Stories

Mobile phones: where does the money go?

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Dediu’s analysis is a good one: winning the commodity smartphone battle really isn’t a battle worth winning. It’s another example of the delusion that turnover is as important as profit.

One of the oldest mottos at Vulture Central is Show Us The Money. There’s one even better, I think, which is Show Us The Profits. Are there any? If there are, where are they going? At a stroke, this cuts through huge amounts of hype and puts entire industries (and, for good measure, almost anything WiReD magazine has ever endorsed) in a much clearer perspective. So have a gander at the following analysis of the mobile phone business – it’s quite startling.

Asymco is a one-man analyst company operated by Horace Dediu, a former Nokia manager in Helsinki, erudite and informative with a good eye for history. Earlier this week he looked at the profits of the largest seven manufacturers, responsible for 80 per cent of the phones sold, over the past three years. The trend indicated last year is now quite clear, with two North American companies capturing the lion’s share of the profits. In Q2 2007, Nokia pocketed 63 per cent of profits; Apple and RIM just seven per cent between them. Wind forward three years, and Apple and RIM snag 65 per cent of the profits, largely at the expense of Nokia, but helped by the collapse of Sony Ericsson and Motorola, who are a tiny shadow of their former selves.

There’s a conclusion to be drawn for Google and the Android licensees, thinks Asymco. None of the three leaders are likely to abandon their in-house platforms for Android, it’s either inferior (to iOS) or (as with BlackBerry OS, Symbian or Meego) switching simply isn’t worth it. So Android is left to target the very manufacturers who have been squeezed. And that in turn leaves them with some tricky choices to make. Android is becoming a commodity platform, so they need to differentiate themselves from the rest of the Android rabble: we’ve seen Sony Ericsson, HTC and Motorola invest heavily in their own UIs. But because Android is a commodity platform, this investment isn’t worth it.

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Hypnotic illusions at the Wikileaks Show

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There’s a theatrical quality to the publication of the Wikileaks Afghan logs that’s quite at odds with what they contain. You’ll recall that Wikileaks obtained a large number of classified field reports from US forces in Afghanistan and gave three media outlets, the New York Times, Der Spiegel and the Guardian, advanced copies of a … Read more

Mrs Brin’s Medicine Show

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Companies selling DNA kits have been deceiving customers with “fictitious” and “misleading” medical advice, an undercover sting operation by Congressional watchdog the GAO has discovered. One of the companies, 23andMe, was co-founded by Mrs Sergey Brin – Anne Wojowcki – and boasts veteran Silicon Valley socialite Esther Dyson as a director. All the companies investigated have been referred to the Food and Drugs Administration and the Federal Trade Commission for “appropriate action”.

The GAO investigation [summary – text] titled Direct-To-Consumer Genetic Tests: Misleading Test Results Are Further Complicated by Deceptive Marketing and Other Questionable Practices sent DNA samples to four companies, and followed up with undercover calls for medical advice.

The results ranged from misleading, to what the GAO found as “horrifying”. Two of the companies claimed to “repair damaged DNA”. The GAO castigates the companies for implying that their advice that is diagnostic.

“One donor was told that he was at below-average, average, and above-average risk for prostate cancer and hypertension,” the report notes. Another donor with a pacemaker was told he had a below-average chance of contracting the condition. Another donor was told they were “in the high risk of pretty much getting” breast cancer.

How odd that skeptics devote so much time to the fraudulent claims of homeopathy, but have given DNA testing a free pass. But maybe it isn’t so strange at all.

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RIP: The copyright quango that wanted to terminate your rights

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The Strategic Advisory Board for Intellectual Property is to be abolished. The Coalition has decided that dismantling copyright is a task that the Intellectual Property Office is quite capable of performing without assistance, and has folded SABIP’s duties back into the IPO.

SABIP was founded in 2008 in the wake of the Gowers Report, as a quasi think-tank focusing on copyright policy. New technology has allowed many more people to record and distribute material – “everyone’s a creator” – we’re told, and this hasn’t gone unnoticed. From publishers such as News International to giant web data aggregators such as Facebook, the pressure to weaken the individual’s rights remains enormous. All are eager to exploit amateur material, and drive down the cost of professional material.

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Nokia, Apple and Sudden Extinction Events

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Every day brings fresh gloom for Nokia – and the criticisms are now so familiar I won’t elaborate on them. But I was struck by a recent observation likening Nokia’s plight now to Apple’s in the mid-1990s.

It seems absurd, at first – Nokia is still turning a profit in the billions, while Apple’s annual loss was in the billions of dollars. But one thing should focus minds of executives and shareholders for one reason that’s never mentioned – the Sudden Extinction Event.

A recent theory suggests that life on Earth is extinguished and starts over every 27 million years. Coincidentally, 27 million years is how long it takes the Dave TV channel to show every repeat of Top Gear without showing the same repeat twice [*].

Businesses suffer Sudden Extinction events too, and we saw one in the past 12 months right in Nokia’s backyard: the rebirth and crash of Palm. Some businesses are much more vulnerable to Sudden Extinctions than others, and I’ll explain why by using Apple’s pre-Jobs quandary to illustrate it.

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Adventures in Linux (Part One)

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Last Autumn I volunteered to review Windows 7. But in the following weeks, I found Linux to be preferable in many ways. This is pretty significant progress, and outside the ‘community’ has gone largely unnoticed, too – I haven’t seen all that many Ubuntu stories in the Wall Street Journal. But what comes next is … Read more

Utopians, then and now

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 A hundred years ago, the socialist utopians had a vision of what they called “a world without want”. The Zero Carbon Trust published its vision of Britain in 2030 earlier this month, and it’s one where people’s “wants” will substantially increase. Particularly anyone wanting, say, a lamb chop with rosemary and garlic, or a Shepherd’s Pie.

 

The Trust wants British livestock be reduced to 20 per cent of current levels, and since shipping in frozen meat is carbon intensive, and verboten, you’ll have to do without. Or be a Lord to afford one.

 

This one example is just one of the random miseries to be inflicted on the population as part of the Trust’s proposed “New Energy Policy”, a collection of ideas assembled with the scattergun enthusiasm of the Taliban.

 

Let me give you another example of how what was once an idealistic progressive impulse can turned into what we might justifiably call an “austerity jihad”. After 1917, Trotsky had grand plans for mass transit – this would no longer be the preserve of an elite. The proletariat would travel far and wide, at low cost, and in great comfort. Not only that, but he envisaged room in Soviet train carriages for a string quartet. And a lectern. Travel would broaden the mind, Trotsky believed, in so many ways.

 

But back to the Zero Carbon Britain of 2030, we see that all domestic air travel will be banned, and all travel they deem unnecessary will also be impossible. This is not a group that thinks of Maglev Trains, speeding between London and Glasgow at over 300mph are a good idea. Mobility will pretty much return to C17 standards, where you had to hitch a lift from a passing horse.

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