Retro design is not a new occurrence. In the field of fashion and accessories, for example, cyclical emergence and re-emergence of trends is commonplace. In respects of industrial and consumer products, however, retro themes are reborn usually decades later, particularly based on niche repositioning. Re-emergence of vinyl records is an example. Re-contouring of automobiles is also another example. With the emergence of digital technologies, miniaturization and minimalist form factor have emerged as one-way development. Yet, the smart phone industry has been home to some contrarian trends. The ‘smaller the better’ principle has been reversed in the smart phones with the emergence of large screen smart phones (usually screen sizes of 4.5 to 5.5 inches) and larger screen smart phones, called phablets (usually screen sizes of 5.5 to 6.5 inches). These have not been retro cases but more of re-forming diverse design options with superior digital technologies.
Steve Jobs, the late Founder and CEO of Apple, Inc was a visionary product conceptualizer and developer. His iPod and iPhone devices revolutionized the era of palm held devices. The real revolution of smart phones started with the emergence of the original iPhone in 2007. The first iPhone had a screen size of just 3.5 inches. Jobs resisted the trend of larger smart phones popularized by most other manufacturers, especially Samsung, even as iPhone underwent successive annual iterations. In fact, Apple stuck with the first iPhone’s 3.5 inch screen until late 2012 (launch of iPhone 5), and even then the increase was to the relatively small size of 4 inches. After the takeover of the CEO position by Tim Cook, the screens had a real bump up to 4.7 and 5.5 inches with iPhone 6 and iPhone 6 plus respectively in 2015, a move that received both qualitative and quantitative appreciation. As was the wont with Apple, the emergence of large screen phones saw the phase-out of the earlier smaller screen models.
Apple sprang a surprise this year by bringing back its 4 inch iPhone 5 as Apple SE, signifying on the face of it one of the most dramatic retro returns of all time. The earlier perception was that it was intended as an option to address mid-range price point, especially in emerging markets such as India and China. However, the announced pricing of Rs 39,000 for the 16 GB version and Rs 49,000 for the 64 GB version defy that assumption by making SE as pricey as the larger siblings. Apple SE actually brings out certain interesting lessons. First, the profile of Apple SE packs the contemporary iPhone 6s and 6S Plus specifications in the 4 inch form factor by featuring the latest A9 chip, iOS 9.3, 12 megapixel camera, 4 K video, retina display, Siri, and features such as live photos and night shift. In terms of body materials, finishes and colour options, it matches the latest generation iPhones. Experts who reviewed Apple SE vouch for the top-of-the-line features of the phone.
At one level, Apple SE may be seen to be following what Samsung or Nokia did to date, offering different products in different form factors and at different price points. There is one important difference, however. Samsung and Nokia brought in different products with different specifications; moreover, in their case, lower positioned products had lower specifications, invariably. On the other hand, Apple SE offers the best of specifications in a retro form factor. There is nothing retro on its form factor finish either! On the other hand, it represents what Apple always represented, a combination of the top end hardware and software. The logic and rationale behind Apple SE, the first retro revival in the smart phone industry, have important considerations, which are relevant not only for smart phones and other electronic devices but also for all other products as well.
Style and substance
Ever since the launch in June 2007 of the first generation iPhone, Apple sold over 820 million iPhones of successive generations. Of these, over 60 percent belong to iPhone 5 (4 inch screen) or earlier generations (3.5 inch screen). They typically have 1.3 GHz dual core A6 or earlier generation single core processor, 1 GB RAM and below (as low as 128 MB RAM), iOS 6 or earlier versions and 8 MP or lower MP (as low as 2 MP) primary cameras as well as internal storage as low as 16GB. They compare with the latest generation iPhones, not unnaturally, sporting high end specifications like dual core 1.84 GHz processor, 2 GB RAM, iOS 9.3, and 12 MP primary camera as well as internal storage as high as 128GB. More than just specifications, it is the overall user experience that took a quantum jump over the last two iterations of iPhone, of larger screen sizes (4. 7 and 5.5 inches). The launch of iPhone SE is more than an admission that an overwhelming proportion of Apple iPhone users are still comfortable with small size iPhones that can be held conveniently in the palm.
Apple iPhone SE is a phone that, no doubt, brings back reminiscences and nostalgia to early Apple users but more importantly, is a phone that encourages them to upgrade to newer and smoother user feel. This, coupled with the Apple recent philosophy that the average expected life of iPhone is only 3 years, is indicative of a larger strategy of Apple to hold its loyal base fully secured to itself. That the earlier 5S chassis is as elegant today as it was a few years ago is proof that deployment of design and manufacture of high elegance leads to sustainable product strategies, almost on the lines hypothesized by this author in a blog post of 2009. Reference may be made to author’s blog post, “Style is Substance: Management of Product Design and Manufacture’, Strategy Musings, August 8, 2009, http://cbrao2008.blogspot.in/2009/08/style-is-substance-management-of.html. In sum, iPhone SE represents a coherent product initiative with demand management at its core. More importantly, it has implications applicable across all products.
The demand for a product is driven as much by product innovation as by customer population. Demand for any product has two basic components, namely incremental demand and replacement demand. Both may arise from own customer base and competitor customer base. Incremental demand happens when a product-naïve customer (example, someone who never owned a smart phone or an automobile) buys such a product. Incremental demand also happens when an existing user of the product buys the same product or its variant from the same company for use by other members of his or her family, or his or her friends. Replacement demand happens when the user of an existing product desires to upgrade the current product with the purchase of a new product. Four grids are possible: Incremental Demand from Product naïve or Existing Customer (IDEC), Incremental Demand from Competitor Customer (IDCC), Replacement Demand from Existing Customer (RDEC) and Replacement Demand from Competitor Customer (RDCC).
Apple, as one knows, is extremely strong in IDEC and RDEC segments. iPhone SE helps the company consolidate its hold in these two segments. Importantly, given the superior technology it has deployed in the compact smart phone segment, it has enhanced its chances of weaning customers from the competitors’ fold. The new phone is the first open admission that demand need not, and will not, necessarily migrate to different product segments just because of a market leader’s phase-in and phase-out policy. As the user base exponentially grows, a broad-based product strategy is vital for comprehensive and effective demand management. Even then, it is still less than what a mighty designer and manufacturer like Apple could do to address all of the potential customer universe. For example, iPhone SE still sports the rather primitive 1.2 MP front camera for selfies when the current trend is for 5 to 16 MP front cameras to please the selfie enthusiasts.
A firm which has an integrated approach to product development and manufacture as well as product positioning and marketing would have an exceptional ability to drive growth. Apple iPhone SE, whether so intended or not by Tim Cook and his team, provides us a platform, which the author would like to christen as retro-futurism to develop such an integrated strategy. Retro-futurism must have the following essential features: (i) A product should be developed with a state of elegance that could enable it to qualify itself as a new product even years later, (ii) Recalling a retro design has to be more than for emotional or reminiscence reasons; it should bring the latest technologies within the restored contours, (iii) The higher the size of the industry market base (and its growth rate), the greater is the potential for retro-futuristic products, (iv) Retro-futurism is not about using old dies, moulds or chassis for cheap products but is more about creating superior products with re-optimized cost and technology balance, and (v) importantly, Retro-futurism should never be mere refurbishment; it must be on reinventing a contemporaneously relevant old.
For Indian companies, Apple SE represents a new but relevant paradigm of retro-futurism. Several Indian companies and products can benefit from retro-futurism. Tata Motors had a uniquely Indian truck called Semi Forward Cowl (SFC) truck. Retro-futurism would be an ideal application for SFC truck, which is still an attractive truck, to be refitted with modern engine and gear box options as well as digitised systems to bring it up to date. The Western world, not so much used to the Indian ceiling fan concept, can be a great new market for ceiling fans provided continuously variable and noise free operation can be ensured by the Indian manufacturers. Indian jewelery houses can revitalize the royal ornamental designs with modern gold and diamond finishes, and discover new global markets. With Mann ki Baat being the communication medium for the Prime Minister Narendra Modi, the good old radio can take a new ubiquitous digital avatar. The dialing telephone could become a new cellular communication system with all the capabilities of a new age smart phone built in. The possibilities for retro-futurism could be endless but the key is to make every product, as the legendary Steve Jobs did, with the best of design and manufacture that could last successive generations too.
Posted by Dr CB Rao on April 18, 2016