Apple’s new iPhone 11 offers predictable improvements over last year’s model. The astonishingly low price has both consumers and investors delighted.
The iPhone used to be prohibitively expensive. The first iPhone cost $499 for the base 4 GB model. It required a two year contract and consumers were locked into expensive cellular service.
With everything taken into account, the original iPhone cost consumers $1200 or more, and the device wasn’t very capable. There was no App Store. Apple developed a few native apps, but the browser was central to user experience.
Apple’s will to almost gouge customers carried on for over a decade. The most ridiculous scam was charging $100 extra for additional storage space, when the actual components were very inexpensive. Even accounting for Apple’s high quality supply chain, a 64 GB SSD only costs a few dollars more than a 32 GB chip. There’s no additional costs in manufacturing between the two. It was a pure profit grab, and without external storage, Apple customers had few options.
The iPhone X was Apple’s ultimate affront to budget conscious consumers. Although its cutting edge design warranted a higher price tag, at $999 for the base model, it was almost offensively expensive. Although it sold well, it also turned off consumers and spooked investors. If Apple was turning its back on middle class consumers, what future could they have?
Yesterday, Apple pleased both investors and consumers with the new iPhone 11. Packed with features, this new smartphone is surpassed only by the iPhone 11 Pro. At $699, the iPhone 11 is competitive with Google’s Pixel smartphones and actually beats most of Samsung’s offerings.
If that’s not enough, Apple is “only” charging $50 more to upgrade from 64 GB to 128 GB of storage. They’re still gouging consumers, however, it’s a much smaller wound.
The reasons for this move are obvious, and it’s not altruistic. iPhone sales are slumping and Apple is pushing services. By selling more iPhones, the Cupertino company expects to develop more service subscribers. With Apple Arcade, Apple TV+, Apple News+ and Apple Music, the tech giant stands to make a lot of steady, monthly revenues, even if the iPhone is less profitable.
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