Apple is leaving a lot of room to maneuver in the smartphone and tablets battle. Yes Apple has the advantages of both first-to-market and huge number of phone apps lead over its rivals. But here are three reports which suggest that there are openings for rivals.
Basic unit cost mean huge margins for Apple but pricing room for others in tablet space:
Some wonder how much money Apple can make with the iPad. Obviously the higher end models are usually more profitable for Apple, and the iPad is no exception. I’ve done some quick and dirty research with OEM suppliers and whipped up some estimates. The high-end iPad model with 3G and 64 GB of storage will retail at $829 and produce a profit of $455 for Apple (and retailers), while the low-end iPad model with 16GB of storage (and no 3G) will retail at $499 and bring a profit of $213.
Now the netbook and iPad clone retailers who are used to much tighter margins have big head room here. But vendors that have a big OS cost [think Microsoft Phone 7 after the launch discounts] may have less to show for it.
The problem of AT&T bandwidth choking off iPhone and potentially iPad users:
AT&T has stumbled into a quagmire. When it secured exclusive rights to support Apple’s iPhone on its wireless network in June 2007, investors hailed the deal as a masterstroke. Here was stodgy, safe AT&T positioning itself to gulp profits from a cutting-edge technology. But AT&T and Apple vastly underestimated the iPhone’s appeal. At launch, Real Steve Jobs said he’d be happy if the device could grab 1% of the global cell-phone market, or about 10 million units for 2008. Instead, Apple has sold at least 42.4 million—25.1 million in 2009 alone, 14% of the global smartphone market. AT&T, which markets the iPhone in the U.S., simply can’t handle the traffic.
This is a pervasive problem that only the launching of 4G and LTE network upgrades and charging pig-users [10% of users hog 70%++ of all you can eat” bandwidth].
Self defeating policy on what can run on iPhone and iPad [no Flash] drives developers to other platforms:
Apple’s SDK and iTunes App Store rules have prohibited apps that exploit certain iPhone features, such as global UI enhancements (e.g., copy and paste), video recording and streaming, multimedia SMS, Bluetooth file sharing, Internet tethering, and background processing. Apple also blocks apps that don’t fit its vision for iPhone usability, including podcasting, direct GPS access, and competing e-mail and Web browser clients.
Having Steve Jobs genius feel for what will sail in electronic market, has its downside – some non-trivial management burdens.
So just as in the first PC-personal Computer and then the first GUI for PCs with Lisa, Steve Jobs has shown a knack to incur deep, self-inflicted stab wounds on Apple sometimes thwarting the company’s longterm success. The petty battle against Adobe’s Flash and the over-reliance on AT&T appear to just a few telling examples.