In smartphones, it’s Apple’s luxury or Android’s rock bottom

“Apple and Xiaomi’s successes reflect the world’s growing income inequality,” Christopher Mims writes for The Wall Street Journal. “By maintaining its own walled garden of services, with a huge selection of apps that are often better-implemented than on Android, Apple has sufficiently differentiated itself from the mass of Android phones to charge consumers on average two to three times as much as they would pay for a comparable Android device. In China, Apple has become the luxury brand most frequently given as a gift, ahead of Louis Vuitton, Gucci and Chanel, according to a survey released last week by Hurun Report, which tracks luxury goods in China.”

“A recent piece in The Wall Street Journal on America’s ‘two tier’ economy outlined the way that makers of everything from homes to groceries are responding to the hollowing out of America’s middle class: They are moving either to the high or the low end of their respective markets. The same thing is happening to phones,” Mims reports. “The twist here is that smartphones are sold all over the world, and this split market is hardly just a product of what’s happening in the US. Indeed, Xiaomi doesn’t even sell its wares outside of Asia. But just as a growing class of global rich is creating a demand for the highest-end phones—made by Apple—so, too, is a growing middle class creating demand for phones made by Xiaomi and its ilk. ‘Middle class’ is by nature a relative term. To be part of the world’s richest 1%, you need make just $34,000 a year, Foreign Policy noted in 2012.”

“The commoditization of smartphones has led to price trends which highlight the fact that there have always been two distinct markets for smartphones: A luxury market, and everyone else,” Mims reports. “Predictably, distribution of profits between these two markets mirrors the distribution of wealth between the buyers of these goods. Analyst Horace Dediu estimates that in the past quarter, Apple captured about 90% of all profits in the mobile market. The world’s top 10% control 87% of the world’s wealth, according to economist Justin Wolfers.”

Read more in the full article here.

MacDailyNews Take: And Apple stands alone as the world’s most aspirational brand.

Related articles:
Apple takes top luxury gifting spot in China – January 29, 2015
Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
Why Android users can’t have the nicest things – January 5, 2015
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
iPhone users smarter, richer than Android phone users – August 16, 2011
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009


  1. For me choosing Apple over Android isn’t about luxury its about not being Googles Product, remember android was created (well bought) by Google so it can harvest its sheeps data to sell to its real customers its advertisers.

    Also Android has a terrible reputation of apps also data mining people dumb enough to use a android.

    To Apple I am the customer, to Google you are the product.

    Ask yourself this question, do you want to be the customer of a company that does its best for you because you are the customer. Or do you want to be the product of a shady company that harvests every little piece of data from you it can so it can sell you to its true customers the advertisers.

    1. Agreed. Take 5 seconds and change your default search engine to Duck Duck Go. Take the google app off your iPhone (they are actually saving your voice data as well as search queries). Stay away from (or at least minimize your data in) “free” services/products. If its “free” you are not the customer…you are the product.

  2. “Apple has sufficiently differentiated itself from the mass of Android phones to charge consumers on average two to three times as much as they would pay for a comparable Android device.”

    Really? How many Android phones are 64 bit? How many Android phones have an aluminum shell? Are there any ‘comparable’ Android phones?

  3. The vast majority of the Android market focuses on cheap, therefore the demand for 64 bit hardware will be low, therefore the demand for 64 bit software will be low, therefore developers won’t feel any urgent need to develop 64 bit software, therefore no need to purchase 64 bit hardware, therefore no urgent need to build 64 bit hardware.

    I call it the “BOGO Event Horizon” and it won’t be easy climbing out of that.

  4. Yet Android still dominates terrorist IED market share in the middle east. Eric the Schidt really hit the sweet spot when it came to placing cheap remote detonation devices into the hands of the ISIS.

  5. I call this nonsense:

    …the fact that there have always been two distinct markets for smartphones: A luxury market, and everyone else,” Mims reports.

    And this nonsense:

    Apple and Xiaomi’s successes reflect the world’s growing income inequality

    Damned right The Rich have and all out ‘war’ on the peasantry. I call it Neo-Feudalism and it’s rampant.

    But does that mean Apple products are ‘luxury’ goods? Of course not. It means Apple products are the BEST goods. It’s that simple. You save up and buy and Apple, if that’s what it takes, because you want the best. You don’t want cheap knockoff crap from parasitic plagiarists. DUH.

    This article may point out the ‘class warz’, but is only fueling the fire of idiocy that created the ‘class warz’. Would we have ‘class warz’ with out the revolution of the idiots? No. Anyone with a useful, educated, intelligent brain knows that Neo-Feudalism is THE LAST thing we want.

    Now back to the quality company: Apple…

  6. I don’t think it’s quite as simple as the article makes it out to be.

    First off I believe that many if not most iPhone users were previously iPod users and got locked into Apple’s ecosystem. When you’ve been purchasing Apps, music, movies and television shows from iTunes, you’re not likely to switch to Android and lose access due to the DRM and the money you’ve sunk into Apps. You also become very familiar with iOS and don’t relish the idea of changing operating systems.

    There are a lot of Android users who genuinely enjoy tinkering with their phones. They may also have a significant amount of money tied up in that ecosystem nor do they want to learn another operating system.

    Xiaomi isn’t really much of a consideration because if they try to sell outside of an area that doesn’t give a rats ass about IP, Apple will sue them out of existence.

    Granted most Android sales go to people who don’t want to spend money on high end devices, and since Apple does have the highest end devices, these people will avoid them, but there are high end Android devices that do sell rather well. It’s blatant prejudice to call all of Android hardware rock bottom.

    Now, I wouldn’t touch an Android phone with a 10 foot pole because I like iOS, the security, the ecosystem, the designs and the ability to interface effortlessly with other Apple hardware.

    Right now Apple has a very powerful advantage over Android and that’s the fact that Apple is currently working on a 3rd generation 64-bit processor while Android processor manufacturers are having a hard time introducing their first 64-bit processor. Android 5.0 has a microscopic market presence, OEMs are having problems incorporating these half baked processors into their high end equipment and it will be many years before they can catch up.

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