Apple’s relevance and the $1,000 iPhone

This article may contain personal views and opinion from the author.
Apple’s relevance and the $1,000 iPhone
Another year, another iPhone(s), another annual event of crashing servers, jammed data lines from folks who stayed up until all hours of the night (in the United States anyway), and frustration from those that could not part with their hard earned (or borrowed) money once it was possible to pre-order the new device.

This year’s new iPhones were even less of a secret than last year’s iPhone 5s and 5c. The often rumored Apple Watch actually remained in the shadows, with its fate left to conjecture right up to the announcement this past week.

Apple broke new ground in a couple of ways as well. While not saying anything directly about it, the company arguably surrendered to consumer demand for bigger screens. The new iPhone 6 and iPhone 6 Plus deliver on that front despite the one-handed comfort the previous generation offered. The company also announced a new product with no firm availability date with the Apple Watch, “early 2015,” something I cannot remember happening with an Apple product, ever.

The fan bases of Apple products or competing platforms have been throwing their barbs back and forth as expected. A particular favorite jab I saw shortly after the announcement was a comparison graphic put together by Ron Amadeo over at Ars Techinca. The graphic has seen wide circulation in social media since. In short, it welcomes iPhone users to the year 2012, as they finally have a feature set that matches what some Android flagships have had for a while.

For those that can take a joke, have a chuckle and move on. For those that cannot, relax, this is not an anti-iPhone rant, nor is it an anti-Android or Windows manifesto. As it is, I moved away from the iOS ecosystem years ago, with an HTC One (M8) Google Play Edition, and Nokia Lumia 1520 now serving as my daily drivers.  I know that will not likely hold back many-a-fan-boy in the discussion, but even with the ribbing Apple is getting from the competition, the company’s position has become far more relevant, and it is due to a rather comprehensive set of hardware and service solutions.

Apple Watch


While some might argue that Apple is a bit late to the game when it comes to wearables, that is really only part of the picture. Yes, Apple did announce a product before HTC or Microsoft have even entered the arena, but Android Wear, Samsung, Pebble, and others have the jump. We also got to see a lot more of the Apple Watch than what we saw of the new iPhone, so it is anything but vaporware.

Since consumers have to wait until sometime after the holiday season to buy the watch, the onus is on Apple to retain interest from its customer base that is being enticed with new and ever-evolving products, many of which will have, or already have, a significant price advantage over the Apple Watch’s $350 starting price.  Considering timing and price, I can't shake the feeling that "early 2015" was not the planned roll out for the Apple Watch.

Apple did right by its iPhone 5 generation owners by ensuring the new wearable will work with those devices, which may draw them to make an investment in the wearable over spending a few-hundred on upgrading their device, particularly iPhone 5s owners, since that device is still a contender among flagships.  It also opens the door for wider Apple Pay adoption.

As things are now, where the Apple Watch stands out is in functionality, or at least the promise of functionality, the level of which is not available on any other platform. While some will pine about the closed ecosystem that is Apple, there is no denying the depth of the functionality or form factor of the hardware. I do not need to discuss whether or not people like the looks or not because it is irrelevant, people are going to like it, leave it, or feel ambivalent about it.

The $1,000 iPhone


Even though I divested myself of the iOS ecosystem a couple years ago, that does not mean I am going to hammer the new iPhones as a fan boy. In fact, I might pick one of them up for myself sometime after the mad purchase rush has subsided a bit, and will certainly be picking one up for the missus who likes the iPhone. However, I do have a couple criticisms about the new line of smartphones from Apple.

First, is the absolute highway robbery for storage. I’ve ranted about this a couple times in the past, but in Apple’s case it is not necessarily an issue of not enough storage as it is the price of admission for that storage. Second, there is one device that will certainly not be on my list of acquisitions: the 128GB iPhone 6 Plus, retail price, $949, or a cool $500 on-contract.

Those are the prices of full blown, full function computers and 2-in-1 devices. The top shelf iPhone even costs more than a decked out iPad Air with the same storage and cellular connectivity, which retails for $929. I understand that there are those who want as much media residing on their device as possible, but this is clearly a device for those that are inescapably “all-in” with the iTunes experience and want all their media with them, time to pay the piper.

Remember those are prices in the United States, before sales taxes (which typically range between 6-11% at a state level). The economies of scale make the price of the iPhone an order of magnitude more expensive in nearly every other market around the world. In the United Kingdom, the same iPhone 6 Plus will cost £699 (including VAT), or $1,140. In Italy, they will be shelling out €949 ($1,230). Russia is pushing 42,000 Rubles or $1,111.

As I already noted, Apple made an appropriate response to market demands with larger screened hardware. The quality of Apple hardware has never been much of a concern to me and despite a few misgivings I might have about the user experience of iOS, mainly the seven-year-old grid of icons, iPhone users receive system updates more reliably than from any other platform, a benefit of the tightly controlled environment that is Apple. iOS 8 brings parity with the new hardware and augments what I think will be a vital cornerstone of the mobile experience of the future, which is Apple Pay.

Apple Pay


Credit where credit is due, Apple Pay is the differentiator that gives the iPhone (and Apple Watch) an edge, at least in the American market for now. This is where we can see the benefit of that “fenced-in” world that Apple has built such a robust ecosystem.

Apple leveraged its strong market position in the United States to sign on every major bank, like American Express (the bank), Chase, and Wells Fargo, to its new payment service, and there are more waiting in the wings like Navy Federal Credit Union, PNC, and USAA. Support from banks is critical, but Apple has also ensured that American Express (the card), Visa, and MasterCard are on board as well, potentially bridging gaps the credit issuers (banks) might leave. This may ease the integration of debit cards too.  I reasoned several months ago that banking apps alone are potentially a major impediment to the growth of Windows Phone. Moreover, Apple Pay basically leapfrogs over Softcard (formerly ISIS) and Google Wallet.

Google Wallet ostensibly has the same retail exposure, but thanks to the carriers, in many cases, it was not available to consumers due to conflicting interests with Softcard (developed by AT&T, T-Mobile, and Verizon) or other services. The result was low exposure, coupled with Google’s hit-or-miss marketing, carrier bloatware, and 31 flavors of OEMs in the mix.

Apple continues to write its rulebook by which it directs its interaction with the wireless industry in the United States. The devices have everything Apple wants and zero carrier bloatware. It is an example where a company with the resources to do anything, and the will to use those resources, breaks through potential barriers as if they do not exist. Even where Apple does not hold similar market share to the US, iOS is a wholly unaltered experience out of the box. Windows Phone can make a similar case, but Microsoft does not have the wherewithal or market influence to follow Apple's example.

The Apple faithful can rightly argue that mobile payments will now become more mainstream. I’m in Northern California which is not exactly a backwater to technology.  You know how many people I’ve actually seen pay for something with their phone (not counting scanning a Starbucks card)? Zero. None. Nada. Apple’s install base, while a smaller share than “big Android,” is ubiquitous, and that lays the groundwork for setting tangible benchmarks by which all others will be measured.

A fenced-in world pays off


Between market share, wide adoption by OEMs, the near ubiquity of Android, and the partitioned, controlled, and integrated focus of iOS, we are seeing a two divergent paths of success. Apple owns the non-luxury high-end market in the battle of mobile platforms. The new iPhones give away nothing in terms of Apple’s intention to maintain that position.

It is not a perfect world for Apple, but the “PRO” column has far many more checkmarks in it than the “CON” column. The past several weeks and months have seen all sorts of leaks and concept renders about the iPhone, we read all manner of theories about an “iWatch,” and media along with industry analysts were intrigued by an Apple payment service.

This past week, Apple effectively delivered on all fronts, shifting the landscape of mobile again. The company has not been “first to market” with a lot of things, however, Apple made good in a way that only Apple could – it made sense of the technology that us geeks let ourselves get carried away with. For Apple’s existing consumer base, and likely a few converts, that will change everything, again.

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120 Comments

1. amiaq

Posts: 509; Member since: Jun 30, 2012

Happy departing from your money for less.

7. Vexify

Posts: 570; Member since: Jun 16, 2014

$120 for a 128g iPhone 6 Plus. $500 on contract my a$$.

14. hurrycanger

Posts: 1773; Member since: Dec 01, 2013

And where can you get it for that price? :3

20. Vexify

Posts: 570; Member since: Jun 16, 2014

Do some research :D A lot of people are doing it.

35. hurrycanger

Posts: 1773; Member since: Dec 01, 2013

Sure, you are that lazy you type a few words of something you already knew. Nope. Source or it's false info.

36. Finalflash

Posts: 4063; Member since: Jul 23, 2013

He showed an article laying out the math. It basically requires that you factor in future savings (about $600) when switching to a T-Mobile plan and then, in essence, using that money as a subsidy for your iPhone which after some effort makes it about $120. If, for example, you buy an equivalent Android phone using the same, you would be +$400 instead of -$120, but that would make too much sense to consider.

39. Mxyzptlk unregistered

iPhone is always worth the premium price.

64. meanestgenius

Posts: 22492; Member since: May 28, 2014

Paying more and getting less is never worth a premium price.

92. Mxyzptlk unregistered

Too bad that's not the case here.

97. meanestgenius

Posts: 22492; Member since: May 28, 2014

Too bad for you that's DEFINITELY the case. Learn to accept the truth. It will soothe the bum-burn.

98. Mxyzptlk unregistered

Maybe you should do the same with blackberry.

102. meanestgenius

Posts: 22492; Member since: May 28, 2014

Accept what? That BlackBerry is much in enterprise than anyone, including your precious Apple? I've always said that BlackBerry in the consumer market is a side gig for BlackBerry. They should treat it as such. But even with it being a side gig, they have created a handset that is superior to the iPhone, hardware and software wise(Passsport). I don't care how about how mmany millions of iPhones Apple will sell. That just goes to show you that simple people want simple things. I don't care about Apple's ecosystem. That means SQUAT in enterprise. BlackBerry owns the mobile enterprise market. That's the reality I've accepted because it's a FACT. Apple releasing sub-par handsets is also a fact. Accept the reality.

105. TheOldOne

Posts: 196; Member since: Mar 29, 2012

let's be a bit off topic then: everyone, including BB, got the revenue from the consumer market and not enterprize. It is true they got big contracts, but that's not where the big money were comming from. Right now, they are close to demise, only nostalgic ppl are buying it.

107. meanestgenius

Posts: 22492; Member since: May 28, 2014

Let's be be a bit off topic indeed: You really have NO IDEA what you're talking about if you think that BlackBerry's "big money" comes from the consumer market. BlackBerry's bread and butter has ALWAYS BEEN the enterprise market. It wasn't until they decided to devote too many resources to the consumer market and lose sight of what made them what they were that they fell on hard times. They stayed too long and devoted too many resources to a market that wasn't theirs to own. Why do you think they are concentrating more on ENTERPRISE and LESS on the consumer market? Those "big contracts" that BlackBerry has is where their big bucks come from. Enterprise spends more than consumers do, and enterprise, government and regulated industries aren't nearly as fickle as the consumer market is. You really don't know what you're talking about if you think they are close to demise. They own over 60% of the enterprise market. Whether you choose to believe it or not, companies can and have been surviving and flourishing in the enterprise market alone, without the aid of the consumer market. You really need to do some research before you post such nonsense.

114. TheOldOne

Posts: 196; Member since: Mar 29, 2012

I may be slightly wrong, but again, from your reply I see that I have a bit more info than you on this, you seem only to carry on the general ideea promoted by RIM itself that their focus was the enterprise and this automatically means that was also the case with the revenue. Let me bring this up to you for your consideration: the BB decline started when the smartphones started to be used by the general public. The enterprise market start moving their attention to smartphone segment way later, almost 2 years, and even then they were shy in signing with other manufacturers. I'm not arguing on what BB focus was on, this is clear, but the situation on where most devices went is a bit different. Also, this applies to the current smartphones as well; no mater how big are the contracts, there will always be more devices sold to general public, once pp are loosing interest in them you cannot stay afloat with few government (or big company) contracts. Not in the same way you did before. I work in telecom by the way, and I have some experience with government contracts, even tough not with US ones. Peace!

117. meanestgenius

Posts: 22492; Member since: May 28, 2014

First: The company name is BlackBerry now. RIM is no longer in use. That it seems you do not know this or are unwilling to recognize this makes me question what you know. I am well aware of when BlackBerry's decline started and why. I have always said that BlackBerry should never have gone into the consumer market in the first place, but seeing as how there was huge consumer demand for their products back then, they followed the money as any business would have. However, I respectfully disagree with you on the point of BlackBerry made more money in the consumer market than the enterprise market. Enterprise has always been what made BlackBerry the iconic handset and software services company that it was, and is now becoming again. BlackBerry does not need to cell tens or hundreds of millions of handsets a year to stay afloat and in the black. They only need to cell 10 million handsets a year for their handset division to remain profitable. Their software and services is what is their bread and butter, especially as of late. BlackBerry is now predominantly a software and services company. Even with BYOD being so prevalent in enterprise, government and regulated industries, BlackBerry is set up to create revenue to be profitable. Their MDM and EMM solutions are their to bring in revenue where they may be lacking in handsets.

115. TheOldOne

Posts: 196; Member since: Mar 29, 2012

Also, in order to use BB services, you need to have RIM switches and other equipment in your network. Integrating them is a pain the ass and you had to pay them license and maintenance. Once sales for BB declined and a mobile network sow more opportunity in smartphones, they ditched RIM. I sow this happening with almost all small networks I'm working in US. No more phones means no more BB data/email services and no more licenses/maintenance for RIM (this is your enterprise revenue), and here you have it. Let's not start an internet war here - I say this based o my sole experience, I don't have access to BB financial results nor the time to look at it if they are public. Probably you are right but then again what I've described above happen, I've seeing it.

118. meanestgenius

Posts: 22492; Member since: May 28, 2014

I am well aware of what equipment is needed for BLACKBERRY'S software to work. However, considering that BlackBerry recently added over ONE MILLION new licences for its BES software, I believe they are well positioned to create value and make profits in the enterprise space. They do not need to necessarily have handsets in play when the recurring fees from their MDM software and services is place. BlackBerry commands over 60% of the enterprise market. They are larger than their next 3 competitors the enterprise space COMBINED....and by far. Please do not misunderstand me: Handset sales are always good for a company in the mobile space. But that's just a PLUS for BlackBerry. They can create value for their shareholders and positive revenue for the company WITHOUT handsets, due to their software and services. MDM, EMM, and BES is where BlackBerry's main and most lucrative form of income is at, not handsets. I trust you are aware of BlackBerry's recent purchase of Movirtu. With this purchase, BlackBerry now has another very lucrative form of income. Enterprise and regulated industries will continue to adopt the virtual sim card. With this in place, BlackBerry will now make a profit off of every other OS's handsets sold in enterprise, be it Android, iOS or Windows. Why would there be an internet war here? I welcome a mature, intellectual, debate anytime. Have a good day.

87. steedsofwar unregistered

Say those that would buy any garbage with an Apple logo on it. Typical blind fanboi mentality. I know many iFan friends of mine who tell me they are too invested in the ecosystem and acknowledge the pricing is TOO high.

93. Mxyzptlk unregistered

Uh ok? Cool story

101. Astoni

Posts: 649; Member since: Sep 28, 2013

Okay whats so premium about the phone?

95. AlikMalix unregistered

What difference does it make if your processor is 10 times faster when iPhone is still faster/smoother/more enjoyable to use? You, and others do realized that we're not buying the sum of chips, LED's, alumenum, and battery? Where android people need their specs (you really do need it when using a third-party freeware for OS), iPhone people are buying a device that lets them tap into the iOS ecosystem - and that device actually does the job extremely well for extremely long time compared to competition.

96. steedsofwar unregistered

First, I didn't say ANYTHING about processors and RAM. Even though it is iFans bragging about 64bit processor LOL. And retina high resolution display. Second, mate, stop lying. I have seen lag on idevices that I reproduce each time, from invoking spotlight keyboard to pressing the home button. Even swiping away notifications, apps in memory swipe away is often non responsive.

52. hurrycanger

Posts: 1773; Member since: Dec 01, 2013

Oh then I may go check out that workaround. LoL. At least it sounds more fun than the contract price or $0 down monthly payment craps (which ends up costing the same as the full price). And sorry, Vexify, for calling you lazy. It was sure more than a few words. XD

61. Vexify

Posts: 570; Member since: Jun 16, 2014

Oh no booo hoop -$120 lmao! Id pay $120 ANY day over any crapdroid phone that isnt a Nexus 5 or LG G2, G3, Note 4.

71. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Lol I think it would be -$520 (compared to a nexus 5 even), by your math....

88. steedsofwar unregistered

LG G2 costs £275 brand new and off contract here in the UK.

80. sgodsell

Posts: 7579; Member since: Mar 16, 2013

There is no one selling the top end iPhone with 128gb for $120 on contract period. Good luck find one at that price. Also one glaring mistake by Maxwell R. is when he said "Apple owns the non-luxury high-end market in the battle of mobile platforms". Clearly you are not looking at the sales of smart phones. Just last quarter Apple sold 35 million iPhones last quarter. Out of that 28 million were high end iPhones. Android sold 255 million phones for the same quarter. Out of that 50 million were high end Androids. So sales would definitely dictate that Android is beating Apple in high end sales of smart phones. Not to mention the 84% that Android commands of the total sales.

31. Rizchy

Posts: 61; Member since: Jan 17, 2014

Giggity giggity goo. :D

40. magnanimus

Posts: 565; Member since: Mar 29, 2013

This probably isn't any of your concern but I just want to let you know of my experiences with my Android device. I use an LG G2 and I've been using it for a year now and 3 months into using this phone has pushed me to flash cyanogenmod because I just couldn't stand the LG UI (laggy and ugly IMO). Cyanogenmod has proved to be a very good custom ROM but I do get glitchy problems here and there where I have to google the solution. These problems have grown with the current version of the ROM and my phone app doesn't even function properly. I've been reduced to using my iPod 5th gen for most of my daily tasks but calling. Even asphalt runs better on this thing using a 4S chip than my LG (the LG starts to stutter after some minutes). Apps like IGN, 9GAG, Pinterest have better support on my iPod. I do all the customisation I want on my LG until I realised I need to do away with them if I want a snappy device. Anyway the thing is I modded my phone to get a snappy experience and this has caused problems for me. Say all you want about the iPhone but it actually works (I'm considering the iPhone works just like my iPod). And if you actually have the money you won't be disappointed. I would give you a potato for the long post but there's no way to. Thanks for reading.

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