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9/17/13

ePaper Lite - Times of India Publications

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World View [Next]

Can Cheap Apple Still be the Real Apple

Brian X Chen

For upscale brands,there is a fine line between cheaper and cheap. And for Apple,the premium electronics maker,the key is to avoid crossing it.Apple (late yesterday) introduced two iPhones,including a new lowercost model targeted at overseas countries where expensive smartphones are out of reach for many.The addition of a cheaper iPhone could help Apple sell tens of millions more phones.But it could also diminish its reputation as a premium brand.Many luxury companies have faced this challenge before,with wildly different results.Luxury carmakers have introduced less expensive models,but many efforts have tripped up.Tiffany & Co found so much success with its cheaper Return to Tiffany jewelry,that it attracted too many teenagers.And Target has paired up with a variety of high-end fashion designers,often with considerable success. The High and Low For Apple,the devil will be in the details: just how much lower the price of the cheaper iPhone is,and just how much cheaper it looks and feels.If the iPhone is deemed cheap,it could get into the hands of so many people that it loses power as a status symbol and turns Apple into a maker of commodity products like Dell,Hewlett-Packard or Asus.Its hard.Its an art and a science, said Milton Pedraza,chief executive of the Luxury Institute,a research firm.Makers of luxury cars have long struggled with how to increase market share with less expensive models,while still retaining the brands cachet and exclusivity.The marriage of Daimler-Benz and Chrysler failed partly because German engineers developing Mercedes sedans were opposed to sharing parts with mainstream Chrysler models made in the US.While that preserved the integrity of the Mercedes brand,the company missed a golden opportunity to cut overall costs.Still,Mercedes is taking another stab at lower-cost...