Cheap iPhone will turn Apple into Samsung

Apple creates the iPhone 5 for $200 and sells it for $700. Google, on the other hand, makes zero or little profit on its Nexus devices (Nexus 4, Nexus 7, and Nexus 10).

Some people do not understand Google's philosophy, citing the fact that Google ads are found on Apple phones as well. The best way to understand Google's plan is to imagine what the world would look like if Googlr never invented Android and Apple controlled the entire smartphone market. Apple would make its iPhones for $200 and because they can they will charge $2000 for it to maximise profits. Because the price is so high, they will not sell much phones but because there profit margin on each phone will be so high, Apple is happy. Google makes money off advertising. If smartphones were all $2000 thanks to lack of competition as a result of monopoly, hardly anyone will use smartphones and therefore not many people would look at Google's ads and Google would not make much money. By creating Android, giving it away for free, and producing high-quality and cheap Nexus and Chromebook devices, Google is able to put pressure on Apple to bring its prices down and get the iPhone into more people's hands. Apple is content with selling fewer phones buy making high profit margins on each, explaining why Apple takes in 80% of smart phones profits even though 80% of smartphones run on Android.

The plan is working, and Apple is giving in. Apple will soon release a cheap plastic iPhone in an attempt to compete with Android at the lower end. Regardless of whether the cheap iPhone increases sales of Apple devices and steals market share from Android, it does not matter since Google ads are on Apple devices. A cheap iPhone will only dilute the Apple brand and transition Apple from a boutique low-volume high-margin company into a commodity mass-manufacturing, high-volume low-margin company. In other words, Apple will become Samsung.

First thoughts on the Samsung GALAXY S4

The Samsung Galaxy S4 (or Samsung Galaxy S IV) was released today. It was released in New York, which meant that here in Australia it was released at around nine or ten in the morning, which coincided with when I was at work. I got out of work at eleven today but missed the opportunity to watch the Samsung presentation live on YouTube.

The Galaxy S4 is nothing surprising. It pretty much looked exactly like the leaked pictures. The hardware specifications are what were expected. It has a five-inch super AMOLED display with full HD, 1080p at 440ppi. The display size and pixel density matches phones like the Xperia Z and HTC One but what is great about Samsung phones are the fact they use AMOLED displays rather than conventional IPS LCD displays. AMOLED displays give deeper blacks and more vivid and bright colours. Some people do not like th vividness of AMOLED displays, saying it is unrealistic. It's a matter of preference which one you prefer, but I prefer AMOLED.

The Galaxy S4 has an unprecedented Exynos 8-core processor. The octacore processor has four performance cores and four economy cores. When performing power-intensive tasks like gaming or watching videos, the performance cores are used whereas the economy cores are used when you are engaged in mundane tasks like web browsing. Along with the 2 GB of RAM, this allows the S4 to achieve an unprecedented 26,000 score on the AnTuTu benchmark, which is 6,000 higher than the runner up HTC Buttery's 20,000 score. This makes the Galaxy S4 the fastest and most powerful smartphone yet.

There are numerous other features on the S4, far too much to digest in this blog post. Many people claim that these features are not "proper innovation," or evolutionary rather than revolutionary features. But this is subjective. I happen to believe the octacore processor and AMOLED screen are highly innovative, but others may not think so. Many believe Apple's first smartphone, with touchscreen-only input and apps was innovative, but closer inspection reveals they are evolutions of Microsoft handheld devices like the Palm Pilot. Apple simply improved the specs and marketed the product very well.

In my opinion, the Galaxy S4 is technologically superior to any other phone on the market today. Where the S4 is criticized heavily is in the plastic material is uses for its body. Samsung have good reasons for using plastic. For one, it absorbs shock better, which means dropping it will damage it less compared to, say, a glass phone like the fragile Nexus 4. Metal phones, such as the iPhone 5 or HTC One, tend to scratch easily. Most people, when they buy a metal or glass phone, put a plastic case on it anyway for the very reason that they don't want to damage the metal or glass. Premium material is only a concern for those with so much money that, if they crack a glass phone or scratch a metal phone, they can simply afford to buy another one. Many people, when criticizing Samsung phones, refer to the "build quality." I hate it when people use this term because plastic Samsung phones don't break. The plastic actually improves its build quality. Instead of using the term "build quality," we should call it what it is and use the term "snob appeal." Samsung's plastic phones are technologically superior to any other phone out there, but lack snob appeal because plastic is perceived to be cheap and nasty.

That said, I do not mind owning a nice-looking phone. The benefit of Android is variety. For those who want glass, there is the Sony Xperia Z, which is by far the prettiest phone yet. For those who want aluminum, get the HTC One. For those who want value for money, get the Nexus 4.

Good Android Phones with Small Displays

People with iPhones go on about how small screens are great. One of my friends purchased an iPhone 4S outright for close to $1000 and claimed that he didn't mind getting a phone with a small display because it fits well in his hands. He claimed that the 4S's 3.5 inch display is the perfect size and that high-end Android phones all had large screens that don't fit in your pocket. Android phones with small screens were not "high-end" enough for him like the iPhone was.

First of all, not all Android phones have large screens. The Samsung Galaxy Ace has a 3.5 inch screen, just like the iPhone 4S and iPhone 4. Furthermore, who said the iPhone was ever a high-end phone? The iPhone 4 has a 800Mhz single-core processor with 0.5GB RAM, and the Galaxy Ace has those exact hardware specifications but comes at half the price. The iPhone 4S has a dual-core 800Mhz processor with 0.5GB RAM. The Samsung Galaxy Ace 2 also has those same hardware specs (but with slightly more RAM at 0.7GB) yet is around half the price of the Apple.

But then lo-and-behold, the iPhone 5 with 4 inch display comes out and all of a sudden my friend gets one and contradicts himself when he says that now he believes that 4 inch is the perfect size. It seems like he is just buying first and rationalising his purchase later.

iPhone 5 Specs Not Released Yet

The iPhone 5 has been announced. It will have a 4 inch display and be lighter. Although Apple claims it has a A6 chip, there has been no announcement about the specs, such as how many CPU cores the phone will have. We therefore cannot speculate on how the phone compares to other phones, mainly high-end Android phones, the number one phone for now clearly being the Samsung Galaxy Note 2, which has a quad-core CPU with an incredible 2GB of RAM and over 3000mAh battery capacity. It also comes with an in-built stylus and a screen size greater than 5 inches. We will need to see the iPhones specs (including the price) and compare it.

The old iPhone 4S is a big disappointment. Long before the iPhone 5 came out, it sold for about $700 outright, which is about the price of high-end Android phones, yet the iPhone 4S only had a dual-core 1Ghz CPU with a mere 0.5GB RAM. The screen size on a 4S is only 3.5 inches. Screen size is very subjective, but in my opinion the main reason for getting a smartphone is to get internet access and, mainly, to read (and watch videos) online. You just cannot do that on a small screen without squinting hard and potentially destroying your eyes. If you just use for phone for making phone calls and texting, it's okay to have a small screen, but if you only make calls and text, why not spend $50 on a small dumbphone instead of spending $700 on a smartphone? It just doesn't make sense.

The weakness and cheapness of the iPhone 4S's hardware clearly explains why Apple makes massive 73 per cent gross margins on each iPhone it sells and why, even though Samsung is the number one phone company is terms of sales, Apple is the number one phone company in terms of profits. Apple is able to price their phones at the same price as high-end Android phones, yet their phones are weaker and cheaper to produce. Apple today is the world's biggest public company. Customers get less for what they pay.

Hopefully the iPhone 5 is better value for money.

Facebook phone is a good idea

There is an article on The Age titled Facebook smartphone? Dumb idea that criticizes the idea that Facebook may create its own line of smartphones.

The article states that there is not much money to be made in smartphones. According to the article, there are two ways of making money in the smartphone industry: the Apply way, which involves creating a phone that is worth $150 and then selling it for $800, thereby making huge profits and making Apple one of the biggest publicy owned companies in the world; the Android way, which involves creating a phone at a cost that varies from $100 to $800 and selling it for only a little bit more, thereby making small profits.  The article assumes that Facebook will opt for the Android way and maybe use the free and open Android operating system or create its own operating system and gain market share by heavily subsidizing the phone and lowering its cost considerably. Facebook intends to make money by gaining large market share and then putting ads on the phones.

I don't think this is a bad idea. However, the article states that this is a poor idea because Facebook is already integrated in most Android and iOS phones. This may be true but Facebook does not control the prices of these phones. Rather, Apple, Samsung, HTC, and so forth control the prices. If Facebook makes a phone, it can subsidize heavily and undercut the rest.

I wouldn't mind buying a supercheap phone and have ads on my Facebook. I'd rather see ads on my Facebook than pay more money on a phone. Comparing smartphones with 1GHz processing power only, currently you can buy a iPhone 4S outright for about $800. You can buy an HTC Desire HD smartphone with 1GHz processing power for $380 outright and unlocked. Suppose Facebook offered a smartphone that was only $150 outright and unlocked with Facebook installed with ads. I certainly would buy it. In terms of value for money, it makes sense. Anyone who is smart with money will do the same things. Facebook will steal customers from Apple, Samsung, and HTC phone users and make more money from advertising revenue. Sounds very smart to me.