Kinda like an iPhone

Given I’ve been teaching about Willingness-to-Pay and firms making decisions about the level of benefits they offer potential customers (a.k.a. The Value Proposition), it was intriguing to see this quote regarding the market for counterfeit iPhones:

“The customers) generally want to have something that looks like the real thing, so they can say that they have an iPhone”.

The article was heralding the push to shut down the importation of fake iPhones into Australia.

I am curious as to which features this segment is valuing (i.e. is willing to pay for) in the fakes and which they are not.

bad apple iPhone fakeAre these fakes anything more than a normal 2G phone in a fancy case?  Or do they have 3G capacity?  Or, even worse are they nothing more than a shell (like a toyphone that toddlers wonder around with)?

Do they have any “apps” and user-friendliness?  Or would a purchaser just pretend to be touching and dragging stuff around?

What might Apple learn from consumers’ behaviour here?  Should they seek to address some of these lower-end users’ needs?

Would a genuine iPhone model with pared back features and lower price broaden their market penetration?  Or might it hurt their brand caché? Is there a Shuffle equivalent opportunity in this market?

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3 Responses to “Kinda like an iPhone”

  1. russm Says:

    the ones of these I’ve seen are standard WindowsMobile smartphones (probably based on HTC reference designs) that are packaged in an iPhone-style shell instead of a more traditional smartphone shell… when it’s turned off and sitting on the table in front of you, or when you’re holding it to your ear, nobody can see that the interface isn’t a real iPhone interface…

  2. Andre Sammartino Says:

    Thanks russm,

    So, in that instance, the valuation algorithm goes something like:

    Willing to pay for:
    3G/Smartphone capacity
    impression of iPhone ownership (or iPhone external design and cache)

    Not willing to pay for:
    iPhone interface
    iPhone app access
    restrictive phone company hookups required by Apple arrangements

  3. Rags Srinivasan Says:

    Marketing is about segmentation, targeting and positioning.
    Strategy is about making choices – making choices on how to deploy limited resources to maximize outcome. A business cannot go after every segment just because it exits.
    Recently WSJ wrote an analysis of the market share vs. profit share split in the mobile phone market. Apple and RIM have less than 3% market share but more than 30% of profit share. Nokia which has the largest market share and largest profit share but very low profit share to market share ratio.

    You probably are correct in saying a iphone-nano will increase penetration but for Apple to enter this segment it should first exhaust all its options that deliver higher profit share to market share ratio.

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