Apple and product family engineering

The Apple event on September 12 at the recently inaugurated Steve Jobs Theater is a case study in product family engineering, or PFE, with truly complex, almost Machiavellian, nuances.

The company, as it has year after year, announced the launch of a wide range of products: new operating systems, a new Apple Watch, another Apple TV and, of course, its star product which makes up a huge part of its revenue: the iPhone. We could analyze any of the above or discuss to what extent a product seen by many pundits as a failure, the Apple Watch, is actually the best-selling watch in the world, with an impressive 97% user satisfaction rating, but what really caught my eye was the launch of the assorted iPhones.

There are now eight members of the iPhone family of products, ranging in price from $349 to $999 in the United States, and between €419 and €1,159 in Spain (and of course, more expensive if you want more storage, and even more expensive if you want Apple Care, advisable for a device of that price). What is particularly interesting in all this is that until yesterday what was the top of the range is now the mid-range, with a new model, the iPhone X, which for the uninitiated, is 10, now the top model. There is no 9, because the product commemorates the tenth anniversary of the original. Geddit?

Which is all well and good, but what does this mean in commercial terms? The nomenclature of the models means nothing and companies can call their products what they like. But in this case, there is a competitive element: suddenly, customers aren’t making an assessment based on the Samsung 8, the flagship model of the world’s largest handset manufacturer, nor against the corresponding Apple model, but against what which has become the mid-range Apple, the iPhone 8, knowing that there is an additional option, the iPhone X, if you want some other specs or simply something that seems superior. That psychological effect of comparing, moreover, takes place regardless of any comparison, and instead on the basis of aspects that avoid such comparisons.

It is very difficult to compete with Apple on a spec by spec basis, because if there is one thing the company does well is to sell its products as a whole, almost beyond mere comparison, and worth having even if they do not have some features other phones do. Apple continues to differentiate itself because while its competitors launch today’s terminal, it knows that its products are seen as belonging to tomorrow as well.

Subtle, a mind game? That is something to discuss when the sales figures are in. The iPhone X, makes Apple look like the company that knows where the future is headed, the ones that have been able to deliver a facial recognition system that, at least in theory, works (even though it failed during the demo), and the company that positions its terminals as the most advanced in everything related to machine learning. This might be a risky move in relation to the iPhone 8 or the iPhone 8 Plus (supposedly “cheaper” options!), but not so in the case of the top-of-the-range model. The fall in the value of Apple shares yesterday is simply due to an accounting issue: sales of the iPhone X, which will not be available until October and will not be delivered until November 3, will not be accounted for in this fiscal year, but in the next.

Is an iPhone X worth the price tag? The real question is whether it is worth paying that amount for a smartphone. When deciding which smartphone to buy is at the same level as buying a computer a few years ago — there are already many smartphones that cost more than laptops, which we use for longer — the idea that we are buying a “phone” is absurd: we are buying a powerful pocket computer, a tool that we will use for one or two years and throughout the whole day to carry out dozens of tasks.

Are we willing to pay more than $1,000 for such a tool? I have no doubts. For the right reasons? That I cannot answer. I am sure that many people will buy the new Apple Watch not for its additional features, but instead because it has a red dot on the button that sets it apart from previous models. I have no doubt that there are many people who believe they need a new smartphone could make do with cheaper devices. But again, that’s not the point.

Apple is still that brand whose raison d’etre is to give its fans a reason to go into one of its stores at least once a year because they feel part of a special club, and who tend to be hugely satisfied with their choice.

The brand that is able to make more from each sale and each customer, able to position its products as objects of desire, long ago made it the most valuable company in the market. And the best that can be said of yesterday’s launch is just that: it was coherent with that philosophy.

(En español, aquí)