1- Pricing not only says who can afford your product but also establishes a brand, determines channel, & more.
2- The first key to having low priced offerings is that you have to have a set of partners who are willing to compete on thin margins in order to bring the product to market.
3- When people say Apple needs a cheaper phone there are many questions to answer beyond the get over yourself luxury brand issue.
4- What is distribution constraint? What partner absorbs some cost to leave margin? What is the branding?
5-Easy question — would a cheap phone be sold and supported in Apple stores side by side? How would the rest of the customers feel about more crowds and tougher appointments competing with people who paid half as much? Sell one phone against another—how?
6- Anyone that thinks Apple is unaware of the challenge and has not sketched out ideas, tested them, and thought about them immensely is crazy.
7- What does all this mean? Apple may or may not have a “pricing” or “price point” or “structural” / secular challenge. For sure just releasing a cheap phone doesn’t make all better.
All takes place in context of lots of cheap/bad competitive phones.
(1): https://mobile.twitter.com/stevesi/status/108117488690147328...
There's an obvious difference between "a cheaper phone" and making the range as affordable as it was five years ago - instead of relying on so-called luxury branding while offering very little extra and annoying customers with product issues (missing headphone jack, BatteryGate, etc) and mediocre software updates.
Apple doesn't have an iPhone problem. Apple has an Apple problem.
It's at least possible (who knows for sure...?) that if Jobs were still alive Apple would have opened up at least a couple of innovative new product lines by now - not just gimmicks like Watch, but new "I didn't know I wanted that, but now I see it I obviously do" products, with supporting services and industry partners, all pitched at the affordable-at-a-push level that Apple products originally lived in.
This is where Cook has failed. There's nothing new on the table. Putting up prices is a short-term tactic. So is "a cheap phone".
What Apple needs is a coherent and impressive long-term strategy, and investors aren't seeing that.
Well of course Apple, and every other company needs that. But hoping for a savior is not a plan.
Now it's just like, "Why'd they take off the ports on this laptop? It's a weird brown color. And two of the keys don't work, already." To make it worse, everything is the same. You can't tell anything apart? Is this the Air? Wait, it's the old Pro? Which watch is this? Is this the XR or the XS? What's the difference?
Microsoft is sitting on such an amazing ecosystem and it feels like they just don't know how to tie it all together sometimes.
2.25x multiple
With customisation you can easily reach 3x.
The idea being pushed is cannibalization by a better product, not lower prices.
[0] https://www.goodreads.com/quotes/908575-one-of-job-s-busines...
Apple ships models that fill the lower price brands. It is the iPhone 7 and iPhone 8 which are still supported and being sold.
Same story with the Mac: buying the iBook didn't make you feel like you were cheaping out, you were making a conscious choice for what you wanted, not buying "last year's PowerBook".
With the phones it's very different. Buying an old phone doesn't make you feel good, it just makes you think "I know this isn't the best, but it's all I could afford", and that's very un-Apple feeling -- especially when you still have to pay quite a lot.
Apple has apparently boxed itself into a corner, though: this is its second attempt to segment the line (the 5c being the first) and both have failed because they didn't feel like different things, they just felt like cheaper ones: the 5c was just a plastic 5S, and the XR is basically an XS with cheaper camera and screen.
So how else can they differentiate? Making a small phone won't really fly - while I'd love an SE-sized XS, the Chinese market they need to win back wants its phones big.
That only leaves the margin to cut, and that's a shibboleth. You can see why they'd much rather focus on services to escape this fix.
The iPhone needs to be split between iPhone Mini, iPhone and iPhone Pro, instead of current model of “last year”, “this year medium” and “this year large”.
As much as I wanted to love the iPhone SE, it always felt like last year’s model. It wasn’t a differentiated product that had a proper update cycle. A lot of people in the community were hoping for a proper update to the SE.
I also wanted to love the 5C because I actually preferred the design over the metal iPhone, but they hindered it with last year’s specs. I was always hoping they would break out a proper model line from the 5C, but it died with the 6.
I never think about specs/performance... much in the same way that I haven't thought of specs for the mid 2012 MBP I bought years ago. What are people doing with their phones that drives a sense that last year's specs aren't good enough?
On the other hand, people can spend $550 for OnePlus 6T, a current generation phone, and feel better about their decision.
PS: The above quote is just one of the gems from https://funroll-loops.teurasporsaat.org/ - a humorous portal to a lost world from the 90s - 2000s (ie the gentoo subculture).
>"I notice that my disk does a whole lot of thrashing when I boot up. I have a lot of stuff that gets loaded into memory every time I boot, like X11, ion2, Firefox, Eterm, Thunderbird, etc. It seems to me that putting all of the files necessary to those apps in a contiguous section on the disk and loading that into memory in one shot would be a whole lot faster. Is there a way to do this? Is it stupid?"
That's a good idea! It's kind of what Windows Prefetch feature does.
Wanting to play the new game showcased in the announcement. and other news games that come out, that requires the latest phone to play smoothly and without utterly destroying my battery in under 2 hours.
EDIT: That said, I care less about performance specs and more about physical size, and so I too am still on an iPhone SE
I have an SE and appearance aside I disagree. It had the guts of the current model including touch id and performs quite well for me.
Now, sure, it feels a little bit left behind. Maybe. It's still fast enough to run the apps I want. But, let's face it, all of the updates that the 7/8/Xfoo have had are updates I don't want.
The problem I've got with Apple is that they don't have any new products I want. I just had them replace the battery on the SE (which was a clusterfuck in its own right) and I just bought a refurb 2015 MBP. Granted Apple probably made more money off the sale of a refurb than they would've off of a new unit... but if the lineup hasn't improved in another six years I'm off to Linux on the desktop.
IIRC iPhone SE does not have the second generation Touch ID sensor that iPhone 6s does.
iPhone S - 5.8" / 6.8" OLED, Face ID, Stainless Steel, Best Camera, 4x4 Antenna. Tri- Camera
iPhone R - LCD, Under Screen Touch ID? Or Face ID with a larger bezel at top or bottom to save cost. Aluminium, 2x2 Antenna. Double Camera
iPhone E - Basically the traditional iPhone design with Touch ID with slight update in Design. Single Camera
The three model will then just iterate on their own. May be the iPhone E could even be unapologetically Plastic!.
Although I think Apple will just continue its current model until things really break.
It was a nice looking phone but a tough sell because the 5S was such a big leap (first 64-bit CPU) over everything else. The 5S is over 5 years old and still supported by the latest iOS.
Do you remember, back in the day, when the smallest IBM thinkpads were way more expensive than the less-small IBM thinkpads?
I understand big phones are king if you only have one device. If I wasn't carrying like five devices all the time, I'd also want a giant phone-tablet, and I guess these days, most people don't have computers, and if I didn't have a computer, I'd want a really giant phone. But I am carrying five devices all the time, and I do have desktops everywhere I spend significant time, so I want my phone to be small and easy to operate with one hand.
As far as I can tell, there's a pretty big correlation between having a good income and having multiple devices. What I'm saying is that giant phones can be seen as... kind of the low end of the market.
And it's not like apple needs to stop making giant phones; they just need to make a small phone for the high end. That, or they need to upgrade functionality on the watch to the point where I can just use the watch for everything, but as far as I can tell, app developers are moving in the other direction (Last time I dropped off my phone for repair, I found that lyft had disabled it's watch app, and the uber watch app doesn't work reliably without the phone nearby. I mean, I got the uber watch app working once I got my phone back, but it's just not designed to function as the backup for your transportation app that I wanted. It was kind of annoying; I ended up calling a friend on the watch, 'cause txt messages weren't working, either. Walking around shouting into my watch like I thought i was dick tracy)
Personally, I'm actually pretty happy paying apple prices for a new phone every two years or so, but you've gotta give me a reason. I mean, if you came out with a really nice small phone, I'd even be willing to pay big phone prices for it; I'm not really that price sensitive when it comes to things like my cellphone, but I really don't have a lot of desire to buy the new phones, just 'cause they are all so big, and as far as I can tell, they don't do anything I want any better than my iphone 7. (I don't hate face ID, but as far as I am concerned, it's not any better than the fingerprint)
If Apple came out with a 3d-touch capable iphone SE sized phone with lots of memory and really good cell reception/networking features? Yeah, I could see me paying a grand for it.
In the olden days, when Apple was much smaller, they were ironically freer to just make the best device possible because success would be meaningful in very small markets. The OG iPod saved them despite selling relatively tiny numbers. Nowadays, markets that used to matter significantly to Apple -- education, media, creatives -- are allowed to wither and die because they are a blip on the bottom line.
I don't see what could change that, though. They now prioritise growth/financials/share price over pure products in a very calculating way, but what corporation doesn't? You need an exceptional mandate to do otherwise, and only the Bezos's and Jobs's of the world get those.
So the pity is that as a result we'll continue to see Apple pushing hard into services and (probably) media, because that's where it can smell growth. That might keep the numbers up, but I suspect it's going to transform what Apple is even further away from the "make great products" company we knew into ... something else. (Probably something less great, given their track record with services, tbh.)
I think this is one of those situations where you count dollars rather than heads.
My understanding is that the "next billion users" push that all the big companies are doing is a bit like putting macs in schools. It is a long-term plan 'cause yes, the developing world is poor right now. maybe those people who are poor now won't be poor in the future, and if they know how to use your ecosystem, that's great for you. It certainly seems like a good idea, but I don't think it's where you make your money today.
I really think if you were serious about that plan, you'd come out with a giant low-end phone; You remember the thinkpad W series? something like that. big and clunky and cheap. Apple needs an iphone 5c level cheap plastic reskin of last year's big phone for that.
The market you're really talking about them capturing with a small premium phone is "rich people who have multiple devices and want a small phone and when they can't get one they buy an Android phone or make do with an SE". I'd wager that's small in most terms, certainly in Apple terms -- whether you're talking dollars or heads.
But what do the top-end Chinese consumers do when Apple doesn't have a phone that appeals to them? They buy one of the other flagships that run WeChat, and Apple loses them. That's big in Apple terms, missed-expectations-warning big.
Probably means they'll discontinue the non-touchbar MBP in the next round.
MacBook Air has newer processors.
By comparison I think the iBook was always a crippled version.
For $999 or $800 old/refurbished, it was the only small (5 lbs) laptop you could get with a decent GPU back then. The pentium 4 stuff of the day was huge and power hungry and the Centrino line didn’t support it for some reason.
What reason is there for the XR to exist other than to be a more affordable, new option compared to the XS? If it's failing at being a more affordable alternative, it's failing.
If they offered new phones for a lower price but with the software update support lifetime that matches the flagship phones, then they might have a killer product!
Point being, the cycle isn't known. The iPhone 7 could be supported for many years. Or, hardware design could change in 2019 and even the XS and XR could be obsolete.
For 99%+ of the general market, if the update is not available by clicking update in their phone, it doesn't exist and end of support is when the carrier/OEM stops releasing them.
OMG, somebody find me a fainting couch fast!
Apple should make a phone like the SE which is made for the low-mid market, not just discount its old models.
i'm on an SE. i got this phone fairly late into its life cycle and it was a deliberate choice. my biggest regret is probably not getting a second one before they discontinued it because when my current SE fails i have no idea where to get a replacement.
I bought my wife the XS, not because it has a fancier display, but purely because it was the smallest model available - and it's still too big for her.
Instead of differentiating their phones based on features, they should simply differentiate them based on screen size. That would allow them to meet several price points without making their customers feel like they’re cheap.
Remember, the SE was released outside of the usual iPhone release cycle in March 2016, so I think intent for a longer cycle was clear.
Lots of people predicted between 2 and 3 years before the SE got an update, so if March 2019 passes without an announcement, then who knows what's next.
Also, I think there's a high probability they're trying to work out the kinks in an SE-sized phone that is all screen. I'd be surprised if they released the SE2 and it has a home button.
With the solve down in new features and design Apple could have skipped the iPhone 8, XS and XR. Except of cause "the market" and their stockholders expects new phones, regardless of the need.
It was a miniaturised iPhone 6s released while the 6s was ‘current’, and got to ‘low-mid market’ pricing by being discounted as it got older.
SE size, just go edge to edge.
Now I have 3 SEs (one with a broken screen that I'll get fixed, one currently in use, one still in the box) that will hopefully last me a while - maybe the phone market returns to sensible sizes & features in a few years.
I don't want an 8 because I don't want a phone with a glass back.
iPhone SE was perfect. Metal all round, small, affordable, powerful.
The glass back thing is a matter of taste, sure, but caring what material is inside the case is a bit silly.
What is this “case” you’re talking about?
Kind regards SE-owner
The trouble with a glass back is that it can still shatter when dropped even if it has a case on it.
I’m not being funny. I treat every phone I’ve ever owned as the expensive devices they are. I buy a protective case, don’t put it in my back pocket where it can be bent or broken. I don’t use it while standing over the toilet so it can’t be dropped in. When I drink with friends, I don’t lay my phone on the bar where some drunk can spill beer on it.
It’s more than being able to have the use of a fully functioning device, at trade-in time my phone is worth more because I take of it.
Both times I've dropped the phone getting in or out of the car. First time it landed face first on the garage floor and shattered the screen and the second time it landed on its side and just scratched the case a little.
Hard to know what will happen when you drop your phone.
I find this is the real problem. I've had phones that I've dropped many, many times, onto hard surfaces, that have come away without a scratch. Then I dropped a Nokia 3 and the screen just flew apart.
I can't not drop things.
It is not my first time hearing that some individuals may prefer a smaller phone, and you’re correct. I don’t find that difficult to understand.
Headphone jack
Unfortunately even last years models do not support LTE band 71, so they are a poor choice for T-Mobile US customers. No dual SIM support is another reason for many.
How long, though? An Apple device is supported for a mere 5 years after release. The iPhone 7 came out in late 2016, so it has 3 years remaining. And unlike Android, once an iOS device goes out of support it stops being able to update apps or install up-to-date versions thereof, because these always require the latest release of iOS... With Android, even if you don't get that OTA update, the apps will still work and you can often install a modded version of the OS that's kept up to date. It's just so much better.
https://www.cnet.com/news/apples-iphone-xr-has-been-its-top-...
What Greg Joswiak says is likely true, but you have to account for the fact that peak demand for the XS has already passed by the time the XR is launched, so total XS sales to date could still be more.
I think you’re failing to account for the fact that most people just use their phones and enjoy them as long as they work and do what they want it to do. The “gates” and outrage you mention comes from a small and vocal portion of Apple’s customers.
Really? Typically it's all the claims by the press pundits (X not selling, Apple losing Y country, etc) that are proven invariably BS after each quarter results conference.
https://appleinsider.com/articles/19/01/08/the-wsj-calling-t...
So they already have an offering in that price band. Sure, it's bigger than the iPhone SE, and naturally it doesn't have the prestige of something that costs twice as much, but if you want a new iPhone today and you've got $450, Apple has a product for you.
Do they actually do that though? Feels like BOM reduction exercises like removing the short power cable from their $3000 laptops and headphone dongles from their $1000 phone, laptops still shipping with painfully low space that triggers space warnings on their OS after you add just a few files to them (complete nightmare if you work at a company that cheaps out on laptops).
Feels like the user experience is actually secondary to maximizing ASP and minimizing BOM.
I have a Nokia 6.1 (the black copper one).
Side by side if I knew nothing about either I'd be hard pressed to tell which was the 800 quid phone and which was the 200 quid phone.
Throw in AndroidOne and recent Android and the experience is largely similar, I mean sure the processor in hers would murder mine in a benchmark but in real world use do I ever care about it, they feel equally fast on a human time scale (and I have a better adblocker).
There was a time that putting an iphone next to a 200 quid phone would have been a laughable comparison not so much anymore.
Then they should offer models that are cheaper to manufacture, like the 5c. I'm surprised not to see a successor to the 5c. Maybe they are worried it would be too popular and gouge sales of flagship models negating some of their premium branding.
I'm currently on a 6s and see no update path for myself, I would happily sacrifice faceID and some of the higher-end phone materials for a modern paired down iPhone. I have about as much confidence in this appearing though as them fixing the state of the keyboards on the MBP's.
The 5C was a sales flop. In Australia, the 5S was outselling the 5C by eleven times [1]. Even in China, people were buying the more expensive iPhone rather than the plastic 5C one [2].
[1] https://www.smh.com.au/technology/australian-telcos-struggle...
[2] https://techcrunch.com/2014/03/24/apples-iphone-5c-sales-sto...