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Posts Tagged ‘Matthew Lynn’

Two years later . . .**********

From: Dan B 
Date: January 17, 2009 11:50:55 AM PST
To: matthewlynn@bloomberg.net
Subject: Respectfully, I think your conclusions about the Apple iPhone are decidedly wrong.
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Jan. 15, 2007: “I have marked my Apple iCal for January 15th 2009.  On that date you will receive another e-mail from me.  Two years from today it will be evident who was right”

Dear Mr. Lynn:

As promised, two years have now passed since your article on iPhone … I’ve re-attached your original article just below my Jan 15, 2007 e-mail to you.  I stand by the subject line of this e-mail. I would appreciate your authorship of another article to correct the record.  

137-million-iphones-2008On Wednesday, January 21, Apple will announce their Q12009 earnings. During this call, I expect Apple to announce that they have blown past their original goal to sell 10 million iPhones by 2009. How many iPhones did Apple sell in full year 2008? 13.7 million! If you include 2007 iPhone sales Apple sold over 17 million iPhones by the end of 2008.

~ Dan Butterfield

For further reference, see:

 *******************************

Begin forwarded message:

From: Dan B  >
Date: January 15, 2007 9:35:47 AM PST
To: matthewlynn@bloomberg.net
Subject: Respectfully, I think your conclusions about the Apple iPhone are decidedly wrong.
********************************

Dear Mr. Lynn: 

I read your Bloomberg.com article today – “Apple iPhone Will Fail in a Late, Defensive Move.”   Respectfully, I think your conclusions are decidedly wrong.  I believe the iPhone is revolutionary and will usher in a new era in mobile communications.  I’ve no doubt that you will receive a deluge of e-mail from Apple fans and stockholders (and I am both).  I am also sure that many will be more strident in their opinions.  I will keep my powder dry for now.  I have marked my Apple iCal for January 15th 2009.  On that date you will receive another e-mail from me.  Two years from today it will be evident who was right.  I will either offer you an apology or ask for a follow-up article admitting to the erroneous conclusions you drew in your original piece. 

Today is Martin Luther King’s Birthday.  And Dr. King once said “Change does not roll in on the wheels of inevitability.”  There is nothing inevitable about the future for Apple’s iPhone.  And there will be challenges ahead.  But in my humble opinion, the iPhone is a game changing device and the future for Apple is amazing!

~ Dan Butterfield 

Apple iPhone Will Fail in a Late, Defensive Move

By Matthew Lynn

Jan. 15, 2007 (Bloomberg) — Few products have been launched with such a blizzard of publicity as Apple Inc.’s iPhone.

To its many fans, Apple is more of a religious cult than a company. An iToaster that downloads music while toasting bread would probably get the same kind of worldwide attention.

Don’t let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won’t be whispering nervously into their clamshells over a new threat to their business.

The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant.

If column inches and airtime guaranteed commercial success, Apple would already have a global hit on its hands. For the past week, it has been impossible to open a newspaper or look at a Web site without reading something about the shiny new phone.

Certainly, it looks like a nice piece of equipment. The iPhone combines Apple’s iPod music and video player with a mobile phone as well as having wireless Internet access for e-mail. Instead of lugging around a phone for making calls, an MP3 player for listening to music, and a Blackberry for checking your e- mail, you can do all three on one device. Even better, you only need one charger.

It will be released in the U.S. in June, with a rollout to the rest of the world later, and will cost $499 to $599, depending on how much storage space you want. How many might they sell? Ten million in 2008, according to Apple Chief Executive Officer Steve Jobs.

Three Reasons

Not everyone is sold on the idea.

“The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry,” Charles Golvin, an analyst at Forrester Research Inc., said in a report this month.

There are three reasons that Apple is unlikely to make much of an impact on this market — and why it is too early to start dumping your Nokia shares.

First, Apple is late to this party. The company didn’t invent the personal computer or MP3 player, but it was among the pioneers of both products. Yet there is no shortage of phones out there. There are already big companies that dominate the space, all of whom will defend their turf. That means Apple will have to fight hard for every sale.

Next, the mobile-phone industry depends on cooperation with the big networks. Phones — the high-end ones in particular –are usually sold with a network contract. The provider subsidizes the handset in the U.K. and hopes to recoup its money with ridiculously expensive charges for calls and data. Yet Apple has never been good at working with other companies. If it knew how to do that, it would be Microsoft Corp.

Network Opposition

On top of that, its rivals will be pulling out all the stops to prevent the networks offering iPhones. Sure, a big operator such as Vodafone Group Plc would like an exclusive deal to sell the iPhone in, say, the U.K. market. Against that, how much does it want to annoy Nokia — and what kind of incentives will Nokia be offering not to go with the Apple product? There will be lots of tough conversations between companies that know each other well. Apple will find it hard to win those negotiations.

Lastly, the iPhone is a defensive product. It is mainly designed to protect the iPod, which is coming under attack from mobile manufacturers adding music players to their handsets. Yet defensive products don’t usually work — consumers are interested in new things, not reheated versions of old things. Likewise, who is it pitched at? The price and the e-mail features make it look like a business product. But Apple is a consumer company. Will your accounts department stump up for a fancy new handset just so you can listen to Eminem on your way to a business meeting?

Fresh Competition

In many ways, that is a shame. The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider.

It may come — but probably from an entrepreneurial start-up somewhere. How about phones with fewer gadgets but better at making calls? Or with never-ending batteries? Or chargers that don’t weigh three times as much as the phone?

It won’t come from the iPhone. Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Matthew Lynn in London at matthewlynn@bloomberg.net .

Last Updated: January 14, 2007 19:28 EST

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Excerpts from Apple’s Q4 earnings call on Oct. 21, 2008 – Steve Jobs: .“iPhone business has grown to about $4.6 billion, or 39% of Apple’s total business, clearly too big for Apple management or investors to ignore. 

 adjusted sales for the quarter were $11.68 billion, 48% higher than the reported revenue of $7.9 billion, while adjusted income was $2.44 billion — if this isn’t stunning, I don’t know what is, all due to the incredible success of the iPhone 3G.

I would like to now highlight two remarkable milestones resulting from iPhone’s outstanding performance last quarter. The first is that Apple beat RIM. In their most recent quarter, Research in Motion, or RIM, reported selling 6.1 million BlackBerry devices. Compared to our most recent quarter sales of 6.9 million iPhones, Apple outsold RIM last quarter and this is a milestone for us. RIM is a good company that makes good products and so it is surprising that after only 15 months in the market, we could outsell them in any quarter.

But even more remarkable is this — measured by revenues, Apple has become the world’s third-largest mobile phone supplier. I know this sounds crazy, but it’s true — as measured in revenues, not units, Apple has become the third largest mobile phone supplier. Let’s look at the ranking — Nokia is clearly number one at 12.7 billion; Samsung number two at 5.9 billion; Apple is number three at 4.6 billion; Sony Ericsson, number four at 4.2; LG, number five at 3.4 billion; Motorola, number six at 3.2; and RIM number seven at 2.1. Pretty amazing.”

iPhone Death Watch

 


“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer, Microsoft CEO, 30 April 2007 

 

 

 

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, Nov. 16, 2006

“You could look at Apple and the iPhone as something that’s come out of nowhere, essentially, and changed the dynamics of the smartphone space–there’s every opportunity to do that in our case as well,”
Palm CEO Ed Colligan, May 28, 2008


“[iPhone] just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.”
Eamon Hoey, Hoey and Associates, April 30, 2008 

 

 

 

“We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.”
Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008

“Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple.”
Peter Misek, Canaccord Adams, March 07, 2008

“[Apple should sell 7.9 million iPhones in 2008]… Apple’s goal of selling 10 million iPhones this year is optimistic.”
Toni Sacconaghi, Bernstein Research, February 22, 2008

eb_xpromo_stone_120x1201“What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.”
Laura Goldman, LSG Capital, May 21, 2007

“How do you deal with that? How do they deal with us?”
Ed Zander, Motorola CEO/Chairman May 10, 2007

“The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.”
Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007

“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.”
John C. Dvorak, Bloated Gas Bag, March 28, 2007

“Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment.”
Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007

“I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.”
David Haskin, Computerworld, February 26, 2007

“Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it’s a hard pill to swallow just to have the coolest thing.”
Neil Strother, NPD Group, January 22, 2007

“The iPhone’s willful disregard of the global handset market will come back to haunt Apple.”
Tero Kuittinen, RealMoney.com, January 18, 2007

“[Apple’s iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”
Steve Ballmer, Microsoft CEO, January 17, 2007

“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.”
Matthew Lynn, Bloomberg, January 15, 2007

“iPhone which doesn’t look, I mean to me, I’m looking at this thing and I think it’s kind of trending against, you know, what’s really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these… And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it.”
John C. Dvorak, Bloated Gas Bag, January 13, 2007

“I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed.”
Jack Gold, J. Gold Associates, January 11, 2007

“Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it.”
Bill Ray, The Register, December 26, 2006

“The economics of something like [an Apple iPhone] aren’t that compelling.”
Rod Bare, Morningstar, December 08, 2006

“Apple is slated to come out with a new phone… And it will largely fail…. Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits… When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.”
Michael Kanellos, CNET, December 07, 2006

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