Since last week’s iPhone launch and the resulting lack of Wall Street enthusiasm there has been a great wailing and gnashing of teeth both from technical writers and financial “experts”. It is all well and good, they say, but you cannot build a $500bn company on the basis of expensive, elitist products. You need massive volumes to do that, they say. All this comes about because the iPhone 5C is perceived to be too expensive and elitist. Where is the cheap phone to capture the world markets, the areas that Apple appears to be neglecting?
It seems to me that there is a need for both low-price, high-volume products and high-quality aspirational products on which the manufacturer can make sufficient profits to ensure long-term viability. Wall Street, it appears, does not take this view.
My friend Pietro Montalcino writing in his Macography blog has a robust view of Apple’s position. Extravagantly, he compares it to the choice facing King Leonides before the battle of Thermopylae: Stand by your principles or submit to tyranny, in this case the tyranny of the markets. I appreciate the analogy, drastic as it may seem. Have a chuckle over this extract from the movie 300 on YouTube.
Writing this piece has brought to mind a picture I snapped on my iPhone yesterday. Is this what Wall Street means by providing cheap products for the masses in order to boost the value of the company? Give away both your phone and your tablet in return for a phone contract. Now that really does make sense and is clearly the way to riches and Wall Street approval. The term “busy fools” springs to mind.