Tuesday, July 16, 2024
Smart Phones

An inferior iPhone 14 does not make the iPhone 14 Pro sell more: Apple needs to make its less premium products better, not worse

Regardless of how you feel about Apple there is one thing that cannot be denied – the Cupertino company knows how to sell expensive devices. After all, we are talking about the tech giant that normalized the $1000+ smartphone and largely paved the way for the massive increase in average smartphone prices over the last couple of years. I would like to assert that, strictly speaking, I have no issue with that fact. So long as users are willing to splurge on the latest and greatest iPhone 14 Pro Max, Apple and its products will continue to thrive. Supply dictates demand, and the latter seems to be extremely high when it comes to the company’s ultra-premium devices.

Nevertheless, regardless of how successful Apple’s current business model is, there is one particular aspect that simply does not sit well with me. Namely, the utter lack of any meaningful entry-level options. By this I mean that most ‘budget’ (or, in this case, less expensive) Apple products have at least one very obvious and intentional flaw that disproportionately hinders the user experience in some way.

In the following paragraphs I will explain why this is not an ideal scenario in my view and why I, as a consumer, have a problem with how Apple currently approaches its entry-level and midrange products.

Some Rudimentary Economics

Firstly, I will try to address the most common argument I hear when I try to voice my problem with the current strategy. Essentially, I am always told that Apple does not want to make good budget products because it prefers to sell only its flagship ones. I cannot agree with that sentiment.

The smartphone market is not limited to the $1000+ segment and there is money to be made outside of it. Additionally, given how good high-end Apple products are, I simply do not see a reason for this approach. You don’t need to make entry-level devices bad, in order for the premium ones to sell well. Why not make the cheaper ones good, and the expensive ones better?

It should be noted that from an economic point of view, demand for the iPhone is often characterized as inelastic, because of brand loyalty. Thus, increases in the price of the top-of-the-line models are unlikely to dissuade Apple enthusiasts from buying them. Conversely, I don’t see a reason why boosting the competitiveness of the lower-end models would have a negative effect on the sales of the high-end ones.

Even if the latter decrease slightly, the added market share that a lower price tag can translate to will offset at least some of the potential loss of profits. That is, of course, based on my limited understanding of economics and Apple.

I am not a CFO and I do not aspire to be one. Nevertheless, I still see companies like Volkswagen selling cheaper cars, without worrying that affluent consumers might prefer them over the luxury vehicles in their portfolios. Furthermore, it is precisely a diverse and balanced portfolio that makes a company such as Volkswagen command an impressive market share.

And Apple needs a huge market share in order to continue to dominate. One of the main selling points of the Cupertino company’s products is the ecosystem, the clout of which is directly proportional to the number of users it encompasses. Put simply, the more people use FaceTime, the bigger of a selling point it becomes.

In short, there is at least some economic rationale for boosting the competitiveness of entry-level products, especially when they are not all that cheap to begin with. But that should not be the only reason why Apple diversifies its product portfolio.

The Consumer’s Point of View

In the last section I focused on what Apple stands to gain from (or rather, what it will not lose as a result of) implementing meaningful entry-level options. In this part, I will look at the other side of the equation – the user.

Currently, Apple has only 3 smartphones below the $700 mark: The iPhone 13, the iPhone 13 mini and the iPhone SE 3 (2022). Out of all of them, I believe only the mini serves a specific purpose and makes sense. It is a compact smartphone that offers incredible performance and no handset on the market comes close to what it brings to the table.

However, the iPhone 13 on the other hand is, at least for me, a true conundrum. It is, in essence, a cheaper iPhone 14. Additionally, despite having a price tag of $700, it comes with a 60Hz display. In 2021, the lack of ProMotion made sense as it ensured the proper differentiation between the iPhone 13 and the iPhone 13 Pro. Now, however, this is borderline laughable.

Apple is limiting ProMotion to the high-end iPhones purely for the sake of differentiation, a move it will reportedly continue to employ in 2024 with the iPhone 15 lineup. Unfortunately, I simply cannot justify paying $800+ for a smartphone in 2024 that comes with a 60Hz display. I also do not think you need to spend $1000+ in order to gain access to that feature.

Apple has no ‘cheap’ products, therefore, it does not make sense for the less expensive (by Apple standards) ones to lack something that is virtually omnipresent on the market as a whole at that price point. At best, it feels like a rip off. At worst, it is predatory pricing. But the iPhone is not the only culprit.

The Features that Apple deems ‘Pro’

I have always believed that Apple, unlike most other tech giants, has 3 types of products: premium, more premium and the most premium. And it is interesting to see how Apple decides how premium a device must be in order to qualify for a ‘Pro’ feature.

For example, ANC (Active Noise Cancellation) is regarded as a ‘Pro’ feature. This is why the AirPods 3 do not have it – only the AirPods Pro 2 and the AirPods Max do. This is also the reason why the first generation AirPods Pro had to be discontinued – a price cut would have put the ‘Pro’ feature in the non-Pro price point.

However, the fact that the AirPods 3 are ‘more premium’, but not ‘the most premium’ in Apple’s lineup, does not change the fact that they still cost $169. They remain premium by market standards and should, in my view, qualify for a ‘Pro’ feature regardless of the more expensive headphones Apple sells.

This naturally begs the question of how proper differentiation can be maintained. In my view, the answer is simple and Apple knows it – performance. Just take a look at the company’s MacBook lineup. The MacBook Air (2022) might be an entry-level option but it does not have an obvious flaw that is there purely in order to make consumers upgrade to a more expensive option.

Consumers splurge only (or mostly, at least) when they need the increase in performance. This is why I am not opposed to the vanilla iPhones using a year-old chip or having an inferior camera module. However, selectively limiting ‘Pro’ features on high-end devices, just because you offer a more premium option is not something I am willing to support.

Given that there are plenty of smartphones that come with 60Hz+ refresh rates that cost less than the iPhone SE, I am more inclined to consider a 120Hz display the norm, and not the ‘Pro’ exception.

Conclusions: Entry-level but not cheap

Finally, all of my arguments stem from the fact that Apple simply does not sell cheap products. If the iPhone SE 3 did not cost as much as an Android midranger, I might be able to stomach the decade-old design. Apple products are premium by default which entails a bare minimum of sorts, beyond the logo on the back.

Making your entry-level iPad (2022) compatible with your 4-year-old proprietary stylus is not equal to giving it a ‘Pro’ feature. There is a difference between luxury and necessity, and Apple should not charge customers extra for the latter.


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