I get a little bothered when people expect pundits like CC to be right 100% of the time. If they get nit-picked too much, then people stop making predictions. And CC may indeed be correct on the iPod - it had a great run, but sales are falling through the floor. Similarly, Apple is looking great in the iPhone, but it is still under attack on the low end.
I doubt very much that businesses are as rational as he makes them out to be. Many businesses buy extremely expensive software for completely irrational reasons or pay business consultants for obviously meaningless fluff.<p>The difference between consumers and businesses is that businesses that act too irrationally for too long are more likely to fail and get replaced by more rational businesses. I suspect that the statistics on rational businesses often suffer from survivor bias.
Ben Thompson is mostly wrong: Customers don't 'buy' iPhones, Carriers do i.e. iPhones are protected from low end disruption by carriers subsidizing and obscuring the price with plans/contracts. In markets where carrier subsidy isn't as popular (e.g. Europe) iPhone market share is very low. Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product.<p>NB Apple was always careful to sell low end iPods like the nano and shuffle so they continuously disrupted themselves in that product market and kept other companies from doing so.
I guess this is a 2013 article, but I'm surprised that what hasn't been mentioned in the comments yet are the platform/network effects of iOS apps and the App store.<p>I think it's interesting to identify a consumer focus on status/UX/psychological benefits, but I actually think it's wrong to say that the consumer isn't paying for more functionality because I think the iOS app ecosystem actually provides pretty compelling additional functionality in addition to the incremental, but still relatively meaty, upgrades between phone models and nominally nicer UX.<p>I mean, the App Store is still much better curated than its open Android counterpart. The iOS development seems to have more robust developer tools, offer better return, have a more or less standard device structure for testing, etc etc.
(<a href="http://thinkapps.com/blog/development/platform-build-first-ios-vs-android/" rel="nofollow">http://thinkapps.com/blog/development/platform-build-first-i...</a>)<p>The iOS ecosystem isn't just the handsets. It's the App store, the developer tools, etc. This allows developers to better create functionality on top of all these Apple devices and enables Apple to surface those quality apps/functionality better and faster. That's a significant benefit.
I don't relate to this at all, but accept that I'm an outlier in the marketplace. I have a cheap android phone on a cheap month-to-month plan. Other than the apps it came with, I have installed very little from Google Play. I use the phone for texting, phone calls, mobile email, maps, occasionally mobile browsing, and that's about it. I don't play games with it, I don't listen to music with it, I don't take pictures with it. Even this cheap phone does way more than I need. I would never consider an iPhone.
That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak.<p>In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status).<p>In a sense, the same applies for the BMW - you could probably get as great car as the BMW , for much less , but the BMW holds important psychological advantages.<p>And as for consoles - i'm not sure we've reached "good enough" level of graphics for true gamers. When we'll reach that - it would be interesting too look at that market.<p>So yes, consumers aren't rational and for some thing you can never satisfy them, but i'm not certain user experience is one of those things.
iPhone and iPod are very interesting and unique case studies in that they combine high-end differentiation (the devices, or at least the brilliant marketing-fueled perception of the devices) with low-end disruption, and with network-effect ecosystems (music, apps).<p>The low-end disruption is cheaper music (iPod) and cheaper computer (iPhone). Computer in that many consumers initially saw iPhone as a way to do email, web and apps without paying for separate computer and Internet.
Were Steve Jobs, John Ive, Tim Cook and other Apple guys crystal clear about the theory when they started iPod/iPhone? I don't think so. Apple has a unique weapon called design and is willing to pay whatever it costs to enhance it. Its business is to use the weapon wherever there is a chance: mp3 player, tivo, mobile phone, watch and more to come. The rest is upon professors in business schools to figure out.