→ Why talk of a $1000 iPhone is not overblown


Jan Dawson, in an article titled Why Talk of a $1000 iPhone is Overblown:

There’s been a lot of talk about Apple releasing a $1,000 iPhone next week, and a lot of pushback from financial analysts in particular on the idea that people would actually buy such a thing. […] But the reality is that talking about a phone in these terms is a bit old-fashioned at this point regardless of the actual price, especially in a US context.

Perhaps I’m oversimplifying, but what I took away from Dawson’s piece is that, since the iPhone is more and more frequently offered through instalment plans and leasing, the fact that the upcoming iPhone X will be likely priced at $1000 or more doesn’t really matter; that it doesn’t have the same impact it would have if paid upfront in full.

I think this is nonsense.

I think $1000 for a phone is a stupidly high and unjustified price. You can talk about the great technology and that an iPhone is a powerful computer in your pocket all you want. I still think that $1000 — and the rumours talk about this as being the entry price — is an insanely high premium to pay for an iPhone. And since I live in Europe, that premium, once converted to euros and inflated by additional taxes, will be even higher.

Sure, monthly instalments make things more tolerable, but that’s hardly a justification for putting up with this kind of prices. By that logic, who cares if Apple next introduces a $2000 phone? You just pay a bit more every month. Except expenses are expenses, no matter how you frame them. I know, it’s a bit old-fashioned as a concept, but still.

It’s also not uncommon that instalment plans involve interest rates. So that $1000 iPhone X, which may be the €1200 iPhone X in Europe, may end up costing you €1500 after 2 years. It. Is. Insane.

Oh, but the value. Again, I cautiously agree: you get value from Apple products over the long term. This is especially true for Macs (I’m still using a 2009 MacBook Pro that has always worked very well until recently), and to a certain extent for iPads. But iPhones are another story. Speaking hypothetically, a €1200 iPhone should last you at least 4–5 years to be a valuable investment. We all know that iPhones don’t have that kind of upgrade cycle.

So really any survey that asks about a thousand dollar iPhone is asking the wrong question: the real question is whether customers are willing to pay a little extra (or perhaps none at all) for a great new phone. […]

This is the framing you can expect to see from Apple next week: affordable-looking monthly pricing, with the new phone probably coming in at around $40, or $8–10 more than the iPhone 7 Plus. And that’s going to be a lot more palatable than the “$1000 iPhone” headlines will lead people to believe.

The real questions are: Is $1000 a ridiculous price to ask for a phone? And: Is it worth spending $1000 on an iPhone? My answers are ‘yes’ and ‘no’ respectively. The fact that there are people willing to spend that sum, whether as a one-off payment or in instalments, doesn’t justify turning these price tiers into the new normal. And frankly I’m appalled that a lot of Apple-oriented tech pundits are okay with it. As Adam Banks succinctly said on Twitter, I do get a bit fed up with tech folk on here assuming $1000 is small change to everyone or if you pay monthly it’s not real money.

The sad thing is, in a few hours the new iPhones will be unveiled, there will be aaahs and ooohs, everyone will be talking about the new features, the new technologies, the better cameras, the infrared sensors, the powerful CPU, and so on and so forth, and this kind of criticism towards the iPhone’s price will be buried under an avalanche of articles and reviews talking about how awesome the iPhone X is.

But price matters. And $1000 or more is simply too much, no matter how you look at it. Talking about this isn’t overblown. I think it’s an aspect we should insist on more frequently. The message Apple should get is Hey, you’re going too far now, and not Here, take my money no matter how much!

(Yeah, wishful thinking.)

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