“Next week at AllThingsD’s D11 conference in LA, Apple CEO Tim Cook will be interviewed by Kara Swisher and Walt Mossberg,” Horace Dediu reports for Asymco. “Here are some questions I’m hoping they will ask:”
1. Why is the iPhone not sold as a portfolio product? Meaning, why, after six years, is there no iPhone product range being updated on a regular basis. Having a portfolio strategy is not only followed by every phone vendor but also by Apple for all its other product lines, including the iPad, which came after the iPhone. In other words, please explain why the iPhone is anomalous from a product portfolio point of view.
More questions in the full article here.
I’m surprised with Dediu. Somehow, I suspect that he may already know all the answers to these questions.
#1 is obvious to me. There is a “portfolio” of iPhone products already and they all get updated every year. iPhone 4, iPhone5 and the soon to be released iPhone 5S. From cheap to expensive. luckily with pretty much the same abilities.
That’s not a portfolio. A portfolio would be different phones. Not the continuation of manufacturing of older phones. A portfolio would be the 5S, a larger iPhone and a smaller more affordable iPhone for the emerging markets. They should have the smaller iPhone and the 5S by late fall. Don’t know when they will have the larger iPhone to complement the portfolio? They are sorely missing it.
Easy to answer why they don’t have a range – ROI (return on investment). The longer you keep reselling a particular design the more you get back on your initial investment for that model.
I’d love to see an iPhone mini. A simple phone with simple apps. Most Android phones are used this way, as feature phones.
The other thing is, Apple doesn’t need it. They offer one very good product. It is the standard against which all other phones are measured. There is the current iPhone and all others, including older model iPhones.
At the same time other manufacturers are offering “portfolios” of phones with little functional difference, year over year, mostly repackaging and rebadging. Reminds one of the annual model change in the US auto industry, mostly chrome and hype. Meanwhile, you have the Porsche 911. Good design always trumps hype and chrome.
Is that why they came up with the iPad mini? The original 9.7 inch iPad was great! Get your head out of the sand. Quit living in denial. There will be a smaller iPhone and it will be here by fall. There will be a larger iPhone and Apple wishes dearly that they had it now. And by the way, Porsche sells different models in different price ranges. In different colors too!
GM I don’t agree. What you describe as a portfolio can be applied to the range if iPhones. Besides, it is a stupid question.
It’s easy to come up with questions about why Apple isn’t doing the same things that all the other not so profitable phone manufacturers are doing.
fuckchop? man, that’s a new one. I like it, I like it a lot. I’m definitely gonna use that gem.
hmm.. that didn’t reply to sfgh…please imagine that it did, you fuckchops.
You armchair fuckchop loser. Why is there no portfolio product? Why are you such a fucking hack who can’t make it in business? This is just another one of those, why don’t you do like everyone else. And if Apple did like everyone else, they’d be broke and dead.
This guy is asking the most successful tech company why they follow the strategy that they do. A strategy that works and gets them massive profit and success.
Horace, do yourself a favour and envelope your head in your balls and suffocate yourself to death you fucking piece of shit.
Tell us how you really feel. 😛
And DON”T hold back!!! 😎
Hey, Horace is one of the best Apple analysts out there. He has consistently produced positive articles with in-depth analysis.
Nearly every one of Horace Dediu’s little articles are re-tweeted by news organizations (like MDN) as news because Horace has developed such a strong reputation for careful analysis in contrast to all the unsubstantiated opinions usually expressed about Apple.
In doing so he has created a successful business for himself providing real analysis of the mobile phone industry, not the dreck put out by most traditional sloppy and biased “analysts”.
Tim Cook’s answers to Dediu’s questions would be most interesting. I expect he would dance around them though, as they address basic strategy tradeoff decisions Tim has had to make and he prefers to talk about Apple products not reveal internal Apple thinking to competitors or others.
No such thought went into your post, sfgh.
Wow. Such venom. It is common for companies to build a product line around one idea. Apple sells different sizes of MacBook Airs and Pros. There is the iPad regular and mini. There are several different iPods. However, there is just one iPhone. The point is not to challenge Tim Cook on this but to ask why they do this? What is the rationale?
You only need one. That “one” is better than all the others.
Older models fill in the various price points.
Price points, that’s the “reason” for your “portfolio”. 😉
And what will you say this September when many smaller iPhone is launched? Ooooooops! There goes your reasoning.
I have always thought Apple’s strategy of moving the last model down and reducing it $100 is brilliant. The reason is that anyone that had recently bought the older model they do not feel abandoned and the operating system is the same. Another thing is the typical person that buys a PC never sees the value in the newer model so they will buy the older model. As soon as a new model comes out, I have no problem with paying several hundred dollars to break my existing contract to get it.
I’m down to a $36 “upgrade fee” from my current iPhone. (4S)
We shall see what the next version contains. No real hurry to upgrade at this point, but if it has the finger id, that might tip it over the edge…
Pretty sure Horace’s first question will become obsolete after this fall, when Apple introduces two clear tiers (one with the sensor LTE, the other without).
I’m guessing part of the answer lies in lacking clear differentiators up to this point. When the 4 and 4S came out, Apple had a plastic model with the 3GS, but that has since gone away as an option. All we are left with are relatively expensive phones to produce. I think that will change in the fall with the re-introduction of a plastic model.
All of the other questions are excellent, but I doubt they will be asked (except for maybe the last one). Horace has been basically the only analyst to point out Apple’s massive cap-ex spending (10 billion per year!!). It could be fab facilities, production of new types of machines, satellites, advanced assembly robots, etc. I wonder if Cook would even answer that question.
They buy the machines that the manufacturers use to make Apple THINGS. 😎
But didn’t Horace say that the amounts that they spend are far too great to account solely for machinery?
I mean, I get it. It’s not like Apple has been making secret data centers somewhere, but there does not appear to be a clear outlet for this capital expenditure.
Maybe they pay Ballmer to sabotage Microsoft. 😀
Horace Deidu probably knows the answers to all these questions, and all have already been discussed on this website at great length. He probably wants to see what kind of answer Tim Cook would give. So this is my understanding of what has been discussed:
1) Apple iPhone Portfolio. Already exists, just not explictly stated as such; three models offered annually–the flagship/latest model, and the two previous iterations;
2) Apple iPhone offered at only 250 companies out of 800 worldwide: Apple will offer their iPhone based on whichever company is willing to agree to their terms.
3) Apple’s increased capital spending: possibly based on Question 4, Apple has been carefully making acquisitions based on their strategy to control & monitor the production of their products from beginning to end, and not be subject to the whims of a third party.
4) Why rely on Samsung? Discussed here at length. Apple has finally decided to move away from Samsung as a supplier, but this is a lengthy process: it does not happen overnight.
I thought Steve Jobs made it clear in the introduction of the iPhone that it is the top of the iPod (hand held) group. Thus, the array of product categories is Desktop, Laptop, Tablet, Handheld/Wearable, in decreasing order of portability.
“portfolio product”!? O brother…
That’s a stupid question.