Thursday, September 19, 2013

Apple Sticks to Strategy: No "Junk"

Apple long has had a "premium product" strategy, even if it occasionally has produced lower-cost versions of some products, such as the iPod. But the philosophy of "no junk" remains the watchword at Apple, according to CEO Tim Cook.

Does that mean Apple never will create a lower-cost iPhone? That might not be the relevant question. The bigger question is whether Apple ever will try to make devices at price points the Chinese mass market will buy. The answer to that seems an emphatic "no."

For better or worse, Apple simply does not presently see any reason to deviate from its strategy, and is willing to lose the smart phone operating system or device market share battles. 

Apple is banking on the smart phone market being different than the old PC market, where Apple never escaped a niche. If Apple is correct, the smart phone market will eventually shape up for Apple as being between the pattern of PCs and MP3 players.

Though it was a niche supplier in the PC market, and the dominant provider in the MP3 market, Apple's smart phone business will be somewhere in between. Apple won't dominate in terms of share, but Apple will be relevant. 

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