Other Apple needs a true budget phone

[tonybarnaby]

I played with my friends new $480 Pixel 3a XL today and it’s crazy how much phone you get for $500 and change after taxes. This is a brand new, midrange phone with pretty decent specs. The most important things from the more expensive 3 XL are there: stock android, rear camera and google support. It loses a front camera, some processor speed, lower resolution screen and a few other things. But it actually gains better battery life (bigger size) and a headphone jack. The 3a is even cheaper, and still solid.

If you have $500 to buy a phone, Apple has nothing for you except for a phone several years old and refurbished.

If they want to charge $1600 for the next Max, that’s ok with me. They are missing out on people who want midrange phones at affordable prices. $500 is as much as a lot of people will spend for a phone, and Apple has nothing new for them. If the se successor comes out, there’s no chance it’s $500. It’s hard to go into a store and pay $500 for a refurbished 7 or 8 when you see a phone like the Pixel 3a series.

 

[willmtaylor]

No, they obviously don’t. They’ve always operated on much higher margins, and they don’t seem to have much motivation to do anything different.

(I’m sure they’ve done the math for themselves.)

 

[Apple_Robert]

Hardware is meaningless without good OS implementation and integration.

Apple for the win.

 

[tonybarnaby]

No, they obviously don’t. They’ve always operated on much higher margins, and they don’t seem to have much motivation to do anything different.

(I’m sure they’ve done the math for themselves.)

Believe me, I know Apple are far smarter than I am, but it is inevitable if they made a $499 phone, they would gain new users by the boatload. I’m sure if Ferrari made a $35k car, it would also be a massive hit with people who have always wanted one but couldn’t afford it.

The SE was proof that people love cheap iPhones. Most people who owned it picked it up because it was cost effective. My buddy works at a phone store, and people come in all the time asking for the cheapest iPhone. They don’t know the difference between a Max, a pixel or a galaxy. All they know is they want an iPhone that is the lowest price. A $499 iPhone would be the best selling phone year in and year out.

 

[dcpmark]

No, they obviously don’t. They’ve always operated on much higher margins, and they don’t seem to have much motivation to do anything different.

(I’m sure they’ve done the math for themselves.)

Yeah, was thinking just the same. It’s like saying Mercedes needs a budget car to compete with Toyota. They could just have decided that they are not interested in customers below a certain monetary threshold, and leave budget phones to other manufacturers.

 

[tonybarnaby]

Hardware is meaningless without good OS implementation and integration.

Apple for the win.

I agree 100%. I can thankfully afford a new iPhone, but many people can’t and are stuck with Android due to the price. Apple could make a stripped down $499 iPhone and sell them like crazy I feel. Everyone should get a chance to own a new iPhone, even if it’s a budget device.

 

[willmtaylor]

I agree 100%. I can thankfully afford a new iPhone, but many people can’t and are stuck with Android due to the price. Apple could make a stripped down $499 iPhone and sell them like crazy I feel. Everyone should get a chance to own a new iPhone, even if it’s a budget device.

The quality would have to be subpar at that price point and those margins. That would mean the perceived value would diminish—along with Apple’s allure and reputation.

 

[tonybarnaby]

The quality would have to be subpar at that price point and those margins. That would mean the perceived value would diminish—along with Apple’s allure and reputation.

This isn’t a $4000 handbag. There isn’t “allure” to an iPhone in 2019. It’s the best phone available in my opinion, but it’s not a fashion statement anymore.

The quality wouldn’t have to be subpar. They could make the phone with an older chip and a smaller/lower resolution screen and do just fine.

 

[Shirasaki]

SE is an iPhone with mostly recycled parts and chassis. It is also meant for people preferring smaller iPhone than any other iPhone. But Apple’s customer shows apple they don’t want a slightly budget iPhone when they buy iPhone 5s but not iPhone 5c. Even the XR is not that cheap compared with other android counterparts. In short, Apple is not known for budget and lower tier customers. Their use of premium materials and top tier internals helps them keeping the price high.

 

[retta283]

The iPhone has never been cheap, and never will. Apple's price increases are unlikely to go up or down soon. Sadly they are not interested in the budget market. More so they aren't interested in the budget pricing...

 

[Shirasaki]

This isn’t a $4000 handbag. There isn’t “allure” to an iPhone in 2019. It’s the best phone available in my opinion, but it’s not a fashion statement anymore.

The quality wouldn’t have to be subpar. They could make the phone with an older chip and a smaller/lower resolution screen and do just fine.

Then they would need to have something that they can recycle en mass. Maybe another recycled iPhone SE2.

Yes. One can always hope.

 

[willmtaylor]

This isn’t a $4000 handbag. There isn’t “allure” to an iPhone in 2019. It’s the best phone available in my opinion, but it’s not a fashion statement anymore.

The quality wouldn’t have to be subpar. They could make the phone with an older chip and a smaller/lower resolution screen and do just fine.

I didn’t say it was a handbag. It’s a PHONE! Didn’t you read my post at all?

No, but seriously, perception is reality and in many markets and with many demographics, Apple’s phones are still regarded as the best and the highest of quality.

Selling cheaper low-margin handsets would hurt hay perception, and perception IS reality.

If one wants a cheaper phone with an older chip, one gets last year’s model or buys used. It’s better for the environment anyway.

 

[tonybarnaby]

I didn’t say it was a handbag. It’s a PHONE! Didn’t you read my post at all?

No, but seriously, perception is reality and in many markets and with many demographics, Apple’s phones are still regarded as the best and the highest of quality.

Selling cheaper low-margin handsets would hurt hay perception, and perception IS reality.

If one wants a cheaper phone with an older chip, one gets last year’s model or buys used. It’s better for the environment anyway.

People are weird. You will see it on here all the time where people will say “I know the iPhone X is a good phone and I can get it for a nice deal, I just don’t wanna pay good money for an old phone”. People would probably have an easier time buying a 2019 stripped down iPhone for $500 than a 2-3 year old flagship for the same price.

 

[willmtaylor]

People are weird....

No argument from me there!

 

[Shirasaki]

People are weird. You will see it on here all the time where people will say “I know the iPhone X is a good phone and I can get it for a nice deal, I just don’t wanna pay good money for an old phone”. People would probably have an easier time buying a 2019 stripped down iPhone for $500 than a 2-3 year old flagship for the same price.

The thing is, even if they buy 2019 stripped down iPhone, they still buy outdated internals and specs anyway. What’s the main difference between buying a used iPhone than buying a stripped down current iPhone? It doesn’t look like the software support will go any further because it is “newer”.
I agree with you. People are weird with weird mindset, including myself (ignores 12.9” iPad entirely until now, and ignore 512GB option for an iPad that carries videos).

 

[AZhappyjack]

Believe me, I know Apple are is far smarter than I am, but it is inevitable if they made a $499 phone, they would gain new users by the boatload. I’m sure if Ferrari made a $35k car, it would also be a massive hit with people who have always wanted one but couldn’t afford it.

The SE was proof that people love cheap iPhones. Most people who owned it picked it up because it was cost effective. My buddy works at a phone store, and people come in all the time asking for the cheapest iPhone. They don’t know the difference between a Max, a pixel or a galaxy. All they know is they want an iPhone that is the lowest price. A $499 iPhone would be the best selling phone year in and year out.

Apple is not interested in that segment of the market. They never have been. The original iPhone was $499/599... and they've never been less for an outright purchase price. They never will be.

And in your Ferrari analogy, the $35K model that you want would not even resemble the $220K entry level Portofino.

 

[tonybarnaby]

Apple is not interested in that segment of the market. They never have been. The original iPhone was $499/599... and they've never been less for an outright purchase price. They never will be.

And in your Ferrari analogy, the $35K model that you want would not even resemble the $220K entry level Portofino.

The iPhone cost a lot when it first launched because it was the first of its kind. There were no previous models to recycle. I feel like they would make a killing if they released a budget phone. Everyone would know it was a budget phone, it wouldn’t diminish the brand at all. Release the 6s again with a modern camera and 64gb storage and sell it for $500. Call it the XST or whatever you want.

 

[Shirasaki]

Release the 6s again with a modern camera and 64gb storage and sell it for $500.

That’s exactly what iPhone SE does.

 

[tonybarnaby]

That’s exactly what iPhone SE does.

SE is too small for the vast majority of people. I have a feeling the SE sells well based on price, not because people are clamoring for a tiny phone. The 6s feels nice in your hand.

 

[Shirasaki]

SE is too small for the vast majority of people. I have a feeling the SE sells well based on price, not because people are clamoring for a tiny phone. The 6s feels nice in your hand.

Rumour says Apple will shrink XS size down a bit and bump max size a bit in 2020. We will see.

 

[eyoungren]

I played with my friends new $480 Pixel 3a XL today and it’s crazy how much phone you get for $500 and change after taxes. This is a brand new, midrange phone with pretty decent specs. The most important things from the more expensive 3 XL are there: stock android, rear camera and google support. It loses a front camera, some processor speed, lower resolution screen and a few other things. But it actually gains better battery life (bigger size) and a headphone jack. The 3a is even cheaper, and still solid.

If you have $500 to buy a phone, Apple has nothing for you except for a phone several years old and refurbished.

If they want to charge $1600 for the next Max, that’s ok with me. They are missing out on people who want midrange phones at affordable prices. $500 is as much as a lot of people will spend for a phone, and Apple has nothing new for them. If the se successor comes out, there’s no chance it’s $500. It’s hard to go into a store and pay $500 for a refurbished 7 or 8 when you see a phone like the Pixel 3a series.

Your argument makes total sense…if we assume that all Apple is concerned with is making money and acquiring customers.

But if you take all of Apple statements about their goals and vision over the years you cannot come to the conclusion that profit is all they are about.

Yes, just like any other company, Apple needs to sell products people will buy so that the company makes money, satisfies it's investors and continues to operate - and where that fits into their vision it's all fine and good, but it's not their sole focus.

I think there is considerable proof that Apple is more than willing to tell the customer to go to hell at this point. Or do we so soon forget what Apple takes away or pushes on us?

 

[PrettyWings]

I played with my friends new $480 Pixel 3a XL today and it’s crazy how much phone you get for $500 and change after taxes. This is a brand new, midrange phone with pretty decent specs. The most important things from the more expensive 3 XL are there: stock android, rear camera and google support. It loses a front camera, some processor speed, lower resolution screen and a few other things. But it actually gains better battery life (bigger size) and a headphone jack. The 3a is even cheaper, and still solid.

If you have $500 to buy a phone, Apple has nothing for you except for a phone several years old and refurbished.

If they want to charge $1600 for the next Max, that’s ok with me. They are missing out on people who want midrange phones at affordable prices. $500 is as much as a lot of people will spend for a phone, and Apple has nothing new for them. If the se successor comes out, there’s no chance it’s $500. It’s hard to go into a store and pay $500 for a refurbished 7 or 8 when you see a phone like the Pixel 3a series.

Are you saying there’s no front camera? Also, it’s Android. Part of what you pay for an iPhone is going to iOS.

I get what you’re saying, but they’re probably not going to come down on their prices, because they know they don’t have to. People will keep paying.

I just hope we’re not going to see prices continue to increase. Was barely satisfied with the XS Max itself. Any more money and it would bother me that I’m not getting exactly what I want for what they’re asking for.

 

[MacLappy]

I played with my friends new $480 Pixel 3a XL today and it’s crazy how much phone you get for $500 and change after taxes. This is a brand new, midrange phone with pretty decent specs. The most important things from the more expensive 3 XL are there: stock android, rear camera and google support. It loses a front camera, some processor speed, lower resolution screen and a few other things. But it actually gains better battery life (bigger size) and a headphone jack. The 3a is even cheaper, and still solid.

If you have $500 to buy a phone, Apple has nothing for you except for a phone several years old and refurbished.

If they want to charge $1600 for the next Max, that’s ok with me. They are missing out on people who want midrange phones at affordable prices. $500 is as much as a lot of people will spend for a phone, and Apple has nothing new for them. If the se successor comes out, there’s no chance it’s $500. It’s hard to go into a store and pay $500 for a refurbished 7 or 8 when you see a phone like the Pixel 3a series.

The problem here.... is the Pixel 3A in some scenario feels like something from 4 generation back. Another words the iPhone 8 with an A11 chip would be a much better performer in spite of it’s age. Much less the iPhone XR which to me is the best value iPhone currently available.

Quoting Anandtech on pixel 3A performance

CPU - It was extremely snappy in everyday usage, and if all you do on a smartphone is social media-like activity, then you’d be hard to press to find any differences between the 3a and other flagship devices. Where the Pixel 3a more notably fell behind in was web browsing and loading of heavier pages. Here it was evident that there is indeed quite a generational performance gap and the mid-range SoC isn’t quite able to give the same experience.

GPU - Graphics performance of the Snapdragon 670 is something I admittedly didn’t have too much expectations for. The Adreno 615 of the chipset is a very cut-down version of last year’s Adreno 630 in the Snapdragon 845. In fact you shouldn’t be expecting much of an experience beyond light gaming. Over the rest of the GFXBench benchmarks we continue to see quite lower-end performance. In general the Snapdragon 670’s GPU performance is around ½ to 2/3rd of that of a Snapdragon 835 which puts it about 4 generations behind the top of the line right now.

Quoting Anandtech on iPhone XR

CPU - We’ve had the opportunity to test the newer generation SoCs from HiSilicon as well as Qualcomm, both employing Arm’s new Cortex A76 CPU cores. While both SoCs have shown fantastic gains, especially in regards to energy efficiency at peak performance, absolute CPU performance and ISO perf/W of the Android vendors are still very much lagging behind Apple’s best. As a result, these latest-generation Android SoCs are having trouble competing with even last year’s A11, never mind the A12. The new Exynos 9820 is the only other important chip for 2019 on which we don’t have data on – and I’m not expecting any miracle on Samsung’s side, which means the A12 and subsequently the iPhone XR will remain very much a top performer for the rest of the year.

GPU - Because of the relatively low screen resolution on the part of the XR’s display – a sub-FHD 1792×828 – I’ve had a lot of trouble actually getting workloads to push the A12's GPU to its peak frequencies in on-screen scenarios. This causes an interesting dilemma for the iPhone XR: It has absolutely abundant GPU performance that won’t be used any-time soon. As game developers on iOS will be targeting and tuning their workloads to run smoothly on the most demanding devices of a generation, it means that games will most likely be setting their baseline as the higher-end iPhone XS Max, which has to push over twice the pixel resolution. The net result is that for any given 60fps graphics workload, the iPhone XR will run cooler and with a longer battery life than what you would experience on the XS or XS Max. If gaming and gaming performance (and battery efficiency) is important for you, then the iPhone XR is definitely the phone to get. Not only does it deliver class-leading performance, but it also will be quite future proof in terms of performance thanks to the lower-resolution display.

 

[QCassidy352]

Believe me, I know Apple are far smarter than I am, but it is inevitable if they made a $499 phone, they would gain new users by the boatload.

Yes, but that's not their business plan. They want the high-end, high-margin part of the market, not to dominate marketshare with low-margin phones.

I can see why a company might want to go for marketshare instead (ecosystem, services, etc), but that's that's not their plan.

 

[TGM85]

Perception is reality and in many markets and with many demographics, Apple’s phones are still regarded as the best and the highest of quality.

Selling cheaper low-margin handsets would hurt hay perception, and perception IS reality.

If one wants a cheaper phone with an older chip, one gets last year’s model or buys used. It’s better for the environment anyway.

Indeed. OP should read about the economic theory of Veblen goods. Some items in the market are expensive because, as price increases, demand for them actually goes up. iPhones are Veblen goods. They're also an aspirational product, i.e. people aspire to be able to purchase an Apple device. Their high price is a big part of their allure.

Apple would lose a big part of their painstakingly built up image of exclusivity and high quality by releasing a low price budget phone.