Apple's Shifting Differentiation

Apple has a small piece of the smartphone pie. That said, their CPU's are consistently in a class of their own.

And this year they are creeping back to 90s era: iPhone 12 and iPhone 12 Pro are essentially the same phone. So no reason why both exist, except to muddy up the product line.

Small is relative. Some estimates claim 1b active iPhones: https://www.aboveavalon.com/notes/2020/10/26/a-billion-iphon...

Small in units shipped, but dominant in design, aesthetics, and, most importantly, profit margin.

The key differentiator is the camera on the Pro, which significantly increases the cost. Some people will pay a premium for the privilege of owning the top model and yet others will go for the Pro precisely because of the more advanced camera.

By having separate lines, Apple can sell the 12 for cheaper than the 12 Pro, and those who are willing to pay for the 12 Pro camera can do so. Don’t see any muddying here.

> but dominant in design

Debatable. If anything, modern Android designs are cleaner than iPhone looks.

> aesthetics

Again, debatable.

> and, most importantly, profit margin

This is the key factor, and it's tied to something you missed.

Apple products and iPhones are ahead in profit margins because Apple consistently delivers reasonable quality goods, with few disappointments, so that users trust them. They've gained user trust despite obvious "design, aesthetics" mis-steps such as the notch or the touch bar.

The key words are: consistent delivery, reasonable quality and few disappointments. That's how they hook users in. Apple mostly delivers on time something very close to what they promised and that thing doesn't have catastrophic flaws. That's a much taller bar than you'd think, in the tech sector.

> Apple has a small piece of the smartphone pie.

An iPhone is the single best-selling phone on pretty much any given year.

iOS is also 50/50(or more) with Android in a number of countries.

Most of them are tier 1 countries.

> modern Android designs are cleaner than iPhone looks

Design is about more than the way apps & interface looks. I recently switched from Android and the thing that most struck me is that iPhone usability is more consistent. I was able to do everything I wanted with Android and honestly I loved it, but its not as intuitive as iOS.

The problem is as a “normal user” you can’t go to your ‘tech friend’ and get a straight answer — there are too many considerations now to direct someone to one phone over another.

It’s not ‘yeah, the new iPhone is great! You gotta have it.’ It’s “so what do you want to do mostly?” — no one knows.

That is what I believe the 90s curse really means — your evangelists are no longer as effective because they give potential customers an overwhelming amount of information that slows down, and sometimes prevents, a sale.

—- Your point is exactly right - Apple has decided to harvest the demand curve over making something undeniably great.

Edit: let me clarify, watch and homepod mini are currently in the category of 'just get it' products. This is only a critique of the iPhone line.

For any other company, the notch probably would've been viewed as a design misstep. For Apple, it became a distinctive feature that was actively imitated by phones that didn't even need to have such a large cutout. That's what it means to be dominant in design and aesthetics.

> The problem is as a “normal user” you can’t go to your ‘tech friend’ and get a straight answer

Uh, it's 3 options.

Small size, best camera option, remaining option.

I didn't know this - I just went to Apple's website, clicked iPhone and it has a single page that presents all this very clearly.

So um, yeah. This is by the way how I do 'tech advice' to anyone who ever needs it - I open google, I type in the question and the first link has the answer 95% of the time.

Phones haven't been in 'gotta have it' category since iPhone 6 when they released a bigger size that a lot of people wanted. Since then, it has been 'better camera' yearly releases, oh and 'better chip', as if anyone needs a supercomputer to browse Instagram.

Half of USA market is far from "small piece".

So?

Cameras (and the associated computational photography power) have the advantage (for Apple and other manufacturers) of simultaneously still being on a fairly rapid improvement curve and being something a lot of people really care about. It's no coincidence that Apple really hits hard on the photography angle.

There is clearly a difference between my iPhone 6 and iPhone X but I've never been on a particularly frequent upgrade cadence. Under normal circumstances, I'd probably upgrade to this year's model but there's not a lot of point until I get out and about a lot again.

A lot of people are still using an iPhone 5S or an iPhone 6. From iPhone 6 to now, that's actually close to 1.7b iPhone sales. 1b active iPhones sounds very reasonable after accounting for breakage and the unused spares forgotten in a drawer.

Apparently there's approx a total of 3.5 billion smartphone users today. https://www.bankmycell.com/blog/how-many-phones-are-in-the-w...

iPhones could be 30% of the market.

It's four options. Two of them different:

- iPhone 12 Mini, the small one

- iPhone 12 Pro Max, the huge one

And then there are these two: iPhone 12, iPhone 12 Pro.

They are the exactly same phone in every regard that a "regular" user cares about. They are so identical that Gruber lumped them together in benchmarks in his review at Daring Fireball.

The only difference is the difference in cameras which is important to a very small number of people. And even then it doesn't make sense to make two different models instead of one, with the new camera setup.

1b active iPhone users out of 3.5 billion smartphone users worldwide.

A quarter of the pie can't really be called a small piece.

The US is only 4.2% of the global population.

> the notch probably would've been viewed as a design misstep

Why? The alternatives are a smaller screen or terrible audio when using one’s phone as a phone. It’s different. But it makes perfect sense and made perfect sense the first day.

I think you underestimate how many people care about cameras a lot--or at least think they do. Personally, I'm inclined to give Apple the benefit of the doubt that it knows what it's doing by having a cheaper mid-size model and a more expensive one with a better camera.

Ah ok I've had to do a few more clicks.

So the 'latest' options on Apple's website are presented as iPhone 12 Pro (best camera) and iPhone 12 (not best camera) - 2 options.

Then each option has 2 sizes, that makes it a total of 4.

I guess they could've named things better - it's still same old 'best camera = more expensive' formula from years prior, with an addition of 'smaller size' to the mix.

They weren't the first. Sharp and Andy Rubin's Essential Phone had that terrible design first.

OEMs come up with something and the designs echo through the industry.

A curious critique of Apple's product line given the strategy of the competition: https://gadgets.ndtv.com/mobiles/samsung-phones

(I would argue it's very simple: "Get the iPhone 12 in the size and colour you like", the Pro models are an up-sale for the people who want different screen-size or slightly better cameras)

[Edit] I just re-read your comment... "remaining option" ...

I'd argue if you're comparing to your competition, you have no idea what you want to build.

[Edit] Apple is specifically doing this frayed product line to harvest the demand curve, lower supply costs, and amortize R&D across a large unit base... they are playing to the current low interest rate world in this product line. It's an intentional business choice, not a product choice.

And what's up with the camera bumps? ;-)

I know most people use a case, anyway, but I'd rather have an extra mm or 2 and a flat back, and either get more battery or just empty space...

And that 4.2% of population created one of the richest corporations in the world. Pretending that Apple doesn't have an important world market share with their mobile products is really a bit facetious.

Even if it reaches a low % of total world population, it does command important amount of profits and dictates trends.

I like how Gruber put it:

“Pro”, in Apple’s parlance, also simply means “more expensive”.

Think the issue is Jobs era Apple wouldn't do this, it would just be one great phone and one budget phone which would usually be last years good phone.

New Tim Cook Apple philosophy is doing what Apple fans used to criticise other tech companies of which is needlessly fragmenting their product line to try and milk more money out of it.

It's things like this that make the difference between ok and good and good and great.

I use mostly Apple devices, both Mac and iOS, because I like the hardware. But I also have a cheap Android phone, and even though I'm not using it very often I find it more consistent/intuitive than iOS, mostly for two reasons:

One is iOS's arbitrary separation of settings and other app functionality. It makes no sense. I'll never remember what goes where.

Secondly, Android's back button is simple. I can use it without thinking even though you can probably find a lot of inconsistencies in its behaviour. iOS has multiple inconsistent one-off solutions for going back that cause a lot more mental friction.

Apple's revenue has gone from 65.2 billion dollars under the last year under Jobs to 275 billion dollars in 2019. It's easy to say that "Jobs would never!" but Jobs never ran a company almost 5x bigger. It's entirely possible that he would have. It's equally possible that Apple never grows to these heights with him at the helm. It's just an impossible comparison to be making.

To the lovely downvotes, do we have to talk about how this plays perfectly into the tiny form factors required for all day AR?

However I still believe it’s a bit more aggressive than necessary.

Yeah I also notice there are a ton of MBA preferred jobs for aapl now too

The back button was something I missed when I went to an iPhone 6S in 2015. Apple had back arrows near the top of the screen, which I could not reach with a thumb and one hand. Annoying.

There is only one problem with the notch IMHO... and it's a software issue: taking video fullscreen in the horizontal orientation should only have ever filled the rectangular area.

Otherwise, it's great: the status indicators you want anyway go up in the corners and don't take out a full row of the "actual" screen.

I think people also forget the dominance of iPhone (and imessage) in the US market. iPhone is simply the most popular and go-to phone in the US market. Not so much in similarly richer areas like Europe.