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Print 37 comment(s) - last by TakinYourPoint.. on Jun 9 at 4:28 PM

Apple is likely introducing cheaper models in an effort to gain a larger customer base

Apple introduced a new, stripped-down member to the iPod touch family recently -- which you might have missed if you weren't paying close attention to Apple's online store. 

Apple added a 16GB iPod touch for $229. The new version loses a few features found in the latest generation of the iPod touch family, such as the rear-facing 1080p camera and the assortment of colors (this new version only comes in black and silver).

However, the 16GB device does still hold key features like the 4-inch Retina display, the dual-core A5 chip, 720p front-facing camera, and even the Apple EarPods. 

If you can't do without the rear-facing camera or the pretty colors, there's the 32GB version for $299 or the 64GB version for $399. 

Apple is likely introducing cheaper models in an effort to gain a larger customer base and compete with its main rival -- the Android-powered Samsung. 

Apple was also likely looking to fill the price gap between the $149 iPod nano and the $249 iPod Classic. This new 16GB version seems to have replaced the 16GB 3.5-inch Touch that had been selling for $199.

Also reportedly forthcoming in the cheaper Apple product line is a more affordable iPhone, but there's no word on a release date quite yet. 

Source: Apple



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RE: wow
By ven1ger on 5/30/2013 3:34:26 PM , Rating: 2
I agree up to a point what you say but that doesn't make it true. Apple does care about market share, and this release shows that Apple does care. Would Apple like to be a monopoly, I think, yes. Why are they not a monopoly, because their business strategy was insufficient, during the PC wars, MS was its major competitor and MS eventually the PC wars. Now, in the mobile devices, Apple had the first quality product available and it probably seemed that they would be the top dog for awhile to gain the necessary marketshare to be top dog, but that is no longer the case with Android surpassing them, and they see the threat.

As far as premium pricing goes, the only reason they are offering premium pricing is that some people will still buy it at that price because they like iOS, but as iOS is getting more dated, people are looking at Android and MS, especially since premium devices for both Android and MS are available. Jobs plan was to create a good OS and sell equipment at premium prices, that's why when computers like the Franklin and others that built Mac-compatible equipment, Jobs later killed any sort of compatible systems, Apple would be the sole distributor of equipment using their software.

In essence, Apple does have a monopoly on their devices to work with their OS. But they do care about overall market share, even the Macs had to come down in price to match price drops across the PC industry when equipment prices were falling from the days it cost at least $10K for PC. Just because Apple equipment doesn't directly compete with equipment from other manufacturers, as they are to use different OS's. Apple still has to worry about market share because if more people move over to competing OS's they lose the ability to sell their equipment at high prices which equates to large profits for them.

If you still don't think they care about market share, then why do you believe they are using Patents to block competition. Samsung and HTC does not compete in the Apple ecosystem as only Apple products can be sold for iOS? No one is able to buy a Samsung or HTC product and use it for iOS so logically it wouldn't detract from Apple sales except that Android is taking market share away from Apple.


RE: wow
By ven1ger on 5/30/2013 3:36:39 PM , Rating: 2
"MS eventually the PC wars." should be MS eventually won the PC wars.


RE: wow
By BRB29 on 5/30/2013 3:57:24 PM , Rating: 2
Why Apple's strategy does not want to be a monopoly?

1. antitrust lawsuits
2. lower profit margins
3. unsustainable in today's global economy and especial in the tech industry.

The problem with aiming for high end dominance

1. High margin but low overall sales
2. Tech cycles are fast so their high end will be low end quick
3. First to lose sales in a tough economy

Why was Apple successful and how did they eliminate the cons of high end product strategy

1. They sell tech but also fashion.
2. They used marketing to compensate for their lack of being high end.
3. They ensure that it look, feel, and has the quality of premium product.
4. Use existing tech and improve it in a whole package that is practical.
5. Used marketing to create hype and cool factor.
6. Marketed towards the mainstream as a premium to increase sales. Most companies making high end products aim for wealthier people. Apple aims for mainstream.
7. Priced it as premium and never offer discounts unless it's near EOL. This created a very healthy used market that bumped the perceived value of new products.
8. Made it simple that anyone can use.
9. Instead of reinventing, only made incremental improvements. This made people more willing to buy the next generation because everything is better and nothing is worse. This avoids blunders like win8.
10. They don't give into what they want. They tell people what they want.

Apple practically erased all the cons of selling premium products. There's no reason for them to want the whole market because they've enlarged the high end portion of the market.

No business in history has ever been able to sell high end product with mainstream sales volume before. This is why everyone in the business world regards Apple as a miracle of a business success story. I hate apple products in general except for the iPad. But there's no way I can ever knock their business.


RE: wow
By ven1ger on 5/30/2013 5:30:52 PM , Rating: 2
1. antitrust lawsuits

I still consider that Macs are a monopoly of Apples. But, DOJ has bigger fish to fry since Macs are not mainstream. While it was their business strategy, Jobs imagined that Macs would be mainstream in lieu of MS.

2. lower profit margins

uh...totally diagree, when you have a monopoly you can dictate prices. That's why if you consider Apple being the only maker of Macs because they control the OS, whether or not you consider it a monopoly or not, you cannot deny that they are only able to achieve their high profit margins because of lock-out of any other manufacturer, same with their mobile devices. In essence this is a monopoly because Apple can control prices because no one else can compete with them in their market.

7. Priced it as premium and never offer discounts unless it's near EOL. This created a very healthy used market that bumped the perceived value of new products.

Sorry, but Macs were heavily discounted originally for education. Students and educational staff were able to get very hefty discounts.

You make good points, but I don't think they evolved business strategy was by any means they not wanting to dominate the marketplace or monopolize it. I think they do, but because they were not able to monopolize the market and seeing real threats coming up to their ability to monopolize the market, they have had to change business strategies and resort to Patent threats. Most of what you list is true but that doesn't mean that if they lose market share they lose profits.

In some markets, companies can make premium products and offer it for premium prices and come out profitable, against low quality, low margin goods, but that's true if everything else is equal. But in the case of mobile devices, what drives it are two things, the software and the hardware. I'm not an economist, but I'd think that if what you're selling is no longer popular or becomes a niche product you're going to be losing profits and the userbase. What counts in the PC/mobile arena is the userbase, and that helps drives profits. Larger userbase means more development, and that's market share.


RE: wow
By BRB29 on 5/30/2013 9:03:58 PM , Rating: 2
quote:
I still consider that Macs are a monopoly of Apples. But, DOJ has bigger fish to fry since Macs are not mainstream. While it was their business strategy, Jobs imagined that Macs would be mainstream in lieu of MS.


No, a monopoly is not brand specific. It's product specific. They're not a monopoly in any market because they don't own 80% of any market. Maybe the ipods but there's too many cheap mp3 players out there. There's also too many substitute goods for it too.

quote:
uh...totally diagree, when you have a monopoly you can dictate prices. That's why if you consider Apple being the only maker of Macs because they control the OS, whether or not you consider it a monopoly or not, you cannot deny that they are only able to achieve their high profit margins because of lock-out of any other manufacturer, same with their mobile devices. In essence this is a monopoly because Apple can control prices because no one else can compete with them in their market.


If you have a monopoly in a product that people need, then you can dictate prices. Everything apple sell are not needed by anyone. They all can also be easily replaced with substitute goods.
When you own the entire market. You have to have both low end, mid range and high end. What do you think will happen to your margin? Look at smartphone profits. Look at laptop profits. Look at mp3 player profits. See the trend? high end = higher margin if you can sell

If you don't know anything about business strategy. You want the least liability with the highest margin. Low end always bear the highest market share but also the highest risk because you are razor thin on your margin. Go read a book about supply chain and operations management regarding operation efficiency and safety margin.

quote:
Sorry, but Macs were heavily discounted originally for education. Students and educational staff were able to get very hefty discounts.


You're just proving my point. They were discounted only for education not the whole market. They're still discounted for education to this day and only school essential hardware. They may not make money doing that but it's more of a PR or marketing thing. Not meant to drive sales and profit.


RE: wow
By ven1ger on 5/31/2013 4:46:02 PM , Rating: 2
http://www.investopedia.com/terms/m/monopoly.asp:
Definition of 'Monopoly'
A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products.

Apple has a monopoly, and there is nothing in the what constitutes a monopoly as having low/mid/high end. Apple has a monopoly, why? because no one else can participate it in its ecosystem, that's a monopoly. Can I buy another computer that can run Mac applications or Ipad apps, no. That's pretty much the definition of a monopoly. Why is the DOJ not going after them, because for the Macs there is a bigger competitor for marketshare, MS. For their Ipads, currently Android. Macs are not mainstream, but Apple is a monopoly and they can dictate their own prices for their equipment in the Apple ecosystem.

If you're claiming that Macs and Ipads can be replaced with substitute goods, what computers or emulators can you obtain to run Mac software or Ipad Apps? At least Windows is emulated under Bootcamp not vice versa because Apple controls and restricts any use or copying of its system. There are many programs/apps that are created only for Mac/Ipad that are not available for Windows/Android.

As for the educational discount, it was a great deal, but the past years, the discount itself is a mere shadow of what they used to offer. It wasn't for PR or marketing, purpose was that computers were generally new to the public, if they got Macs out to the educational system where there was more widespread acceptance of it for learning, especially with the younger crowd, they would build the marketshare that would expand into them later staying with the Macs for use at home and other businesses.


RE: wow
By BRB29 on 5/31/2013 7:28:33 PM , Rating: 2
quote:
A situation in which a single company or group owns all or nearly all of the market for a given type of product or service


The type would be media player, smartphone, laptops, etc...

You are confusing brand with types. A phone with an OS regardless of what it is is a smartphone. They sell it as a smartphone in one complete package. The whole market of smartphone includes, all phones with all OS. Their ecosystem is a support of that product, not an actual product.


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