Horace Dediu on the Alphabet

In the first in a wonderful series of articles, C is for Cognitive Illusion, Horace discussed the positioning of the iPhone 5C, how it differed from past years’ portrayal of the “n-1” product, and what this means for the iPhone line:

“This [the iPhone 5C] is where there might be a shift happening. Under the old model the n-1 variant was meant to be a modest volume contributor to the portfolio, being essentially a cognitive illusion which encouraged buyers to stick with iPhone n at the expense of competitors. However, the new n-1 product (the 5C) has a distinct positioning that makes it seem fresh and not a lesser, stale version of the flagship. It is designed to appeal as a legitimate upgrade for iPhone 4/4S users. It is, in other words, not meant as an illusion, and not focusing attention on the flagship1. Rather, it is meant to be a genuine, core product.”

Perhaps the best part of the entire article, though, comes shortly after when Horace explains the implications of this shift in positioning, before he seals the article with a very interesting conclusion.

Later that afternoon Horace posted the next article in the sequence, S is for Service. Having discussed positioning in his last article, Horace went on to tackle the ever-present question of why the iPhone costs so much and, in doing so, explain why Apple has refused to enter emerging markets and indirectly answer the question of when Apple will create the “low end” offering so many expected the 5C to be:

“The iPhone could thus be finally understood as a complex service business. It captures value through the phone bill but delivers value through a screen. A misdirection magic trick which many have tried to pull off. It’s essentially tapping into the $1.3 trillion communications market, skimming profits by delivering the ‘content’ which lights up the wires.

It’s great except it does not work everywhere. Not yet at least. The complexity of services means that they are usually found in more advanced so-called service economies and rare in less developed so-called goods economies.”

And then in the current final post of his series, M is for Mystery, Horace conjectured as to the purpose of the M7 motion coprocessor:

“Hence the question of what is the M7’s job to be done. As part of an iPhone, it does not seem to have one. Saving a bit of battery life is not a job, and certainly not one that needs to have billing in a media special event. The answer must be that the M7 was developed for some other, as yet unstated reason.”

That “other, as yet unstated reason”, many have proposed, is the elusive iWatch. That still does not explain the M7’s existence in the iPhone, however. Fortunately, I do not believe we will have to wait too long to discover its true purpose.

Horace’s article series has spawned a great deal of intelligent discussion since he published C is for Cognitive Illusion last Wednesday. Most recently, Greg Cox of Expletive Inserted responded to M is for Mystery with an article of his own: Faith in the Job Unknown. Throughout his piece Greg worked to counter the notion that a lack of definition in the jobs to be done of a smart watch in particular, but ultimately any new device, should not — and possibly will not — prevent a company from building such a product.

If you’re looking to spend an hour or two reading this afternoon and want to better understand the tech community’s continued fascination with Apple, these four articles are a great place to start.

 The excerpt in C is for Cognitive Illusion: “It might still be an illusion for many but I’m suggesting that it won’t be for most.”