Tech reviews and broad tech industry media coverage are often about the cutting edge of technology and, as a result, can be very critical of anything seen as less than stellar. But the reality is many ordinary people regularly use technology that could be much more accurately described as “good enough” rather than bleeding edge. The vast majority of us aren’t using the latest and greatest technology, not least because that often costs more than we’re willing (or able) to spend and yet we do just fine. This creates an odd disconnect between how real people use technology and how the experts talk about that same technology.
EarPods and Defaults
Every iPhone ever shipped has come with a pair of Apple-provided earbuds in the box, just as iPods did before them. These earbuds have never been at the forefront of headphone technology – they’re small, relatively cheap to manufacture, and make no claim to be anything more than they are. But Apple nevertheless made them part of its early ad campaigns for the iPod, and they became a fashion statement of sorts. In a recent survey our Tech.pinions editor Ben Bajarin conducted, over half of those surveyed said they used the headphones that came in the box.
The fact is, defaults are powerful. Many people use those defaults, especially when they’re good enough. That’s not to say there aren’t better options out there for audiophiles or those who want noise canceling or over-ear options, but it is to say that, for many people, the basic option is just fine and they’ll never look beyond it. This is obviously important in the context of the removal of the 3.5mm headphone jack on the new iPhone 7. Apple is banking on the fact the majority of people who buy one of these new phones will use the new Lightning-based EarPods just as they have always used their 3.5mm predecessors. Those who don’t will use the free adapter with their existing headphones or start or continue using wireless options.
Deciding Where Good Enough is Enough
It’s notable, however, that Apple chose not to ship Bluetooth earbuds in the box, even though its vision for the future is a wireless one. Why is this? I think there are two reasons. First, as a practical financial matter, “good enough” in a Bluetooth headset costs significantly more than in wired earbuds and Apple didn’t want to either raise the price or lower the margins on new iPhones to accommodate that increased cost.
But I think the other reason is there is a dividing line between products that can afford to be simply good enough and those that can’t. Apple wants to evangelize wireless technology and you don’t sell a vision based on “good enough” products. You make the very best to sell the story and then, over time, you supply options which are good enough to meet needs further down market. When the perception of a product affects the perception of your brand, you can’t just do “good enough” (unless that’s the brand identity you’re going for, as with Amazon’s Basics line of electronics). Hence, Apple’s very different focus with its AirPods, which are on par with Apple’s hero products in terms of the positioning, marketing and – yes – pricing. This marks a departure for the Apple brand in the headphone space, although, of course, the acquisition of Beats brought higher-end headphones into the company under a separate brand. That, in turn, signifies something about the broader significance Apple expects the AirPods to take on over time, something others have written about here and elsewhere, and which I’ll likely tackle separately soon.
The Challenge of Premium
One of the biggest challenges for consumer electronics brands is targeting the premium segment while also serving lower segments of the market. One of Apple’s strengths is it has never really strayed from its premium positioning even as it has brought several of its major product lines down in price over time. Conversely, other smartphone vendors looking to target the high end have also served the mid-market and have struggled to associate their brands with premium positioning. This becomes particularly challenging when the same brands put out “good enough” and premium products in the same product category, like smartphones.
Part of Apple’s genius has been carefully separating the categories where it provides premium products from those where it participates at a good enough level and not allowing the two to mix or converge. The fact Motorola and Samsung produce both high-end flagships and very cheap low-end smartphones doesn’t help their attempts to compete with Apple for the premium customer and Motorola has arguably largely abandoned the very high end in the last year or two. In the car market, this problem is solved with sub-brands (think Lexus versus Toyota, or Cadillac versus Chevy), but we haven’t yet seen that approach play out in the consumer technology market in the same way.
Disruption Theory and Jobs to be Done
Clayton Christensen’s Disruption Theory comes into play here too – when companies insist on providing only a premium version of certain products, they risk low-end disruption from competitors catering to the needs of those who feel over-served by the current options. However, despite repeated predictions that the premium smartphone market would eventually be disrupted in this way, it hasn’t happened. Yes, low-end Android smartphones have become increasingly capable and cheap, but that’s disrupted almost entirely other Android smartphone vendors rather than Apple. Why? I believe there’s something about products which have strong personal associations — such as smartphones, cars, clothing, and other luxury goods — which makes them stubbornly resistant to low-end disruption. Our use of these products says something about us and using cheaper imitators may not convey the message we want. The job to be done of smartphones and other similar products, then, goes beyond their obvious functions and is another reason why “good enough” isn’t good enough for at least some buyers who can afford to be more discriminating. This continues to be one of many fascinating aspects of the smartphone market which separate it from the rest of the consumer electronics industry and continue to make it such an interesting one to follow.
I guess my family’s has abnormal ears. We fall into the other half that has never found the Apple EarBuds comfortable. We have a drawer full of them. That’s why we bought over-ear headphones. Everything from $40 “good enough” for the kids to $200. The 3.5 mm headphone jack made it easy to work with iPads, iPhones, Nintendo 3DS, Macs, and Sunday morning watching of the Formula 1 races (I love listening to the stat of the race at full volume).
Yeah, the “over half” wasn’t overwhelming over half. It was just over half. The “almost half” is still a huge number. That’s a lot of customers to affect.
I am guessing, though, that the “almost half” considers a portion of wireless users, too. With the Airpods, that likely addresses a greater majority of users.
But even then, that is still a large chunk of “not good enough” and “don’t fit my ears” users that I guess Apple is fine leaving to either third party users or, as with me and a few others I’ve since come across who were big Apple proponents and users, done with the Apple level of “good enough” on the iPhone.
I wonder what disruption theory says about alienating one’s user base?
Joe
Joe,
Unless one is an investor or stakeholder in a company, who gives a rat’s a$$ what “disruption theory” or any other hypothesis not based on natural law says? The rest is as honest as business…
A user should just not care.
We’re not here as solely users though. It’s fine to draw from our experience as users, but we’re trying to understand the Mobile/Tech market, maybe even more generally Business.
Plus all the theorizing is kind of fun. I loved Asimov’s Foundation (well, the first few books). This is trying to Foundationnize business. A bit small in scope comparatively, but still ^^
Fair enough, but that’s not Tech, and Tech is not just computers for that matter. This is not Bizpinions either perhaps it should be.
Either way, I’m clearly the oddball on that point, but when I hear “Disruption Theory” as if it’s a real thing and not something that just got made up, it gets me going…
Agreed, it kind of gets tiring after 3 decades of business theories. But we can see that as a philosophy of business: we’ll never reach full understanding because like in economics, politics,… the very fact we’re getting some insights just bakes in more complexity since the insights now impact the processing inside the company/economy/political campaigns; but it’s still more interesting than giving up or going on gut feeling.
I get the feeling we’ve gone full circle from “creative destruction” to “disruption”. Maybe we’re a bit more inside the circle though.
What bothers me most is the lack of emphasis of product and execution. It gives an air of inevitability to things, as if strategy was the only factor. To be expected from strategy consultants I guess ?
You’d think the theory explains everything there is to explain in the world including why Aunt Sally does multiplication before addition*. It’s reached the point that every time I hear or read the word ‘disruption’, my vision dobules as I suffer a minor seizure. I dread the day I come across that word in the same sentence as ‘paradigm shift’.
*Wond’rin’ who gets the obscure allusion.
PEMDAS I would guess.
Anyone who ever used an HP RPN calculator….? 😉
Never liked them, myself.
I was being mostly tongue-in-cheek. But only sort of. When a company starts to alienate their strongest user base, however, that can’t be a good sign. I’m still a Mac user, but the iPhone “innovations” are really getting quite superfluous, imho. But of course, where else do they go with the smartphone at this point?
Joe
In fact, you are the least likely person to have gotten that comment from me. It’s all in the timing.
At the peril of painting you by similarity, I agree with you on the user parts. Happened to me in ’09.
I think Apple has enough data about their customers’ characteristics and preferences to know that getting rid of the 3.5mm jack will alienate some customers but nothing close to their user base, that is if by ‘user base’ you mean the bulk or at the very least a significant segment of their customers.
Of course I don’t know what the numbers are but the evidence suggests the people running Apple have above average IQs so I have some faith that if they expected anything even remotely close to half of their customers were going to go Android because of the disappeared jack, they would not have disappeared the jack.
In the end it’s serving themselves and making their goal easier to achieve. They added zero sound benefit that didn’t already exist in order to add other features while maintaining the same arbitrarily thin profile.
Falkirk would say, it’s their right, it’s a design decision. He’s right, and that decision is subject to scrutiny on all levels. There are fewer jobs that can be done as a result of this design decision.
I have no doubt that I and the other iPhone users I know who have staunchly owned one since 2007 are simply collateral damage. Of course, for myself, it isn’t just the audio jack, but the OS overall, too. I am not saying I am looking forward to Android (I would rather go Windows, but the work apps I use aren’t available on that platform), but they certainly are “good enough” at this point.
Joe
As I have probably discussed elsewhere on this site, Android has 80% of the smartphone market whereas iPhone has somewhere around 15%. This makes the smartphone market a textbook example of disruption where Android has captured the low-end of the market (where current smartphones are “good enough”) and also greatly expanded the market size itself. Android has however failed so far to move upmarket to the premium segment where the iPhone is.
This is similar to many other cases where low-end disruption has occurred, but where the incumbent still remains very profitable in the premium segment niche. The wristwatch market is a good example of this, where quartz dominated the market in units but the mechanical watches dominated in profits.
In these cases, what happened was that the “enabling technology” (In the case of Android, it was modularisation. In the case of watches, it was quartz.) alone was not sufficient to drive out the incumbents. Since technology is less capable of replacing aesthetics or branding/marketing, these cases will be more common in markets where this is important. In markets where features and price are the most important, even at the high-end, the incumbents are more likely to be pushed out because they match the “enabling technology” more.
The problem with applying the “personal associations” discussion to smartphones, is that you have to contend with the fact that people will have “personal associations” with their Android phones too. By realising that the iPhone has already been disrupted by Androids, and that the premium segment where the iPhone users are has very different market dynamics, its much easier to draw similarities to the watch market for example and see where things are heading. Essentially, the iPhone does not compete in the same feature-cost driven market where Android is. It’s in a different market.
Regarding AirPods, I think it is wrong to place them in the premium segment. They are more like the original MacBook Airs which were originally overpriced and underpowered laptops, but quickly became the entry-level devices. Remember that Steve Jobs also negotiated hard with Lucent to reduce the price of the WiFi card in the original AirPort devices. Apple is dead serious about making wireless mainstream, and not premium. It’s probably just that they cannot bring the costs down enough yet. Either way, Apple never does just plain “good enough” as can be seen in the beautifully designed boxes they sell their devices in.
http://www.greenpeak.com/company/Opinions/CeesLinksColumn24.pdf
“Essentially, the iPhone does not compete in the same feature-cost driven market where Android is. It’s in a different market.”
That’s a great way to summarize it. I’ll have to remember this snippet. Thanks.
Apple never does just plain “good enough”
Depends in which area. Packaging, sure ^^ design and looks too. But specs-wise, the MBA screen and webcam, the iPhone battery, the Macs’ performance (esp. graphics), expandability, I/O, … are barely “good enough”.
Agreed about the iPhone not competing in the features-cost market, but then it’s not in the premium market, but in the luxury market. Premium is about doing more, better, faster, easier, ie still features-based. Luxury is about intangible, subjective stuff (cf luxury wine, mostly about the label; luxury handbags and shoes, mostly about splattering logos and red stuff; even luxury cars ie Rolls-Royce aren’t about performance/comfort/…). Premium and luxury overlap a bit especially for technical goods, but are really distinct concepts.
I disagree on your definition of premium vs. luxury, but that isn’t the point here. As long as we agree that the markets are separated, it doesn’t really matter how.
Obviously the jet black finish is “good enough”. I remember when Apple wouldn’t ship the newly announced white iPhone because it wasn’t good enough. Times have changed.
Joe
I thought the white iPhone was delayed because of light leakage re: the white material finish and that problem had to be solved first. Is there a similar functional problem with the jet black iPhone? The jet black iPhone finish reminds me of stainless steel, stunning at first, but then you get a few scratches and it looks bad, but once you get a kind of full patina on the surface it looks really cool again.
“The fact Motorola and Samsung produce both high-end flagships and very cheap low-end smartphones doesn’t help their attempts to compete with Apple for the premium customer”
I agree it doesn’t help but the primary reason these companies can’t compete with Apple for premium customers is that much of the premium segment is looking for an experience that only Apple provides, and no other company even seems interested in attempting to provide a similar experience. Most premium customers want a solution that is closed and curated, abstracted and simplified, a whole solution from wrist to pocket to pad to laptop and desktop from a single vendor, all well supported (including a good retail presence), well-designed, integrated services as well as hardware/software, quality build/materials, and safe, secure, private.
While it is true that some premium customers are looking for something more open and are less concerned with a single vendor solution, that is not the majority of the premium segment. Premium customers want the kind of experience Apple is providing. Who else in tech is even attempting to offer this kind of whole solution? Apple isn’t perfect, but they are delivering the kind of value and experience that resonates with premium customers, and Apple’s dominance of this segment is tough to argue with.
As for the issue of ‘good enough’, when you are delivering an integrated and abstracted user experience (computing as appliance) it is very difficult to overserve and reach good enough, it may actually be impossible to get to good enough, which is why Apple has been and will continue to be largely insulated from disruption.
I agree. I like your argument much more than the often cited “personal association” discussion.
I beg to differ. Good enough is a Wintel strategy.
Inexpensive headphones, that typically cost less than $3, have been included with most cell phones for years as a way to make the phone safer to use while driving. Whether they do or not can be debated, but it’s partially driven by the corporate lawyers.
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