4 years agoThree charts from Katy Hubert’s “The Emerging Power of Apple Services, Part 2: The App Store”:
Click to enlarge.
My take: iPhone is the razor, App Store is the blade.
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We have had to “unlearn” a lot of the lessons we learned in Windows vs Mac. When Apple’s “mere” 15% of the market constitutes almost a billion customers — and when those customers are more loyal and willing to spend more on devices, peripherals and services, well, sometimes “less” is “more.”
1) The low-end Android phones were, and still are in many places, touch screen feature phones because those users cannot afford data plans. In some areas data plans are still not available. Figure 7, above, supports that idea that a major portion of the Android base spends nothing, or very little, on Apps. Apple share of true smart phone saless is higher.
2) If we add back to iPhone market share, used iPhones, iPhone share goes up a bit more.
3) The whole market share thing was based on economics, mainly that low market share meant less R&D to go back into future innovations and cost reductions, leading inexorably to death. Just the opposite has occurred. Apple can out-spend any other SmartPhone maker, with the possible except of Samsung due to Samsung’s other lines of business.
By the way, the last point is NOT understood by the market, which as Philip has pointed out is priced as though they’re going out of business.
Apple has been investing in software tools and developer support programs for years*. Tim and Craig remind us at every Apple event. The press and most analysts yawn. Figure 7 says that App revenue went up by 55%% in two years. That rate means it doubles in less than four years.
*Apple coined the job title “software evangelist” in the early 80’s.
I was a “special education evangelist.”
There were evangelists in areas other than Kawasaki’s but he remained the head honcho evangelist and he was amazing.
The success of the App business has other side benefits.
App developers take an “iPhone-first” approach. It’s harder to get good ROI developing Apps that take advantage or unique Android OS software or Android clone hardware. In contrast, developing for iOS or iPhone features can give App developers an edge. And the iPhone first approach makes the iPhone more sticky. Finally, aspiring App developers have better career options taking an iPhone first approach.
App developers, now in the millions, will buy the latest iPhones when them come available. Small, but positive, impact.