Sorry for the slow reply. I don't seem to get email notifications any more when I receive replies on HN.
It seems like I might not have been very clear, so I'll summarise my points again briefly:
1. Apple products are in general only affordable to the middle and upper classes.
2. That does not mean that they are only attainable to the middle and upper classes: I specifically said affordable because a poor person owning an Apple device does not mean that it is "for" them in the same way as a middle class person owning a Ferrari does not mean that Ferraris are "for" the middle classes.
3. Your refutation of my point is that you know low income folks who have iPhone. But that isn't what makes something a luxury product or not, and if we draw the line in this way (Apple can't be luxury because poor people own it), then LV is not a luxury product because plenty of poor folks have LV goods too.
Hopefully that makes sense. From your most recent reply:
> a designer handbag is not a necessity
No doubt.
> A cell phone isn't a nice to have; it's pretty close to being a necessity
Agreed, but you're (presumably accidentally) creating a false equivalence by implicitly comparing the necessity of a designer handbag and any cell phone. The more illustrative comparisons would be any handbag to any cell phone, and an LV handbag specifically to an iPhone specifically. (I would expect you agree that "handbag adoption" amongst women is likely to be as high as cell phone adoption, right?)
The things which make a cell phone a necessity -- a fixed phone # to be contacted on, messaging, and web browsing -- are accessible at far lower price points than any iPhone, including the SE. You can get all of them in a $30 Alcatel handset. iPhone does the same stuff, but nicer (and more expensive).
Clearly wanting a slightly nicer thing than the very cheapest one available does not mean that you are buying a luxury good. The economic underpinning of a luxury good is that as income drops, propensity to spend on it reduces disproportionately (and the inverse is also true). The idea being that folks use their capital to take care of necessities, and increases in income yield the purchase of things which are not necessities. When times get tough, the first things which people stop buying -- and they stop buying them disproportionately to the drop in wealth -- are luxury items.
The iPhone SE is almost certainly the product of Apple's struggle with this very issue. iPhone ASP prior to the SE was c. $900, and I would bet good money that a lot of Apple's customers switch away from iPhone to cheaper handsets when they fall on tough times.
It's fairly uncharted territory, because for the first time the very best product in the market is one which is reasonably attainable, but that does not mean that Apple is a mass market brand. Andy Warhol wrote this about Coca-Cola, which I think helps to drive at the challenge in categorising Apple:
> You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.
For two decades, this sort of calculus was not possible in the handset industry, but now there is nearly zero subjectivity. You don't need a $25,000 Vertu phone to know you have the best phone in the market, you can just go and buy a $1200 iPhone 11 Pro.
But the fact that cell phones are now a necessity shouldn't confuse us into thinking that Apple is not a luxury brand.
1. The ASP for iPhone is $900, and they report c. 70% of their mix being the Pro models.
2. ASPs for the remainder of the handset market are lower, and Apple is outsold about 4:1 globally by other manufacturers. They attract about 20% of buyers globally, and from the ASP we can be fairly sure that they are people spending the most money in the market.
3. From a utilitarian perspective we know that iPhone does not do anything which other handsets do not in the same way as a Ferrari does not do anything which a Prius does not. So if you are paying for iPhone you are paying a premium for "nice".
4. The people I am saying are excluded by Apple's strategy (lower income households) account for about 30% of the US. This is a really important point: your view of what is luxury can be distorted quite easily. (See also prevalence of LV bags in China.)