This is a “friday fun” article. I tend to do these in a joking, perhaps even a bit taunting manner. This time I will bring in stuff other people have written so in that sense I can’t fully remove the tone of voice, only censor the worst parts. But hey, let’s begin:
Due to Tomi’s area of expertise he has always had a blind spot (one of the many) what comes to iPhone. In his view it will sell to silly Americans that do not know about better but rest of the world always knows that iPhone is overpriced and underspecced. So before we go to todays post, I want to note that according to recent Kantar numbers, iPhone accounted for 48.6% of Japanese market whereas Android comes second at 47.4%. This was before NTT DoCoMo started selling iPhone.
That is very interesting read for anyone who had been taking iPhone guidance from Tomi’s blog where Japanese market is so advanced that clueless Americans cannot have even a small dent of it. I’ll copy-paste here excellent collection of his past text from Mobile Review:
In January 2007 Tomi tried to predict the fate of the iPhone, and in usual form, got the chance of success in Europe and Asia spectacularily wrong:
“But if you have to go to every tinpot little European country, and haggle with every little one million customer operator about a substantial subsidy for the iPhone – without an exclusive deal – then it is a huge headache indeed.
This means real, long-term customer-service and relationship management with the carriers. Yes, one hundred of them in Europe, another 100 of them in Asia. Does Apple have an army of account managers to manage all of these? Do they have the distribution systems in place with DHL to ship the phones as these customers will then demand to fit their given launches, replacements, upgrade plans etc. Where can I have my Orange logo. Where can I have my Vodafone Live button, etc etc etc.“
However, he did throw out a sales-number of ten million which turned out to be correct.
“I concluded that I felt it was reasonable for Apple to achieve the 10 million level, but very difficult to go much above that.“
That Tomi got something right is quite the feat and can apparently get him quite ecstatic, since he giddily reminded everybody about his correct prediction and quoted his 10 million number for the next year and a half, whenever there was a story about Apple brewing.
But somehow, he always neglected to mention Apples sales target in those self-congratulatory posts. That target also happened to be: 10 million…
(ExNokian comment: he does that indeed. Here is from August 24th 2013:
“I was one of very few analysts who could explain why the iPhone would indeed reach 10 million sales in the first year.”
Yes Tomi, Apple indeed had set that 10 million sales target and said it was valid for them. You were one of very few – probably only one – to find the need to explain that they could do it. Considering that Apple is – and has been – the most profitable smartphone maker, we all understand your need to emphasize that your own full-of-faith analysis:
“I would say they will do it. But it will come at a serious cost to profitability”
that you made 6 years ago.
Back to Mobile Review:
Ever since however, Tomi has been up to his usual form regarding iPhones. You see, every single year, Tomi predicts that the iPhone market share has peaked hoping to be right sooner or later…
Here he is talking about why the iPhones marketshare has peaked, and isn’t a threat to Nokia:
“Yes, its a great phone, now in July 2009. But the mobile phone industry moves very fast. 3 megapixels may seem hot for most Americans, but Koreans have had 12 megapixel cameraphones for several years and they have already been brought to Europe. The most common camera resolution for new phone models last year in the UK was not 3 megapixels, it was 5 megapixels. Last year! So even the 3GS is starting to appear mediocre by its camera now, in Europe where they have far more advanced smartphonesThe specs of a hot phone become very boring in six months and nearly obsolete in 12 months“.
(Yup… It’s the same iPhone3GS that you can STILL buy over two years later!)
Not discouraged by being way off mark last year, and determined to set some sort of Olympic record in mistaken prediction, Tomi then set out to write the iPhones orbituary in April 2010:
“You read it right. I am writing the first history of the once-iconic iPhone, written now in early April 2010, before Apple has released its first quarter earnings for 2010. This is literally the peak of the short reign that Apple’s iPhone had as the most emulated smartphone. I do not know yet whether Apple’s peak market share has already gone or is right now as I write (we w’n’ know for sure unti lthe full year 2010 numbers come out which it was) – but I do know what signs will tell us which (coming later in th is blog). And that will become clear long before the year 2010 is gone, we will know the signs by June. And mark my words, the numbers are now very clear, Apple’s market share peak among smartphones, and among all handsets, on an annual basis, is being witnessed now. Yes its true, Apple cannot grow market share into 2011.“
And what he lacks in accuracy, he definetly got in determination! Here he is just four months later, insisting that everybody else is wrong.
“And Apple’s market share peaked in Q3 of 2009 and has been in free-fall since. This is now really dangerous, as there is Apple’s Antennagate and Death Grip hurting this current Q3 (July-Sept) quarter, as IDC reported, two thirds of Apple current iPhone owners are delaying iPhone 4 purchases until Death Grip is fixed, and operators are starting to delay iPhone 4 launches – South Korea’s KT was first to do so,. The prognosis for Apple’s market share in 2010 is dire.”
However, just because he couldn’t neither analyze nor predict his way out of a phonebooth, doesn’t mean that Tomi doesn’t have good advice!
“So, lesson to Apple: You have to expand your product range from one model to several. The 3GS is a hot phone now, it is an ok phone for the Christmas sales, and then a boring last year’s phone in February. You have a horribly inefficient sales cycle right now, big spike in the summer and a second spike for Xmas, but its down hill ever since. Very bad. You need more models, Apple, if you want to climb past 10% of smartphones sold (ie 1% of total mobile phones sold) per year.”
Here he shares his wisdom about mobile trends. You know: Trailblazing stuff like QWERTY keyboards
“And there is the trend to full QWERTY keyboards. The article mentions RIM’s Blackberries and Palm’s Pre which illustrate this trend (as does the N97 also mentioned). The trend to QWERTY keyboards is far bigger than the trend to touch-screen phones. Touch-screens are not that new or innovative, as they originate from early in the previous decade… But QWERTY keyboards are now the hot trend”
Yup… You can always count on Tomi to recognize hot trends, and the companies riding them!
“Since then Nokia has expanded its range of QWERTY keyboard phone models and has always had more such models than any other maker. Who is the innovator?”
Tomi of course doesn’t limit himself to merely calling new trends, that turn out to be fiascos… He also has a special knack for pooh-poohing and discounting what later turns out to be gamechangers.
“What this means, is that the hysteria around smartphone apps stores is centered in the USA, especially around Apple fans and enthusiasts (but also Google, Microsoft, RIM and Palm) and they get ample ‘good evidence’ from their home market, which will (probably) not translate to the rest of the world. Just like for example push-to-talk, a great mobile communications idea that worked in the US market and never took off in the rest of the world” “So, not all Apple iPhone smartphone users will install apps. Both the Apple and the US markets are ‘extreme’ and thus more apps-oriented than the rest of smartphones and rest of the world. Even among all other smarphones, the proportion of customers and the total number of downloads – will not be as great as Apple sees today with iPhone Apps Store.”
Oh? So if app-stores wont become a mobile trend, where will we get our third party applications?!?
“On most other smartphones, a large proportion of apps will be sold to the enterprise/corporate client, bypassing any apps store.”
But finally Tomi concludes that apps aren’t really worth going for. Do you know what is though?
“for a truly massive audience and a truly massive revenue opportunity, that is totally viable today, go mobile ‘services’ not mobile ‘applications’. Use WAP, or MMS or SMS, “
Ah, you’re a true pioneer, Tomi! And nevermind that WAP was a spectacular failure. Maybe it’ll work if we try again ten years later! WAP isn’t the only technology where Tomi disagrees with other analysts. Whenever one of his colleagues really is on the mark with an acurate prediction, you can count on Tomi being there, vehemently disagreeing! For example, like in 2009 when other analysts were starting to doubt whether Nokia could keep up with the competition:
“The battle is not one Nokia model N97 vs one Apple model iPhone 3GS. The battle is a swarm of Nokia Symbian phones vs iPhone, if you want to consider that match-up. A totally mis-matched battle, even before we look at other factors like operator/carrier relationships. Nokia will have several Symiban powered smartphone models which will outsell the iPhone.“
That never happened, of course. Unless you ask Tomi! Next year he was happy to report that:
“While the gossip in America is that Apple is somehow ‘winning’ in smartphones – it is gaining in the US market yes, but globally Apple is falling behind“.
“While Nokia’s market share in smartphones is growing and Apple’s is declining, the storyline for nine months now and counting, has been from Wall Street – that Nokia is ‘losing market share to Apple’s iPhone’. This is absolutely categorically factually untrue! For the past year the exact opposite has been happening. Apple’s market share peaked in Q3 of 2009 and is in decline. Nokia has turned its market share decline back into growth.”
And what about last year, when RIM and Blackberrys deroute began? Tomi was of course there!
“They keep repeating the factually opposite from the truth story – they keep repeating the myth that RIM is losing market share to Apple’s iPhone. The exact opposite is the truth. Apple is losing market share to RIM! But with Apple, Wall Street is hypnotized. Facts no longer matter, it is what Apple says.”
Tomi’s specialty is not merely NOT picking up on a new trend or change in the market. Whenever one of his colleagues writes an early report about changing conditions, Tomi seems to take great care to disagree with him as loudly and as far off the mark as possible.
One of the big changes over the last year or two is Bring Your Own Mobile: In the corporate world, employees can choose to use their own phone for work, instead of getting a particular model from the company. That has meant that iPhone and Android phones now has the biggest share of the corporate market, dearly costing Blackberry in market share. Here is Tomi eh, trying to school a Wall Street Journal reporter, who reported early on that major change.
“the employees want another smartphone, specifically the iPhone. Haha, totally meaningless point. Darcy you are illustrating to all of yoru readers how ignorant you are of enterprise/corporate smartphones. It does not matter at all what some employees want.”
“No, it matters not one iota, if some employee loves some fashionable smartphone of this year. The IT departments will not accept the disruption. This second scenario will not matter one percent of all sales to enterprise/corporate custoemrs.”
Less than two years later, Blackberries have lost over half the market, so not bad Tomi! Now how bout a awesome finale? A hellacious explosion of being incorrect?
“Darcy argues that the applications on Apple’s Apps Store will trump RIM’s lock on enterprise customers who need the instant emails on their “Crakberries”. Again total misunderstanding. 70% of all iPhone apps are games. What business/enterprise corporate buyers do not want, is to buy a gaming platform for their employees. The Apps store may be a cool thing for tech writers to drool about, but enterprise/corporate customers will not be impressed with tens of thousands of games.“
“Sorry Darcy, you do not understand the market you write about, in “intelligent investing”. You really don’t know what you wrte about, do you Darcy? But don’t you have enough professional training and ethics, to at least research your story?“
If I may now add that Tomi is not totally in denial about iPhone. Already before Nokia switched to Windows Phone, Tomi made it clear that nobody comes even close to Apple what comes to usability. And he even remembered to say in Twitter how N8 is strictly inferior to iPhone.
So Tomi should have some clue of the fact that his normal way to measure markets does not apply to Apple. However when it comes to making forecasts on iPhone sales, Tomi always fails to see usability as a selling point and thus we have his “expert views” on iPhone, such as his recent report how we have (again) seen iPhone peak like we could see from his report already in 2009, or in 2010, or in 2011 or – could you believe it – in 2012.
But this time I noted that discussion in his blog was more than interesting. One of the commenters said that in the past iPhone had higher specs than competition but not anymore. Nickname “leebase” disagreed on that and said that in Tomi’s blog iPhone has never been superior against competition. His comment follows:
Here’s the history of Tomi’s views on the iPhone. At no point did he EVER think the iPhone stacked up to the competition. Read the reviews and the comments. The only time the iPhone is ever acknowledged as being superior is when someone is referring to PAST superiority (and when the past wasn’t the past…the iPhone wasn’t seen as superior).
Tomi On the iPhone
Original iPhone: http://communities-dominate.blogs.com/brands/2007/01/handicapping_th/comments/page/1/
— Tomi says iPhone won’t be profitable
iPhone 3G – 2008
— funny, Tomi says Apple has ceded the high end of the smartphone market
IPHONE 3GS – 2009
— Tomi does not get apps…only geeks would care about apps
— The “pocket PC” is a niche lol!
— Apple iPhone is now good, but RIM is really impressive
— as to this point, the iPhone isn’t seen as prohibitively priced…compared to Nokia’s top phone
— Americn Telco’s must be salivating over the chance to offer the Nokia N97 as alternative to iPhone
IPHONE 4 – 2010
— new iPhone is like a 3 yr old Nokia
— Apple to sell only to those who already own iPhones
— predicts poor sales outside the US
— Apple no longer cool
— Apple on a path to oblivion
— Tomi credits Apple -may- make video calling usable and a hit, but never more of a hit than standard 3G video calling
— HP is going to turn Palm into a major threat
— Blackberry bigger than Apple and Apple ceding the much larger QWERTY market
— Samsung’s new Bada to be major threat
— Nokia still the company to beat
— the N8 will be the first real “iPhone Killer” from Nokia
— iPhone 4 will only sell well in the US because the US consumers are stupid
— “kevin” makes first attempt to educate Tomi about the power of platforms/ecosystem for Apple
— Tomi “I am now totally certain that the iPhone 4 is not ‘good enough’ to reverse the decline in market share which I first forecasted earlier. ”
— Tomi references prior claim that the iPhone has peaked
— my first comment…where I point out (a theme I will hit time and again) that if Tomi’s analysis were correct, then the iPhone would never have been as successful as it already has.
IPHONE 4S – 2011
— more of the same…all the new specs are behind the competition
— Tomi finally admits iPhones sell
— a minimal upgrade
— again Tomi thinks Apple has run to the end of it’s market
— Baron95 has finally joined the fray…and his analysis is spot on as to what actually happens and why
— once again from me “Until you understand how the iPhone has succeeded to date, you won’t understand why the latest iPhone is going to sell better than ever.”
iPhone 5 – 2012
— a bit of a disappointment
— either just caught up in some specs or still lags behind
— expects block buster sales, but never gives a positive reason why someone other than an Apple Fan would want one
— Baron95 calls the Samsung/Apple duopoly first
Posted by: leebase | August 21, 2013 at 07:02 PM
That was before iPhone 5S/5C announcement. As those are out, I’ll add Tomi’s view on it:
— iPhone 5C and 5S are too similar in price to bring big market share gains
— iPhone 5C is overpriced
— camera sensor still keeps its pixel count at the modest 8mp
— Android opportunities keep growing and the big winner is Samsung.
— to find out what is in the newest iPhone, look no further than the 5 year old Nokia
— iPhone product line has been finally split as Tomi demanded
(except they discontinued iPhone 5 so it’s same 2-model strategy as before but Tomi eagerly ignores this)
— Tomi takes credit of “being right” when he said five years ago that Apple should introduce two models to – ehh – “become profitable”. 😀
— Wraps up by saying that this will not gain significant market share for Apple but in same sentence forecasts Apple market share to climb from current 13% to 22% in Q4 2013. At least he will have one of the two right, I’m sure.
…and Tomi completely ignores fingerprint reader, 64-bit CPU, about everything that was actually new except the iPhone 5C. But hey, his experience has always been from networks side only, so I guess it’s quite okay to be clueless on a handset as niche as iPhone. 😉