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Comment by mtgx | Hacker News Reader

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).

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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.

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".

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.

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.

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