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Apple products are preferred by 80 percent of all teenagers

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November 22, 2012

A new report published by Nielson Research reveals that over 51 percent of today's teenagers and the next generation are already devoted Apple fans, and won't even look at what the competition has to offer them.

But wait, it even gets better... Apple products make up about 80 percent of the preferred gadgets wish lists as compiled by Nielsen.

And about 48.6 percent of the younger kids aged six to twelve that Nielson questioned said they wanted the iPad. Another 36 percent wanted an iPad Mini and, 37 percent wanted an iPod Touch. Over 34 percent of the same group of kids say they wanted an iPhone 5.

Parents: get your cash out of your wallets, these youngsters are not letting go of their choices!

The Nintendo Wii U managed to break the gadget wish list at number two, with 39 percent of the under-12s eager to pocket the gaming device.

The same questionnaire asked the group of kids about interest in buying each device but it seems more likely that it's going to be interest in pestering your parents to buy a given device...

The iPad tops the gadget wish list for 13+s, with 21 percent interested in buying an iPad in the next six months. The top five desired gadgets for teenagers are: the iPad, an Apple desktop computer, a tablet computer other than an iPad, the Nintendo Wii U and, last but not least, the iPhone 5.

Interestingly, the iPad Mini clocks in at number 9 on the wish list - below eReaders and tablets other than iPad. It will be interesting to compare this with the same survey that Nielson plans to do again in three months from now.

In other mobile and wireless news

For the past few years, Apple has pretty much dominated the mobile industry, both in terms of market share and in terms of net profits. In deed, it was in a very enviable position, and a unique one at that, borne of Apple's commitment to out-innovating the industry, allowing it to consistently charge a premium for all its mobile products.

However, as the industry has matured, Apple has lost some market share to its low-cost Android rival made by Google. In turn, it's now also losing its hold on some of the industry profits as well.

Given Apple's stubbornness for profits over market share, it is consigning itself to a repeat of its long-time war with Microsoft, wherein it ends up as a profitable, but niche market player.

But like anything else, it was supposed to be different this time... Apple had supposedly learned from its previous Microsoft mistakes. Even as Android and other new market entrants joined the smartphone and tablet segment, Apple lowered prices on older models to fend off threats.

Some industry observers have praised Apple's pricing strategy, arguing-- "Apple's ability to enjoy its impressive profit margins while offering such a wide range of pricing is real evidence of success at Apple and doesn't evidence the deterioration of Apple as a competitor in the electronics industry."

No matter how you look at it, some say that Apple's hold on industry profits is starting to slip, even as its market share plummets. Others disagree.

Earlier in 2012, Apple controlled about 77 percent of the mobile industry profits. Now that's down to about 59 percent, and this number will continue to fall, no matter what Apple does to boost profitability through chip-making or other means.

Henry Blodget captures this nicely over on Business Insider: "The reason market share is important is that mobile is a platform market. In such markets, third-party companies build products and services on top of other companies' platforms. As they do, the underlying platforms become more valuable and have greater customer lock-in."

But building products and services for multiple platforms is pretty expensive, so platform markets tend to standardize around a single leading platform. As they do so, the power and value of the leading platform increases, and the value of the smaller platforms goes down rather fast.

The PC software market is (or was) a platform market, and we saw how powerful that eventually made Microsoft back in the 1990s. Not only is Apple losing market share in established markets like North America and Western Europe, but it's practically an afterthought in the world's most critical market-- China.

An Analysys International report reveals that Android has more than a 90 percent market share of the China market-- That's up from 58.2 percent in 2011, and is even more interesting when you see Apple declining in China to 4.2 percent (from 6 percent in 2011). In a market with more than one billion subscribers, that's market share Apple can ill-afford to lose.

None of which is good for Apple but all of which is, as we've argued, very good for the mobile industry. Apple has dominated the wireless industry in unhealthy ways.

We love the products, but we can't love how the company has hoarded profits for itself. In Microsoft's desktop heyday, its partners made a lot more money than it did. In Apple's mobile dominance, it has captured most of the industry value for itself, even despite one million apps submitted to its App Store, roughly half of which are paid apps.

But make no mistake-- Apple still is a great company, consistently building products that we've been very happy to buy. But its manic desire to control its ecosystem, coupled with its insistence on sky-high margins at the expense of market share, could potentially ensure that it will soon be an important mobile vendor.

A few years ago, this seemed impossible, at least, to those who had no memory of the desktop market. But for those of us who lived through Apple vs Microsoft, it's very, very familiar.

What's surprising is that Apple doesn't seem to have learned from its mistakes. It's not enough to be a profitable niche company in a platform market, as Blodget argues.

Even profits suffer if a company can't deliver the market share to justify mobile app developers focusing on its platform. Apple, so incredibly dominant and profitable just a few years ago, stands to lose both attributes. Time will tell.

In other mobile news

In true honesty, you can't really blame Intel's now departing CEO Paul Otellini by saying he didn't detect the way personal computing was becoming more mobile, because he certainly did. However, you could still argue that his strategy for adapting Intel to the trend really wasnít the right one either.

But if you look at this more closely, as a 40-year Intel veteran it never really occured to him that he would one day reject one of the company's most reliable product-- the CPU.

It's clear to most observers now that Intel hasnít adapted to the mobile world. The writing was in fact on the wall and Otellini didn't see it. Weíre all buying fewer traditional computer desktops and even fewer laptops, but ever more smartphones and tablets, however. And the trend is rapidly increasing.

Otellini said yesterday that he is finally stepping down as CEO from Intel, after working for the chip maker for over forty long years.

Early in his tenure as CEO, Otellini first attempted to position Intel at the forefront of this change. As early an 2006, the company was quick to promote the first Ultra-Mobile PC (UMPC), a Celeron-based low-end PC in a thick tablet form-factor.

Then in 2007, UMPCs having failed to win a thumbs up from most consumers, Intel strove to persuade World+Dog to buy netbooks instead, compact laptops designed for easy portability and Wi-Fi internet access. Initially based on Celeron chips, netbooks soon became flag bearers for the Atom CPU, Intelís new family of x86 processors for ultra-mobile devices.

At that time, Otellini forecast Atom would go on to become the foundation for the Mobile Internet Device (MID), another tablet, this one smaller - and much thinner - than the UMPC but more internet-friendly than the cell phones of the time.

Indeed, in 2009 Otellini said that Intel would, in five years' time - so by 2014 - be selling more Atom system-on-chips (SoCs) than regular CPUs. We all know now that was a mistake.

The common element running through all these initiatives is the simple by constant use of Intelís x86-based processors. Itís now driving the largely unsuccessful push to Ultrabooks.

Intel had ARM chips in its portfolio, but one of the first things Otellini oversaw on becoming CEO was to shift his engineersí attention away from the ARM instruction set architecture and back to Intelís core intellectual property, the x86 instruction set.

Eventually, he sold Intel XScale ARM family to Marvell, but it was too little, too late.

To be sure, the x86 processor holds a special place in long-term Intel executivesí hearts. Alongside with Mooreís Law, it is one of the two self-evident truths that define the post-1970s Intel-- that chips will double their transistor count every 18 months or so, leading to ever more processing power, year in year out - and that those chips will use Intelís now famous instruction set.

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But the problem is that it's not the 'de-facto' instruction set anymore, and Otellini and his engineers know that. But Intel had a nice run through the 1980s, 1990s and early 2000s demonstrating that these two notions are more fundamental than they actually are. Or are they? Some might disagree on that one.

At any rate, thereís no reason Mooreís Law canít continue to define Intelís chip roll-outs for some years yet. But the rise of ARM, the de facto standard architecture for the worldís phones, smartphones and tablets, shows that the x86 doesn't reign supreme anymore, and that's a very big issue for Intel.

Top executives at the chip maker continue to claim that the key benefit of x86 is compatibility-- with Windows and with the vast library of application software already coded for the platform. Otellini banked on buyers wanting to run that software on their mobile devices as well.

May be they do, although thereís no real evidence to show that thatís the case. Certainly, users have exerted little pressure on makers of ARM-based mobile devices to develop x86-based versions that can run Windows and Windows apps.

Yes, Microsoft currently offers an x86 version of its Surface Tablet, but thatís as much about the company playing all the angles as a firm sense that some people donít want an ARM-based Surface in the first place.

In 2005 and 2006, Otellini knew that technology was going mobile and that ARM was then best suited, from a hardware perspective, to deliver greater mobility. He also pledged to aggressively drive down Intel chipsí power consumption to a point where x86 processors could match the energy efficiency of ARM devices.

Eight years on from Otelliniís elevation to CEO, Intel can argue that itís there. It has the x86 in smartphones and, unlike previous attempts, they donít deliver a much shorter battery life than ARM devices. The problem now, though, is that the rise of ARM in the interim has eroded the compatibility value of the x86 processor, and that's another problem for Intel.

Manufacturers have used ARM for a variety of reasons, some financial, others technical, such as the platformís energy efficiency and the way ARMís licensing model makes for greater system-on-a-chip customization, to better differente your chip from your rivals.

To be sure, Intel could have delivered such a foundation years ago, but its belief in the primacy of the x86 instruction set and the software compatibility that came with it simply slowed its development work down to a point where it's now irrelevant.

For its part, Googleís successful development of Android primarily on ARM, and Appleís choice of ARM for the iPhone and iOS, clearly demonstrate that Intelís chips weren't seen as viable alternatives in the mid-2000s and, more importantly, that they were willing to invest in a new instruction set.

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Source: Nielson Market Research.

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