What did Apple do with the iPod that was so great? Like the iPhone, the iPod was the first really usable portable media player, and Apple made one for every taste and budget. What of the iPhone? Not so much.
A Hole In The Bottom
Apple critics chastised the company for the original iPod. It was expensive. It was Mac only. It was FireWire. And it sold like crazy.
Apple demolished the nascent portable media player industry when the iPod moved to Windows, USB, and the iTunes Music Store opened. Along the way, Apple created a broad line of iPod products which started at $49 and moved all the way to what is now the iPod Classic.
That line of products had a product migration range which prevented competitive media players from attacking the iPod from the low end of the market. Apple’s iPod didn’t leave a pricing umbrella over the market it created the same way the iPhone does now. Think about it. Today’s iPhone doesn’t really have a product migration line.
The iPhone 5 is differentiated by storage and color and carrier. That’s it. There’s no low priced iPhone 5. There’s the iPhone 4S, and iPhone, both of which Apple has used to shore up the low end against competition.
True, last year’s iPhone 4S (now almost two years old) may be a better buy than some of the competition’s latest smartphones, but you see the problem. Apple has created a pricing umbrella with the latest iPhone models and that gives aid and comfort to competitors with lower priced smartphones.
That’s a different strategy than Apple used with the iPhone and it’s about to change. How so? Let me rub my crystal ball and peer into the next 15 months or so. What do I see?
A broader line of iPhones, starting with an inexpensive, multi-colored polycarbonate shell iPhone that runs iOS 7. The 4-inch iPhone 5S with a Liquidmetal shell will be the flagship product with the latest and greatest of everything– case, camera, CPU, GPU, storage, et al. At the high end will be a 5-inch iPhone max; more expensive, more storage, bigger screen, longer battery life.
In other words, Apple is about to embark on a broadening of the iPhone line, expanding the top end, while shoring up the low end, and creating a easy buyer migration from one product to the other, just as the company did with the iPod (and, to a certain extent, with the entire Mac line).
There’s little doubt that Apple needs to do this, although the iPhone is selling very well against an ever increasing number of very inexpensive smartphones. If the price difference between the mid-range Android, Nokia, or BlackBerry models is nominal, new customers may migrate to the iPhone line instead of going with cheaper, no-name models.
The question to ask is this. Why didn’t Apple do this a year or two ago?