With the iPhone 8 and iPhone X, are consumers caught in the middle?
Today’s retail launch of the Apple iPhone 8 and 8 Plus is a crucial test for Apple’s riskiest iPhone strategy.
For the first time, Apple introduced its latest iPhone upgrades while simultaneously teasing something better coming soon — what, by Apple’s own admission, is “the future.”
Apple’s iPhone 8 and 8 Plus are, based on my review and what I’ve seen elsewhere on the web (and even in teardowns), “S” series devices in full-number-update clothing. Except for the glass back, the handsets maintain the iPhone 6 design introduced in 2014. Apple swapped out the A10 Fusion chip for the incredibly powerful A11 Bionic CPU, but left the screen and cameras largely unchanged.
I really like the iPhone 8 and 8 Plus, but the changes come directly from Apple’s “S” playbook.
There’s nothing wrong with any of this, and I really like the iPhone 8 and 8 Plus, but the changes come directly from Apple’s “S” playbook: Upgrades instead of an overhaul, so the number stays the same to signal the subtler nature of the changes.
Instead of delivering the iPhone 7S (and 7S Plus), though, Apple gave them the full-number update treatment and simultaneously introduced the iPhone X (which, to remind, is pronounced “ten”). With its aggressive redesign and cutting-edge technology like the TrueDepth camera module, edge-to-edge OLED display and retirement of the home button, the iPhone X earns the name. It’s the true apex iPhone and easily the most coveted product in Apple’s iPhone lineup.
On Friday, the day Apple put the iPhone 8 and 8 Plus on sale in retail stores (after a few days of online store pre-sales) I started reading reports of sparse crowds at Apple Stores. In London, there were more Apple employees in the store than queued up iPhone 8 buyers, and it appears to be a very similar picture in the U.S. To be fair, iPhone retail launch events have been in decline since the iPhone 6 launch.
At the same time, I launched a little online poll:
Granted the results aren’t exactly scientific, but the sentiment is clear: More than half the people responding are sitting on their hands and waiting until the sexier iPhone X ships in November, even after numerous reports said supplies could be so low that some people won’t get the smartphone until next year.
What if, I wondered, Apple made a terrible mistake?
This strategy of offering the iPhone 8 and 8 Plus first, while the real update, one that some believe is prohibitively expensive, looms just a few weeks later, is an unusual choice. In fact, it could squeeze Apple from both sides. iPhone consumers usually want the shiniest, new thing, but they don’t want to pay an arm and a leg (The argument could be made they they’ve been doing so for ages, but the loss of carrier subsidies and the psychographic impact of a $1,000 price should not be underestimated).
Could iPhone consumers feel caught in the middle between the phone they really want, but can’t afford, and the more reasonably priced device that doesn’t excite them because it’s not Apple’s ultimate iPhone?
Looked at this way, this bold iPhone strategy could be Apple CEO Tim Cook’s first big misstep… or another stroke of brilliance.
One iPhone for all
Ten years ago, we had one iPhone to choose from. Even as Android competitors started introducing a wider array of handsets and the early, large-screen devices that, at the time, few (certainly not Steve Jobs) believed would be successful, Apple maintained its one (small-screen) handset strategy
That strategy persisted until 2013, when Tim Cook unveiled the iPhone 5C alongside the iPhone 5S. Suddenly, Apple’s new phone lineup doubled in size. It set the stage for the company’s first big-screen iPhone, the 5.5-inch iPhone 6 Plus, which launched in 2014 next to the 4.7-inch iPhone 6.
Personally, I loved this shift. It acknowledged changing smartphone tastes and started to give people design and price options.
Today, we have a lineup of eight iPhones that range in price from the $349, 4-inch, iPhone SE to the $999, 5.8-inch, iPhone X. There’s a lot of choice in there and I have no doubt that consumers welcome this. However, the core iPhone user, the person who bought the first iPhone as a status symbol and has upgraded like clockwork to every new device each year is possibly facing a dilemma.
This bold iPhone strategy could be Apple CEO Tim Cook’s first big misstep…or another stroke of brilliance.
If they bought the iPhone 7 last year, are they planning on buying the iPhone 8? Probably not. It certainly wasn’t my recommendation. So that means they wait for the iPhone X.
As Mashable Senior Tech Analyst Raymond Wong pointed out to me: This is potentially a “win-win” for Apple. Consumers who don’t buy the cheaper iPhone 8 or 8 Plus, will just wait for the expensive iPhone X.
He may be right, but what if anemic iPhone X supplies in 2017 mean that most people are waiting or buying their iPhone X in 2018?
“So what?” you might respond. Apple still makes the money, right?
Yes, but what does the Apple’s first quarter look like if demand for the iPhone 8 and 8 Plus is low (we have yet to hear about pre-sale numbers, but there have been zero reports of delivery delays on pre-sales, a possible sign of soft demand) and tens of millions of customers wait for iPhone X in 2018?
Apple’s first quarter, the one that includes holiday sales, has looked amazing for almost a decade precisely because of the iPhone, which sells anywhere from 40 to 75 million units in the first three months after launch. Those sales are driven by the Apple’s hottest new device and, in this situation, that isn’t the iPhone 8.
Things could still work out in Apple’s favor, especially if they just collect all the pre-orders for the iPhone X, put those sales on the 2017 Q1 books and then let people wait for delivery until next year when they can make enough of the 5.8-inch handsets.
Alternatively, Apple could benefit from the unusually high number of upgraders ready to buy new phones. Samsung told me earlier this year that some 50 million consumers were at the end of the 18-month smartphone ownership cycle. They hope to sweep a lot of them up in the Galaxy S8/S8+ and Note 8 launches. But they’re up for grabs for Apple, too, which could sell them any one of eight different iPhones.
I’m confident Apple will sell millions of new iPhones, but if most them end up being the iPhone X, the question of when those sales happen starts to look really murky. Will they still be meaningful if many happen after the Samsung Galaxy S9 is a reality? Or iPhone 11/iPhone X2 rumors start to mount?
How the world — and Apple’s customers — respond to a protracted iPhone X launch is anyone’s guess.
Watch: Secrets of the Steve Jobs Theater
Read more: http://mashable.com/2017/09/22/could-apple-risky-iphone-8-and-x-strategy-backfire/