The Next Billion Users

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    Posted: 20 May 2010 05:05 AM

    The signals that Apple is sending that they plan to make the iPhone OS global computing standard:

    1. Geographic and cultural universality. What plays in Peoria should play in Beijing.  As it has shown by being big in Japan, the iPhone crosses over cultural idiosyncrasies. Not long ago it was taken for granted that “mobile tastes” differ and “one size does not fit all” in mobile phones hence the need for hundreds of phone models in every portfolio. Apple has completely destroyed this myth. (One could ask why should mobile computers be polymorphous when their slightly larger cousins the laptops are rigidly monotonic?) By broadening the platform with multiple screens and connectivity options, Apple is cleverly spanning the jobs that he platform can be hired for.
    2. Avoidance of a pricing umbrella.  Note that this does not mean being low prices, but rather, the protection of their franchise through pricing. Apple has developed a way to stretch a single product across multiple price bands, and carefully builds product to price and margin targets that have strategic placement.
    3. Product cycles and product ramps. Apple has imposed upon itself a yearly product cycle for the iPhone and the iPod.  This is a brilliant (but extremely difficult to duplicate) move because it keeps the product fresh without having it seem disposable.  It also keeps competitors within its turning radius. However, the challenge is that the distribution network has to be filled rapidly and drained rapidly to maximize availability. This gets harder and harder as the volume grows. Imagine having to manufacture and ship into the channel a billion devices in less than a quarter.

    I would point out that all these are marketing, not technical challenges. They are thinly disguised questions about product placement, portfolio, pricing, production and distribution?classic Marketing 101. (Promotion, which is what most people equate with marketing is not particularly challenging, especially for Apple who mostly does it through PR).

    It is comforting perhaps to know that Apple is the best marketing organization in the industry today.

    More here: http://blog.asymco.com/2010/05/20/the-next-billion-users/

    [ Edited: 20 May 2010 05:16 AM by asymco ]

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    Posted: 20 May 2010 10:03 AM #1

    asymco - 20 May 2010 08:05 AM

    The signals that Apple is sending that they plan to make the iPhone OS global computing standard:

    1. Geographic and cultural universality. What plays in Peoria should play in Beijing.  As it has shown by being big in Japan, the iPhone crosses over cultural idiosyncrasies. Not long ago it was taken for granted that “mobile tastes” differ and “one size does not fit all” in mobile phones hence the need for hundreds of phone models in every portfolio. Apple has completely destroyed this myth. (One could ask why should mobile computers be polymorphous when their slightly larger cousins the laptops are rigidly monotonic?) By broadening the platform with multiple screens and connectivity options, Apple is cleverly spanning the jobs that he platform can be hired for.
    2. Avoidance of a pricing umbrella.  Note that this does not mean being low prices, but rather, the protection of their franchise through pricing. Apple has developed a way to stretch a single product across multiple price bands, and carefully builds product to price and margin targets that have strategic placement.
    3. Product cycles and product ramps. Apple has imposed upon itself a yearly product cycle for the iPhone and the iPod.  This is a brilliant (but extremely difficult to duplicate) move because it keeps the product fresh without having it seem disposable.  It also keeps competitors within its turning radius. However, the challenge is that the distribution network has to be filled rapidly and drained rapidly to maximize availability. This gets harder and harder as the volume grows. Imagine having to manufacture and ship into the channel a billion devices in less than a quarter.

    I would point out that all these are marketing, not technical challenges. They are thinly disguised questions about product placement, portfolio, pricing, production and distribution?classic Marketing 101. (Promotion, which is what most people equate with marketing is not particularly challenging, especially for Apple who mostly does it through PR).

    It is comforting perhaps to know that Apple is the best marketing organization in the industry today.

    More here: http://blog.asymco.com/2010/05/20/the-next-billion-users/

    Apple product cycles allow’s it to coordinate all the different moving parts.  This IMO is one way Apple maximize’s their margins.  Apple continued carrying last years version of the Iphone/ipod touch at a lower price point.  This allows Apple some flexibility in forecasting product demand and not get stuck either having no product to sell or too much product in inventory.  Pretty much all the parts are reusable so Apple rather then dumping unsold inventory on the market they can offer an Apple branded product to a customer at a lower price point.  I am interested to see what happens with the iPhone in this cycle.  Will Apple continue to offer the 3GS and match the current 3G price or what will they do to match their current price points and maintain their pricing umbrella.  Apple to date has used memory size as one of the key differentiator for price points for the iPhone/iPad.  Will this cycle be the same.  The next generation flash memory is just hitting production ramp so a single chip solution for 64GB is possible but do most folks need that much memory in their phone?  If Apple was making the jump in memory again I would have expected it in the iPad since it makes more sense in a tablet, but obviously this will wait for version 2 of the iPad.

    The iPad release cycle has not yet been established will we see the next version next spring or will they roll out an upgraded version this fall and align the upgrade to the post back to school pre Christmas release cycle of the iPod.  This would allow them to include the older version in back to school promotions and have fresh product for the big Christmas quarter.