That future is upscale and expensive techno-baubles which keep the company floating in money but could– could– begin to leave a sizable segment of the company’s customer base shopping downscale, and prevent another sizable segment of potential customers from moving toward Apple’s iconic aspiring brands.
Words From The Woz
Who knows Apple better than co-founder and former pilot, the other Steve, the Woz, Steve Wozniak? Never one to shy away from an unfounded or misguided and often misquoted opinion, the Woz likes Apple’s new products, including the Watch, but not the fashionable, upscale, premium perch the company has taken.
I love my Apple Watch, but – it’s taken us into a jewelery market where you’re going to buy a watch between $500 or $1,100 based on how important you think you are as a person.
I don’t fully agree that the pricing has anything to do with how important you think you are, but he’s right about the basic premise. Jewelry can be expensive baubles and that’s where Apple makes the most money.
The only difference is the band in all those watches. Twenty watches from $500 to $1,100. The band’s the only difference? Well this isn’t the company that Apple was originally, or the company that really changed the world a lot.
And that’s just the tip of the Watch iceberg. If you have $17,000 lying around and have a penchant for gold, Apple’s got your back.
It’s not all gloom and doom from the Woz. On Tim Cook:
He is continuing a strong tradition that Steve Jobs was known for of making good products that help people do things they want to do in their life, and not taking the company into roads of, ‘Oh, we’ll make all our money like by knowing you and advertising to you.’ We’ll make good products. And you know, I started out as a hardware product guy, so I’m glad to see that.
That Apple makes lust-worthy products is not the issue. Everything Apple makes and does is lust-worthy, including Mac, iPhone, iPad, Watch, and Apple TV (less lust, higher price for the latter). It should be obvious to anyone who studies product marketing, product pricing, and branding, that what Apple is very good at– in fact, getting better at it– is making premium products that capture the imagination of people who aspire to a higher level of product ownership.
Want more proof?
The new iPad Pro 9.7 is $100 higher than its predecessor from nearly two years ago, the venerable iPad Air 2. Plus, the Pro model gets the same $99 Pencil from the 12.9-inch iPad Pro introduced last year, plus it’s very own Smart Keyboard, an option for 256GB of storage, and a price tag– fully equipped– which tops the new similarly equipped MacBook model.
The Mac itself is saddled with creaking old technology at the low end, bristles with drool-worthy tech in the mid-range with iMac and 5k Retina displays, yet falls down at the high end Mac Pro (more on that when Apple figures out that it’s lust-worthy only in looks). MacBook Air models are yesterday’s technology and many PC manufacturers have higher hardware specs, so says Wil Gomez.
At every turn Apple’s products are the most expensive among many competitors which produce similar products. Mac, iPhone, iPad, Watch, Apple TV, even music and movies. Where Apple really wins is in differentiation. Apple sells everything in such high volumes– and high prices– that the company sucks up the profits in each business segment, fully differentiating products with premium hardware married to OS X, iOS, watchOS, tvOS, while Windows PC makers and Android device makers struggle trying to differentiate their wares from others.
Wozniak is right. Apple is a premium brand, and with Watch, iPhone SE, iPad Pro, and MacBook, the company is doubling-down on the premium end of the product space.