Market Segmentation in Action (for Apple)

Scott Francis
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Looks like our previous discussion of market segmentation might be just about right. An update from Kantar reports that almost half of iPhone 5C owners were switching from Android (or at least “other brands”), whereas nearly 80% of iPhone 5S owners were upgrading from previous versions (which is typical at the beginning of the product cycle).

So, Apple has produced an additional way to differentiate its products that is neither:

  • selling last year’s phone, nor
  • selling an upgraded RAM package ($100 per step up)

Not that Apple isn’t still differentiating on those two fronts as well.  But this time around, the departure is netting “switchers” from other operating systems.  Perhaps the lower cost (with subsidies, iPhone 5C might be $99 in the US) puts the phone in direct competition with Android phones.  Or perhaps the price is low enough to no longer be a deterrent.  Or perhaps they just like the plastic finish better (less hipster?).

A year’s worth of data will make this really interesting.

  • Alberto Manuel

    Scott:
    This is just a side comment taking into consideration that your passion for Apple should be as an example that if most people should have the same passion they have for a brand as they have for their own lives, companies, processes, bpm, enterprise architecture could be much better (this is the important part).
    Anyway, I found funny how people are addict for the measures about what is the best phone, like internet traffic, app ecosystem, app revenue, etc It’s like in process management, full of KPI that cannot be compared and only create noise. Putting differently, Apple cannot deliver the maximum of the scale in phone features (like screen size) but what it delivers is perfect or near perfect compared to competition. This makes a lot of difference. It’s best to restrict features offering but excel because the consumer will never be annoyed with under-performing points. This is the way I see and I never owed an Apple product. Forget the traffic.

    • Alberto, you are so spot on. Passion for product, passion for what you do, passion for what you do with a product- these are really compelling forces in the economy and in people’s lives. And being really good at what you provide to customers is a great way to build that fan-base.