I’m linking An interesting thread in r/apple on Reddit. . It’s not unprecidented for Apple to offer deals in new hardware close to the holidays, but to offer large discounts so soon after release is a bit odd.
Has iPhone pricing reached the point that it’s driving people to hold onto their devices 2+ years longer than they normally would?
This is the first time in 6 years that I am considering skipping out on getting a new iPhone and am sticking with the previous years’ model (currently using an iPhone 8). Price is 100% the reason for me holding off. I now look at my iPhone the way I look at my Mac and iPad Pro: because they are premium-priced products, I only purchase when I’m intending on using that device for 3+ years and expect them to be adequate for that interval. Spending $1K or more yearly for a new iPhone that only has better camera tech and data speeds isn’t compelling.
Now it seems like iPhone is going to fall into that same replacement cycle for me as my Mac because of the skyrocketing costs.
I’m curious to know what everyone else thinks about this.
I think the questions aren’t quite right. Critical mass is different, I think, than Apple perhaps getting closer to the top price of the phone people are willing to pay.
I have a feeling Apple knows the numbers better than we do, but I think they are getting closer. Phones are getting really expensive although to my knowledge the only reports of phones not selling as well relate to the XR, not the most expensive phones.
I think their price increases are reflecting them not selling as many phones.
As to not buying each year, I think that’s a perfectly reasonable response. I believe most people don’t buy a new phone each year … that is I think people on this forum aren’t the typical iPhone purchaser.
I think they will keep releasing a new phone each year, and would get crushed in the press if they don’t. Shareholders would become extremely nervous and their shares would drop, I believe.
It’s a worldwide slowdown, and it’s been long expected by all phonemakers, even if it is fodder for all sorts of breathless new handwavy articles. Back in 2015, Americans replaced their phones after 23.6 months, on average, according to research firm Kantar Worldpanel. By the end of 2017, we were holding onto them for 25.3 months. ‘Critical mass’ ignores that people are still spending (more) in terms of more expensive hardware and more on services, even if they hold onto their devices for longer periods.
New technologies will also drive replacements - everything from FaceID to more powerful processors that improve photography to the rollout of 5G, etc.
Again, this is a worldwide phenomena and affects all smartphones. Don’t try shoehorning explanations about Apple’s price increases as explaining what’s happening to all smartphone sales worldwide.
I have only owned 3 iPhones current one included. Started with a 4s in 2011, bought a 5s in 2013 and bought an 8 in 2017. I budget about $150-$200/year for the phone device. SO my current one needs to last me until 2021-2022 or so. I’ll only upgrade from that if there is a critical need/applicaiton that requires a new device.
I treat my hardware like MacSparky’s subscriptions. I have a budget for the various hardware items I use and try to eke out a bit longer if I can on most of them. I’m still running my main iMac a late 2013 model. The oldest currently in use mac is an old iMac G4 purchased in 2003.
Pricing is probably part of the reason for the slowdown. But I think it is more likely that a lot of people see no reason to upgrade their phones as often as they have in the past.
What does a new iPhone XS have to offer a person who uses their iPhone 7 to surf, text, check email, facebook, & twitter, & snap the occasional selfie? That’s the bulk of what most of the people I’ve dealt with over the years do with their phones. Oh yeah, some of the older ones also make calls.
Things will probably change in a few years when some major new technology is offered. Until then cell phone manufacturers seem to be facing the same problem as the TV industry. They don’t really have anything new so they offer 3D.
I’m still happy with my 6s. It’s a working phone. Calendar, reminders, communications, pay a few bills, tether my iPad, etc.
But I’d be first in line for an upgrade if Apple stopped making “Fabergé eggs” and offered a phone that didn’t require ballistic armor to survive a trip to Starbucks.
Someone will come up with something to separate us from our money.
I think there will always be people who want the latest and greatest.
Personally, I’ve never upgraded regularly. Since my first iPhone in 2010, I’ve been waiting 4 years between upgrades and I’ve found it ideal, especially as I don’t like to waste money. I’d much rather have an extra family holiday a year than a new phone.
I walked into the Apple store and blithely signed up my husband and myself for the iPhone XS a few weeks after it was released…I got all the way to the point of signing the new provider contract before it twigged that I was paying almost $2000 AUD for each phone.
I know this is entirely my own fault for not checking ahead of time (and I did continue with the purchase) but it simply didn’t occur to me that the iPhone had reached the $2k mark here. I’ll need a very compelling reason to stay on an annual upgrade cycle.
Agreed, the expected issue wrt ‘critical mass’ has to do with saturation, not pricing, and certainly not a drop in people engaged in 1-year replacement cycles; that group was always a tiny sliver of the market, and irrelevant to overall trends.
The Pew Research Center found that 95 percent of US adults now have mobile phones and 77 of those people have smartphones. That leaves roughly 17 percent who have yet to “upgrade.” Most of those people tend to be older (above 50). The smartphone penetration rate is 85 percent and above for those under 49. Saturation.
Smartphones having gotten sufficiently powerful that not only the average 2-year replacement cycle has lengthened (a cycle initiated in much of the West under circumstances of carrier subsidy that has been largely reduced or eliminated) but much of the growth was from people who bought into smartphones for the first time. First-time or entry-level users are much less likely to use their phones to their fullest extent, are therefore less likely to find a need to replace a slow but still working model. Now that growth potential has been reduced, as has long been expected.
Worldwide, cheap smartphones are eating Samsung’s lunch, while Apple seems to have plateaued while increasing prices. This summer it was reported that Samsung’s sales to Europe dropped 15% while Huawei’s increased 39%. This was in a period in which smartphone sales in Western Europe declined overall around 15%. Sammie’s getting squeezed by cheaper handsets, and its high-end models aren’t selling as well as expected either.
But the news is not dire. There’s still meaningful global headroom for internet growth, which will undoubtedly be via smartphone, and while the US market is near smartphone saturation, usage has not peaked.
A hardware race to the bottom continues, with makers like Samsung getting squeezed by cheaper handset makers on the low end (all of whom make minuscule profits in a heavily competitive space) while facing Apple’s high(er) end phones (from which Apple not only derives higher margins but ancillary service revenue and ecosystem lock-in). People willing to pay more for a phone are more willing to buy Apple products/services, and recognize the privacy/hardware/services advantages there, and more budget-conscious phone buyers (who don’t want to spend 99¢ on an app, let alone $500+ on a phone) will continue to buy cheap … or hold off on purchases … or both.
The original question was, “Does there really need to be a new iPhone every year?” The answer is, YES, because stock analysts demand that publicly held tech companies record increased revenue year after year, or they will tank the stock price. Apple, and every other tech company, is on a treadmill that demands adherence to that standard, or fail.
I don’t think it has anything to do with stock analysts. Apple derives over 75% of its revenues from phone sales, it’s in a highly competitive market, it wants to sell more phones, and its main competitors offer more models that often are on a rollout release schedule throughout the year. Not refreshing models yearly would be to its competitive and financial detriment. If Apple were a private company I don’t think there’s evidence we’d see a slower rollout of iPhone hardware.
Does there really need to be a new iPhone released every year?
Yes. Apple has to show that it is able to innovate. This means that there need to be new iPhones out there on a regular basis. And I do not think that this is limited to iPhones. The same is true for Macs and for iPads. If there are no new iPhones, iPads, MacBooks, iMacs … on a regular basis, it will hurt sales. And to be honest, I think if Apple waits too long before releasing a new version (see the Mac Mini that had to wait 4 years until it was updated), it almost feels like betraying your customer. Because tech is constantly evolving, eventually already released versions are just too old to rectify their selling price if they are not updated regularly. And like it or not, but even now, there are Android phones like the Google Pixel 3 out there that do have a better camera (yes, I know that the iPhone XS’ camera is not too shabby either). Apple is not always leading the charge with its products. It has to innovate and - yes - sometimes, it even has to catch up.
Do I really need to buy the new iPhone, when it is released every year?
No! If you are fine with your iPhone, then you are fine with your iPhone. But if you need a new iPhone, you should be able to buy an iPhone that is great and comparable to other smartphones on the market. And there is no way that a premium priced iPhone (and boy, this thing is premium priced!) is worth its money when it is being bought 24 months after it had been released originally. With Apple releasing a new iPhone every year, I get a “fair” deal when buying a “new” iPhone. I would not feel the same about it if I had to buy a “new” iPhone at a price premium two years after it has been released.
I view it as my contribution to Apple’s continued R&D and survival so that they can continue providing wonderful products and services in the years to come.
Would I survive without the upgrade? Yes, pretty sure I would. Is the cost compared to the hard benefits of an upgrade sometimes a bit out of wack (when going from last years model to the new one)? Yes, they probably are. Have I (with some help from Apple) trained myself to be super-excited and happy around iPhone Launches so that the total benefits of an upgrade is worth the cost? Yes.
