On the topic of old Apple posts from last September, this one from Horace Dediu is full of interesting tidbits -- especially in light of aforementioned headwinds Apple is now facing with the iPhone:
Fundamentally, Apple is betting on having customers not selling them products.
The purpose of Apple as a firm is to create and preserve customers and to create and preserve products. This is fundamental and not fully recognized.
An iPhone at $1200 may be less expensive than an iPhone at $600 if the $1200 version lasts twice as long as is used twice as much each day. The $1200 phone delivers 4x the utility at twice the price, making it half the price. By making more durable products, both in terms of hardware and software, the customer base is satisfied and preserved.
It's a good, simple, and fair point. Yet, as a public company, Apple still has to answer to shareholders (Wall Street, by proxy) that wants to see growth. The above is clearly a better long-term strategy, but a worse short-term one.
Overall Apple has 1.3 billion devices in use and perhaps as many as 1 billion users. This base is certain to expand and it will expand more rapidly with durable devices and software.
Tim Cook emphasized this a few times last week as well.
This is a hardware-as-platform and hardware-as-subscription model that no other hardware company can match. It is not only highly responsible but it’s highly defensible and therefore a great business. Planned obsolescence is a bad business and is not defensible.
I agree -- but they need the right strategy here to take advantage of this!Read more...