The speaker discusses the current state of the smartphone market, noting that it has been declining for several years due to an overall economy hit. Despite this, Apple has been the only major smartphone company to see its market share rise, despite being on the higher end of the price spectrum. This is due to several key factors:
1. Global income increases: As incomes rise, more people can afford expensive things, which naturally favors Apple.
2. Unique pricing strategy: Unlike other smartphone companies, Apple has set a minimum price for their iPhones, which is lower than their competitors. This strategy positions Apple as an aspirational brand, particularly for first-time buyers.
3. Network effect: Apple's products, such as iMessage, FaceTime, and AirTags, become better with more users. This network effect contributes to Apple's growth.
4. Ecosystem: Apple's ecosystem, which includes their App Store, accessories, and financial services, appeals to wealthy users who are willing to spend.
5. Control: Apple's control over its products, services, and ecosystem drives loyalty among its users.
The speaker also mentions Huawei's recent ban in the U.S. due to security concerns, which has potentially opened up a market for Apple. Overall, Apple's strategy of focusing on quality, control, and user experience, coupled with the current market conditions, has put it in a strong position despite the overall decline in the smartphone market.
1. The smartphone market has been declining for a few years.
2. Companies are selling fewer models and discounting to keep numbers up.
3. Apple is the only big smartphone company whose market share is rising.
4. Apple's pricing strategy is intentional, they charge a minimum of $400 for the iPhone SE series.
5. Incomes are rising globally, with an average of 50 million more people moving into the high-income category every year.
6. Apple's products are well-positioned to take advantage of this rising income.
7. Apple's products are engineered around the network effect, where the product becomes better the more people use it.
8. Apple has engineered their products around the network effect philosophy, with iMessage and FaceTime being examples.
9. Apple's network effect is most noticeable in their ecosystem, which includes air tags, HomePod, and the App Store.
10. The Android market is more experimental, with a wider range of devices and more frequent feature updates.
11. In a mature smartphone market, future purchases are less about the latest features and more about enjoying current features.
12. Apple has carefully planned out the release of new features to maximize profit and maintain user loyalty.
13. Apple's control over their products and services, such as repairs and charging methods, drives loyalty among users.
14. Apple's pricing strategy protects the value of their products, making them a more secure investment.
15. The US-China ban on Huawei has released millions of new users for Apple.