Analysts continue to forget one of Apple’s smartest decisions: copying the Samsung phablet. This was huge.
Credit to Tim Cook, because you absolutely know Jony Ive must have hated the very idea of a phablet.
Even as Samsung began selling millions of them, as China — Tim Cook’s favorite market — embraced the phablet, Apple resisted. Ive and his sycophants in the blogosphere made it clear that the phablet was ugly, ungainly, and poorly designed — requiring two hands to use!
As if that ever mattered to actual users.
When Apple finally released its own psuedo-phablet, the iPhone 5, it was hideous. One of the ugliest Apple products I can ever recall. It’s shape, which again the high-paid bloggers cheered, was all wrong. It was as if Jony Ive placed an iPhone 4 onto a railroad track and called it a day.
But, pent-up demand for phablets was so huge that Apple sold millions.
With the iPhone 6, Apple finally gave the world the large iPhone (phablet) it craved. That was back in 2014. Now, in 2016, there’s a hole in the iPhone line-up.
Because even though bigger is bigger, as Apple tells us, bigger doesn’t suit everyone. This means money is left on the table. And this cannot be. Apple is a corporation and the north star for all corporations is money, and so Apple will absolutely build a “small” iPhone.
The rumors are true.
But, positioning a small iPhone will remain tricky.
We are humans. We equate bigger with better, bigger with more, bigger with pricier, and this is particularly so for screens.
Meaning: the market will absolutely assume that a “small iPhone” should be a cheaper iPhone. And a cheaper iPhone likely means an iPhone with a lower margin. Problem: Tim Cook is the sitting Pope at the Most Holy Church of Profit Share. He will be loathe to offer an iPhone with a low(er) margin. Worse, the last time Apple attempted this, with the iPhone 5c, it flopped. Hard.
The iPhone 5c was originally promoted as the “cheap iPhone.”
And it looked it.
It had a brittle-feeling colorful shell and was utterly lacking in hardware and features, compared to the then top-of-the line iPhone.
I am sure Tim Cook no doubt thought he could build a cheap iPhone, using last year’s tech, but sell it for only a bit less than the top-of-the-line iPhone. This was a doomed strategy.
Two years ago I called out the iPhone 5c failure — and was brandished a heretic by the Apple priesthood.
Later that year, I offered additional reasons for the failure of the iPhone 5c:
The iPhone 5c was a failure both in terms of sales and for how it diminished Apple’s image as an innovator. I may never have been so right as when I declared the 5c a failure. Expect it to be erased from Apple Stores before this year is out.
The 5c will not be the last Apple flop. I suspect the primary value of any iWatch, at least in the first few years, will be to show people you have an iWatch.
Yep. Back in 2014, I also called out the failure of what was to become the Apple Watch.
iPhone 5c was priced about $100 less than the iPhone 5s, cheap by Apple standards, but the specs were woefully lagging. The effort to go down-market and maintain margins blew up in their face. Apple was demanding that its own customers pay Apple-like prices but for a device that had obviously lesser hardware and features, plus a design that signaled to the world — this is Apple’s hand-me-down!
Of course iPhone 5c was doomed to fail. It was an easy call.
The new alt-iPhone, smaller, what some are calling the iPhone 5se, does not have to meet the same fate.
(Spoiler: make it an Ahrendts product, not an Ive or Schiller product, both of whom I suspect Tim Cook is losing faith in.)
Based on my analysis, if the small iPhone came out today, there would be the iPhone 6s and 6s Plus at the top, the 6 and 6 Plus at the Apple midrange, and then in its own world, not bringing up the rear, nor priced as such, is the “special edition” iPhone.
The vision for the smaller, special edition iPhone will more closely match Ahrendts vision for Apple. Branding, luxury, margins, an endless supply of wealthy Chinese. It’s anti-Steve, yes, but it’s proven extremely profitable for her in the past.
And Tim Cook seems to love nothing more than profits.
For the new, smaller iPhone, instead of DISRUPTION! or REVOLUTION! or even ONLY APPLE! think high-fashion, high-profit, and highly accessorized — with high technology. It’s the Apple Watch strategy, but for a product that matters.