This could be the beginning of the end for Apple. It is clear that people are less and less willing to go for $800 phones. I noted in coverage of the last WWDC that Apple had to resort to using web usage statistics to have a number that in any way beat Android. Well, even that just fell to Android. The simple truth is that Apple was there first and corralled a lot of early adopters and upper-middle class users (this describes many of my friends). Due to ecosystem effects, they stuck with iOS, but now that it is no longer cool and Apple has essentially given up on innovation, they are looking elsewhere. The people adopting iOS early on also had more money, thus the dichotomy between iOS and Android app profitability. As these people leave, then surprise, surprise; Android will quickly surpass iOS in app profitability. This is all pretty obvious, but for some reason Apple does not see it coming. If they just would admit it's a commodity market and behave accordingly, they could still be a significant player... but they just don't seem to be able to admit this. It's the '90s all over again. Apple thinks they are still great, but any independent observer can see they are not.
Some may think my statements here are overblown, but when it comes to Apple's profitability iPhone is everything for Apple. iPad's are still selling well, but they are not nearly as profitable.
If We've Reached Peak Smartphone This Is Bad News For Apple And Samsung And Good News For Others - Forbes
Samsung surpasses Apple in smartphone Web usage | Mobile - CNET News
Verizon could owe Apple $14 billion off iPhone sales shortfall
Blinding Light and Deep Dark Evil: Apple's App Store After 5 Years | App Store | TechNewsWorld
BBC News - Apple conspired to fix e-book prices, judge rules
Rival mobile browsers chip away at Safari's lead - CNET Mobile