iPhone XS pricing — Was it too damn high?

Are iPhone prices too $%&$ high?

So, are they? And, if so, is that what caused Apple's iPhone pain this quarter?

Watch the video version. Seriously. It's so much better.

Tim Cook was asked about pricing directly during the Q&A portion of Apple's Q1 2019 financial results call yesterday.

If you look at what we did this past year, we priced the iPhone XS in the U.S. the same as we'd priced the iPhone X a year ago. The iPhone XS Max, which was new, was $100 more than the XS. And then we priced the XR right in the middle of where the entry iPhone 8 and entry iPhone 8 Plus have been priced. So that's actually a pretty small difference in the United States compared to last year.

I'll go over historical pricing changes in the U.S. in more detail in a minute, but so far, so clear.

However, the foreign exchange issue that Luca spoke of in the call made that difference or amplified that difference in international markets in particular the emerging markets which tended to move much more significantly versus the dollar.

Cook also brought the exchange rates with Reuters right before the call:

He said Apple is rethinking how it prices the iPhone outside the United States after largely setting the price in U.S. dollars, which made the phones more expensive in local currencies as the dollar strengthened.In markets with currencies that weakened considerably against the dollar over the last year, iPhone price "increases were obviously more," Cook told Reuters. "And so as we've gotten into January and assessed the macroeconomic condition in some of those markets, we've decided to go back to more commensurate with what our local prices were a year ago in hopes of helping the sales in those areas."

We saw these quasi miss-reported as price cuts in some markets, notably Japan, earlier in the year.

But that's outside the U.S. What about inside?

So yes, I do think the price is a factor. I think part of it is that the effects piece and then secondly, in some markets, as I had talked about in my prepared remarks, the subsidy is probably the bigger of the issues in the developed markets.

So, let's break this all down.

Pricing progression

The original iPhone was expensive for its time. Real expensive. $499 and $599 U.S. And that was on contract.

At that price point, it prompted Steve Balmer, then CEO of one of Apple's biggest rivals at the time, Microsoft, to say it was, if not DOA, functionally the same thing.

But, if there's one thing history has shown us about Apple, it's that they're not afraid of changing course. Sometimes in a big way.

And so, when Steve Jobs announced the second generation iPhone, the 3G, one of the key areas he and it addressed was pricing: $199 and $299 on contract, which was the only price almost everyone in the U.S. saw, at least for the first 9-months. Off-contract, though, they were up to $599 and $699.

Pricing for the iPhone 3GS stayed the same, and, even though it contained the first-ever Retina display and FaceTime camera, so did the iPhone 4.

The iPhone 4s off-contract, though, went up to $649, $749, and $849. And that's where iPhone pricing stayed for the taller iPhone 5 and the Touch ID iPhone 5s.

I'm only focusing on the flagships here, not the experiments like iPhone 5c, which was an iPhone 5 in a colorful plastic shell, that slid in under at $99 and $199 on contract, and $549 and $649 off.

The bigger iPhone 6 also stuck with the $649, $749, $849 range, but the even bigger iPhone 6 Plus, which also had a slightly better camera, added $100 to the bill, making it $749, $849, and $949.

iPhone 6s was the same again, but while iPhone 7 kept the $649, $749, and $849, the iPhone 7 Plus and it's all-new 2-camera portrait mode system crept up $20 to $769, $869, and $969.

iPhone 8, which added inductive charging, also added $50 to the pricing, going to $699, and for the iPhone 8 Plus, $40, going to $799.

Then came iPhone X, with its pricy edge-to-edge OLED display, and a sticker price of $999 and $1149.

iPhone XS kept the same pricing but added a $1349 option. iPhone XS Max followed the same formula as the previous Plus models by adding $100 to the price, but only for a bigger screen — the camera stayed the same. $1099, $1249, and $1449.

Again, I'm sticking to flagships here, but Apple also released the iPhone XR last year, took over the old iPhone 6 Plus price point of $749, but without the usual jump to the second tier. Just $799, then $899.

At the same time, though, Apple retired the previous entry-level, iPhone SE at $349 and $449, and made iPhone 7 the new buy in at $449 or $549.

Searing all that down, though, we have the base price of the iPhone going from $499 in 2007 to either $749 or $999 in 2018.

And that's a lot. Even though the price of everything from a movie ticket to a car has gone up considerably over the last 10+ years, and what you get in the latest iPhone is a Star Trek: The Next Generation leap over what you got for the first one, the difference in pricing is still a lot.

Margins minus

From Apple's point of view — not that Apple's point of view really matters to customers, we're the ones buying this stuff, but for the sake of completeness — they're charging more for iPhones but making less.

Gross iPhone margins — which are dumb things to look at as they discount pretty much everything but raw materials, like no humans were ever involved in anything, and seriously, you try making a phone out of a glass and metal, so don't ever do this even though I'm about to ever do this — have gone from 74% for the iPhone 3GS in 2008 to an average of 60% for the X-type iPhones in 2018. 53% for the deeply discounted iPhone SE.

Gross margins company-wide, which obfuscate iPhone specifics but include, you know, all the humans who have to bring the products to market, most recently peaked around 43% in 2012 but were down to just over 38% last year. And, some would point at all the new services revenue, which is traditionally much, much higher margin, and how it could be masking even lower margins now on the hardware products like iPhone.

So, even with higher retail prices, Apple is making less money on iPhones than ever before. And, if they'd kept retail prices lower, they'd be making even less money. Likely significantly less.

But, again, who cares about Apple. This is about us.

Loss of subsidies

What Cook and Maestri also stressed, and have been stressing for a while, is that the loss of subsidies and exposure of full iPhone pricing has caused sticker shock, primarily in the U.S. but in some other markets as well.

For various reasons, iPhone subsidies are becoming increasingly less common. In Japan, for example, iPhone purchases were traditionally subsidized by carriers and bundled with service contracts. Competitive promotional activity frequently increased the amount of subsidy during key periods. Today, local regulations have significantly restricted those subsidies as well as related competition. As a result, we estimate that less than half of iPhones sold in Japan in Q1 of this year were subsidized compared to about three quarters a year ago and that the total value of those subsidies have come down as well.

While markets, like in the E.U., have always trended hard towards full price, in the U.S., and a few other places, most customers only ever saw the $199 on-contract.

But, with T-Mobile leading the charge to decouple device subsidies from monthly rates, in order to make the monthly rates sound lower, and with Verizon completing the market transformation a few years later, all that changed. It was great for the carriers and the perception that competition was driving down prices, but what it really did was shift costs back to the vendors. Hard.

And, you know, I got a lot of this wrong. I figured it was in no one's best interest, not Apple's or Samsung's or any other vendor, and not AT&T or Verizon or any other carrier, to show those full prices up front. So, I guessed they would lean more heavily into the leasing programs, which effectively provide 0% financing on new phones, and only advertise the monthly cost of the phone.

Instead, they did both, full price and monthly price, maybe in an attempt to show how little the monthly price was compared to the full price, which again was good for carriers, bad for vendors. Because that sticker, it shocked. All people saw was that full price. Glowing. Pounding. Like neon. Like techno.

Figuring forward

Costs. Subsidies. Exchange rates. Margins. Ultimately, none of that matters. Even if iPhone price increases were in line with inflation and the increases in quality and diversity of components and new features, and we factored out exchange, and we didn't give a damn about margins, it wouldn't matter.

iPhone XR held in hand alongside river

iPhone XR held in hand alongside river (Image credit: iMore)

Pricing is physiological more than mathematical. In the market, perception really is reality.

And the perception is that iPhone pricing is too damn high.

And, as evidenced by Tim Cook's comments, Apple knows it and is working to change that perception.

Trade-ins, for example, are being experimented with as a partial replacement for subsidies. They work for Apple because, ultimately, they get more devices onto the market and that increases the user base and that plays into Apple's new ecosystem narrative. More people with iPhones, more people to sell accessories like Watch and AirPods, and services like Music and Apple Pay to.

Apple is also arguing total value now rather than just upfront cost. From higher quality materials and manufacturing to to more capable chipsets to performance enhancements for older devices to free support and educational services from AppleCare and Today at Apple, Apple is making the case that when you buy an iPhone you get much more than you pay for, especially a couple or a few years down the road. Up front, even without any additional accessories or services.

This has led to some investors and analysts complaining that Apple is making iPhones too valuable and making them last too long, but fiery Tim Cook — on record, my favorite Tim Cook — addressed that on the same call yesterday.

We do design our products to last as long as possible. Some people hold on to those for the life of the product and some people trade them in. And then that phone is then redistributed to someone else. And so it doesn't necessarily follow that one leads to the other. The upgrade cycle has extended, there's no doubt about that. As we've said several times I think on this call and before that the upgrades for the quarter were less than we anticipated due to all the reasons that we had mentioned. So where it goes in the future, I don't know. But I'm convinced that making a great product that is high quality is the best thing for the customer and we work for the user and so that's the way that we look at it.

Apple could also, obviously, cut prices by either using less expensive components — including the exorbitant amount Samsung currently charges them for OLED panels — or by further reducing margins.

I don't think anybody wants to buy a lower quality iPhones, though. We've seen that, historically, with the rejection of iPhone 5c and even the shade thrown at iPhone XR before it got in saner, smarter reviewers hands.

If anything, iPhone X and XS show that Apple wants to make higher quality iPhones.

Again, Apple hasn't been making iPhones more expensive. Apple has been making more expensive iPhones. A lot of the increased cost has gone to increased components like the OLED displays, TrueDepth and Portrait Mode cameras, and A12 Bionic. Apple is thinking long term here, not short term.

That's also what makes just cutting margins tough. I mean, it sounds like the best answer to most customers, because it's Apple's money and not ours, and screw Apple's money, right?

But the market already down-values Apple more than any other major tech company, and losing margin would be an amazingly effective way to bring on even more punishment from Wall Street.

More importantly, Apple attracts and retains talent — the designers and engineers who make the products — through stock incentives, and devaluing Apple stock is a great way to repulse and lose that talent.

So, Apple has to be incredibly careful with not only the levers it chooses to pull, but how fast and how hard it chooses to pull on them.

Cost Conclusions

Whether iPhone pricing really is too high or not, that's the perception. Flossy knows it. And Tim Cook just said as much. So, what is Apple doing about it?

Ramp up will take care of some of it. As OLED capacity increases, for example, and more high-quality suppliers come online, component prices will drop. Same with TrueDepth camera modules. Apple will always pack new features into new iPhones, but massive leaps like iPhone X will continue to be stretched out over many years, not every year. So, as costs come down, so too should prices.

Trade-ins, if they become generally accepted, could mitigate against the lack of subsidies. But so could the iPhone Upgrade Program if Apple could break it out of just the U.S., roll with it internationally, and figure out how to make the messaging less up-front shocking and more over-time compelling.

If Apple really wants to get big into services, iPhone as a service is potentially one of the biggest. Especially if it comes with the other ones, like Music, Magazines, TV, games, and more.

Same with making the case for overall value. Break down everything you get for every dollar you spend, including the longevity, the support, the education, and everything else. Don't just throw the price up on a slide. Show the value you're getting over multiple slides.

And, of course, figure out that sweet, sweet spot where people aren't just willing to pay what you ask but are happy to pay it for what they get.

That way, people stop complaining about how damn high iPhone prices are and go back to preaching how damn good iPhone are. Period.

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Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • I think you nailed it when you mentioned that now with contract subsidized pricing gone consumer are in fact getting sticker shock to learn the actual pricing of these devices. I personally don't mind the price for the most part since both Verizon and Apple offer annual upgrades with trade-ins. So for a tech nerd like me I can always have the latest and greatest. While I am still holding on to my iPhone X because of the higher costs the price still doesn't necessarily deter me completely but it has caused me to pause on my annual upgrades.
  • I disagree. Regardless of brand the same pricing has been available for donkeys years. You've been able to buy a handset outright for as long as I can remember and also SIM only.
    You always had the option of X up front plus a drip feed for Y years. You never really got away with not being able to pay for you device and your airtime.
  • Its not just that the prices are too high (they are). But also, the more you pay for something, the longer you are going to keep it. No one is going buy a new $1,000 anything every year. No one buys a new TV every year. No one buys a new refrigerator every year. Everyone now has a phone. At least one. I have two 8 pluses, one personal and one from work. I intend to keep both for at least 2 more years. I also have a new iPad Pro, so I am out of that market for a least 3 years. The days of everyone getting a new phone every year - just because - are over. Any high end phone from the last 2 years is still a very good device. My 256GB 8 plus is nowhere near the end of its life. That is the new reality. Everyone will be on a 2-3 year upgrade cycle. Apple is not "doomed". They just reported $84 billion in revenue, instead of the $90 billion they predicted. Does this sound like a company that is in trouble? I can think of LOTS of companies that would love to have $84 billion revenue in a quarter.
  • Agree. Not upgrading for 2-3 years as the hardware far outpaces the software. It's the reverse of what we had back in 2009 when the software was really out running the silicon. Back then the speed gain and hardware benefits were so good that you could justify hi-tech upgrades in a few cases... Right now, a lot of power is wasted by the platforms, which si.ply aren't fully leveraging them. These phones have a lot of performance headroom. This is why Apple took so long to upgrade RAM. The low capacity helped keep profit margins up, but it also helped obsolete devices and fuel upgrades, same as sealed batteries and non upgradable storage with low capacity base SKUs.
  • Apple took a long time to upgrade RAM because unlike Android, iOS doesn't eat RAM for breakfast. iPhones don't have upgradable storage because SD cards are slow, and whilst I dislike the fact that the battery is sealed, most Android phones now do that as well. Your insinuations of obsolescence are unsubstantiated.
  • Yes, the iPhone price is too high. And so is the Samsung Note 9 and the rumored price of the coming Galaxy S10 family. It is not just Apple's problem. Market demand is like a pyramid. The higher you go, the narrower the market. Basic economics. This problem has been seen coming for a while and it was easy to foresee. But Apple is a special victim of its own success. If I am an Android user, I can look at the Samsung line as the premier flagship. But if that is too rich for my blood, I have options, such as the highly reviewed OnePlus 6T asmt a significantly lower price. Still a flagship class device. But if the XS Plus is too rich, then, if I am in the Apple universe, either I take the XR, still pricy, or I consider an old year's model. If I have a 7 Plus or an 8 Plus, I might just decide to say "no thanks, I'll wait". My options are very narrow. There is a reckoning that is coming to the entire market. I may pay $1000 plus for a laptop, but I will keep it for 3 or more years. If the phone manufacturers continue to charge those same $$ for a cell phone, then that it the replacement cycle that an increasing number of people will choose. They will say "my current device works well enough".
  • What I find ‘painful’ is what non-US customers pay. For an example, the base iPhone XS Max from the Apple US Store is $1,099 (NZD$1,600 approximately) but in New Zealand that same phone costs $2,099. Now I accept that the exchange rate fluctuates but still that is a significant markup. I do wonder if Apple subsidises the US market through it’s international sales. Don’t get me wrong, I bought an iPhone XS Max and I really do love it. However, in the past I would have owned both an iPhone and an iPad but with the pricing as it stands I have limited myself to a single device - effectively Apple is now missing out as I would have spent more when prices were lower.
  • Keep in mind that US sales taxes are not in the US price whereas most international prices are required to include VAT. So the gap is a bit narrower than shown.
  • From the customers perspective that is the selling price regardless of what's included or not included.
  • The US continues to be behind the rest of the world…
  • Sales tax differs by state. Some states have no sales tax. Stop being clueless. Educate yourself. Delaware, for example, has NO sales tax, so if you live close by in PA, MD, etc. you can drive over and buy an iPhone for MSRP and pay no tax at all, saving a lot of money.
  • I'll disregard your "clueless" remark, prіck. All you've really told me there is that the "United" States aren't so united. It doesn't matter whether sales tax exists or not, if it does, it should be marked on the price tag
  • I do believe the prices are too high. I certainly don’t blame Apple for increasing the prices as they are providing a much better device than they did in the past.
    What I blame them for is keeping the price of old models so high. The starting price for the iPhone 7 Plus in Australia is $929 (or $749 for the iPhone 7) when the iPhone XR is only $1229. That’s an incredibly high price for a device that is two years old.
    I understand R & D is not cheap but I think the older devices should be much cheaper than they are considering they are probably going to be discontinued soon.
    I think Apple should sell 4 different phones. A budget small screen phone like the iPhone SE or the iPhone 7 that costs under $500, a mid range phone like the XR & two premium high end phones. That way it allows older devices to be sold for much cheaper than newer devices but they shouldn’t canabalise the sales of more expensive iPhones as they target different markets and there will be a clear distinction between the devices at different price points.
    This will also help increase the number of users which means they can sell an increased number of services which should help improve the bottom line.
  • Apple prices their devices. You certainly should blame Apple. What they should do is the price of the base model xs should be applied to the top spec model and go down accordingly. They will still make a **** pot full of money.
  • What they should do is follow the market. If people are willing to pay it why shouldn't they charge it?
  • All prices are based on the American dollar
  • With only a 12-month warranty for a premium-priced product, and non-existent post-sale support, iPhone value proposition is at an all time low. So no wonder market share is eroding. But, at the same time, that business model buys Apple some very sweet profit margins. And money is, at the end, what it is all about, not a certain share of the market per se.
  • Non-existent post-sale support? I don't see how you come up with that. I had a question about my iMac, purchased in July 2017 with Apple Care Plus, and I was speaking to a real human in less than a minute. Same with a defective HomePod: real person immediately. Apple has some of the best support in the business.
  • I was going to say, I had an iPhone 6s which was 1 year out of warranty replaced free of charge because my son broke the screen. Post sale support for iPhone is awesome, as is any other apple product.
  • That is not my experience or anyone else's of my acquaintances (in Finland and in Europe in general). No post sales support, yes. No DOA (Dead on arrival) swaps (unlike the competition), which forces the user to send faulty-out-of-the-box hardware for servicing for weeks at a time, be it a Mac or iPhone or Apple Watch. Ridiculous localization bugs that remain unfixed for years at a time despite being reported. No native-language support. Shorter-than-legal warranty periods. At the same time, the Chinese brands are upping the game on all these counts while charging half the price for their products -- and have, in consequence, grabbed market share like crazy. The future does not look good for Apple. The Chinese's more humble, respectful, and less cowboy-arrogant attitude appeals to locals.
  • Half the price with poor hardware, poor updates and non existent support. I don't really think Apple will dies if a person or two from Finland decides not to buy the iphone
  • The last few lackluster updates for iOS made me stop caring about then. Went to Android. Not itching for any. I get security updates every month. When the platform updates come, good for them, but I can honestly do without the ;-) I just don't care that much about this stuff, anymore. iOS basically took the excitement out of it by delivering the most iterative software updates I've ever experienced - macOS as well, increasingly.
  • iOS 12 was known to be an "optimisation" update way before it came out, so saying it was a lackluster update is like saying the sky is blue, it was supposed to be that way. iOS is generally behind Android in terms of quantity of features, which is another well-known thing, although if customisability and features mattered so much to you, you would already be on Android. Not all iOS updates are lackluster. As for macOS, what more do you want? macOS has been around for so long that I'd expect fairly iterative updates. Unless you're expecting touchscreen support or some sort of hybrid OS. Besides, making change for the sake of change isn't always a good idea, look at Windows 8 and what a mess that was.
  • IOS 11 was incredibly iterative as well as 10, 9, and 8... 7 and 6 as well. They introduced a new "theme here and there," and features to justify hardware additions, but that's about it. they've all be hilariously iterative, like Windows 10 feature updates. That's fine on a PC, where I can just switch platforms, but less so in a phone, where the platform is a supposed selling pointing the device - and there is no altrrnatives... Their cloud services certainly aren't a reason to buy... ... Right now, iOS updates aren't any distinct competitive advantage unless your Android phone isn't getting security uodates... Which is unlikely unless it's really old, or from a no name OEM. Even 3-4 year old Samsung phones are still getting those... It isn't about change, it's about adding value. Apple adds very little while talking up the little they do. Then, fanboys like you and the Tech press run with it - acts like it's the biggest update ever, because they delay all app updates for platform updates and put them all in one list. Apple says this, so it must be true. Imagine if Google did this... (20 pages of "upgrades"). It's hype. Meanwhile, I had to wait 3 years for Apple Photos on my Mac to stop down converting video to 720p M4V files whenever I dragged anything to the desktop... Priorities, though. I'm a user. I'm using the devices and the platforms. You can't gaslight me. I know when the update is useful or forgettable. Barely anything in the past 5 iOS updates have been worth remembering, except a few features added to enable hardware (3D Touch, which kind of flopped, anyways). The major things they've released have all been hardware, which starts blanketing immediately and hopefully the "support cycke" is enough of a bonus that you don't mine... Cause the updates do not advance the devices or increase their effectiveness - except perhaps for the last iPad update which is still a worse productivity interface than Samsung DeX, nevermind Windows 10... Performance doesn't need it's own software release. That's what QA and testing is for. That was just Apple making up for bad development and management on their part. And let's not talk about how the amazing hardware is completely throttled by the fact that the devices are hard locked in feature set on release to make room for selling upgrades... So you don't really benefit much from the amazing hardware, anyways (ignoring the irony of them needing a full release dedicated to performance despite talking this up every keynote).
  • "Ridiculous localization bugs that remain unfixed for years at a time despite being reported. No native-language support." Last I checked, iOS has support for tons of languages, Android not as many. It could be that Android has more quality over quantity when it comes to localisation though
  • The Chinese government subsidizes Chinese shipping among other things to keep prices artificially low to gain market share. Is one of the main contentions for trade trade war, and why European Governments, while publicly acting aghast at Trump are privately very happy to see US doing something about as it threatens their own manufactures as well. That said I’m no Trump fan, but let’s be clear on why Chinese goods are so cheap. Also, I realize that it’s a tall order to expect the end user to know or even care about any of this. Even if it’s in their own best interest to do so.
  • The XS Max is an expensive phone; no one is debating that. But it is the top-of-the-line model, with premium features on the premium price tag. There are so many other options in the iPhone line-up, as well as the iPad, both Pro and regular. I would LOVE as Aston-Martin, but I can't afford it. I'll stick with my Ford. Does that mean Aston-Martins are priced too high, or are too exclusive? No, it just means they serve a different market. I believe people complaining about the price of the iPhone lineup are looking only at the top tier. There are many other options that sit well in the price range of other smart phones.
  • No, the Aston is priced too high. The law of diminishing return sets in. After that it's a lifestyle choice, some can afford it some can't.
    Usually a blind test would weed out the fashion victims but who wants to be objective all the time? There'd be no fun in life.
  • It's not too high. If it were, no one would buy one. It's that simple.
  • Nope. Guess what food price being too high doesn't mean that you'll starve.
    Do you have a house? If yes did you buy it cash? I'm guessing no as the PRICE IS TOO HIGH.
    So like most others you get a loan to be able to afford it. People DO live outside their means.
    It's THAT simple.
  • Apple's main problem going forward is that their services growth is, intrinsically tied to iPhone sales. They might report growth now, but in the long run, the reduction in numbers (not margins or profits) of iPhones will eventually affect their services. Think of services as phone cases. People might splurge on a premium case for their brand new (and expensive) iPhone. A couple of years down the line, when the case cracks and they're still keeping the same phone (due to the high prices of new models), they'll just go "meh, this phone's old, so I'll just get a cheap-*** case (or go caseless) this time". It's the same for services. Someone with a new phone might buy a bunch of new apps. After a year or two, they just won't bother. That's also the real reason Apple want to encourage subscriptions - it's not for the sake of developers, but themselves - but I digress.
  • iPhone pricing is too high, no matter the intense parsing that Rene and other online apologists have done to justify what Apple is doing. When competitors can offer devices that contain 4k OLED screens and full LTE-Advanced capability, two things that the iPhone XR leaves out, for half the price of the XR, then something is terribly wrong, and customers are perfectly right for rejecting the XR in favor of those other devices. Personally, I bite the bullet and pay the exorbitant price because I like the iOS ecosystem and cannot tolerate Android and the resultant lack of updates you have to endure with that platform, but I am definitely NOT happy being gouged like I am.
  • The 4K display is a bit much for a mobile phone unless you're using VR, but I agree with you in that the XR should have an OLED display. Not sure on how much of an impact LTE-Advanced makes to the end consumer or what networks will actually offer the full speeds in the majority of areas, but here in the UK the 4G on iPhones gets the same speed as other phones, so at least here that part isn't making a difference. But ultimately, I do think the iPhone is priced too high. Bear in mind that there are Android One phones which get the latest updates pretty much straight away, and the Nokia phones get the updates fairly quickly as well.
  • Danny I would have agreed with you if I never looked at the Xr. It's actually a great phone. I was irritated by the "extra space" around the screen because of the LCD, however, after using it for 5 min it was a non issue. I like the Xr better than the Xs. I am digging the color options. I put my iPhone 8 next to the Xr at my local provider, and other than screen size, the displays are **** near the same. I am cool with my 8 for another year and sit back and wait to see what comes out this year. As for android, been there, done that, a few times. Moved to Windows Phone because android was terrible. After Microsoft decided to not support my 1020s with windows mobile 10, I decided to support apple and got an iPhone 6s and I am staying put on iOS. I keep looking at android phones and keep looking at my iPhone and going NAH. I am keeping the apple device.
  • The XR proce OS laughable when you realize you can get a Galaxy S9 for almost the same price. Please... That screen is low res LCD. The phone looks like a$$ with those bezels. Just, no. The entire line is overpriced. I'd get an 8 Plus over the XT any day.
  • Show me one Android company with the support structure of Apple.
  • exactly! I would guess google themselves are close with the pixel lineup. Other than that NO ONE!
  • Your point? Their support is meaningless if nobody wants to pay high prices.
  • I've literally only used support when I had a phone stolen. I wouldn't pay for Apple care anyways, and I'd throw the phone away and claim it was lost tl Assurion before I paid their laughable repair prices.
  • Nice article Rene. Full of insightful information. "So, even with higher retail prices, Apple is making less money on iPhones than ever before. And, if they'd kept retail prices lower, they'd be making even less money. Likely significantly less." The paragraph above deals with the margin percentage of what Apple receives from an iPhone not the $ amount. For instance $600 in 2018 is still greater than the $420 in 2008. So Apple receives $180 more now, even though the margins on a $1000 iPhone XS are less than on the $600 iPhone3G.
  • Great article and comments. Yes, I too agree that iPhones are priced too high. And Samsung is much the save, though they face more competition (as someone else commented). BUT I think a big part of the problem involves manufacturers coercing us into ‘upscaling’. In other words, iPhones prices are up because they do more and have more expensive components (Yeh, I know ‘Duh’). BUT we’re being sold on the concept that we need bigger screens, more resolution, or 2, 3 or more cameras. It’s very similar to car manufacturers convincing folks that we need bigger cars with more features - oh, and by the way, no coincidence that the car manufacturer makes more on larger vehicles. Even existing car models get bigger as manufacturers try to win at the numbers game - more luggage capacity, better acceleration, etc. For example, today’s Toyota RAV4 or Ford Explorer is much larger than earlier models. So it is with Apple and the ‘phone wars’ - they want us to **** for their big, luxurious ‘flag ship’ phones. It’s not about giving us what we need, and not about increasing units sold, it’s about making the most $$$ per unit sold.
  • Note 9 is technologically more aggressive in terms of feature set. They have an SD card slot and a 128GB base SKU. The price was more justifiable there. Yes, they have more competition, and that's why their users get a better bang for their buck. Competition helps the consumer. The extra cameras are used for more than taking pictures, so your analogy is pretty shaky.
  • Apple has too many cheaper iPhones and should just have 2 being Xs & Xs plus as it once only did. This keeps the second hand price higher for when I upgrade.
  • I want Apple to keep the SE, there are many people that want a smaller model.
  • With these ridiculously high prices, Apple should be giving everyone free Apple Care+ with loss and theft AND free iCloud storage.
  • "iPhone 3GS stayed the same, and, even though it contained the first-ever Retina display" This is not correct.. iPhone 4 was the 1st iPhone to support retina display and not the 3GS.
  • You're right. iPhone 4 was one of my favorite iPhones, the new design, Retina display, front camera. Great phone.
  • If 128GB storage was the base SKU, the process would have been less of an issue. Samsung did the "right thing" with the Note 9. Apple was crazy to start at 64GB, at those price points. The Xs Max was immediately a non-option. Day of announcement, I went get a Note 9, and haven't regretted it sense. My iMac is in the closet now, cause I have no use for it without the iPhone.
  • I would rather they started at 64GB but priced correctly, I have no need for 128GB on a phone and if 64GB means I'll get it cheaper then that's what I want to go for.
  • Flash is faster, more secure, and more reliable than WE cards, so 128 is needed, especially if you don't upgrade yearly and keep lots of data local. If not, do you really need an $800+ phone to begin with? For the same price as an Xs the Note 9 has a better screen, far better battery life, twice the storage, better connectivity, and more flexibility. Enjoy streaming your 4k video from iCloud, while the Samsung users are playing off their $15 128GB mSD cards? Not sure many people realize how much money they're wasting on these storage upgrades, for capacity that costs pennies on the dollar to deliver... It's absolute ludicrous, especially for bulk media storage (music, pictures, videos, movies, eBooks, audiobooks, etc .) 64GB is great WHEN you have expandable storage. In that situation i would never buy a storage upgrade. ****, even 32 would do, in that situation... Without it, 128 is the minimum for me. With expandable storage beings dirt cheap, it's unconscionable to pay $100-150 for a storage upgrade for bulk data storage, or be doomed to wireless access bottlenecks (cloud storage) or low quality cached media.
  • Apple has had nothing new since the iPhone X not even to update my wife’s 7s. Apple watch update is what I’m looking forward to over the next 2 years. I’m at a stage with all my Apple products after my 2019 iPad Pro 12.9” their is no need to upgrade and will not be looking for 3 more years if not longer.
    I’m very disappointed in Apple dropping there time capsule and routers.
  • Since subsidized cellular plans in Canada are exorbitantly high, I decide to buy all my phones outright as it's cheaper over the long term. I've been wanting a larger screen iPhone and when the iPhone XS Max was announced I was excited. But getting a 64GB iPhone XS Max for $1750 (including tax) just doesn't cut it. Especially when I can get a comparably spec'd phone for hundreds cheaper and can generally add additional storage through microSD card. I think Apple should consider pricing a little more reasonably, especially outside the US.
  • I ended up paying $1249 for the XS Max. And yeah, unless the next iPhone brings USB-C, AppleCare on the XS Max will keep me happy for another 3-5 years with the XS Max. C’mon Apple, my Switch, my 12-inch MacBook, iPad Pro and now my wh1000-mx3 (because Beats still has MicroUSB) now all have USB-C, your move with the iPhone, Apple.
  • Yes. When the pricing went up for the 8 Plus and the X was announced, I knew I would be fine with the iPhone after that one. Went Note the next year. Absolutely loving it. The best battery life I've ever experienced in a phone tons of storage amazing screen and camera. Fast. If the X had better battery life, I may have settled for a base model just to avoid changing ecosystems, but the small battery along with the low storage rules that out. As Mac originate no sense considering what Samsung had already released. Ironjcally, I'm even more satisfied after the One TO update. It cleaned things up in ways that literally deleted any regret moving from iOS. After about 2-3 years in actually using my phone all the time, again. Not sure what they will do with next iPhone, but improved cameras is not what I care about in 2019. The software needs a mega update, and I'm not sure I'm willing to give up any conveniences moving forwards, especially when I have to pay a premium for it. Did replace FaceTime with Duo. Don't care about I Message since I got a new PC and put my iMac in a closet. The price was too high, relative to the competition and the value proposition of these devices. Even besides the Note, the S9 was like $800 - and probably less - by the time these phones launched. They needed to WOW me to justify a $200 premium, and a forgettable software update on top of a fairly forgettable hardware refresh simply wasn't enough.