Eight Years After the First iPhone, Apple Keeps Going Its Own Way - The New York Times

An increasing returns case study

"But the iPhone is not just what it does, but what it means to its users — which is directly a product of the savvy way Apple has designed and marketed the device to produce global lust. As the writer Ben Thompson has argued, the iPhone is in many ways a “Veblen good,” the economic term for a product whose high price actually increases its desirability. Apple’s resistance to selling low-end phones may thus feed into its success. IPhone resellers in Asia, for example, say that for many people, lower-end iPhones — even used ones — are seen as more desirable than more powerful, brand-new, but cheaper Android devices. 

Across large swaths of the globe, in other words, the iPhone is a status symbol, which is not to say that it’s frivolous — unlike a Prada suit, the iPhone is one status symbol that you’ll still find extremely useful."

Eight Years After the First iPhone, Apple Keeps Going Its Own Way - The New York Times