Let's talk about price


#1

Now that I have a little time on my hands (I’m on holidays, which is why there’s no news this week), I’ve noticed that we haven’t exactly had any real debate on Apple-related subjects for… quite a while now. I have my own suspicions as to why that’s the case, but I’m also of the opinion that there are certain topics that we should be talking about and discussing as Apple enthusiasts, even if we’re going to fall on one side of the fence or the other. Topics from The Garage occupy four out of the top five topics right now, which Just Won’t Do, no matter how much I acknowledge that we all have other interests and pursuits.

I’ve got a few ideas for price-related discussions, hence this topic. The idea is that I’ll post up something, give it a few days so we can discuss, then, once the discussion has petered out, post up something new for us all to chew on (still related to price). Reply if you’ve feel there’s something you need to say, or if want to point out the many, exhaustive, number of ways I’m wrong (or how flawed my analogies are), but hopefully we can all learn a little.

So, price.

Back in the Australian iPhone XS/XS Max/XR Pricing topic, I hinted at having some kind of argument that iPhones were the cheapest bit of technology you owned when you factor in cost per use. I never published it — until now. I still think there’s an argument to be had that says if you consider cost per use, the iPhone is the cheapest bit of technology you own.

I mean, I get it, iPhones are more expensive than they’ve ever been. A lot of that is on Apple charging as much as they think the market can bear, which is reflected in their market cap and financial statements as examples of how good at capitalism they are. Even if at times, as evidenced by their recent updated financial guidance and missed revenue, they get some things wrong. The other half of the equation probably has something to do with the economy — the AUD is about 10% down vs the USD at the same time last year (at least, it was when I wrote this back in October, and is probably something similar now), and the iPhone XS Max has an even bigger screen and even more on-board storage than the previously-most-expensive device, so obviously it’s going to be comparatively more expensive. Bear in mind that both of these (higher iPhone selling prices and currency fluctuations, specifically) are reasons — explanations — that Apple execs have used to explain lower revenue than they expected from Q1 2019, so at least some of this is based in fact.

But as expensive as iPhones are, they’re probably still somewhat comparable with other things you own when you talk about cost per use, if they’re not outright beating them.

Some quick maths: Screen Time says I’ve picked up my iPhone an average of 36 times per day for the last seven days. If we’re saying I get a new phone every year, that’s 13140 pickups over the course of a year, which puts the cost per use at 15c, assuming I paid $2000 for the iPhone when I bought it.

Obviously, these numbers depend a lot on what you consider a “use”, and we’re also ignoring running expenses here (the cost of your phone plan, charging, etc) but you can see where I’m going with this, right? That number halves if you keep your iPhone for two years, which is an entirely reasonable proposition now that iPhone hardware and software is what it is, now that both have had a decade to mature.

Comparably, if you buy a high-end DSLR kit, you can probably expect to pay upwards of $5000. Let’s say $6500, once you have a nice lens and all the other accessories you might need. That’s upwards of 40,000 shots to even approach the same figure in terms of cost per use. Now obviously, if you’re a pro whose livelihood depends on that kit, then you’ll probably be able to put double that amount through before wearing out your shutter or thinking about upgrading, but I think my point stands. Even if you’re buying a cheap point-and-shoot (not sure why you would when smartphone photography is so good these days, but that’s for another time) for $600, you still have to take 4,000 shots before you get to the same 15c/use level. By my reckoning, that’s more than a few overseas trips, which you’re probably doing over a few years anyway.

And if we truly want to compare Apples and oranges, my washing machine cost $800 (I have no idea how much my current washing machine cost, but let’s go with this ballpark figure I found from The Good Guys). If I’m using it an average of three times a week, that’s $5.13 per use after a year. Obviously no one is upgrading their washing machine every year, but even if I hang onto it for ten years, the cost per use is still 50c — more than three times the cost per use of an iPhone — again, ignoring running expenses like water, electricity, detergent, etc.

So yeah, we’re making some pretty huge assumptions here. I like to think I use my iPhone relatively conservatively, compared to others, and obviously there will be people who use their iPhones even less than I do. But I still think there’s an argument to be had that the iPhone is the cheapest bit of technology you own, especially when you consider what you can do with it day-in, day-out, or the fact that you can replace a handful of different devices with it, the kind of experiences it offers, or the kind of thing you never thought would be possible with an always-connected supercomputer in your pocket.

I think it’s important to keep in mind that no one needs to be upgrading their iPhone every year (we’ve been through this argument with Macs, in a different topic), and if you are in the privileged position of being able to even consider doing so, your complaints about iPhone pricing are likely to fall on deaf ears.

All of that said, I didn’t buy a new iPhone this time around. Not because I couldn’t, but because of reasons I outlined in another topic at the time. I’ve only upgraded every other year, even before I was employed full-time, and while I could afford to (upgrade every year) now, I feel as though it probably falls into some kind of “unnecessary luxury” territory, especially when S-revisions — like this years’ models were — don’t have the same kind of narrative attached to them that previous S-revisions have had.

All I’m saying is, there are other factors to consider besides price, even though that’s a large part of the “new iPhone?” question for many. Because when it comes to price, there’s a good chance than iPhones are the cheapest bit of technology that you own.

But what do you think? Is the argument of “iPhones are too expensive” just a fallacy, or is there something to it, in light of Apple execs admitting that they may have priced the iPhone too high in countries that experienced currency fluctuations?


#2

For the purposes of putting my remarks in context.
I upgraded from an iPhone 7 to an iPhone XR 256Gb.

Sitting next to me on my table are several devices -:

My Samsung J5 dual SIM (for travel overseas used 3 months per year), so about 1/3rd the use of the iPhone and 1/4 the cost.

My iPad 2018 (used for watching streaming video and playing games), used about 2 hours per day (about the same as the phones but only 1/3rd the cost of the iPhone.

My Kindle paper white (used for reading ebooks), about 1 hour per day but only 1/8th the cost of the iPhone.

My MacBook 256Gb (used maybe 30 minutes per day and more expensive than the phone but there are some things I just can’t do on iOS).

My fridge cost $599 (300 liters) and it runs 24/7 (that is use in my book).

My washing machine cost $549 and gets used maybe 3 times per week.

My TV cost $1999 plus $499 sound bar plus $500 PS4 and gets used if I’m lucky 1 hour per day but it will I expect last longer than the phone.

I’m not trying to argue with you, just pointing out that every bodies useages will be different depending upon if the phone is the primary device or not (in my case it is not, which is part of the reason I eventually decided against an XS max and went for an XR.

PS… the screen is fine :slight_smile:

I think the XR is suffering not from a real screen issue but from lack of ‘premium’ status for many buyers who don’t want ‘good but second best’. Me I buy things with my head not my heart (which is why my next laptop won’t be an Apple).

Edit I forgot to mention that the XR was bought outright like my last several phones were.


#3

I think it’s obvious to say that they’re too expensive, and they are. At least for most people to purchase upfront they definitely are.

However, using myself as an example, the only iPhone I ever bought outright was my first. An iPhone 3G (I did buy a 3GS a while ago but that was for nostalgia). I upgrade iPhones every single year using Telstra’s New Phone Feeling, so the outright cost of an iPhone these days doesn’t affect me in the same way.

I could also say the same thing about their other products. Namely Macbook Pro’s and iPad Pro’s. Which is why I currently use a 2013 15” MacBook Pro I bought secondhand.

If Apple were to have something similar to the ‘iPhone Upgrade Program’ they have in America, except also for their other more expensive products, I would probably have a 2018 MacBook Pro and iPad Pro right about now.


#4

I understand your methodology, @bennyling, but kinda feel like you’re trying to justify Apple’s recent price increases (rather than simply justify the price from a personal expense viewpoint).

Using the above logic, the original iPhone (not that it was sold here) would have had a much much lower price per use (less than half). Admittedly, it was also a much less capable device, so - perhaps that makes sense.

As the iPhone has become more like a swiss-army-knife of useful features, so it has become more a part of our lives, and the more justifiable the purchase price - based on above logic. For at least the past 4-5 years the need to own a(n average) digital camera has been null and void if you own an iPhone. Personal voice recorder, got my iPhone. GameBoy? Yep. Kindle? Sure. But again, that’s been the case for a number of years - back when the iPhone only cost US$400.

The iOS may have made advances in recent years, and the screens gotten bigger, security better, batteries longer lasting, but - is that enough to warrant the price hikes? The iPhone made numerous evolutions between 2007 and 2014 without the price ever going above its original mark.

We will never know if Apple are simply charging what is fair considering the production cost - or if they are trying to fill their coffers “just because they can” - but that tends to be how it feels at the moment.


#5

This is a topic that I have been also considering of late. I’m at the point where my devices are starting to get long in the tooth (well my iPhone 8 is a little bit of an exception but that’ll get upgraded later this year)
My Mac mini is a Mid 2011 model which doesn’t support Handover and is unsupported beyond High Sierra.
My MacBook Air is a Mid 2013 model which is unlikely to be supported beyond Mojave.
My iPad Air 2 is starting to develop a charging issue which persists beyond iOS reinstall via DFU mode.

To replace my Mini, MacBook Air and iPad with latest model equivalents at similar spec levels I would be up for $4327 - and that would be a functional downgrade of the mini as I have a 1TB ssd fitted to my current one. Also downgrading the iPad from 128GB cellular to 64GB wifi. Similar storage upgrade for the mini adds an extra $1280. So now I’m up for $5607.
There is no way in hell I’m getting that past my wife. Oh, and she’s got the same model MacBook Air, so let’s upgrade hers at the same time. I’m now up over $7500, and I reiterate, that’s just for base model devices.

So, what do I do? Maybe I could give up the laptop and wait for the next iMac. Whenever that is released.
Or maybe I jump back to using Windows based PCs.
I love the integration of the Apple ecosystem, hardware and macOS/iOS, but I’m not sure it’s worth the cost of entry.

starts looking on realestate.com.au for caves to hermit in


#6

Mojave’s successor is unlikely to be very intensive so I can’t see any reason why they’d drop another generation of Macs at least from a technical perspective. At least I hope.

But yes, the iPhone is too expensive IMHO.


#7

By what measure? You, or someone you know, can’t afford one? Enough people complain about the price, so therefore it must be true? Apple had their second-best quarter ever, but it wasn’t their best ever, so it Must Be iPhones?


#8

But what about accessories? For example the Apple Pencil 2. They increased the price, removed the extra nib and it certainly doesn’t feel as solid as the previous one. I don’t really see the justification for that.


#9

There is pretty solid evidence that the new range of iPhones aren’t selling as well as expected and the most common reason given is price.

If not price then what would you suggest is the actual reason?


#10

I think there could be a psychology factor here.

Once the price started matching that of a laptop - it’s a lot harder for your mind to justify…


#11

The massive number of people who took up a reduced price battery replacement is one factor that suggests people have been satisfied with the performance and functionality of older models (6S, 7, SE)


#12

I can’t afford to upgrade my iphone… its been a bit of a lesson for me, I used to upgrade every second year (having started with the Original iPhone imported from the US)… but once I got to 6S (by which time I could not afford to buy on release and waited til the following year when the price dropped a bit) I couldnt go any further. I dont use my phone a lot, which is why I stay on prepaid, and why I’ll never have a “plan” again. I just dont have a need for it. I was hoping that when the last generation of iPhones was released, that the previous (the X) would still be available at a reduced price. I probably would have bought that. But, Apple, in its obscure wisdom, chose not to do what it had done every other year, and we can now only buy X from some resellers, and mostly the price is much as it was at release. So… I keep using my 6S and SE, and my elderly 2010 Macbook (White), and my 2012 Mac Mini. I did spring for last years iPad Pro, and its been great. I dont have an overwhelming wish that I had waited the few weeks for the latest.

The thing is, you can’t just keep upgrading ad infinitum. Its a giant rabbit hole. Its taken a lot of wasted dollars for me to realise that (between cameras and Apple gear, yikes)

I’d like a new iPhone. I do think they are overpriced when they approach the same/similar cost to a base Apple Macbook, and for me its mostly about economics. Would I buy if I could afford? Actually, I don’t think so. If my phone gets upgraded, it will only be through the second hand market, I’m afraid. Just cant keep doing it, and dont want to. New stove, and a split system a/c first.


#13

Moving away from price for a second, the smartphone segment as a whole is nearing saturation point so a slow down is to be expected. Couple that with only incremental or ‘evolutionary’ technological advancements I can see why people are starting to become jaded with the whole Apple ecosystem.

Now, put price on top of all of these perceived shortcomings and consumers attitude is starting to become extremely jaded towards Apple as they are starting to feel taken advantage of.

I think Apple has realised this which is why we are seeing a push with all the trade-in programs that Apple throwing at buyers. Also, some new flashy innovation is needed - something tangible not just the cutesy Animojis or the like to win back consumers.

But hey what would I know, I’m a 3rd year marketing student vs an almost $1T company. :joy:


#14

The new iPhones have priced themselves out of my business.
Looking “over the fence” my new Android phone is soooo good I’m using it more than my MacBook Pro and Windoze machines for just about everything in my day to day requirements. It’s my P.A.
In short, I feel as though my Android phone represents VALUE.

Al


#15

A good topic that we are all engaged in each year @bennyling,
I wonder whether your perspective may be wrong. I don’t buy an iPhone. I buy the Apple ecosystem with the iPhone, iPad Pro, iMac, Apple Watch, HomePod and Apple TV. So I don’t use the phone as much as if I owned it alone

So I need to ask the question about whether the ecosystem is good value. My current view is that it is expensive.

My most used device is the iPad Pro. I could happily use a less expensive phone. I still have my 6S and it is all I need. My iMac is from 2008 (maxed out on RAM and with SSD). It does all I need. The Homepod, Apple TV and watch are good, but I don’t use them as much. (The Homepod and Apple TV4 are a bit disappointing)

Perhaps I need to be more selective and spend more on fewer devices


#16

I think the amount of disposable income will influence everyone and their feeling towards things. Those who can easily afford the price of Apple products probably don’t care too much, but for the rest of us it is becoming a real concern.

It used to be that the premium paid for an iPhone or MacBook Pro wasn’t all that different (if at all) than buying an equivalent Samsung/Dell/HP, sure there were cheaper alternatives, but often they were lower spec, cheaper materials or a combination of compromises. The premium products were more cutting edge and you could at least see some value in that.

These days it just feels like those premiums have gotten out of hand. When cheaper products offer more functionality, greater connectivity, upgradability or expansion AND come at a cheaper cost it’s getting harder to justify the prices Apple are asking. Case in point I upgraded my 2013 15" MBP to a Dell last year. The same or more of everything at 25% less dollars. I do miss using that MBP and OSX sometimes, but then there are lots of things I do like about Windows. Funny thing is on OSX I always had VMs to run my Windows based tools I needed for different things. On Windows I don’t have any OSX tools/applications there isn’t a free or cheap alternative to and Windows 10 is pretty stable.

On the comparisons to cost per use, I see what you are getting at, but the logic is flawed in that many of the examples are necessities and/or the best alternative. For example, what’s the alternative to your washing machine, unlike a smartphone having clean clothes is more of a must have? Alternatively you could be paying a cleaner to do everything for you? Even if you do it yourself you could spend $500 to over $5,000 on a washing machine. Would a $500 machine lasting 3 years beat out a $5,000 machine lasting 10? 20? 30? Is capacity an issue? What I’m trying to get at is that raw cost per use isn’t everything, some things you just need to have and cost per use is always going to be higher (even if the cost to manufacture that washing machine is probably less than making the iPhone!).

I think another real factor in the technology market, at least for the majority of ‘average’ users, is that tech is some mature these days that even cheap tech that’s 2 years behind the current gen is still very very usable (same issue behind people not upgrading their devices). So plenty of people are just fine with that low end smartphone and laptop, hell a quick and dirty search shows I can get a smartphone and laptop for just over the cost of a base model iPhone XR. I’m not trying to say these products are in the same class as their Apple alternatives, but they sure are a hell of a lot less expensive and can do pretty much everything the Apple ones can.

OPPO AX5 Unlocked Mobile Smartphone 64GB Diamond Blue $377

Asus 14" Core i5 Laptop F407UA-EB352T $877
https://www.officeworks.com.au/shop/officeworks/p/asus-14-core-i5-laptop-f407ua-eb352t-syasf407ua

Now I am still embedded in the Apple eco system thanks to my Apple Watch and iPhone and iMessages but I’m starting to wonder if an Android based world would work for me.

I’ve recently started using Google Hangouts for messaging where I can since it allows me to type on a real keyboard when I’m using my laptop, something the MBP did REALLY well with iMessages but something my Dell can’t do. More importantly to me though is that I can use Hangouts at work to communicate with my Wife right from my work computer and she still gets those messages on her phone (or computer). I’m sure there are phone and watch alternatives too, but not something I have looked into yet.


#17

Cost is relative, I earn enough to buy a new iPhone when one comes out that I like the look of. I wasn’t phased much by the cost of my new XS Max. I recently bought a Surface Pro 6 though, and that’s because I’m sick of the MacBook Pro being so overpriced for the spec, which is usually far behind the competition anyway. I just find Mac’s boring now, they haven’t innovated at all in recent years. I got a high spec touchscreen surface with a bunch of accessories for $2K. I couldn’t even consider a Mac with the spec I wanted at less than $3500. At least the iPhone is innovating still. People might be holding on to them longer but I will still be interested in the newest greatest until I can see they’re not innovating any longer.


#18

iPhones are expensive, they always have been. Of course they’ve gone up with the increased material costs, but I think the prices have become more apparent recently as the innovations and advancements haven’t been as groundbreaking as they might have been in the past - I couldn’t tell you what the ‘killer feature’ of the current flagship iPhones are.

Having purchased an iPhone X on release, I couldn’t justify any reason to upgrade to the Xs, there simply wasn’t enough of an improvement in the device to make the upgrade worthwhile for me.

I can’t really imagine what there is left to innovate really. They’ll eventually remove the notch. And the cameras and processor will continue to improve incrementally, but how much more camera resolution or processing power do we really need in our phones?


#19

The traditional photographers prime lens carry group is wide angle, standard and short telephoto.

This would require a 3 camera lens and I think that would be a useful improvement.

I’m really not sure what the 4 and more lens systems are for… seems overkill.

But yes smart phones are a mature product now and further change will be incremental.


#20

I dunno if I’d measure value by cost per use.

I could buy a One Plus 6T for $770 and it’s a stellar piece of kit if Android doesn’t bother you. It’s cost per use is significantly less than iPhone. The question will be if it holds it speed and updates for as long as an iPhone would.

I almost bought an older generation surface laptop instead of my MacBook Pro. It’d still be fast and do what I need it to do, and it would have cost me half the price. And I’ve stated previously how much I resent Apple for making a shittier laptop in 2017 than the 2011 model it replaced. On a cost per use basis, the Surface would have won.

My point is it’s about more than that, it’s about the beauty of Apple’s designs, and the simplicity of Apple’s operating systems, and people are willing to pay a premium for that.

The thing is, before now, that premium’s value was never tested. But now people are going hey that seems a bit much for what I’m getting, and the premium suddenly has a ceiling.

Will the high prices ever stop me? Maybe one day, but not yet.