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The smartphone market is not competitive.
Take a look at the list of the best phones published by many tech websites,like CNET.
Apple doesn’t want your Samsung phones, switcher!
There is usually a best iPhone and a best Android phone, and never the two shall meet.
Apple doesnt think anybody is switching, thats for sure.
That phone is two years old.
Apple doesn’t want your Samsung phones, switcher!
Apple hasnt felt the need to update its trade-in list for two years.
Measuring competition in the US smartphone market
The market is entrenched.
The HHI gives every market a score.
General Motors, the #1 car brand, has the same market share as Samsung
To find that score, you take the market players and you square their market share.
Then you add them all together.
If the HHI for a market is 1,500 or lower, it is considered competitive.
In a competitive market, this iPhone 13 should be much cheaper by now
A market with ten companies that each held an equal share would be very competitive.
If the HHI reaches 2,500, the market is considered highly concentrated.
Look at the US car market.
I wish I could use Check In with my family, but they use Galaxy phones
The HHI for the total US auto market is approximately 1,100, making it a competitive market.
The US smartphone market?
A very different picture.
Computing the HHI for US smartphones gives us an index of more than 4,200.
This is not a competitive market in any way.
Apple controls the US smartphone market.
Accounting for the top ten global smartphone makers, the entire market scores around 1,700 on the HHI.
A monopoly is about power, not percentage
Is Apple a monopoly?
Market power means the ability to raise prices profitability above those that would be charged in a competitive market.
In a healthy market, we have competition.
New things get better.
Old things get cheaper.
It is hard to look at the current smartphone market and believe that all of this is happening.
The prices just dont drop as much as they should.
Were not seeing major cost reductions.
If we were, Id be able to buy an old iPhone right now at a reduced price.
A two-year-old leftover phone should cost 20% less than a new phone.
But look at the iPhone.
That means Apple only cuts prices by less than 8% every year.
Thats control over the market.
With cars, people are learning about hybrid versus electric options.
In home appliances, people are learning about the differences between heat pumps and air conditioning.
Where is the education in phones?
We arent seeing that wide range of activity that youd expect from a mature market.
In the phone market we have the iPhone, and phones that attempt to imitate the iPhone.
If a phone veers too far from the iPhone formula, it wont find space on carrier store shelves.
It wont find developers to support its platform.
Except I cant use it with my Dad because he has an Android phone, not an iPhone.
Apple does not have an obligation to help its competitors or lose its competitive advantage.
Thats not the way its supposed to work.
