ok, “retard” isn’t politically correct but it helps make my point. i’ll say it again:
the chief executives of Motorola, Xiaomi, One Plus, LG, Huawei, HTC, Meizu, and many others, are all fucking retarded. stupid. idiots. mouthbreathers. none should be in charge of wiping their own asses, much less in charge of multinational corporations.
now, please hear me out. i promise not to swear or use abrasive language from now on, but fans of Google’s Android OS may have a more difficult time reading this than others. once i’m done though, i invite you to say anything you want but i will always prioritize thoughtful responses over biased, abusive drivel.
first, i’ll begin with the obvious: i left out manufacturers like Samsung, Sony and Amazon for a reason. these three manufacturers offer more than just the hardware. despite the lack of any measurable success, they still offer their own media stores, software and/or valuable applications and services in an attempt to continue generating profit from buyers after the sale. the others, however, do not in any measurable way. that’s proof positive that the leaders of those corporations are mentally deficient. let’s set this fact aside for a second; i promise i’ll address this by providing facts to support this conclusion.
how about some math? i promise it will be very, very basic. in arithmetic, we all know that anything multiplied by zero equals zero. this was the only row and column on our multiplication table that was actually easier than multiplying by one. any multiplicand of zero results in a product of zero, no exceptions. 1 times 0 and 100,000,000 times 0 both equal zero. now let’s say you’re a smartphone manufacturer. obviously you’d want to sell them for more than zero profit so you can afford to keep making even more phones while making some money for yourself in the process. you cannot price them too high or people won’t be able to afford them, too low and you won’t make any money. so to ensure sales, you want to price them as high as people can both see the value and afford to buy them. some of these manufacturers have chosen a strategy that puts primary weight on market share. they choose to lower their selling price in hopes of attracting more sales and they do this by reducing their profit margin. putting this into context, let’s set a fixed goal of $1,000,000 in profit. you can reach this number either by selling a few devices with a larger profit margin or many devices with a smaller margin. (yes, this is oversimplified and i’m purposely ignoring issues like “economies of scale.”) Motorola and Xiaomi are two that choose the latter strategy. the problem is that strategy requires far more effort and energy to meet that $1 million goal as you must produce, ship, deliver, sell and support far more product than by selling fewer for more money. so where’s the benefit, outside of economies of scale that apply only toward reducing the production cost?
simply put, there isn’t any for the manufacturers involved. yes, they increase their market share in hopes of having an even larger pool of current buyers being turned into repeat buyers. but what’s the value of market share if you have nothing to sell them for the next eleven months? NOTHING. it’s the carriers that get the monthly fees. but it’s Google, and only Google, that benefits from increased market share. there’s more eyes on their ads, using their apps and search engine, buying TV shows, movies, music, and app add-ons. basically, manufacturers like Motorola and Xiaomi are falling on their own swords only to benefit Google, leaving money on the table during the hardware sales process just so Google can benefit from increased marketshare. so, back to Samsung, Sony and Amazon: these three are the few who operate their own outlets, giving themselves the opportunity to monetize their installed base and directly benefit from increasing their marketshare.
but monetize what, exactly? Google mostly generates profits not from sales to end users but from the advertisers whose ads Google serves to their share of the market. Google doesn’t care who buys these devices. they only care that these devices run Android OS and are used by as many people as possible, as much as possible, for as long as possible to keep generating money from advertisers. users can be rich or poor as long as they keep viewing the ads advertisers have paid Google to serve.
funny thing about the poor: they tend to spend what little money they have on necessities like food rather than monthly music subscriptions or the latest episode of Game of Thrones. these are users Google doesn’t care to focus on monetizing through the Play store. without advertisers throwing money at them, these users end up the butter to Samsung, Sony and Amazon’s smartphone bread. needless to say, they’re left with a lot of unbuttered bread but companies like Motorola and Xiaomi don’t even have the option of butter.
focusing on low cost, high quality devices only endears them to a larger percentage of the customer base with little in the way of disposable income. they will not be returning eleven months later to buy your latest model or wood paneled battery covers. the greater demand over a wider demographic only wastes even more resources, and thus money, in getting the devices into these hands. and even if a few do elect to buy a song, it’s Google, not Motorola or Xiaomi, that reaps the reward. so what, really, is the benefit for an Android smartphone manufacturer to develop their company strategy around high quality at low cost? companies like LG and HTC sell Android devices to target a wide range of buyers, from low cost commodity devices with mass market appeal to high quality/high cost luxury items with large profit margins. they know they have no post-sale monetization program.
it’s the strategy of companies like One Plus and Xiaomi, and the ridiculous support they receive from investors, that confuse me. their whole business model and product mix is built around high quality/low cost, with no current potential for post-sale monetization. they must work harder to turn the equivalent profit, seemingly prioritize marketshare above actual money, which explains both their status as “unprofitable” when you count actual dollars. despite this fact, they are currently the favored sons of Wall St and investors, each company parading valuations in the billions while losing tens of millions in real dollars every quarter. they sell more and make less, demonstrating how their sales, times zero profit margin, equals zero profit. even if, say Xiaomi were to capture 75% of the smartphone market, so what? they’re aren’t built to profit from either the handset sale or post-sale ownership. in fact, if they were to capture a dominant portion of marketshare, they would likely go bankrupt while trying to service and support that many devices during the standard 1-year warranty period.
that’s why all of the chief executives of Android OS device manufacturers are all retarded. they’re not listed as non-profit organizations. i just don’t get it. do you?