The third heavyweight is Microsoft which mostly missed the mobile industry revolution but is fighting back in the way that only the Windows maker can. By doing what is totally stupid and will not work.
Cheap Is Always Cheap
Apple has been criticized ad nauseam because the company won’t build cheap and less expensive products. Why not? Everyone else does, right?
The ‘why’ is so simple one must wonder why Samsung, Google, Microsoft, and others haven’t figured it out. Or, maybe they have but don’t know what to do.
The problem? Those who make Android and Windows devices are plagued by the brand of each. Android and Windows both are associated with cheap and troublesome. Apple’s brand is associated with quality and ease of use.
The logic is inescapable and Microsoft is falling into the same trap that plagues Samsung. Why buy a Galaxy S class smartphone for $650 when less than $100 gets you the exact same functionality?
Microsoft is pushing Windows Phone into new markets in an effort to avoid competing head-to-head against the iPhone. The latest is a $70 Lumia 430 with specifications that appear 1999-sh. 2-megapixel and .3 megapixel cameras, rear and front. Plastic everywhere. 4-inch WVGA display, 8GB of storage, but with a microSD card slot acceptable to 128GB. Plus some free OneDrive storage thrown in, too.
The sad part about this strategy is that none of the numbers will add up. Apple sells over 750,000 iPhones per day, all at the industry’s highest gross margins. Microsoft will sell so-called smartphones for less than $100, making almost no profit on each one, hoping somehow to make it up on volume, but not achieving enough volume to be worthwhile.
Why not? The cheap Lumia phones are being sold as entry-level smartphones almost exclusively in developing countries. That may sell lots of phones (but not as many as Apple) but as those markets mature and customers become more prosperous, they will want better phones. Android? Windows? No, those are associated with cheap brands. Going upscale has only direction. Apple’s iPhone.