Selling Non-Pro iPhones, Revisiting iPhone Repairability, Less Frequent Upgrading Can Help Apple's User Monetization (Daily Update)
Hello everyone. Welcome to a new week. In today's update, we will cover a few topics related to the iPhone. The discussion begins with Apple’s strategy for selling non-pro iPhones. This leads us to revisiting the subject of iPhone repairability. We go over three primary implications of improved iPhone repairability. The discussion ends with an example of how Apple can turn less frequent device upgrading into improved user monetization over time. Let's jump right in.
Selling Non-Pro iPhones
Over at The Sydney Morning Herald, here is Tim Biggs:
“The latest line-up of iPhones has arguably the biggest gap ever between the standard models and the Pros. The phones have different displays, different features, different cameras and different processors.
If you ask Apple, it will say the two categories are designed with two different consumers in mind, each model having its own strengths. And if you take a look inside, you’ll see that the standard phone can’t simply be written off as a stripped-down Pro or a repackaged model from last year…
It can be hard to tell just from looking at the specs and exteriors where each ‘standard’ iPhone model sits in a hierarchy amid previous models and Pros, new and old. With Pros, it’s easy to assume they’re the biggest and best iPhones at the time of release, but with the standards there’s always an implicit question of what sacrifices are made to get to the lower price.
Richard Dinh, Apple’s longtime senior director of iPhone design, said the company didn’t really think of it like that.
‘We don’t always follow a recipe, as much as maybe our customers would like to predict what we’re going to go do next, but it always starts with the customer experience,’ he said, noting that a standard phone might have different goals for performance, weight, longevity and photography than the Pro models.
‘Sometimes we do draw from the Pros because they’re just incredible, and we’re bringing some of that hardware to a broader audience, and sometimes we go do something different.’”
In talking to The Sydney Morning Herald, one of Apple's goals was to draw attention to how less expensive flagship iPhone models aren’t just pro models that had features removed. Instead, non-pro iPhone models may in some years contain features that premium models lack. For the iPhone 14 and 14 Plus, such features include superior battery life (found with the Plus) and repairability (found with the 14).
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Apple Warns on iPhone Supply, The “iPhone City” COVID Timeline, Revisiting iPhone 14 and 14 Pro Sales (Daily Update)
We begin with Apple issuing an iPhone supply warning due to COVID lockdowns and restrictions at the largest iPhone production facility in China. After going over Neil’s thoughts on the news, we take a closer look at the timeline of events to obtain a better handle of the situation and what Apple may have known and when. The discussion concludes with a look at how the lockdown may impact 1Q23 iPhone sales.
Hello everyone. Welcome to a new week. Let’s jump right in.
Apple Warns on iPhone Supply
In a press release issued yesterday, here's Apple:
“COVID-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China. The facility is currently operating at significantly reduced capacity. As we have done throughout the COVID-19 pandemic, we are prioritizing the health and safety of the workers in our supply chain.
We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.
We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker.”
Zhengzhou is responsible for an estimated 50% of Apple’s iPhone production. While Foxconn’s smaller facilities in China, including Shenzhen, battled COVID outbreaks and lockdowns earlier this year, Zhengzhou had managed to escape major lockdowns and interruptions until now.
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