Fake Gold iPad mini?
Clayton Christensen posits the following two theories (via Stratechery):
I’ve always believed that Apple is very susceptible to the “low-end disruption” theory based on the way they priced their products. More often than not, it gives competitors an opportunity to create “junk” products, which inevitably ends up with the largest market share in that specific category. This clearly did not happen with the iPod since Apple was able to offer a variety of form factors at different price points in this category.
However, after the launch of the iPhones and Tim Cook’s interview with Bloomberg Business Week, I’m more confident that ever that Apple is on the right track with their integrated approach and refusal to take part in the junk market.
Here is a video of Steve Jobs talking about market share and pricing strategy (via Ben Evans):
Low-cost is absolutely a viable strategy. The existence of Wal-Mart, Wrangler, and Kia attest to that. But differentiation is a sustainable strategy as well, and nothing about technology changes that. True, you can’t differentiate on technology alone, but Apple has been clear – explicit even – that their focus is on the sort of differentiation that matters to consumers.
Apple is – and, for at least the last 15 years, has been – focused exactly on the blind spot in the theory of low-end disruption: differentiation based on design which, while it can’t be measured, can certainly be felt by consumers who are both buyers and users.
Ben Thompson concluded his piece by saying “It’s time for the theory to change.”
Agreed. What about you?