Shira Ovide, Bloomberg:
Like Apple’s 2017 iPhone editions, there will be three current year models but with even clearer product and pricing segmentation: good, better and best.
Here’s the thing, though: Apple has never done well selling the “good” phones in its lineup. That has hardly mattered because the more entry-level models effectively serve another duty: They push people to the more expensive versions that Apple increasingly relies on for its sales growth.
This article does a great job explaining Apple’s motivation in steering people to the top of the line models. As shareholders would rightfully expect, it’s all to maximize revenue.
Check out the first chart in the article, which shows Apple’s average revenue from each iPhone sold, on a yearly basis. Back in 2014, that number was $603. In only 3 years, that number skyrocketed to $758. Apple is good at this.
Think about the marketing you’ve seen over the last few years. Almost all of it is dedicated to pushing the top of the line iPhone X. When was the last time you saw a commercial for any other model, let alone the diminutive, in both price and form, iPhone SE.
Fire up Apple’s web site. There’s a gorgeous image of the iPhone X. Of course it makes sense that Apple would focus on the latest and greatest, but there’s also the flip side lesson, few people come to Apple for a budget phone:
This fits with a pattern of Apple’s relatively low-end iPhones not setting the world on fire. Remember the iPhone SE released in 2016? Apple said at the time that some people wanted a relatively smaller smartphone when most phones were getting supersized. It could have been the iPhone for the masses, but the $399 iPhone SE 2 has been relegated to a niche in Apple’s product lineup. The 2013 iPhone 5c was considered a budget alternative at $100 less than the $650 flagship model of the time. It is the Voldemort of iPhones. No one speaks of it.
“The Voldemort of iPhones”. Heh. I like it.