When Fragility Becomes Strength

A case study into the iPhone’s fragility and the Apple brand.

As it has become clear just how luxurious life within the Apple ecosystem tends to be, so too has it become clear why Apple power users — often dubbed “sheep” — tend to behave in the ways that they do; they are the definition of people who pay premiums at every turn — with their time; with their money — they are the type of people who wake up at hours they shouldn’t, wait in lines others don’t, and pay amounts others can’t. As I noted in The Luxury Network, there is good reason for this; life within the Apple’s ecosystem is sumptuous both because yes, the user experience is actually that good, but more so because the person you see yourself as within that ecosystem reflects the person you aspire to eventually become.¹ To those on the outside, this is impossible to imagine; indeed, it makes some angry to even consider that people perform the duties of an Apple devotee as dutifully as they do. But the truth remains. And, of course, one of those oft-mocked duties is enduring the permanent anxiety induced by the fragility of most of Apple’s products — namely, the iPhone, and specifically, the iPhone X. Almost nothing illustrates the power of Apple’s brand as clearly as iPhone owners’ behavior surrounding the protection — or more correctly, the maintenance — of their investment into it.


Between June of 2007, when the iPhone debuted, and late 2014, U.S. consumers spent roughly 23.5 billion dollars on smartphone repair, 10.7 billion of which was spent on iPhone repair, specifically. In that same time, Apple’s average share of the U.S. smartphone market, based on point-in-time averages, was 27%.² This means that, on average, since the release of the iPhone in 2007, Apple has owned 27% of the U.S. smartphone market, but 46% of the U.S. smartphone repair market. To summarize, iPhone owners are, on average, nineteen percentage points more likely to fix their broken phone than an owner of any other smartphone. I first wondered if the difference could be accounted for by a difference in repair costs, but prices for smartphone insurance and repair have followed a similar path over the years, and Samsung’s current prices are slightly higher than Apple’s. Another simple explanation for the discrepancy could be that iPhones are simply more likely to break than any other type of phone, but the same company providing the data for the repair market share found there to be virtually no difference in the tendencies of the phones to break, assuming typical use. Given all of this, one thing is abundantly clear: Apple users are more likely than any other smartphone user to get a broken phone repaired.³ The next question is simple. Why?

First, Scott Galloway, Professor of Marketing at NYU Stern School of Business and author of The Fouron Apple’s status as a luxury brand:

“In the first quarter of 2015, the iPhone accounted for only 18.3 percent of the smartphones shipped globally, but 92 percent of the industry’s profits. That’s luxury marketing. How do you elegantly communicate to friends and strangers that your skills, DNA, and background put you in the 1 percent, no matter where you are? Easy, carry an iPhone.” — Scott Galloway, The Four

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An advertisement for the Apple Watch in Vogue.

Second, Scott Galloway again on luxury’s power:

“Luxury products make no sense on a rational level. We just can’t break free of the desire to be closer to divine perfection or to procreate. When luxury works, the act of spending itself is part of the experience. Buying a diamond necklace out of the back of a truck, even if the stones are real, isn’t as satisfying as the purchase at Tiffany, from a well-dressed sales assistant who presents the necklace under brilliant lights and speaks in hushed tones. Luxury is the market equivalent of feathers on a bird. It’s irrational and sexual, and it easily overwhelms the killjoy, rational signals of the brain — such as “You can’t afford this” or “This really makes no sense.” — Scott Galloway, The Four

Apple commands an irrationally large portion of the market for smartphone repairs because it is a luxury brand, and the iPhone is a luxury good. To own a broken iPhone, then, is to tolerate yourself in the presence of a defective luxury item — a Louis Vuitton purse with a tear in the leather, or a Porsche with a dent — and to find yourself a fraud for that reason; no one buys a luxury item to be seen with it damaged, and to own one in any other state is be in direct disagreement with the type of person you aspired to be by purchasing it. It is no surprise, then, that consumers spend so much both to insure and repair Apple products; to be seen with a cosmetically damaged iPhone is to be known as the type of person who either tends to break phones — not a flattering status to own — or the type of person who cannot afford — either with money, or time — to fix the one they have. (And in either case, of course, a fraud.) The only difference between those who fix the breaks and those who don’t, then, is that for those who do — and don’t have to think about where the money is coming from — owning a perfectly functioning iPhone is in direct agreement with the person they already are. These people, like the iPhones, do not aspire — though at one point, they probably did — they are aspired to.

Meanwhile, of course, the rest of us angst over our spider-webbed screens, waiting for our next paycheck or week without a bad judgement call at some bar so we can purchase the fix without crippling anxiety. In the meantime, we are reminded each and every time we pull out our phones that we are not where we want to be; that we are still aspiring, and that maybe, some day, we may also be aspired to.


Acknowledgements: Thanks to Scott Galloway, Ben Thompson, James Allsworth, and David Perell for inspiring the thoughts that lead to articles like this. Thanks also to David Perell, Desmond Dahlberg, and Tyler Kimble for their feedback.

Footnotes:

¹ I like to think we all aspire to be something greater than our current status, even if we aren’t taking any tangible action towards getting there.

² Links here and here to visualize Apple’s U.S. smartphone market share over time. And yes, the first one is by platform, not device, but it works as a proxy because of Apple’s control over both hardware and software.

³ Footnote here to acknowledge another good point made to me prior to publishing: the presence of Apple retail stores and third party repair companies specializing in iPhones could be part of the reason iPhone users tend to get their phones repaired more than owners of other smartphones. The reason I footnoted this was twofold; first, because I think it’s true, though I don’t believe it can account for a nineteen percentage point difference, and second, because if anything, it bolsters my point about Apple’s status as a luxury brand. Retail locations are a hallmark of any luxury brand; you cannot achieve long-term success selling a luxury product without them. Thus, it was genius of Apple to acknowledge that retail stores would not only be a boon for sales of their products, but also of their repair services.

5 Comments

  1. Hard to understand as an outsider. Build quality of the handset is not much — if at all — better than flagship Android handsets, and it’s a Fisher Price operating system, perfect for noobs, normals, geriatrics, and children.

    I see an iPhone owner, and I don’t think upper-crust, I think tech-illiterate — and if not that — generally superficial.

    Looking forward to the OnePlus 6.

    Liked by 1 person

    1. Chris —

      I’ve been meaning to reply to this for a while; thanks for the opportunity to do so on my blog. First and foremost, I think the Macalope (guy or gal, not sure, but I’m going to assume guy) misunderstood my general perception of Apple from the start per TNW’s renaming of my piece. (They changed it to “iPhones are fragile — and so are their owners” from “When Fragility Becomes Strength.”) Even if not, I figured it was worth clarifying. I should’ve had TNW change it back, but it amused me and I didn’t think much of it, so I didn’t. I am an iPhone X owner. This may or may not surprise you. And I love Apple.

      Now to his point by point takedown of the piece. I do think he makes a lot of fair points (and there have been a lot of other good points made in the comments sections on Facebook and Twitter, too), though there are a few that I want to address. First, I state early in the article that iPhones are fragile. Here is the sentence he quotes: “…one of those oft-mocked duties is enduring the permanent anxiety induced by the fragility of most of Apple’s products — namely, the iPhone, and specifically, the iPhone X,” and he responds by saying the following: “iPhones are remarkably fragile compared to other smartphones. That is an interesting thing to say.”

      …Except it isn’t what I said. I just said that iPhones are fragile. Anyone who owns an iPhone would agree with this. Especially anyone who owns an X. Me saying that iPhones are fragile does not automatically mean that I am saying they are more fragile than other phones. And yet this is the point that he uses to begin his takedown.

      Here’s his follow-up to that: “Allow the Macalope to respond to that premise…” keep in mind, a “premise” that he pulled out of thin air “…with a quote from… let’s see… Oh, it’s actually Zander Nethercutt, six paragraphs later. ‘…the same company providing the data for the repair market share found there to be virtually no difference in the tendencies of the phones to break, assuming typical use.'” He’s right that this wouldn’t make any sense in the context of an argument that started with the premise that iPhones are more likely to break than any other phone. But that wasn’t my premise. Nowhere in my piece does it say that.

      As for the rest of his argument, again: a lot of what he says is on point, and I am impressed by his rhetoric. The initial adjective I used to describe his takedown of my piece was “stunning.” He takes advantage of my vagueness, which is fair. (When I say “duties,” I’m referring to things like waking up at 2am to order the new iPhone, waiting in long lines at the Apple store for new devices, paying for alerts from third party companies to know when Apple is stocking a certain item, etc. I didn’t feel the need to list those “duties” because I figured other Apple lovers — and haters (see: https://www.youtube.com/watch?v=R59TevgzN3k — and yes, I do see the irony in citing a Samsung ad as an accurate portrayal of Apple users, but I do think it is at least somewhat accurate) — would intuitively understand what I was talking about. Maybe I was wrong to assume, but given how fast iPhones sell out, how long I’ve seen people wait in line for Apple products, and how long I myself waited for an alert to know that the Apple Store in Chicago was stocking AirPods, I don’t think I am. And I don’t think people behave like this with regard to Samsung phones, or Google phones, or any other phones. Again, though, I could be wrong.)

      He also makes the very valid point that iPhone users tend to have more money, meaning their tendency to be more likely to repair their phones is a result of being less “budget-constrained” than the typical owner of a phone of a different brand. This is probably true, given Apple’s market positioning and target demographic. Knowing that the people who buy iPhones make a good amount of money does not necessarily mean that the iPhone is a “luxury good,” as I say, but Apple’s brand strategy does indicate a focus on luxury. First, Apple invested heavily into beautiful retail locations in upscale neighborhoods, like any luxury brand would, and second, they took out ads for the Apple Watch in Vogue, and partnered with Hermes to sell bands for the watch. Do these moves not sound like something out of the playbook of a luxury brand? They do to me.

      Okay, okay, this doesn’t mean that people only fix the phone because they aspire to be something greater and their iPhone is a microcosm of that aspiration. Yes, repairing an iPhone is just a practical thing to do (given you have the means), and people with more money (iPhone owners) have more disposable income to spend on fixing a phone than someone with less. And, as another commenter pointed out, it is much easier to obtain parts for an iPhone (if you’re a third party making a living by fixing them) than for other phones, AND it is true that the iPhone tends to hold its value better after being fixed, incentivizing users to fix it. But aren’t all of these things behaviors that are also true of owners of luxury goods? You are more likely to repair a luxury good than replace it because as an owner of a luxury good, you would likely rather fix what you have (given your investment into it) than just toss it for something new. Thus it is ALSO true that it is easier to find parts (because the manufacturers of those parts are incentivized to stock them because they get purchased by both luxury companies and third parties to help owners maintain their investment).

      In broad strokes, my argument was this: because the iPhone is a luxury good, users are more likely to invest into fixing in than they would be another device, say a Samsung phone. I added the “aspirational” piece because I do think that people buy into luxury to imagine themselves as something greater. My rhetoric was perhaps too much for an article on consumer tech, but that doesn’t mean I think the point is wrong. Maybe I should’ve left it at the basic idea: the iPhone’s status as a luxury good means people are more likely to repair it than they would be to repair a phone of another brand.

      Again, thanks for the response and opportunity to clarify my points.

      Like

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