iPhone 6: Steve Jobs was wrong – bigger really is better

Despite the carping by critics that the new iPhones, the iPhone 6 and the iPhone 6 Plus, were not groundbreaking in any sense, that they were in fact playing catch-up with Android phones’ larger screens and sharper displays, people are lining up in front of Apple Stores across the country awaiting general release of the new products.

Pre-orders were sold out in hours. The new phones are the fastest selling devices Apple has ever made.

But the truth is that no matter what critics and Android-besotted tech writers say about the new iPhones, it seems everyone wants one and Apple is even winning back users who felt the previous iterations of iPhones were lagging behind Android phones from Samsung, HTC, and Motorola.

Lessons from the master

But that Apple cachet is magic. Apple, the largest corporation on the planet, can seemingly do no wrong. They are The Beatles of the tech world. Yes it’s true that larger screens and faster processors, combined with Apple’s industry leading design and build quality, do provide a user experience people lust for. And even though Steve Jobs, who was a genius at marketing and evangelizing Apple’s product line, is no longer with us, his successor, Tim Cook, learned from the master at milking the Apple mystique.

But some analysts say Apple is headed for trouble.

imageApple comprises just 15 percent of the smartphone market, and it has just two models, the iPhone 6, with a 4.7 inch display (a huge leap over the 5’s four-inch screen), and the phablet-sized iPhone 6 Plus, with a 5.5-inch display.

Flagship Android phones, by contrast, have generally adopted a five-inch standard, with some six-inchers thrown in.

But Android phones are made by many manufacturers, and come in many form factors and generally much lower prices. The latest Android phones can easily compete with Apple in specifications and comparable Android phones can be found that approach or equal Apple’s famous build quality.

Publicity mill

This article is not a review of Apple’s newest entries in the smartphone wars. It is rather a look at why and how Apple generates such publicity and demand from the public for their products.

First though some unbiased facts about their phones generally, and the qualities that make them unique. One is their build and design quality, which is arguably the best in show among smartphones. They are elegant, durable, and ergonomically superior to most, but not all, Android-powered devices.

Then comes their user interface, which used to be simpler and more elegant than Android, though this advantage has narrowed if not evaporated with the latest flavor of Android, KitKat 4.44.

In fact the two are nearly identical now, with Android enjoying a slight advantage in flexibility and ability to personalize the user experience through the use of third party launchers, which alter the look and feel of the OS. But vanilla Android, which Google is encouraging manufacturers to offer, rather than slapping a branded UI over unaltered systems, varies little from Apple’s.

It could be argued that Apple’s iOS has copied some of Android’s best features, such as changeable wallpaper and automatic reorientation from portrait to landscape mode when the phone is turned onto its side.

And though the Google Play store now contains more apps than iTunes, the fact is  that app developers create apps first for iPhone, and then port them to Google Play. Most apps are available eventually for both platforms, but the iOS versions are often superior in their implementation, or contain features missing from their Android counterparts. Though more than twice as many Android apps are downloaded from Google Play as iTunes, Apple grosses twice as much revenue from the sale of apps as Google.

In other words, iPhone owners are willing to pay for apps that are free from Google. And this brings me to the point of this article. iPhones are not phones “for the rest of us.” They are phones for the top 15 percent of income earners in this country and elsewhere.

If you need to ask you cant afford it

Studies have been done overlaying regional income maps over maps showing smartphone distribution, and there is a distinct positive relationship between higher levels of affluence and prevalence of iPhone vs Android ownership.

Smartphone ownership over a broad range of educational and income levels have similar rates of Android adoption, but those from the top tiers are much more likely to buy an iPhone. Half of households earning $150,000 or more have one or more  iPhones, while of this same group only 27 percent own Androids. Those with graduate or post graduate degrees are also more likely to own an iPhone, at 38 percent, while 29 percent own Androids.

Among those who never finished high school, just 11 percent own an iPhone. A Pew study also found that only 16 percent of African-Americans own iPhones, compared to 42 percent who own an Android device. This skews way over the income disparity between black and white in this country, and suggests that fashion may play a more important role in who buys which type of phone.

I live in the predominantly white, affluent Virginia suburbs of Washington D.C. and use public transportation to job sites in the city. Nearly everyone has an iPhone. When I see an Android user I casually but covertly note the brand or form factor, since I too use Android, and am naturally curious about what others are using. I’ve noticed that they range from mid-level to flagship phones in general.

Worldwide, Android has captured 85 percent of the market for smartphones, while iPhones account for just 15 percent.

More than one billion smartphones are in use today, with another one billion expected to be sold in the next five years in the developing markets of China and India in particular.

Not only must established manufacturers compete with each other in these regions, new domestic companies are gearing up to enter the fray. Google is keenly aware of this and thus has purposely geared down the hardware requirements for their latest OS release, which is designed to function smoothly on just half a gigabyte of RAM and slower, less expensive and capable processors. Interestingly, large screens seem to be far more popular in poorer countries, as smartphones are often the only means of connection to the Internet in these populations.

The big niche

Some contrarians are predicting that Apple, with its expensive high quality components and high mark ups, will eventually lose out to Google and Android manufacturers. But to me this is nonsense. This has been Apple’s business model from the very beginning, across its entire product line. It has found its market and is the most profitable company in the world. Apple is not competing with Android; it has conceded the lower end of the market to Google.

In fact, with its new 6 series, Apple is competing only with itself, and it’s winning. Each iteration of the iPhone is incrementally superior to its predecessor. The 6 line, with its large screens, is the biggest change in the product line since its inception.

Steve Jobs had been strongly opposed to larger screens, stubbornly insisting that one handed use was the only fit and proper method of phone usage. But the success of the huge 5.5-inch and six-inch screens of some Android phones, especially the Galaxy Note, proved there was demand for such a product from Apple. The wildly successful introduction of the Sixes, which shows sure signs of being its most popular iPhone ever, belie Jobs’ insistence on keeping them small.

This is not the first time Jobs was wrong (the first Mac portable, the ill-fated Lisa, the botched Mac third party Mac OS licensing agreement), but it put the lie to his reputation for infallibility, though it really never resulted in an erosion of Apple’s bottom line profitability.

Have no doubt; Apple is going to make a ton of money on its new phones. It has found its market, affluent white people in First World economies, and has conceded the rest of the world to Google.

Apple will go on being Apple, and will continue to dominate that spectrum of the market coveted by the likes of Samsung, HTC, and the others. There’s really nothing elitist about this market plan or iPhone ownership in general. But it is nevertheless the elite, on a worldwide view, who purchase and use iPhones. If I may intentionally misparaphrase Jesus, the rich will always be with us. And Apple will be around to give them what Apple decides they really want.