Apple Abandons the Mass Market, as the iPhone Turns Luxury

Not sure a $1000 phone was ever mass market, I always thought they were luxury smart phones...

Apple is moving "upmarket." It will be interesting to see if their fans' intense loyalty towards the company's products will win over this classic "innovator's dilemma" mistake that Apple is making.

I for one thought Apple was going down a wrong path the moment they started implying they wanted to make super-expensive (compared to their costs and features) "fashion" products instead of continuing to make "premium tech products", which I define as tech products using high-quality materials (and as such more expensive by default than the average product) that may or may not have "healthy margins", too (as opposed to the "outrageous margins" that most luxury/fashion products have).

Most laptops have been in the luxury market for forever! (Judging by your definition of $1000+ as luxury)

Maybe I'm a little young and naive, but it seems as if the disparity between what you paid in dollars versus what you got as an "experience" has never been greater than now I think. "Experiences" are always sort of an subjective measurement, but back in the day you could reasonably argue that the value proposition of the Mac and Apple's ecosystem as a whole was worth the premium. Think back to just after the iPhone's launch in 07-08. Vista was crap, XP was riddled with malware and viruses, and there wasn't really a competent software and hardware solution that "just worked". In comes Apple with the beautiful unibody MacBook Pros and OS X 10.5, two absolutely solid pieces of engineering that just kept getting better with Snow Leopard and on. You had Apple come out of left-field and start machining consumer electronics out of aerospace grade metals, and a stable OS with features like Time Machine and AirDrop that are true delighters. Microsoft gets out Windows 7 (also a solid piece of software engineering in 2009), but then you get this wave of absolutely awful hardware in the form of craptop netbooks with Atom processors that can barely handle having a tab of IE open, maybe two in Chrome (this is before Chrome was a bloated mess and you needed ad-blocking on every site). On the desktop side you've got people likely going down to Wal-Mart and buying a top of the line (read crap) E-machines desktop. All of that terrible hardware would bring down even a software experience as seamless as Windows 7. Sure I'm paying $600 for my E-Machines desktop versus the $1200 iMac, but when I want three tabs of Chrome open, who's got the edge? (No pun intended.) An E-Machines desktop with (sounds good on paper, but performs like shit IRL because the Bulldozer architecture) an AMD 6-core CPU and 2GB of RAM or the Mac with a Core I series processor and software and hardware that is tuned to work as a cohesive unit?

Now the desktop and laptop market have matured and so have PC OEMs. I think this started with Dell and their excellent XPS laptop in 2012(spurred by the introduction of the MBA ironically.) Microsoft's attempts at software have matured as well with Windows 7 and (arguably) Windows 10. Factoring all that in, it just doesn't make sense to pay a premium anymore, unless you consider the cult of personality and luxury brand that Apple is. I think this is most evident in the smartphone market. Android used to be the kind of OS in which you'd be sitting a red light, fumbling to get directions out of Google Maps, and then the app would crash or the phone would reboot (but you need to know NOW if you need to take a turn at this street or whatever). That's by and large not the case anymore. Android has generally gotten more stable and cheap OEMs are pushing out half decent experiences on low end hardware. You can pretty much do everything on a $200 Android phone that you can on the $1000 iPhone. Now, things are certainly going to be a bit bumpier on the cheap Android phone, but bumpy enough to justify an $800 price jump to an iPhone? Most people would say no. Its the same for Chromebooks and the like. Again, the only thing that changes this equation is the social status effect that comes with owning an Apple product (or any luxury product.)

Apple's revenue keeps going up. There is just no need to diversify.