The Apple iPhone 7 plus contains more features than the iPhone 7

The Apple iPhone 7 plus contains more features than the iPhone 7
Image Credit: Kārlis Dambrāns

You sorta gotta have some pity for the poor product managers over at Apple. I mean yes, they are responsible for one of the most popular products out there: the iPhone. However, we are living in an age in which just about everyone who wants to have a smartphone already has one and so the ability to generate more sales is becoming harder and harder. Couple this with the great Apple / Android divide, and you can see how challenging it must be to try to change their product development definition in order to grow sales when you are an Apple iPhone product manager. What are these folks to do?

A New Way To Make Money From The iPhone

It’s getting harder and harder to make money from the sales of iPhones. It turns out that customers have started to hold on to their older model iPhones for longer periods of time. This is in part because the newer models don’t seem to have any “must have” features that people feel that they can’t live without. At the same time the difference between the iPhone and its cheaper alternatives (especially in China) is becoming smaller and smaller every day. Just too really make things complicated, the 10th anniversary of the iPhone is coming up soon and everyone is expecting Apple to roll out a special version of the phone then and so this is causing people to delay their purchases.

With the introduction of the latest version of the Apple iPhone, version 7, the Apple product managers decided to do something different. This time around the more expensive version of the iPhone 7, the iPhone 7 plus, was loaded with a larger screen as well as extra hardware that was not available on the more basic iPhone 7 model. The US$769 iPhone 7 plus comes with a dual camera system, it has a longer battery life, and more computer memory than the US$649 iPhone 7 model.

The result of this differentiation between products has been a boost in sales for Apple. Sales of the iPhone plus has made up roughly 40% of the over 58.5M iPhone 7s that have been sold. This is an increase of 17% over the number of people who purchased Apple’s iPhone 6 plus over the iPhone 6. Now that would be something to put on your product manager resume! This should help out Apple who is starting to experience a softer than expected demand for their latest iPhones.

Next Steps For The iPhone

The iPhone has always been a popular product ever since its introduction. However, as the market for smartphones has become saturated, sales of the iPhone have started to become stagnated. For the first time, Apple is not going to be able to deliver double digit growth numbers. It turns out that the iPhone is responsible for roughly 75% of Apple’s gross profit.

It appears as though the people who want iPhones are really looking for an iPhone with cool new features. The base iPhone 7 does not provide them with this. However, the iPhone 7 plus has revealed that consumers have an appetite for new features. The iPhone 7 plus has turned into the most successful higher-priced phone that Apple has ever sold.

One of the most important things for Apple is that consumers in China have shown a preference for the iPhone 7 plus. For the first time ever, more Chinese consumers opted to buy the iPhone 7 plus than its smaller sibling. What’s even more impressive is that 40% more people purchased the iPhone 7 plus than purchased the iPhone 6 plus. Clearly what people are saying is that despite the availability of lower cost phones, they still value what Apple is doing with their phones and they are willing to pay more money to have it.

What All Of This Means For You

The Apple iPhone product managers have a bit of a challenge on their hands. Their product has been so successful for so long that the market for smartphones is starting to become saturated. What this means is that it is becoming harder and harder for the product managers to find ways to grow profits like their product manager job description tells them that they should be doing. Whatever should they be doing?

One tactic that they have adopted is to create two different versions of their most recent product, the iPhone 7. There is the regular version and then there is the iPhone 7 plus. The plus model has a larger screen, a better camera, more memory, and is waterproof. Despite costing more than the base model, the iPhone 7 plus has become a big seller. What the Apple product managers have discovered is that customers have a desire for phones with cool new features. This is important to know as Apple shortly prepares to bring out the 10th anniversary version of the iPhone.

Instead of trying to create one product to meet every customer’s unique needs, the Apple product managers have decided to create multiple products with multiple price points in order to better match customer needs. Their creation of the iPhone 7 plus appears to have been successful. Now we will just have to see if they can do it again when they bring out the iPhone 8!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that Apple should have also made a cheaper version of the iPhone in order to capture the low end of the market?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

I’m pretty sure that we all know about Gatorade – the brightly colored sports drink that we always see pro athletes drinking during matches and pouring on their coaches when they win a game. However, times change. The product managers at Gatorade realize that they need to change their product development definition with the times if they want to keep selling their sports drink. It appears as though they plan on doing this by going high tech…

{ 0 comments }

There's a battle that getting ready to start in the market for mattresses

There’s a battle that getting ready to start in the market for mattresses
Image Credit:
Charles Wagner aka ChumpChange

Just exactly how much time do you spend every day thinking about that mattress that you sleep on. Scientists say that we’ll spend roughly 1/3 of our lives sleeping, so you’d think that the mattress that we sleep on would be a very big deal. However, if you are like most of us, you don’t generally think about your mattress until the day arrives that you decide to get a new one. That’s when you’ve got some decisions to make…

Change Comes To The World Of Mattresses

Mattresses? Mattresses have always been thought of as being relatively immune from all of the madness that the Internet has brought to so many markets. The way that you sell a mattress is to build a showroom where people can come in and lay on each of the mattresses, include a lot of different styles and offer a confusing set of discounts offered by high pressure sales people. However, this is all starting to change. A new breed of Internet startup firm has changed the mattress product development definition and identified the mattress market (US$14 billion) as being so lucrative that they have decided to go after it.

The new breed of mattress seller has shown up with good looking websites that talk about all of the benefits of their brand of mattresses. What makes these new firms different from the long established mattress retailers is that they have chosen to offer only a few varieties of mattresses. Additionally, they are selling their mattresses at fixed prices – all of the hype and confusion about prices has been removed. These are all basic product management activities that can be found on anyone’s product manager resume. These new mattress sellers offer free shipping to their customers. When a customer orders a mattress from them, they ship them a foam mattress that has been compressed into a box that is only the size of a large piece of luggage.

In the U.S., most mattresses cost under US$1,000. However, the mattresses that cost over $1,000 account for over ½ of the industry’s sales. The new breed of mattress firms have designed their websites to be used by customers who are on their smartphones. It takes only a few clicks to order a mattress. They offer their customers free shipping, a 100-day guarantee, and free returns that they will completely take care of. Their target market is the wealthier, younger, and busier consumers who don’t feel a need to touch a real product but who are willing to make a purchase based on other user’s reviews.

How To Compete With The New Players

As you may well imagine, the existing mattress players are not taking this new breed of competitor lying down. Temper Sealy International who is the world’s largest mattress manufacturer, has announced that they will start selling their own “bed in a box” that will be called “Cocoon”. They have created a dedicated website to sell this mattress and they’ll be offering it at two prices, $549 and $999, depending on size. It will also be offered in two different models: soft and firm.

Offering a mattress online was a big step for Tempur Sealy. Internally, they needed to create a group made up of young people to take a look at the marketplace’s growing interest in mattresses being sold online for under $1,000. The company gave this group permission to create solutions that could possibly upset their retail partners. This was a big deal because 91% of Tempur Sealy’s revenue comes through chains. Sealy is giving its retail partners an opportunity to add the “bed in a box” to their website and sell them online. For every sale that they made, they’ll get a portion of the sale.

Why are compressed mattresses a better product than traditional spring mattresses? Compressed mattresses provide the seller with higher margins simply because they are easier to ship to the customer than inner spring mattresses which cannot be compressed. Due to the way that UPS and FedEx calculate delivery charges, it turns out that delivering a 90 pound (40.8 kg) compressed mattress package is less expensive than hiring a truck to home deliver a regular mattress.

What All Of This Means For You

The good news about the new breed of online mattress firms is that when it comes time for you to purchase a new mattress, you now have more options. Instead of having to go out to one or more stores and lay on a bunch of mattresses, you can now do all of your shopping online.

The online mattress retailers have upended their market by simplifying the number and types of mattresses that they offer. They have also bundled free shipping and free returns into their pricing. Existing mattress firms have started to react by offering their own “bed in a box”. They need to be careful because such offers may end up antagonizing their retail partners. However, they need to do something because the online seller product manager’s have updated their product manager job description and they have discovered that that it can be cheaper to ship a compressed mattress than deliver a standard spring mattress.

Clearly the world of mattresses has changed. What used to be the domain of fancy showrooms with high pressure sales people has now moved online. The future will probably belong to the online sellers. We’re going to have to see how the product managers at the existing mattress companies react to these new challenges. Hopefully they won’t take them lying down!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that the standard spring mattresses have any advantages over the compressed mattresses?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

You sorta gotta have some pity for the poor product managers over at Apple. I mean yes, they are responsible for one of the most popular products out there: the iPhone. However, we are living in an age in which just about everyone who wants to have a smartphone already has one and so the ability to generate more sales is becoming harder and harder. Couple this with the great Apple / Android divide, and you can see how challenging it must be to try to change their product development definition in order to grow sales when you are an Apple iPhone product manager. What are these folks to do?

{ 0 comments }

How Did GoPro Lose Their Focus?

March 6, 2017

Wouldn’t it be great if when you are out and doing all of the exciting things that you do, rock climbing, surfing, hiking, etc. if you could somehow capture the moment in a photo? Sure your cell phone has a camera on it, but it’s not really up to the task of surviving a lot […]

Read the full article →

Oracle Product Managers Get Ready To Battle Amazon In The Cloud

February 27, 2017

I’m pretty sure that by now you’ve heard about “the cloud” – it’s the mythical place where companies can get their programs to run and their data to be stored in such a way that they don’t have to buy any computers or storage systems. Another company takes care of all of the day-to-day activities […]

Read the full article →

How Product Managers Can Find More Customers

February 20, 2017

I’m pretty sure that we all know and understand that product managers don’t work in sales. However, our career is very closely tied to the success of the product that we are responsible for. So, while we don’t have primary responsibility for selling our product, we are however quite motivated to make sure that the […]

Read the full article →

A Product Manager’s Approach To Finding Love Online

February 13, 2017

Let’s talk about love, shall we? I fully understand that your job as a product manager probably takes up a lot of your time and you really don’t have a lot of time left over to think about such trivial things as love, but it’s all around us if you’d just take a moment to […]

Read the full article →

Amazon Product Managers Prepare To Do The Unthinkable: Open A Store

February 6, 2017

You would think that being a product manager who works for Amazon would be a pretty cushy job right? The company operates one of the largest online stores and they don’t seem to have to generate a profit and investors still seem to love their stock. However, all of this success may hid a key […]

Read the full article →

When Moving Online, Product Managers Need To Do Some Planning

January 30, 2017

Retail businesses are dead. We all need to change our product development definition because everything in the future will.be sold online. Well, ok, maybe not. However, I think that we can all agree that online sales are becoming a bigger and bigger part of just about every company and what you’ve done to help make […]

Read the full article →

Can Product Managers Bring A Product Back From The Dead?

January 23, 2017

There’s one aspect of being a product manager that we don’t spend enough time talking about. Killing products. Yes, you heard me correctly. We talk and talk about what we can do to make our products more successful; however, we need to understand that every product comes to the end of the road eventually. When […]

Read the full article →

Bar Code Scanner Product Managers Find A Way To Grow Their Market

January 16, 2017

Product managers for bar code scanners have it pretty good these days. Their products are in high demand by companies such as Amazon who operate the large warehouses that contain thousands of items, each identified by a unique bar code. These scanners, often called a “brick on a stick”, are used thousands of times each […]

Read the full article →