"Obvious"

Looking again at that chart, and with the realities of these three markets in mind, it’s not so much that the iPhone has saturated the American-style and European-style markets, and ought to focus on the Asian-style one; rather, the iPhone has saturated the high end in all three markets – the high end just varies in accessibility ($200 for American-style, $650 for Asian-style). And, if you accept that the iPhone is in roughly the same competitive position in all three markets – that the difference in market share is due to inherent structure of the market – then it’s not at all obvious Apple should focus on the SE Asia-style market. In fact, it’s obvious they shouldn’t.

The whole "western market = premium, Asian market = cheap" view of the smartphone industry indicates a misunderstanding of the nature of aspirational goods and the process of market segmentation.

The other risk, though, is more localized. Specifically, iOS is on the verge of being a complete non-factor in several countries on the right side of that chart. In India, for example, iOS penetration is minuscule, meaning the local app advantage tilts towards Android.

One major factor in the Indian market that sometimes gets overlooked is Apple's lack of distribution. The Indian government requires that branded stores source 30% of their stock from Indian companies (h/t 9to5Mac), which Apple can't do because of how its supply chain is built. That means that Apple Retail - one of the company's greatest competitive advantages - is relatively weak there. Fixing that is more important than cutting the price of devices.

Ben Thompson is doing some really great work right now.