Benefit from innovation
The mobile application analytics Platform Flurry compared the starting sales of iPhone, Nexus One and Motorola Droid. And they found some interesting facts.
Flurry compared in its analysis the first 74 sale days of the iPhone 1G, Google’s Nexus One and Motorola’s Droid. They used the 74day range, because the first million Iphones were sold after 74 Days. This Analysis is surely a bit concerning, considering that the Iphone was a completely new product when it was launched in 2007. It was the first real Smartphone and generated a new product category. People had to be taught first, why they needed one, and they had to be told that the time was over for devices only capable of making calls and sending short messages.
In this perspective it isn’t surprising that Motorola was able to sell 1Million pieces of its new device, the Motorola Droid when they started in late 2009 (and benefitting from Holiday sales), because a market for devices like the Droid already existed. Remember, the Apple 1G was launched in July 2007 and iPhone sales are still strong. As the first of its kind, the iPhone seems to be the “original Smartphone” for most people. (Even at Microsoft some seem to see it like that. Read this at the Wall Street Journal)
Regarding the Nexus One from Google, it was surprising to me, that sales numbers are very low. Launched at January 5, 2010 the device only sold 135.000 times. This shows me that the Smartphone market gets tough for new competitors. And that Apple, as the direct competitor to Google, benefits strong from being the big innovator in that segment. Something the company is now trying again with the launch of the iPad.
Another Fact the Flurry analysis points out is that the iPhone’s average selling price was nearly double as high in 2007, as the price for the Droid today. So Apple did not only create a new market segment, it also could dictate prices at the beginning and profit more than other companies from this situation.
In my opinion those numbers show, that it can be very fortunate for a company to take the risk of being innovative. If people like what you make you are the leader in this new segment for a while and that means lots of profit. As investors we should look out for companies that have the guts to launch innovative products. And if we and the market consider them as good, we should give this innovation a try and buy the stock. And if this new product fails and stock prices go down, we still have our risk management that provides us from getting hit too hard.
The stock market always finds quality and innovation is quality especially if it can make ones life easier. The iphone certainly did that.
You find the full FLURRY analysis here. There are also some interesting user comments at the bottom of the page.
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