The Short Tail

It was an interesting week, especially where Apple is concerned. Oh, yeah, and I had a lot of work to catch up on, too.

But my amusement towards those who persist on believing Apple has to take on the low-end market quickly turned into boredom when pundits either rambled on about how Apple is doomed or tried to put all sorts of different spins on the 5c launch, to the extent where I find it worthwhile to reiterate Apple‘s blindingly obvious strategy to those who’ve spent the past half decade high on fumes:

  1. Improve their product range iteratively, leveraging economies of scale (identical screens, form factors, connectors, storage, etc.)
  2. Position their top tier as an aspirational product by adding exclusive features (camera, performance, security – whatever sets them the most apart from their competition)
  3. Push last year’s top model down to mid-tier and kill off older products, or at least remove them from active promotion (the 4S is their de facto dark horse for the low-end market, but you won’t see Apple actively advertising it anywhere1, and pundits largely ignored it).

Apple has no interest in keeping a long tail around, or to rush headlong into segments that can’t afford an iPhone or lack disposable income to spend on accessories, apps, music, etc.

They get enough traction on the lower tiers of the market (and in places where they lack retail footprint) by way of resellers, carriers, etc. without taking on all the risks involved – promotion, logistics, customer acquisition costs, etc. It’s a sweet deal, and it’s likely not as circumstantial as it looks.

I also don’t see them pushing products that wouldn’t allow you to take full advantage of their (paid) services – apps, music, etc. Any compromise in terms of features that might limit a customer’s ability to spend money in the App Store, for instance, would be right out.

So there’s no way they’d blindly cut down on features and sell an iPhone that did less than last year’s device, or something else that was different enough to fragment their vertical offering (unless it’s markedly for the best2).

Also, most pundits tend to forget that current approaches to integrated electronics make it insanely hard to consistently improve things rather than completely tossing out older designs and starting from scratch. SoCs are seldom completely backwards-compatible, specs keep changing, etc. So you need to get your money’s worth on current designs.

The A7, for instance, didn’t just fall off a tree – it’s probably been in the works for two years or so (as likely was the M7), and it’s sure to pop up on the next “big” iPad (together with Touch ID). As such, I expect the next iPad Mini to not have an A7 (maybe not even a Retina display for now) but keep milking the A6 chipset for all it’s worth3.

If you don’t focus on a few designs and iterate them mercilessly, your operational costs (fabbing, assembly, logistics, etc.) will spiral out of control. Most people are at a loss as to how Samsung manages to spit out so many form factors until they realize how piss poor their average build quality is, the (relatively) small size of many of their production runs, or how much their margins vary across product ranges.

As to innovation, well… Again, pundits have no idea what it takes to deliver an integrated product, even if it’s “just” an improvement. As far as I’m concerned, packing all those features into the 5s camera (even if a significant portion is mostly a matter of software) is excitement enough for one year, let alone bundling an A7 into the deal and refactoring their production line.

And yes, I agree that the 5c is likely to sell far more units than the 5 ever did. It looks fun, fresh, sturdy, and is a lot more appealing to the young, active crowd (who, incidentally, are much more likely to buy apps and take advantage of Apple‘s services) than to stuffy, greying tech journalists and business analysts – it has all the hallmarks of a runaway success.

  1. I’m curious as to what kind of production volumes it represents right now – you’d think it’s likely to be a “while stocks last” offer as both carriers and part suppliers flush out their inventory, but I can’t find any numbers on it (or the 4, for last year). ↩︎

  2. A bigger screen, for instance, would most likely not be for the best. Besides ergonomics, parts sourcing, and fuzzing the distinction with the iPad, it would likely also raise issues for developers, and we’ve gone through those last year already with the iPhone 5↩︎

  3. Maybe (shudder) it will even have a polycarbonate casing, despite what’s been leaked so far. We’ll wait and see. ↩︎