The model is changing slowly but keep in mind that TMobile, Verizon, Sprint, AT&T are still incentivised to heavily push the iPhone due to multimillion units they've essentially preordered when partnering with Apple
> You don't think it's because they essentially invented the market, starting out at 90% market share?
Apple essentially invented the harddrive digital music player with iPod+iTunes and maintained a +80% marketshare for the lifespan of that product
> I disagree. I think people shop for a phone the way many people (unfortunately) shop for a new car: On the monthly payment, not the sticker price. All that matters is that the carriers finance the phone, subsidies are dying. Every major US carrier now has installment options.
The monthly payments for cars vary widely with the differences measuring in hundreds of dollars per month. The monthly payments for contract cellphones in USA are mostly the same for a $0 low end phone or a $0 iPhone. Indeed for many years AT&T/Verizon/Sprint wouldn't give a discount on the monthly plan even if the consumer brought their own phone which made it slightly irrational to not sign a contract. It's impossible for the low end to disrupt when the high end is the practically the same price.
Ben Thompson is mostly wrong: Customers don't 'buy' iPhones, Carriers do i.e. iPhones are protected from low end disruption by carriers subsidizing and obscuring the price with plans/contracts. In markets where carrier subsidy isn't as popular (e.g. Europe) iPhone market share is very low. Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product.
NB Apple was always careful to sell low end iPods like the nano and shuffle so they continuously disrupted themselves in that product market and kept other companies from doing so.
http://www.businessinsider.com/apple-verizon-iphone-2013-7 (NB the numbers were wrong, and iPhone demand and growth keeps increasing, but the underlying business relationship is as described)