What’s your iPhone worth to you? Well, it’s whatever you paid for it, right? Not so fast. There’s more to using an iPhone than just the upfront price tag. Like everything Apple, an iPhone is more than the sum of the parts.
If so, then what are the parts worth, as a total or sum? David Gewirtz wondered if you would buy an iPhone if Apple doubled the price? Or, would you run screaming to the nearest Android-based Samsung Galaxy whatever? Is an iPhone cheap at twice the price?
The $1,000 Barrier
Marketers say there is a price limit for every product. A candy bar shouldn’t cost more than 99-cents (unless you’re in an airport). Gasoline sales slow to a crawl when the price tag his about $3:00 per gallon. A fast food meal shouldn’t cost $10. But a dinner in a nice restaurant is OK if it’s under $30.
My current iPhone is the 256GB Jet Black iPhone 7 Plus, priced at an astounding $969 from Apple. That pain is made easier thanks to the annual iPhone Upgrade Program which slices and dices the price tag into monthly payments which are easier to digest. Word on the streets is that Apple will introduce four new iPhones in 2017. An iPhone SE in the spring. Two iPhone 7s models. And an iPhone 8, ostensibly with white wall tires, tail fins, lots of chrome and a price tag that exceeds $1,000.
That $1,000 barrier is coming folks.
Compare iPhone 8 and what we know it will contain– faster CPU, better battery, OLED display, blah, and more blah– with the original iPhone that debuted at $599 (later dropped to $399). Now, look at an iPad Pro fully loaded at 256GB of storage, LTE cellular, smart keyboard, and Pencil at $1,377, or more than the price of an entry level but more powerful MacBook and almost the price of a MacBook Pro.
Apple loves that $1,000 threshold like controversy loves fake news.
Jason Perlow is an iPhone user but bought a much less expensive Android smartphone to see the difference between Apple’s walled garden ecosystem and something that runs the same applications for $600 less. To Perlow, the app experiences– Facebook, Twitter, Mail, Chrome, Gmail, Outlook, and most popular games that run on iOS and Android– ran about the same.
Why buy an iPhone at twice the price?
To be fair, there are differences in brands, the buying and owning experience, and other items which change the price tag. For example, Apple Care makes taking care of broken phones far easier. Where do you take an LG or HTC or even a Samsung phone to get fixed? Another example is the so-called ToC, or total cost of ownership. iPhones command a premium for used models, and that helps offset the initial price tag and makes owning an iPhone often less expensive than Android-based models that are far less expensive.
Would you buy an entry-level iPhone 7 for $1,300; double the current price tag? Would you pay $1,538 for an iPhone 7 Plus; double the current price tag? I suspect that Apple would sell plenty; millions if not a few tens of millions at those prices, but not nearly as many as the record levels sold last quarter.
Price, like size, matters. But our iPhones are more than just parts and more than just a price tag. For many, it’s how we use the internet sans PC. It’s how we communicate, how we socialize, and how we conduct business. If all those Android smartphones at less than half the price of a comparable iPhone are so good, then why did Apple sell a record number last quarter (again) and why are Apple’s customers not running toward the cheaper Android models by the millions?
Price matters for many of us. But not that much.