Apple: "It's what you buy"

John Gruber and Ben Thompson's recent posts about Apple's station in the high end are strong cases for Apple, even if you take the most cynical interpretation. Matt Drance's post on the unoriginal Samsung Galaxy Gear ad is astute, but ends on an unfortunately cynical note.

October 10, 2013
Jonathan Libov

When a friend of a friend was in need of a new computer, his represented nearly the most paradigmatic case for replacing a laptop with a "good enough" laptop or tablet that would save hundreds of dollars. He works in education and does no sort of computing that couldn't be done effectively with a Thinkpad, a Macbook Air, or even an iPad and a standalone Bluetooth keyboard. And yet he bought a Macbook Pro.

His explanation: The Macbook Pro "is what you buy".

His thinking was unfortunately flawed and costly. And although this anecdote encompasses laptops and not phones, it speaks volumes about Apple's position on the high-end of the smartphone market.

Put aside the earnest "build quality" argument for why Apple products are generally superior to competitors', posted recently by Ben Thompson and John Gruber. (For what it's worth, it's an argument I wholly agree with). My friend's friend's purchase epitomizes the most cynical bull argument for Apple's continued success; cynical or not, it's a compelling one: All consumer sectors produce a status symbol class product. By pricing a product at the high end, you go a long way toward defining it as the status symbol within its market. Price is a signal of quality, whether or not it's actually true. Sometimes it isn't.

Sub-Zero refrigerators, BMW's, and iPhones will always have a market, but if those particular companies falter, it won't evaporate the high end of the market. It will merely open the door for new high-end entrants. This might be Xiaomi's play (so long as they learn to spell "Android" correctly.)

In fact, the commoditization-of-hardware-and-software argument is as much an argument for Apple as it is against. A high-end smartphone will always be in demand precisely because it is not perceived to be commodity class. Rather than chastising Apple for being "greedy" with their margins in a world where Android is free, you might say that the Android ecosystem actually complements the iOS ecosystem rather auspiciously. Given the alternative of the vast and wild Android market, there is a segment of consumers for which the iPhone "is what you buy."

This dynamic alone couldn't possibly sustain Apple, but it goes a long way toward tamping the argument that market forces alone will drive the iPhone into obsolescence.

The Samsung cynic

Matt Drance crystallizes why Samsung's lame advertisement for the Galaxy Gear ad is not only shamelessly derivative of Apple's original iPhone ad, but is, even more unfortunately, completely vacuous.

Drance concludes his post on a cynical note:

"The problem with this ad is not that it’s ripping anyone off. The problem with this ad is that it exhibits everything wrong with Samsung as a company."

Now, as someone who values originality as a consumer and a professional, I would much sooner accept a job with Apple than I would with Samsung. And, all things being equal, if the marketing executives behind the original iPhone ad and the Galaxy Gear ad were competing for the same contract on some new project, the one behind the iPhone ad will get the gig.

But does that make Samsung "wrong"? Only in an alternate universe where the free market has been replaced with a meritocracy.

The market will reward some company for copying Apple in the way that Samsung does because consumers don't value originality as much as they value cost. If not Samsung, it would be someone else. Perhaps that makes Samsung less interesting to observers of the industry, but it hardly makes them "wrong".

There are censurable practices in marketing and advertising. Making false claims about a product, for example, is wrong and illegal. Lame, unoriginal advertising is neither of those.