Monday, October 14, 2013

Is Apple is on borrowed time?

Controversial? Probably. In the last few weeks we've seen Apple release the new iPhones, both at a premium price. And whilst Apple can tell us how well they are selling I reckon that unless they make a change before long that their market share will dwindle. Why? I hear you on.

Bear in mind that I'm not a journalist or researcher and that this is only my opinion informed by factors that impact on my family and me.

There's no doubt that for a while now the iPhone has been more than a gadget. It's a fashion accessory and for some people a bit of a statement. The interface is intuitive to the point that almost anyone can feel comfortable with it in no time at all. I have one, that came free with my phone plan, and I think it is the bees knees.

Let's look at phones and tablets. It's unusual for kids these days not to have one or the other. And for many kids, they are prepared to spend money that they earn on their gadgets even if the first one they had was a hand me down or a cheap pre-paid option. This is where non-Apple devices win out. Recently my 15 year old son bought himself a Nexus 7 tablet. This was after weeks, if not months, of lusting after an iPhone. Why did he do this? Was it software - no - he readily admits he'd like a device running iOS. Was it the "cool factor" - no - Apple still wins on that front. Was it price in terms of bang for your buck - indeed it was.

I'm not saying that the device he bought (he also has a cheap Android phone) is better than the iEquivalent but it's faster, has double the memory and is less than half the price. What's not to like? It also got consistently good reviews.

Bundle into that the GooglePlay store which for all intents and purposes offers an equivalent range of apps for almost every practical application.

Next we'll see the release of the new Nexus phone at an equally tasty price point and with the latest version of Android.

What I see happening is the younger generation voting with their hip pockets and the Google/Android camp being the big winner. For the $9 per hour McDonald's employee and their friends they want value for their precious dollar in a way that most adults don't. And what will then transpire is that there will be a significant part of a generation who are immersed in the Google/Android way of doing things. Their apps, music and content will come from Google, not iTunes and Apple. When they get "real" jobs why would they change everything they already know and have setup?

Can Apple combat this? Absolutely. But they need a pricing structure and options that will compete with devices such as the Nexus range. A plastic covered iPhone 5 at $750 just doesn't cut it. And they need to get in with laptops and tablets at a price that kids will consider. I know that my son and his friends are all looking very closely at the Chromebook and similar devices. Their lives are in the cloud and $1400 for a MacBook Pro compared to $300 for a Chromebook is a big difference for a machine that most kids will use for the same purpose.

We live in interesting times and it will be interesting to see if Apple products stay as they are or attempt to compete in the ever growing teen tech market. After all, today's teens are the people who Apple will be wanting to buy their premium products in a few short years.

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