Horace Dediu does a fantastic analysis of how Apple is determining whether they have reached the point of “good enough” with the iPhone, eventually concluding:

By ranging products which are older and at lower price points it can measure whether the improvements are valued.

His point is that by keeping older iPhones selling at a lower price along side the new iPhones, Apple can compare the sales of the different models. So if the iPhone 4S outsells the iPhone 5, then Apple can conclude that the new features in the iPhone 5 are not valued by consumers. It’s a very clever way of doing business — not only does it open up lower-priced markets for Apple, but it provides them with robust data.


Posted by Ben Brooks