Since the iconic 1984 Superbowl ad, Apple has always positioned itself as a class apart from the ordinary. While MSDOS reigned over the PC world in the 80s, Macs ran Xerox PARC inspired GUIs. They offered colour printers, graphics and sound, all of which would take till the 90s to go mainstream on the PC. Apple also ran quirky ads (‘Think Different’) to position itself on the side of mavericks, creative geniuses and the like. This was all fine and dandy in a world where Macs had less than 10% market share, and were often prohibitively expensive. The price was another factor that shored up the impression of being an exclusive, luxury brand (that also ran on a completely different hardware stack). And for a while, this was true. Mac OS X also changed things, it had polish and ran smoothly compared to Windows 98/2000/XP that was current at the time.
Fast forward to the present. Everyone and their mother (in the US anyway) has an iPhone on contract. Apple fanboys routinely crow about its dizzying sales, and people queuing up outside Apple stores all night is a common routine. But what happens to your carefully constructed image of ‘cool’ and exclusive when every single person everywhere has it? iPhones can be got for $200 on contract. That’s quite affordable for many people.
Now consider consumer technology products, specifically personal computers and mobile phones. Both of these are mass produced, and anyone can walk into a store and buy one. Unlike other tech products (home theatres, surround sound systems etc), Moore’s law ensures that every year’s model is way faster and cheaper than the previous years’ one. Second, the very definition of mass produced implies planned obsolescence. Electronic goods break down within a couple of years, sometimes even before the warranty runs out. Getting them repaired may often cost more than just trashing them and getting a new one.
All these traits apply to Apple. And to every other technology company, but let’s face it, no one else is trying to position themselves as elite and exclusive as Apple is. There’s another factor that can be considered a luxury in this age of mass produced goods. Personalized service. Years ago, Nokia had a luxury phone brand called Vertu, which has since been sold off as a separate company.
These are sturdily constructed phones, made of solid metal, or with wood inlays and sapphire buttons. The priciest model cost up to $310k. On the inside, they were as good or bad as the flagship Nokias of the day (we’re talking 2003-2004, now they run Android). But what sets them apart is an exclusive push-button concierge service. You can use that to book tickets for travel, or make reservations at hotels/restaurants and you would be given priority over others. Now that’s exclusivity. And it doesn’t have to be linked with technology – you could hold an obsolete 2003 vintage Vertu in your hands today and still call up the service.
Apple Siri and Google Now have nothing on personalized service like this, an actual human being at the other end who will recognize you and make arrangements according to your preferences like a butler.
All these years, people were content to pay a huge markup to get an iPhone (the iPhone 5 costs $230 to manufacture, against a retail price of $649 unlocked, for a nearly 300% markup) because they bought into the illusion that they were getting an exclusive, high end product. Today Samsung has pushed the technology envelope far ahead not just with the Galaxy S3 (with a larger screen and the ability to play a video in a small overlay window while running other apps, among other features) but also in terms of pure technology, with their bendable displays that were shown at CES 2013.
Here in India, the Galaxy S3 is priced at ₨ 32,540 or $605, unlocked. The iPhone 5 starts at ₨ 45,500 or $846, unlocked, and as expected, costs much more and does far less. It offers remarkably little over its predecessor, unlike the Galaxy S3 vs. the S2 (and Android itself, from the Gingerbread powered at launch S2 to the Jellybean powered S3, there’s a massive difference in the look and feel and features introduced).
Today Samsung is taking the battle to Apple’s own turf, with its series of ads that turn the ‘Apple = cool and innovative’ argument on its head. Samsung has also seeded the market with a huge variety of handsets at different price points and different combinations of features. People are also slowly realizing that if you’re spending money on a product with a life cycle of just a year(until the next version shows up), you should be getting value for money. What will really hurt Apple in the long run is the idea that mobile technology is not luxury and therefore does not deserve a premium.
Apple is a one trick pony. Now they are in a tricky situation. If, as analysts say, they decide to introduce a cheaper version of the iPhone, they’re diluting the core snob factor that drove people to buy it in hordes long after the novelty of the first truly innovative 2007 iPhone had died down. If they continue as they are, they’ll slowly become the phone for young children, or very old people.
I’m not saying they can’t do it, but the next iteration of iOS will have to be really, path-breakingly different for them to grab the limelight the way they used to. Personally, I’m glad that companies other than Apple are innovating. Their locked down, walled garden approach and their attempts to stop competitors’ products from going on sale is a threat to general purpose computing and consumer choice/freedom. Much better if other companies don’t emulate their example.
Update: So iOS 7 is out, and what do we have - a notification bar with quick settings similar to what Android's had for 3 years, flat icons similar to Windows Phone and other features snagged from HP's WebOS. This from the company that patent trolls everyone else and makes loud noises about having its ideas 'stolen'.
Fast forward to the present. Everyone and their mother (in the US anyway) has an iPhone on contract. Apple fanboys routinely crow about its dizzying sales, and people queuing up outside Apple stores all night is a common routine. But what happens to your carefully constructed image of ‘cool’ and exclusive when every single person everywhere has it? iPhones can be got for $200 on contract. That’s quite affordable for many people.
The luxury connotation
Let’s take a look at luxury products in general. They sell because of a combination of factors – a reputation for solid quality (think Rolls Royce), or sheer snob value (lots of examples of luxury fashion/jewellery/watch and other brands). Some brands like Rolls Royce choose and reject customers at their own discretion, because they care about the connotations attached with ownership of their brand. Luxury products are built to last. They may be handed down as family heirlooms, or fetch stunning amounts at auctions a few decades later by which time they’re collectors’ items.Now consider consumer technology products, specifically personal computers and mobile phones. Both of these are mass produced, and anyone can walk into a store and buy one. Unlike other tech products (home theatres, surround sound systems etc), Moore’s law ensures that every year’s model is way faster and cheaper than the previous years’ one. Second, the very definition of mass produced implies planned obsolescence. Electronic goods break down within a couple of years, sometimes even before the warranty runs out. Getting them repaired may often cost more than just trashing them and getting a new one.
All these traits apply to Apple. And to every other technology company, but let’s face it, no one else is trying to position themselves as elite and exclusive as Apple is. There’s another factor that can be considered a luxury in this age of mass produced goods. Personalized service. Years ago, Nokia had a luxury phone brand called Vertu, which has since been sold off as a separate company.
These are sturdily constructed phones, made of solid metal, or with wood inlays and sapphire buttons. The priciest model cost up to $310k. On the inside, they were as good or bad as the flagship Nokias of the day (we’re talking 2003-2004, now they run Android). But what sets them apart is an exclusive push-button concierge service. You can use that to book tickets for travel, or make reservations at hotels/restaurants and you would be given priority over others. Now that’s exclusivity. And it doesn’t have to be linked with technology – you could hold an obsolete 2003 vintage Vertu in your hands today and still call up the service.
Apple Siri and Google Now have nothing on personalized service like this, an actual human being at the other end who will recognize you and make arrangements according to your preferences like a butler.
All these years, people were content to pay a huge markup to get an iPhone (the iPhone 5 costs $230 to manufacture, against a retail price of $649 unlocked, for a nearly 300% markup) because they bought into the illusion that they were getting an exclusive, high end product. Today Samsung has pushed the technology envelope far ahead not just with the Galaxy S3 (with a larger screen and the ability to play a video in a small overlay window while running other apps, among other features) but also in terms of pure technology, with their bendable displays that were shown at CES 2013.
Here in India, the Galaxy S3 is priced at ₨ 32,540 or $605, unlocked. The iPhone 5 starts at ₨ 45,500 or $846, unlocked, and as expected, costs much more and does far less. It offers remarkably little over its predecessor, unlike the Galaxy S3 vs. the S2 (and Android itself, from the Gingerbread powered at launch S2 to the Jellybean powered S3, there’s a massive difference in the look and feel and features introduced).
Today Samsung is taking the battle to Apple’s own turf, with its series of ads that turn the ‘Apple = cool and innovative’ argument on its head. Samsung has also seeded the market with a huge variety of handsets at different price points and different combinations of features. People are also slowly realizing that if you’re spending money on a product with a life cycle of just a year(until the next version shows up), you should be getting value for money. What will really hurt Apple in the long run is the idea that mobile technology is not luxury and therefore does not deserve a premium.
Apple is a one trick pony. Now they are in a tricky situation. If, as analysts say, they decide to introduce a cheaper version of the iPhone, they’re diluting the core snob factor that drove people to buy it in hordes long after the novelty of the first truly innovative 2007 iPhone had died down. If they continue as they are, they’ll slowly become the phone for young children, or very old people.
I’m not saying they can’t do it, but the next iteration of iOS will have to be really, path-breakingly different for them to grab the limelight the way they used to. Personally, I’m glad that companies other than Apple are innovating. Their locked down, walled garden approach and their attempts to stop competitors’ products from going on sale is a threat to general purpose computing and consumer choice/freedom. Much better if other companies don’t emulate their example.
Update: So iOS 7 is out, and what do we have - a notification bar with quick settings similar to what Android's had for 3 years, flat icons similar to Windows Phone and other features snagged from HP's WebOS. This from the company that patent trolls everyone else and makes loud noises about having its ideas 'stolen'.
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