Apple Abandons the Mass Market, as the iPhone Turns Luxury | Hacker News Reader

Apple Abandons the Mass Market, as the iPhone Turns Luxury

wired.com

30 pointsPretzelFisch20 comments

I'm wondering if part of this is Apple adapting to people keeping phones longer? The cost is spread out over more years. Also, refurbished iPhones may be the new low end, and why not?

I don't use iPhones, but the MacBook I bought last year was refurbished and I'm quite happy with it.

Refurbished iPhones are the best deal running.

Apple has already said every refurb gets a new battery and case. And if they replace any glass breakage, there's really nothing left besides the logic board. You're essentially getting a brand new unit.

https://www.cnet.com/news/apple-refurbished-used-iphones-new...

Good for them. They manage to increase revenue without increasing production, and they refuse to be evaluated based on production numbers. Still, 46 million devices just in the last quarter? And investors want it increased?

Apple is moving "upmarket." It will be interesting to see if their fans' intense loyalty towards the company's products will win over this classic "innovator's dilemma" mistake that Apple is making.

I for one thought Apple was going down a wrong path the moment they started implying they wanted to make super-expensive (compared to their costs and features) "fashion" products instead of continuing to make "premium tech products", which I define as tech products using high-quality materials (and as such more expensive by default than the average product) that may or may not have "healthy margins", too (as opposed to the "outrageous margins" that most luxury/fashion products have).

Most laptops have been in the luxury market for forever! (Judging by your definition of $1000+ as luxury)

Disagree. The median laptop price is <$1k and it's not a fair comparison by any metric.

The iPhone 7 (an excellent phone that I own and use daily) is prominently displayed on their iPhone page. It starts at $449 up front or $18.70/month. That is affordable to many people in the developed world. Doubly so when you consider that a phone is probably the most-used single object that most people own.

at a certain point, you have to accept that there's nothing left to be done: at some point all the low hanging fruit has been picked clean.

If they really want to expand their revenue and move into areas it's going to be very risky. So, why not milk the cow for all it's worth.

Well, that's what happens when strippers and drug dealers start buying iPhones and incorporating them into their bling alongside Prada handbags and Ralph Lauren shirts. Once the iPhone got that sort of normie cred, the door was closed on Apple as a tech company and open on Apple as a lifestyle brand. Plus it's a bit hard to say no to the luxury-aspirant dollar because you can charge a high price and still have a relatively large customer base.

I like to analyze Apple as if I were Warren Buffet, looking at from a fundamental valuation perspective.

Apple is more of a brand and high-end retailer these days (sales per sq ft rival and even exceed Nordstrom), with sticky customer retention through all of their service products. It helps they have made their tech fool-proof and continue to innovate in the direction of improving user experience, which is primarily social in nature with the smartphones.

In this regard, is the brand’s value compounding? Is the App Store, for instance, compounding in value the more it has aged? I think so.

Completely agree. This news fits perfectly with the book "innovator's dilemma".

Apple is so big, I don’t know why they can’t be mass market and luxury at the same time. Toyota:Lexus, VW:Audi:Porsche.

It’s never been so easy to switch ecosystems. Trying to milk the apple cult is a quarterly earnings trap. Lacks vision.

VW: Audi, Porsche, Lamborghini, Bentley, Bugatti

Apple's revenue keeps going up. There is just no need to diversify.

it's simply too expensive to be selling to the masses. Apple knows where and who the money is, and it's not with the masses.

besides, Apple actually has plenty of low end offerings on sale alredy: the iphone 6 and iphone 5. the refurbished versions of their older phones the 4,5 and 6. Right? are those selling out?

Not sure a $1000 phone was ever mass market, I always thought they were luxury smart phones...

Once upon a time, $1000 was the price of two iphones. That $500 wasn't cheap, you could get many, many Nokia 5501s for the money, but a doubling is a doubling.

Maybe I'm a little young and naive, but it seems as if the disparity between what you paid in dollars versus what you got as an "experience" has never been greater than now I think. "Experiences" are always sort of an subjective measurement, but back in the day you could reasonably argue that the value proposition of the Mac and Apple's ecosystem as a whole was worth the premium. Think back to just after the iPhone's launch in 07-08. Vista was crap, XP was riddled with malware and viruses, and there wasn't really a competent software and hardware solution that "just worked". In comes Apple with the beautiful unibody MacBook Pros and OS X 10.5, two absolutely solid pieces of engineering that just kept getting better with Snow Leopard and on. You had Apple come out of left-field and start machining consumer electronics out of aerospace grade metals, and a stable OS with features like Time Machine and AirDrop that are true delighters. Microsoft gets out Windows 7 (also a solid piece of software engineering in 2009), but then you get this wave of absolutely awful hardware in the form of craptop netbooks with Atom processors that can barely handle having a tab of IE open, maybe two in Chrome (this is before Chrome was a bloated mess and you needed ad-blocking on every site). On the desktop side you've got people likely going down to Wal-Mart and buying a top of the line (read crap) E-machines desktop. All of that terrible hardware would bring down even a software experience as seamless as Windows 7. Sure I'm paying $600 for my E-Machines desktop versus the $1200 iMac, but when I want three tabs of Chrome open, who's got the edge? (No pun intended.) An E-Machines desktop with (sounds good on paper, but performs like shit IRL because the Bulldozer architecture) an AMD 6-core CPU and 2GB of RAM or the Mac with a Core I series processor and software and hardware that is tuned to work as a cohesive unit?

Now the desktop and laptop market have matured and so have PC OEMs. I think this started with Dell and their excellent XPS laptop in 2012(spurred by the introduction of the MBA ironically.) Microsoft's attempts at software have matured as well with Windows 7 and (arguably) Windows 10. Factoring all that in, it just doesn't make sense to pay a premium anymore, unless you consider the cult of personality and luxury brand that Apple is. I think this is most evident in the smartphone market. Android used to be the kind of OS in which you'd be sitting a red light, fumbling to get directions out of Google Maps, and then the app would crash or the phone would reboot (but you need to know NOW if you need to take a turn at this street or whatever). That's by and large not the case anymore. Android has generally gotten more stable and cheap OEMs are pushing out half decent experiences on low end hardware. You can pretty much do everything on a $200 Android phone that you can on the $1000 iPhone. Now, things are certainly going to be a bit bumpier on the cheap Android phone, but bumpy enough to justify an $800 price jump to an iPhone? Most people would say no. Its the same for Chromebooks and the like. Again, the only thing that changes this equation is the social status effect that comes with owning an Apple product (or any luxury product.)

Consider that people - en masse - are willing to spend tens of thousands of dollars on cars that they spend far less time in.

$1000 for a phone is both expensive (compared to cheaper models) and trivial (compared to other budget items).

The interesting thing isn't why people buy an iPhone over an Android phone.

The interesting thing is why people spend huge amounts of money on luxuries when they have less than 6 months in the emergency fund.

Mass market, talk about being out of touch. Considering Apple has about 12% of the cell phone market they were already a luxury item. They are becoming an ultra luxury item.

My wife ditched the iphone for a lower end Samsung, even my status symbol focused teenage daughters can't justify the cost of an iphone, their old iphones are being replaced by much cheaper Android phones.

Reply on news.ycombinator.com