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Too many can afford Apple?

Chua Hian Hou asks if Apple's mass market strategy will work against it.

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Published on September 11th, 2008
 

NOT many companies inspire the level of cult-like devotion Apple, maker of iPods and iPhones, does amongst its fans.

In recent years though, Apple has moved to try and grab a slice of the mass market, with the launch of products like the iPod Shuffle and more recently, the iPhone 3G.

This mass market strategy may yet work against it.

And signs of this may be showing up in the recent fall-off in grey-market iPhone 3G demand.

From $1,600 during and just after its Aug 22 launch, the higher-end 16GB iPhone 3G are now going for about $1,200. Meanwhile, the low-end 8GB sets are going for under $1,000, from $1,200 previously, according to handset resellers and online classifieds.

Will Apple lose its appeal if too many get to enjoy its products?
Photo: AP

Is anybody going to disagree when I say that a huge part of Apple's appeal was its inaccessibility and exclusivity, that having an iPod meant membership into some "in" crowd?

Thought so.

And during the early iPod days, Apple designed and priced its products to capitalise on this.

It worked, and the iPod was the epitome of brand cachet and desirability, a case study trotted out at pretty much every single marketing and branding seminar I went to last year.

There were even reports of how those who could not afford an iPod would buy its trademark white earphones, connected to a cheaper player, simply to fake the look.

These reports usually emerged because the poseur had been beaten to a pulp by a disappointed robber who thought he had scored an iPod. Ouch.]

2005's iPod Shuffle marked a departure from this.

At US$100, it was cheap - by Apple standards anyway - a product clearly targeted at the mass market.

It has pursued this strategy consistently since, all the way to its newest product to hit our shores, the iPhone 3G.

But in going downmarket, Apple appears to have lost some of its original shine, to its original fans.

"Today," said an analyst who declined to be named, "every Ah Beng and Ah Seng can afford to buy and has an iPod."

"If Apple is not careful, this will be the case for the iPhone, and other future products, too," he said.

And this cannot be good for a company that made its fortune by being synonymous with "cool".

Apple still makes desirable, sexy products. But they are also clearly no longer as "cool" as they used to be.

Is the unexpected crash in grey-market demand for a new, limited distribution yet heavily marketed product could be an early sign that Apple has lost its deathgrip on the tech consumer?

Maybe.

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