In all the discussion over the antenna problems with the new Apple iPhone 4, there is one thing that I have not heard, and that is how few product lines that Apple has. The iPhone 4 is a prime example. It comes in two memory sizes and we are promised a second color real soon now. On the Apple site you can still buy the previous generation iPhone 3, but that still makes it 3 models available with another one or two to come. Compare this with BlackBerry which has six ranges and thirteen models. Blackberry is restrained in the number of models it offers compared to the likes of Motorola, Samsung or Nokia.
The same its true in other areas. With the Mac, Apple has three ranges of laptops, three ranges of desktops and one rackable server. Compared to HP, Dell or Acer this is a ridiculously small number of product lines. Again with the iPod there are 4 product ranges each with a couple of different memory size and and more variation on color.
There are a number of advantages in having a small number of product lines. Economy of scale will make the product cheaper to manufacture, however by the time you get to millions of devices, the additional advantage is not that great. More important are a brutally strong brand image and a lack of consumer confusion. There is no question about which version of the iPhone to get, the only question is whether you are willing to pay more for the extra memory.
However, there is one big disadvantage to having a single product line like the iPhone, and that is that you have all your eggs in one basket. If the product should prove to have a flaw, there is no other product line to take up the slack. If a consumer want to buy an iPhone now, they either have to go ahead and take the risk that it might be a lemon or wait until the problem is fixed. They cannot go out and buy the other Apple phone because it does not exist. For a big consumer goods company, Apple has had remarkably few dud products, but their life depends on getting each one right.
Thursday, July 15, 2010
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