Pete Mortenson’s post about Steve Ballmer’s reaction to to iPhone got me thinking about the intersection between user experience, quality and pricing. Ballmer’s negative response focused on pricing and the iPhone’s unsuitability for business customers. The business customer argument doesn’t hold much water, mainly because Apple isn’t targeting the business audience with this product. So much for that argument.
According to BallmerMicrosoft’s “strategy” in this case is pretty clear. Devices that run Windows Mobile like the Motorola Q are “very capable… it’ll do music, it’ll do Internet, it’ll do email, it’ll do instant messaging. So I look at that and I say I like our strategy, I like it a lot.” The only issue with this is that those aren’t strategies, those are features that are easily copied and improved upon.
The criticism of Apple’s iPhone pricing has gotten some traction though. Expensive? Certainly. But taken from the classic, Michael E. Porter perspective, the iPhone’s pricing, and the strategy behind it is dead on.
Here’s why:
Trade-offs are essential to strategy and price/quality is the granddaddy of trade-offs. Quality, in the iPhone’s case, is the phone’s user experience. A touch screen, motion sensors that tilt the display automatically, a fantastic form factor. How these features work together in concert is the difference. Great user experience doesn’t come cheap. It costs money for design, engineering, prototyping and testing, something that we know Apple does compulsively. And in doing so, they create products and software that deliver a great user experience. Apple’s Q1 numbers back that up.
Here we have the CEO of the world’s largest software company calling feature parity a strategy and making the most superficial of price/quality arguments. What Ballmer and much of Microsoft don’t understand, and what is borne out by many of their products, is that there is a legitimate trade-off between cost and user experience. Apple understands that although good user experiences are expensive, they deliver value. That’s why they can charge an arm and a leg for a phone. Consumers understand the value of a good user experience.
Too bad for Microsoft Steve Ballmer doesn’t.
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