Apple Inc. Prices ‘Outrageous’: Motorola President

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Motorola president Rick Osterloh said that Apple’s prices are outrageous, but that hasn’t stopped people from buying them in droves

There’s no love lost between Apple and Motorola, and execs have taken pot shots at each other in recent days that highlight their very different positions in the smart phone market. Apple continues to aim high, charging a premium for a high end phone and ignoring anyone looking for a decent, affordable gadget. Considering the company just posted the most profitable financial quarter in history (not the history of Apple, the history of financial quarters) it seems to be working.

Ive, Osterloh take shots at each other’s business strategies

The latest spat started when Apple’s senior VP of design Jonathan Ive criticized a rival firm because “their value proposition was ‘Make it whatever you want. You can choose whatever color you want.’ And I believe that’s abdicating your responsibility as a designer,” in an interview with Ian Parker at The New Yorker. Parker didn’t name the rival company, but that’s clearly a reference to Motorola’s Moto Maker campaign.

Motorola President Rick Osterloh shot back at Apple for being too expensive, and (at least according to him) was missing out on the future of the industry.

“The mobile phone industry’s greatest failure is also its greatest opportunity: to make really good, affordable devices for people who don’t want to spend a lot of money,” Osterloh told BBC. “A great smartphone, and a great mobile internet experience, shouldn’t be an expensive luxury. It should be a simple choice for everyone.”

But the Apple iPhone 6 isn’t really that much more expensive than other smart phones in the same class. The Motorola Nexus 6 currently sells for $650 from the company’s website, and you can buy a new Apple iPhone 6 for another fifty bucks online. The Nexus 6 has better specs, but that assumes clock speed, for example, is comparable between devices, which isn’t necessarily the case. There are also issues of style, branding, and design, all of which work to Apple’s advantage.

Osterloh is ignoring some of Apple’s big advantages

The other big advantage that Osterloh is overlooking is the benefit of being part of Apple’s platform and having all of your devices work together seamlessly. It’s an experience that a lot of people are willing to pay a little bit extra for. After last year’s Apple cloud hack embarrassed the company you might think that security would put a damper on iPhone sales. Not only has that not been the case, but Lenovo (which now owns Motorola) just got busted installing malicious adware on people’s laptops. A security oversight is one thing, blatantly taking advantage of your customer base is something else entirely, and the breach of trust could easily spillover into Lenovo’s other divisions – including Motorola.

In the long run Osterloh is right, smart phones will eventually become commoditized and no one will be able to charge a premium for the same basic gadget. But Apple continues to prove that we haven’t yet reached that point, and new products like the Apple Watch and the electric car that’s rumored to be in early stages of development mean that it’s already looking for the next big thing. Even when smartphones all do more or less the same thing, having one that syncs up with your car (we could spend some time listing just the obviously useful apps) is still going to have a big draw.

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