The Smartphone Wars: Android loses share?

The April 2012 comscore results are out, and something very odd has happened. If they’re to be believed, Android has actually lost U.S. market share over the last three months – albeit by a statistically insignificant amount of 0.2% – for the first time in its history.

This is so grossly at odds with the way the market has been moving for three years that I have to wonder if it’s a tabulation mistake. I’ll be looking into other market surveys over the next week to see if they confirm this.

157 thoughts on “The Smartphone Wars: Android loses share?

  1. 0.2% is within noise range. And even if not, you’d need to wait to confirm the trend.

  2. >0.2% is within noise range

    Well yes, I realize this is really statistically flat. On 6 March, discussing the January numbers, I wrote this

    I refused to overinterpret Android’s relatively poor performance in the last quarter then, and I’m not going to read too much into Apple’s fall in market share now – it’s probably within the statistical noise limit for comScore’s numbers. I’ll leave the hyperventilation to the fanboys.

    I think ignoring tiny drops like 0.2% is still good advice. But what happened to the normal 2% growth?

  3. RIM seems to be flattening out, so maybe most of Android’s growth was RIM defectors with Apple getting more first time customers?

    This would make some intuitive sense because most first time smartphone customers have likely formed a very positive impression of the Apple marketing juggernaut regardless of its actual merits.

  4. I’m one of the Android non-buyers in the last quarter even though I’m due for an upgrade. My next phone WILL be an Android, it’s just that there aren’t any truly compelling handsets on the market at this time that offer any really significant advantages over the Droid X2 I currently have. That, combined with the limited availability of LTE (nowhere near me), has pretty much put the decision on the back burner for me as couple Mhz, LTE I won’t use, and a marginal increase in display quality isn’t enough to get me to upgrade. Maybe the release of the Galaxy S III will change that.

  5. Two plausible reasons, both may be applicable.

    1) ICS penetration on new phones is haphazard, and people are holding off on upgrades until they know they phone they want on the carrier they want with the networking they want actually exists.

    2) We’ve hit our first trough on overall smart phone adoption. This trough has more to do with carrier data plan pricing (and the reversion of the last ‘all you can eat’ data plans for tiered plans) than the hardware or operating system in place.

    A third reason, which I consider less plausible, is upgrade fatigue. Prior to you getting your Nexus 1, you’d had your prior phone for something like seven years. I generally hold on to my phones for four or five years. We may be seeing the bow wave of “Good enough is good enough, and I’ll wait until the hardware dies before upgrading.” price consciousness. I consider this less plausible for Android because I’d expect it to happen AFTER widespread ICS adoption, since ICS manages to fix so many UI issues with Honeycomb.

  6. Well, when I get my Android smartphone next week that’ll push them back above the negative region! ;-)

    I doubt that any survey can have less than a 3% margin of error.

  7. I am not entirely sure of what the data means, but I can only imagine it’s Nokia Lumia devices taking a larger share from Android than from Iphone while it starts to grow in popularity.

    This is what has been going on for a long time, RIM is losing market share because it started to become generally unattractive. So their main competitors naturally take this remaining share, growing at their expanse. Iphone is a bigger commitment than any other platform, because it’s a golden-cage device and more expansive, so it naturally grows slower, what doesn’t mean it’s not quite popular.

    Blackberry is “toxic” and Iphone has a bit of an uncertainty around it (“Am I an Iphone person or not?”). So Android retains the larger share of the people who didn’t quite like the Blackberries but weren’t also quite happy with the idea of starting to eat Apples. Nokia’s Lumia introduction will first steal market share from Android because it was the only viable, “remaining” platform. Lumia is taking less share from Iphone because this is a more captive audience, it’s harder to convince and Iphone user to try anything else.

    Of course this is all just guesstimates! :P And I would prefer to look at the data smoothed in three months to say anything with more certainty. It’s pretty silly to talk like this about what is potentially just a blip. I just though I didn’t hear enough people talking about the possibility that this could be the Lumias making a difference (I actually don’t like Lumias BTW, I’m a Symbian and Maemo fan.)

  8. Could be related to people holding off from buying phones just before the GSIII launch?

    Or that Lumia phones are really cheap in US ? a friend went in to get a replacement Android phone after their screen broke and came out with a Nokia ? because it was the cheapest phone to get.

  9. “But what happened to the normal 2% growth?”

    Despite some peaks, it has been trending below 2% and downward for more than a year (over the last 15 periods, there has only been one month at 2%; there were 7 months between 1.5 and 2%). You would be hard pressed to fit a line holding at 2% on your second data graph.

  10. Here’s a little R script that compares predictions from two really simple timeseries models of the Android market share data. The confidence intervals only barely overlap, so the next month or two of data should be enough to determine if the long-term linear trend holds (blue prediction), or not (red prediction).

  11. Oops, fixed a typo in that script. The confidence intervals on the predictions overlap much more with that error corrrected. The long term drift is 1.5 [1.2,1.8] %/month for the first order AR model.

  12. I’ve got to replace both my 300-dollar Android phone, which is less than a year old, and my carrier in the next month. My phone is a Samsung Galaxy Indulge which is slow, filled with bloatware, and running Android 2.3. I hate the thing. Battery life is poor, in part due to bloatware and in part due to my crappy carrier. It’s still running 2.3 (why hasn’t Samsung or my carrier pushed out an upgrade?) and there is no good path for a software upgrade with this phone.

    I’ve settled on Sprint as my carrier, due to their liberal roaming policy and good local service, but most of the Android phones I saw for sale at the Sprint store were STILL running 2.3. I still haven’t settled on whether to buy an Android and upgrade it to run the Cyanogen Mod, or buy an iPhone.

    I’m currently leaning towards the iPhone because my current Android is such as disappointment, though this probably has as much to do with my carrier and the need to learn a new operating system to run the phone as anything else. (I didn’t want the damn thing; my boss insisted that I buy a smartphone.)

  13. @esr “I think ignoring tiny drops like 0.2% is still good advice. But what happened to the normal 2% growth?”

    Well, 50% isn’t the magic number you predicted.

    WP7 put a stop to Windows decline (now flat instead of declining)

    iOS is still strong.

    I still see the market settling on 2 major players: iOS and Android. RIMM is dying and WP7 will be very lucky to ever get to 10%. Maybe MSFT can buy some market share with a TON of marketing/carrier payoffs, seems like their only hope.

  14. When an anomaly is detected, one of the first things to examine is the mechanism, even if it’s just a brief check. How are comScore data produced, and is there anything about that method that explains the anomaly?

    From http://www.comscore.com/Press_Events/Press_Releases/2012/6/comScore_Reports_April_2012_U.S._Mobile_Subscriber_Market_Share:
    “MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device.”

    So far, the hypothesis here seems to be ‘polling margin of error’. Are we sure that’s all?

  15. In addition to all of the above-mentioned influences, keep in mind the ITC fiasco with the HTC One X series. I personally have been planning to buy one, and even though I don’t watch TV or read the print paper I know they’ve been hyped as the next gotta-have.

  16. @esr
    >I think ignoring tiny drops like 0.2% is still good advice. But what happened to the normal 2% growth?

    Well, I didn’t remember the previous numbers and hadn’t analyzed the situation.
    I now checked the graphs slowly, and you’re right: first time negative change in your recorded history.

    And Microsoft actually grew, for a change, after tanking for so long.

    User adoption for Android is almost nil, a very sharp drop from 2 millions… which doesn’t seem like statistical noise.

    It seems very at odds with your reasoning that this plateau happens right after the 50% market share has been hit and outgrown, except if there are reasons to justify this market behavior. To be fair, the total change in the “Userbase by platform” graph is very close to 1M, right in with Apple’s change; new users getting into Apple and little bleeding from other companies into might explain this.

  17. I think Ken Burnside’s #2 is spot on — a lull in conversions from dumbphones. Only a million.

    (His other reasons are more unlikely. We all have to remember that Comscore is trying to measure installed base, not current quarter sales. So the lack of an Android -> Android upgrade doesn’t make any difference in their numbers.)

    The carriers are being horse’s asses on data. They make it expensive and make it require significant monitoring so you don’t go over your threshold, in most cases. Even in the most benign cases, e.g. T-Mobile, you can’t get cheap data and cheap voice together unless you pay monthly.

    And most of the third-tier companies have crap Android phones. I keep thinking I’m going to get an Android phone soon, but it never happens. It’s too complicated. You can’t BYOD on most third-tier networks or MVNOs. You can on T-Mobile, but then you get into the question of which Android device to get. There is an overwhelming selection available on the open market, and a lot of research is involved to figure out what the right answer is. I hate to say it, but Apple really is the safe choice for most people who want a monthly data plan — the upfront cost of the phone is negligible, and you’re usually not getting a discount on the data plan if you don’t get the phone anyway.

    Finally, everybody who really wants and can afford a smartphone already has one, no matter which carrier they are on. But everybody who really wanted an Apple smartphone, and who was on Sprint, had to wait until they were available and then until their next upgrade window. Especially given the running average that Comscore applies, it’s not surprising to see Apple adoption tick up even when overall smartphone conversions are down, because their carrier availability expanded dramatically last fall. Since September, the increase in Apple users is roughly proportional to the increase in subscribers who are on Apple-supported carriers. That’s a pretty impressive timeframe to achieve that in, so Apple’s probably still got legs for some additional market share gains.

    It will be interesting to see what happens with the carriers, though. Most of the value-based pricing they engage in very artificially segregates their customers, and most of the people sitting out the smartphone revolution (like me) probably aren’t jumping in unless the competition gets a bit more brutal.

  18. Maybe people have started cutting back on luxuries, because the economy sucks.

  19. Ken, I was just browsing through the phones in the Verizon store while waiting for service, and NONE of them have ICS. NONE. They’re all Froyo or Gingerbread.

  20. I bought my Nexus One two years ago. But I see no reason to upgrade. I will simply buy a SIM only subscription with data.

    10.58 Euro a month for voice + SMS + 500MB on a one year contract.

  21. @Winter:

    I bought my Nexus One two years ago. But I see no reason to upgrade.

    And, if you lived in the states, you would theoretically be part of the Android majority measured by comscore.

    Upgrades from older Android phones won’t matter to comscore. Changes from Android to Apple, or vice-versa, and upgrades from dumbphones or RIM matter.

    I think there are three primary reasons why not everybody has upgraded:

    - Total cost of ownership. When the prepaids come out with nice Android models that you can use just with voice (and with WiFi for data) and/or come out with more reasonable pricing for voice and data, Android will pick up again — there are a lot of people waiting for this.

    - Technophobic. Dumbphone or RIM users who are forced by circumstance to upgrade. Apple’s going to get most of these people. That may be part of what’s happening right now.

    - Don’t care/not paying attention. These people aren’t technophobic; they just don’t have to be connected all the time. Computers/tablets/smartphones are tools. Apple can get a lot of these people with the subsidized carrier model. A lot of the ones who start paying attention and do their research will come away confused by the plethora of Android offerings. Apple is the easy way out.

  22. I think the notes about people waiting for ICS and the iPhone 5 might have something to do for it. I personally had an aging Palm Pre and was waiting for ICS phones with LTE built into their SoC last year (to get better battery life). Then I extended my wait specifically because Qualcomm was coming out not only with an SoC with LTE *and* moving from 4x to 28nm fabrication. Plus, somewhere in there Sprint announced a move from WiMax to LTE. All this caused m to wait another six months. But I now have an HTC EVO 4G LTE, so that should help the Android stats a tiny bit. Even that was delayed a week by US Customs (Apple patent wars).

    Don’t know how many other people have been holding off waiting for ICS, LTE, new features, etc. We shall see.

  23. “When an anomaly is detected…”

    What anomaly? Here is the average share growth per month over several periods beyond the last two years:

    months averaged // % share growth per month

    1 // -.2
    2 // .35
    3 // .73
    6 // .75
    9 // 1
    12 // 1.2
    15 // 1.31
    18 // 1.52
    21 // 1.61
    24 // 1.62
    27 // 1.62

    If we throw out the last month entirely, we get:

    months averaged // % share growth per month

    1 // .9
    2 // 1.2
    3 // 1.23
    6 // 1.03
    9 // 1.21
    12 // 1.36
    15 // 1.49
    18 // 1.64
    21 // 1.72
    24 // 1.70
    27 // 1.70

    Whether or not we discard the latest data point, the average growth rate has been below 2% for a long time and is clearly decreasing. It’s just a question of whether the growth has slowed from an average of 1.6-1.7% to less than 1% or if the decline in growth rate has actually approached zero or gone negative already.

    The closest thing to an anomaly is Android fans thinking that Android has been consistently growing at 2% month after month when the data clearly shows otherwise.

    “How are comScore data produced, and is there anything about that method that explains the anomaly?”

    That won’t get you very far. You can’t explain away one reporting period and accept the rest. If Comscore’s data is too anomalous to accept any one data point, it’s too anomalous to use any of their data. They’ve used the same methodology for years (where any small tweaks have actually moved towards greater and greater accuracy).

    ESR’s argument all along has been: this is the best, most consistent, most openly reported data available so I will accept it at face value for what it is. Now, all of a sudden: ANOMALY, ANOMALY! Because the data doesn’t agree with what he wants to see.

  24. Personally, I suspect it has more to do with general economics than the phones or OS. I know that I’m not really interested in making any upgrades at this time because I don’t want to recommit to my contracts in case things go poorly with the US economy in the next year.

    The test of this would be to look at the numbers for new iOS subscribers. If I’m right, they’ll also be down (although, probably not as much, because IRCC the average iPhone owner has more disposable income than the average Android owner and likely will be less effect in his/her spending habits).

  25. >Now, all of a sudden: ANOMALY, ANOMALY! Because the data doesn’t agree with what he wants to see.

    You can stop projecting at any time. I haven’t used that word.

  26. No, but you did say, “I’ll be looking into other market surveys over the next week to see if they confirm this.” After more than a year’s worth of dismissing other data whenever anyone else proposes looking at additional data.

  27. And you also said, “This is so grossly at odds with the way the market has been moving for three years that I have to wonder if it’s a tabulation mistake.” Even though it is by no measure “grossly” out of line with the last 3 years of data.

  28. No, you called it a possible “tabulation error”. It’s perfectly consistent with the data Tim F. cites.

  29. Now, you may very well be right. It might be a blip. But you need to be consistent in how you view this data and how you view other data points.

    Either comscore is the most accurate source of data in this realm, or it’s not. You’ve been preaching its righteousness for a couple of years now. If Android is starting to pull a fade, you need to be willing to acknowledge that. And it certainly looks like, at the very least, there has been a gradual slowdown.

    Will it last? Will iOS start picking up more ground, with the rumored release of a 4G phone this summer or fall? Are we seeing the beginnings of impact due to relative market saturation? Beats me.

    But you do need to be consistent in your analysis of the numbers and predictions based on said. That’s what people are pinging you on.

  30. >After more than a year’s worth of dismissing other data whenever anyone else proposes looking at additional data.

    Bullshit. You should at least try to keep your trolling plausible.

  31. Yeah. “This is so grossly at odds with the way the market has been moving for three years that I have to wonder if it’s a tabulation mistake” seems to imply an anomaly, doesn’t it?

    But, whatever.

    I don’t think there is really any way to know what this data point means, or whether it means anything at all. There is no real reason to think that Android has to go on accumulating market share on a nice smooth curve forever, or even at all. These markets are messy, unpredictable things. There are humans involved. There’s really no way to model them scientifically.

  32. Pingback: Android Sales Drop? | Daily Pundit

  33. “…“There is nobody on the face of the planet who needs a soda, let alone a 32-ounce soda,” said Robert Lustig, a pediatric obesity researcher at the University of California at San Francisco who is a vocal proponent of restrictions on sugary drinks….”

    Sorry for dragging this OT, but it seems that Noo Yawk ‘mini-joo-hitler’ Bloomberg is finally riffing on that Lustig fella’s “sugar is toxic” drivel.

    I’m utterly certain this will be a nice result for freedom.

    Lustig is yet another in a long line of academic social-inadequacy statist nutbags.

  34. I think ESR has been more than fair with his reporting, and has even gone as far to post this particular blog article when he knows there are Apple fanbois here who are just drooling over the opportunity to pounce. All he said was “this is an odd change, let’s look into it.”

    Android growth slowed. Who did well this quarter? If Microsoft’s freefall is leveling off then it’s happening at the expense of further Android growth. It’s also a safe bet that if Microsoft’s freefall is leveling off even though their phones are unusable garbage, it’s because they’re basically dumping the product in order to buy market share. I can confirm this; a friend who works for AT&T mentioned that they’re pushing Vista Phone *very* hard, even to the point of forcing employees to take them as their personal phones.

    Given the above, it’s a pretty good conclusion that Vista Phone’s ability to steal market share from Android is probably in the same statistical range as Bing’s ability to steal market share from Google: Microsoft has a huge war chest with which to buy customers, while Android/Google have superior products and more satisfied customers.

    I don’t think Apple factors into it at all. They’re a known quantity.

  35. >Lustig is yet another in a long line of academic social-inadequacy statist nutbags.

    Huh? Nothing in his propaganda says statism to me. In fact he’s been extremely scathing about the shitty quality of government dietary advice.

    And you can’t write off “Sugar is toxic” as drivel unless you know enough metabolic chemistry to understand the toxicity pathways Lustig points out. Happens that I do, which is why I take him seriously.

  36. “It’s also a safe bet that if Microsoft’s freefall is leveling off even though their phones are unusable garbage…”

    I’ve had a Windows Phone (Samsung Focus) for 15 months. It’s the nicest phone I’ve ever owned.

    I can tell you a dozen things I don’t like about Microsoft and their products, but the Windows Phone is a good product. The Lumia is getting pretty good reviews, too. You may have a general dislike of Microsoft, but if you don’t actually own and use a Windows Phone, I don’t understand why you wish to make a blanket condemnation.

  37. My objection to Lustig isn’t on scientific grounds. I have no idea whether sugar is ‘toxic’. I’m not knowledgeable enough to answer that question. My objection is to the idea – apparently advocated by Lustig – that the state has a role to play in regulating diet.

  38. >My objection is to the idea – apparently advocated by Lustig – that the state has a role to play in regulating diet.

    If he has asserted this, it has not been in any of the talks or written materials I have seen.

  39. This is from his nature magazine piece:

    >Authorities consider sugar as “empty calories” — but there is nothing empty about these calories. A growing body of scientific evidence shows that fructose can trigger processes that lead to liver toxicity and a host of other chronic diseases. A little is not a problem, but a lot kills — slowly. If international authorities are truly concerned about public health, they must consider limiting fructose — and its main delivery vehicles, the added sugars HCFS (high fructose corn syrup) and sucrose — which pose dangers to individuals and to society as a whole.

  40. > Why no ‘Smartphone Wars’ header prefix?

    Shhh! there is no Smartphone War in Oceania.

  41. @Patrick
    “And, if you lived in the states, you would theoretically be part of the Android majority measured by comscore.”

    I did realize that, but only after the post the consequences actually settled in ;-)

    If you look at the total changes by month, the total number of new smartphone users increased by only 1 million in April. That was 2 million in March and 3 million in February. Android’s user base increased by only 0.30 million in April, 10% of the increase in February.

    In November the increase of the market was also low, 1.7 million. In that month Android’s user base increase was lower than usual too, only 1.2 million. During earlier lows, Android grew by eating market share from other platforms, mostly RIM. There is not much of that is left to eat. RIM seems to have stopped hemorrhaging users.

    A simple assumption that might explain these numbers is that iPhone growth is largely independent of total market growth, at around a million per month since February 2011. Android picks up the remainder. Whenever total market growth drops, Android growth drops with it, but iPhone growth does not. Hence the drops in November 2011 and April 2012.

    Or, equally valid, if Android growth drops, the growth of the whole market stalls.

    Next question, why did the smartphone market stop growing in April?

  42. @esr
    “And you can’t write off “Sugar is toxic” as drivel unless you know enough metabolic chemistry to understand the toxicity pathways Lustig points out.”

    Actually, all food is poisonous. That might be a little overstating the case, but not by much. Oxygen is poisonous too. In the end, it is breathing that will kill you. People die every year from drinking too much water.

    Fun aside, toxicology started as a science with the realization a poison is in the dose. So, everything in moderation and eat with variety. Whatever you eat, it should be as different as possible from what you have eaten before.

    In this light, the fact that sugar can be unhealthy is to be expected, just as salt, fats, or salad. It all depends on the dose. Your metabolism simply has a limited capacity for every food component. It will fail when overstuffed. It is just that we only rarely know the toxic dose and the underlying pathway.

  43. All he said was “this is an odd change, let’s look into it.”

    And note how back in March ESR said of a 0.8 drop in apple market share :-

    I refused to overinterpret Android’s relatively poor performance in the last quarter then, and I’m not going to read too much into Apple’s fall in market share now – it’s probably within the statistical noise limit for comScore’s numbers. I’ll leave the hyperventilation to the fanboys.

    Anyone breathlessly commenting about how important a 0.2 drop is now who didn’t pipe up about how badly Apple was doomed back in March can tell it to their double standard.

    Looking at the “Change in U.S. smartphone userbase by platform, change per month” table there’s something which is probably nothing… The scale of RIM’s continual plummet is much the same between March and April. If you were to posit that Apple is scoring the majority of those (and i know that theory has been posted by several commenters here) that could account for Apple’s sustained growth in what was overall a dead month in smartphones.

  44. *cough* ok… i skimmed where Eric posted this.

    Still, double standards.

  45. Winter,

    Lustig’s point is that the toxic dose for sugar is an amount we might consider normal in the standard American diet. He has proven this now beyond the shadow of a doubt. We do know the metabolic pathways, thanks in part to his research.

    And yes, Lustig and other scientists have advocated for state intervention in limiting the amount of sugar we consume. Considering how it got there in the first place — food companies appealing to our base instincts in order to capture our dollars — I’d say epidemic-level sugar toxicity is a sign of market failure and government intervention is warranted.

  46. @Jeff Read
    “I’d say epidemic-level sugar toxicity is a sign of market failure and government intervention is warranted.”

    Seems to be the same king of problem as alcohol and smoking.

  47. I’d say epidemic-level sugar toxicity is a sign of market failure and government intervention is warranted.

    I don’t think ‘market failure’ means what you think it means. People like what they like, they make choices and then live with them. Perhaps with more knowledge they wouldn’t make the exact same choices, perhaps not.

    I’d be interested to hear your basis for gov’t intervention. Besides that the peasants are doing something of which you don’t approve, that is.

  48. @Jeff Read

    >I’d say epidemic-level sugar toxicity is a sign of market failure and government intervention is warranted

    It’s not a market failure. The market is giving people exactly what they want. It’s just not giving them what you think they *should* want.

    @Winter

    >Seems to be the same king of problem as alcohol and smoking.

    This is pretty much what Lustig says. Of course, in my view alcohol and smoking should be completely deregulated as well.

    Tell me the health dangers. Fine. But the final choice remains with me.

  49. @Tom can you demonstrate that you have not defined “market failure” into meaninglessness? People not wanting what is actually in their best interests because they have incomplete information (people are not widely aware of this, and I assume if it were spread wider it would be contested by the corn industry) seems to me a *textbook* market failure.

  50. Winter,

    Except not smoking is cheaper than smoking. Not drinking alcohol is cheaper than drinking it. But the economics of food in Murka have been so distorted such that not eating processed foods with toxic levels of refined carbs is more expensive than eating them, because you have to eat SOMETHING. And because they sell so much better, Food Inc. has tooled up to move large quantities of processed foods, while healthy foods don’t enjoy those economies of scale. It’s like Idiocracy where all of humanity’s hydration needs are filled by Brawndo.

    Anyway we regulate smoking and drinking because these activities pose public risk. The same should be true of sugar.

  51. @Random832

    >People not wanting what is actually in their best interests because they have incomplete information

    I am all in favour of distributing information. But the only person who can make decisions about what will make me better off is me. I am the only one who knows my preferences. Allowing governments to make decisions on our behalf will only result in the market becoming less efficient, because government will be acting on imperfect information about consumer preferences.

  52. Especially given all the multiple vehicle collisions caused by people with sugar cravings. The wife beating resulting from hyperglycemia. And I should not forget the crime sprees of people stealing to buy donuts.

  53. @SPQR on Monday, June 4 2012 at 10:53 am

    Bravo, sir. Well struck!

    @Winter & Jeff Read

    Much of the growth in the production and sales of foods containing High Fructose Corn Syrup is a side effect of the anti-fat crusade. Companies add sugar to make their foods palatable after they remove the fat. This is exacerbated by the tarrif and other trade barriers to imported cane sugar.

  54. @random832:
    “Can you demonstrate that you have not defined “market failure” into meaninglessness? People not wanting what is actually in their best interests because they have incomplete information (people are not widely aware of this, and I assume if it were spread wider it would be contested by the corn industry) seems to me a *textbook* market failure.”

    Nonsense. Market failure has a very specific meaning in economics; it occurs when items that consumer demand (that is, products they want to buy) are not available at a price they are willing to pay (and can afford), even though there is no fundamental issue of technology, labor, or input scarcity that prevents that demand from being profitably filled. Rather, it is because suppliers choose not to make the product available.

    This has absolutely nothing to do with consumers lacking information about what they “should” demand.

  55. The sort of informational asymmetry that leads to market failures have to do with principal-agent problems (problems of incentives not lining up) and fraud (passing off conterfeits as the real thing). Knowing (or not) what’s in your best interest (a disagreement over preferences) is not a market failure by any stretch.

  56. @ Random832:

    > (people are not widely aware of this, and I assume if it were spread wider it would be contested by the corn industry)

    High Fructose Corn syrup is really 2 related things in the same bottle: Glucose syrup and Fructose syrup. The ratio between these two is what determines if it is “high-fructose” or not. Sucrose (table sugar) is a di-saccharide: one glucose and one fructose tied together in a way which is easily split up during digestions. I’m assuming that high-fructose is a syrup with greater than 50% fructose, but that doesn’t really matter. The glucose is actually useful food – though a simple sugar, it is what the whole body (esp. the brain) uses as fuel. Most basic carbs get converted to this. Fructose is (apparently) not used nutritively by the body and is alleged to be toxic.

    The fun thing is that fructose is sweeter, but both glucose and fructose can be independently created from corn. The result is that food could be sweetened with *just* glucose without the fructose. Of course, it would require more to get the same sweetness and thus have a greater number of calories. However, it would be easier to cut out fructose starting from corn than it would be from sugar cane. Thus, if this approach was taken, it would actually be better for the corn lobby than not – they’d sell more product , have less competition and be able to claim health benefits for doing so.

  57. >Much of the growth in the production and sales of foods containing High Fructose Corn Syrup is a side effect of the anti-fat crusade.

    That is correct, and it’s something Lustig is (quite properly) loud and angry about. Lustig points out that “Big Food” dumps HFCS in low-fat foods not because they’re evil lizardoids or something, but because fat is a flavor transmitter – low-fat processed food tastes like crap, so it has to be sugared up to be palatable.

  58. @SPQR:

    I think the toxicology report showed an elevated level of fructose in that zombie who was chewing the face off the other zombie. That and the nearby empty canister of Big Red syrup are really all we need to know, right?

  59. Most basic carbs get converted to this. Fructose is (apparently) not used nutritively by the body and is alleged to be toxic.

    Completely wrong. Lustig is saying that sugar, at the levels people are eating it at, is toxic. This includes sucrose and high-fructose corn syrup, and, yes, even fructose itself to some extent. There was link to a talk Lustig gave in previous post on this blog.

    The main problem with HCFS would be the amounts they are adding it to processed foods, sodas, etc.

    Also, someone said the increase of HCFS had something to do with the promotion of low-fat foods. That’s only true for the increase in all sugars being added to food. The rise of the use HCFS in particular has to do with its cost and the Nixon administration. Nixon’s aids told him that food prices were on the rise, and that if food got too expensive, it would make people unhappy with his administration and he might not get re-elected. Someone, probably from the corn industry, told him that HCFS was cheaper than sugar and if it replaced sugar in most foods, food prices would drop.

    Of course, HFCS is cheaper than sugar, and whether we had a subsequent reduction in the price of food in the 1970s would be a question best answered by someone with more skill than I have in economics.

  60. Patrick, you mean I need to add a HFCS detector to my anti-Zombie AR 15? Fortunately, there is still one empty rail …

  61. >”If international authorities are truly concerned about public health, they must consider limiting fructose”

    As statism goes, this is pretty weak tea. I think, before anyone dismisses Lustig’s science as tainted because of his politics, they ought to present evidence that the politics is actually driving and making him slant his conclusions or presentation in a pro-state-intervention direction.

    Such evidence is easy to find, for example, with respect to many (though not all) AGW alarmists. Lustig, not so much. He is quite scathing about the effects of past policy interventions.

  62. @ESR

    I don’t dismiss his science, but he is clearly stepping beyond the bounds of what medical science can tell us. He is assuming that if something can be proven to be damaging to public health then it ought to be regulated by the state.

    His science might be right, but his economics and public policy is absolutely wrong. His statism is undeniable, as this quote reveals:

    “Take, for instance bans on smoking in public places and the use of designated drivers, not to mention airbags in cars and condom dispensers in public bathrooms.

    “These simple measures – which have all been on the battleground of American politics – are now taken for granted as essential tools for our public health and well-being. It’s time to turn our attention to sugar.”

    As does this quote from a BBC article:

    In a comment in the journal Nature, Prof Lustig, a leading child obesity expert, says governments need to consider major shifts in policy, such as taxes, limiting sales of sweet food and drinks during school hours, or even stopping children from buying them below a certain age.

    The professor of paediatrics at the University of California, San Francisco, told the BBC: “It [sugar] meets all the criteria for societal intervention that alcohol and tobacco meet.”

  63. “…And I should not forget the crime sprees of people stealing to buy donuts.”

    @SPQR: No – all those armed men at the donut shops are the *cops*.

    One interesting factoid about HFCS is that it was introduced as a sugar substitute that was supposed to be ‘healthier’ than sugar. That sure worked out well.

  64. Perhaps Lustig is merely being logical:

    If the dangers of smoking justify governmental regulation of tobacco
    Then the similar dangers of sugar consumption also justify government regulation.

    He may not have thought long and hard about the side effects of governmental regulation.

    I can imagine a thriving black market in sugar, complete with organized crime and turf wars…

  65. @LS:

    One interesting factoid about HFCS is that it was introduced as a sugar substitute that was
    supposed to be ‘healthier’ than sugar.

    Yeah, that was supported by the same (lack of) science that had them telling diabetics that fructose was better for them than glucose.

    A little knowledge is a dangerous thing.

  66. Sorry to get back on topic, but apparently Samsung is now desirable enough to not get pushed around by the carriers like they used to be:

    http://www.slashgear.com/the-galaxy-s-iii-is-samsungs-coming-of-age-04231811/

    This has got to help for reduced development costs, time-to-market, etc.

    The obvious thing the article doesn’t mention is that if none of the flagship phones that a carrier offers are branded by the carrier, what’s the point of the carrier branding the third-tier crap phones?

    In other words, Samsung has finally matched Apple’s position well enough to tell the carriers “take it or leave it” because they know the answer will be that the carriers will take it, but in this case, I think Samsung might have long coattails — the carriers might just give up on all the branding crap. Not overnight, but I think it’s coming.

  67. @Patrick Maupin on Monday, June 4 2012 at 3:28 pm

    I wonder that the market for unlocked phones isn’t bigger in the USA. I’ve never had a problem using an unlocked phone with a US GSM carrier.

  68. Answering myself, it’s probably because we don’t get a discount for not having a subsidised phone.

  69. @Bob:
    “I wonder that the market for unlocked phones isn’t bigger in the USA. I’ve never had a problem using an unlocked phone with a US GSM carrier. Answering myself, it’s probably because we don’t get a discount for not having a subsidised phone.”

    Now that *is* a market failure…

  70. @Patrick Maupin:
    “Samsung is now desirable enough to not get pushed around by the carriers like they used to be.”

    This is very significant. It shows that power is moving from the carriers to the phone manufacturers, and that phone brand is becoming more important than carrier brand. Most important, it shows that Apple is not an anomaly in its ability to dictate terms to carriers.

  71. @Cathy

    I suspect it’s a fragile market failure; the first carrier to give the discount will force the others to follow.

  72. @Cathy

    >Most important, it shows that Apple is not an anomaly in its ability to dictate terms to carriers.

    I doubt that this will spread beyond Apple and Samsung though. They are also the only two profitable handset makers (apart from HTC, which made about $5).

  73. @Tom:

    I doubt that this will spread beyond Apple and Samsung though.

    I dunno. One (Apple) is an anomaly; two is a trend. I’m trying to look at it from a carrier’s perspective. If I can’t brand/personalize my high-end stuff, why would I brand and personalize my crap? How is that going to help my brand?

    With two competitive high-end smartphones that are each identical on all carriers, the carriers are going to have to differentiate by, you know, doing a good job of carrying (voice and data). Which feeds into the hope that cracks will start to appear and tiered pricing will actually become available for subsidized vs. non-subsidized phones.

    When Apple and Samsung take it to the next level on the iPhone 5 and Galaxy 4 (when iPhone works properly on T-Mobile and, hopefully, a single build of the Galaxy 4 works on anything), and the carriers are tired of massive phone subsidies, the carriers might start embracing BYOD in a big way. If AT&T thinks it can lure some of Verizon’s customers away without having to give them phones, and prices a plan accordingly, people will sit up and take note, and start looking for more portable phones. Once this happens, the first carrier to offer lower-end cross-carrier subsidized phones will score a temporary win (at least for the contract period) and then the other carriers will follow.

    In the past, we have accepted that phones are not portable between carriers. Once it becomes clear to customers that phone portability is rapidly becoming a reasonable possibility, watch out!

  74. Decent analysis from Horace:
    http://www.asymco.com/2012/06/04/trouble-with-the-robot/

    I liked these parts:

    “As we reach saturation, the basis of competition will change.”

    and

    “The concern has to be that rather than seeing the net adds growing–as they have for two years with only two contiguous months of decline–Android net adds have been falling for four months.”

    Perhaps Android’s 50% penetration will be its undoing. Millions got their feet wet in the smartphone waters via Android, but now they’ll be moving up to Windows Phone and iOS.

    This graph is really interesting: http://www.asymco.com/wp-content/uploads/2012/06/Screen-Shot-2012-06-04-at-6-4-2.01.45-PM.png

    “Here again we see the lowest user growth for Android since 2009 (and hence since it reached mainstream distribution.)”

  75. “…And you can’t write off “Sugar is toxic” as drivel unless you know enough metabolic chemistry to understand the toxicity pathways Lustig points out. Happens that I do, which is why I take him seriously…”

    Yeah. I’m not exactly approaching this from a position of utter ignorance either.

    This topic is the first one to elicit a position from you that actually surprises me.

    Sincere apologies, again, for polluting an unrelated thread :) Just caught whiff of this story, and it reminded me of one of your earlier posts.

  76. “…Yeah, that was supported by the same (lack of) science that had them telling diabetics that fructose was better for them than glucose.

    A little knowledge is a dangerous thing….”

    Actually, *strictly speaking*, fructose *is* better for diabetics….admittedly in a narrower sense than many would understand, of course.

  77. @Patrick

    >I dunno. One (Apple) is an anomaly; two is a trend.

    I don’t think either is an anomaly. I just think that with the industry in the state it’s currently in – with almost nobody making any money – it’s unlikely that any other handset maker will have the necessary clout to force the carriers into line.

    >If I can’t brand/personalize my high-end stuff, why would I brand and personalize my crap? How is that going to help my brand?

    They’ve been branding their low-end stuff forever. I don’t see why that should change now, just because some of their higher-end phones won’t be branded.

    >With two competitive high-end smartphones that are each identical on all carriers, the carriers are going to have to differentiate by, you know, doing a good job of carrying (voice and data).

    I think you are vastly overestimating the importance of the carrier’s customisation to consumer decision making. I don’t know for a fact, but I find it hard to imagine that people making their decisions based on the minor differences between handsets created by the carriers.

  78. and the carriers are tired of massive phone subsidies, the carriers might start embracing BYOD in a big way

    @Patrick Maupin:

    I don’t think this will happen and here’s why: people are far too conditioned to the status quo. Most would rather have the convenience of having to pay nothing up front and everything in monthly payments than pay a big chunk upfront with smaller back-end payments. What do you think the housing bubble was all about? The American mentality is “I can use it now and I can worry about how to pay for it later.” Or, put another way, “I’ll gladly pay you on Thursday for a burger today.”

    The carriers got themselves into this mess because they wanted to expand their market at a time when most people couldn’t afford a cellphone. Now they’re stuck with it.

  79. @Dan:

    I don’t think everybody here expects all good scientists to be good libertarians, or all good libertarians to be good scientists. (We are mostly surprised, however, to see good scientists turn out to be creationists, possibly because we expect scientists to think deeply about the beginnings of the universe, but don’t necessarily expect them to think deeply about politics.)

    What to watch out for is “scientists” who base their science on a political or remunerative agenda. There are such scientists at all locations on the political spectrum.

    So, if a scientist realizes that sugar is unregulated poison, and hasn’t given much thought to politics, but notes that it seems acceptable to society to regulate drinking and smoking, it is unsurprising to see him advocating lumping sugar in with those other poisons, and is not necessarily indicative of a strong desire to subjugate the universe.

  80. @Patrick Maupin

    The Samsung announcement is an interesting development indeed.

    I’ve informally monitored the subsidy levels on my carrier (Verizon) for the past few months. Until the Galaxy Nexus contract price dropped to $200, the only Android phone with a $450 subsidy was the HTC Rezound. All models of the iPhone have always had a $450 subsidy.

    Purely speculating on the Verizon observations, I would say that the carriers have learned the lesson of the value of phone branding from their Apple experience. The fact that subsidy levels for high end Android phones are being elevated to iPhone levels coupled with today’s announcement suggests that they are attempting to promote alternatives to the iPhone. They’d rather it be something other than Android, but the WP/Nokia offering isn’t going to get it done yet.

    I suspect Samsung had to make some concessions to get uniform branding (offload some support from the carriers to Samsung?) but the carriers are trying not to become any more beholden to Apple than they already are.

    Interesting summer ahead…

  81. >So, if a scientist realizes that sugar is unregulated poison, and hasn’t given much thought to politics, but notes that it seems acceptable to society to regulate drinking and smoking, it is unsurprising to see him advocating lumping sugar in with those other poisons, and is not necessarily indicative of a strong desire to subjugate the universe.

    Exactly. As both as a matter of ethics and of good propaganda, I think it’s important not to attack the likes of Lustig for wrong politics unless the problem really is with their politics and it’s distorting their science. I’m even careful about AGW-alarmist scientists this way, though given the not-very-subtle totalitarian leanings of their political allies restraint is sometimes difficult.

    If I could have a face-to-face with Lustig, the approach I’d take goes like this: “You know very well that the results of past attempts to engineer a ‘better’ diet through government action have started with the best intentions but gone perversely wrong. What makes you think trying to restrict sugar intake would go any better?” I think he’d get it. And I’d only attack his politics if he were so fixed on government intervention that he refused to get it.

  82. @Dan:

    Actually, *strictly speaking*, fructose *is* better for diabetics….admittedly in a narrower sense than many would understand, of course.

    Depending on who you believe, it may only be in the sense of a little arsenic being better for those with chronic arsenic poisoning than cyanide.

    http://www.ajcn.org/content/88/5/1189.full

  83. @Tom:

    I think you are vastly overestimating the importance of the carrier’s customisation to consumer decision making. I don’t know for a fact, but I find it hard to imagine that people making their decisions based on the minor differences between handsets created by the carriers.

    I haven’t written anything about how customization impacts consumer decision making. Personally, I think it’s all a negative. No, the carriers apparently found customization important for delivery of additional revenue sources and for lock-in, by creating phones that wouldn’t work with any other carrier.

    @Morgan Greywolf:

    I don’t think this will happen and here’s why: people are far too conditioned to the status quo.

    There are multiple status quos at work. Poor people use prepaid, and already pay for their phones up front. Rich people are the ones who buy the Samsungs and iPhones, and they will wind up with unlocked multi-carrier phones at the end of the contract period. They can even give them to poor people if they want to stay on the upgrade treadmill.

    Most would rather have the convenience of having to pay nothing up front and everything in monthly payments than pay a big chunk upfront with smaller back-end payments.

    So you don’t think they will notice that the phone that costs $200 up-front lets them switch carriers after two years (or has a better resale value or whatever), and that some of them will pay that $200 instead of $100? You don’t think that the technology that allows any phone to work with any carrier will rapidly move down the price curve? You don’t think that BYOD (which is already taking off in prepaid) will become desirable to more people? You don’t think that people will find T-Mobile’s new more transparent pricing on subsidized phones to be desirable? Who doesn’t want their phone bill to drop by $20/month after the first two years?

  84. @Kevin Snyder:

    I suspect Samsung had to make some concessions to get uniform branding (offload some support from the carriers to Samsung?) but the carriers are trying not to become any more beholden to Apple than they already are.

    I suspect the main “concession” Samsung made (if you could call it that) is to keep giving the carriers a bigger wholesale discount than Apple does. The carriers are still butt-hurt over subsidy costs.

    I could be wrong, but for it to show up on 5 carriers simultaneously suggests to me that all Samsung said was “Here’s the earliest date we can have them available for you. If you want changes, add 6 months and $2 million NRE. How many do you want, and when do you want them?”

  85. I’m having a hard time taking seriously calling a substance with an LD50 measured in pounds “toxic” … or a “poison”. An unhealthy diet is an unhealthy diet, not an exercise in abusing rhetoric.

  86. >I’m having a hard time taking seriously calling a substance with an LD50 measured in pounds “toxic” … or a “poison”.

    It’s a chronic poison rather than an acute one.

  87. @SPQR:

    Yes, an unhealthy diet is a chronic poison, not an acute one (with, of course, the odd exception like badly prepared fugu). But it’s hard to get a lot of fructose straight from nature, though — honey is the best example, and even that has one glucose molecule per fructose molecule, not like HFCS, which has 1.3 glucose molecule per fructose molecule. Oranges have about 1.0 – 1.1 fructose molecules per glucose molecule. Apples have more, but not nearly as much total sugar, and lots of mediating fiber. Juice or cokes == bad.

    I doubt the good doctor means to abuse rhetoric, and probably thinks he’s helping people. Of course, others disagree.

    Of course, now salt’s good for you too. In fact, if you limit your intake to the recommendations, you’ll probably die.

  88. All tbe speculation about the “fall” of Android marketshare ignores the fact that less new Android means less new smartphones in total.

  89. I think nutritional information in the US can be improved.

    It is years ago when I was offered these items, but anyone who is fooled by advertisements for cholesterol free omelets or cholesterol free bananas should get some remedial education.

  90. @Bob:

    One US carrier does offer discounts if you bring your own device (or pay for it up-front, IIRC): T-Mobile. Sadly, I don’t think that’s made much difference for them, though.

  91. The notion that “sugar is toxic” is about as accurate as “all sex is rape”.

    Most healthy food–carrots, apples, yams, lettuce (yes, a little), lemons (a lot actually) have sugar, including gluose and fructose in them. For optimal health most people need to eat a wide variety of these foods.

    Sugar is only a problem when you strip it out of it’s “natural” carriers (apples, carrots, yams, lettuce, lemons) and mix it with water, esters and a panopoly of colors.

    Fuckers are even adding it (sugar/sweetners) to fucking FRUIT JUICE. Yes. Really. Apple juice with ADDED SUGAR. Like Cocaine, with ADDED CRACK.

    As mention previously, I live in Australia right now and you can see the effects here to about teh same degee as in the US, except here (a) soda is about 2-3x more expensive, and (2) most of the soda manufacturers use “real” sugar instead of HFC (you can taste the difference too).

    HFC wouldn’t be cheaper than regular sugar if not for price supports.

    @Jeff Read:
    It is not cheaper to eat like crap. Fresh, healthy foods are generally cheaper on a per-calorie basis. It’s just that you have to *prepare* the fresh, healthy foods. Canned, pre-cooked, pre-packaged and pre-digested meals are *easier*. Especailly if you demand a great deal of meal-to-meal variety in your diet. See http://wholehealthsource.blogspot.com.au/ for details on meal varibility and reward. Oh, how interesting: http://wholehealthsource.blogspot.com.au/2012/05/how-bad-is-fructose-david-despain.html
    This too:

    http://wholehealthsource.blogspot.com.au/2012/02/is-sugar-fattening.html

    Drinking 64 ounces of carbonated sugar water at one go is not a good idea. Eating a piece of chocolate cake mixed in with a diet high in fresh vegetables, fruits, meats and nuts and a lifestyle full of movement is, well, it’s a very tasty thing indeed.

    Heck, the most dangerous thing for you is to spend more than 6 hour a day in a chair. http://sweatscience.runnersworld.com/2012/03/you-cant-outrun-the-health-effects-of-your-desk-job/

    Well, yeah, it’s runnersworld. They WOULD say that, wouldn’t they?

    (Fucking hell I miss America).

  92. @Winter:
    “…anyone who is fooled by advertisements for cholesterol free omelets or cholesterol free bananas should get some remedial education.”

    Shocking news: Half of all Americans are of below-median intelligence! In fact, fully 1 in 4 Americans falls in the bottom quartile of intelligence! The government must do something immediately….more funds for education!

  93. @William O’Blivion:
    “It is not cheaper to eat like crap. Fresh, healthy foods are generally cheaper on a per-calorie basis.”

    People do not shop or eat on a per-calorie basis. They need to get enough bulk to feel full, and if they’re going to be healthy they need to have sufficient vitamins and trace nutrients.

  94. >(2) most of the soda manufacturers use “real” sugar instead of HFC (you can taste the difference too).

    Hell yeah. At Penguicon I had a Coke made with cane sugar, bottled in glass. It actually tasted good.

  95. @cathy
    “Shocking news: Half of all Americans”

    So you oppose informing Americans about nutrition? Say, to protect them against scams and fraud?

    I already see a Libertopia full of people paying lots of money for these elusive cholesterol-free omelets and bananas.

  96. @William O. B’Livon
    > Heck, the most dangerous thing for you is to spend more than 6 hour a day in a chair. http://sweatscience.runnersworld.com/2012/03/you-cant-outrun-the-health-effects-of-your-desk-job/

    The writer got the right solution (stand up at work), but the wrong implementation (adjustable height desk).

    The right implementation is to work standing up, by using a standing desk. If you want to sit down, get a bar height chair. The default state is what’s important – stand by default.

    I converted to a standing desk last year (I sit less than an hour a day, mainly at lunch), and it really does help you stay fit. Your back, legs, and feet all get stronger, and you’ll notice it, especially during the first month, when your body is adjusting to its new default of standing.

  97. >>cholesterol free bananas
    That’s topped — or at least equaled by the box of microwave popcorn I have behind me — ’100% Whole Grain’. (They must ignore the fake butter and salt)

    What I really want to see is the microwave popcorn that isn’t whole grain.

  98. Well, all of you can come down off your sugar highs…Disney is out to save us:

    http://finance.yahoo.com/blogs/daily-ticker/disney-ban-junk-food-ads-kids-america-struggles-165346887.html;_ylt=Asu7_YrMKHX7nPb4McU1jSqiuYdG;_ylu=X3oDMTQzdjEydmlpBG1pdANGaW5hbmNlIEZQIEp1bWJvdHJvbiBMaXRlBHBrZwNjODMzNjAyNC1mYjVhLTNmYzUtOWM3OC1hYTRjMmMzOGE3YmIEcG9zAzEEc2VjA2p1bWJvdHJvbgR2ZXIDZThkYzA1OTAtYWYzMC0xMWUxLWI1YWYtZGIwZmQ2ZWU4Y2Q0;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

    I notice that they just happen to be readying their own line of kiddie junk food, that meets *their* standards, while high-mindedly excluding food ads from their competition, all in the name of saving our children. It’s another triumph of the free market!

    Against such stupidity, cholesterol-free bananas struggle in vain….

  99. esr> Hell yeah. At Penguicon I had a Coke made with cane sugar, bottled in glass. It actually tasted good.

    Yeah, we used to be able to get this readily around South Texas, coming from bottlers in Mexico, but now even the Mexican bottlers have started using HFCS. Not sure what lever ADM and company used for that trick, but it’s becoming more and more prevalent.

    Luckily, the local grocery chain has started making it’s Dr. Pepper analog with sugar. Good stuff!

  100. I already see a Libertopia full of people paying lots of money for these elusive cholesterol-free omelets and bananas.

    I’m ok with this. A fool and their money are soon parted.

  101. @Dan:

    I particularly love Lileks’ comment: “Leave it to Americans to invent a Puritan strain of Epicureanism.” Priceless.

  102. @JonCB
    “I’m ok with this. A fool and their money are soon parted.”

    That is a thief’s ethic.

  103. Apple marketing juggernaut

    I hope that all of Apple’s competitors believe as you do that it’s all marketing. That way, they won’t bother to fix the deficiencies of their products, and Apple will continue to eat their lunch.

  104. Apple is not an anomaly in its ability to dictate terms to carriers.

    Apple does NOT dictate terms to carriers. It negotiates terms, and does so from a position of strength. If they could dictate terms, iPhone would have been on China Mobile four years ago, and they never would have given AT&T an exclusive.

  105. @Some Guy:

    Apple does NOT dictate terms to carriers.

    Arguable.

    It negotiates terms, and does so from a position of strength.

    Sure. Like Darth Vader.

    If they could dictate terms, iPhone would have been on China Mobile four years ago,

    I think you mean “If they were reasonable, iPhone would have been on China Mobile 4 years ago.”

    and they never would have given AT&T an exclusive.

    That particular deal was made back when Darth was known as Anakin.

  106. What are you arguing about? Sugar is definitely a poison. It is nearly as toxic as dihydrogen monoxide.

  107. Patrick Maupin on Wednesday, June 6 2012 at 10:14 am said:
    >Some Guy said:

    >> If they could dictate terms, iPhone would have been on China Mobile four years ago,

    >I think you mean “If they were reasonable, iPhone would have been on
    >China Mobile 4 years ago.”

    CM has no iPhone for technical reasons.

    This article (
    How the Chinese screwed up their 3G mobile phone networks
    explains it in detail.

    Short version: back in the ’90s, the Chinese government decided to “roll their own” 3G technology (TD-SCDMA).

    It didn’t work, but China had too much “face” invested to drop it. CM was ordered to build a TD-SCDMA network. TD-SCDMA was still not working properly, but it was good enough for another market – “Wireless Local Loop”, a pseudo-landline. CM’s “3G” customers are nearly all WLLs.

    But TD-SCDMA won’t support full iPhone functionality. So Apple won’t offer a TD-SCDMA iPhone, so CM has no iPhone.

  108. Corn syrup has been replacing sugar because of the insane sugar quota system we have in the U.S. (Europe has a *different* insane quota system.)

    Various favored producers get to sell a certain amount into the U.S. market, and there’s only so much sugar cultivation in the U.S.. Back in the 80s, that meant the growers could make about 5 times their costs, but only on their quota. However, that meant that if they had a U.S. quota, they could sell the rest of their sugar below cost, and still come out ahead. Sugar was so expensive in the U.S. that various ag companies figured out cheaper sweeteners to sell to the big food processors; HFCS ended up being the preferred one.

    I don’t know if the economics of the sweetener market are still that badly distorted, but we still do have sugar quotas, and not a lot of land which can grow sugar cane (Hawaii and Puerto Rico, pretty much). Mexico can grow sugar cane, and doesn’t have the same import restrictions, so they use a lot more sugar and less HFCS, which is why Mexican Coke still has sugar.

  109. Sprint now selling iPhone for VirginMobile prepaid:

    http://www.google.com/hostednews/ap/article/ALeqM5jNC6H05YBhka8wFz8S1ohbf1Wh1Q?docId=8569319a51964387864dd57b64b10593

    This is how the majors will manage the transition to allowing customers to pay upfront for the phone and less per month. They won’t offer the plans through their normal brands. (In Sprint’s case, this helps a tiny bit with shifting the amount of Apple kit they’ve contracted for.)

    It’s still problematic that you wind up with a locked phone. Unfortunately, this incents the carrier to raise your rates later. This is tempered by their desire to lure more customers, but still…

  110. OT: Coke-a-Cola sold in Mexico and probably many other places uses cane sugar. HFCS is a U.S. centric ingredient, I believe a side effect of farm subsidies. In Texas, there is a local soda brand obviously intended to be a “generic Coke” which advertises it’s use of pure cane sugar sweetener.

  111. Developers prefer iOS to Android by a factor of 2 to 1.

    When it comes to app ecosystems, iOS is still the happening party, market share be damned. This could make Android’s market share lead ephemeral, as people come to realize that although there are more and cheaper Android devices out there, the app selection still sucks when compared to iOS.

  112. According to this survey, about 23% of recent iPhone buyers are coming from Android, and about 15% from Blackberry, up from 18%/11% a few months ago.

  113. @PapayaSF:

    That’s nice. I wonder why they don’t publish where the Android buyers come from…

  114. Especially given all the multiple vehicle collisions caused by people with sugar cravings. The wife beating resulting from hyperglycemia. And I should not forget the crime sprees of people stealing to buy donuts.

    Tobacco smokers don’t do these things, yet we regulate the shit out of tobacco. Why? Reason number one is secondhand smoke, but I don’t think that’s the primary reason. The bulk of the public risk doesn’t lie in the activity itself, but in the marketing of tobacco. There is just too much danger that people will make poor choices. This isn’t a “the public is stupid and therefore we can’t trust their judgement” thing. Eric is smarter than I am and look how easily he falls to Big Oil propaganda. This is a “we can’t trust the big companies to not subvert the public’s judgement” thing.

    Lately I’ve reluctantly come to the conclusion that adopting a postmodernist perspective is essential. Postmodernism is not as it’s commonly caricatured — denying objective reality. It’s about being savvy to the hidden biases and agendas of anyone who might tell you what reality is.

    The situation with sugar is parallel: it’s primarily the marketing of sugar-added foods that warrants regulation.

  115. It’s about being savvy to the hidden biases and agendas of anyone who might tell you what reality is.

    So what are your hidden biases and agendas, Jeff? And why might you think no one is savvy to them?

  116. “we still do have sugar quotas, and not a lot of land which can grow sugar cane”

    But we have a lot of land that can grow sugar beets.

  117. Lately I’ve reluctantly come to the conclusion that adopting a postmodernist perspective is essential. Postmodernism is not as it’s commonly caricatured — denying objective reality. It’s about being savvy to the hidden biases and agendas of anyone who might tell you what reality is.,

    Fascinating. The problem with postmodernism, of course, is that it does wind up denying objective reality- try as you might, you can’t make it go away by lampshading it. Because no matter how bad the hidden biases and layers of agenda, reality still exists and you can compare whatever bullshit people try to feed you to it and make your own call. Postmodernism is sick insofar as it assumes that it’s biases and agendas all the way down- you see it most comically when a postmodernist manages to wander into an area where the hard sciences are being discussed (or the occasional gag paper submission). Physical laws are not narratives or social constructs.

    For anyone not actually mentally ill, you want skepticism.

  118. @Greg
    “Physical laws are not narratives or social constructs.”

    Indeed, and they underlie natural selection. Natural selection is predicted to weed out those who deny reality.

    Any post-modernist worth his salt will be able to show natural selection is the result of hidden agendas long before it will “deselect” him.

  119. iPhone is already the largest selling phone on AT&T, Verizon and Sprint. Leap/Cricket now carries it. Virgin Mobile starts selling it June 29. It will cost $549 for a basic model, higher than the $100 charged for Sprint-branded service. However, service will cost $30 a month and won’t require a contract. Sprint charges $80 per month and requires a two-year contract. The Virgin Mobile customer can save nearly $800 over two years for the same phone on the same network.

    Many smaller carriers, such NTelos Wireless of Virginia; Appalachian Wireless of Kentucky; and Alaska Communications, Matanuska Telephone Association and GCI all of Alaska all carry it.

    T-Mobile is testing 1900MHz (iPhone 4/4S-compatible) 3G HSPA+ (22Mbps) at WWDC next week.

    “merely a coincidence”

    Oh, sure. Like we can’t decode that. T-Mobile USA already has over 1 million iPhones on its network. They already offer microSIMs for the iPhone 4/4S. AT&T is now unlocking iPhones for customers who have completed their contract.

    The iPhone is coming to T-Mobile, and when it does, Android will have nowhere (in the US market) to hide.

    The early result: HTC, once the #1 brand in Android-land is now on its knees, begging for its life. The once mighty Motorola is now a wholly-owned subsidiary of Google, largely for defensive reasons. And now Samsung is signaling that it is interested in breaking ranks with the Full Google Experience.

    It’s as-if one side in the Smartphone wars suddenly found a reason to change sides in the fight, or run to find a third way.

    If the Smartphone Wars were about Google .vs the world, it’s becoming increasingly obvious that 50% marketshare (60% according to NPD) will be a high water mark, because the wave has broken and is rolling back.

  120. @Jeff Read:
    “The bulk of the public risk doesn’t lie in the activity itself, but in the marketing of tobacco. There is just too much danger that people will make poor choices. This isn’t a ‘the public is stupid and therefore we can’t trust their judgement’ thing. Eric is smarter than I am and look how easily he falls to Big Oil propaganda. This is a ‘we can’t trust the big companies to not subvert the public’s judgement’ thing.

    “Lately I’ve reluctantly come to the conclusion that adopting a postmodernist perspective is essential. Postmodernism is not as it’s commonly caricatured — denying objective reality. It’s about being savvy to the hidden biases and agendas of anyone who might tell you what reality is.”

    Jeff,

    Thanks for the good laugh. I haven’t read anything so hilarious in a long time! The opinions you expressed here were such a perfect caricature of the attitudes of a certain segment of left-wing political thought.

  121. I have never been quite sure why anyone trusts surveys over actual reported shipment and sales data. I guess because the shipment and sales data is spotty. Even so, if AT&T, Verizon and Sprint state that X% of sales are iOS or Android smartphones then it’s generally a good indicator that any survey data that disagrees is likely off somehow.

    Thus I have always felt that IDC and related shipment based calculations which has to fill in some holes but is based on reported ship numbers to typically be more trustworthy than Comscore Mobilens.

  122. @Nigel:

    Unfortunately, AT&T and Verizon don’t tell us how many connected devices are iOS vs. Android. You can’t get to installed base from sales data.

    I hate surveys too, but the ones that ask what’s in your pocket are probably a lot more reliable than the ones that ask what’s going to be in your pocket next week/month/year.

  123. “I have never been quite sure why anyone trusts surveys over actual reported shipment and sales data.”

    Professional market researchers use both. And you’re right, actual sales data is the final arbiter. But even when you are the manufacturer or retailer, there are things that straight sales data may not be able to answer that a survey can.

    – Why did the consumer buy the product? What need does it meet?
    – Are they new to the category, or is this an upgrade?
    – What are their demographics (age, income, gender, size of household, hobbies, education level, etc.)?

  124. Back on topic. Nice quote on iOS:

    there’s a “Schwarzschild radius surrounding Apple. It’s not just a reality distortion field; it’s a whole new dimension. Inside, time slows and light never escapes– as time compresses to an amorphous mass.

    Android already offers more than iOS 6, but…
    https://www.zdnet.com/blog/open-source/android-already-offers-more-than-ios-6-but/11207

    For example, it’s true that ICS has all the features that iOS 6 will eventually have, but you can only find ICS on 7.1 percent of all currently running Android devices. Talk to any serious Android user, and you’ll soon hear complaints about how they can’t update their systems.

    You name an Android vendor-HTC, Motorola, Samsung, etc. -and I can find you a customer who can’t update their smartphone or tablet to the latest and greatest version of the operating system. The techie Android fanboy response to this problem is just “ROOT IT.” It’s not that easy.

    Note that 7.1% of all Android devices is about the market share of WinPhone.

  125. I seem to remember a number of people around here claiming that fragmentation is not a problem for Android, and that older versions are just fine….

  126. @PapayaSF
    “I seem to remember a number of people around here claiming that fragmentation is not a problem for Android, and that older versions are just fine….”

    I have no problems with it. Have you?

    ICS is new and shiny, but I have no real urge to get it running on my two year old Nexus One. No one is predicting MS demise because so many people still run XP (there are other reasons MS will fall).

    Also, Android is doing pretty fine with all this fragmentation. Better than the “unfragmented” Blackberry, WinPhone, and iPhone. So, what is the problem exactly?

  127. ICS is new and shiny, but I have no real urge to get it running on my two year old Nexus One.

    Because it’s a hassle.

    OTOH, plenty of iPhone 3GS users will have the urge to get iOS 6 running on it because it’s a painless update.

    Vendor support matters.

  128. A news story in Finnish media says that CEO Stephen Elop has called all Nokia staff in Finland to a briefing today (14 June). He’s to talk over a video conference call from the headquarters in Espoo to employees in Oulu, Tampere and Salo. Apparently Nokia is laying off a lot more people. The height of the Finnish vacation season is in July, so this is exactly the time of the year for corporations to do large layoffs so that the disgruntled ex-employees can spend their notice period on vacation rather than do something rash at the office.

  129. Winter, you’re a bright guy. Surely I don’t have to spell this out for you?

    1) Operating systems evolve and improve over time. In order for that to happen, people have to acquire and use them. When smartphone vendors don’t provide OS upgrades and ship new hardware with old OS versions, it hinders this process.

    2) This hobbles developers, because their new app won’t work (or work fully) on many phones. Or they have to forego implementing the latest OS features, and do more testing on different OS versions.

    3) It’s confusing and painful for many users. Their new phone may not have the latest OS and thus not have the latest features or be able to fully run the latest software. Their old phone can’t be upgraded because there isn’t an upgrade. Less user satisfaction means less platform loyalty.

    As for Microsoft, if they released a new OS, and seven months later only 7% of Windows users were using it, and many vendors were still shipping PCs with years-old versions of Windows, I think people might well be predicting their demise. (I am not predicting the demise of Android, just arguing against the prediction that it will sweep the board and drive iOS down to single digits.)

  130. The news is now out. Nokia will cut 10 000 people, 3700 of them in Finland, through the end of 2013. This is the largest single layoff in Finland ever. The layoffs announced today bring the total over Stephen Elop’s tenure to 40 000. Elop says that the transition to Windows Phone has been more painful than expected, but that there’s no need to change strategies. Nokia will cut prices, have high hopes for WP 8 and “work more closely with carriers”. I’m not sure it matters what Nokia does with the carriers if Microsoft continues its business as usual with them.

    Three top-level executives are to leave, including the head of the dumbphone division, Mary McDowell. She’ll be replaced by Timo Toikkanen. I’m guessing he’s come up through the ranks at Nokia. I wonder what this means for Meltemi (that is, if Nokia ever was serious about it).

  131. The entire Ulm R&D facility, where Meltemi was being developed, is going to be shut down. As I understand it, Meltemi is now gone, along with all Linux talent left in the company.

  132. @Jeff
    “OTOH, plenty of iPhone 3GS users will have the urge to get iOS 6 running on it because it’s a painless update.”

    ICS requires some extra beef in hardware. And most of the new shiny things are lost on me with such a small screen.

    Furthermore, I am the guy who still shoehorns Crunchbang into a years old EeePC 4G with a 4G SD card. And used it with an external screen, keyboard, mouse, and HD to do productive work. New and Shinny might not be what attracts me most. (the only real problem with the EeePC is Firefox 3 which hogs too much memory, I need to upgrade my distribution to get the newer versions)

    @PapayaSF
    “Winter, you’re a bright guy.”

    Thanks, that is appreciated.

    @PapayaSF
    “As for Microsoft, if they released a new OS, and seven months later only 7% of Windows users were using it,”

    View MS users upgrade their OS, ever. OEMs sell the new versions only because MS forces them to. Most users would happily buy a new XP computer if they only could.

    @PapayaSF
    “This hobbles developers, ”

    I feel their pain and understand their feelings. Goes with an open platform. As you see above, I still run old versions of hard&software.

    @PapayaSF
    “It’s confusing and painful for many users.”

    They blame it on their phone vendor, not Google.

  133. More on the decline and fall of Nokia.

    It is a pity Eric was unable to give us his piece about the decline and fall of MS.

    Nokia’s Problems Haunt Microsoft
    http://online.wsj.com/article/SB10001424052702303822204577465771376539532.html

    Those sales numbers are hurting Microsoft as well. In the first quarter, Apple had 23% of the global market for smartphones, Android had 59%, and both were growing, according to IDC.

    Microsoft’s operating system, meanwhile, came in sixth place, powering just 2.2% of smartphones, down from 2.6% a year earlier. Nokia and Microsoft are aiming for a 10% share of the smartphone market, though they haven’t put a timetable on that target.

    Unsatisfied with Nokia’s progress, Mr. Elop shook up the company’s marketing and mobile phone leadership, naming his former Microsoft colleague and U.S. chief Chris Weber as head of sales.

  134. It’s pretty clear that Nokia is doomed, at least in its present form. I’m amazed that Elop isn’t one of the ones being fired.

    Moody’s faith in Windows 8 is touching, if completely misguided.

    Moody’s Labels Nokia Junk
    Wall Street Journal

    “Nokia Corp. saw its credit downgraded to junk by Moody’s Investors Service, which said the company is facing more pressure on its earnings and higher cash burn than it had previously thought.

    “The downgrade of the ailing handset maker’s credit to Ba1 from Baa3—Moody’s second downgrade of the company within three months—means Nokia’s credit now carries junk status by all the three major credit rating agencies. Nokia’s credit was downgraded to junk by Fitch Ratings and Standard & Poor’s in April. All the rating agencies have a negative outlook for Nokia’s credit.

    “In a separate statement on Friday, Fitch Ratings said Nokia’s profit warning suggests that the company over the last two months has moved further away from being able to deliver stable revenues and positive operating margins. The ratings agency added that Nokia now is facing a ‘precarious combination of a depleted cash balance, without an end in sight to the declining cash flows.’

    “Moody’s said Nokia’s new range of smartphones, running Microsoft Corp.’s Windows operating system, should get a boost by the launch of the next Windows 8 operating system, which is expected this fall.

    “Additionally, Nokia’s new line of basic mass market feature phones with full touch-screen functionality should support demand in emerging markets and raise average selling prices for Nokia’s phones.”

    http://online.wsj.com/article/SB10001424052702303822204577468251129110174.html?mod=WSJ_hpp_LEFTTopStories

  135. It was been a cliché to talk about how much Microsoft follows Apple, but the tablet thing really is remarkable. It seems like Microsoft has been playing a defensive game for years now. I can’t imagine that the OEMs who were going to pay MS big bucks for the right to release Windows tablets are thrilled.

    Winter, I have no doubt that Android is best for you and ESR and many others around here. What I (and others) have been arguing against is the idea that Android will crush iOS in the market. Android has reached a majority of the smartphone market, but that’s not enough for a tipping point that will drive iOS down to single digits, as predicted by ESR.

  136. @PapayaSF
    You do not understand. Apple might sell 500M appliances in the end. But Android is on its way replacing all 6B dumphones.

    That is single digits market share to me.

  137. Nokia’s market cap is closing down to its cash value. If you add the value of Nokia’s patents to it’s cash, there is nothing left. Shareholders obviously think Nokia will never be profitable again.

    Nokia Takeover Seen as Collapsing Shares Signal Bottom: Real M&A

    Nokia had $12.4 billion in cash and short-term investments as of March 31, topping its market value of $8.6 billion yesterday, the data show. After accounting for debt, Nokia’s net cash position of $5.9 billion is still the equivalent of 68 percent of its market capitalization.

  138. @winter

    500 million out of 6 billion is still double digit…no?

    Anyway is all good…. as long as the 80% of Android is Fragmented and Fork it won’t matter as they all split into individual OS…

    Right now, WE have the
    MainStream Google’s Android with all of its version and OEM skin,
    The Chinese-base Android and its flavor,
    the less popular Open-source Android only plus its open source distro…..

    Plus
    Amazon Android…..
    Nook Android…
    soon to be Facebook Android,
    Sony Playstation Android and many more to imagine.
    Except for the first ,These Android Os don’t need any of Google services.

    Right now, Googles biggest Android maker Samsung is already taking step to split away from google’s services. The samsung Galaxy 3 that is driving the sale of the huge vista like failure OS of Ice Cream Sandwich OS. Without Samsung, Ice Cream Sandwich would be a HoneyComb!

    So was Buying Motorola actually a good idea after all???

    —————————————————————————————————————————-

    And Now Apple is ditching Google Map services…
    Plus they have siri which is a new way to mobile search..
    Plus Icloud and Iad… block google effort to make a profit in the mobile appp and mobile services world.
    Plus integrated and tight. partner ship with Twitter,Yelp, Yahoo,flicker and Facebook.
    Great deal with chinese Internet provider…Baidu.Youdou and the rest.
    Even partnership on the side with Bing and Microsoft.

    All these are the natural rival and enemy of Google l
    Something Google cannot and will not do deals with.

    Yet google still have only Search an Ad to show up for this.
    PLus Google make all(most) of its mobile money from Apple!!

    What a good idea android turn out to be.

  139. my bad is actually 600 Million out of 5 billion is double digit…. sorry

  140. @kkman
    “What a good idea android turn out to be.”

    Indeed, conquering more than half of the global smartphone market and with it, controlling the future of personal computing.

    It is like you deride Gutenberg and Tim Berners-Lee for not getting total control all publishing done with their inventions.

  141. Indeed, conquering more than half of the global smartphone market and with it, controlling the future of personal computing.

    No, that’s Apple. Indeed, the niche that Android fills was an Apple creation.

    Apple’s relationship to the rest of the computer industry is perhaps best summarized by Ron Suskind’s unnamed Bush administration official: “We’re an empire now, and when we act we create our own reality.” And while the rest of the industry studies that reality, Apple has moved on to creating other realities.

  142. The Surface was a stronger showing from Microsoft than I expected. Still not an iPad killer but, if they can obtain a respectable piece of the supply chain, the Surface is poised to cut off Android’s air supply in the tablet market.

    I can’t imagine that the OEMs who were going to pay MS big bucks for the right to release Windows tablets are thrilled.

    Microsoft doesn’t give a shit about OEMs anymore. They realized — perhaps too late — that the Apple approach was right all along: hardware and software integrated as a cohesive functional unit. That’s their play with the Surface.

  143. Android 4.0 is only just showing its face in retail, and there really isn’t any other strong reason to upgrade from the previous generation. The uncertainty of T-Mobile’s future may be having an impact. We all just lost 38% of our net worth over the last several years, so maybe an $800 phone isn’t a toy that people still need to have. A lot of what I used to do on my phone I now do on my iPad – it’s just better for things like email. That takes the pressure off the phone upgrade.

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