“Investment analysts, VCs, and some media sites get a simple-minded idea. Apple should sell cheap iPhones to stop the infestation of cheap Android phones in emerging markets,” Martellaro writes. “That will surely allow Apple to squeeze out the bad guys and dominate the market. If Apple dominates, its investors get rich.”
Martellaro writes, “Apple executives have access to information we do not. They know how each part of the design of the iPhone fits into their strategy and the markets the company pursues. They know what sells and what doesn’t. They can estimate what would be lost by going cheap.”
Read more in the full article here.
MacDailyNews Take: Asking Apple to produce cheap iPhone in a profitless unit share chase is ridiculous. Why rack up cheap customers who do not buy apps, TV shows, movies, music, and, certainly not, extras like iTunes Match? It makes no sense when you already are developers’ first choice. Smart developers create apps for Apple iOS products for the same reason they do for Mac: Apple has the best customers who are willing to pay for software (see related articles below).
Oh, some say, developers will stop developing for iOS first and switch to fragmandroid because of sheer numbers. No, the smart developers won’t. One non-paying piracy-loving user is the same as one billion of them: Worthless to developers.
We look at the choice of personal computer, tablet, portable media player, and smartphone purchases as an IQ test. It’s pass/fail. You can either understand a simple value equation or you’re too stupid. It’s very useful in a coffee shop or an airport; you know instantly who’s worth talking to. (Now, listen, smart people can make mistakes. That’s why we always ask people how they like their Android phones before we try to help them. If you screwed up and saddled yourself with a Windows PC or an Android phone, it’s never to late to wise up.)
The quality of the customer matters. Apple understands this implicitly.
There is no good reason for Apple to make a cheap iPhone. It would only dilute the brand and cause 100x the work for too little, or actual damage, in return. In this case, unit share is nowhere near as a valuable as some Wall Street analysts and Apple pundits would have us believe.
As we wrote back in November 2012:
It’s the marketing, stupid.
Android is pushed to users who are, in general:
a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.
Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong. Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Unsurprisingly, survey says Apple’s iOS is highest priority among mobile developers – January 23, 2013
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
iPhone owners more likely to pay for digital content – November 26, 2009
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple iPhone users buy many more apps, surf the Web much more than other ‘smartphone’ users – March 27, 2009
NPD: Mac users significantly more likely to pay for music than Windows PC owners [updated] – December 19, 2007
Report: Apple iPod owners buy more music – September 19, 2006
Study shows iPod owners significantly less likely to steal music than the average person – January 13, 2006