Why innovation laughs in the face of statistics at Piaras Kelly PR

Why innovation laughs in the face of statistics

3 Comments Published June 5th, 2007 in General

Lance Davis has an article in The Register about why the Apple won’t sell ten million iPhones in 2008.

Davis picks apart Steve Jobs’ rationale behind his 2008 sales prediction that “10 million iPhones is one per cent of the mobile phone market”, arguing that he is not comparing like with like:

The vast majority of those phones are super cheap. The smartphone category, which is closest to iPhone territory, is very different. Symbian has sold 100 million smartphones in the last 10 years. BlackBerry hasn’t reached the 10 million figure yet. It’s a bit like saying the world car market is 18 million cars so McLaren can sell 180,000 because that’s only one per cent. In practice, it sold 28 cars last year.

In actual fact Davis isn’t comparing like with like. The iPhone isn’t competing so much with smartphone as it is carving its own niche by becoming as iconic as the iPod before it. In a focus group of teenagers that I observed earlier this year, all the participants had it as top of their wishlists. While its price may make it out of their reach when it is eventually launched in Ireland, it is wetting the appetite of consumers worldwide. With ads like this who could blame them? The iPhone is being positioned as something completely different.

If you followed the rationale of Davis’s argument then innovation would be stifled at every turn. You can’t use research to predict how markets that don’t exist yet will operate.

There are other reasons why the iPhone might fail, but not due to the reasons Davis outlines.

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3 Responses to “Why innovation laughs in the face of statistics”

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1 Ed Byrne Jun 5th, 2007 at 7:43 pm

While I totally disdain the business-justification of ‘If I get just 1% of this market we’ll make millions’ approach, here’s another question along the same line: If the iPhone get’s just 1% of the iPod market how many will they sell? Being as it is essential an iPod, with Video, and a Camera, and a Phone, and a few other bits.

And I agree, it’s not competing with Smartphones … it’s competing with fashion-phones and tech-phones. The Nokia 8800 Sirocco, the Blackberry Pearl, the Helio, the Sidekick …basically all phones OTHER than the low-end cheap ones.

If a betting shop had a bet on for numbers of phones, I’d bet 10m for 2008. I’d bet it for 2007 in months too if Apple had been smart enough to launch in Europe – where Mac is strong, but the mobile market is WAY stronger than in the US.
2 Damien Mulley Jun 5th, 2007 at 9:02 pm

1% of the iPod market is 0.9 million.

How many kids will be demanding iPhones for Christmas?

The iPod was more expensive by most other mp3 players on the market and still is, yet it destroyed the competition. The iPhone is not competiting with the phone market. It is competiting with everything that makes people feel like a bit of a trendy. Watches, iPhones, other expensive gadgets, runners, XBoxes, diamond earrings and tattoos. How much of these markets are impulse purchases that gather dust in the end? The iPhone will grab that money too. I think Jobs is being conservative with his numbers just so he can wow shareholders when they release sales figures.
3 Chris Jun 10th, 2007 at 9:38 am

http://technology.timesonline.co.uk/tol/news/tech_and_web/personal_tech/article1889304.ece

It will be interesting to see how the competition get on!