Baer Facts

If You Can’t Afford It Apple Doesn’t Want You


In this live-from-an-abandoned-warehouse edition of The Baer Facts, I talk with Kyle Lacy of ExactTarget about Apple’s new iPad announcements, and the fact that they really don’t care whether the masses buy their gear.

Apple Sauced

I was neither overwhelmed nor underwhelmed by the new versions of the iPad. I was just whelmed.

The big feature of the newly christened iPad Air is that it’s faster (good) and a lot thinner (meh). The television commercial touting the new iPad Air demonstrates that the gadget can “hide” behind a pencil. In addition to being creatively barren and a rehash of the “look it fits in an envelope” reveal of the MacBook Air, it’s a curious feature to emphasize. At this point, are tablet owners really hoping for a device thin enough to fit behind a pencil? Is the difference between 1/8 inch thick and 1/16 inch thick driving sales?

Simultaneously, Apple rolled out the new iPad Mini. I was very much looking forward to this one, as I had planned to get one now that it has Retina display capabilities. But given that almost zero additional features were included, I’ll pass.

Whoops! Apple's own cases cover up the logo on the 5c.

Whoops! Apple’s own cases cover up the logo on the 5c.

A major criticism of Apple after this product release was the fact that the company did not drop prices for the new iPads, and in fact increased the price of the Mini by $70. This is right on the heels of the company’s desultory rollout of the iPhone 5C – a device so unloved that the company’s own cases cover up the logo, and is so homely that Bill Maher said looks like your iPhone is wearing Crocs. Sales of the 5C are presumed to be disappointing, and it is rumored that the device was even conceived based on investor pressure to tap the Chinese market, among others.

Apple Pi

This has led analysts to tsk tsk Apple for not sufficiently trying to expand their customer base via lower price points and intro-level product offerings. But guess what? Apple doesn’t WANT to expand their customer base (one of the reasons the whole 5C thing is so half-assed). They have enviable margins driven by their upmarket cachet, and the fastest way to kill that cachet is to broaden the product line. History is littered with brands that wanted to expand, and killed the golden goose in the process. Hilfiger. Mossimo. Mercedes may be on the way with their new, sub-$30k approach. Tiffany ain’t what it used to be, either.

We forget that Apple survived DECADES of being a company with single-digit market share in the personal computer space. Do you think they give a whit that they are no longer dominating the market for phones and tablets, with other firms gobbling up the low end of the buyer pool? I say not really.

I’m worried about the lack of feature innovation, and the advertising has been terrible over the past year. But on the product side, remember that Apple neither wants nor needs to have an offering at every price point. Stop bashing the company for being exclusionary, when that’s so clearly their strategy not a shortcoming.

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  1. says

    Brilliant title.

    The iPhone 5C was an interesting product rollout. I think it was an attempt to upgrade all the young kids who buy the iPod Touch. Despite reports, it was the second best selling phone in US and other countries over the past 6 weeks. So they made some cash there, just probably not the normal Apple cash.

    I think the key here is that Apple is patient. They screw up occasionally (remember Ping anyone?) but they play the long game and launch new products when they are ready. 2014 will be interesting. Scoble says the iWatch will be launching in the first half of the year and will be a big hit. Not sure about that, but it will be fun to watch either way.

    I will hold out for the iRobot. I figure 2020.

  2. says

    Love the Apple insights, Jay. I admire companies who know who they are not. It’s disappointing that the feature innovation and advertising are subpar more recently, but Apple is definitely confident in their dedicated customer base. I’m an Apple user and am with you that it’d be hard to switch (for a number of reasons) so I’m loyal – for now.

  3. Brian Berg says

    “Stay tuned for our next episode when we’ll be broadcasting from a van down by the river!” Great stuff, Jay… I literally was just talking about this very subject with my son yesterday as kids in his middle school are having ongoing iOS vs Android debates.

  4. says

    Great post! I couldn’t agree more. Brands like Louis Vuitton have thrived on their exclusivity. Apple is no different. Those that have tried to be everything to everyone end up tarnishing their brand and losing their edge in the long-run.

  5. allarminda says

    I find it fascinating that we have a cultural expectation to be wowed by Apple so frequently. While I’m also very plugged into the “Apple ecosystem” like you, Jay, I’m really content with it and don’t need a new next best thing every 6-12 months, yet if they’re not delivering iSomething everyone is sooo disappointed. I don’t get the feeling the same pressure or rules apply to the masses.

  6. RogerHurni says

    Nice article but your point about the ability to hide the new iPad behind the pencil misses the point. The pencil represents the power of ideas and the tool we have always used to create them. The iPad hiding behind it and with the reveal at the end spot shows that this is the new way we create.

  7. says

    Oi vey, where to begin with this post? Other than your main point, I don’t think I’ve ever been so disappointed by one of your posts. Underwhelming or not, that thinness also reduces the weight of the product by a third. That is huge, and if you aren’t impressed by that benefit and the innovation required to make it happen then I think your expectations of Apple are entirely too high.

    • says

      Did you read the post? The point is not to quibble with the product. You love it. I’m non-plussed. So what? The point is that they are getting beaten up for not going downmarket, when they clearly neither want nor need to go downmarket. I’m defending their strategy, even if I’m not doing cartwheels about the products.

      • says

        No I didn’t read the post, but agreed with your main point…Of course, I read the post. I realize the point is not to quibble about the product. I’m also not defending the product decisions nor doing cartwheels about them. How they left touch ID out of this update baffles me, but there just seems to be a lack of acknowledgment around the innovation that has occurred to create these products regardless of whether you like or are impressed with the new features or not. In addition, as a guy that has spent his share of time at tables discussing brand and campaign strategy as much as you have, I’m surprised you don’t give the “pencil” ad more credit for just how smart it is. Sure this year’s ads haven’t been their best, but that one is good.

  8. Bob Reed says

    Anyone who follows Apple knows they don’t give a hoot about marketshare. No surprise. What is a surprise is how so many analysts still have not recognized Apple’s market strategy and constantly insist that Apple must go downmarket to maintain growth. That said, I’m still using my five-year-old MacBook Pro and perfectly usable iPhone 4S. I’m waiting for something really new, not incremental.

  9. says

    I still think they are becoming less elite and more mainstream with all the variations of their products. I “may” understand, perhaps slightly, the need for an iPad mini, may-be, but iPhone C? iPad Air? I mean they are now confusing people with all the options. Focus wasn’t on making products to cover all of the consumer segments, it was to innovate and they had AN iPhone, AN iPad. That’s it… Of course not talking about the Macs, they are different.

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