No one wants a ‘cheap’ iPhone: Apple sells premium products

“Apple, for better or worse, is a premium products manufacturer,” Mike Murphy writes for Quartz. “A recent report from UBS analysts suggests that there’s a large disconnect between the amount of iPhone Xrs that have been produced and how many people actually want them.”

“Apple’s latest phone is a bit of an odd one. It’s cheaper than the iPhone Xs and Xs Max, starting at $749, but it has fewer cameras and a lower-resolution display than its costlier siblings. However, it’s larger than the Xs,” Murphy writes. “Perhaps as a result of weak sales, Apple is advertising both the iPhone Xr and Xs at seemingly discounted prices on its homepage… While this is a common practice in advertising… it’s not really something that Apple, a company that has rarely hurt for demand for nearly two decades, has had to stoop to.”

“Perhaps the company’s premium push, positioning itself as a luxury brand, has worked to its detriment. Or maybe Apple just doesn’t do ‘cheap’ well,” Murphy writes. “Its last colorful, supposedly budget, model was the 2013 iPhone 5c, which was billed as ‘unapologetically plastic’ and wasn’t much of discount over the new 5s, rather like the current Xr-Xs similarities.”

iPhone XR comes in six new finishes: white, black, blue, yellow, coral and (PRODUCT)RED.
Apple’s A12 Bionic-powered iPhone XR comes in six new finishes: white, black, blue, yellow, coral and (PRODUCT)RED.

Apple's all-new 5.8-inch iPhone Xs starting at $999 and 6.5-inch iPhone Xs Max starting at $1099
Apple’s all-new 5.8-inch iPhone Xs and 6.5-inch iPhone Xs Max

Read more in the full article here.

MacDailyNews Take: You can’t do cheap without cheapening your brand. (See the Cadillac Cimmaron.)

Of course and as usual, our own SteveJack explained this rather concisely years ago (Newsflash: Apple sells premium products at premium prices to premium customers, October 23, 2012) and also subsequently offered an idea that would potentially solve Apple’s current conundrum of wanting to sell more than a handful of iOS smartphones in emerging markets: “Apple should buy BlackBerry and sell lower-priced iOS-powered phones and tablets under the BlackBerry brand.”

For as long as Apple has been Apple there have been calls for the company to make “affordable products.” By this, most mean lower price tags. They’re not talking value or Total Cost of Ownership (TCO). When you bring those ideas into the discussion, Apple’s prices are very low indeed. No, this is all about price tags. People want Apple to sell products for less, so that more people can use them and – side benefit – it hurts those ripping off Apple’s intellectual property to produce cut-rate facsimiles of Apple’s innovations. Android, I’m looking at you.

One major problem: Offering low priced products is, as Apple’s leadership likes to say, “not part of Apple’s DNA.” This is a nice way of saying: We can’t dominate entire markets (outside of the fluke iPod/iTunes Store) because it would irrecoverably damage the Apple brand or as Steve Jobs once said, “We can’t do it; we just can’t ship junk.” More recently, this has been parroted by Tim Cook: “There’s always a large junk part of the market. We’re not in the junk business.”

I have a solution that satisfies everyone: Buy an established brand (on the cheap, no less) and design and market products for mid-tier consumers. There are other possibilities – other brands, creating your own (quite expensive) – but the BlackBerry brand would fit the bill quite nicely. No sense letting a widely-known brand just whiter away to nothing.

What would happen if Apple bought the BlackBerry brand and soon after, this new BlackBerry announced two products to start: A brand new 5-inch BlackBerry smartphone and a brand new 7.9-inch BlackBerry tablet, both of which are powered by Apple A-series processors, run iOS 7, and connect to the App Store (or the “BlackBerry App Store” which just so happens to mirror exactly what’s in Apple’s App Store)? Remember now, these aren’t junky products we’re talking about, these will be quality mid-tier Jony Ive-designed products. They will offer quality components and excellent build quality, they just won’t be the very latest, highest-end stuff. BlackBerry will be the best of the mid-tier, not at all low-end.

Here’s what I think would happen: Apple iPhones and iPads would continue to own the high-end smartphone and tablet markets. BlackBerry smartphones and tablets would crush Android in the highly-profitable mid-tier (the low-end can keep buying junk). Apple would, of course, keep all of the money (instead of watching Samsung bank all of that non-Apple revenue using products based on Apple’s IP). iOS market share would rapidly overtake Android; first in the U.S. and then quickly spread elsewhere around the developed world. Even though the mid-tier BlackBerry users wouldn’t buy as many apps, patronize as many ads, spend as much money on services, etc. as Apple user, they would be iOS users. This would only make developers even more enthusiastic about developing for iOS. Many would lose interest in Android rather quickly. Android et al. would be relegated to the low-end. Google would be sucking fumes in mobile advertising. iAd would dominate. Plus, all of these new BlackBerry users would be far more primed to graduate to Apple devices next than even the Android settlers are now.

Mini Cooper has worked very nicely for BMW. BlackBerry could work even better for Apple.

Apple should buy BlackBerry for the brand and use it to preserve the Apple’s brand cachet while hitting Android and Samsung where it hurts, relegating Google’s wannabe OS and Samsung’s wannabe devices to the junk liquidation warehouses where they belong.SteveJack, MacDailyNews, November 4, 2013

Remember, half a decade ago, the BlackBerry brand meant much more to people than it does today. So, where would Apple be today – in markets like India – had they done as SteveJack described above?


  1. Ever since I bought the original iPhone, 2 thing, I stayed around the $800 mark and the home button. Then came the Product Red. I just fell in love with the color. But the problem was the Product Reds would not come out until about 6 months after the new phones came out. So I just stuck with Space Grey. then they came to the present phones. It was announced that the “cheeper one” was going to have the home button, then they said no there would not be and it went back and forth. Yes it would no it wouldn’t. So when my 7 was up and all I needed to pay $75 to upgrade, I wanted the the phone I always wanted. So I got the 8 of course with the home button and Product Red. Then when they announced the Phones and the XR was going to come out at the gate with Product Red. I cried. For the first time you did not had to wait for six months. If I would have know, I would have waited and take the dive without the home button. To bring my point out, there are people like me just want the latest and greatest from Apple without spending more. The Xr is the perfect phone for me without the bells and whistles..It will do what I need it to do. Then there are others that just want Apple’s newest and spare no cost.This just proves that there are more people that spares no cost than people like me.

  2. It doesn’t have to be cheap to lower the price.
    Apple may not “do cheap” bit they do gouge on the higher models. I wish I could pickup a Xs sized all-screen phone for the same upfront price I paid for my wife’s XR from our carrier. The XR is too big for me, uncomfortable in my jeans pocket and in my large hands.
    What are the chances they will some day produce an iPhone the same size as Xs but with LCD, single camera etc. so that its more affordable for us that can’t justify ridiculous cost of the Xs. Sadly a very small chance, I bet.

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