Business Plan Of Apple

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China is awash in phones from Huawei and others that meet or beat Apple's i Phone specs, and usually at dramatically lower price points. Bad news for Apple is good news for Apple buyers (ZDNet) Some of us (mea culpa) have continued to purchase new i Phones each year, despite there not being any obvious reason why we should do so.

While Apple's bi-annual upgrade cycle used to be driven by carrier subsidies, and not really from significant functional enhancements, the move from the X to Xs was a new low for some of us.

For me, the only noticeable improvement from my X to my Xs was that Face ID became less of a torment to use (but I still pine for Touch ID).

In this world of non-obvious reasons to upgrade, Apple's i Message remains the one big reason to stick with i OS.

With under 1% market share in the only other fast-growing mega-market (India), Apple's high-price, high-margin business plan finally seems to have run out of runway, something promised for close to a decade, and only now coming into focus.

The problem, it seems, is not that Apple charges too much for its phones—the problem seems to be that it's getting harder to justify paying any premium for devices that largely seem unchanged from year to year.

While not enough to cover the i Phone shortfall Apple CEO Tim Cook has warned about, it's a gift that should keep on giving as i Phone users remain loyal to the Apple brand.

Historically, that loyalty may have been bought with a superior product; however, it's increasingly harder to argue that i Phones offer the best functionality at any price point.

And even if I or others who can get their employers to pay for their i OS habits, that's not a winning strategy for Apple long-term—which would be too bad, as Apple's services business is a winner.

One observer tried to encapsulate the services strategy this way: "Sell fewer i Phones and assorted devices such as Macs and i Watches at a higher price than mass-market rivals, and then flood those millions of users—who have more than average disposable income because they were able to afford those devices in the first place—with apps and content that they will pay for." Sounds great, with some positive signs supporting this thesis.


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