‘No, I do not hate the iPhone’

‘No, I do not hate the iPhone’

John Strand
John Strand

John Strand, from Strand Consult, on what he really thinks of the iPhone…

No, I do not hate the iPhone, but nor do I respect any media or person that believes that the world is only populated by Polish people.

I’ll explain. A lot has been said and written about the iPhone, and there is no doubt that Apple has created a beautiful phone that has many fans and that has received a great deal of media coverage. In fact, Apple has an army of devoted and almost religious supporters among journalists and other good people that really impresses me.

But the truth of the matter is that the iPhone only has a little over 1% of the total global mobile telephone market. In other words, there are more people with Polish passports in the world than iPhone users!

Niche device 

When Apple originally launched the iPhone in January 2007 many people asked me for my opinion. My answer was the same back then as it is today; it is a beautiful phone targeted at a niche segment and that it will be unlikely to have any great influence on a mobile operator’s total business case.

In the summer of 2009, I and three of my employees were the first in the world to compile and publish a 110 page report that analysed the iPhone market from a global perspective, using market figures from around the world to illustrate the iPhone in the global telco economy.

The report has since been distributed to over 10,000 people around the world and its conclusions were very clear. Strand Consult was first to document that:
1.    iPhone sales were growing significantly slower than the distribution Apple had been building via operator deals around the world.
2.    Sales of mobile services for the iPhone only added up to a marginal share of the total global market for paid mobile services – with a total value of around 3%.
3.    The data traffic generated by iPhones on mobile operator networks was marginal compared to operators’ total data traffic. Data traffic from smartphones is currently less than 10% of an operator’s total data traffic. Most data traffic is generated from portable PCs using mobile Internet.
4.    Operators that had exclusive deals to sell the iPhone did not increase their market share, revenue or earnings via the iPhone. In fact we actually documented that on a number of markets, operators with exclusive Apple deals posted the poorest financial results on their market.
5.    A number of operators issued profit warnings due to the iPhone  – their costs of marketing and selling the iPhone did not match the revenue being generated from the iPhone.

 

First question

We were the first to question the coverage that Apple and the iPhone was receiving from the media and were the first of just a handful of companies that examined the figures being published, putting the figures into a global perspective and using our market experience and knowledge to take a critical standpoint to a mobile phone that only has around 1% of world sales.

We were also among the first to describe how Apple was imposing a number of limitations on its partners. Operators were not allowed to comment on the iPhone, Apple or their partnership without Apple’s approval, and furthermore Apple reserved the right to approve the journalists that operators communicated with.

This meant that if a good trade journalist writing for a media important to operators ever criticised Apple just a little bit, Apple could prevent that journalist from receiving Apple products to review.

On a Danish television consumer programme called Basta on Danish National TV2, viewers watched as the mobile operator TeliaSonera during two programmes was attacked for the way Apple was treating TeliaSonera’s customers and partners, but due to TeliaSonera’s contract with Apple, TeliaSonera was unable to defend itself.

The fact that the journalists chose to attack TeliaSonera, rather than attack the real culprit Apple clearly illustrates how many journalists are totally uncritical of the way Apple does business and proves that they knew that they would not be able to get Apple to participate and therefore refrained from including them in the story.

 

No comment

Basically Apple’s standard ‘No comment’ response has resulted in many journalists simply giving up trying to have any dialogue with Apple and also made them avoid writing critical articles. One could say that Apple has been very good at quelling critical journalism.

Today it is an unfortunate fact that the number of journalists that are able and willing to criticise the hype surrounding Apple and the iPhone are few and far between. On the other hand, the fact that Apple controls such a large part of the media makes it perfectly natural that the facts we publish suddenly become very visible, resulting in John Strand really standing out from all those communicating as if they are a ventriloquist’s dummy.

I will never forget when the renown IT journalist Walter Mossberg from the Wall Street Journal accused me of being anti-American during the Mobile World Congress a couple of years ago, because I was critical about the importance of the iPhone to operators. Everyone who reads this column knows that the man is an Apple fanatic, but to claim that someone is anti-American, because they view a mobile telephone’s sales figures from a global perspective really shows how Apple fanatics react.

If there is one thing that I am not, that is anti-American. But I do have a very clear attitude towards fanatics, both religious fanatics and people that are totally infatuated by a mobile phone that has a marginal share of global sales. The iPhone reminds me of Paris Hilton – I really don’t understand why she gets so much attention either!

 

One sided

When we examine the companies that have launched apps for the iPhone, it also clearly illustrates the one sided focus many people have regarding this part of the mobile world. A Danish company recently contacted me about a fantastic new app they had developed for the iPhone, and were very angry when I told them that they would probably have a better business case selling coffee to Turkey than selling apps for the iPhone.

In conclusion I have nothing against the iPhone, but I do believe that the iPhone should be viewed in a national and global perspective. Perhaps you are wondering why I involved the Poles in the title? I am sure that you will agree that if all the Poles in the world had received the same media attention as the iPhone, a lot of people would either call it poor or one-sided journalism.

On the other hand I am certain that some Apple fanatics will still claim that John Strand is anti-iPhone; again I’m sure you will agree that they have more in common with Walter Mossberg, than I have with any anti-Americans.

Strand Consult provides research on: the mobile broadband market; the MVNO market; the market for value added services; and next generation prepaid services.

 
World Wide Web visit http://www.strandconsult.dk/