company had nothing but awesome coverage in the media. The first half of the last decade belonged to Google and the second half obviously belonged to Apple. That said, Apple’s golden era is now over.

While Apple is still strong and selling well, it is no longer the darling of the media. In the past it was taboo to knock on Apple in the media. Now that line has been crossed and there is no going back.  Microsoft lost the media in the late 90s with the IE fight and anti-trust battle, Google lost its halo with its on again, off again do no evil in China policy over the past few years. This year Apple seems to have stumbled with the kicking down the doors of a journalist’s source demanding the lost iPhone back.  Someone should remind Steve Jobs that an attack on one journalist is an attack on them all and that some journalists went to jail to protect a source just a few years ago under a Bush administration crackdown. If journalists are willing to stand up to the full force of the US Federal Government, they will stand up to Steve Jobs.

This led to bad blood with the media and the media jumped on the iPhone 4.0 antenna problem with glee. Business week even mocked Steve Jobs’ claim that the iPhone 4 was the most successful product launch in Apple’s history. Remember Jon Stewart’s AppHoles? The rock star treatment of Apple in the media is over.   That will make Apple spend more time and energy on its image. (Something it is good at, BTW.)

The media is not the only reason why Apple’s golden era is over. The second reason is the government. Last summer’s blocking of Google Voice by the AppStore led to the first threat of FCC and DOJ investigations. Now there are grumblings in Washington DC about more investigations (which I don’t think are necessary, but obviously the government has less important things to do.) Once DC opens up a case, expect the EU to follow suit. Government investigations and suits distract companies and they never fully recover. Just ask IBM and Microsoft. Apple will not only be distracted by these potential governmental probes, but will also have to devote more resources to its legal and government affairs issues, resources that should be going to products.

The third reason why the golden ear is over is increased competition and the “second mover advantage”. Apple was the first mover in the uber cool app driven web integrated smart phone category: they created a new category and reaped the rewards for years in both market share and mindshare. As with all first movers, Apple spent a lot of time and money educating the consumer base, telling them that they want this new product category. As what always happens with a new category, second movers then come in and free ride on that education and offer similar and sometimes superior products. The second movers get the second mover advantage and start to eat away at the first mover’s margins and market share. This is what is happening with Google’s Android. Android is growing faster than the iPhone and overtook the iPhone’s market share in the United States for smart phones in the first quarter of this year. A year ago Android was a rounding error, now it is a dominate player and formidable competitor to Apple. Second mover advantage at work.

I also won’t count out Microsoft. While I am not confident that they can create a better offering than the iPhone or Android out of the gate, they are masters at the second mover advantage game. (Remember how the Mac created the PC revolution, Netscape created the Internet revolution, etc.) Microsoft is flush with cash coming off its 150 million Windows 7 sales this year and motivated. Apple will face massive competition in the form of two tech industry giants: Google and Microsoft. In addition you can’t expect Samsung’s Galaxy, RIM/Blackberry and Nokia to roll over and die either. So five giants on Apple’s heels, as well as any startups that emerge.

Don’t get me wrong, Apple will still be strong and successful. The golden age is just over. Welcome to the rest of us Apple.

Wednesday, July 7, 2010 8:41:04 AM (Eastern Daylight Time, UTC-04:00)
Golden age is not over. apple it's not a company like the other. The mac does'nt say is last word. A lot of grow is possible.

Jobs do not hesitate to replace a product with a new one even if it got success. They don't sleep on a success.
Wednesday, July 7, 2010 11:24:54 AM (Eastern Daylight Time, UTC-04:00)
If Apple's continually climbing astronomical sales of iPads (2 million per month), Macs (35% increase YoY) and iPhone 4s (millions in first couple of days) are indicating, Apple's golden era is only beginning.

Also, Android hasn't overtaken the iPhone.

You shouldn't rely on those numbers from NPD which suggest that Android sales in the USA have over-taken the iPhone in Q1 2010. NPD only covers the consumer market and considering that 40% of AT&T's iPhone sales are to businesses, right there NPD's figures go out the window. (Android's business share is much less due to lack of hardware encryption, exchange support, remote wipe etc).

In terms of installed base, Nielsen reports that the iPhone outnumbered Android by three to one (28% vs 9%) in the USA during q1 2010 with both growing their share by 2% QoQ. And these numbers don't include the other members of the iOS platform - the iPod touch or the rip roaring iPad which together double the size of the iOS platform. Remember it's not just about the phone anymore - it's the platform.

In Australia where every carrier has the iPhone and offer a whole range of competitive plans, the iPhone has captured 40% of the smartphone market and is only 5% behind first place Symbian according to IDC in q1 2010 and closing fast. Of course since iPod Touches almost double Apple's marketshare (not to mention the just released iPad), iOS is already by far and away the largest mobile OS on this continent. In contrast Android has only captured a measly 2.1 percent.

In Japan, the iPhone has captured an astounding 72% of the smartphone market after pundits predicted it would fail due to not having emoji and other Japanese-specific curios.

Remember, the iPhone is still outselling Android almost 2 to 1 worldwide despite many users holding off for the release of iPhone 4.

Likewise Gartner indicates that worldwide, Android's 8 point increase was at the expense of Symbian (down 4 points), RIM (down 1 point), Microsoft (down 4 points) not Apple, who were up 5 points from a much larger base.

In point of fact, according to Gartner's figures, Apple sold 3.1 million more iPhones in Q1 2010 (40% more phones) than the total number of phones from all Android OEMs.

There are 100 million iOS devices out there today vs less than 10 million Android devices and worldwide Gartner indicates that 8.4 million iPhones were sold last quarter vs 5.2 million phones from all Android manufacturers combined, so the gap is still growing wider by the day.

Wednesday, July 7, 2010 12:16:53 PM (Eastern Daylight Time, UTC-04:00)
You have constructed a straw-man argument. Worse yet, you come across as a Wintel fanatic.

Apple never had a Golden Era.

The Media never liked Apple; there has always been FUD against them since IBM invented the technique and Microsoft continued using it. Just ask the anti-Apple pundits, like Enderle. Of course, the criticism against Apple has been less believable lately. It is tough to write passable Fear, Uncertainty and Doubt when your opponent is fielding a string of successes. If you spout FUD too often, people will doubt your objectivity; they will stop listening to you.

Companies often turn out products with eccentricities; with the iPhone 4 you must be careful about bridging the two antennas in the case with moist palms or fingers. If you are the careless type, then buy a bumper. Perhaps, Apple should sell the iPhone with bumpers installed.

The Feds can investigate all they want and not find Apple guilty of anything. (hint: is it not against the law to refuse to sell something in your store).

Apple is not afraid of Android, because Android is a flawed OS using a business model which eventually poisons itself. Nor is Android stealing market share from Apple; both Operating Systems are attracting former feature phone users. Their customers have different characteristics. There are a billion feature phone users for them to co-opt, so this war, between the phone OS's, has barely begun.

Apple is unafraid of the competition. Nor should it be. Apple needs competition to keep from getting lazy. Neither Google nor Microsoft have a good track record in creating products. Apple makes its money selling hardware. Google makes its money from advertisements; how does Google's success hurt Apple? Microsoft makes its money from the Windows OS and Microsoft Office and both are in decline.

The future is more uncertain that you can imagine. Many surprises are ahead; trends are at work which puts everything up for grabs. I suspect that Apple is better positioned to navigate the future than either Google, Microsoft or RIM. The iPad is proof that Apple understands where the future will lead us.
Louis Wheeler
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