Two brilliant moves that helped create the Apple iOS powerhouse
daltoncaldwell.com
daltoncaldwell.com
The needs of a high end consumer 3 years ago is different from the needs of a low end consumer today and different technologies age at different rates. The iPhone 3GS is still using a 65nm processor which means it's using almost twice as much silicon for the same number of transistors as an iPad 2, driving up cost. At the same time, features introduced into later phones like better cameras or the gyroscope would probably be worthwhile even in a low end phone.
Additionally, high end finishings like steel and glass might be attractive to a high end consumer but low end consumers would rather take the cost savings from using plastics.
At the same price point, the iPhone 3GS is not at all competitive hardware wise with modern low end phones. The only reasons they sell so well are because a) They grant exclusive access to the iOS ecosystem which trumps performance issues and b) the modern American way of pricing phones confuses most consumers. If the phones were priced at $649, $549 & $449, a lot more consumers wouldn't find a 30% discount for 2 year old technology that good a deal.
A lot of my friends have a iPhone 3 GS and they are happy with it and see no need to change. It's not the same with Android low-end models.
Please don't get me wrong I don't want to bash Android here but I want to make how smart this decision was / is. People are buying the old hardware ( which was awesome) and getting it with new the software for a good price.
Maybe I should also point out that people have also seen the same product last year and friends using it. Think about it. Would you buy a new phone which just came out as low-end model or would you buy the product from last year for a better price? Apple shows that the second choice wins.
I can't believe that slipped though. It's a blot on the impression of the iPhone 4S as a solid thing.
Disclaimer: I have a iPhone 4.
Dropping the 'bumper' by itself also induces the rattle sound.
Other than that, I have not heard of any iphone4S rattle sounds. Does yours have a 'bumper' case on it?
I'm more or less dumbfounded at the popular perception of the iPhone 4 as a "great" industrial design. While it's definitely a great phone, if they don't return to a curved back with the next model or otherwise provide some tactile cues that help the user sense how it's oriented as it's being withdrawn from a pocket, it'll almost be enough to send me over the fence into the Android camp. Failing to move to a bigger screen will certainly do that.
In fact, I wouldn't be surprised at all if the 3GS processor is costing Apple more at this point than the 4 processor due to a larger die size and outside licensing fees. Paying more for a worse processor is something that you would never do if you just built a low end phone from scratch.
edit: For example, the Samsung Galaxy Nexus (http://www.amazon.com/Samsung-GT-i9250-Smartphone-Touchscree...) is $450, is running Android 4.0, has twice the Mhz, twice the storage, 3x the resolution and 1.6 times the camera megapixels, all for the same price.
The device worked as it is and it will work in the next year as it worked so why should we change it? No costs on this side to find. We can argue about costs and which of them would be higher but either way I think they choose the way which fits Apple best.
Apple wants to mess with new stuff and not with old already gone low-end model phones.
I don't know how non-tech-users see the nexus. I never seen one have it. I don't know why but it seem that the majority was bought by techies compared to a 3 GS which was bought from all kind of people including a lot of females which argue "I don't need the latest stuff".
See also Anandtech's writeup of the substantial new chip fabrication improvements going into this year's version of last year's iPad: http://www.anandtech.com/show/5789/the-ipad-24-review-32nm-a...
Yes, iOS 4 was slow on the iPhone 3 hardware, I used that phone for years while waiting for an upgrade, but it was never worthless. It worked.
I'd say that overall the 3GS looks like a better deal.
Sure, pricing is confusing but that cuts both ways.
Jobs was a proponent of porting iTunes to Windows, but Schiller didn't want this. As a result, Apple joined leagues with MusicMatch, and they made a music player, but Jobs said it was a terrible piece of software:
"To make the iPod work on PCs, we initially partnered with another company that had a jukebox, gave them the secret sauce to connect to the iPod, and they did a crappy job. That was the worse of all worlds, because this other company was controlling a big piece of the user experience. So we lived with this crappy outside jukebox for about six months, and then we finally got iTunes written for Windows. In the end, you just don't want someone else to control a big part of the user experience. People may disagree with me, but I am pretty consistent about that."
So Caldwell appears to be right in both points: it was understood that it would bring a lot of value back to Apple, but it also took a lot of smart people to convince Jobs to let it happen.
Here's the Jobs quote from the biography:
"'Screw it,' he said at one meeting where they showed him the analysis. 'I'm sick of listening to you assholes. Go do whatever the hell you want.'"
I don't think Jobs should get any credit for the iTunes/Windows port. It's for the people that finally managed to wear Steve down and get the decision made.
No, plan-subsidized prices do not count.
It may be true and a great idea that Apple does market segmentation by keeping to sell older models, but it is very limited. They're only segmenting the upper end of the market.
Which may eventually bite them when cheap Android phones become affordable to billions of people in the 3rd world.
I think you have a valid point about segmenting only the upper end of the market though. Apple has always catered more to the upper end than anything else, but it works for them. Segmenting this end of the market is still a very lucrative proposition for them. Also, the fact that the top selling smartphone in the US is the iPhone meaning they're currently able to cater to the whole of the smartphone market very effectively, not just the upper end.
I agree this isn't a good strategy when the 3rd world countries start going strong on smartphones, but that doesn't mean it's not a good strategy now. Perhaps when that happens they will fundamentally have to shift their focus from catering only to the upper end of the market to a broader one, but I don't think that will happen soon enough for them to change their strategy now.
the network company i am currently with offers a plan for the iphone/android cellphones too. i can get the Samsung Galaxy Note or HTC One X for the same price/same contract as an iPhone 4.
I am not sure i would say "inexplicably runs Android 2.2, looks like a Hummer, & has 3 hours of battery life" about either the Samsung Galaxy Note or the HTC One X.
edit: and since i pay around EUR 6,00 per month for my mobile telecommunication needs (EUR 4,00 for internet, rest for voice, EUR 0,00 for text), I am not sure I care about plan-subsidized phones either (unless they are attached to a EUR 5,00 plan).
So Apple has a situation. Go low end and basically go against the corporate ethic, or allow Moore's Law to let them price the previous generation down so they're still making a profit but allows them to fight at a lower price point. And that's smart, as it covers the bases, and that's what Cook has brought to the table.
But of course, in "corporate" they are going to require a "user friendly solution"
It (was) usually a VB program done by people with no UX talent, on a budget an a short timeframe and with no testing as well. Also they make file copies take magically 3x as much time than copying using Windows explorer.
Not to mention iTunes is a better solution, because it's your music library integrated with syncing. It's different for example than having one program to sync and another to listen. (Similar solutions like Amarok + iPod plugin work great as well)
Early adopters were buying a device that wouldn't work with their current PCs, and many ambivalent Windows users started buying Macs. They didn't see it this way, but they bought into the Apple ecosystem.
For many people, longer they live in the Apple ecosystem, the more difficult it is to leave - your non-Apple device looks different, feels different, acts different[1], and won't dock in music players or anything else, and needs a different charging/data cable. It's an eyesore like having a yellow door on your black car. For the large fraction of the population that values image, this is unacceptable, and Windows is equivalent OSX for most computing needs. The iPod served to funnel this group into this ecosystem.
After they had acquired most of the users who would willingly switch, Apple removed the lock-in to allow more users to purchase their device. This allowed both device and software (app+MP3) sales to continue to people less willing to switch from Windows.
In effect, it's also time-delayed way of creating different price points - early adopters had to pay extra to purchase a Mac, but later adopters saved that money.
[1]Unless it's a Samsung Galaxy Nexus?
A version of iTunes arrived on Windows 2000 and Windows XP in October of 2003; two years. (October 2003 also saw the announcement of Panther, 10.3.)
Prior to the availability of iTunes on Windows, MusicMatch Jukebox was commonly used with Windows, and that package was included with various iPod devices.
The general market acceptance of OS X didn't really get rolling until the Intel port, and that was announced during the 2005 WWDC. (I don't have that plot handy; that's from memory.)
Here's a plot of iPod sales, and note the sales trend and the years: http://www.macobserver.com/tmo/article/charting_apples_growt...
For more plots on sales of iPod and Mac devices (as well as iPad and iPhone), see the Asymco site. Here's one of the many available plots: http://www.asymco.com/2011/07/26/apple-has-moved-on/
And in a business, recognize too that Apple would have been foolish to constrain the potential sales of their then-new iPod product (and now iPhone and iPad) from the volume computing market, and that market was and remains Windows. And first with MusicMatch Jukebox and later with iTunes, they didn't. And they still don't. Their statements and their history of intentional self-cannibalization among their products points to this, too.
And in general, always question what your professors tell you. Always. That's part of what college is supposed to teach students, even if your individual professors don't or won't.
There was a market for Windows users to use the iPod, you knew that because there was software out there for it. You could go down to CompUSA or Microcenter and buy a boxed piece of software for $60 or so that would do all the syncing. All you had to do was provide an iPod and FireWire. There were a lot of people (at least gadget nerds) who were really interested in the device despite the difficulty of using it unsupported. I doubt more than a handful of people purchased a Mac just for an iPod, since ~$150 in software and hardware would let you use the 1st gen with Windows.
The iPod that was released with Windows compatibility was the first one to support USB, which was a necessity in the Windows world. If they had tried to sell to Windows users with only FireWire, I think the reaction would have been pretty bad.
They could introduce three new models a year (high-mid-low) and spend months advertising what they are. Or, they could introduce one new model a year, and market that.
Brand new, but low-end, customers already know the product because it’s been in the market for a year or more.
As of last quarter, the top selling smart phones [1]:
1. iPhone 4S
2. iPhone 4
3. iPhone 3GS
4. Samsung GALAXY S II
5. Samsung GALAXY S 4G
[1]: https://www.npd.com/wps/portal/npd/us/news/pressreleases/pr_...
http://www.anandtech.com/show/5789/the-ipad-24-review-32nm-a...
15-30% more battery life is nothing to sneeze at, and certainly seems like they are committed to still selling as many of "last year's model" as they can.
Are those like real prices, or are they contracts? I hate when people quote prices that are actually tied to some kind of contracts. It doesn't make any sense to compare those numbers.
(I always get my phone and contract separately)
Well, it's a valid comparison, since it's apples to apples. Even the numbers themselves can be considered valid, given that a large portion of American mobile customers get their phones with their contracts.
Over two years, this amortizes the phone cost, and if you keep paying, it's basically just extra gravy for ATT.
* Anything that mentions regex needs to have an automatic disclaimer of "yes, you know the formal mathematical definition of regular expression and how it differs from what most programming languages now offer, good for you".
* Anything that mentions SQL needs to have an automatic disclaimer of "yes, you know that Database X isn't really relational according to a strict interpretation, good for you".
etc., etc.
Any article which discusses mobile phone pricing similarly needs to have a "yes, you noticed that it talked about contract-subsidized prices, good for you".
Because, to be perfectly honest, such comments add not one good goddamned bit of insight or information to the discussion (as here, where subsidized iOS phone prices were compared to subsidized Android phone prices, which is roughly as fair a comparison as one can get of how up-front cheaply such phones can be acquired), and typically are just restating something most readers already know.
And we'd have to make sure to restrict pedantic comments trying to find workarounds to the disclaimer (by taking overly literal and meaningless interpretations of them of course) to one giant pedantic orgy thread.
In all seriousness though, I see this happening on every sufficiently busy thread on HN, it's annoying. It's not all bad though, as that kind of attention to detail is sometimes also what facilitates insightful discussions on the threads.