Daniel Joseph
Sep 12, 2013

How will Apple's low-cost iPhone strengthen its brand?

Apple's expected announcement of a low-cost iPhone will only strengthen the brand, writes Daniel Joseph, director at The App Business.

Apple: announcing new iPhone models
Apple: announcing new iPhone models

When Steve Jobs passed away a lot people were asking, "Is Apple now toast?" Why? Well Steve was the world’s toughest gatekeeper.

"Write down 10 things you need to do. Now cross out six to 10!" he used to shout. All he cared about was a ruthless focus on doing a few things great, not a heap of things OK.

So, does a low cost iPhone spell the death knell for Apple’s brand? Has Apple finally succumbed and entered a race to the bottom?

Heck, of course not. Apple’s low-cost iPhone will strengthen the brand at a time when its high-priced devices are diluting it, and here is why.

Tim, like Steve, has always said that the most important thing to Apple is to make 'the best products' and not necessarily 'the most'.

Being the best

But that is changing. Not because Apple has changed its tune, but because to be the best now means making the most.

You see what really matters to Apple is attracting the world’s very best developers, who build the world's best apps which attract the world's biggest audiences.

And so the cycle continues, with more and more people getting 'locked in' to the ecosystem.

This cycle has worked out great for Apple over the last few years.

Our work for clients like Unilever, Sky and Sony has historically been focused on iOS as these businesses and brands go after iOS' large and valuable audience.

But this has started to change, radically, and fast.

There is not a single product that we are now working on that is not iOS *and* Android. And internationally, a bunch of our work is Android-only.

So what's changed?

Well, with more and more customers buying cheaper and cheaper Android devices (that are better and better quality), businesses can not de-prioritise Android any more, despite its fragmentation headaches.

And looking to 2014, the developer balance looks like it could tip to Android.

Just look at Asian markets - the world's largest smartphone and software opportunity, and a relatively untapped one at that.

Android is actually starting to become the first platform of choice for a range of native Asian businesses and brands.

So what is Apple going to do about it?

Tim loves talking about 'the arc of time' and it looks like Apple has got their timing just right with this.

There is no chance that Apple will compromise on technology quality to hit the magic low-end price point.

Instead, Apple have played the long-game all along.

Through their upfront purchases of key components, innovative proprietary chipsets and tight supply chain control, Apple have been slowly reducing the cost of making the phone not the quality of the phone to hit the magic price point.

So I expect Apple to launch an iPhone 5C this evening that is superior to, and kills off, the iPhone 4S and every Apple device before it.

Not much of a compromise there then.

And I expect the new iPhone to be priced at an internationally acceptable mid-range smartphone price point, way below Apple's existing new models.

Sure they will take a hit on their enviable margins, but long-term volume and plugging the holes in market share should more than make up for that.

To wrap up, price does not define brand in this technology world any more.

Just ask Amazon who are going to release a near-free phone so that they can continue their mission of being the world’s best platform for buying anything.

Quality of experience

What defines a brand now is the quality of the experience available on it, and that requires a price point that attracts enough customers to attract the world’s best software developers.

We know that Steve looked to his first war with Microsoft and vowed never to make the same mistake again.

In essence, he did not want to be so premium that he failed to attract enough developers to create a healthy ecosystem.

And while Apple have got this right to date, with the highest quality App Store on the planet, things are a changing in 2013/14.

Tim can probably look to Microsoft’s sorry state today and accept that nothing lasts forever; or to Steve who once said, "If you don't cannibalise yourself, someone else will".

Oh, and what about those ads?

Well, despite being a planning director on Apple in a former life I can tell you that Steve never really liked 'planners'. He thought they got in the way of the products.

The article first appeared on marketingmagazine.co.uk

Campaign India

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