Apple’s awful iPhone news has a silver lining

“Apple on Wednesday warned investors that its revenue for the last three months of 2018 would not live up to previous estimates, or even come particularly close,” Brian Barrett reports for Wired. “The main culprit appears to be China, where the trade war and a broader economic slowdown contributed to plummeting iPhone sales. But CEO Tim Cook’s letter to investors pointed to a secondary thread as well, one that Apple customers, environmentalists, and even the company itself should view not as a liability but an asset: People are holding onto their iPhones longer.”
“As recently as 2015, smartphone users on average upgraded their phone roughly every 24 months, says Cliff Maldonado, founder of BayStreet Research, which tracks the mobile industry. As of the fourth quarter of last year, that had jumped to at least 35 months,” Barrett reports. “‘There’s not as many subsidies as there used to be from a carrier point of view,’ Cook told CNBC Wednesday. ‘And where that didn’t all happen yesterday, if you’ve been out of the market for two or three years and you come back, it looks like that to you.'”
It’s bad news for Apple, but “it’s terrific news for consumers, who have apparently realized that a smartphone does not have a two-year expiration date. That saves money in the long run. And pulling the throttle back on iPhone sales may turn out to be equally welcome news for the planet,” Barrett reports. “Given a long enough horizon, Apple may see a financial benefit from less frequent upgrades as well. An iPhone that lasts longer keeps customers in the iOS ecosystem longer.”
“It also offers an important point of differentiation from Android, whose fragmented ecosystem means even flagship devices rarely continue to be fully supported beyond two years,” Barrett reports. “‘In reality, the big picture is still very good for Apple,’ Maldonado says. Compared with Android, ‘Apple’s in a better spot, because the phones last longer.'”
Read more in the full article here.
MacDailyNews Take: People are coming back for a new iPhone (or fake iPhone) after a few years and they’re being sticker shocked because there’s no carrier subsidy to hide the real cost of the devices which raises the question:
Where’s Apple’s lower-priced iPhone for the masses?
They did it with iPod, why haven’t they done it (years ago) with iPhone, too? Were/are they really so afraid of trading iPhone ASP for more device sales and more users (read: potential users of Apple subscription services)? The fact is that Apple does not have an iOS “phone” that the vast majority of people on the planet can afford.
If they’re afraid of cheapening the Apple or iPhone brand, why didn’t they buy the BlackBerry brand (or some other well-known brand) years ago on the cheap – not for the company or employees, just the brand — and make it a subsidy that makes and sells less expensive iOS smartphones under that brand? BMW has Mini. Why didn’t Apple go the same route? Imagine how many more iOS devices Apple could have sold in places like China, Brazil, and India had they done so five years ago!
See: “Apple should buy BlackBerry and sell lower-priced iOS-powered phones and tablets under the BlackBerry brand” — SteveJack, MacDailyNews, November 4, 2013