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How Apple Plans to Conquer the Mass Market

Of course there have been knockers. Cries have already been made that when you run the numbers the 'free' iPhone 3GS is actually a rip off. Again they miss the point. Initial outlay is crucial to the mass market and long term support is vital to business. With RIM dropping like a stone, Windows Phone unproven and Android so fragmented that long term firmware support from model to model is about as reliable as an alcoholic barman, the iPhone 3GS is a veritable rock of stability.


Let's make sure we am not misunderstood as Apple has been. We're not saying come October 2012 the iPhone 3GS will have sold in greater numbers than the iPhone 4S. It won't. Not a chance. The iPhone 3GS will certainly gain traction, but what it is telling the 95 per cent is: 'yes the iPhone 4S is expensive, but you can invest in it because the 3GS shows we support our products. You can rely on our long term commitment to your handset.' In the meantime Tim Cook's company starts the long, slow climb towards mainstream mass sales.

The irony in all this is Apple probably doesn't want to do this. The company can’t hope to maintain its famously high profit margins and sell to the 95 per cent. The problem is it has no choice. Cook himself said so: "We believe that over time all phones become smartphones." As such the only solution is to adopt the iPod business model and address different price points to cover the market. Unlike an iPod shuffle or nano the iPhone 3GS, 4 and 4S may not look radically different, but they create a similar tiered approach and with Cook proclaiming one billion App Store downloads per day the hope is customers are tied into the range as their budgets increase.


It is a clever master plan, but not one without risk. Apple is seen as both an aspirational brand and a design leader. By dropping entry level prices, holding onto old models and rehashing the electronics inside existing designs it may well undermine each of these perceptions. After all the response to the iPhone 4S has already been largely underwhelming. This despite the fact that almost every aspect of the iPhone 4S – processor, camera, video, software, antenna, battery, capacity and Siri – is what was hoped for in an iPhone 5. Simply housing it in an iPhone 4 chassis is a deal breaker for many which shows Apple is reaping the superficialities it has sown.

In technology it is often proclaimed that your business must evolve or die. In life it is often proclaimed you have to take one step backwards in order to take two steps forwards. By sticking with the iPhone 3GS Apple will hope it has started the transitions required to achieve both.


October 6, 2011, 3:46 pm

Gordon: I totally agree with you. Good article.


October 6, 2011, 4:32 pm

Interesting take. Last time I checked, Apple wasn't the best at supporting older products. I feel that Apple have been forced into keeping the 3GS by both lack of balls and by a sad twist of events.

Tim Cook should have called the current 4S the iPhone 5 and be damned with what ever anyone said about it keeping the same shape as the 4. Steve would have spun it in to a line explaining that the iPhone 4's case was so magical that they decided to keep it. In short he would have made it a selling point, such was his marketing savvy.

So, for whatever reason - the predicted iPhone 5's design didn't cut the mustard with the top brass or had technical difficulties through development, but in my opinion (for what it's worth!), Apple always intended to launch a new shape phone in time for this Christmas. Tim Cook should have just called the 4S the '5' and sales would have rocketed and they would have killed off the 3GS.

Do you really think Apple's plan is to conquer the mass market with a technologically obsolete phone from 2009? Like it or not, I think Apple will have to diversify with new products in different price categories and aimed at different demographics.


October 6, 2011, 5:30 pm

@ ElectricSheep:

I would welcome a thinner screen bezel in the same body of iPhone 4. What is missing in iPhone 4S that everyone is moaning about? Like Gordon has rightly put and I quote, "almost every aspect of the iPhone 4S – processor, camera, video, software, antenna, battery, capacity and Siri – is what was hoped for in an iPhone 5"

Apple is known to keep the same design and form factor for a long time of a product line. Look at Macbook Pro unibody what has changed since it's inception. Nothing but the internals. It is still selling like hot cakes because it is beautiful, sturdy and reliable.


October 6, 2011, 8:58 pm

>>Apple wasn't the best at supporting older products.

Out of interest, who do you think is the best?
I agree that support lifecycle for devices like these is not very good, but from what I can tell Apple's isn't the worst.

Eg. HTC Touch Pro, came out about the same time as the 3G. The last download I can find from HTC is dated 7-7-2009, the 3G was 9-3-2011, nearly 2 years longer.

The Doctor

October 7, 2011, 2:56 pm

Keeping the 3GS is not about getting hold of more customers in existing markets, it's about trying to bolster Apple's share in emerging markets where the cheap phone is still king.

For most people in India and Brazil, an iPhone 4S is a dream phone and a basic Nokia is the most likely alternative. However, the low(er) cost of a nearly 3-year old design means that an Apple product will become a genuinely aspirational product and give the brand more traction. Think BMW rather than Aston Martin.

However, keeping the 3GS exposes Apple to a few problems. It can either continue to support older products and be hamstrung by the consequences of maintaining backward compatibility (like MS and WIndows) or it can experience what Android phone manufacturers currently suffer where people who bought an HTC Hero whine how unfair it is that HTC isn't providing them an update to Gingerbread....


October 7, 2011, 10:37 pm

Agree with most of this (and thank you, it always amazes me how few tech sites sit back and think about why certain product decisions are made) but this bit I'm not so sure about:

"After all the response to the iPhone 4S has already been largely underwhelming"

It's been underwhelming from the geeksphere where shiny new form factors and unending lists of features are what counts. I'm not convinced that's going to be the case with the mass market. UK pre-orders have already jumped to 1-2 weeks delivery and that's for the unlocked models from the Apple store rather than carrier subsidised upgrades. There's a LOT of people out there on 3GS phones coming to the end of their contract and, let's face it, the iPhone 4 is still a gorgeous looking phone. The 4S has a couple of features that are really going to appeal to consumers, namely a better camera and Siri. Siri in particular is the feature I think geeks are overlooking but if it really does work as well as its supposed to (and the initial hands-on were good) it's got a good chance of being a system seller all on its own.


October 10, 2011, 10:35 pm

I think it has been underwhelming to people in general, but that is far from saying it is a bad phone. To the contrary, I do stress every aspect of the phone is new and initial pre-orders are outstanding.

I don't believe anyone who saw the iPhone 4S didn't let out a short sigh on first sight though, we always want a new model to look new in an ideal world.


October 10, 2011, 10:39 pm

It certainly will be for emerging markets, but don't discount the fact that smartphones are still too expensive for the majority of people. A 2 (not 3) year old iPhone is still vastly better equipped and manufactured than most rival smartphones in its price bracket too and the vast app support will be vital.

You are completely right, however, legacy support brings with it a whole new set of problems, but all our products become legacy at some point and I don't think any of us will see better support for products just a few generations old as a bad thing.


October 10, 2011, 10:40 pm

Many thanks.


October 12, 2011, 7:05 pm

Do you know what people in India make? I don't think even a 3GS is going to be on their radar. It might be "free" in the UK/US with a contract, but it's another world (literally) over there. The rich there, they can get the 4S, the rest of the people can only afford the most basic dumbphone.

This article is full of wrong, normally I agree with Gordon, but I think he's way off here. The 3GS is to get everyone off Blackberries and to fight the lower end Android phones. Considering how slow my gf's 3GS was with iOS 4 and the crashes she gets now with her iPhone 4 - I wouldn't recommend anyone hoping to get good performance with a 3GS on iOS5. But perhaps Apple have finally optimised things a bit, that would inspire confidence but they only talk about new features so I would doubt it.


October 12, 2011, 7:13 pm

Gordon, one thing Apple rarely are is misunderstood. I think you are reading too much into this and your conclusions make little sense. Your conclusion seems to state that Apple aren't doing this to sell the 3G, but to show they support their phones for years? What kind of backwards logic is that, and so very non-Apple.

The 3GS is to get people in developed nations who cannot afford the 4 or 4S to get an iPhone which they've aspired to for ages. Instead of getting a "cheap Android iPhone copy" or a Blackberry (and now with iMessage, Apple has a good way to counter BBM) they can now own a "premium brand" iPhone.


October 13, 2011, 4:58 pm

Hi HK, I think you're misunderstanding my points.

The whole argument is it IS very non-Apple, that is why it is such big news. When has Apple last chose to hold onto legacy hardware? It is for businesses primarily to know they can invest in Apple handsets and see long term software support. The cheaper models will then also appeal to those on budget BlackBerry and Android handsets - hence iMessage. In short we are arguing the same point and I'm not sure how you missed that in my feature.

I think the developing nations aspect is overplayed. Yes cheaper iPhones will be appealing, but for most any mobile phone is expensive, let alone one which requires a contract and data. To sell iPhones to the masses here is a very, very long term goal.


October 14, 2011, 6:28 pm

"Simply housing it in an iPhone 4 chassis is a deal breaker for many which shows Apple is reaping the superficialities it has sown. "
Get out of my brain, you! ;)


October 14, 2011, 6:31 pm

@HK: Your girlfriend manages to crash the iPhone4? :-| Good grief man, what's she doing to it!?! :P

@The Doctor: Indeed, the Android whiners, oh God... *rolls eyes*

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