SEPT 12- With Apple launching two more versions of the iPhone – 5S and 5C — calling them “the gold standard of smartphones”, there is no harm in revisiting a recent blog post by world-famous economist and Nobel Prize winner Paul Krugman on why Apple products may be overpriced.
Krugman wondered why Apple was selling its stuff at “premium prices” by offering products only a little better than competitors.
So, in a blog post in the New York Times on August 24, Krugman, an expert in international trade, said he switched to Samsung after his iPhone “did not survive dunking in water”.
And now that he was using a Samsung, he said “the differences (with Apple) don’t seem huge”.
The Princeton University professor said the only way Steve Jobs’ products sold at high prices was because as the company was “relying on the loyalty of individual customers.”
“…Apple isn’t selling an inferior product. But it’s selling products that are little if any
better than competitors, at premium prices. How can it do that? Again, network externalities: mainly a much deeper bench of apps, or so I’m told (I actually don’t use many),” he wrote last month — before the launch of iPhone 5S and 5C.
He also said Apple “reflected the spirit of Jobs, who knew what was good for you – and left you no way to do things differently”.
“And if you are an atypical user, you end up putting a lot of effort into fighting iOS in order to do simple things,” he said, citing two examples.
He said Apple “misunderstood” the market when it said: “We have a better system, so we’re going to make it available only on our own beautiful machines, and charge premium prices.”
He also said iPad Mini “wasn’t significantly better than several Android competitors and in fact for my purposes worse in some ways”.
But the post made news for another reason-Krugman had compared the sales strategy of Microsoft with Apple and found “a remarkable symmetry”.
He said Apple was only “temporarily” ahead of the curve in the mobile market because its “products no longer have a dramatic quality edge”.
INDIA TODAY
