8 ms·

The best thing Tim Cook didn't announce

82 points by richoakley 15y ago

maigret 15y ago
"The equivalent of Aston Martin releasing a competitor to the smartcar." Sorry, but I need to LMAO here. Please meet the Aston Martin Cygnet: http://www.cygnet-astonmartin.com/ http://www.cygnet-astonmartin.com/
- veyron 15y ago
  That was to satiate a european fuel efficiency requirement. At the beginning (not sure if it's true now) you have to own another Aston Martin to purchase this. They basically ripped the Toyota iQ platform
  - eftpotrm 15y ago
    Not just the platform. Each Cygnet starts as a complete iQ and is then reworked into a Cygnet.
- ZeroGravitas 15y ago
  Or the more directly ironic fact that Smart cars are made by Daimler-Benz?
  - hammock 15y ago
    They are not branded so, though.
  - maigret 15y ago
    Yes, I totally agree on that also.
Tyrannosaurs 15y ago
I'm not sure how relevant it is that Apple's move in the lower cost market was letting the iPhone 3GS drift down rather than introducing a specific model. My view on why they've done it this way is that they've retained a clear visual deliniation between the higher end iPhone 4s and the low end 3GS. No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. That comes with the downside of making the cheaper model a slightly tougher sell - it's visibly "old" - but that's Apple protecting their key market, the high end stuff. But it will be interesting to see how the cheap [1] 3GS performs commercially against more modern Android phones in the same price bracket. Will Apple's brand have people going "wow, I can get an iPhone" or will people be saying "I don't want a two / three year old phone regardless of who makes it". Obviously the attitude will vary from person to person but it will be an interesting test of Apple's name value to see if it can give a boost to older hardware.[2] [1] I say cheap not free as it's free on a relatively pricey contract. [2] I'm not running the 3GS down - I have one in my pocket right now, it's my primary phone, just it is older hardware and I think over the next 12 months will begin to show it's age more and more.
- gks 15y ago
  I had installed iOS 5 on my 3GS just to do some testing. It ran perfectly fine. Better than iOS 4 actually. It may be old looking, but aside from processing power, graphics performance and "retina" display, it is a perfectly fine phone for the low end market.
- ssp 15y ago
  No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. Maybe, but it's a gamble. It's not enough that the 4/4S guy himself knows that he has the good stuff. Everybody else needs to know it too.
  - Tyrannosaurs 15y ago
    That's my point - this way with the 3GS as the entry level model it's clearly a cheaper phone, leaving the iPhone 4 users happy that they've still got the cache that goes with their more expensive version.
    - ssp 15y ago
      The best case for Apple is indeed great: The old phones will be clearly marked as less desirable, which allows Apple to sell to more price-sensitive customers, while also communicating to the faithful that they really need to ditch the old junk and buy new phones. Perhaps most importantly, they grow the market share of iOS. But the potential downside is that there will be Apple-branded hardware out there that is seen as cheap and less desirable, and that many people won't understand the distinction. If that happens, the 4/4S guy will now just have an "iPhone" like the rest of the riff-raff, which opens up the high end to competitors.
- cbs 15y ago
  No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. Why would someone else be annoyed by another persons choice in phone? I guess I could understand if you thought the other person made a bad purchase, but how is it possible to be annoyed that someone else has something you agree is good? Are iPhones really that big of status accessories for their owners? This explains so much.
jsavimbi 15y ago
I think it's a great move by Apple to make the 3gs seem free because it says the following: 1. 3gs owners: it's time to upgrade to the 4/4s (that's me) 2. It'll burn down existing stocks a lot faster. What was more valuable, an HP TouchPad in production or an HP TouchPad when the production was stopped? 3. Parents who have an iPhone will be able to get their kids one on the cheap, thus reclaiming ownership of the ir own phone. This also indoctrinates the child into the world of the iPhone, a strategy Apple has pursued with all of its products since the very beginning. 4. Lastly: get the phone into the hands of a holdout, at least on a trial basis, and hope for an upgrade after a couple of months, if not the same day in-store. Market share is very important to Apple as it bears on their bottom line and while not compromising on quality (low-end iphone) they can still get a portion of that share by unloading old 3gs stock and maybe even removing 1 & 2 stock still out there in the wild that does nothing to promote present-day Apple products. Walk into any of their stores with an ugly piece of hardware and they'll try hard enough to get you to hand it over.
- angryasian 15y ago
  signing a two year contract on a 3gs is hardly a trial basis.
  - jsavimbi 15y ago
    Sure, but Apple is betting that once they have an iOS phone in their hands, and judging just by repeat customer shopping patterns, they have a pretty good chance of upgrading that customer to a 4s, if not at least a 4. All they have to do is get that phone in their hands.
dawie 15y ago
I think they still need to release an iPhone Nano for the masses. The iPod was big, but the moment Apple brought out the iPod Mini, the iPod went mainstream, because it became affordable. Apple needs to do the same for the iPhone...
- funkah 15y ago
  The iPhone is already mainstream. And the 3GS is now free, it doesn't get more affordable than that.
  - dagw 15y ago
    Do all phone plans cost the same in the US? A free phone plus $10 a month is a lot more affordable than a free phone plus $60 a month.
    - kyleslattery 15y ago
      As I understand it, all the US carriers (with the exception of T-Mobile) charge the same per month whether you bought a phone subsidized or not, so it doesn't make too much sense to buy an unsubsidized phone, because you won't be saving anything per month.
      - hugh3 15y ago
        Get a prepaid. I paid $200 for an LG Androidy thing (an Optimus V, if anyone really cares) and now I pay $25 a month for 300 minutes per month and unlimited data. It's a crazy better deal than anything else out there.
      - retroafroman 15y ago
        This is exactly what makes me sad about a possible takeover of T-Mo. I'm happy to bring my own phone and just buy service, and they give me a discount for that. I may have to switch to a lower quality pre-paid company in the future.
  - dawie 15y ago
brudgers 15y ago
>"Apple is all about the brand. About image. About quality." That's what makes Siri such a concern. When was the last time Apple released a beta product? Have they been hiring too many Googlers? Or, given that "Siri" alledgedly sounds like slang for buttocks according to today's interwebs, bought an outside technology and didn't immediately rebrand it to sound Apple like?
- ryannielsen 15y ago
  In the presentation, they said Siri's "beta" because it's only available in a subset of iPhone's markets, not because they consider it low-quality.
  - HoltonDeniis 15y ago
    Schiller said it was beta because more language and services support was coming. I'm surprised that Siri doesn't already provide turn-by-turn activation nor can be used for launching apps or changing settings.
- Argorak 15y ago
  No so long ago. FaceTime was 'beta' for quite a while.
bambax 15y ago
What (some) people want is not a low-priced iPhone on contract, or even free on contract; they want a cheap (i)Phone available sans contract. I want a cheap iPhone available without contract, because: - I don't want a contract - I tend to break things (me or my kids) and want the freedom of being able to buy a new device without asking anyone if they would be so kind as to subsidize it, or having bought "insurance", or having to pay north of $600 for the privilege! So, if 3GS is the device for the lower-end of the market, fine: just sell it at an acceptable price with no contract.
- jhancock 15y ago
  Well said. The author also seems to not understand that in developing markets such as China and India, no contract && very low monthly bills are the norm. No way to subsidize in that space.
- Tyrannosaurs 15y ago
  I suspect what is happening is one of two things: 1) Apple are pushing down into the mid-market before moving further down into the low end. 2) Alternatively at the moment Apple aren't happy that they can create an iPhone that they want to put their name to and make money on at the price point you talk about. Based on the way we see them behave with the Mac where Apple simply don't complete at the very low end, I suspect it's the later. This is a company who make money selling hardware - all the music and apps pull in a comparatively small amount and apparently really only run at break even. If they can't sell a phone at that price and make money then they'll happily leave that market to others.
  - bambax 15y ago
    I think you're right, but I also think that this strategy is dangerous: as PG used to say (maybe quoting somebody else?), don't let anyone fly under you. If you want to pursue the strategy of the very high end, you have to be innovating all the time, in a very big way, which is not what yesterday's event was about. Or you can count on a core of very loyal customers who will buy your products no matter what, at any price; those people exist but there aren't enough of them to fuel Apple's growth forever.
dhawalhs 15y ago
Emerging countries don't have contracts. So making it free on a 2 year plan isn't the same as targeting emerging markets. Its the cost of the unlocked phone that would matter. I would also argue paying 70-80$ a month for a phone plan isn't exactly "low end" . For comparison, I got a Galaxy S(captivate) phone for free when I renewed my contract a year ago.
T_S_ 15y ago
Is it just me? I like the form factor of the 3GS much better than the 4/4S. I was hoping they would go back to that with the 5.
morsch 15y ago
Well, that's a fairly obnoxious article. And even those spitting with fury at the disappointment will glance with envy at the guy who in a meeting quietly asks Siri to order him coffee for the lunchtime break. Really? I think it's far more likely people will glance with annoyance at the guy talking to his phone PA app during a meeting. There are a lot of good use cases for smart voice input, none of them take place in a meeting.
- mindstab 15y ago
  Starbucks takes phone orders from robots now? ;)
yariang 15y ago
" The equivalent of Aston Martin releasing a competitor to the smartcar." Hmmm.... http://en.wikipedia.org/wiki/Aston_Martin_Cygnet http://en.wikipedia.org/wiki/Aston_Martin_Cygnet Bad example. I know the underlying motivation for Aston wasn't to compete with Smartcar, but that's what they released nonetheless.
- aaronbrethorst 15y ago
  Not to mention that they were owned by Ford until 2007, and Ford still retains a stake in the company today.
spot 15y ago
focusing on just the high-end is a losing strategy in phones just like it was with computers. volume wins. ecosystem wins.
- mbrubeck 15y ago
  Apple's shareholders would probably disagree with you. For that matter, so would HP's and Nokia's.
  - spot 15y ago
    with computers apple is the low end. i was referring to the attack of the killer micros: http://en.wikipedia.org/wiki/Killer_micro http://en.wikipedia.org/wiki/Killer_micro
abp 15y ago
And, quite frankly, the iPhone 4 is probably years ahead in features, quality and design than the equivalently-priced Android, Nokia, or RIM device. I don't understand how one can write this.
- wmeredith 15y ago
  Yeah, he misspelled UX and accidentally wrote "features, quality and design".

82 points by richoakley 15y ago

"The equivalent of Aston Martin releasing a competitor to the smartcar." Sorry, but I need to LMAO here. Please meet the Aston Martin Cygnet: http://www.cygnet-astonmartin.com/ http://www.cygnet-astonmartin.com/

veyron 15y ago
That was to satiate a european fuel efficiency requirement. At the beginning (not sure if it's true now) you have to own another Aston Martin to purchase this. They basically ripped the Toyota iQ platform
- eftpotrm 15y ago
  Not just the platform. Each Cygnet starts as a complete iQ and is then reworked into a Cygnet.
ZeroGravitas 15y ago
Or the more directly ironic fact that Smart cars are made by Daimler-Benz?
- hammock 15y ago
  They are not branded so, though.
- maigret 15y ago
  Yes, I totally agree on that also.

Tyrannosaurs 15y ago

I'm not sure how relevant it is that Apple's move in the lower cost market was letting the iPhone 3GS drift down rather than introducing a specific model. My view on why they've done it this way is that they've retained a clear visual deliniation between the higher end iPhone 4s and the low end 3GS. No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. That comes with the downside of making the cheaper model a slightly tougher sell - it's visibly "old" - but that's Apple protecting their key market, the high end stuff. But it will be interesting to see how the cheap [1] 3GS performs commercially against more modern Android phones in the same price bracket. Will Apple's brand have people going "wow, I can get an iPhone" or will people be saying "I don't want a two / three year old phone regardless of who makes it". Obviously the attitude will vary from person to person but it will be an interesting test of Apple's name value to see if it can give a boost to older hardware.[2] [1] I say cheap not free as it's free on a relatively pricey contract. [2] I'm not running the 3GS down - I have one in my pocket right now, it's my primary phone, just it is older hardware and I think over the next 12 months will begin to show it's age more and more.

gks 15y ago
I had installed iOS 5 on my 3GS just to do some testing. It ran perfectly fine. Better than iOS 4 actually. It may be old looking, but aside from processing power, graphics performance and "retina" display, it is a perfectly fine phone for the low end market.
ssp 15y ago
No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. Maybe, but it's a gamble. It's not enough that the 4/4S guy himself knows that he has the good stuff. Everybody else needs to know it too.
- Tyrannosaurs 15y ago
  That's my point - this way with the 3GS as the entry level model it's clearly a cheaper phone, leaving the iPhone 4 users happy that they've still got the cache that goes with their more expensive version.
  - ssp 15y ago
    The best case for Apple is indeed great: The old phones will be clearly marked as less desirable, which allows Apple to sell to more price-sensitive customers, while also communicating to the faithful that they really need to ditch the old junk and buy new phones. Perhaps most importantly, they grow the market share of iOS. But the potential downside is that there will be Apple-branded hardware out there that is seen as cheap and less desirable, and that many people won't understand the distinction. If that happens, the 4/4S guy will now just have an "iPhone" like the rest of the riff-raff, which opens up the high end to competitors.
cbs 15y ago
No-one who has a 4 or a 4S is going to be annoyed that they guy with the cheap iPhone looks like he's got the same thing as they have. Why would someone else be annoyed by another persons choice in phone? I guess I could understand if you thought the other person made a bad purchase, but how is it possible to be annoyed that someone else has something you agree is good? Are iPhones really that big of status accessories for their owners? This explains so much.

jsavimbi 15y ago

I think it's a great move by Apple to make the 3gs seem free because it says the following: 1. 3gs owners: it's time to upgrade to the 4/4s (that's me) 2. It'll burn down existing stocks a lot faster. What was more valuable, an HP TouchPad in production or an HP TouchPad when the production was stopped? 3. Parents who have an iPhone will be able to get their kids one on the cheap, thus reclaiming ownership of the ir own phone. This also indoctrinates the child into the world of the iPhone, a strategy Apple has pursued with all of its products since the very beginning. 4. Lastly: get the phone into the hands of a holdout, at least on a trial basis, and hope for an upgrade after a couple of months, if not the same day in-store. Market share is very important to Apple as it bears on their bottom line and while not compromising on quality (low-end iphone) they can still get a portion of that share by unloading old 3gs stock and maybe even removing 1 & 2 stock still out there in the wild that does nothing to promote present-day Apple products. Walk into any of their stores with an ugly piece of hardware and they'll try hard enough to get you to hand it over.

angryasian 15y ago
signing a two year contract on a 3gs is hardly a trial basis.
- jsavimbi 15y ago
  Sure, but Apple is betting that once they have an iOS phone in their hands, and judging just by repeat customer shopping patterns, they have a pretty good chance of upgrading that customer to a 4s, if not at least a 4. All they have to do is get that phone in their hands.

dawie 15y ago

I think they still need to release an iPhone Nano for the masses. The iPod was big, but the moment Apple brought out the iPod Mini, the iPod went mainstream, because it became affordable. Apple needs to do the same for the iPhone...

funkah 15y ago
The iPhone is already mainstream. And the 3GS is now free, it doesn't get more affordable than that.
- dagw 15y ago
  Do all phone plans cost the same in the US? A free phone plus $10 a month is a lot more affordable than a free phone plus $60 a month.
  - kyleslattery 15y ago
    As I understand it, all the US carriers (with the exception of T-Mobile) charge the same per month whether you bought a phone subsidized or not, so it doesn't make too much sense to buy an unsubsidized phone, because you won't be saving anything per month.
    - hugh3 15y ago
      Get a prepaid. I paid $200 for an LG Androidy thing (an Optimus V, if anyone really cares) and now I pay $25 a month for 300 minutes per month and unlimited data. It's a crazy better deal than anything else out there.
    - retroafroman 15y ago
      This is exactly what makes me sad about a possible takeover of T-Mo. I'm happy to bring my own phone and just buy service, and they give me a discount for that. I may have to switch to a lower quality pre-paid company in the future.
- dawie 15y ago

brudgers 15y ago

>"Apple is all about the brand. About image. About quality." That's what makes Siri such a concern. When was the last time Apple released a beta product? Have they been hiring too many Googlers? Or, given that "Siri" alledgedly sounds like slang for buttocks according to today's interwebs, bought an outside technology and didn't immediately rebrand it to sound Apple like?

ryannielsen 15y ago
In the presentation, they said Siri's "beta" because it's only available in a subset of iPhone's markets, not because they consider it low-quality.
- HoltonDeniis 15y ago
  Schiller said it was beta because more language and services support was coming. I'm surprised that Siri doesn't already provide turn-by-turn activation nor can be used for launching apps or changing settings.
Argorak 15y ago
No so long ago. FaceTime was 'beta' for quite a while.

bambax 15y ago

What (some) people want is not a low-priced iPhone on contract, or even free on contract; they want a cheap (i)Phone available sans contract. I want a cheap iPhone available without contract, because: - I don't want a contract - I tend to break things (me or my kids) and want the freedom of being able to buy a new device without asking anyone if they would be so kind as to subsidize it, or having bought "insurance", or having to pay north of $600 for the privilege! So, if 3GS is the device for the lower-end of the market, fine: just sell it at an acceptable price with no contract.

jhancock 15y ago
Well said. The author also seems to not understand that in developing markets such as China and India, no contract && very low monthly bills are the norm. No way to subsidize in that space.
Tyrannosaurs 15y ago
I suspect what is happening is one of two things: 1) Apple are pushing down into the mid-market before moving further down into the low end. 2) Alternatively at the moment Apple aren't happy that they can create an iPhone that they want to put their name to and make money on at the price point you talk about. Based on the way we see them behave with the Mac where Apple simply don't complete at the very low end, I suspect it's the later. This is a company who make money selling hardware - all the music and apps pull in a comparatively small amount and apparently really only run at break even. If they can't sell a phone at that price and make money then they'll happily leave that market to others.
- bambax 15y ago
  I think you're right, but I also think that this strategy is dangerous: as PG used to say (maybe quoting somebody else?), don't let anyone fly under you. If you want to pursue the strategy of the very high end, you have to be innovating all the time, in a very big way, which is not what yesterday's event was about. Or you can count on a core of very loyal customers who will buy your products no matter what, at any price; those people exist but there aren't enough of them to fuel Apple's growth forever.

dhawalhs 15y ago

Emerging countries don't have contracts. So making it free on a 2 year plan isn't the same as targeting emerging markets. Its the cost of the unlocked phone that would matter. I would also argue paying 70-80$ a month for a phone plan isn't exactly "low end" . For comparison, I got a Galaxy S(captivate) phone for free when I renewed my contract a year ago.

T_S_ 15y ago

Is it just me? I like the form factor of the 3GS much better than the 4/4S. I was hoping they would go back to that with the 5.

morsch 15y ago

Well, that's a fairly obnoxious article. And even those spitting with fury at the disappointment will glance with envy at the guy who in a meeting quietly asks Siri to order him coffee for the lunchtime break. Really? I think it's far more likely people will glance with annoyance at the guy talking to his phone PA app during a meeting. There are a lot of good use cases for smart voice input, none of them take place in a meeting.

mindstab 15y ago
Starbucks takes phone orders from robots now? ;)

yariang 15y ago

" The equivalent of Aston Martin releasing a competitor to the smartcar." Hmmm.... http://en.wikipedia.org/wiki/Aston_Martin_Cygnet http://en.wikipedia.org/wiki/Aston_Martin_Cygnet Bad example. I know the underlying motivation for Aston wasn't to compete with Smartcar, but that's what they released nonetheless.

aaronbrethorst 15y ago
Not to mention that they were owned by Ford until 2007, and Ford still retains a stake in the company today.

spot 15y ago

focusing on just the high-end is a losing strategy in phones just like it was with computers. volume wins. ecosystem wins.

mbrubeck 15y ago
Apple's shareholders would probably disagree with you. For that matter, so would HP's and Nokia's.
- spot 15y ago
  with computers apple is the low end. i was referring to the attack of the killer micros: http://en.wikipedia.org/wiki/Killer_micro http://en.wikipedia.org/wiki/Killer_micro

abp 15y ago

And, quite frankly, the iPhone 4 is probably years ahead in features, quality and design than the equivalently-priced Android, Nokia, or RIM device. I don't understand how one can write this.

wmeredith 15y ago
Yeah, he misspelled UX and accidentally wrote "features, quality and design".