Phones are sold. Tablets are purchased.

Last week, you asked “Why Is iPad So Much More Dominant Than iPhone?

The uber short version is phones are sold. Tablets are purchased.

The slightly longer version is. The vast majority of people buying a phone just want a phone that does (fill on the blank) like Mary’s or tad’s. They walk into a cell phone store and they leave with whatever phone the phone store wants them to leave with. They do this because their is immense channel pressure to move these phones and since they do not have “organic demand like the iPhone” they pay for sell thru at point of sale. Stores and sales people are incentivized to sell phones.

Demand for Android phones is three overly simplified segments

Geeks that don’t want to live in Apples walled garden (smallish but not insignificant group)

People who cannot or think they cannot afford an iPhone. (the cost of the phone is largely irrelevant relative to the cost of the contract)

And lastly…people who walked into a phone store without knowing exactly what they wanted.

None of the carriers WANT to sell iPhones. The $400+ per unit subsidies added up to over 6 Billion in Q4. The Carriers would much rather sell you a phone they pay 150-200 to subsidize that they are getting spiff money from the manufacturer to sell.

The reality is that the carriers NEED the iPhone ask Sprint how they were doing before the iPhone.

One last bit. I think the iPad has a greater margin of quality lead over its competitive set than the iPhone does. It Is sold at tighter margins that manufacturers have not been able to compete with. And lastly. Google ain’t apple so Android for tablets ain’t iOS.



About the author:

Neither my current job nor my history would help you pigeon hole me too well. I was a late bloomer, partial college musician/bus driver supporter of wife In college I quit driving took an entry level job in a bank and went back to school. I now work at a major Capital shop with over $100 billion in AUM, most of which is fixed income.

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