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Back to the Future: Why the 3GS Matters More Than the iPhone 4S

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.

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