Top Bananas | Tag Archives: market share

The End of Windows Phone

Posted on July 11, 2017 by admin Posted in Business, Software Leave a comment

What it is: Today, Microsoft officially ended support for Windows Phone 8.1.

How did one of the most dominant computer companies in the world manage to completely miss the mobile computing market, despite being a leader in that market? Easy. What Microsoft did at first was duplicate their Windows desktop business model by licensing Windows Mobile to multiple phone manufacturers. Windows Mobile used the Start menu interface introduced in Windows 95 and essentially put the Windows desktop interface on a mobile device.

Not surprisingly, this wasn’t an optimized user interface for mobile phones so when Apple introduced the iPhone, Microsoft suddenly found themselves trying to sell an outdated user interface to compete against the iPhone. This would be like trying to sell a more advanced horse carriage while everyone else is buying a car.

So the first mistake was simply coasting along with Windows Mobile and offering incremental improvements to a poorly designed user interface. Then Microsoft made a second mistake by taking so long to offer Windows Phone 7. By the time Windows Phone 7 appeared, most of the world had already adopted Android or the iPhone.

Here’s where Microsoft compounded their mistakes. To create Windows Phone 7 apps, Microsoft chose Silverlight, their Flash clone. That’s because Flash was slowly losing popularity and Silverlight was dying too. That meant Microsoft needed to find another use for Silverlight and they chose to make it into the Windows Phone 7 development language.

So as Silverlight died along with Flash, Silverlight only had a future as a Windows Phone 7 programming language. Then Microsoft made another mistake by introducing Windows Phone 8, which was incompatible with Windows Phone 7 and relied less on Silverlight and more on C# to create apps. That meant all those developers who used Silverlight to create Windows Phone 7 apps had to rewrite them in C# to get them to work on Windows Phone 8.

Then Microsoft introduced Windows Phone 8.1, which still didn’t attract much market share. With a sliver of market share, Windows Phone 8.1 couldn’t attract many customers. Without customers, developers had no one to sell to. Given a choice between learning to write Windows Phone 8.1 apps or make more money writing Android and iOS apps, most developers chose to follow the money and develop for Android and iOS instead of Windows Phone 8.1.

Then Microsoft switched things around with Windows 10 Mobile. Now Windows Phone 8.1 apps couldn’t work on Windows 10 Mobile, forcing developers to rewrite their apps yet again. Not surprisingly, most developers gave up constantly rewriting apps for a nearly non-existent market.

It’s no surprise that Windows Phone 8.1 is officially dead. It’s been unofficially dead since its arrival. Microsoft’s mobile strategy now focuses on making apps for Android and iOS. Windows 10 Mobile still exists, but it’s unlikely to grab any significant market share any time soon. Expect Windows 10 Mobile to quietly fade away. Look for any developers and most will be creating apps for Android or iOS. There’s no room for another mobile operating system at this point. The era of Windows Phone is over for good and Microsoft’s mobile phone operating system strategy looks like it’s gone for good as well.

Apple’s Pricing Strategy

Posted on March 18, 2017 by admin Posted in Business Leave a comment

What it is: At one time, Apple products were so expensive they were dubbed the “Apple Tax.” But that’s not always accurate.

Critics used to claim that Apple products were so expensive it amounted to an “Apple Tax.” because of the high price of Apple products, critics touted alternatives as superior based on the lower price of rival products. While lower prices made rival products more attractive, they didn’t always make those same rival products superior in performance or quality.

Yet because Apple products were often priced so high, rival products could comfortably compete by going after market share and making up profits in volume. However, those days may be ending soon.

Apple’s AirPods are priced at $159, which actually undercuts similar products offered by other companies. If AirPods are cheaper than rival products, why would anyone buy a rival product unless the features or quality was better? However, if rival products are neither cheaper nor better in any meaningful way, why would anyone still buy a rival product?

Apple appears to be targeting both the high-end market and the low-end market to drive rivals into a corner. By selling both new versions of products alongside older versions, Apple can target the high-end market with the newest products while also targeting the budget-conscious market with older, yet completely serviceable products. Apple did this first with the iPhone by selling older models and even a budget model such as the iPhone SE.

Apple is doing this with the Apple Watch, selling the original Apple Watch model for $269 while still selling the newer Apple Watch model for $349. If you want the features of an Apple Watch but don’t want to pay more, you can simply buy the older Apple Watch model. Conversely if you want to pay more and not get all the features of an Apple Watch, you can buy a rival wearable product.

In the old days, rivals competed on price, but how can they compete on price any more when they are now the more expensive option? By removing the price barrier to their products, Apple now makes it easy for everyone to choose an Apple product instead of a rival product. Now the only reason people will have for choosing a rival product is if they illogically hate Apple but still want features similar to an Apple product.

Apple already captures the majority of the smartphone profits so by offering lower cost iPhone models, Apple can effectively capture more market share while driving the profits of rivals into the ground. How can rivals compete? They can try offering superior products, but that takes money for research. They can try lowering their prices, but that reduces razor-thin profits even more.

By backing rivals into a corner, Apple is increasingly making it difficult for them to make a profit and grab market share. The less money they make and the fewer customers they get, the less likely they’ll be able to continue competing with Apple.

Apple won’t capture market share at the expense of profits. They’ll capture market share by capturing profits form the high-end and low-end of the market simultaneously. Meanwhile, rivals can’t capture the high-end market and can barely make a profit on the low-end market, leaving them almost no way to make a profit at all.

Rivals aren’t going to disappear but Apple is increasingly making it harder for them to exist. If you want a rival product, make sure it’s not more expensive and offers fewer features. Otherwise, there’s no reason to buy a rival product and that’s exactly what Apple wants people to think.

Apple Pay – Apple’s Hidden Money Maker

Posted on March 7, 2017 by admin Posted in Business, Software Leave a comment

What it is: Apple Pay recently appeared in Ireland and will soon be introduced to Germany and Italy.

While everyone keeps focusing on the latest iPhone developments and rumors, most people forget about the incredibly profitable Apple Pay service that lets Apple Watch, iPhone, iPad, and even Macintosh users use a credit card securely without revealing their credit card number to a retailer. By expanding into other countries, Apple Pay will soon establish itself as the leading mobile payment system with rivals Android Pay and Samsung Pay closely behind.

Besides working on smartphones and tablets, Apple Pay also has an advantage on working with wearable devices (Apple Watch) and computers (Macintosh). With Android Wear still failing to provide a rival to the Apple Watch and Android Pay and Samsung Pay unavailable on PCs, Apple Pay will likely grab more market share in the payment processing business than either Android Pay or Samsung Pay.

The demographics also support Apple Pay over Android Pay and Samsung Pay. In general, buyers of Apple products spend more and have more disposable income, which has the potential of leading to greater and higher use of Apple Pay where Apple earns a percentage of all transactions. In comparison, Android users tend to have less disposable income and spend less, which means less profits for both Android Pay and Samsung Pay. Android Pay could make up for less wealthy users by volume, but Samsung Pay only works on Samsung devices, which aren’t as numerous as the total number of Android devices available.

Even worse, Android Pay and Samsung Pay compete against each other in the same Android market. There are likely huge numbers of people who will never buy an Apple product so they’ll never use Apple Pay and opt for Android instead. That means Android Pay and Samsung Pay have to split the market between themselves. Instead of competing against Apple Pay, Android Pay and Samsung Pay are busy offering duplicate services to the Android market. Given a choice, it makes sense for most Android users to use Android Pay so they can use any Android device they wish. Using Samsung Pay means locking yourself into Samsung products for both smartphones and tablets.

While Android Pay and Samsung Pay fight each other, Apple Pay keeps growing into new markets. Over time, Apple Pay will likely reach into the major markets in Europe, Asia, and America. By reducing credit card fraud, Apple Pay will be a far more convenient alternative to ordinary credit cards. Already given a choice between Apple Pay or a chip-enabled credit card, it’s often faster to use Apple Pay instead.

The profits from Apple Pay will only keep growing, which means as long as Apple continues selling smartphones, tablets, watches, and computers, they’ll just keep expanding their market even more. If you want to see the future of Apple, don’t just look at the hardware features of the iPhone. Look at how much money Apple is making with Apple Pay.

One day, Apple could earn more money through Apple Pay than they ever will selling hardware.

The Demise of the Wearable Computer Market

Posted on February 6, 2017 by admin Posted in Business, Hardware, Software Leave a comment

What it is: Wearable computer maker Jawbone has announced they’re shifting away from consumer products to dedicated health products.

Before the iPhone arrived, Blackberry, Nokia, and even Microsoft dominated the smartphone market. When the iPhone appeared, all the smartphone leaders faded away until only the iPhone and Android (which copied iOS) survived. Today, nearly every smartphone is either an iPhone or an Android phone.

Before the iPad arrived, multiple companies tried selling tablets. Microsoft tried peddling their Tablet PC concept where a laptop folded its screen across the keyboard, creating a heavy, bulky tablet that was too cumbersome to use as a tablet. Even worse, there was little software dedicated for the Tablet PC, which meant most people simply used Tablet PCs as an ordinary laptop. To make matters worse, the Tablet PC cost more than an ordinary laptop, which meant there was little reason to buy a Tablet PC.

Other companies tried marketing tablets such as JooJoo and Hewlett-Packard, but as soon as the iPad arrived, all of those tablet rivals fell apart. The same pattern is now repeating itself in the wearable computer market.

Before the Apple Watch arrived, Jawbone, Pebble, Fitbit, and other companies made fitness bands. Even Microsoft introduced the Microsoft Band to track health and fitness. Then the Apple Watch arrived and proved it was more than just a fitness band. Instead, it was a fitness band plus an iPhone accessory, plus an Apple Pay device. The Apple Watch is essentially a computer on your wrist that can also perform as a fitness band.

Given a choice between choosing a dedicated fitness band (for less cost) or an Apple Watch (for more cost), many people are opting for the more versatile but more expensive Apple Watch. In the meantime, the fitness band makers are either struggling to sell more fitness bands to a shrinking market, or trying to scale up and develop more versatile wearable computers, but without the benefit of a software platform like Xcode, Swift, and the WatchKit software framework.

Even Microsoft couldn’t compete against the Apple Watch and quietly killed the Microsoft Band. Pebble couldn’t compete and got acquired by Fitbit. Now with Jawbone abandoning the consumer wearable computer market, that leaves Fitbit alone to compete against the Apple Watch. While they may succeed on price and in the dedicated fitness band market, they have a huge uphill struggle to compete against the Apple Watch in the smart watch market.

Fitbit vs. the Apple Watch is much like watching Bambi vs. Godzilla. There’s little chance that Fitbit can compete directly against the Apple Watch and there’s also little chance that Fitbit can survive by targeting the fitness band market in the same way that dedicated word processor companies failed to compete against the more versatile PC that could run word processing software like Microsoft Word and WordPerfect. In short, the future of Fitbit looks like one of declining revenue and market share until they become an ever-shrinking threat against the Apple Watch.

That means the Apple Watch has pretty much defined the wearable computer market. Even Android Wear hans’t made much of a dent in the wearable computer market, mostly because Android smartphone and tablet manufacturers still don’t make much money selling Android devices, so why continue losing money trying to compete in the wearable computer market with Android Wear?

The slow demise of Jawbone is evidence that the wearable computer market is more than just a fitness band market, and that the Apple Watch is slowly taking over with no real competitors in sight. Expect Jawbone to disappear completely like Pebble. When the Apple Watch reigns supreme, you can expect even fewer rivals to compete in the wearable computer market just like you never see anyone trying to compete any more in the smartphone or tablet markets unless they’re trying to use Android.

The Apple Watch is now the wearable computer market. Expect more people to discover the benefits of the Apple Watch as Apple continues improving the Apple Watch with additional health sensors. Today if you want a wearable computer, your only real choice is the Apple Watch.

Apple Services

Posted on January 22, 2017 by admin Posted in Software Leave a comment

What it is: Besides selling hardware, Apple also provides services such as iCloud, iTunes, and the App Store.

Many people focus on the iPhone since that’s how Apple makes the bulk of their income. Yet selling hardware is only a one-time profit generator. Once you ell someone an iPhone, they probably won’t need another one for another year or two, maybe more.

The problem gets worse with the iPad. Many people still use their older generation iPads because they work perfectly well. The Apple Watch has fallen into that category as well since the first generation Apple Watch is little different from the second generation. What’s the point of upgrading hardware often if there’s little advantage in doing so?

That’s the dilemma that Android manufacturers face because they sell smartphones and tablets, and that’s the only way they can make money. What makes Apple different is that they also see services.

Once someone buys an iPhone or iPad, chances are good they’ll also periodically buy apps from the App Store, music from iTunes, or ebooks from the iBookstore. In this way, Apple continues making money from older hardware, which gives them an incentive to keep older hardware updated on the latest operating system. In comparison, Android manufacturers have zero incentive to update their devices because that costs them money and generates zero revenue in return. That’s why the best way to get an Android update is simply to buy a new Android device.

Because Apple makes money through services, they can afford to support older hardware. Although Apple would likely want everyone to update their iPhone and iPad every year, that’s never going to happen. Instead Apple can generate revenue through its multiple services instead that Android manufacturers can’t offer.

Just using iCloud alone provides a simple backup storage system along with letting you seamlessly work on data between multiple Apple devices. If you don’t go over your allotted storage limit, iCloud is free, but many people constantly capture pictures and back them up on iCloud, which generates revenue for Apple once they start paying for extra storage.

Apple services are the key to the company’s success. By not relying on hardware sales, Apple doesn’t have to race every year to offer new devices with a laundry list of dubious features. Instead, they can focus on offering only those features that help tie users tighter into Apple’s ecosystem so it will be less convenient to leave. Apple makes money with every iPhone and iPad sale and then makes additional, steady revenue through services.

Some people undoubtedly use more services than others, but that steady revenue stream is far better than zero revenue at all, which is what Android manufacturers face. As long as Apple continues making money through services, they don’t need a huge market share. They can just earn massive profits from both hardware sales and services while every rival slowly goes bankrupt trying to sell hardware alone.

the moment Apple’s services start floundering, that’s the first sign that Apple itself is floundering. Don’t look at hardware sales. Look at service revenue. That’s a far more accurate long-term prediction of Apple’s future profits.

A Strategy for Failure

Posted on January 6, 2017 by admin Posted in Business Leave a comment

What it is: Sears is selling their Kenmore, DieHard, and Craftsmen Tools brand to raise money, but what will they do without these valuable assets?

Back in the early days if you wanted to look up a business, you opened the Yellow Pages. If you wanted to buy a computer, you went to IBM. If you wanted to shop at a department store, you went to Montgomery Wards or Sears. So what happened?

At one time, a huge company led the market. Then suddenly those same huge companies find themselves scrambling. The Yellow Pages could have easily turned themselves into Google just like Montgomery Wards or Sears could have turned themselves into Amazon. After all, Montgomery Wards got started initially as a mail-order catalog business so they could have easily adapted to the Internet world as well.

The reason why today’s leaders rarely become tomorrow’s visionaries is because today’s leaders are focused on preserving the past. People flock to Walmart while largely ignoring Sears, but in the old days, people flocked to Sears and ordered products from Montgomery Wards by mail. Now the latest news is that Sears is selling their iconic brands of Kenmore, DieHard, and Craftsmen Tools to raise money, but to what purpose?

One reason why people shopped at Sears was to buy Kenmore, DieHard, and Craftsmen Tools products. Without these still valuable brands, people have even less of a reason to shop at Sears. Selling your greatest assets guarantees you’ll never recover. Sears is going to disappear just like Blockbuster Video and Borders Books.

The strategy for failure is simple. Once you become a leader, keep doing what worked in the past and avoid doing anything new. Then when the world changes around you, panic because you’re too late and too slow to change. Of course, be sure to continue paying your executives huge salaries for their leadership, even though that leadership is driving you straight into the ground.

If this doesn’t make any sense to you, then you obviously don’t belong in the corporate world, managing a big, dying company like Sears.

In the computer world, you can see how this same strategy for failure killed leaders like Blackberry. At one time, Blackberries dominated the smartphone market. If you had a Blackberry smartphone, you had status because everyone wanted one. Rather than innovate, Blackberry simply preferred the safer strategy of incremental improvements. When Apple introduced the iPhone, Blackberries suddenly looked obsolete (because they were), and sales of Blackberries steadily declined while sales of iPhones and similar Android phones kept steadily stealing Blackberry customers away.

Now Blackberry is a shell of their former self with no hope of every dominating the smartphone business any more. Their smartest move is to focus on providing services and software, especially their QNX operating system that’s used in self-driving car technology.

Even Microsoft is shifting their focus away from Windows to cloud-based subscription services like Office 365. The simple formula for staying in business is to assume your current business model will fail eventually and be ready to shift to a new business model as quickly as possible.

The Yellow Pages didn’t do this, which is why search engines like Yahoo and then Google took over.

Montgomery Wards and Sears didn’t do this, which is why Amazon took over.

Blackberry didn’t do this, which is why Apple’s iPhone and Google’s Android took over.

The strategy for failure is simple. Just do what used to work and hope. Now that Sears is selling off their most valuable assets, they have nothing of value anymore, so how do they expect to turn sales around at their retail stores? They have no strategy and no hope. They just have executives continuing to collect huge salaries for their “leadership”
and “guidance” that’s heading them towards eventual bankruptcy. In a fair world, these executives would be paid nothing because their leadership is worth nothing. In reality, these executives are getting paid handsomely for steering a sinking ship straight to the bottom of the ocean.

If you want to become a failure, simply follow the path of former leaders like Sears. In a few months, you should even be able to hire some former Sears executives so you can pay them huge salaries to run your company into the ground as well.