The iPhone Franchise

The strategy is, dare I say, bordering on over-confidence. Apple is raising prices on its best product even as that product’s relative differentiation to the company’s next best model is the smallest it has ever been.

Here, though, I thought the keynote’s “Mission: Impossible”-themed opening really hit the mark: the reason why franchises rule Hollywood is their dependability. Sure, they cost a fortune to make and to market, but they are known quantities that sell all over the world — $735 million-to-date for the latest Tom Cruise thriller, to take a pertinent example.

That is the iPhone: it is a franchise, the closest thing to a hardware annuity stream tech has ever seen. Some people buy an iPhone every year; some are on a two-year cycle; others wait for screens to crack, batteries to die, or apps to slow. Nearly all, though, buy another iPhone, making the purpose of yesterday’s keynote less an exercise in selling a device and more a matter of informing self-selected segments which device they will ultimately buy, and for what price.The iPhone Franchise

This analysis from Ben Thompson was one of the most well-put pieces I’ve read in a long time. It was almost impossible to decide on what segment to include here but I think the closer is too good to miss.