The Apple Core

Jason D. O'Grady & David Morgenstern

Analysts: iPhone way way up in 2010-11, iPad to beat out netbooks

By | June 17, 2010, 10:17pm PDT

Summary: As Apple stocks inch their way to a new 52-week high share price, analysts are coming out with upbeat predictions for the company’s mobile platforms, the iPhone 4 and the iPad tablet.

As Apple stocks inch their way to a new 52-week high share price, analysts are coming out with upbeat predictions for the company’s mobile platforms, the iPhone 4 and the iPad tablet.

According to a Digital Daily report, Morgan Stanley analyst Katy Huberty predicted the iPhone installed base will climb to 100 million by the end of 2011. She expects sales of 42 million units in 2010, assuming a 30 percent upgrade rate. If that rate is greater, then so will the installed base (duh!).

Result: “We see the iPhone installed base rising from approximately 30M subscribers at the end of 2009 to over 100M by the end of 2011,” says Huberty. “We believe there are several key drivers of iPhone upgrades including:

1) Redesigned hardware with many new important features,
2) ‘Stickiness’ of the installed base due to App store and iTunes,
3) 57 percent of U.S. installed base is not fully upgradeable to iOS4 (i.e. no multitasking),
4) Early upgrade incentives from AT&T and 5) Maturation of the installed base. We would also point to AT&T’s introduction of tiered data pricing (that potentially reduces iPhone total cost of ownership by 20 percent+) as a possible driver of the strong initial pre-order activity.”

Reminder: at the WWDC last week, Steve Jobs said the current iOS installed base is 100 million devices.

In another analyst paper, Forrester Research said the tablet market will be 20.4 million units in 2015. More users will buy tablet computers than netbooks.

“Tablet growth will come at the expense of Netbooks, which have a similar grab-and-go media consumption and Web browsing use case as tablets but don’t synchronize data across services like the iPad does,” Forrester Research Analyst Sarah Rotman Epps said in a statement.

“Consumers didn’t ask for tablets. In fact, Forrester’s data shows that the top features consumers say they want in a PC are a complete mismatch with the features of the iPad. But Apple is successfully teaching consumers to want this new device.”

According to the analysis, desktop sales will slip in that time frame. However, I don’t know that this trend will apply to Macs. The iPad may let users who picked a MacBook, purchase a desktop machine, such as the quad-core iMac.

In the past month, I’ve noticed that the discussion about “what Mac should I buy?” has become much more complicated. The outcome requires a hard look at what work you do, what content you process and where all that work takes place. And time spent at the Apple Store. The details about file transfers from devices such as cameras, keyboards and applications are being worked out. It’s still a hard decision.

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Topics

David Morgenstern has covered the Mac market and other technology segments for 20 years.

Disclosure

David Morgenstern

Freelance journalist/blogger David Morgenstern has nothing to disclose.

Biography

David Morgenstern

David Morgenstern has covered the Mac market and other technology segments for 20 years. In the recent past, he founded Ziff-Davis' Storage Supersite, served as news editor for Ziff Davis Internet and held several executive editorial positions at eWEEK. In the 1990s, David was editor of Ziff Davis' award-winning MacWEEK news publication as well as its successor title, eMediaWEEKly, which focused on multiplatform professional content creation. His byline can be found online and in print publications including CreativePro.com, Peachpit Press' Mac Bible and Popular Photography.

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I want a phone that works!
emsguy 20th Jun 2010
After a year with the Iphone 3GS I am ready to dump it and AT&T. Voice calls sounds horrible, Calls fail constantly and the phone still shows 4 bars, Calls don't ring through and then I get the phantom voicemail message.

Yes the Iphone was fun...but before I went to AT&T/Apple (and they are one right now!) I had sprint and crystal clear calls, no dropped calls, and no phantom voicemail. I live in the San Francisco bay area home of Apple and the phone should not be called an iphone but an ipod touch with occasioanl phone capabilities.

You can tout how wonderful the "phone" is but it just sucks as a phone.

I am extremely impressed with the EVO and more so that its on the Sprint network. Hopefully the Iphone 4 will work more like a phone but I am tired of being igouged by AT&T rate plans and crappy phone service...and yes Apple is as much to blame, since they went exclusive.

Don't get me wrong I love the iphones interface and ability as a mini-computer but I still need a phone.
Speed, how many iPhones can surf on 3G consistently at:

http://www.speedtest.net/result/793084660.png
http://www.speedtest.net/android/5266893.png

Ok, now the goodies can an Iphone dream of:

-FREEDOM
-Hotspot
-Flash
-Swype (text 4 times faster then any iPhone)
-Faster JIT
-Gesture Control
-Google Translation
-Google Navigation
-Google SkyMap
-Voice to Text
-Text to Voice
-REAL multitasking
-60% free apps 50000
-8 MegaPixel Camera
-Camera Flash
-Removable microSDCard
-Removable Battery
-Real Keyboard
-External Storage
-Multicore
-2GHz processors
-Projector
-Froyo
-8hr + Battery life real multitasking

-Something better than gesture control

If you don't need this and you want to play games and take pics an iPhone or iPad is just dandy.
@Uralbas
Do you work for Best Buy or some other large surface store?
Haven't you yet figured out why other companies (HTC, motorola etc.) do not strike a chord with the public at large?
They're coming out with new models every few months trying to out-spec each other.

BTW your first bullet point really kills me.
FREEDOM .... all in CAPS.
I guess you must be running around with you Android phone singing "The hills are alive with the sound of music..."
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@Uralbas

The spec geeks will never learn. Half the things you mentioned are subjective nonsense. happy Freedom? Do most iPhone users feel they're jailed? Real multitasking? What's real multitasking if your battery suffers? I prefer "smart multitasking" on my phone where the battery doesn't take a nose dive. Or you have to constantly use task managers just to avoid it taking a nose dive. Apple and I think MS with WP7 have the right idea here.

60 percent free Apps? Why is this a good thing for developers again? Sounds like Android users expect everything to be free (free lunch). Many of these crappy free Apps were probably rejects from the App Store, or developed for the App Store first then ported to Android.
@Uralbas

Hummmmmm:

- Unreliable OS that reboots on it's own
- Sucky batt life
- OS very open to viruses and for sure malware since the Android store is open to anything.
- Phones with sucky screens that peal back (Evo 4 G)
- Phones that the screens stop working right (HTC incredible)
- Phones most people can't get (Nexus one)
- OS that regular people can't seem to figure out half the time.
- In consistent user interface.
- Swype (Normal users can't figure it out)
- Removable batts but no one can't afford to buy second batts so they never do. Just get pissed that the removable one sucks with short batt life.
- Removable batts drop your phone and your back falls off and your batt falls out. Or like with the Droid Verizon will give you some tape to hold the back on.
- External storage like my girlfriends Samsung behold 2, the SD card erases its self, by it's self.
- OS upgrades ?? (Whats those?)
- 60% free apps out of 250,000 (And finally getting rid of those stupid AD Mob ads that jump all up in your screen and take you out the apps.
- 8 MP Camera (On the EVO and Incredible) that takes worse pics then the 5 MP camera on the new iPhone. Hummmm.
- 2GHz Processors? On which device. Snapdragon is not there and most Android phones use Arm processors like Apple does?
- Multicore what?
- Real Multi tasking (Sucky batt life)

I like Android but don't act like doesn't have issues! And for real most people in the US buy an Android phone because they don't want to go to ATT or can't afford an iPhone. If you look at every place outside the US where the iPhone is on more then one network iOS is killing Android.
Thank you for carrying Apple for the last 3 years so they could finally make a decent phone. The world is a better place because you gave Apple a lot of money for really bad phones and Apple took that money and finally made a good phone.

I have to admit...

I'm tempted by this one. happy
@NonZealot
Before calling others "idiots" you should probably look in the mirror sometimes and ask yourself, how you can judge other people based on electronic gadget buying patterns.
@MG537
Nicely said
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@NonZealot
bad phones.. sigh. If only there was a way to explain this kind of thing happening time and again with one company ie Apple? Well I could get insulting and call all of them idiots or I could take a look at Apple's long history and see how the consumer has reacted to it's products? Seems if I do that I see a very long history of products that give the consumer who purchases them a great deal of user satisfaction and very few problems over all. Creating one of the.. If no THE best rate of consumer loyalty in the industry perhaps ANY industry. So while this explanation takes more time to digest and is harder to actually become aware of than a simple insult it does seem more rational after all my opinion about Apple products is just that an opinion it's subjective if other don't agree with me it does not make them wrong. Or am I arrogant like I've often accused Apple fanboys to be? I certainly hope not that would make me rather a sad little person who throws out insults without basis in fact... In fact it would make me an arrogant sad little fellow:(

Pagan jim
Why do we want to have a feature list? This is not a PRD after all... Get it right, rather than just get it first! Show me an universal CCP (Cut, copy and Paste) on the Android phone.
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Spoken like a true fanboy with Shades on
Uralbas Updated - 18th Jun 2010
@tang2000 can't see beyond his nose. I'll partially humor you, check this link out... it work on all Android phones and everywhere its needed, so CCP is no brainer, but for a fanboy its a missing feature.. when it actually exists ROFL

http://android-tips.com/use-keyboard-shortcuts-to-switch-between-applications/



Now the Android features, lets see..

Do you have the slightest notion what its like to have wireless access where ever you go for your laptop and you dont need to pay an extra penny?

Do you have a clue how nice it is to page through your phone or dial with gesture control while you are driving with out touching it or in a meeting, all you do is move your eyes, its magical..... now wait a second the iPhone is magical.. wonder why?

Have you any idea know how nice it is to go to any webpage and have fulle access no need to get a mobile screen, and you can actually see all sites, even Flash animated ones. Guess not, Apple can't have it, well that might change, Macs got a version of Flash this week!, wonder why?

Do you have the slightest idea how nice it is not to type anything when you are in a hurry, just speak to your phone and state what you want need, and it will figure out you need Google Maps will find it, or it will just dial the person you want, or just respond to a text message or an email by dictating sentences to your phone, like in Star Trek, Android DOES NOW.

Or get your textmessages and cant read them cause your are driving your car, and you can just play them back through BlueTooth?

Do you know now nice it is to have a FAST Network ALWAYS, no need to wait for a webpage to download... guess not, iPhone's seldom can actually surf the internet, and when they do, they are happy if they get 1Mbps, you have no clue how nice it is to do so 5 times faster, even with a G1. (www.cnn.com page loads under 12 seconds, try that with out cached data).

And when you need to type something do it four times faster than an iPhone user can?

Do you how nice it is to stream any song or watch any movie on your cellphone? No need for something special? You just ask your phone for what you want, and its there, no need to sync it with iTunes?

I can continue for hours, but until you actually see the difference, you wont comprehend it. Those features make the phone a lot more useful than just playing games or taking pictures.

Like I said before, if that's all you want to do and have a wonderful experience playing games or taking pictures go with Apple, while we actually do things with our devices.
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@Uralbas - Interesting test. Thx for giving me a frame of reference.
@Uralbas Loading CNN took 9 seconds on my iPhone; maybe it was slowed because I was also using it to make a call at the same time.
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Android is Interesting, But
Robt. 18th Jun 2010
I sure wish my Motorola Droid could display my contacts by last name without going through some crazy hoops. That drives me crazy. Doing a search for a name is overly complicated. In fact, there are several "features" that I learn one day, but can't figure out how to do the next. Intuitive? Far from it. Lot's of good features? I suppose, but I still hate this phone. I've never had an iPhone but I sure wish they'd work with Verizon. I'd drop the Droid like a hot potato. Now, if they finally make it able to act as a mobile hotspot without additional charges, that will be one redeeming quality. I'm afraid though, that my "unlimited" data plan will have strict limits on it. Of course, that's Verizon, not the phone. Still, I find the Droid to be utterly frustrating.
@Uralbas

"Spoken like a true fanboy with Shades on"
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to all who loaded cnn under 10 sec
Uralbas 18th Jun 2010
@Uralbas proved my point about your knowledge and. Comprehension of phones. Iphone doesn't suport flash so it does not load completely. Even on a2010 high end Mac with Flash and 8GbRam qud it takes 25 sec on a 30gbn network line. The page you load on an iphone tkes 3 sec on a g1
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dude Macs ALWAYS had flash
Davewrite 18th Jun 2010
@Uralbas

you say
"Macs got a version of Flash this week!, wonder why?"

Dudes Macs always had flash. It's just iOS (iphone, iPod Touch iPad) who don't have it. I don't really want to comment on the rest of your post as you've already got one of the very basic facts of Apple wrong.

Back to flash... All the reviews of so called flash (flash lite) etc on other mobile phones suck. For example the much touted flash on EVO is crash prone and as the New York Times Evo review says "it still can?t play the Flash videos on CNN.com or, sadly, TV shows on Hulu.com." .. ? NYT points out it can run all the blinking flash ads though! And it also sucks the life of the battery. You get the point. At least Apple has the ballz to push technology forward towards better standards even though they might lose sales (which none of the other vendors have the guts to do).
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@tymiles Not subjective
Uralbas 18th Jun 2010
@tymiles I actually use:


-Hotspot
-Flash
-Swype (text 4 times faster then any iPhone)
-Gesture Control
-Google Translation
-Google Navigation
-Google SkyMap
-Voice to Text
-Text to Voice
-REAL multitasking (7hr actual use battery life on a G1, modified)
-Removable microSDCard
-Removable Battery
-Real Keyboard
-External Storage

On a G1..

So not subjective at all, its been real for me for over a year now. And not a single iPhone fan has been able to outdo me yet, they all end up hyping the experience, cause in actual useful capacity they are toast.
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Outdo you? what now?
richardw66 18th Jun 2010
@Uralbas

Do you think phone users get their phone as some sort of sport?

I thought the idea was to improve your life and to stay in touch? maybe I have been mistaken and I should have been playing Phone feature wars with my friends.

I think you have outdone yourself.

Hotspot is just plain bad idea, why, really, why do you need it?

Since it is dead easy to use an iPhone as a modem for a laptop, why is it such a big deal?

I don't go around trying to translate things in my everyday life? do you?

I have gone from a phone with a removable memory card to an iPhone, since the removable memory card was taken out basically never in the many years I had it, I am happy not to have the annoying bump on the phone that was useless to me.

If you think I am in any way outdone by the features you mention, then you are, sadly, over-impressed with unnecessary techno toys.
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All my computing technology is Apple...
tonyhunterajh 18th Jun 2010
... except the iPhone! I refuse to be bullied into going with AT&T just to get one. Until Verizon gets to carry it, I will be using a Droid which suits me just fine because regardless of what my Apple brothers and sisters say, Droid are hot devices!
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So Droids run HOT!?! OUCH!!!
James Quinn 18th Jun 2010
@tonyhunterajh
Well I suspect Apple knew that the single provider AT&T would always be a factor in loosing some business. Apple must have weighed it against the benefits and figured that this was the way to go. Why? I could not say might be the contract it is getting with AT&T? Perhaps they have plans to expand/improve coverage? I think I read somewhere that the coverage AT&T does have allows the iPhone to do several thing while talking on the phone where others like Verizon do not?

Pagan jim
@James Quinn

You are correct. The ATT network allows 2 com channels at the same time, voice and data because of the technology used, not because it's ATT.

This is why the Verizon wishers are out to lunch. Apple chose a global platform for the phone, and they willingly decided to ignore verizon customers. In the grand scheme of things, a few million verizon customers are small potoatoes when compared to the global smartphone market.
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Apple and AT&T
Davewrite 18th Jun 2010
@James Quinn

I always wondered about this AT&T thing too. On many countries iPhone is on multiple carriers, I believe there's only 3-4 worldwide that Apple has a single carrier. Everywhere where Apple has multiple carriers Android sales are dismal, less than 3% marketshare (Changewave survey shows that 53% of Verizon customers want the iPhone).

reading here and there this is what I found out:
1) When Apple first shopped the iPhone around no carrier in U.S wanted it except AT&T. Wired in their long piece on the genesis of iPhone said Steve Jobs started calling the telcos and their execs "orifices". Most of the telcos wanted a huge amount of control over the iPhone, to load their own apps in etc.
2) Apple wanted a phone that worked worldwide and had a consistent UI. CDMA has 50% U.S (via Verizon etc) but only 1% worldwide. And you are right that CDMA limits voice data simultaneous transfer.
3) The last is quite intriguing.
Here and there I've read that Apple engineers spend a lot of time with AT&T and vice versa. Some reports say AT&T were teaching Apple the intricacies of phones, mobile networks etc and helping apple resolve technical problems. Apple had no phone experience and I suspect this insider help was vital (to go against the vast knowledge base of Nokia, Motorola etc). Is Apple showing loyalty to AT&T (besides their original contract) due to the engineering help they are getting?
@tonyhunterajh

regardless of what my Apple brothers and sisters say,

I haven't seen the church of Apple anywhere yet? Which chapter do you attend?

As an Apple user for many years, I only just got an iPhone 3GS, cause I was not conviced. Now I am. But since I don't have to worry about AT&T, I guess I am not in the same position you are.

The iPhone is great - but you go on exercising your right to Hype the Droid.
The one carrier issue with Apple will put Android over the top. Well, Android is already on top, but they will further their lead this year.
I will wager 95% of Ipad use is recreational.
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@akear

This is the same problem MS has with Windows Mobile. If you are making a smartphone and you are not RIM or Apple, what OS do you use?

Answer: Android.

Problem is - and this might become a problem for RIM too - is that iPad and iPhone buyers are buying the phone because of the "magical" iOS. It makes the devices futuristic and intuitive. On the other hand, very few people are buying Android on purpose - they are just getting Android as a *byproduct* of not buying RIM or Apple.

That's a huge distinction.
Any sufficiently hyped Apple product is indistinguishable from magic... at least, it is to the Apple faithful.
@akear And I'll wager that 95% of the people who bought multi-thousand dollar Alienware computers use them for recreational purposes.

What's your point?
@akear
I am happy that Android exists as competition for Apple and RIM (and hopefully will crush Windows Phone 7 out of existence).

However, as has been mentioned, I'd wager than in all other countries besides the U.S., Android isn't doing as well - because the iPhone is available on multiple carriers.
Here in Calgary it is available on Rogers, Fido and Telus - soon to be on Bell.
Obviously the U.S. is a huge market for phones, but it's not the only market. Don't forget the influence the rest of the world has!
@rossdav@...
I think you would get disappointed totally and wish why you had written this message on this forum. happy
--Ram--
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And your point is?
godsfault 18th Jun 2010
@akear said: "I will wager 95% of Ipad use is recreational."

So are movies, television, music, the internet, email, and sex. But, keep trying to explain away Apple's success; it's amusing watching you Apple haters "twisting in the wind." Metaphorically, that is.
@akear

"I will wager 95% of Ipad use is recreational."

And if that number was true, how is this bad again?

Seeing that Google did such a good job of cloning the iPhone; and they will surely help their manufacturers do the same with Android Tablets this year to compete with the iPad. How do you see these consumers using there iPad clones? Just curious. Will they be typing up papers while running Autocad and photoshop at the same time? Or will most be using it for social, for games, movies, tv shows, skype/IM, web browsing.......?
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What a delusional dreamer
MacCanuck 18th Jun 2010
Only reason Android has any sales at all are...

anti-Apple, open source (I demand FREE) fanboys

iPhone only on AT&T (for now) and the issues some have with AT&T

giving away Android phones (over the past few months and especially the last couple of weeks, TV has been inundated with ads for Verizon 2 for 1 deals for Motorola Droids... buy 1 get 1 free will do wonders for sales numbers)

Once Apple moves iPhone to multiple carriers in the U.S. kiss the Droid hype and BS goodbye.
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@akear

I think the Star Trek video on the ads might indicate that it is OK to use your iPad for recreation.

I think you'll find that 95% of all computer use is recreational too.

And android is far from being on top. The only figures that showed that were bogus.
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Recreational use
richardw66 18th Jun 2010
With all this talk of freedom, tablets and recreational use - any moment now someone is going to tune in and drop out.
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iPhone Happiness
dominic64_2003@... 18th Jun 2010
don't care, nothing there that I want....
Long live the iphone...
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Based on speculation or genuine fact?
HypnoToad72 18th Jun 2010
Somebody a few years ago said that the need for PC support techs would be at an 'all-time high' by 2010. The need is dwindling, and cloud computing and anything 'subscription economy' are just snake oil gimmicks and redistribution of wealth with the customer having nothing to show for the money they work harder than ever to get.
What does the following mean?

"Tablet growth will come at the expense of Netbooks, which have a similar grab-and-go media consumption and Web browsing use case as tablets but don?t synchronize data across services like the iPad does"

Which services does it synchronize across that netbooks don't? For cloud services by definition it does not matter what you're running. Otherwise it is not cloud computing, but a device lock-in.
I love it when Android or (fill in the geek mode) abiders run up the features list. The top of the list should be the cluelessness they have about Apple's success. It's not about the features list it's about the ecosystem that Apple has created. 100 million devices is nothing to sneeze at and it certainly isn't peopled by "Apple fanboys". Most of those folk are average citizens who, wait for it, "just want the damned thing to work" without having to acquire a degree in computer science or whip out the ol' soldering iron. The poster who said, dripping with sarcasm, "I'll bet 95% of iPad use is recreational," typifies what I'm saying. Of course it's recreational! That's why they are flying off the shelves. Just because a device has a computer chip in it does not mean you have to use it like a traditional computer. Computers, by definition, are multi purpose tools. You don't think about the computer in your car as something you have to program, or service with a virus pack v. 2 the second Tuesday of the month. You just drive it.
As for Apple and AT&T, let's look at the basics. Apple wanted to go with the most advanced and common type of cell phone protocol in the world: GSM. They are the largest US carrier to use this protocol. Verizon uses CDMA, outdated and crippled and Verizon pretty much stands alone in the world with this protocol. Why would Apple complicate and cripple the iPhone by going with Verizon?
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Hate to actually be on-topic...
dave@... 18th Jun 2010
But the basic premise of the article is flawed... they're talking largely about upgrade sales. And I completely agree... the iPhone has finally caught up to much of the competiton -- better camera, enough pixels on-screen, finally, for real web browsing (well, at least non-Flash sites... despite Apple's best efforts, Flash is still growing). They still fall short on a few things: no replaceable battery, no keyboard, no AM-OLED display, and the one-size-fits-all mentality. BUT if the iPhone was right for you, iPhone 4 is better. Heck, they even, finally, have a full 3G/HSPA cell modem!

But upgrades don't expand the installed base -- users buy a new phone, and toss or mothball the old one. Especialy older iPhones... the batteries are dying, and who wants to spend $80 replacing an iPhone 2G battery. Especially when it can't run iOS4.

Apple cares more about sales, anyway. But you can't apply PC industry use rules to smartphone sales. Only new users effectively grow the installed base.
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Android is doing quite well, thanks!
dave@... 18th Jun 2010
Not because of a lack of iPhone presence, but simply because it's better. The open source aspect is why every major cell phone vendor other than Nokia, RIM, and Apple are using it. And carriers. Apple's been struggling to get into China with a carrier's support. They have to sell it unlocked at the Hong Kong Apple Store to any sales. Meanwhile Android is on multiple phones from China Mobile... more customers than the whole US population.
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iPads and Netbooks
omdguy 18th Jun 2010
Why would anyone buy an iPad over a netbook other than being caught up in the RDF hype and "trying" to look cool. When I see people with iPads, I think to myself, 'what an idiot, he bought a crippled computing device for twice the cost of something twice as powerful'. Honestly, do people really think people are going to buy an iPad, be locked into iTunes and the potential putchase of ANOTHER data plan (3G)? And before anyone spouts off, I have spent a couple of hours with an iPad and hated it. Couldn't figure out how to hold it to watch a movie, was not impressed with alleged quality of the OS and with no USB or SD, made it a pain to copy movies to it. The keyboard is also completely useless. I'll take a $350 netbook with tons of expandability and Win7 ANY day!
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I want a phone that works!
emsguy 20th Jun 2010
After a year with the Iphone 3GS I am ready to dump it and AT&T. Voice calls sounds horrible, Calls fail constantly and the phone still shows 4 bars, Calls don't ring through and then I get the phantom voicemail message.

Yes the Iphone was fun...but before I went to AT&T/Apple (and they are one right now!) I had sprint and crystal clear calls, no dropped calls, and no phantom voicemail. I live in the San Francisco bay area home of Apple and the phone should not be called an iphone but an ipod touch with occasioanl phone capabilities.

You can tout how wonderful the "phone" is but it just sucks as a phone.

I am extremely impressed with the EVO and more so that its on the Sprint network. Hopefully the Iphone 4 will work more like a phone but I am tired of being igouged by AT&T rate plans and crappy phone service...and yes Apple is as much to blame, since they went exclusive.

Don't get me wrong I love the iphones interface and ability as a mini-computer but I still need a phone.

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