00:00:00
the entire smartfare Market has been
00:00:01
declining for a few years now the
00:00:03
economy's taken a hit companies are
00:00:04
selling fewer models they're discounting
00:00:06
left right and Center to just try and
00:00:08
keep the numbers up all except apple
00:00:10
apple is the only big smartphone company
00:00:12
whose market share is actually rising
00:00:14
and it doesn't really make sense they're
00:00:16
always on the expensive end they don't
00:00:17
do discounts at all no why on Earth is
00:00:20
everyone buying iPhones right now well
00:00:22
there's actually nine key factors nine
00:00:24
things that Apple has either
00:00:25
meticulously planned or have just
00:00:27
happened to occur that have all aligned
00:00:28
to put Apple in the strongest position
00:00:30
it's ever been in so at the very surface
00:00:32
level incomes are rising across the
00:00:34
globe every year an average of 50
00:00:36
million more people are moving up into
00:00:38
the category of high income and so
00:00:40
naturally as you get more disposable
00:00:41
money you start to be able to afford
00:00:42
more expensive things and that naturally
00:00:45
favors Apple who only makes expensive
00:00:47
things there's a second subtler effect
00:00:49
that I think amplifies this think of any
00:00:52
big smartphone company apart from Apple
00:00:54
whether it's Samsung or Oppo or xiaomi
00:00:56
every single one of these companies has
00:00:57
both expensive Flagship phones but also
00:01:00
cheap phones you can get a Samsung for
00:01:01
$80 you can get an Oppo for about $60
00:01:04
you can get a xiaomi for 50 but Apple
00:01:06
doesn't work like that apple is
00:01:07
basically decided that the minimum
00:01:09
they're going to charge you to be able
00:01:10
to get the iPhone experience is around
00:01:12
$400 with their iPhone SE series and
00:01:15
this is intentional because what it
00:01:16
translates to is that getting an iPhone
00:01:18
now means something more than getting a
00:01:20
Samsung even though both company's most
00:01:22
expensive phones are the same price this
00:01:24
inaccessibility creates the feeling of
00:01:26
Apple being an aspirational brand that
00:01:29
as soon as people do get money for the
00:01:30
first time they want to spend on not as
00:01:32
much with countries that already have
00:01:34
high income like the United States but
00:01:36
every time I've been to India which is
00:01:37
quite a lot cuz I have a lot of family
00:01:39
there I make a conscious effort to talk
00:01:40
to people there about the phone market
00:01:42
and I definitely get the feeling that
00:01:44
the iPhone almost has a status
00:01:46
associated with it and the data supports
00:01:48
that India Indonesia and Vietnam are
00:01:50
three of Apple's strongest growth areas
00:01:52
and they're all countries that are
00:01:54
either developing or newly
00:01:55
industrialized okay so incomes are
00:01:57
rising apple is well positioned to be
00:01:59
able to take advantage of that but this
00:02:01
alone might cause a slight shift there's
00:02:03
something else that's accelerating this
00:02:05
growth and it's called the network
00:02:07
effect the network effect is an
00:02:08
economics term used to describe a
00:02:10
product that actually becomes better the
00:02:12
more people use it and apple is one of
00:02:14
the very few tech companies who
00:02:16
basically Engineers their products
00:02:17
around this philosophy think iMessage
00:02:20
completely unlimited completely free
00:02:22
deeply interactive messaging it works
00:02:24
really well but only from iPhone to
00:02:26
iPhone or airdrop how many times have
00:02:28
you seen someone trying to drop someone
00:02:30
else a file only to see their expression
00:02:32
sour as the other person whips out to
00:02:34
Samsung from their pocket or apple nodes
00:02:36
which allows any iPhone user to
00:02:37
contribute to your shared document but
00:02:39
if you've got a Google phone you're not
00:02:41
invited even FaceTime video calls Apple
00:02:43
basically engineered a really high
00:02:45
quality really stable calling solution
00:02:47
and then restricted it only to iPhone
00:02:50
users but then with FaceTime they've
00:02:52
taken it further in a move that seemed
00:02:53
very consumer friendly Apple recently
00:02:55
allowed Android users to FaceTime for
00:02:57
the first time ever but this is not
00:02:59
charity this is a actually a very smart
00:03:00
business move because if you're on an
00:03:02
Android phone during this FaceTime
00:03:03
process they make you feel like a right
00:03:05
sucker while you're doing it if you want
00:03:07
to FaceTime on Android you have to wait
00:03:09
for the iPhone user to initiate the
00:03:10
FaceTime and then send you a link that
00:03:12
link opens up a page on your browser
00:03:14
where you then enter your name and give
00:03:15
it permissions to use your mic and your
00:03:17
camera and even then you experience the
00:03:19
FaceTime in this horrible windowed
00:03:21
browser view let's be very clear giving
00:03:23
Android users this option is not Apple
00:03:25
trying to make things Fair it's Apple
00:03:26
saying to iPhone users don't worry about
00:03:28
switching to Whatsapp video calls your
00:03:29
Android buddies will join you on your
00:03:31
platform of choice and then for the
00:03:33
Android users it's them saying look how
00:03:35
good FaceTime works on their iPhone
00:03:36
versus your Android you know you want to
00:03:39
buy an iPhone these are all just one
00:03:41
type of network effect that Apple uses
00:03:43
but where you really feel the full force
00:03:44
of it is via the ecosystem it applies to
00:03:47
air tags which update their location
00:03:49
every time any Apple device is near them
00:03:51
so the more Apple devices in the world
00:03:52
the more precise the location finding
00:03:54
ability of everyone with an air tag it
00:03:56
applies to the new homepod which let
00:03:58
anyone so long as they use an iPhone to
00:04:00
hand over whatever's playing from their
00:04:01
phone to start coming straight out of
00:04:03
the speaker and it even applies to their
00:04:05
App Store I find this really interesting
00:04:06
because even though Android has by far
00:04:08
more total users because the vast
00:04:10
majority of Apple users are wealthy
00:04:12
users who are far more willing to spend
00:04:14
they've actually made iPhone the most
00:04:16
desirable platform to develop apps for
00:04:18
and design accessories for which in turn
00:04:20
means that Apple gets better app support
00:04:21
and more accessory options which then
00:04:23
makes the Iphone even more desirable for
00:04:25
consumers and so it's these incredibly
00:04:28
powerful Network for X which have me
00:04:30
that even in a market where the interest
00:04:31
and urgency to upgrade in smartphones is
00:04:33
falling each one of their ecosystem
00:04:35
products in other categories their
00:04:37
earphones their speakers their air tags
00:04:39
even their financial services now via
00:04:41
Apple pay are all seeds to bring more
00:04:43
people into the world of Apple in which
00:04:45
they're shown very clearly that they
00:04:46
won't get the absolute best apple
00:04:48
experience until they buy an iPhone
00:04:50
which is the center of it I've seen
00:04:52
these Network effects happen in my own
00:04:53
family when I was younger we stayed well
00:04:55
away from iPhones because of the price
00:04:57
but as soon as my mom got the first one
00:04:58
a few years ago one by one each person
00:05:00
has switched over just because of this
00:05:02
whole oh well if you switch then we can
00:05:04
do X thing together now one of the most
00:05:07
powerful pulls from the Android side has
00:05:09
always been the excitement Android
00:05:11
companies are more experimental they try
00:05:13
features that they're not necessarily
00:05:15
going to keep next time and there's also
00:05:17
always just loads of different Android
00:05:18
phones to pick from it's more fun but it
00:05:21
also feels like this Advantage is
00:05:22
shrinking not through any company's
00:05:24
fault but more just the nature of the
00:05:25
smartphone market consolidating when
00:05:27
smartphones first started it was the
00:05:29
Wild West no one knew how they would
00:05:31
evolve or how they would end up being
00:05:32
used but nowadays at least until the
00:05:35
next big thing we've kind of settled
00:05:37
into the smartphone era people have
00:05:38
developed habits and apps and platforms
00:05:41
that they use on a routine basis and in
00:05:43
a mature market like that your future
00:05:45
purchases become less about wa that
00:05:47
phone folds in half I want that one like
00:05:49
it used to be in the future phone ERA
00:05:51
with devices like the Motorola Razer and
00:05:53
more about does the next phone I buy
00:05:55
allow me to still enjoy all the things
00:05:57
that I currently enjoy and this safer
00:05:59
less experimental consumer attitude also
00:06:02
favors Apple it means that with any
00:06:03
given launch Android companies have also
00:06:05
had to become safer with less
00:06:07
experimentation fewer bold new form
00:06:09
factors effectively cutting down on one
00:06:11
of the key ways that Android companies
00:06:12
used to reach new audiences at those
00:06:14
higher price points and without it the
00:06:16
best hope to expand your user bases now
00:06:18
just comes from the budget end of the
00:06:20
market mostly by just being cheaper than
00:06:22
the competition which is not a fun
00:06:24
battle for companies to be making but
00:06:26
there is another factor that Apple has
00:06:28
very carefully planned out that's
00:06:29
working together with this see if You'
00:06:31
asked me 10 years ago why I used an
00:06:33
Android phone I'd have rattled off an
00:06:34
entire list of reasons I'd have been
00:06:36
talking for 10 minutes straight about
00:06:38
everything that Android does better but
00:06:40
this has changed if you look back
00:06:42
through the years you'll see that the
00:06:43
reason Android phones were always the
00:06:44
first to get new features that the
00:06:46
iPhone didn't have is because Android
00:06:48
companies have had to compete with each
00:06:49
other they've had to race at every point
00:06:52
to cram in as much of the latest tech as
00:06:54
possible Android got dual cameras in
00:06:56
2014 Apple didn't introduce them till
00:06:58
2016 Android got wireless charging as
00:07:00
early as 2013 Apple didn't bring it in
00:07:02
until 2017 Androids have always had
00:07:04
millions of customization options
00:07:06
whereas for the longest time with an
00:07:07
iPhone you'd have one choice what
00:07:09
wallpaper do you want the list goes on
00:07:11
but the point is that Apple wasn't
00:07:13
caught up in this Rush Apple was very
00:07:14
aware that they had such a loyal fan
00:07:16
base that they didn't need to compete
00:07:18
with Android but more just with
00:07:20
themselves they realized very early on
00:07:22
that there's only so many things you can
00:07:24
add to a bar smartphone like this before
00:07:26
either the average user just can't tell
00:07:27
the difference or the extra cost from
00:07:30
those additional features actually makes
00:07:31
the phone less desirable like there's
00:07:33
only so good you can make the camera
00:07:35
before the bigger bottleneck actually
00:07:36
becomes the person taking the shots
00:07:38
there's only so fast you can make it
00:07:39
such that everything you want to do is
00:07:41
already buttery smooth there's only so
00:07:42
much you can make the screen bigger
00:07:44
before the phone is just too big to hold
00:07:46
and so you'll maximize your profits by
00:07:48
not rushing to get them all in as fast
00:07:49
as possible but actually by teasing out
00:07:51
those features over a longer period of
00:07:53
time making each upgrade significant but
00:07:55
never so significant that it robs the
00:07:57
next phone of also being able to have
00:07:59
one of these killer features which has
00:08:00
meant that while Android companies have
00:08:02
exhausted all of the most significant
00:08:04
upgrades for the Casual user very early
00:08:06
on creating the first plus-size phones
00:08:08
the first multi camera phones the first
00:08:09
wireless charging phones they've
00:08:11
struggled to keep that pace up in the
00:08:12
last few years but Apple has always made
00:08:14
sure that there's enough things left in
00:08:16
the tank to keep making the iPhone
00:08:18
better at an almost steady rate which
00:08:20
did mean that there was a time they fell
00:08:21
noticeably behind but that now in 2023
00:08:24
there's really not much missing that an
00:08:26
average user would care about they have
00:08:28
one by one bit by bit fixed all the
00:08:30
major pain points of past iPhones to the
00:08:32
point where now the battery's good the
00:08:33
cameras are great the screen is great
00:08:35
and that if you now own any other Apple
00:08:37
products or you even just like the idea
00:08:39
of Apple there's no real barrier that
00:08:42
would stop you getting one but then also
00:08:44
Apple's insistence on releasing features
00:08:46
slowly and steadily has helped them for
00:08:48
another reason it's allowed them to take
00:08:49
their time with features and only
00:08:51
release them when they're done in the
00:08:53
Apple Way in this very polished very
00:08:55
well thought out controlled Manner and
00:08:57
this is a big part of why the company
00:08:58
has this almost cult-like following
00:09:00
people who are fans of Apple's
00:09:01
philosophy are happy that when they try
00:09:03
an apple feature it's going to work in
00:09:05
exactly the way that they expect it to
00:09:06
which gives them this mental peace of
00:09:08
mind that drives loyalty you've probably
00:09:10
heard a lot about the way the Apple
00:09:12
controls L the way they want repairs to
00:09:14
only be done the Apple Way by certified
00:09:16
mechanics the way they wanted iPhones to
00:09:18
charge the apple way with the lightning
00:09:19
connector and then now that they've been
00:09:21
forced to use USBC so people don't need
00:09:23
to buy two separate cables they're
00:09:25
apparently going to employ a chip that
00:09:26
can still differentiate real Apple USBC
00:09:28
cables from other USBC cables from the
00:09:30
outside this level of control can feel
00:09:32
irritating and pretentious and
00:09:34
anti-consumer but from the inside it
00:09:37
drives loyalty because as a core Apple
00:09:39
fan who's willing to buy all of Apple's
00:09:41
official accessories and services you
00:09:43
are getting treated to an experience
00:09:45
that does just tend to work more
00:09:47
seamlessly together than any other
00:09:49
ecosystem this is why there have been so
00:09:50
many surveys over the years which have
00:09:52
basically shown that very few people
00:09:54
migrate from iPhone to Android and so
00:09:57
even though it's slow and steady every
00:09:58
time Apple does steal an Android User it
00:10:01
tends to be the case that this user
00:10:02
stays with them oh and a sub to the
00:10:04
channel would be
00:10:07
appreciate not my best so remember how I
00:10:10
mentioned that Apple never discounts
00:10:12
their phones right they don't throw in a
00:10:14
free pair of airpods with your next
00:10:15
iPhone purchase like Samsung does surely
00:10:17
that's not a good thing in a market
00:10:19
where people are trying to save as much
00:10:20
as possible well again this is Apple
00:10:22
playing the long game so last year I
00:10:24
pre-ordered a Samsung Galaxy s22 and it
00:10:27
was kind of exciting for me because as a
00:10:29
part of the pre-order bonus with it I
00:10:31
got a pair of Galaxy buds Pro for free
00:10:33
but then a few weeks later I noticed
00:10:34
myself even though these earphones are
00:10:36
basically $200 at retail just thinking
00:10:39
of them as cheaper than they were just
00:10:41
because of the way that they were just
00:10:42
chucked in there for free it implicitly
00:10:44
devalues the product and so you'll
00:10:46
notice that actually while Apple does do
00:10:48
free gifts sometimes it'll always be
00:10:50
Beats headphones Apple owns the Beats
00:10:52
brand but they only bought it for the
00:10:54
purposes of strengthening their own
00:10:55
in-house music products so they don't
00:10:57
care about them being devalued but they
00:10:59
will make damn sure that you will never
00:11:01
get a free pair of airpods or homepods
00:11:03
or even a free Apple charger because
00:11:05
Apple has made it a priority to protect
00:11:07
the value of what it means to own an
00:11:09
Apple product and that is now starting
00:11:11
to pay off because it means that while
00:11:12
Apple products are notoriously expensive
00:11:15
it's pricing that you can trust it's
00:11:17
pricing that you know isn't about to dip
00:11:19
in 2 weeks time and that once Apple has
00:11:21
set this price there's no way around it
00:11:23
that is what you pay for it and this has
00:11:25
contributed to Apple's products
00:11:26
retaining their value over time and
00:11:28
therefore also feeling like a more
00:11:29
secure investment to make in less
00:11:31
certain times but there is one factor
00:11:33
that stands above all others Huawei just
00:11:36
a few years ago huawe was the fastest
00:11:38
growing smartphone company in the world
00:11:40
and they were cramming so much into
00:11:41
every new release that they were
00:11:42
accelerating that smartphone spec race
00:11:44
we talked about to the point where they
00:11:46
were obviously a major threat to Samsung
00:11:48
but even started stealing some market
00:11:50
share from the iPhone so the US China
00:11:52
ban which is basically caused the
00:11:53
company's implosion has released
00:11:55
millions of new users for Apple to suck
00:11:57
into their web for one of the most Most
00:11:59
Fascinating videos I've ever made about
00:12:01
brain chips that's here see you there
