A Bit More iPhone 5

1. AppleCare does not cover water damage, I stand corrected. Then again, the "genius" at the Apple Store said it did. What we've got today is a plethora of misinformation parading as truth. I do not want to fall into that category, therefore I print this correction.

It's just too hard to keep up on everything today. The amount of factually wrong information that comes into my inbox is frightening. If you're going to buy something, and care what it is, best to do research. But I have compassion for you, keeping up is a full time job, and it's a futile effort.

P.S. Buy with an AmEx card and you could be protected against theft and accidental damage, the devil is in the details: http://amex.co/TWs3vC

P.P.S. AppleCare may be worth it because of the lack of hassle. They never argue, they just repair, frequently replace. Unless you're ten, time is more valuable than money.


2. Loyalty

Sit on the lift and ask someone how they like their new skis and they always say GREAT! Because they paid for them. You won't find anybody with a new phone who says it sucks...unless they're planning to get rid of it.


3. Argument

I wish people were as passionate about bands. My inbox is coming apart at the seams with opinions, people argue Apple/Android the same way we used to argue Beatles/Stones back in the sixties...yes, they used to have competitions on radio between the two back then.

Unfortunately, mobile manufacturers are more cutting edge than bands. They know if they go to sleep for even six months, they fall behind. I.e. HTC. Whereas a band puts out an album and expects to tour on it for two to three years. Stay in the marketplace. Keep coming up with new stuff. Surprise people, like Apple did with the iPad 4. Give people more than they were looking for. And go for the wow factor. And I don't mean dancing.


4. Apple's Hidden Advantage

Read this: http://bit.ly/Q8IuH8

The money quote:

"What I will add in this article, however, is my belief that an architecture decision by Apple has also given it an intrinsic and durable advantage over Google's Android OS."

"This intrinsic advantage allows Apple to run Apps in its devices faster than those same Apps would run on Android devices with comparable hardware specs; or alternatively, to consume less power when running at the same speed," Santos writes. "This is non-trivial for Apple, for both performance and power consumption come at a premium in battery-reliant mobile devices. It's also non-trivial because an architecture decision is something which stays rather immutable over long periods of time, so any advantage gained is hard to overcome."

http://bit.ly/UTrffH


5. Functionality

We've now entered the sixties/seventies of phone development. Where the exterior is more important than what's under the hood. Toyota and Datsun crushed Detroit by making cars that ran well, that did not break down. They might have been boxy, but they were headache free and cheaper.

Your Android phone may look flashy, but how much of its functionality do you use? How much do you know how to use? Where do you go for help?

For every self-starter hacking his phone, there are hundreds of thousands of people who are completely clueless. Who own what is essentially a thick brick which can dial calls, text, maybe get e-mail and possibly display maps. Apple won by making it easy.


6. Luddites

If you're bragging about having an old phone, you're saying you don't listen to new music, your opinion doesn't count. They're no longer phones, they're mobile computers. The desktop is dying, get with the program.


7. Service Providers

They're different. In reach and speed. T-Mobile might offer you a great deal, but if you need LTE...good luck!

Verizon might be expensive, but take a look at its LTE map. It blows AT&T's away. Sprint might give you unlimited data, but check its speed.

And maybe you don't care about all of this, but if that's so, please stop bloviating, you're just demonstrating your ignorance.


8. Profitability.

Samsung and the low cost providers own television. Panasonic may get out and Sony is a shell of itself.

But at what cost?

Flat panel margins are so thin as to frequently be nonexistent. I.e. the TV's are selling at a loss. Market share doesn't mean much if you can't make money.

There's a business in being BMW or Mercedes. Making top drawer stuff for people who can pay. But what is fascinating is Apple employed this strategy to create and own the iPod market, and the tablet market and a lot of the smart phone market. Can they pull off this strategy in the future? That was why I was writing, not to ding the iPhone 5. I can't tell you how many e-mails I got from people who "read" my article and then said they had changed their mind and were no longer going to buy the iPhone 5.

Mine was a business analysis. Can you own the sphere when you've got no low cost option, and others do?

Let's go the other way, with Clayton Christensen, the business guru who wrote "The Innovator's Dilemma." He's all about the mantra "good enough." That "good enough" triumphs in the end. He won't pay for the best. He says "good enough" keeps getting better and then squeezes best. Are we seeing this now in smart phones? Have Android handsets gotten good enough that the Apple superiority is no longer worth the extra price? That's the question.


9. Tomorrow

Apple is no different than a band. To rule in the future, it needs hit new products. It can make money/tour on the old stuff for a long while, but playing to a smaller audience/smaller buildings.

We revere those who can do it once again. Who can reinvent the wheel. Show us something we've never seen before. That's one of the keys to the Beatles' success. They kept taking us to new places we couldn't even contemplate.

That's why music's in a funk. You know what you're gonna hear before you turn on Top Forty radio.

Then again, many kids don't even listen to the radio. They don't even watch TV. If you're a fat cat businessman you've got two choices... You can plan your exit strategy to coincide with the cliff, i.e. exit the car just before it plunges. Or you can tackle these challenges.

The music business is littered with those employing the former strategy. Caring only about themselves, they're paying themselves high salaries and planning to exit before tomorrow comes.

And then there are those who think they have the power to prevent tomorrow. As if Microsoft could stop the tablet and keep the desktop computer dominant.

You can't stop tomorrow. You've got to play for the day after tomorrow.

One thing we know for sure is no one's going to be using the same mobile device ten years from now that they are today. Many will not even be using the same device two years from now. What will they be using?

And early adopters sculpt the landscape for those who follow.


10. Trade-In

iPhones are worth more. So you can trade up each and every year for a minimum of cash. Usually less than a hundred bucks. There are websites that buy used phones, you can sell them on eBay. Therefore, there are many surfers of the new who get a new phone every year and don't pay that much. But you've got to trade early. Skip a cycle and your old phone becomes a worthless brick.

As someone e-mailed me, maybe cutting edge phones should be leased!


--
Visit the archive: http://lefsetz.com/wordpress/
--
http://www.twitter.com/lefsetz
--
If you would like to subscribe to the LefsetzLetter,
http://www.lefsetz.com/lists/?p=subscribe&id=1

If you do not want to receive any more LefsetzLetters, http://lefsetz.com/lists?p=unsubscribe&uid=0eecea7b60b461717065cbde887c8e25

To change your email address http://lefsetz.com/lists?p=preferences&uid=0eecea7b60b461717065cbde887c8e25




--
Powered by PHPlist, www.phplist.com --