When the iPhone grew to represent more than 50% of Apple’s revenue, critics worried that the company was overly dependent on the device. Now, critics fret because the percentage fell to 48% in the quarter ending in June. The decline isn’t bad news; it’s the mark of a neatly maturing business that benefits from its ecosystem’s network effects…
Apple’s iPhone Game Plan is in plain view, repeatedly explained by its executives to Wall Street analyst in Earnings Release conference calls and other public pronouncements: Let the iPhone stay in its natural element: the Affordable Luxury segment, analogous to Audi for cars or Burberry for clothing. And, from there, play the ecosystem game…
Now there’s this special kind of network effect that should help us rethink and understand Apple’s business. It sheds a better light on the company’s chance to continue prospering in the smartphone segment, even when compared to muscular competitors such as Samsung and Huawei. Certainly, Apple’s ecosystem isn’t as strong outside of the US as it is in its US home market, but, still, Apple Watches, iPhones, and AirPods work well together everywhere.
MacDailyNews Take: Yup.
It’s the ecosystem, stupid. — MacDailyNews, March 1, 2013
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. Apple iPhones get software updates and the company supports older iPhone models for far longer than do fake iPhon peddlers (Android). No, this is all about sticker prices.
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.”
The other issue is that those who settle for Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android settlers to developers, advertisers, third-party accessory makers (speakers, cases, chargers, cables, etc.), vehicle makers, musicians, TV show producers, movie producers, book authors, carriers, retailers, podcasters… The list goes on and on.
The quality of the customer matters. A lot.
Facile “analyses” that look only at market (unit) share, equating one Android settler to one iOS user, make a fatal error by incorrectly equating users of each platform one-to-one.
When it comes to mobile operating systems, all users are simply not equal. – SteveJack, MacDailyNews, November 15, 2014
Again, Apple sells premium products at premium prices to premium customers. Android can have the rest. They’re more trouble than they’re worth as they generally only want things for “free,” “discounted,” or “cheap” and they buy demonstrably fewer apps, accessories, and subscriptions.