If the iPhone set the standard for the modern smartphone, how did competitors differentiate their products from Apple’s flagship product? Price? Check. Size? Check. That kind of product differentiation has caused Apple to miss a rapidly growing market that could endanger the iPhone line.
Price. Size. Smaller.
Take it to the bank that however Apple prices the iPhone line, competitors will differentiate their products by selling lesser products, or, good-enough products at a lower price point.
Apple knew that would happen and did little to compete in the low price arena. Well, actually, that’s not quite true. There’s the iPhone 4 and iPhone 4S.
In the U.S., the smartphone buying model is a bit different because cell phone carriers offer phones with a low entry price point which is made up with payments on a two year contract.
That should help explain why Apple owns about a 50-percent marketshare among smartphones in the U.S. Compared to Europe and Asia, the U.S. is the smaller market.
Elsewhere in the world, Samsung and others came along and undercut the iPhone’s price to sell more smartphones because the purchasing model is substantially different. Apple struggles to compete in a cost conscious market.
What about screen size? It may be that the perfect smartphone screen size is Apple’s original 3.5-inch display, but you could argue the same about the iPhone 5’s 4-inch display.
Samsung, with a number of smartphones that already dwarf the iPhone, has announced the Galaxy Mega 6.3, a 6.3-inch 720p LTE smartphone and it’s priced, in the U.S. at least, lower than an iPhone 5.
Size matters. Shoppers can compare the Galaxy Mega 6.3 with an Apple iPhone and an iPad mini, and declare the obvious– ‘Why buy two devices when I can have one that does what the iPhone and iPad does?‘
That’s a plausible and forceful argument. Size does matter, and Samsung differentiates their Galaxy line from the iPhone with a variety of much larger screens on a number of smartphones.
While studies from the MacKenzie Research Institute** shows there are few non-iPad tablets in use or visible in the wild, there’s a rapidly growing number of larger screen smartphones, mostly Samsung models.
Apple seems to have struggled to meet demand for the iPhone since it was launched in 2007, so it’s quite possible the company simply didn’t have the resources to expand the product line to a lower priced iPhone, and a larger screen iPhone.
Yet, Apple still has well over $100-billion in the bank, and plenty of resources, yet seemingly cannot get an iPad mini with a Retina display while Google already has a tablet on the market, and can’t manage to compete on price or screen size.
That needs to change. And soon.
** MacKenzie Research Institute is comprised on one subway rider going from Brooklyn to Manhattan and back at least five times each week doing visual product usage research.