[John Gruber, in an excellent article about Apple naysayers, points out]:
> The point is to show that Apple’s customers are demographically different. The Mac today has roughly 10 percent of the PC market, but it’s not just any randomly distributed 10 percent of the market. Quite the opposite — Apple’s 10 percent of the market is entirely comprised of the high end of the market. Mac users are discriminating, willing to pay more for a product they deem superior.
With Macs and iPads, I think Gruber is correct. However, with each passing quarter this is a harder argument to make for iPhone users. A large and loyal segment will always be willing to pay more, but as the market size of the iPhone grows the customer base will be more diluted and thus, become more “cheap” and less high-end.
That’s the shift I think we are seeing with app sales right now in the App Store. The largest group of potential buyers are cheap asses that don’t want, or won’t ever, pay for an app. The lure to iOS used to be “there’s an app for that”. Now I fear the lure being sold (not by Apple mind you) is “there’s a *free* app for that”.
The common refrain I hear when people are recommending apps to each other is: “Is it free?” “No. It’s $0.99.” “I bet I can find a free version.”
Judging by the crappy ad laden apps that sit in the top rankings of the App Store, it seems that consumers with iPhones are willing to endure these ads if that means no money out of pocket. And you know what company is better at making free, but ad-laden products? *Google*.
I highly doubt that iPhone users will jump ship en masse to Android, but you have to stay open to the possibility that sexy Android phones with a lot of free apps is potentially a far bigger draw to the general market than anything the iPhone can offer on any front.
Hell, it *might* even be better for the iPhone long-term to get these users over to Android.