How Apple
Plays the Price Game
The XS is the season's gotta-have gadget. Except that
you really don't need it. The company is brilliant at adding features without
much function and charging a premium for them. In other words, this is a
sucker's game.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
Christmas
came early this year, which is not very good news for the toy makers, whose
businesses and sales are still pretty much in the toilet across the board. And
here's the thing: the toymakers can blame technology all they want and complain
about all the kids with their noses glued to the screens. But they're pointing
to the wrong part of the problem. It's not that the kids aren't excited about
getting a pile of new presents; it's that their parents are much more concerned
with buying the new and very expensive "tech toys" for themselves.
Let the kids wait until December; the starting gun for their parents' shopping
sprees is the annual Apple announcement of the latest and greatest new phones
and watches. And this year's race is on.
Once
again, Apple is leading the charge toward the inevitable cliff's edge in a
breathtaking game of "consumer chicken" that would scare even Evel
Knievel if he were still around. Just how high can these prices go for no good
reason? Apparently, at least for the moment, there's no end in sight. This
reminds me of the early days of the Intel Pentium chips when new chips kept
rolling out even though the alleged incremental benefits in speed and
processing power weren't apparent to most humans--at least none that I knew. Of
course, that didn't keep the geeks (and anyone not on a budget) from upgrading
to the newest versions-- see it, need it -- or not. In fact, this dependable
and consistent buyer response (a market-driven version of the Moore's law
belief that things just keep getting better and more powerful) set the behavior
curve for the tech industry and its customers for years thereafter. Honestly,
things aren't that much different even today.
Mom and
Dad don't care about cornering the market for Bobby or Betty on this year's
Beanie Babies. They'd rather brag to their neighbors and their carpool cronies
about their new giant iPhone XS MAX with a new Series 4 Apple Watch on the
side. Apple can try all they want to call this monster the "X-S", but
what leaps immediately into your head is "EXCESS" and that says it
all. Big dollars, big size, wretched excess at its finest. However, knowing
that this gotta-have behavior makes no economic sense and keeping yourself from
falling once again into Cupertino's clutches are two radically different
things.
In the
old days, we used to complain about planned obsolescence in the auto industry;
then we witnessed the same thing in the mobile phone world when our phones'
performance suspiciously degraded right before new devices rolled out.
Apple has also mastered the art of foolish functionality. The Watch is already
approaching a level of complexity (like any other over-engineered product)
where most of the embedded functions are unknown to most mortals and basically
unusable by the vast majority of the users. The additional 8 or 9 features that
are displayed on the face of the new Watch are called
"complications." A complication is a traditional watchmaker's term
for an added feature, but in this case it's more like unintended irony. And the
beat goes on. We're buying into the new stories against our better judgment and
even when we know that the things are no great shakes and not really doing the
jobs that we need done.
And,
the really sad thing - particularly about the Watch with all its new bells and
whistles - is that the battery life still basically sucks. How about fixing
what's not working every once in a while instead of adding more battery-sucking
functions that no one asked for. What good is a tracking device of any kind
(especially one that's increasingly positioned as a medical management tool) if
you can't count on it to last the whole business day and when you have to take
the thing off every night and recharge it? Makes it a little bit challenging to
measure your sleeping behavior if your Watch is sleeping beside you on the bed
stand. I wrote about this angst a while
ago and things haven't changed a bit. If your tracker isn't tracking,
what's the whole point?
Bottom
line: No matter how much steak sauce you put on a hot dog, it's still a wiener.