Rory Sutherland Rory Sutherland

iAddicts

Rory Sutherland doesn’t have an Apple iPhone. But he knows why you do

For many years The Spectator employed a television reviewer who did not own a colour television. Now they have decided to go one better and have asked me to write a piece to mark the tenth anniversary of the iPhone. I have never owned an iPhone. (In the metropolitan media world I inhabit, this is tantamount to putting on your CV that you ‘enjoy line dancing, child pornography and collecting Nazi memorabilia’).

But, even though I’m a diehard Android fan, I still cannot help paying attention to every single thing Apple does and says. I don’t think this happens in reverse. I doubt Apple owners pay any attention to the next phone announcement from LG or Nokia — any more than Anna Wintour lies awake wondering what Primark’s autumn season has in store.

How has it achieved this? Well, like De Beers before it, Apple has exhibited a rare marketing genius in creating something that defies the usual rules of economics.

By stubbornly resisting the pressure to chase volume sales by producing cheaper variants of the iPhone, and through fanatical attention to design, Apple has, ingeniously, become a technology company with the characteristics (and the margins) of a luxury-goods company or a high-fashion brand.

On the one occasion that Apple deferred to the bidding of financial analysts and introduced a lower-cost alternative to the flagship iPhone (the plastic-bodied 5C), it failed. Just as there is very little demand for the world’s second most expensive champagne, or for private jets with densely packed seating, there is very little demand for the world’s second-best flagship phone. As someone wisely once said to me, in response to a business proposal, ‘Yes, there may be a gap in the market, but is there a market in the gap?’

Notice that, for the world’s most valuable company, Apple sells remarkably few things.

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