iPhone 5 Design As a Killer Feature

on September 14, 2012

As Steve pointed out in his article this morning, the sentiment that the iPhone is underwhelming steaming from many of the tech press lacks serious understanding of the consumer market. It is true that the iPhone does not have things that other phones have. Things like the largest screen of any phone, or NFC (I point out why here), or a number of other features. In the whole discussion of what the iPhone doesn’t have people are forgetting that Apple’s philosophy of what you leave out is just as important as what you put in. Many of those things the tech media is complaining about for not being in the iPhone 5 were left out on purpose. And I think its clear that Apple knows what they are doing.

But one thing the iPhone 5 does have that is unmatched in the smart phone market today is industry leading industrial design. In my opinion only Nokia comes close to Apple with its passion for industrial design. I’ve been using the Galaxy Nexus since June and there are many things I like about it. I used a Galaxy S3 for a short time a few weeks ago and it is nice as well. But I continually find the build quality, and attention to hardware design detail sorely lacking across the board, with the exception of Nokia. Design is a feature, that should not be ignored or discounted.

Many smart phones have a plastic, and cheap in my opinion, feel even though the screens are made of glass. Many of the most popular smart phones today are in fact made mostly of plastic. But there is a fundamental reason why these design decisions are made and holistically why most major smart phone OEMs do not pay the same attention to detail and industrial design of Apple.

Android Handset Depreciation

For Android to compete with Apple it takes an army of Android devices. Although Apple has several products on the market, they only have one current generation smart phone. Android OEMs launch dozens or more every year. Although the Galaxy S3 outsold the iPhone 4S briefly last quarter, its hard to believe that is a long term trend since many consumers held off for the iPhone 5.

The Android army can only succeed by flooding the market with Android devices. Some are very good but many are not. The key, however, is that to survive in that market and actually compete you need to constantly put new products in the channel and be very aggressive with price. Android devices depreciate faster than any other product on the market. What I mean by that is they start at inflated price points then very quickly get to $99 or even buy-one-get-one-free.

The Galaxy Nexus, one of the better devices on the market and the one that I am using until next Friday, is already $99 dollars with many carriers with a buy-one-get-one-free offering at that price point.

Some carriers around the world are also already offering similar deals for the Galaxy S3, Samsung’s flagship smart phone. Soon that device as well will be offered at extremely aggressive prices in every carrier around the world.

The iPhone however holds its value and does Apple does not need to drop the price of its flagship phone every three or six month’s to continue to outsell any single other device. Apple has never dropped the price of their current generation iPhone nor has any carrier needed to offer a buy-one-get-one-free deal in order to move tens of millions every quarter. I find this fascinating.

Further points on how the iPhone holds its value is in trade in or resell offers. I don’t see companies offering high value trade nearly a year after its release with any other product than the iPhone. This simply goes to you how the market value for the iPhone is drastically different than any other smart phone on the market.

This is where the design is the key. Because of the unprecidented attention to detail the iPhone does not just hold its value, it is valued by the market. More so than any other smart phone. Premium design is valued and don’t let anyone tell you any different.

Design is a premium differentiator and the fact that Apple keeps such a premium designed product at an entry level price with contract at $199 should continue to impress people.

I stated this in my article on the iPhone 5 earlier in the week but this new product will stand out like the crown jewels at a garage sale at every retailer where it is sold.