HN Explorer

Where Is the Hermes of iPhones?

4 points by thinktechthurs ↗ HN
Why do Taylor Swift and I have the same phone? We don’t wear the same clothes: she wears custom designer clothes and I wear Costco specials. We don’t eat the same food: she eats organic hand-picked arugula and I eat frozen meals. We don’t travel the same way: she flies in a private jet and I take the subway with two hundred strangers. Yet, we both have an iPhone. In fact, a lot of rich people seem to have iPhones. It is weird that rich people aren’t using a more luxurious version of the iPhone. Why hasn’t someone started a company that caters to this underserved market? I have a few guesses, ordered from least convincing to most:

1. No one wants a luxury phone. Maybe the standard iPhone is so good that it is its own luxury version. It already has everything a rich person could possibly want.

2. A luxury phone company would have trouble hiring people. Engineers are a pretty egalitarian bunch. They hate wearing fancy clothes, they play ping pong at work with their boss, and they contribute free code to open-source projects. They will not enjoy spending years building a tool only for rich people to use. (PornHub manages to hire engineers though, so why couldn’t a fancypants phone company?)

3. A luxury phone wouldn’t be good enough. Making a new phone is pretty hard. You have to get right a million little things: the privacy policy and the charging cable and the calculator app. And a luxury tech company can’t just get these things right, it has to get them perfect. Rich people who are spending thousands of dollars on a phone want a phone that is absolutely magical. They want the privacy policy to be written by Zadie Smith and the calculator app to explain the mean value theorem to them. Maybe building something that perfect is impossible.

4. A luxury phone would cost too much. To make a phone from scratch, you need to hire a few software engineers, a few hardware engineers, a designer or two, some testers, and so on. Hiring all these people will cost, let’s make up a number, $10 million. Apple can split this cost across the millions of phones it sells, so each phone is relatively affordable. However, a luxury tech company would only sell, say, a thousand phones. Each phone would need to cost $10k just to cover its R&D costs. Maybe that’s just too expensive, even for rich people. (Billionaires do spend a lot of money on weird shit though, so I’m not fully convinced by this.)

3 comments

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talldayo
iPhone is the Hermes of iPhone. That's the trick; make people rationalize it as a fashion accessory/cultural virtue signal and with good enough marketing people will buy it.

Whether or not it is the apex of luxury, it really doesn't matter. The point is that it gets marketed as such, so you feel less insecure paying for it.

realityfactchex
It's more than that. People who are unsheltered and multi-billionaires have the same phone, too.

> Why hasn’t someone started a company that caters to this underserved market?

I think it would be too technically difficult. There's just so much complexity to solving that problem, it wouldn't actually be possible/profitable. IMO.

Quinzel
I think you’ve raised a really interesting question!

I had some thoughts to the points you made… particularly because it made me think about luxury cars and watches.

1. Firstly, how do we know no one wants a luxury phone? Is there market research on that? - there are people who want elite luxury handbags, watches, etc… Why is the phone the exception? It’s a great question. I don’t have the answer but I sure am thinking about it now.

2. I would have thought the same about luxury car companies because I figured that making a high performance flashy car would take a lot of knowledge and skills, particularly as our cars become more digitized and electronic, BUT… luxury car companies don’t seem to have a problem with this. Would it really be that different for phones? The principles of the technology would be much the same, it’s the marketing of the product that might differ, and maybe you could use some higher quality materials to help with your marketing pitch but… a phone is a phone, just like how my $600 watch tells the same time as a $100,000 watch - the difference is the brand.

3. Surely you could make a luxury phone good enough. I was looking at a $255,000 Rolex watch this afternoon while bored, thinking to myself, if I could afford it, I would definitely buy it, because it was really nice looking, and it would be an actual status symbol. Why couldn’t this also be the case with phones?

4. I think if you had a truely luxury phone then it wouldn’t cost too much. Sam Altman bought a watch that cost roughly $480,000 - it doesn’t buy him any more hours in the day than I get, but he was prepared to pay a lot more for an item that serves the exact same function as my watch.