The Macalope Weekly: A fundamental lack of understanding


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Let’s face it, saying ‘iPads cost too much!” is the same thing as saying “I don’t understand why iPads are popular.” And saying that the iPhone 5c isn’t selling well is just another way of saying “I can’t read sales data.” But a Microsoft exec going on and on about how Apple no longer charging for software doesn’t affect Redmond? That’s just saying “I don’t understand our business model.”

I don’t understand!

The San Jose Mercury News’s Troy Wolverton is back and scratching his head over Apple again.

“Pricing of Apple’s new iPads is out of whack” (tip o’ the antlers to Tay Bass).

Apple (AAPL) still knows how to create compelling products.

Get ready for Troy’s big “but”:

But it seems to have forgotten nearly everything it ever learned about pricing such products for mainstream consumers.


The company’s new iPads, unveiled Tuesday, look great and include some exciting new features. But …

Hey, Troy’s got two big “buts”! Wait, that doesn’t sound good. Shouldn’t he see a doctor or something?

… the pricing of the company’s iPad line as a whole is absurdly high, with Apple’s models often costing at least $100 more than their closest rivals.

Apple has somehow forgotten how to price things? Does Wolverton’s argument really boil down to “Steve Jobs never priced things higher than his competitors!” Because, the Macalope doesn’t know if Wolverton noticed, but we’ve been having this argument for, oh, 30 years. It goes a little like this:

Pundits: “Apple products cost too much!”

[Apple products proceed to sell, often incredibly well.]

Pundits: “Apple products cost too much!”


Apple, of course, has a reputation for offering expensive products, and company executives have repeatedly tried to position its brand as a premium one.

“Tried to.”

Apple’s iPod line was consistently priced aggressively compared with its rivals …

$399 was aggressive? The current iPod shuffle is $49 for 2GB. A 4GB Sansa is $33. And it has a screen. It looks like hell, but it has a screen.

Which, of course, is the point. As Ben Thompson put it about Macs:

Macs aren’t expensive because they’re Macs. They’re expensive because they are high quality.


It’s fine to not care about quality. But at least admit you don’t care about quality. :)

Wolverton doesn’t seem to get that. Or doesn’t want to get that. Or needed to type up something fast because he was on deadline.

When Apple introduced the original iPad with a starting price of $500, many observers were blown away that it would charge that little, as some had speculated that the device would cost as much as $1,000.

And it took Android device manufacturers three years to learn that the only way they were going to compete with the iPad was on price. That says more about their devices than it does about Apple’s pricing strategy.

You may not be surprised to hear that according to numerous reports, the [iPhone] 5C is selling poorly …

Millions of units in the first weekend is the new “poorly.” Note to Wolverton: It may not be selling as well as the 5s and it may not even be selling up to Apple’s expectations, but it is not selling “poorly.”

… and several retailers have already offered discounts on it.

“This just in at the San Jose Mercury News: Discount retailers are offering discount prices. We’ll update you on this breaking news as it unfolds.”

Apple’s prices would make sense if the company were still dominating the tablet market. But its market share has plunged and its tablet sales actually fell last quarter from the same period a year earlier.

Or they would make sense if you would realize that Apple is gobbling up the high end of the market, walking off with all the profit, and not really giving a darn about the low end. Well, that’s not completely true: If they can make a good device and sell it for cheap, heck, they’ll take the low-end profit, too, thank you very much.

And I don’t get this other thing!

Wolverton isn’t the only one who can’t be bothered to understand iPhone 5c sales. The Huffington Post’s Kim Bhasin believes that their inherent suckiness is the result of feelings and evolutionary something something, according to some guy promoting a book.

“The ‘Cheap’ iPhone Isn’t Selling Because It Doesn’t Make Anyone Jealous” (tip o’ the antlers to Jonathan Hilovsky).

Isn’t selling. Millions of units in the first weekend. Not selling. Just jot that down.

Then burn the piece of paper you jotted it down on. And the desk. And the house. Burn the whole world.

You can’t use the iPhone 5C to make your friends feel bad about themselves, and that’s creating a problem for Apple.

That’s what it’s all about, of course: making your friends feel bad about their purchasing decisions. If that isn’t the definition of friendship then what is?

The 5C costs $549 (or $99 with a two-year contract), and Apple appears to be having trouble selling them, according to multiple reports.

That is not what those reports say. What they say is that the iPhone 5s is selling better and that Apple may have made too many units of the iPhone 5c, leaving some on store shelves. That’s a little different.

The problem is …

What’s the problem, all-seeing Huffington Post writer? What’s the problem that you can see that Apple can’t?

… that Apple seems to have lost sight of one of the big reasons people go crazy for its products: iPhones and iPads make buyers feel “superior,” and allow them to flaunt the latest and greatest gadgets for all to see.

Of course. It’s not that they offer a better value because of their superior user experience, build quality, and resale value. It’s because we’re all jerks.

“A long time ago, you were the hunter who brought back the biggest deer or killed the lion and wore its teeth around your neck,” said Roger Dooley, author of Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing.

What would the writers trying to come up with new ways to apply psychology to marketing do without Apple to help them promote their books?

At the heart of Apple’s brand is an “Us vs. Them” factor that has been cultivated since the company’s early days in the 1980s fighting against Microsoft and other behemoths of the tech world.

Unlike, say, Samsung’s. So, we’ve gone from “one of the big reasons” to “at the heart of Apple’s brand.”

Since the first iPhone was released in 2007, Apple phones have long enjoyed being perceived as superior because of product features, design and some level of intangible “coolness.”

They weren’t, of course. They were just perceived to be.

[The iPhone 5s] was the top-selling smartphone in September, followed by Samsung’s Galaxy S4, with the 5C trailing the leaders in third place, according to a report from Counterpoint Research.

The third best selling smartphone is “not selling well.”

No, it’s not you. It doesn’t make any sense.

I really don’t get it

Speaking of not making any sense, let’s see what Microsoft’s Frank Shaw has to say about Apple’s announcements on Tuesday.

[Picture of the Hulk angrily and indiscriminately smashing things.]

Suffice it to say that Frank has never been a guy you have to pry feelings out of, and this case is no exception.

I’m still over in Abu Dhabi, where the only thing hotter than the weather are the new Windows devices unveiled by Nokia this week.


I have to say, I’m really excited for a 1080p Lumia with a third column on my start screen so I can keep a close eye on more people, more news, more stuff.

Slightly less nice, slightly more creepy, but way to drop those product placement bombs.

Seems like the RDF (Reality Distortion Field) typically generated by an Apple event has extended beyond Cupertino.

You are going to owe the Meme Library a gigantic fine for having checked that one out in 2001 and not returned it.

Surface and Surface 2 both include Office, the world’s most popular, most powerful productivity software for free and are priced below both the iPad 2 and iPad Air respectively.

Oh. So they must be selling super well then, right?



Since we launched the Surface line of tablets last year, one of the themes we’ve consistently used to talk about them is that they are a terrific blend of productivity and entertainment in one lightweight, affordable package. In fact, we’re confident that they offer the best combination of those capabilities available on the market today.

If only consumers thought the same thing!

Let’s be clear …..

Surface RT versus Surface Pro kind of clear or …?

… – helping folks kill time on a tablet is relatively easy. …

But helping people be productive on a tablet is a little trickier.

Here we get to Microsoft’s blind spot. (OK, one of its blind spots, but the one relevant to this discussion.) Office may make some people more productive. Heck, many people can’t do their jobs without it. But these days many more work in Web applications, ones that either work through mobile browsers or have their own mobile apps.

It takes an understanding of how people actually work, how they get things done, and how to best support the way they do things already.

Yeah, and you have a great idea of how this worked in 1998. You apparently have no idea how that works today.

The good news is that Microsoft understands how people work better than anyone else on the planet.

For your sake the Macalope hopes that’s just marketing and that you’re paddling like a duck to where the puck is going and now he’s screwed up this metaphor, but you get the point.

So, when I see Apple drop the price of their struggling, lightweight productivity apps, I don’t see a shot across our bow, I see an attempt to play catch up.

That’s funny, because when the Macalope sees you drop the price of your struggling, lightweight productivity laptop he sees the same thing. It’s just that with you being forced to cut prices on operating systems, applications, and hardware, he doesn’t see where you’re going to make any money.

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