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If it were that simple, wouldn't they have more than 20% market share? It seems clear to me that iPhone owners are paying a premium for the branding, which is

If it were that simple, wouldn't they have more than 20% market share? It seems clear to me that iPhone owners are paying a premium for the branding, which is pure profit from Apple's perspective.

shawndumas 11y ago
Which would indicate desirability, no?
- dublinben 11y ago
  For that 20% of the market, sure. For the 80% that buy non-Apple phones, they are clearly more "desirable" to them.
  - shawndumas 11y ago
    How many people that bought a Corolla would have taken a Camry for the same price? (Again, not saying that Apple is better.)
    - dublinben 11y ago
      Even with price parity through on-contract upgrades, apparently not that many. We should expect Apple marketshare to be much higher if the iPhone really is so clearly superior and more "desirable" to any rational consumer.
      - shawndumas 11y ago
        I do not disagree; but keep in mind that I've never spoken of "clearly superior", only desirable. Also, since when did rationality enter the discussion? A beloved wants diamonds so their partner buys them. But diamonds are not worth anywhere near what's commonly paid for them. There is a far mix of rational/irrational behavior in most luxury purchases--it's not an Apple exclusive trait.
    - VLM 11y ago
      This is very close to correct. The better analogy is something like Tesla vs the generic commuter subcompact field. The generic consumer subcompact marketplace is extremely competitive and therefore there are approximately zero profits to be made, whereas the Tesla has one model at one price and basically no competitors. Want an iPhone, you'll buy THE iPhone for whatever Apple wants to charge. Want an Android phone, you'll select from a zillion basically identical competitors all more or less profit free (because competitor A can't extract an extra 5% profit if that would drive 100% of competitor A's sales to sellers B thru Z) This shows the fallacy of "the smartphone market", there's the non-competitive iphone market with about 20% sales and the hypercompetitive confuseopoly market the other 80% buy into.
  - grkvlt 11y ago
    ObBadCarAnalogy: Well, a Ferrari Enzo is more desirable to me than a Skoda Octavia, but I own a bicycle, so there's that.
rch 11y ago
Why is it clear to you that the premium is purely a function of branding, and that physical attributes of the product are not also factored in somehow? This is not a rhetorical question: I could imagine a study that would explore the influence of brand vs. size, density, materials, etc.
gyc 11y ago
Most people would consider a Ferrari to be more desirable than a Toyota, yet Toyota sells many magnitudes more cars than Ferraris because Ferraris are out of reach for most consumers. If money were no object, many more people would own Ferraris in lieu of Toyotas (but not all, given that Toyotas may be more practical, more reliable, easier to maintain, etc.).
Eric_WVGG 11y ago
Why is it so hard to accept the notion that people are paying a premium for a premium product?
- Hasu 11y ago
  Because, having used both, there's nothing "premium" about the iPhone experience except the perception in iPhone users' heads.
  - Eric_WVGG 11y ago
    But that's just it. "Premium" is a subject term. I’ve used both (you mean Android, right? there's other platforms) and found that Android is garbage. So I'm paying good money for a good product. You're free to disagree about the quality but don't tell me I'm brainwashed without offering to pay for a psychiatric evaluation.
    - Hasu 11y ago
      I suspect that this is a motte and bailey trick. Users of the iPhone claim that they use a better product, where by better they mean "objectively better", but when challenged on what it is exactly that makes it so much better, retreat to, "Well it's just my preference", and then as soon as the critics say, "That's fine if it's just your preference, but recognize that you're paying a massive tax for what you've admitted is just a subjective preference," they move back to, "Apple makes better products so they make more money." As if it's some kind of objective truth, even though they've admitted that it's not. "People pay premium for a premium product" doesn't signify to me a subjective difference. Especially when it's used to argue that the premium paid has nothing to do with Apple's branding, an objective and extremely common reason that people pay premium prices for products that are objectively identical to their competitors.
- scoreponok 11y ago
  Premium products usually cost more to make justifying the price. The point being made is that the cost to manufacture the iphone isn't any more than say an android device, so your just paying apples exclusivity tax.

If it were that simple, wouldn't they have more than 20% market share? It seems clear to me that iPhone owners are paying a premium for the branding, which is pure profit from Apple's perspective.

shawndumas 11y ago

Which would indicate desirability, no?

dublinben 11y ago
For that 20% of the market, sure. For the 80% that buy non-Apple phones, they are clearly more "desirable" to them.
- shawndumas 11y ago
  How many people that bought a Corolla would have taken a Camry for the same price? (Again, not saying that Apple is better.)
  - dublinben 11y ago
    Even with price parity through on-contract upgrades, apparently not that many. We should expect Apple marketshare to be much higher if the iPhone really is so clearly superior and more "desirable" to any rational consumer.
    - shawndumas 11y ago
      I do not disagree; but keep in mind that I've never spoken of "clearly superior", only desirable. Also, since when did rationality enter the discussion? A beloved wants diamonds so their partner buys them. But diamonds are not worth anywhere near what's commonly paid for them. There is a far mix of rational/irrational behavior in most luxury purchases--it's not an Apple exclusive trait.
  - VLM 11y ago
    This is very close to correct. The better analogy is something like Tesla vs the generic commuter subcompact field. The generic consumer subcompact marketplace is extremely competitive and therefore there are approximately zero profits to be made, whereas the Tesla has one model at one price and basically no competitors. Want an iPhone, you'll buy THE iPhone for whatever Apple wants to charge. Want an Android phone, you'll select from a zillion basically identical competitors all more or less profit free (because competitor A can't extract an extra 5% profit if that would drive 100% of competitor A's sales to sellers B thru Z) This shows the fallacy of "the smartphone market", there's the non-competitive iphone market with about 20% sales and the hypercompetitive confuseopoly market the other 80% buy into.
- grkvlt 11y ago
  ObBadCarAnalogy: Well, a Ferrari Enzo is more desirable to me than a Skoda Octavia, but I own a bicycle, so there's that.

rch 11y ago

Why is it clear to you that the premium is purely a function of branding, and that physical attributes of the product are not also factored in somehow? This is not a rhetorical question: I could imagine a study that would explore the influence of brand vs. size, density, materials, etc.

gyc 11y ago

Most people would consider a Ferrari to be more desirable than a Toyota, yet Toyota sells many magnitudes more cars than Ferraris because Ferraris are out of reach for most consumers. If money were no object, many more people would own Ferraris in lieu of Toyotas (but not all, given that Toyotas may be more practical, more reliable, easier to maintain, etc.).

Eric_WVGG 11y ago

Why is it so hard to accept the notion that people are paying a premium for a premium product?

Hasu 11y ago
Because, having used both, there's nothing "premium" about the iPhone experience except the perception in iPhone users' heads.
- Eric_WVGG 11y ago
  But that's just it. "Premium" is a subject term. I’ve used both (you mean Android, right? there's other platforms) and found that Android is garbage. So I'm paying good money for a good product. You're free to disagree about the quality but don't tell me I'm brainwashed without offering to pay for a psychiatric evaluation.
  - Hasu 11y ago
    I suspect that this is a motte and bailey trick. Users of the iPhone claim that they use a better product, where by better they mean "objectively better", but when challenged on what it is exactly that makes it so much better, retreat to, "Well it's just my preference", and then as soon as the critics say, "That's fine if it's just your preference, but recognize that you're paying a massive tax for what you've admitted is just a subjective preference," they move back to, "Apple makes better products so they make more money." As if it's some kind of objective truth, even though they've admitted that it's not. "People pay premium for a premium product" doesn't signify to me a subjective difference. Especially when it's used to argue that the premium paid has nothing to do with Apple's branding, an objective and extremely common reason that people pay premium prices for products that are objectively identical to their competitors.
scoreponok 11y ago
Premium products usually cost more to make justifying the price. The point being made is that the cost to manufacture the iphone isn't any more than say an android device, so your just paying apples exclusivity tax.