James Lu's Blog
James Lu male Senior Tech Writer
Don't be fooled by specs, nobody needs a 9000 DPI gaming mouse.
If rumors are true, in less than two weeks, Apple will release the iPhone 5C - a more affordable, more colorful, more plastic, 'budget' iPhone. What would Apple co-founder, Steve Jobs, have to say about that?
Let's consider some of the reasons why Apple may be making a budget iPhone in the first place.
- Expand market share
- Act as an entry-level iOS device to get more users onto the iOS ecosystem
And that's about it really. The thing is, while these are logical, if not fundamental goals, for almost all companies, it just doesn't make sense for Apple.
"If you keep your eye on the profit, you’re going to skimp on the product. But if you focus on making really great products, then the profits will follow." - Steve Jobs
Steve Jobs turned Apple around by focusing on great products. From the first iPod to the iPhone to the iPad, each product has been well built, beautiful and innovative. These qualities are important, because they make Apple products aspirational. For many people, Apple represents quality, the importance of aesthetics and being ahead of the curve; people were, and still are, prepared to pay more for an Apple product, simply because of these qualities.
A budget iPhone risks all of this. It won't be innovative. It won't be beautiful. It won't be aspirational.
Steve Jobs on Market Share, or, Why Apple Never Made a Netbook
In 2007, netbooks were the hottest thing in tech. The cheap, portable notebooks were everywhere and every company from ASUS to Toshiba were making the things. The idea was great: a super low cost, highly portable notebook. It didn't matter that they had lousy specs and were about as attractive as a brick (which a few of them resembled), they were so affordable, everyone had one. The one company that didn't jump on the netbook bandwagon? Apple.
"There are some customers which we chose not to serve. We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there’s a lot of them.
We’ve seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continue to try to add more and more value to those products in those customer bases we choose to serve" - Steve Jobs
Part of Jobs' fundamental philosophy for Apple has always been to not compromise on quality. Apple products are expensive because they use premium materials: machined aluminum, glass, metal. Even the polycarbonate-backed iPhone 3 had metal buttons. For many people, this is what makes Apple great. So while everyone else was selling $300 netbooks, Apple continued to sell millions of MacBook Airs at about five times the price. For Jobs, any product you made had to be beautiful and well crafted throughout, no matter what the actual product was.
“When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.” - Steve Jobs
Does Apple Even Need a Budget iPhone?
"Deciding what not to do is as important as deciding what to do." - Steve Jobs
Which brings us back to the iPhone 5C. Will it expand Apple's market share? Possibly, but let's not forget, there's actually a budget iPhone already on the market: the iPhone 4.
The iPhone 4 is currently available on all telcos for free with any monthly contract. Despite its age, it is still a well crafted, beautiful smartphone made of metal and glass that can keep up with, if not surpass, many other smartphones available today. It doesn't have Siri or an A6 processor, but then, if rumors are true, neither will the iPhone 5C. More importantly, the iPhone 4 still looks and feels like an Apple product. It serves very well as a low-cost entry point to Apple because it fully embodies the Apple philosophy. The pastel-colored, plastic iPhone 5C? Not so much.
As for Apple's current market share, believe it or not, they're actually not doing too badly. While Android has captured a whopping 80% market share, that figure represents every Android smartphone from every Android manufacturer. At launch, the iPhone 5 sold a massive 27.8 million units in one quarter alone. In its first quarter, the Samsung Galaxy S4 has sold about 20 million. Now obviously, Android users have more choices than iOS users, but clearly, there's still plenty of demand for an iPhone.
The one area where a truly bargain-basement iPhone might make sense is the contract-free market. An iPhone 4 without contract is currently $588 (although it can be found much cheaper from unofficial resellers). If Apple aims for this market with the iPhone 5C, it pits itself against the Samsung Galaxy Aces and Nokia Lumia 620s of the world. How many Samsung Galaxy Ace's did Samsung sell last quarter? Not 20 million, that's for sure. Which begs the question of why Apple would even go after this market in the first place, when it risks diluting its core brand values so much.
Of course, ultimately, we can't say for sure what Jobs would have thought of the iPhone 5C. Maybe it's just time for Apple to release more than one new iPhone model a year? Then again...
"I wasn't alive then, but from what I've heard, Babe Ruth only had one home run. He just kept hitting it over and over again." - Steve Jobs