Saturday, September 14, 2013

Is Apple Making the Same Mistake, Again?

Apple surprised some observers, it is safe to say, by not releasing a low-cost device aimed at China and other similar markets.  

To be sure, Apple has been saying it would not do so, but many expected Apple would change its views, as it is changing its views about screen sizes for tablets (smaller) and smart phones (larger), when it earlier had insisted there was no need to change.

Right or wrong, that move suggests to some that Apple is committing a "colossal" error, choosing to maintain a "premium" niche instead of dominating the mass market.

The essence of the argument for trouble is that Apple is clinging to charging ultra-premium prices for products that are no longer ultra-premium, as well as maintaining prices that are so high Apple is priced out of the world's largest and fastest growing markets.

Some of you with long memories remember that Apple made the same decision in the 1980s, when it allowed Microsoft, with a vastly-different strategy based on ubiquity, relegated Apple to a small and niche role from which the firm never really emerged (in the PC market).

Some argue that Apple is in danger of making that same mistake again, by essentially adopting the same strategy again--a premium and small smart phone niche--rather than going for dominance globally. 

Others think Apple still has a strategy that will work. 

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