I know many people who love Apple's ecosystem but who won't pay through the nose for a "premium" phone that's way overpowered for their needs.
However, the iPod Touch has been neglected for several years: it's all but an orphan product at this stage.
(One ray of hope: Apple just refreshed the iPad Mini with a two-generations jump in CPU and a few nice-but-overdue tweaks -- double the storage, 1st generation Pencil support, and a TrueTone display. I hope they're planning on doing the same for the iPod Touch.)
Honestly, before I was 'forced' (for work purposes) to use an iphone, I wasn't a fan of Apple - although I admittedly never tried using one. Since then, the three guys that sit near me at work have bought into the apple ecosystem as well.
The real danger for Apple would be compromising with a budget model at the entry level. It would kill their value proposition on the whole rest of their line. The closest they get is previous-year models and refurbs.
I think you’re forgetting about the significant market for used Apple products. There are many people, myself included, who live on used MacBooks, iPhones, iPads, AppleTV, Airport Express, etc., and are perfectly content. I’m typing this out on an iPhone SE that I bought used, and that was the most I’ve ever paid for a phone. My wife is still content with a 5S, and I frankly never notice the difference when I borrow her phone.
Apple (perhaps begrudgingly) cares about us because the used market helps keep the demand high for their new and shiny products.
Along the way consumers will start to tap out and leave Apple's ecosystem altogether.
Maybe that's already set in motion, people are keeping their phones for much longer so it will take a while for the effects to be noticeable.
What's tapping out is the pool of first time iPhone buyers, but fortunately for Apple, iPhones are very 'sticky'. Existing users are very highly likely to replace an iPhone with a new iPhone, and in fact the bulk of sales have been to previous iPhone owners for several years.
When people talk about iPhone sales slowing, they're taking about growth slowing. Actual sales are just levelling off. From here on out we'll see some ups and downs, sure. It looks like we're in for a period of economic risk and uncertainty too which isn't good for anyone, but I don't see any good reason to expect a sustained decline compared to the rest of the market.
It also doesn't take into account people who may be budget conscious now but will have spending power in a few years. Why would apple turn up its nose at that market share?
What’s the problem with that?
In my mind that’s exactly what the iPhone SE is: a premium phone in a small form factor.
That’s exactly what I want. That’s literally the only thing I want in my next phone.
Nothing Apple currently offers interests me at all. Every option they have, even the “small” options, are way too big.
Some people seem to mistake the iPhone SE as some sort of cheap option for those who can’t afford a “real” iPhone (thinking about market segments as opposed to use-case), but that’s absolutely ass backwards.
We want the best, and we want it comfortably in our hand.
> What’s the problem with that?
In the next sentence he literally lays out what the problem with that would be. It's an engineering problem.
I have a Sony compact and people are constantly asking me questions about it with intrigue then shrug their shoulders and go back to their giant phones.
The main knock against Sony phones is the camera quality, which they intentionally nerf in order to not damage their DSLR business.
I feel like Apple might be able to succeed here where Sony has failed, because of their moat around the Apple ecosystem.
I'd argue that Apple making product decisions for mainly financial reasons is a recent problem. My memory could betray me though.
Apple has been focused on finances for most of its existence as an entity. If it appears they have become more focused on financial success recently, I would argue that's more likely due to market saturation than it is to any categorical change in their priorities.
EDIT: Changed and removed some wording to make the tone less condescending. Sorry about that.
One could also cast it as an entirely predictable consequence of replacing a CEO who came up as a product person with one who came up as an operations person.
Apple's no stranger to saturating markets. They used to grow past that point, in part, by expanding into new markets that were peripherally related to the ones they already dominated in, and becoming a dominant player at those as well. They were remarkably good at it, too, with very few major missteps. They don't seem to be so good at that game anymore,though, so they're falling back on the top leadership's top skill: Expanding margins.
The iPad mini is neither the smallest nor least expensive current iOS device. The Mac mini starts at $800 and the entire Mac desktop line seems to be something Apple has discontinued caring about because they make all their money from iPhones now.
> Your argument is completely on the marketing side of things, but maybe it’s an production issue? Apple is spending large capital expenditures each year, no one exactly know why, but probably they buy all the tooling in the factories. Another form factor will cost them money to produce.
This does cost money, but if there is demand for the product (which isn't just diverted from your other products) then you make it back. And if it was a major factor, would they have existing products like the iPad mini?
Regarding your last point: You are assuming that they're manufacturing the iPad mini on their own tooling like the iPhones. Who knows if that's true. The scale of iPad production is much lower so it might make no sense to buy the machinery.
In this perspective it's interesting how their current "lower tier" phone, the Xr, is priced lower than the Xs for instance, but got the bigger screen and better battery.
It gives them an opening for marketing smaller phones as more niche models with eventually more engineering going towards keeping it small with the same or better specs than the bigger phones.
The real problem for Apple is differentiating their more expensive phones when the most significant thing for end users is the screen size and the camera. Take one of those away and there's not much left to charge for. Their current model is based on artificially inflated prices for big screens. For whatever reason there's a segment of users that happily hand over the cash for what is an overpriced phone. However, it lost them the entry segment; which is why they keep bringing back the 5S/SE formfactor. Without this, they bleed users even as revenue goes up because of the increased ASP.
If they get the bigger 6/7/8 formfactor to the same price, they are cannibalizing their high end range because the difference between that and their premium XR range is mostly not that big. Worse, you can't really tell them apart easily because they have the same design. This is made worse by people using iphone covers. Status and vanity are big reasons for owning an iphone but when they all look the same, you might as well get the cheaper one.
But it's about the price not the actual "size", the Xs has a OLED screen vs the LED screen of the Xr which is way more expensive.
I'm totally fine with Apple coming up with a set of ways to prevent a phone from being perceived as cheap, while keeping a smaller form factor.
I'm not sure I agree with this at all. Traditionally smaller laptops cost more than larger ones, even for an identical or inferior spec(with the assumption that making them smaller takes more engineering to cram everything in). Don't see why this logic wouldn't apply here.
The recent generations of iPhones all look and feel too large to me. I'm like, maybe Apple should include tactical pants in their accessories:
https://techcrunch.com/2011/05/02/carry-your-ipad-2-in-the-p...
If the similar phone did what you want then you’d buy that instead. The extra $900 is either worth it for the missing feature or not.
Nobody’s a fool in this situation.
The nice thing about the SE form factor is that it is enough thicker than the 6 and later form factor to offset much of the battery concern. If they made an SE form factor phone with an OLED display (thinner), kept it precisely as thick overall, and shifted even more of the circuitry to the chin and forehead of the phone, then they could get a pretty big battery in there, and as a bonus, the OLED would generally be more efficient as well.
Interesting analysis. What about if they embraced the luxury brand aspect and instead of making it a premium product via the fastest available processor (etc) they made the back of the phone out of sterling silver or something?
https://9to5mac.com/2019/01/09/iphone-xr-usage-overtakes-xs/
I can't pull up mixpanel trends right now for some reason, but looking at this graph doesn't lead me to believe the XR is very successful.
The form factor inherently makes it less expensive to manufacture. Bigger screens cost more etc. Which creates a pricing problem for them.
If they price it like a small phone (i.e. lower price) they cannibalize sales of larger phones with higher total margins, and lose money. If they price it with the same total margin as the larger phones, it'd still be the lowest priced current generation phone in their lineup, but would then compare very poorly on price to similar spec Android phones, which makes their brand look overpriced (as opposed to premium).
About the only way it would make sense is to make it a premium product. Give it the fastest available processor etc. so it can justify a premium price despite the size. But that's a difficult engineering problem. A faster processor uses more power and generates more heat, but smaller phones have less room for a big battery and less surface area to dissipate heat. And finding a solution for that is extra hard because what it needs is an advantage relative to larger phones, but if you improve performance per watt or battery density in general then the same improvement can go into the larger phone too and you still have no relative advantage.