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I don't know. There must be more factors. How else would you explain the success of companies like Apple, Tesla and Xiaomi. Or for that matter, to a certain ext

I don't know. There must be more factors. How else would you explain the success of companies like Apple, Tesla and Xiaomi. Or for that matter, to a certain extent every luxury product. Marginal Value, MV(iPhone) ~= MV(crap, and most non-crap, android phones) (granted, this is probably not true for the original iPhone). But except for that one time it is certainly not true. The quality is clearly different, however. Even more clear is the Tesla case: MV(Roadster) <<< MV(alternatives). It wasn't the best electric car, it wasn't the best car, it wasn't ... however again there was a clear difference in quality. I would argue most real estate developments are equally examples of this (mostly because laws prevent them on competing on anything other than quality in most inner cities). Trump's whole empire seems an example of it too. It seems to be entirely possible to achieve success by simply copying a badly executed idea, and doing it better.

nopinsight 9y ago
Mobile phones and cars are used in public and many people associate their personal identity with them. Here are the key values I believe are provided by each of your example: iPhone: signifier of good taste, ease of use (relative to Android), being well-off (in developing countries) Xiaomi: middle class or upper-middle class status (in China), good value for money I agree that current iPhones and Xiaomi phones do not provide much better features relative to their competition (no-name Android phones in the case of Xiaomi). Their values lie elsewhere. Tesla Roadster: cutting-edge, environmental sensibility In fact, by sales volume, Roadster itself was not a success. Tesla only sold 2,450 of them in 30 countries [1]. Model S provides much better value for cost and correspondingly achieved much stronger success. Luxury products in general tend to be associated with social exposure. Maybe luxury mobs or floor cleaning liquid exist but either they do provide some special features for a niche or their sales volumes are relatively tiny. https://en.wikipedia.org/wiki/Tesla_Roadster https://en.wikipedia.org/wiki/Tesla_Roadster
majani 9y ago
The luxury market is less about marginal value and more about good marketing and noticeable distinctions from what is considered normal.
- nl 9y ago
  These seem extremely relevant points if they are what makes some companies successful. It’s almost like marginal value isn’t the only thing that matters.
bambax 9y ago
I have an Android phone for purely economical reasons, but I tend to hate it, because it's buggy as hell, nothing really works the way it should. Apple phones are way way overpriced but they're so much better than the competition. It's not true people buy Apple phones only for fashion reasons. The absolute value of an iPhone is vastly superior to the marginal value of any other phone, and the marginal value depends on how much you use your phone. I don't use my phone very much so I can tolerate an Android phone; but if my personal or professional life depended on it, I would buy an iPhone.
- koyote 9y ago
  You must have a very very cheap or an especially buggy Android phone. Having used both Android and iOS I think it's quite clear that both platforms are just as buggy as one another with the recent iOS11 outpacing Android in terms of bugginess by quite a large margin. When you buy an iPhone you are paying for the build quality and for the marketing, you are not getting an objectively 'better' phone.
  - richardknop 9y ago
    You also pay for proprietary operating system. Which is a main differentiating point of iPhones. I have used all types of phones (iOS, Android, Windkws Phone, Symbian). Apple has the best operating system. It has superior UX, is most user friendly and has deep vertical integration with other Apple products. That’s worth a lot of money to most users. I think more people are willing to pay premium to get the great operating system compared to hardware which might be secondary.
    - koyote 9y ago
      All of that is very subjective (and why do you state this as a 'fact'?). If you don't use Apple as your main computer you basically have zero integration. Don't even get me started on interoperability (you can't even use the iPhone headphones on a mac??) That the UX is superior is also highly subjective. There are many things that are either impossible to do or a massive pain to do on an iPhone; I would not consider that good UX (for example try looking at a picture you just took on your camera and apply some filters before posting it to instagram. The only way I have found to do that is to open instagram and open the picture in that app. The notification system is a massive joke. There are dozens of other such examples). What is worth a lot of money to users is convenience and habituality. Having to change your habits, workflow and frame of mind can be quite taxing for some people.

nopinsight 9y ago

Mobile phones and cars are used in public and many people associate their personal identity with them. Here are the key values I believe are provided by each of your example: iPhone: signifier of good taste, ease of use (relative to Android), being well-off (in developing countries) Xiaomi: middle class or upper-middle class status (in China), good value for money I agree that current iPhones and Xiaomi phones do not provide much better features relative to their competition (no-name Android phones in the case of Xiaomi). Their values lie elsewhere. Tesla Roadster: cutting-edge, environmental sensibility In fact, by sales volume, Roadster itself was not a success. Tesla only sold 2,450 of them in 30 countries [1]. Model S provides much better value for cost and correspondingly achieved much stronger success. Luxury products in general tend to be associated with social exposure. Maybe luxury mobs or floor cleaning liquid exist but either they do provide some special features for a niche or their sales volumes are relatively tiny. https://en.wikipedia.org/wiki/Tesla_Roadster https://en.wikipedia.org/wiki/Tesla_Roadster

majani 9y ago

The luxury market is less about marginal value and more about good marketing and noticeable distinctions from what is considered normal.

nl 9y ago
These seem extremely relevant points if they are what makes some companies successful. It’s almost like marginal value isn’t the only thing that matters.

bambax 9y ago

I have an Android phone for purely economical reasons, but I tend to hate it, because it's buggy as hell, nothing really works the way it should. Apple phones are way way overpriced but they're so much better than the competition. It's not true people buy Apple phones only for fashion reasons. The absolute value of an iPhone is vastly superior to the marginal value of any other phone, and the marginal value depends on how much you use your phone. I don't use my phone very much so I can tolerate an Android phone; but if my personal or professional life depended on it, I would buy an iPhone.

koyote 9y ago
You must have a very very cheap or an especially buggy Android phone. Having used both Android and iOS I think it's quite clear that both platforms are just as buggy as one another with the recent iOS11 outpacing Android in terms of bugginess by quite a large margin. When you buy an iPhone you are paying for the build quality and for the marketing, you are not getting an objectively 'better' phone.
- richardknop 9y ago
  You also pay for proprietary operating system. Which is a main differentiating point of iPhones. I have used all types of phones (iOS, Android, Windkws Phone, Symbian). Apple has the best operating system. It has superior UX, is most user friendly and has deep vertical integration with other Apple products. That’s worth a lot of money to most users. I think more people are willing to pay premium to get the great operating system compared to hardware which might be secondary.
  - koyote 9y ago
    All of that is very subjective (and why do you state this as a 'fact'?). If you don't use Apple as your main computer you basically have zero integration. Don't even get me started on interoperability (you can't even use the iPhone headphones on a mac??) That the UX is superior is also highly subjective. There are many things that are either impossible to do or a massive pain to do on an iPhone; I would not consider that good UX (for example try looking at a picture you just took on your camera and apply some filters before posting it to instagram. The only way I have found to do that is to open instagram and open the picture in that app. The notification system is a massive joke. There are dozens of other such examples). What is worth a lot of money to users is convenience and habituality. Having to change your habits, workflow and frame of mind can be quite taxing for some people.