Customer-obsessed marketing

Apple’s Product Strategists Maintain The Company’s Premium Positioning In The Mainstreaming Smartphone Battle

Thomas Husson
Vice President, Principal Analyst
October 5, 2011

My colleague Charlie Golvin and I took the time to step back from the flow of news following Apple’s announcement today. Here below is our take from a consumer product strategy perspective.

Apple’s product strategists face an ongoing paradox: maintaining premium leadership with an annual product renewal while tapping the rapidly mainstreaming global smartphone market

Today, Apple’s product strategists revealed their newest premium smartphone: the iPhone 4S. Just like the 3GS at its introduction, the 4S relies on a leap in processing power and a new interaction paradigm but eschews technology upgrades upon which product strategists building Android-based devices rely today, such as LTE and behemoth screens.

Apple’s new iPhone lineup provides a complete portfolio of products, from the premium 4S in memory configurations up to 64 GB, to the 8 GB iPhone 4 which will allow all of Apple’s carrier customers (including new partners Sprint and KDDI in Japan) to offer a mid-tier iPhone. Apple’s product strategists have opted to add an entry-level option for its GSM-based carrier partners by maintaining the 8 GB iPhone 3GS.

With the iPhone 4S, have Apple’s product strategists designed a product that will maintain Apple’s leadership in the high-end smartphone battle? Forrester believes so — even though Apple chose not to include features that its competitors use to command a premium position, including:

  • LTE. The iPhone 4S uses HSPA, which in today’s marketing war means that only AT&T may opt to position its iPhone 4S as “4G.” Is this a big deal? Not really, since LTE networks are only beginning to roll out, the chips are costly, and the devices are power-thirsty.
  • NFC. This technology too is at an early stage of development, despite all the hype. Nor is there a clear revenue benefit for Apple’s product strategists to derive from this contactless technology. 

Instead, the iPhone 4S is a much-accelerated version of the iPhone 4 that, combined with the new version of iOS, improves many aspects of the experience including photos, communication, and battery life — the total Apple experience. This is not so much about the product and technology features but mainly about the ability to develop a new service ecosystem and to maintain desire for an emotional brand experience.

  • The new iCloud services will enable a superior customer experience across Apple’s entire product portfolio. We already explained here why Apple’s iCloud was further securing Apple’s expanding base of loyal customers. The new services Apple announced today enable consumers to seamlessly access, synchronize, and enhance their personal content from any Apple device.        
  • The new Siri Assistant is a new UI paradigm. Apple’s product strategists designed a new personal Assistant, unique to the new 4S, using the technology acquired from SIRI back in April 2010. This is a powerful harbinger of the future use of mobile devices — not just the power of voice but, more importantly, the ability to contextualize a statement or request. Apple product strategists revolutionized the UI with touchscreen technology, and Siri will do so again as mobile phones increasingly become the remote control of our personal daily lives and act as personal digital assistants. However, Forrester believes that Siri’s revolution will take much longer to play out, given consumers’ tepid embrace of voice interfaces to date.

What do you think of Apple’s announcement today? Are Apple products really better? Let us know your comments by joining our discussion here.

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