I don’t usually care much about these Apple events, but the “Far Out” event of September 7th, 2022 is one I did actually watch after it was held and I saw the new devices.
A couple of years back, Apple called themselves courages for removing the headphone jack from their phones, so they could sell you a couple of Bluetooth ones in addition to their phone.
But I actually think, that this event was the most courages or to use another, more fitting word bold move they have made in the last couple of years.
And this is, why they have become rather interesting for me now. Tim Cook, their CEO, up until now has played it save. Never make to big changes, keep the product flow at a steady pace and extend into services and make sure you don’t cannibalise the own lineup. But this year he signed of on something that might backfire. I think it won’t and I think he has the data to back that claim up.
Let’s take a look at the last two years.
Around 2020 in spring they started doing something unseen before. They released a second batch of iPhones of the current series, just in different colours. And they did so again in 2021. Always in spring, so around 50% into the product cycle.
This was the strangest thing to me. Just about everyone who wanted to upgrade to the new model would have already done that by now and those who didn’t would note be convinced by a new colour, right? But it happened two years in a row, so some were buying these. I did not understand it, but I also didn’t really care, I don’t have to understand everything.
Back to the present
As it turns out, these phones were released to test the waters.
At this point, please note that all of what follows this line is pure speculation on my part, based on past events.
I was wrong about the target group for these phones in new colours, they were not released to convince the last who resisted to upgrade. They were targeted at customers who had already upgraded. At those, whom they managed to put the need to have the latest into their heads. Not having the latest colour means you cheaped out on your status symbol.
Please understand, that Apple know exactly how many customers switch from an iPhone 11 in colour A to an iPhone 11 in colour B and I strongly believe these phones sold like ice-cream on a hot summers day. And mostly to that crowd with the “need” to upgrade and have the latest and greatest.
Which brings me to this years iPhone. The iPhone 14.
This phone is in essence the iPhone 13 in a new colour, with a tiny bit better camera and and over 200€ premium over last years model, putting the base model at an eye watering 1000€.
Remember when I said this was a bold move? What they are doing is basically selling old phones for new at a higher price and hoping their customers have been trained well enough to just get the new one, no matter what. Tim bets on that and I agree with him.
And for Apple that is a pretty good deal. No matter what you think of them, they are now developing their own CPUs for every single product. Designing your own CPU is no cheap endeavour, but by reselling that “old” CPU a second year they double the return of their investment.
We saw this process starting with the SE series of iPhones, resell old designs with last years CPUs at cheaper prices.
Now we have the next level. Resell last years CPU in the new design at higher prices.
What I think we are now going to see is Apple will continuously upgrade their “Pro” serious of products with the latest iterations of CPUs, let these trickle down the iPhone scales until they arrive at the SE model, which they will always have remain many generations behind in design, to everyone nows you “cheaped” out, so not to have any incentive for their customers to get that model.
All in all, if it works out, Tim managed to sell the same CPU they sold for one year for two to three years and thus double Apples ROI.
A bold and brilliant move. Let’s see how it works out.
As for me, after this event, I will have to decide what direction I will be going with phones from now on. Either switch to the SE series after my current phone dies or switch to android, because one thing is certain, I won’t shell out 1000€ for a stupid phone.