A man waits in line outside the Apple store on 5th Avenue, (Image credit: AFP/Getty Images via... [+]
Could
With Samsung looking launch-weary one month into Q2 (at least 8 new products in smartphones and tablets in three months), the time could be right for Apple to extend its low-cost experiment with the iPad, into phones.
The iPad Mini has been very successful for Apple, who now own over 80% of the all important, high growth, China tablet market.
According to experts in the area, there's no clear indication of iPad vs iPad Mini sales but overall the reduced average price of the iPad suggests the Mini is doing the magic, and the reason is it gives people an opportunity to own a bit of the iconic Apple.
Meanwhile the trend in smartphones is towards lower cost, a trend Apple has resisted, so far.
BGR reported on it earlier today, quoting research from ABI:
“As smartphone penetration moves from early adopters to mass-market and laggard consumer segments, the smartphone as a product will be less dependent on technical superiority, and more dependent on reliability and value,” ABI senior practice director Jeff Orr added.
That means irrelevance for feature phones but new classes of smartphone. To one side, the phablet that gives people a bit of the tablet and phone in one. From underneath, low cost smartphone where top-end specifications are absent but users, nevertheless, get a good, if not exceptional, experience.
The value price is under $250, with a mid range of $250 - $400.
ABI estimates the low cost smartphone market will more than triple, in devices sold, between now and 2018 whereas the mid-range will grow at only (roughly) 50%.
Zach Espstein at BGR seems convinced that the low cost iphone is going to happen for that reason, referring to it as almost a matter of public record:
The “iPhone 5S” will reportedly be an incremental update that replaces Apple’s current flagship model in the late summer or early fall, and half a dozen solid reports suggest a new low-cost iPhone will debut in 2013 as well.
The projected market size could make the race to be Number 3 smartphone maker all the more significant.
On the number 3 spot, Parmy Olsen reported here yesterday that the underlying trends look good for Microsoft. Half of Americans still own a feature phone. When trading up from features phones to smartphones Americans have a slight preference for Windows over the iOS or Android.
A couple of days back I interviewed Fernando de Sousa who runs
Of course, you could argue that the future belongs to device makers like Huawei who have a strong presence in infrastructure or HTC who have a potential game changer in the One or Sony, who are in revival mode with the new Experia. And there will be a new generation of phones around new OS, like Firefox.
But as Tomi Ahonen pointed out recently, smartphones tend to be a hit-marker's industry. Only Samsung has been able to battle away successfully without a phone of the iPhone's stature.
The HTC One has been highly praised, and Sony's Experia looks good too. But they lack the ability to move people, in my view. They lack the ability to drag people up into a product category they can't really afford, yet really want to own. That, surely, is the magic of Apple.
There is however, another reason why Apple and Samsung can still dominate and why Microsoft won't. Both have a very strong retail strategy.
Earlier today I spoke with Jorge Aguilar, a partner at Vivaldi, a boutique branding and innovation firm who work with Samsung among other companies.
Aguilar points out that Samsung's partnership with
Separately, Forrester say in-store experiences are a major factor in new product launches:
Forrester’s own consumer tablet buying data suggests that in-person retail was in fact key for tablet buyers: 8 of the top 10 channel impacts on the buying process came via in-person interactions, led by “just seeing and touching the product” (67% of tablet buyers were influenced by this factor) and “in store demo with a sales person” (65%).
Microsoft is hardly in the retail game.
Elsewhere Google's device strategy is still in the wings. Google's leadership seem to have been surprised by how long it takes to do consumer hardware innovation. But Motorola is also exhausting them, as its patent legacy looks more brittle than Google anticipated.
Which brings us back to Apple. Apple has been criticized for refusing to cannibalize its iPhone line with a new lower cost model.
However, they did launch the iPad Mini, and have taken exactly that risk with their phenomenally successful tablet. In fact, Apple has plenty of experience now in managing cannibalization risk.
Just after the Mini launch all the evidence pointed to a low level of cannibalization and a high number of people still coming in new to both the regular iPad and the Mini.
The Mini has been so successful that there are now rumors of a newer, even lower priced version (possibly at sub-$200).
That possibility should remind us that people still love to buy a bit of Apple, a rule that applies even at outrageous prices. In Europe, for example, the Nano is now close to $180. People are also prepared to fork out nearly $300 for an iPod Classic, with only WiFi as a communications channel, though let's be clear some models are sub $200. Apple can deliver an exceptional and desirable experience at this price.
More so than say Nokia and Samsung? It goes without saying.
