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These are the same black & white terms people usually use to frame this debate but the iPad mini has already demonstrated that there's room under the premium ti

These are the same black & white terms people usually use to frame this debate but the iPad mini has already demonstrated that there's room under the premium tier for quality products and healthy margins. Apple's dwindling market share undermines their efforts to establish Facetime, iMessage, iCloud etc as popular services. The problem with dismissing the low end of the market as "junk" is that this segment of the market is increasingly made up of reasonably capable phones with Android 4.x, which is good enough to serve most people's needs. We've already hit the point of diminishing returns on increasingly powerful mobile chips.

gwright 13y ago
I tend to agree with you that partitioning the market into two tiers ("junk" and "premium" in particular) is an artificial distinction but I disagree with your characterization of the iPad mini as something from the bottom tier. It is a different form factor, but that isn't the same thing as lower quality or less featureful. Apple isn't afraid to use form factors, feature sets, and multiple SKUs to partition the market it is just that they focus on partitioning the upper-end of the market and not the entire market. I wonder if Apple could ever manage multiple brands to partition the market even further in the way that Gap Inc, partitions the clothing retail market via its Banana Republic, Gap, and Old Navy brands.
- cageface 13y ago
  I disagree with your characterization of the iPad mini as something from the bottom tier. My point is that the iPad mini is neither premium nor junk, but somewhere in the middle. It expands Apple's user base and makes them a tidy per-unit profit. Like a lot of people, I was hoping the iPhone 5C would be a similarly mid-tier priced device that would open up new markets for them but unfortunately (IMO) a premium-priced phone.
simonh 13y ago
I'm a Mac mini owner myself and its clearly a premium product. Mine is laser cut out of a single block of Aluminium and cost over £1000. You can check my posts (as simon.hibbs) about it in the Mac Mini forums on Macrumors when I bought it last December. EDIT sorry, you said iPad mini. The tablets that were openly derided at launch as being far too over priced to possibly compete with the Nexus 7. The one that costs about 30% more than similarly specced Android devices. As for 'good enough', you're absolutely correct, but Windows has been good enough for over a decade. That doesn't seem to have helped the windows PC vendors all that much. I fully understand why you think the way you do, but for you're not actually engaging with my points. You're just try to rationalise why Apple can't possible get away with doing what they have actually been doing very successfully for decades.
- cageface 13y ago
  Every indicator in mobile is trending the wrong way for Apple right now. The Play store is gaining in every metric and their market share overall keeps slipping. You think they can afford to ignore this forever? Maturing markets are fundamentally different from emerging markets. Historically Apple's been very good at inventing new product categories and terrible at competing in mature markets. The strategy they're pursuing now looks an awful lot like the one that eventually lost them the desktop market. The iPhone 5C actually increases Apple's profit margin over the 5. They could instead shave $100 off the price and bring a lot of new users into the iOS fold and still maintain a healthy profit margin.
  - simonh 13y ago
    So you're arguing that the PC market, in which they are unbelievably profitable is, er, not a mature market? How about MP3 music players, which is so mature it's withering and dying and yet is still basically an iPod market? I don't think you've quite thought that argument through very far. And still with this 'lost them the desktop market'. If Apple's market defining desktop business, which dictate the shape of the computer market by denying the profitable high ground for $1,000+ systems to their competitors, count as losing then you and I have very different ideas of what that word means. If the iPhone's sales numbers last year and the year before that were high enough to sustain a highly profitable premium business, then bearing in mind their sales are still skyrocketing I just don't see where the risk is. Why is having a minority market share in desktop PCs a problem for Apple? What harm has it done them? How has it hindered their ability to prosper over the last 15 years? If it's not been a problem for them in PCs, why should it be a problem for them in mobile? bear in mind that their minority stake in the mobile market is a region thing. In the single most valuable market, the US, they have more market share than Android. > The iPhone 5C actually increases Apple's profit margin over the 5. ... I know, I don't know what the Andorid camp are going to do about it. I mean how can they compete when.... oh... hold on a minute. You're saying that's a problems for _Apple_. Er. Ok.

gwright 13y ago

I tend to agree with you that partitioning the market into two tiers ("junk" and "premium" in particular) is an artificial distinction but I disagree with your characterization of the iPad mini as something from the bottom tier. It is a different form factor, but that isn't the same thing as lower quality or less featureful. Apple isn't afraid to use form factors, feature sets, and multiple SKUs to partition the market it is just that they focus on partitioning the upper-end of the market and not the entire market. I wonder if Apple could ever manage multiple brands to partition the market even further in the way that Gap Inc, partitions the clothing retail market via its Banana Republic, Gap, and Old Navy brands.

cageface 13y ago
I disagree with your characterization of the iPad mini as something from the bottom tier. My point is that the iPad mini is neither premium nor junk, but somewhere in the middle. It expands Apple's user base and makes them a tidy per-unit profit. Like a lot of people, I was hoping the iPhone 5C would be a similarly mid-tier priced device that would open up new markets for them but unfortunately (IMO) a premium-priced phone.

simonh 13y ago

I'm a Mac mini owner myself and its clearly a premium product. Mine is laser cut out of a single block of Aluminium and cost over £1000. You can check my posts (as simon.hibbs) about it in the Mac Mini forums on Macrumors when I bought it last December. EDIT sorry, you said iPad mini. The tablets that were openly derided at launch as being far too over priced to possibly compete with the Nexus 7. The one that costs about 30% more than similarly specced Android devices. As for 'good enough', you're absolutely correct, but Windows has been good enough for over a decade. That doesn't seem to have helped the windows PC vendors all that much. I fully understand why you think the way you do, but for you're not actually engaging with my points. You're just try to rationalise why Apple can't possible get away with doing what they have actually been doing very successfully for decades.

cageface 13y ago
Every indicator in mobile is trending the wrong way for Apple right now. The Play store is gaining in every metric and their market share overall keeps slipping. You think they can afford to ignore this forever? Maturing markets are fundamentally different from emerging markets. Historically Apple's been very good at inventing new product categories and terrible at competing in mature markets. The strategy they're pursuing now looks an awful lot like the one that eventually lost them the desktop market. The iPhone 5C actually increases Apple's profit margin over the 5. They could instead shave $100 off the price and bring a lot of new users into the iOS fold and still maintain a healthy profit margin.
- simonh 13y ago
  So you're arguing that the PC market, in which they are unbelievably profitable is, er, not a mature market? How about MP3 music players, which is so mature it's withering and dying and yet is still basically an iPod market? I don't think you've quite thought that argument through very far. And still with this 'lost them the desktop market'. If Apple's market defining desktop business, which dictate the shape of the computer market by denying the profitable high ground for $1,000+ systems to their competitors, count as losing then you and I have very different ideas of what that word means. If the iPhone's sales numbers last year and the year before that were high enough to sustain a highly profitable premium business, then bearing in mind their sales are still skyrocketing I just don't see where the risk is. Why is having a minority market share in desktop PCs a problem for Apple? What harm has it done them? How has it hindered their ability to prosper over the last 15 years? If it's not been a problem for them in PCs, why should it be a problem for them in mobile? bear in mind that their minority stake in the mobile market is a region thing. In the single most valuable market, the US, they have more market share than Android. > The iPhone 5C actually increases Apple's profit margin over the 5. ... I know, I don't know what the Andorid camp are going to do about it. I mean how can they compete when.... oh... hold on a minute. You're saying that's a problems for _Apple_. Er. Ok.