Ben Thompson: You Should View The iPhone As An Affordable Luxury Item

  • November 13, 2013

Ben Thomspon takes on the latest report from the Wall Street Journal, with another great article. According to Ben Thompson, the growth of the iPhone in Japan is not all that “surprising” if you view the iPhone as an affordable luxury item.

Ben Thompson, responding to the Wall Street Journal piece:

This is one of the key errors most observers – including, in the past, myself – make when considering Apple’s growth prospects. It’s assumed without question that growth is only available in developing nations, or among those without smartphones.

Conventional iPhone wisdom is that the iPhone has tapped out developed markets and must go low cost

This is the completely wrong frame for understanding the iPhone. It’s not that the iPhone has fully penetrated developed countries, leaving the rest – we’re not talking about a Pampers or Pepsi here, or some other consumer packaged good. Rather, the iPhone is an affordable luxury item; the percentage of the population to which it is affordable just happens to differ market-by-market.

The iPhone targets the high-end in all markets, not just developed markets.

With this framing, it’s obvious that the iPhone would be successful in Japan. Japan remains one of the richest countries in the world, which means a whole bunch of the population falls above the “affordable luxury line.”


Image Credit: Stratechery

Posted by | Posted at November 13, 2013 17:50 | Tags: , ,
Storm is a technology enthusiast, who resides in the UK. He enjoys reading and writing about technology.

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