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Nokia Corporation Message Board

  • calbucks09 calbucks09 Oct 6, 2013 9:18 PM Flag

    China smartphone wars: apple / samsung are screwed

    Xiaomi takes 7% share after only 1.5 yrs in the market...

    that is amazing... Xiaomi is doing this by taking no margin at all on their hardware...

    smartphone market is getting commoditized at an incredible pace.

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    • Margins for manufacture of hardware is disappearing fast - Nokia selling devices made sense. The only money in smartphones is in the three area where Apple, Google, and MSFT operate -

      Apple will make profits with ecosystem - mostly music sales, but also some advertising and software sales - Apple retains their "iSheep" profit center of affluent hipsters willing to pay extra for the Apple name because they know it's the "best".

      Google has advertising - they will give away software in exchange for a loss of privacy of users - free email, free maps, free search, in exchange for Google to read your email, know your location, know your searches/interests so they can sell advertising to you.

      MSFT has their ecosystem - one user interface for all of your devices - TV (Xbox), pc, tablet, phone; plus Skype. Strong base in enterprise - if you use Windows at work, it's easy to use it at home, and MSFT's share of enterprise is almost unassailable. MSFT will make money mostly via sale of software, with some music, some advertising. If they keep/expand their installed base, they can and will find areas within that base, within the eco-system, where they can charge - for example, they already charge for a higher level of service for Skype. If they can get $10 a year from each user by one means or another, and they have a lot of users, they'll make a lot of money.

      MSFT can afford to sell basic smartphone at cost, and MSFT will still make money, not to mention bringing people into the eco-system. Once people get all their "stuff" in the eco-system, it will be hard for them to leave, and MSFT will start charging...

      Long term, Google and MSFT have the best models. Between the two, I think MSFT has the best long term model, but Google is in a position to be a strong competitor ("free" will always be an attractive alternative to a lot of uses) as an alternative to MSFT.

    • I think you're right. That's why Nokia are doing the right thing. I don' t think it will be too long before smartphones are printed on a piece of flexible plastic and are sold for a fraction of today's prices.

 
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