But the biggest — and arguably only — surprise with the lineup this year isn’t something found inside a device: the pricing.
“Apple has become the king of the ‘good, better, best’ portfolio with a phone at every relevant price point, particularly given it typically keeps older models in its line-up for those that don’t want to pay four figures for the latest and greatest new devices,” said Ben Wood, chief analyst of market research firm CCS Insight. “Add trade-in into the mix and it makes it possible to get customers signed up for a more expensive phone than they likely planned to purchase.”
Trade-ins remain a central strategy for both mobile carriers and phone makers to drive replacement sales. The catch, however, is that users will need to trade in relatively new devices.
Trade-in offers also typically tie customers to a long contract that can include high-priced data plans. Carriers want to keep these users loyal rather than seeing them move to a competitor network — and a discounted or free iPhone could be the right incentive to keep them there, according to David McQueen, a director at market research firm ABI Research. For Apple, it keeps customers deep within its ecosystem of products.
Prices remain the same
Not only did Apple avoid raising base prices on the iPhone, but it effectively lowered the cost of certain iPhones when factoring in higher entry-level storage options.
As analysts at Goldman Sachs pointed out in a research note Wednesday, the price of the 128 GB and 256 GB iPhone “was reduced when compared to those same storage capacities last year.”
So why not raise prices this year, knowing that Apple always seems to find customers willing to pay top dollar for its devices?
“I believe Apple is aware that it has hit a sweet spot with pricing and the marginal gain of slightly increasing prices versus the negative backlash it would face is not worth it,” Wood said.
More than that, he said Apple is focused on boosting revenue from the many premium services built around the iPhone, such as iCloud storage, Apple Music and Fitness+.
‘Good, better, best’
Some things haven’t changed from the Jobs days, however. There may be a much wider range of options and prices for iPhones, but Apple still doesn’t come close to the lower-price tiers available on Android smartphones.
“The company still focuses on profits and revenue rather than chasing volume and market share, which was the same mantra under Steve Jobs,” McQueen said. “Perhaps Jobs wouldn’t have launched as many device types at different sizes, as he always feared cannibalizing revenue streams — notably across iPad mini and larger screened iPhones.”
Still, the number of iPhone variations and price points has only helped it appeal to more buyers — and it most likely will again this year, too.