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Summary of the tweets of Steven Sinofsky(1): 1- Pricing not only says who can afford your product but also establishes a brand, determines channel, & more. 2-

Summary of the tweets of Steven Sinofsky(1): 1- Pricing not only says who can afford your product but also establishes a brand, determines channel, & more. 2- The first key to having low priced offerings is that you have to have a set of partners who are willing to compete on thin margins in order to bring the product to market. 3- When people say Apple needs a cheaper phone there are many questions to answer beyond the get over yourself luxury brand issue. 4- What is distribution constraint? What partner absorbs some cost to leave margin? What is the branding? 5-Easy question — would a cheap phone be sold and supported in Apple stores side by side? How would the rest of the customers feel about more crowds and tougher appointments competing with people who paid half as much? Sell one phone against another—how? 6- Anyone that thinks Apple is unaware of the challenge and has not sketched out ideas, tested them, and thought about them immensely is crazy. 7- What does all this mean? Apple may or may not have a “pricing” or “price point” or “structural” / secular challenge. For sure just releasing a cheap phone doesn’t make all better. All takes place in context of lots of cheap/bad competitive phones. (1): https://mobile.twitter.com/stevesi/status/1081174886901473280 https://mobile.twitter.com/stevesi/status/108117488690147328...

TheOtherHobbes 8y ago
Considering Sinofsky's record, I wouldn't necessarily consider him a credible authority on this. There's an obvious difference between "a cheaper phone" and making the range as affordable as it was five years ago - instead of relying on so-called luxury branding while offering very little extra and annoying customers with product issues (missing headphone jack, BatteryGate, etc) and mediocre software updates. Apple doesn't have an iPhone problem. Apple has an Apple problem. It's at least possible (who knows for sure...?) that if Jobs were still alive Apple would have opened up at least a couple of innovative new product lines by now - not just gimmicks like Watch, but new "I didn't know I wanted that, but now I see it I obviously do" products, with supporting services and industry partners, all pitched at the affordable-at-a-push level that Apple products originally lived in. This is where Cook has failed. There's nothing new on the table. Putting up prices is a short-term tactic. So is "a cheap phone". What Apple needs is a coherent and impressive long-term strategy, and investors aren't seeing that.
- llampx 8y ago
  I used to love going to the Apple Store and playing with the new iPhones, iPads and Macbooks, especially soon after a new product launch. Maybe its just me getting older but it doesn't have the same appeal anymore.
  - xfitm3 8y ago
    I avoid apple stores at all costs. It’s crowded, long lines, and always located in a busy area or dense shopping mall.
    - yoz-y 8y ago
      I share your experience but I think that all of that shows that they are doing something right, having too many customers is hardly a bad problem to have.
      - ataturk 8y ago
        We visited Disney parks in Orlando over the holidays. Jammed to the gunwales with people. They definitely have a problem with being a victim of their own success. A major fall is coming. Apple is no longer run by techies and has thus lost all its real flavor. The Macbook 2015 era was the pinnacle and we're on the down slope for now. The new Mini that costs 899 to get in the door (any thousands for any reasonably decent config) was just a slap in our faces--a giant FU to Mac users on a budget. The Mini I speced out was over $4000. Sorry, Apple, you're fucking dreaming. The only this Macs have going for them now is that they aren't Windows-based. iOS is meh, always has been. There needs to be more players in the smartphone space, quite frankly.
  - bluedino 8y ago
    The iPad Pro is worth going to play with in person. But the Mac lineup hasn't been in years. First it was the Air, "Wow, look how small this laptop is. And it's made of aluminum!" Then it became, "Wow! Look at the Retina display! It's amazing!" Now it's just like, "Why'd they take off the ports on this laptop? It's a weird brown color. And two of the keys don't work, already." To make it worse, everything is the same. You can't tell anything apart? Is this the Air? Wait, it's the old Pro? Which watch is this? Is this the XR or the XS? What's the difference?
avar 8y ago
Re #5: You can already walk into an Apple store and buy an iPhone that costs 3-4x as much as another iPhone they sell in the same store.
- d4rti 8y ago
  And similar for the MacBook (Pro) range. Without customisation: MacBook Air £1,199.00 Macbook Pro £2,699.00 2.25x multiple With customisation you can easily reach 3x.
tootie 8y ago
Regarding point 6, I wouldn't be surprised at all if Apple had a viable strategy for a lower-priced phones and Jobs just said "never" and Cook is honoring that. I don't know that they did, just that you can't underestimate the potential for powerful people to be irrational.
- dandare 8y ago
  I vaguely remember from Jobs' biography by Isacson that if you are not willing to cannibalize your own market share with a cheaper product someone else will do that for you. I am not 100% if it was Jobs who said that though.
  - shliachtx 8y ago
    “One of Job's business rules was to never be afraid of cannibalizing yourself. " If you don't cannibalize yourself, someone else will," he said. So even though an Iphone might cannibalize sales of an IPod, or an IPad might cannibalize sales of a laptop, that did not deter him.”[0] The idea being pushed is cannibalization by a better product, not lower prices. [0] https://www.goodreads.com/quotes/908575-one-of-job-s-business-rules-was-to-never-be-afraid https://www.goodreads.com/quotes/908575-one-of-job-s-busines...
    - josteink 8y ago
      But for many people the iPhone mini would be a better product than todays iPhone mega.

TheOtherHobbes 8y ago

Considering Sinofsky's record, I wouldn't necessarily consider him a credible authority on this. There's an obvious difference between "a cheaper phone" and making the range as affordable as it was five years ago - instead of relying on so-called luxury branding while offering very little extra and annoying customers with product issues (missing headphone jack, BatteryGate, etc) and mediocre software updates. Apple doesn't have an iPhone problem. Apple has an Apple problem. It's at least possible (who knows for sure...?) that if Jobs were still alive Apple would have opened up at least a couple of innovative new product lines by now - not just gimmicks like Watch, but new "I didn't know I wanted that, but now I see it I obviously do" products, with supporting services and industry partners, all pitched at the affordable-at-a-push level that Apple products originally lived in. This is where Cook has failed. There's nothing new on the table. Putting up prices is a short-term tactic. So is "a cheap phone". What Apple needs is a coherent and impressive long-term strategy, and investors aren't seeing that.

llampx 8y ago
I used to love going to the Apple Store and playing with the new iPhones, iPads and Macbooks, especially soon after a new product launch. Maybe its just me getting older but it doesn't have the same appeal anymore.
- xfitm3 8y ago
  I avoid apple stores at all costs. It’s crowded, long lines, and always located in a busy area or dense shopping mall.
  - yoz-y 8y ago
    I share your experience but I think that all of that shows that they are doing something right, having too many customers is hardly a bad problem to have.
    - ataturk 8y ago
      We visited Disney parks in Orlando over the holidays. Jammed to the gunwales with people. They definitely have a problem with being a victim of their own success. A major fall is coming. Apple is no longer run by techies and has thus lost all its real flavor. The Macbook 2015 era was the pinnacle and we're on the down slope for now. The new Mini that costs 899 to get in the door (any thousands for any reasonably decent config) was just a slap in our faces--a giant FU to Mac users on a budget. The Mini I speced out was over $4000. Sorry, Apple, you're fucking dreaming. The only this Macs have going for them now is that they aren't Windows-based. iOS is meh, always has been. There needs to be more players in the smartphone space, quite frankly.
- bluedino 8y ago
  The iPad Pro is worth going to play with in person. But the Mac lineup hasn't been in years. First it was the Air, "Wow, look how small this laptop is. And it's made of aluminum!" Then it became, "Wow! Look at the Retina display! It's amazing!" Now it's just like, "Why'd they take off the ports on this laptop? It's a weird brown color. And two of the keys don't work, already." To make it worse, everything is the same. You can't tell anything apart? Is this the Air? Wait, it's the old Pro? Which watch is this? Is this the XR or the XS? What's the difference?

avar 8y ago

Re #5: You can already walk into an Apple store and buy an iPhone that costs 3-4x as much as another iPhone they sell in the same store.

d4rti 8y ago
And similar for the MacBook (Pro) range. Without customisation: MacBook Air £1,199.00 Macbook Pro £2,699.00 2.25x multiple With customisation you can easily reach 3x.

tootie 8y ago

Regarding point 6, I wouldn't be surprised at all if Apple had a viable strategy for a lower-priced phones and Jobs just said "never" and Cook is honoring that. I don't know that they did, just that you can't underestimate the potential for powerful people to be irrational.

dandare 8y ago
I vaguely remember from Jobs' biography by Isacson that if you are not willing to cannibalize your own market share with a cheaper product someone else will do that for you. I am not 100% if it was Jobs who said that though.
- shliachtx 8y ago
  “One of Job's business rules was to never be afraid of cannibalizing yourself. " If you don't cannibalize yourself, someone else will," he said. So even though an Iphone might cannibalize sales of an IPod, or an IPad might cannibalize sales of a laptop, that did not deter him.”[0] The idea being pushed is cannibalization by a better product, not lower prices. [0] https://www.goodreads.com/quotes/908575-one-of-job-s-business-rules-was-to-never-be-afraid https://www.goodreads.com/quotes/908575-one-of-job-s-busines...
  - josteink 8y ago
    But for many people the iPhone mini would be a better product than todays iPhone mega.