Moving Downmarket Without Damaging Your Brand

With the iPhone SE Apple is differentiating its products through size while still offering a best-in-class product at every price level. By differentiating through size, Apple can move downmarket with a less expensive iPhone without damaging its brand, and without detracting from an important motivator for people purchasing an iPhone: the status that comes from owning a best-in-class product (best four inch phone, best large phone, etc.). This was one problem with the iPhone 5c -- it was a downmarket move but it wasn't a best-in-class product. As a result the iPhone 5c degraded Apple's brand and failed to accomplish the job-to-be-done of communicating status.

The author owns stock shares of Apple.