iPhone 5C Is `80% iPhone at 80% of Price': Galloway

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Galloway discusses the economics of Apple's iPhone 5C with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Our next guest has a strong opinion on apple's new, slightly less expensive iphone.

Scott galloway is a professor of marketing at nyu stern and the founder of a think tank or ease with us for our weekly digital iq segment.

Always glad to see you.

I'm going to quote you directly -- apple's slightly less expensive ipo is the -- is the dumbest decision from a great company and a while.

This is such a huge missed opportunity.

They came in with 80% value of the gap with -- this is 80% of an iphone that 80% of the price and i don't think it's that compelling a value proposition when you have these other competitors narrowing the gap tween apple and the others.

Apple just hasn't recognized that and lowered the price.

It's interesting you make the comparison because ire member when old navy launched, the idea was there are people making slightly less quality but tends cheaper to your point.

You are essentially saying apple is at the crossroads now and has chosen the wrong way?

It's either disrupt or be disrupted.

Apple has made incredible decisions to disrupt themselves.

They made it a button on the iphone, effectively stripping themselves because they made the iphone that much more compelling.

I was talking about that with a friend of mine that i run with.

You don't even run with the nano.

Everything is on the phone, so just take the phone and he'll with the fact that it is heavier.

The difference between apple and everyone else has narrowed but the price differences for matt.

That means they are going to lose market share.

The technology industry has increased our share of dollars.

Every year, they raise the quality of lower the prices.

Apple has waited for everyone to catch up and haven't lowered the prices significantly.

This of phones is about $600 if you buy the phone and have this service as opposed to the standard 800. the 600 if you are a middle income person, that's still a lot of money to pay for a phone and a contract.

I would say so what?

The opportunity was to come in at the same price as the competitors and say you can't have a utter phone for approximately the same price.

This was an opportunity to open the market and it was a big so what.

What about the flip side playing devil's advocate, what if apple is this -- apple is saying we are a luxury product and want to stay in a certain demographic and be like the american express of phones.

If somebody is buying something on a mobile app, that person will be on sites that cater to a higher-end consumer and spend more.

Mercedes-benz, bmw -- one raise their price we seven percent and has hit a wall -- that is a louis vuitton, because the bags are the same as five years ago.

Bmw and mercedes dramatically increased price but on an inflation-adjusted basis, it's the same price or less.

This was an opportunity to make a bold statement that this is the best phone for the money.

I get it.

This text has been automatically generated. It may not be 100% accurate.


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