It isn't so much quality as it is a lack of "must have" features available only on newer devices. My iPhone 6 Plus was still perfectly serviceable after four years. No, it didn't have 3D touch, live photos, Animoji, or 4K video recording, but ultimately that matters to a small percentage of customers. There were noticeable improvements in display, camera, security, and features between the original iPhone, the 3G, the 4, the 5, and the 6. Things have been pretty stagnant since. Even full screen AMOLED on the X wasn't a drastic improvement over the Full HD display on the 6 Plus from a user standpoint, and FaceID is different (but not necessarily better) than TouchID. For a majority of users who use their smartphones for selfies, Facebook, Instagram, and Candy Crush there was no compelling reason to get the high priced new phones.
Apple has also hurt itself with its policy of selling two, three, and even four year old designs as new. These phones are perfectly fine, but as a result they are also continuing to support the original devices sold years ago with OS updates. You can put iOS 12 on a 5S from 2013 and have a fully functional phone.
My personal opinion is Apple needs to simplify its product offering. Sell only one year old devices as the "cheap" option and discontinue OS updates three years after the device's original introduction. That would mean the 7 would have been the oldest device to get iOS 12 and we would have the 8, 8 Plus, XR, XS, and XS Max as the devices offered for sale new. It would encourage more upgrades and also take some of the wind out of the secondary market. Even this would be better than a majority of Android devices which get only one or two OS updates at best.
"discontinue OS updates three years after the device's original introduction." => If Apple does that, it will get slammed for planned obsolescence.
I switched just over four years ago with the dilemma mentioned in this piece. I was priced our of the iPhone market (new phone), but picking up a much older iPhone (refurbished or second hand) was a ridiculous proposition as I could get a new phone with very competitive hardware for (in those days) 200€.
New phone. Modern technology. Amazing build quality. Fast charging. Extra storage etc. It was Android but I liked the system much more than iOS.
Nowadays, you can pick up amazing new phones that leave four year old hardware in the dust for 250€ (or less!) and follow a far shorter upgrade path or hang on to it for longer if you wish.
You would have to be an iOS die hard to pick up a four year old iPhone as your main phone.
I think my situation is pretty indicative of many people who were in my situation and it is one of the reasons iPhone sales flattened.
New, far cheaper phones from competitors are more than good enough on every level.
The big difference between today and four years ago is that competitors are offering amazing phones at every price band right up into premium and far beyond.
Plenty of options at plenty of prices.
Apple has very limited options and an 's' cycle which is now taking the edge off of its ability to react to market trends.
"The big difference between today and four years ago is that competitors are offering amazing phones at every price band right up into premium and far beyond."
Those competitors offering high-end smartphones at dirt cheap prices won't be around too long since they won't be making any money.
They’re not all dirt cheap though. Anyway there doesn’t seem to be hard evidence that Apple is losing customers to Android - at least not outside China. China is another story and I absolutely believe nationalism comes into play even if Cook can’t admit it. Also in China consumers are tied to things like WeChat. Their buying decisions are based more on what the hardware looks like than what OS the phone is running.
"I absolutely believe nationalism comes into play even if Cook can’t admit it." => Of course it does. And it applies even more so with these trade wars
I switched just over four years ago with the dilemma mentioned in this piece. I was priced our of the iPhone market (new phone), but picking up a much older iPhone (refurbished or second hand) was a ridiculous proposition as I could get a new phone with very competitive hardware for (in those days) 200€.
New phone. Modern technology. Amazing build quality. Fast charging. Extra storage etc. It was Android but I liked the system much more than iOS.
Nowadays, you can pick up amazing new phones that leave four year old hardware in the dust for 250€ (or less!) and follow a far shorter upgrade path or hang on to it for longer if you wish.
You would have to be an iOS die hard to pick up a four year old iPhone as your main phone.
I think my situation is pretty indicative of many people who were in my situation and it is one of the reasons iPhone sales flattened.
New, far cheaper phones from competitors are more than good enough on every level.
The big difference between today and four years ago is that competitors are offering amazing phones at every price band right up into premium and far beyond.
Plenty of options at plenty of prices.
Apple has very limited options and an 's' cycle which is now taking the edge off of its ability to react to market trends.
"The big difference between today and four years ago is that competitors are offering amazing phones at every price band right up into premium and far beyond."
Those competitors offering high-end smartphones at dirt cheap prices won't be around too long since they won't be making any money.
They’re not all dirt cheap though. Anyway there doesn’t seem to be hard evidence that Apple is losing customers to Android - at least not outside China. China is another story and I absolutely believe nationalism comes into play even if Cook can’t admit it. Also in China consumers are tied to things like WeChat. Their buying decisions are based more on what the hardware looks like than what OS the phone is running.
India is another example of losing to Android in a big way. Apple's strategy of premium prices and products are great in the First World. At least until saturation starts to hit as seems to be happening. It doesn't work in the Developing World which kind of shoots the services strategy quite a bit.
The biggest problem with India is not price but very high import duties & India's refusal to allow Apple to sell refurbished iPhones. If Apple can make a deal with their government to change that situation then that will be a huge help.
The iPhone 8 continues to outsell the newer phones (XS and XR) in my local Apple store in Sydney during the Xmas/New Year period. I suspect this is the same situation elsewhere but now that Apple doesn’t report individual model performances we may never know.
But I do know this - many people much prefer Touch ID to Face ID, which causes them to choose the older models such as the iPhone 8.
Touch ID was also a major differentiator for iPhones but Apple’s latest models are almost identical to every other Samsung it Huawei phones.
Apple needs to bring back Touch ID ASAP, remove the silly notch and reintroduce rectangular screens (without curved corners).
How come a strategy which was good for investors in the last 10 years became bad for the same investors in a matter of 3 months??? It is not as if Apple has changed their strategy with respect to the quality/longevity of the iPhones dramatically in the last 3 months. This editorial is beating around the bush, without addressing the core issues.
Nobody said that it was good for investors for the last 10 years.
Then how do you explain Apple becoming the FIRST company in the world to have a Trillion dollar valuation not so long ago?
It isn't so much quality as it is a lack of "must have" features available only on newer devices. My iPhone 6 Plus was still perfectly serviceable after four years. No, it didn't have 3D touch, live photos, Animoji, or 4K video recording, but ultimately that matters to a small percentage of customers. There were noticeable improvements in display, camera, security, and features between the original iPhone, the 3G, the 4, the 5, and the 6. Things have been pretty stagnant since. Even full screen AMOLED on the X wasn't a drastic improvement over the Full HD display on the 6 Plus from a user standpoint, and FaceID is different (but not necessarily better) than TouchID. For a majority of users who use their smartphones for selfies, Facebook, Instagram, and Candy Crush there was no compelling reason to get the high priced new phones.
Apple has also hurt itself with its policy of selling two, three, and even four year old designs as new. These phones are perfectly fine, but as a result they are also continuing to support the original devices sold years ago with OS updates. You can put iOS 12 on a 5S from 2013 and have a fully functional phone.
My personal opinion is Apple needs to simplify its product offering. Sell only one year old devices as the "cheap" option and discontinue OS updates three years after the device's original introduction. That would mean the 7 would have been the oldest device to get iOS 12 and we would have the 8, 8 Plus, XR, XS, and XS Max as the devices offered for sale new. It would encourage more upgrades and also take some of the wind out of the secondary market. Even this would be better than a majority of Android devices which get only one or two OS updates at best.
"discontinue OS updates three years after the device's original introduction." => If Apple does that, it will get slammed for planned obsolescence.
Very likely true, and ultimately a problem of their own making. Apple did cut devices off earlier than they do now. The 3GS and 4 got four updates. The 4S and 5 got five updates. Now the 5S has gotten six updates and we don't know if it is done yet.
To me, planned obsolescence means the phone doesn't work as it was originally manufactured. By extending iOS updates through multiple older years Apple has created the expectation that a phone purchased today will be receive updates for six years. While that is certainly a benefit for consumers, it sets an unreasonable expectation for the future unless Apple expects to have people on a four-year average upgrade cycle. Even the top-line reference Android devices are only marketed with three OS updates.
How come a strategy which was good for investors in the last 10 years became bad for the same investors in a matter of 3 months??? It is not as if Apple has changed their strategy with respect to the quality/longevity of the iPhones dramatically in the last 3 months. This editorial is beating around the bush, without addressing the core issues.
Totally agree with you. Many of us are both consumers and investors, and Apple has had an incredible run over the last decade. Setbacks will occur, and if you don’t have the stomach for it, don’t invest. Or, pick a nice safe no load mutual fund and invest that way.
...while I generally feel Apple has very good build quality for devices that may last years, for a device that one carries with them daily, the risk of something happening to it (theft or other damage) is high.
User-induced damage is an entirely different matter versus good build quality. A well-engineered device of any sort won't handle user abuse and other accidents very well.
I think I posted poorly - Agree with you 100%.
What I was attempting to get across in my post essentially boils down to: “its dicey enough to carry around a device in your pocket that costs several hundred dollars since user induced damage of thief induced theft is prevalent. Each one of us defines that level of acceptable risk.”
For me, carrying $1000+ in my pocket everyday (if I can fit it in my pocket, that is) makes me very uncomfortable not to mention that my personal sentiment is with those that believe the phone (Xs) is way overpriced and I don’t like the Xr.
Why Americans place shareholders rights above all other considerations is beyond me. We've shitted up the planet, we're killing our population with shit food, air & water pollution, shit medicine and all for the one goal of profit. Ugh!
If food manufacturers could grind up old car tires, put some red food coloring on it and call it tomato sauce they would. The largest beverage company is Coke, what do they sell, sugared shit. The largest restaurant company is McDonald's, what do they sell? Shit food that gives you diabetes and heart disease and on and on...
This article is beyond absurd. Sometimes I wonder about this place and its editors/writers. First off, it makes the obvious logical fallacy of assuming that because Apple now sells a $1,550.00 smartphone, that all of that pricing MUST be due to the phone being so expensive to manufacture to such a high standard. I've got news for you: there's a reason that Apple has the highest profit margins in the industry -- and it's precisely because Apple DOES NOT plow all of its revenues into developing superior phones. Sure, it plows some of the revenue in, but (by the largest margin in the industry), Apple charges sky high prices because (1) people (at least in the past) are wiling to pay it; and (2) it creates huge profits for Apple.
Look, I've been using iPhones for over a decade. I have had them break in many, many ways. Are they a bit more durable than a $200 cheapie android? Of course. Is the software more streamlined and easier to use? Of course. But this article totally misses the point. All signs point to the fact that Apple's share price has dropped because of: (1) issues with China, including tariffs; and (2) Apple has finally pushed the pricing envelope too far.
The reality is that Apple has for a long time pushed a strategy that is good for investors, good for consumers, and that creates the world's best phone platform. These items are not mutually exclusive here. There's no need to pretend that they are. This article is based upon a conclusion that is wholly absurd.
The iPhone 8 continues to outsell the newer phones (XS and XR) in my local Apple store in Sydney during the Xmas/New Year period. I suspect this is the same situation elsewhere but now that Apple doesn’t report individual model performances we may never know.
But I do know this - many people much prefer Touch ID to Face ID, which causes them to choose the older models such as the iPhone 8.
Touch ID was also a major differentiator for iPhones but Apple’s latest models are almost identical to every other Samsung it Huawei phones.
Apple needs to bring back Touch ID ASAP, remove the silly notch and reintroduce rectangular screens (without curved corners).
Apple has never reported specific model sales numbers. They were all lumped together.
You couldnt pay me to go back to touch id. Also, every other premium Android device has a fingerprint sensor so how was it a differentiator?
The iPhone 8 continues to outsell the newer phones (XS and XR) in my local Apple store in Sydney during the Xmas/New Year period. I suspect this is the same situation elsewhere but now that Apple doesn’t report individual model performances we may never know.
But I do know this - many people much prefer Touch ID to Face ID, which causes them to choose the older models such as the iPhone 8.
Touch ID was also a major differentiator for iPhones but Apple’s latest models are almost identical to every other Samsung it Huawei phones.
Apple needs to bring back Touch ID ASAP, remove the silly notch and reintroduce rectangular screens (without curved corners).
Apple has never reported specific model sales numbers. They were all lumped together.
You couldnt pay me to go back to touch id. Also, every other premium Android device has a fingerprint sensor so how was it a differentiator?
I agree that Apple won't get rid of FaceID but nothing stopping them from implementing both FaceID and TouchID (based on in-screen ultrasonic sensor tech). There are specific situations where FaceID works better and there are specific situations where TouchID works better. Having both on one device would be a boon for users.
It isn't so much quality as it is a lack of "must have" features available only on newer devices. My iPhone 6 Plus was still perfectly serviceable after four years. No, it didn't have 3D touch, live photos, Animoji, or 4K video recording, but ultimately that matters to a small percentage of customers. There were noticeable improvements in display, camera, security, and features between the original iPhone, the 3G, the 4, the 5, and the 6. Things have been pretty stagnant since. Even full screen AMOLED on the X wasn't a drastic improvement over the Full HD display on the 6 Plus from a user standpoint, and FaceID is different (but not necessarily better) than TouchID. For a majority of users who use their smartphones for selfies, Facebook, Instagram, and Candy Crush there was no compelling reason to get the high priced new phones.
Apple has also hurt itself with its policy of selling two, three, and even four year old designs as new. These phones are perfectly fine, but as a result they are also continuing to support the original devices sold years ago with OS updates. You can put iOS 12 on a 5S from 2013 and have a fully functional phone.
My personal opinion is Apple needs to simplify its product offering. Sell only one year old devices as the "cheap" option and discontinue OS updates three years after the device's original introduction. That would mean the 7 would have been the oldest device to get iOS 12 and we would have the 8, 8 Plus, XR, XS, and XS Max as the devices offered for sale new. It would encourage more upgrades and also take some of the wind out of the secondary market. Even this would be better than a majority of Android devices which get only one or two OS updates at best.
"discontinue OS updates three years after the device's original introduction." => If Apple does that, it will get slammed for planned obsolescence.
Very likely true, and ultimately a problem of their own making. Apple did cut devices off earlier than they do now. The 3GS and 4 got four updates. The 4S and 5 got five updates. Now the 5S has gotten six updates and we don't know if it is done yet.
To me, planned obsolescence means the phone doesn't work as it was originally manufactured. By extending iOS updates through multiple older years Apple has created the expectation that a phone purchased today will be receive updates for six years. While that is certainly a benefit for consumers, it sets an unreasonable expectation for the future unless Apple expects to have people on a four-year average upgrade cycle. Even the top-line reference Android devices are only marketed with three OS updates.
Four-year upgrade cycles are already becoming the norm whether Apple expects them or not so they may as well adapt and offer 4 years worth of OS upgrades. More than that is pushing it.
All signs point to the fact that Apple's share price has dropped because of: (1) issues with China, including tariffs; and (2) Apple has finally pushed the pricing envelope too far.
Just curious: what tariff issues is Apple facing in China?
Finally! Someone with some sense. Everyone should bebuying stock! Tremendous value. Apple is a revenue juggernaut. You could cut their revenues in half and still be higher than MS, Amazon, or Google. In half! And this revenue correction is less than 10%. Get a grip people. The larger you are in this world, the more people want to see you fail. So f’d up.
Charging higher and higher prices for all new versions of products. Just look at how much the 6plus cost vs the XS max. Every year it’s at least a $100 more for the newer phone. Then going up the storage ladder is ridiculously expensive. Including the shiftiest headphones with the iPhone. including Useless chargers with the iPhone. Charging ridiculous prices for new cables and chargers. The new pencil costs $30 more than the last one. The iPad keyboard is a pos and it’s almost $200! I got my daughter a 2018 iPad Pro 12.9” and got the top Logitech keyboard and stand which is cheaper and a 100 times better. I love my apple products but sick of being rippped off. Did I mention Siri sucks as does maps. All the profits go to the shareholders and executives. Executive compensation is out of control. Oh and how did that stock buyback work out? Not too well. Buybacks are a bad idea. That money should have gone to more dividends and probably way mire r&d and possibly more m&a. my 2 cents.
To me, planned obsolescence means the phone doesn't work as it was originally manufactured. By extending iOS updates through multiple older years Apple has created the expectation that a phone purchased today will be receive updates for six years. While that is certainly a benefit for consumers, it sets an unreasonable expectation for the future unless Apple expects to have people on a four-year average upgrade cycle. Even the top-line reference Android devices are only marketed with three OS updates.
Couple problems with this. Apple is selling devices based on the fact that they are secure. The iOS updates also include security patches. It really won't look good for Apple if iPhones start having security issues just because they're a few years old.
Also, Apple wants developers to adopt the latest greatest features in their apps. If that means abandoning a large number of users because the newest OS isn't available on their phones there is less incentive to adopt those new features, better practices, etc.
Charging higher and higher prices for all new versions of products. Just look at how much the 6plus cost vs the XS max. Every year it’s at least a $100 more for the newer phone. Then going up the storage ladder is ridiculously expensive. Including the shiftiest headphones with the iPhone. including Useless chargers with the iPhone. Charging ridiculous prices for new cables and chargers. The new pencil costs $30 more than the last one. The iPad keyboard is a pos and it’s almost $200! I got my daughter a 2018 iPad Pro 12.9” and got the top Logitech keyboard and stand which is cheaper and a 100 times better. I love my apple products but sick of being rippped off. Did I mention Siri sucks as does maps. All the profits go to the shareholders and executives. Executive compensation is out of control. Oh and how did that stock buyback work out? Not too well. Buybacks are a bad idea. That money should have gone to more dividends and probably way mire r&d and possibly more m&a. my 2 cents.
Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple. Your opinion is fine but the fact is Apple as a company is healthy and fine. The stock price is not a reflection of the key performance indicators of company health, like Cash, profits and installed userbase.
Like other major corps Apple re-patrioted a large sum of money from overseas. Apple invested all it could for R & D. M & A is a far more nuanced topic than just going out and Buying disney or netflix! Buybacks vs. Dividends is a topic over my head but I think the goal is to increase EPS... which Wall St. like to see. This last quarter stock dip is not a true reflection of the company’s value. Amazon, Alphabet, Netflix, Etc all down for no apparent reason other than overall market uncertainty.
How come a strategy which was good for investors in the last 10 years became bad for the same investors in a matter of 3 months??? It is not as if Apple has changed their strategy with respect to the quality/longevity of the iPhones dramatically in the last 3 months. This editorial is beating around the bush, without addressing the core issues.
Nobody said that it was good for investors for the last 10 years.
Then how do you explain Apple becoming the FIRST company in the world to have a Trillion dollar valuation not so long ago?
It should still be worth that, based on the fundamentals of the company, and the stupid amount of money that it will continue to make. But yet, here we are.
The markets are irrational. They respond in a knee-jerk fashion to the news of the moment, and pay very, very little heed to long-term trends that aren't immediately quantifiable.
I think that the whole year will be tough with the January quarter being very bad because it’s traditionally a good quarter in China but probably won’t be this year. Who know what the next fiscal year will be like but hopefully better with 4 new phones.
Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple.
Hold on, you said that "Price is what market will pay and people open their wallets for Apple". Are we not talking about "people NOT opening their wallets for Apple", at least not as much as Apple expected them to??? In this situation, what is wrong in talking about "pricing strategy" by Apple, which is the ONLY thing which has changed significantly in the last couple of years?
Comments
But I do know this - many people much prefer Touch ID to Face ID, which causes them to choose the older models such as the iPhone 8.
Touch ID was also a major differentiator for iPhones but Apple’s latest models are almost identical to every other Samsung it Huawei phones.
Apple needs to bring back Touch ID ASAP, remove the silly notch and reintroduce rectangular screens (without curved corners).
To me, planned obsolescence means the phone doesn't work as it was originally manufactured. By extending iOS updates through multiple older years Apple has created the expectation that a phone purchased today will be receive updates for six years. While that is certainly a benefit for consumers, it sets an unreasonable expectation for the future unless Apple expects to have people on a four-year average upgrade cycle. Even the top-line reference Android devices are only marketed with three OS updates.
What I was attempting to get across in my post essentially boils down to: “its dicey enough to carry around a device in your pocket that costs several hundred dollars since user induced damage of thief induced theft is prevalent. Each one of us defines that level of acceptable risk.”
For me, carrying $1000+ in my pocket everyday (if I can fit it in my pocket, that is) makes me very uncomfortable not to mention that my personal sentiment is with those that believe the phone (Xs) is way overpriced and I don’t like the Xr.
If food manufacturers could grind up old car tires, put some red food coloring on it and call it tomato sauce they would. The largest beverage company is Coke, what do they sell, sugared shit. The largest restaurant company is McDonald's, what do they sell? Shit food that gives you diabetes and heart disease and on and on...
You couldnt pay me to go back to touch id. Also, every other premium Android device has a fingerprint sensor so how was it a differentiator?
my 2 cents.
Price is what the market will pay and people open their wallets for Apple. Your opinion is fine but the fact is Apple as a company is healthy and fine. The stock price is not a reflection of the key performance indicators of company health, like Cash, profits and installed userbase.
Like other major corps Apple re-patrioted a large sum of money from overseas. Apple invested all it could for R & D. M & A is a far more nuanced topic than just going out and Buying disney or netflix! Buybacks vs. Dividends is a topic over my head but I think the goal is to increase EPS... which Wall St. like to see. This last quarter stock dip is not a true reflection of the company’s value. Amazon, Alphabet, Netflix, Etc all down for no apparent reason other than overall market uncertainty.