Interesting article about RIM: How Apple Won the West (and lost the world)

[southlander]

(..from theregister.co.uk)

Open ... and Shut The spread of high-end smart phones throughout the rich, developed world is largely made possible by expensive data plans. Such plans enable carriers to subsidise expensive iPhones and Android devices, to the point that even a big swath of teenagers in the Western world can realistically plan to buy iPhones and iPads.

Small wonder, therefore, that as dominant as Apple has been in developed economies, it remains a pipe dream in emerging economies, which continue to buy Symbian feature phones en masse. When a consumer in an emerging economy buys a smartphone, it has traditionally been a RIM Blackberry. Increasingly, however, that "Rest of World" market is moving to Android and this, more than any competition for the hearts and minds of the rich, may decide the smartphone battle for Android once and for all.

Mobile analytics company Flurry released data in December that suggests a rising global middle class – 1.8 billion strong – is ready to buy iOS and Android devices.

Since Apple's launch in China in 2009, plenty of prognosticators have declared that despite the two-year data cost for an iPhone, hordes of middle-class workers would spend their entire annual income to own an iPhone. And, according to the data, plenty have.

But other data suggests that emerging economies may be much wiser with their limited incomes than the developed world has been with its bloated wallets. NetMarketShare data, for example, pegs JavaME as the world's fastest growing mobile operating system. That same research shows iOS and Android in decline, with Symbian and Blackberry both growing since October 2011.

It could be that the data is off, of course, but it's highly plausible that in the case of most of the world, people can't afford expensive hardware, nor pricey data plans to subsidise the hardware.

This is why RIM, for all its stumbles in developed economies, is growing strongly in emerging markets. And it's why JavaME, which powers low-end feature phones, remains a very big deal, even if it doesn't generate much revenue for Oracle.

It's also why Android, not iOS, has the most potential to dominate smart phones and tablets, globally.

Apple controls most of the mobile handset industry profits, which isn't likely to change much. Apple has always focused more on profit margin than market share. If given the option of minting billions in rich markets or dropping prices through the floor to compete aggressively in emerging markets, Apple is going to laugh all the way to the bank.

Android, by contrast, is a ready-made platform for both high-end and low-end smart phones, the latter being a great upgrade from the developing world's feature phones and Blackberrys.

Google technical lead Clinton DeWitt articulates this well:

For some pundits, it's all about which companies are building the fanciest and most feature-rich handheld computers. Which, if we're being honest about it, are devices for those that already have everything. When you're at the top, it's great to see the tech giants going head-to-head and competing for our dollars like this. Having a few dollars, I benefit from that, too.

And yet in spite of that, I'm even more excited about seeing a $25 mobile device that has access to a killer web browser and endless mobile apps, and watching that device appear in the hands of a billion school children over the next 10 years.

This isn't a question of which device is better. Pinch/Zoom founder Brian Fling can argue that "the iPhone is the perfect mobile design and development platform", but that's an irrelevant argument for the farmer in Uganda or the office worker in Chile. Which is why Kenya's Safaricom has already sold 350,000 Android-based, $80 smart phones to a populace which averages a $2 per day living allowance.

Thom Holwerda is thus largely correct in asserting that "the iPhone's impact on the world is negligible", whatever its impact on markets for the rich. This isn't to disparage what Apple has done, but to put it in context, and to serve as a reminder of just how revolutionary Android promises to be for the world. ®

[mjs416]

Good article. Thanks for posting.

I do find the following ridiculous...

Since Apple's launch in China in 2009, plenty of prognosticators have declared that despite the two-year data cost for an iPhone, hordes of middle-class workers would spend their entire annual income to own an iPhone. And, according to the data, plenty have.

Spending their entire annual income on an iphone? WTF is wrong with people. If there income is so low they are spending a years salary on a phone - they really need to adjust their priorities.

[southlander]

It is interesting because it jibes with a lot of what gets said here on CB. RIM's doing well worldwide because of providing low cost handsets and services with global reach (mainly BBM), that work well on lower bandwidth pipes.

It implies there is a good market niche for RIM that kinda fits like so:

1. Apple markets pricey hardware and reaps fat profits but stays away from the low end.

2. Android mops up everywhere. Cheap hardware and powerful software. But fragmented as heck.

3. RIM keeps selling Curves. But RIM focuses on providing more efficient centralized subscriber based services that have worldwide reach. Basically sort of QoS for the open mobile web. Compression, better security, redundancy, and for businesses device management.

[Economist101]

"And yet in spite of that, I'm even more excited about seeing a $25 mobile device that has access to a killer web browser and endless mobile apps, and watching that device appear in the hands of a billion school children over the next 10 years."

Great. Let us know when it's ready.

[i7guy]

Originally Posted by Economist101

"And yet in spite of that, I'm even more excited about seeing a $25 mobile device that has access to a killer web browser and endless mobile apps, and watching that device appear in the hands of a billion school children over the next 10 years."

Great. Let us know when it's ready.

They are already being made. Maybe not $25, but certainly low cost enough.

[i7guy]

Great article. I do like my ipad, and I agree apple is the epitomy of form over function. It's just not at the top when it comes to form and function coming together.

[lamazion]

I'm not sure I understand the "form over function" comment. I use an iphone for home use. It seamlessly integrates email, calendar, music, and web. Apple products are designed arround simplicity and function. My ipad is on my desk at work and my playbook sits at home. Why? Because currently the ipad has the business functionality I need. I love my playbook, but for me it's a toy until I have better productivity apps available.

[i7guy]

Originally Posted by lamazion

I'm not sure I understand the "form over function" comment. I use an iphone for home use. It seamlessly integrates email, calendar, music, and web. Apple products are designed arround simplicity and function. My ipad is on my desk at work and my playbook sits at home. Why? Because currently the ipad has the business functionality I need. I love my playbook, but for me it's a toy until I have better productivity apps available.

I use by BB for business, ipad is kind of a toy with no business apps, but netflix runs great on it. I dislike the native email client and the browser keeps crashing. It's simple all right and there is no upload/download button in mobile safari, android and playbook both support that.

Hence my comment form over function.

[trelawrence]

Interesting article. It does beg the question: is Apple's strategy working? It seems to be.

[undone]

Originally Posted by trelawrence

Interesting article. It does beg the question: is Apple's strategy working? It seems to be.

No strategy works forever, adapt or die...RIM is the shiny example of what happens when your on top and do nothing with it.

[trelawrence]

Originally Posted by undone

No strategy works forever, adapt or die...RIM is the shiny example of what happens when your on top and do nothing with it.

Can't argue with that.

[mjs416]

Originally Posted by lamazion

I'm not sure I understand the "form over function" comment. I use an iphone for home use. It seamlessly integrates email, calendar, music, and web. Apple products are designed arround simplicity and function. My ipad is on my desk at work and my playbook sits at home. Why? Because currently the ipad has the business functionality I need. I love my playbook, but for me it's a toy until I have better productivity apps available.

I always hear about the app benefits of the ipad/iphone but my wife has both and I have found useful apps on neither. I searched in vein for anything in the apple app store that would provide more utility than my PB in my field (I am a facility engineer). I understand app's are important but 1 useful app is better than 10,000 apps that dont do jack for you.

[lamazion]

Originally Posted by mjs416

I always hear about the app benefits of the ipad/iphone but my wife has both and I have found useful apps on neither. I searched in vein for anything in the apple app store that would provide more utility than my PB in my field (I am a facility engineer). I understand app's are important but 1 useful app is better than 10,000 apps that dont do jack for you.

I agree there isn't a need for thousands of apps, just a handful of useful ones. unfortunately for me, I couldn't find the ones I needed on the PB. I'm hoping that will change in the future because I do like the size and function of the PB. Currently I need to access work email, a good task managent app with notifications and repeats, and a banking app. My ipad does all three of these, my PB cannot.

[trelawrence]

Originally Posted by lamazion

I agree there isn't a need for thousands of apps, just a handful of useful ones. unfortunately for me, I couldn't find the ones I needed on the PB. I'm hoping that will change in the future because I do like the size and function of the PB. Currently I need to access work email, a good task managent app with notifications and repeats, and a banking app. My ipad does all three of these, my PB cannot.

Bingo...

It's all about that increased functionality. A great app selection does that. Even an app like HanDBase would be golden... I can see an engineer going to town with that.

[BBFXPro777]

Originally Posted by mjs416

Good article. Thanks for posting.

I do find the following ridiculous...



Spending their entire annual income on an iphone? WTF is wrong with people. If there income is so low they are spending a years salary on a phone - they really need to adjust their priorities.

The American market, in a somewhat similar sense, isn't too far off. According to financial databases I have seen, the average net-worth of iphone users is pretty small, typically no more than $20k.

It would be pretty interesting to see the specific net-worths of smartphone users in other parts of the world.