"Verizon reported Tuesday that more than half of the iPhones the company sold in the fourth quarter were older models that sell at deep discounts. Dane Scism, a Verizon dealer with nearly 600 stores around the country, said many of his customers settled for the iPhone 4 and iPhone 4S, because they didn't see a value in paying up for the iPhone 5's faster cellular connection—one of the new device's marquee features."
Apple's strategy of always having the next big thing in technology has not worked well in the past few months. It appears that Apple is reaching market saturation with the early adapters. Apple devices are still the highest selling smartphone brand in the United States, but customers are settling with the older versions of the iPhone. "Apple's decision to let carriers sell its older model phones at discounts or even for free has helped get iPhones in the hands of more users". But this decision, in some cases, has also made older versions more attractive than the new versions. I recently purchased an iPhone 4 rather than 4S or 5. Part of this is because the iPhone 4 was free with my upgrade and I couldn't justify spending an extra $100 to get the 4S or $200 for iPhone 5. The characteristics of the 4 and 4S are pretty similar except for Siri, a voice control program that does not always understand my commands. Regarding iPhone 5, "it is a combination of lightness, thinness, performance, and beautiful design". My thought process was: well, I really like the iPhone 5, but I know that Apple will probably launch iPhone 6 soon so I am better off getting this free iPhone and waiting for the next big thing.
Apple no longer dominates the smartphone market. Competitors are right behind Apple just waiting for the moment when Apple's products become so similar to older versions where the expense does not justify the purchase, that customers are no longer interested. Apple should reevaluate its marketing strategy to be able to keep its customers loyal to the brand and to attract new customers. What's next Apple?
Source: http://online.wsj.com/article/SB10001424127887324539304578262360860151882.html?mod=WSJ__MIDDLENexttoWhatsNewsFifth
http://www.gizmag.com/iphone-5-vs-iphone-4s-vs-iphone-4/24351/
http://live.wsj.com/video/the-race-to-unseat-apple-as-the-smartphone-king/F1C0073B-D45D-41D7-B7DA-0D806C068835.html
Very interesting! In my capstone class last week we not only discussed the fact that consumers are now settling for older versions of the iPhone at a lower price, but also how Apple isn't really an "innovator." While the company has been successful and is really great at perfecting a product, it's usually after another firm has put the time and money into researching and developing an up-and-coming technology.
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