Why? Because Samsung and Chinese makers of cheap knock off smartphones were going to rule the industry if Apple didn’t ship at $299 iPhone. With a larger screen. That was then and this is now and a funny thing happened on the way to reality.
Apple Could, But Won’t
Reality can be a cruel mistress to those who watch Apple but do not understand what Apple does or why. Remember Samsung? They sell more smartphones and tablets than anyone.
Samsung has entered a dark period where revenue and profits are down, while Apple, without a $299 iPhone, continues to grow both.
In the U.S. the iPhone’s marketshare continues to increase while Samsung and the usual Android suspects fare less well.
What about developing countries in Asia? Isn’t that where all the growth is these days? China, India, et al? Apple is doomed there because those poor folks can’t afford Apple’s outrageous prices.
Or, can they?
By sticking to the premium end of the smartphone spectrum, and not trying to please every segment of the industry like Samsung, Apple’s iPhone sales continued to grow rapidly, even in the so-called developing countries.
Why? As people become more affluent they aspire to own all the trappings that come with being affluent, and that means nicer homes, nicer cars, better clothing, and the best technology gadgets. And that means Apple products.
Meanwhile, Samsung has been caught in a squeeze, unable to compete well with Apple at the premium end of the smartphone and tablet product spectrum, and getting prices and margins attacked by competitors in the mid-range and low-end of the spectrum.
In other words, it’s Samsung that is caught between a rock and a hard spot– not Apple.
What about the latest darling from China, Xiaomi, the copy cat knockoff maker of Apple iPhone and iPad clones, the same company that just topped Samsung sales in China? In almost every way, Xiaomi’s products look and feel and copy Apple. Why doesn’t Xiaomi sell in Europe or Japan or North America? There’s an easy answer. Xiaomi can sell Apple copycat products into countries with weak intellectual property laws.
We may want to have an iPhone and pay only $299 (instead of the base sticker price which starts at $650 for an iPhone 5s), but we’d also like to have a $499 Mac. That won’t happen, either.