There’s no denying it – Apple is trying to go mainstream (well mainstream into the rest of the world outside of San Francisco!).
If you look at them closely, those price cuts earlier this week are the fruit of a volume-sales strategy. The now $399 iPhone being the obvious kicker but really you can see it across the line. Video-playing iPods (the 4gig Nano) for just $149 – that’s the cheapest-ever entry point into the Apple video experience.
In fact, video may well be the reason for this strategy – it’s undoubtedly one of Apple’s biggest potential future revenue earners, and for that to occur everyone has to have video-capable devices. It makes it an easier proposition for your conscious to pass if the new (better) device costs less than what you paid for your old one.
But a volume-sales strategy needs to bring in new customers, and it’s fair to say that for many the price of previous iPod models have just been too much of a hit in the stomach (and wallet) to take. Those already not on the iPod bandwagon may have been absent for reasons of limitation rather than desire. Apple’s new pricing strategy beings to tip that.
Backlash of the early adopters: Jobs doesn’t care
What has come out of this is a backlash from the early-adopter crowd. Those who spent $599 on their 8gb iPhone feel cheated, with the $100 gift certificate offered by Steve Jobs falling pretty short (well $100 short) of their expectation. Owners of the now-obsolete 4gb device must be even more angry, not to mention those who canceled far more competitive and faster wireless plans to switch to the crappy AT&T EDGE network only to find that they could kept their existing phone and bought an iPod Touch to get all of the new technology.
You can’t burn the candle at both ends. People do not get passionate about mainstream, commodity items. It’s the allure of exclusivity, the fact that the rest of the world doesn’t have the new shiny device that helps fuel the Apple
zealot fan base. Hey, I know the feeling personally – living in San Francisco has subjected me to having the fucking iPhone shoved in my face at every opportunity.
Steve Jobs has met the fork in the road – does he keep is company exclusive and enjoy the premium profits from the sales to a select few, or does he mainstream his product range and enjoy that smaller cut from the masses? And how can he gain further traction in lower-economic markets like parts of Asia and Eastern Europe where he has to sell at lower price points than he has previously in North America?
The shark was jumped on the day of the iPhone launch
In many ways the shark was jumped when all those people queued up outside Apple stores across the land to get the exclusive new phone from Apple and then were greeted with bountyful supplies of the product. Those who who came a few hours after the launch that night could just walk in off the street and buy their own.
Where was the exclusivity there?
Steve Jobs is a business man and CEO of a publicly-listed company. He’s going to be forced to think about growth and that can only occur by getting more devices into the pockets of more people. It’s the natural progression of any profitable company and in many ways we should have seen this day coming.
Am I jumping the shark too?
The MacBook is my first Apple computer (bar a first-gen PPC MacMini, which runs YellowDog Linux as a dev server), having never been tempted to dive into the ‘new world’ with my own money. I’ve always been a windows and linux user, and never really felt the need to switch.
It’s fair to say I would never have purchased the MacMini or the iPhone with my own money – but the timing of receiving both devices (and Apple’s shift in position) seems poignant – perhaps an omen even – and so I’m going to give Apple a chance. I’ll be switching out the iPhone for an iPodTouch when it’s released (I have a killer deal on Sprint) but we’ll see what happens.
I’ll keep you posted!