Apple Focuses on X Appeal with the iPhone XR, XS, and XS Max

Sort of. It had the SoC of the 6s and the rear facing camera of the 6s, but the cheaper Touch ID and front facing camera of the 5s. Plus, of course, the casing, battery, lightning port, speakers, and headphone jack of the 5s (though of course most of those are negligible costs.)

And iirc the 6s sold in nowhere near the volume of the 6, and it’s possible that Apple may have over-committed to a higher number of A9 chips than they actually used, so this was a way of selling another device to increase the production.

That was not my point. The point was that if Apple were to make a new SE (as in a new small device), they would have to find a way to engineer XS internals into a much smaller enclosure → space constraints, heat management, power requirements, etc. That is difficult and hence most likely costs money. Now if Apple is faced with something that is likely expensive to do, but promises only limited revenue you could start to understand why they might not be particularly interested.

I note that people here aren’t even in agreement regarding the premise. No wonder we don’t agree on the consequences. ;)

That is certainly more reasonable cost wise but doesn’t address the HUGE factor :frowning:

(not your fault of course)

Diane

That was not my point.

It certainly read that way, but I’ll take your word for it.

And it might not even be possible to reduce XS internals at this point. They probably would have to invest a lot of money and human resources to shrink them down.

I can tell you personally, and I have a number of friends who are also a fan of smaller form factors, we’d all be more than happy to pay over $1000 for a 4 inch class phone. We happily paid top dollar for the biggest storage possible on the iPhone 4, 4S, 5, 5S, and we reluctantly accepted the older internals and compromises of the SE after our shock and abhorrence of the HUGE iPhone 6 and iPhone 7.

I paid a crazy amount of money for the iPhone X 256GB because my SE was lost/stolen, and I’m in love with the tech, just not the size. I would pay that price and more for a 4 inch version. My friends have said the same (but they still had SEs to skate by with, and are now debating between XS and XR, and might even just see how iOS 12 runs on the SE for another six months in hopes of an SE-class revival in the Spring.

No, Apple is simply not serving a large part of their market, many of whom are clinging to SEs, others who reluctantly buy the smallest version with the least memory they can buy of the current phones, or buy used.

If they had updated the SE each year with newer internals and features, it would have continued to sell in good quantiles, and it would have effectively cannibalized sales from the larger phones. I will stand by that opinion, full stop.

Side anecdote: my local grocery store only had shelf space for about a dozen of a particular product I buy; I was rarely able to find even one, let alone the quantity I wanted to purchase each week or two (when I would buy double to make up for the missed week). I complained again and again; finally the store manager told me they didn’t stock more because there wasn’t enough demand. I replied, how can you possibly know what demand truly is if you don’t have any on the shelf to offer? I have to drive across town to your competitor to fill your demand, each and every week!

It’s not exactly the same, but it’s close enough: Apple killed much of the demand for the SE through sheer neglect; the exact same demand they are killing with multiple Mac lines; Mac Pro (five years without an update); Mac mini (four years without an update; even more without substantive update); MacBook Air; etc.

No, what Apple lacks is time, focus, engineers, and manufacturing capacity for multiple lines. There is a sweet, fat, profitable market for small phones that no one is taking advantage of, because it is simply not as big as that of big phones. And, I guarantee you if Apple offered a best-of-class 4 inch phone, Samsung, Huawei, et al, would chase the same market.

The same is true for Mac; Apple believes the Mac market is shrinking (in part) because they are not devoting enough resources to making each and every mac line the best it can be, as well as offering affordable versions in the same or related lines; I am convinced YoY Mac sales would go up, overall, if they hadn’t neglected them all (and hadn’t made terrible missteps like the 2013 Mac Pro).

Don’t even get me started on the market for expandable mid-tower Macs; I am/was a consultant who dealt with businesses buying in the hundreds and thousands of units who want Macs, but can’t work with the mini, the iMac, or a MacBook; and for whom even a full tower Mac Pro, were it still sold, is overkill; they want Core i5 (now Core i7) mid-towers with 2-3 slots and user-expandable drives/memory. Apple’s “Sweet Solution” of adding everything externally quite simply does not fly. Externals are more expensive, more complicated, easier to lose/steal, and become buggy and unreliable. See? You got me started, and it’s taking extreme will power to end this rant.

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I agree wholeheartedly with this.

Lackluster Mac sales are the direct result of deliberate neglect on Apple’s behalf. During 3Q18 Apple sold fewer Macs than in any quarter since 2010 [1]. The poorest Mac sales quarter in almost a decade! Well, that was the same quarter Apple was selling an almost entirely outdated lineup. Except for the iMac Pro all Macs were held over 2017 models still selling for the same prices they debuted many months ago. Meanwhile newer components had become available, the older components they were using had dropped in price, and the rest of the computer world had moved on.

If Apple is selling fewer Macs it’s because of their own choice to let the platform wither (why bother with Mac when you’re making $300 of pure profit off of every single phone you sell?). Despite what Apple says, their actions and their conduct strongly indicate they don’t really care about Mac as a platform anymore.

Lesson Apple should take: Keep the Macs updated.
Lesson Apple will take: People don’t want Macs anymore.

[1] Apple Sold Fewest Macs in Any Quarter Since 2010 as Nearly Entire Lineup Was Outdated - MacRumors
https://www.macrumors.com/2018/08/15/apples-notebook-share-took-a-hit/

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Hah! Yes, you do get to say that as a fellow native (I was born here), but I was merely trying to make the point that it’s not just an online phenomenon. The people I’m thinking span the gamut from locals from the outlying rural areas to graduate students and professors at Cornell.

I should also clarify what I mean by a 4 inch class phone: I need a phone that is roughly the size of the iPhone SE frame; the screen could presumably take up most or all of that surface area. It could even be somewhat wider or taller, just not by much. I’d even be more than fine with it being thicker, if that meant better battery life or camera or whatever; I absolutely loved the weight, size and thickness of my iPhone 4.

There are just a ton of people, those with small hands, those with dexterity issues, and those with smaller pockets (yes, I’m directing this towards women, as well), who both want and need a smaller phone than is offered.

It’s exactly the same for me.

To keep beating this horse, give me a mostly bezel-less iPhone 6 or an absolutely bezel-less iPhone 6 Plus.

Well the SE has an overall diagonal of 5.4" (4.87"x2.31") so you’d think you should be able to integrate a 4.7" display if there were only very slim bezels (different aspect ratios though).

frederico

    September 18

MMTalker:
They’re not gambling on this. Costs to manufacture SEs have most probably gone up, and people who do love their current SEs and are willing to spend $500 probably will not want to spend $600+ for the same thing that might not be able to run the latest and greatest software.

I can tell you personally, and I have a number of friends who are also a fan of smaller form factors, we’d all be more than happy to pay over $1000 for a 4 inch class phone. We happily paid top dollar for the biggest storage possible on the iPhone 4, 4S, 5, 5S, and we reluctantly accepted the older internals and compromises of the SE after our shock and abhorrence of the HUGE iPhone 6 and iPhone 7.

Groups of friends are not representative of the global smartphone market, or even the the US market. Although Apple sold fewer iPhones in 2017 than 2018, their profits were significantly higher, primarily because 2017 new models soared through the roof globally. The average selling price for an iPhone, as of July 31, as of $724, and larger iPhones were responsible for this increase.

https://www.bloomberg.com/news/articles/2018-07-31/iphone-s-average-selling-price-helped-revenue-gain-17-chart

Apple has been growing its profits in a market that, except for a few countries, is pretty much saturated. Though people do upgrade their phones more frequently then their PCs or Macs, not as many people are upgrading their phones as they used to, which makes iPhone profit growth even more astounding. If they want to continue to grow revenue and become the first two trillion dollar company, they need to maximize profits.

No, Apple is simply not serving a large part of their market, many of whom are clinging to SEs, others who reluctantly buy the smallest version with the least memory they can buy of the current phones, or buy used.

If it was even a minimally significant portion of the market, Xiamo, Samsung, LG, Huawai, etc. would have jumped in with a slew of 5 inch models at lower than the SE, but they haven’t. And I haven’t heard they intend to.

People aren’t upgrading their smartphones or computers as quickly as they were, and I think Apple is stressing the longevity of its hardware as well as the years of regular software and security upgrades it offers to convince people to buy into the whole ecosystem, not just a piece of hardware. Samsung, etc. aren’t in any kind of position to do this. Google hasn’t been terribly successful with hardware and can’t risk getting overly competitive with companies that provide devices their advertising business is dependent upon.

If they had updated the SE each year with newer internals and features, it would have continued to sell in good quantiles, and it would have effectively cannibalized sales from the larger phones. I will stand by that opinion, full stop.

Even if this were true, they couldn’t rake in enough profits on the hardware. And people with the smallest sizes tend not to shop much online, subscribe to streaming services, play games online, make in-game purchases. Last quarter Apple’s services revenue grew 31% from the previous year to $9.55 billion when analysts predicted revenues would be even with the previous year at best:

https://www.cnbc.com/2018/07/31/apple-q3-2018-services-revenue.html

Larger phones play a bigger part in the a-z shopping process more and more. People are using phones for work more and more, and not just for phone calls and email. They’re using phones more and more for entertainment. They are taking more photos and videos and want more physical and cloud storage space.

On top of its current services, Apple will be launching a streaming video service. They bought the paid, all you can read magazine service Texture to improve News and bulk up its subscription revenues. This is on top of the App Store, iTunes, Apple Pay, etc., and there are more services on the horizon. R&D spending on larger phones leads to more profits from Services.

Apple killed much of the demand for the SE through sheer neglect; the exact same demand they are killing with multiple Mac lines; Mac Pro (five years without an update); Mac mini (four years without an update; even more without substantive update); MacBook Air; etc.

It’s strategy, not neglect. Desktop and Laptop PC and Mac sales show significant sales declines year over year.

No, what Apple lacks is time, focus, engineers, and manufacturing capacity for multiple lines. There is a sweet, fat, profitable market for small phones that no one is taking advantage of, because it is simply not as big as that of big phones. And, I guarantee you if Apple offered a best-of-class 4 inch phone, Samsung, Huawei, et al, would chase the same market.

Apple would, at best, not turn a profit on a high end four inch phone, and the few people who would buy it are not likely to buy or stream much.

The same is true for Mac; Apple believes the Mac market is shrinking (in part) because they are not devoting enough resources to making each and every mac line the best it can be, as well as offering affordable versions in the same or related lines; I am convinced YoY Mac sales would go up, overall, if they hadn’t neglected them all (and hadn’t made terrible missteps like the 2013 Mac Pro)

Individuals and businesses are doing more and more on their mobile devices and using PCs and Macs less; they are upgrading less often. And people who buy iMacs, MacBooks and Pros, pay more money for them because of the quality of the screens, internals and externals. They get regular security and software updates and in major software versions are released every year. They give away free photo, productivity and business software. Excellent repair, support and fun stuff are offered in Stores across the globe. Most important, you get beautifully designed, user friendly and high quality products and services that all work beautifully together. And Apple stuff just looks great.

Steve Jobs got fired after he fought against cutting corners and lowering prices of Macs and look what happened.

Oh, my, word, I feel like I’m in a political discussion of the current climate in this country. And you’re not doing your argument any favors by quoting CNBC and Bloomberg.

No, but again my consultancy and interface to large successful businesses, as well as my peers, and their respective relations with even more businesses, and all the forums that we all read, and the numerous articles by pundits who have also been in contact with businesses and consumers alike around the world, all say the same thing: there is a market, however small, however unproven, for what we have been calling 4 inch class phones, but are really potentially 5 inch, bezel-less phones. Apple didn’t sell them until last week because they weren’t selling.

Do you not remember the articles quoting Apple press releases and Tim Cook himself, touting the surprise and delight of the very strong demand and success of iPhone SE sales? And that was just the pent-up demand for what was essentially a barely updated iPhone 5s. Can you really not imagine what kind of sales and demand there would have been if it had all the latest technology available in the iPhone 6 at the time, or features and tech that came to the next year’s iPhone 7?

Sure it was an inexpensive option at the time, and rightly so, because it had an older processor, built on an older chassis, with older and lesser components, such as first generation touch ID instead of second generation touch ID which was available if they have desired to boost the sales price, but instead they went after the low-end market, and didn’t give the high-end market a chance.

No, sorry, all that proves is the ASP was higher because the phones were more expensive; that they happen to be bigger is no proof at all that a more expensive 5 inch class phone could not sell at or drive the same ASP, or even at a higher ASP, or even a lower ASP that has a an even higher profit margin just because Apple wants to gouge that market a little more for its trouble.

Just more evidence to support my point: build a 5 inch phone with the best possible technology you can put in it, and charge us out the ass for it. It will sell, and it will drive profits.

If it doesn’t sell, you will prove that it was a failure, but you Still will have sold all of its inventory and all of its production, and I can’t begin to believe that it wouldn’t at least give you a full ROI and plenty more, even if ultimately it isn’t worth continuing.

Sorry, I’m not going to take the examples of perpetual followers to indicate that they know the market better than Apple; Apple invented the market, and Apple has always led the market, with the one exception of releasing big ass phablet phones like LG, Samsung and Hauwei did while they were throwing literally every size and class of phone at the wall to see what would stick in a desperate bid to catch up with Apple. It was sheer dumb blind luck that Samsung captured the big phone market before Apple got around to it.

And what happened when Apple finally did release the iPhone 6? They got a massive number of big phone android users to jump ship (as touted each and every quarter by Tim or Luca) padding the numbers far more in my opinion, then the “pent-up demand of Apple users“ who were waiting for the big phone.

Yes plenty of Apple users were indeed waiting, but not entirely because of the size; tons and tons of people were absolutely content to sit on their 4 and 4S and 5 and 5S phones because there weren’t gigantic leaps in features and technology — especially cameras; and your other point that people are not upgrading as rapidly had at that time definitely become to take effect, because people had realized how much they were spending on these very expensive phones, and Apple was doing a great job of updating the software each year so that they remained completely functional and useful, until the batteries were wearing thin.

People then made choices to either buy new, or take advantage of one of the now incredibly common and inexpensive third-party battery replacement services, which prior to 2015 weren’t nearly as common or inexpensive; and are now found in vans on every fourth street corner and big box parking lot.

Yup. And SE (and even 5S!!) owners are being allowed to cling to them via iOS 12 precisely because Apple has recognized their value.

And, as stated, aren’t natural leaders in the first place. They will tailgate wherever Apple leads them. Don’t forget Samsung knows exactly what size iPhones Apple will make at least 18 months before we ever see a leaked case blueprint.

Why? Again, why? The 5S sold for $650 and as high as $850; just like the 5 before it. The 6, 7 and 8 had bigger screens and bigger batteries, thus bigger costs, and went up, accordingly. The iPhone X introduced a barrage of very expensive new tech and production costs, and the price shot up again. Inflation, politics and tariffs are hitting this year, and even previous models have not dropped as low as we might’ve expected.

So where is your proof that a smaller phone, packed with current tech, and priced accordingly, won’t sell?

Prove it. Apple has never released numbers showing iPhones 4-SE owners are cheapskates or don’t consume. And don’t point to baloney reports by Canalysis and the like. Spotify and Tidal and (one other I cant recall) used to tout subscribers by device, and small iPhones always made up a substantial portion; you don’t need a big phone for streaming music; you need a good data connection. If big phones increased streaming, it’s because they had better radios.

Big time gamers definitely drove big phones; but gaming did just fine on small phones before them. Crashes like Pokémon and AR games and GPU intensive games are what really drive new sales; if you want to play awesome games, you need a chip newer than offered in the SE, not necessarily a bigger screen.

TV and movies? Sure, bigger might be better; but that doesn’t stop users from balancing other needs, and smaller hands and smaller pockets and smaller tastes still exist; you can’t assess the demand until you line up two devices with identical or at least very comparable features and speeds except screen size.

And you can guarantee this is entirely because Apple sells bigger, more expensive iPhones? Nothing to do with an existing user base, adjusting to a new paradigm of cloud services and subscriptions being, better, more convenient, and even necessary? And said services becoming better, richer, and more cost-attractive? And Mac (and PC) users have nothing to do with it, either?

Yup. And small phone users do a hell of a lot more than calls and emails, too, just like they did starting with the original iPhone. And still do with SE and older.

Yuppers, again; and small phone users want to do all of this, too, and are pretty chuffed they are stuck with a three year old A9 and even older camera and at best 64GB of storage.

Again, all you can prove is that people are spending more on services; you have zero breakdowns that can prove any more (proportionately) is coming from one phone over another, or from a Mac or an iPad. Are there more iPhones than other devices? Yes; without question; but the mere fact they own an iPhone is the only proveable driver of paying for iCloud, Apple Music, AppleCare, etc.; those same iPhone owners may well own an iPad and a MacBook and a Mac; which device gets credit for the services sales? The iPhone? Why? Because it’s bigger than an SE?

It’s a strategy, I will give you that much. But you are talking out of your other orifices if you are trying to seriously tell me that the Mac Pro debacle is a strategy; they didn’t hold an apology press circle last year to brag about their “strategy” regarding the Mac Pro.

The Mac Mini is yet another example of what is can only be called neglect, or if you must, a failed strategy. We can throw a lot of blame on Intel you want, but it’s still a failure.

Um, yeah, recently; but it wasn’t very many quarters ago that Apple kept bragging year after year about year-over-year increases in Mac sales that was outpacing, or even acting against the decline in PC sales. I will proffer the position once again that Mac sales would absolutely be better if Apple had been offering new and up-to-date technologies and best in class features and performance.

Gigantic missteps like taking away too many ports and beloved features like MagSafe; failing to drive and really support USB-C; offering hated keyboards and ill-received features like Touchbar; repeatedly refusing to offer better GPUs and limiting max RAM in favor of thinness and narrow edges (thus less battery to support said features) kept people who were desperate to upgrade clinging to two and three and even five and eight year old MacBooks and MacBook Pros; doing almost nothing but drop the price on the MacBook Air drove sales early on, but is anyone knowingly, happily buying that model in large numbers today? If they are, they are desperate, foolish, or being sadly misled by Apple Salespeople.

How many years have we been begging for retina displays on the lesser models? We’ve proven we’ll pay more on the high end, but Apple can’t be bothered to update to what has to be cost effective by now.

Can you prove this? I can’t either. Only Apple can prove this by building a 5 inch powerhouse with at least a great, if not best in class camera, and Face ID; or a 4 inch class phone with Touch ID. OLED is an optional gamble. I maintain an LED could compete with the XR, and an OLED could compete with the XS. I’d bet Apple could even sell them at the same price, claiming that smaller costs more to produce (because of expected ROI, of course, not materials or line production).

Baloney, on multiple fronts; especially given an equal or nearly equal sales price; you are basing all these assumptions — assumptions — on a $379, three year old CPU in a five year old frame.

The iPhone 5C didn’t bomb because it came in colors; it bombed because it was quickly a three year old, storage-limited design in a cheap plastic case; it succeeded as much as it did not so much on cost as it did colors. I can introduce you personally to two dozen people, mostly women, who downgraded and bought it for the colors, period; and clung to it for the size until it wouldn’t upgrade to iOS 11. They can afford any phone they want, but want things Apple isn’t offering on the top end. They’ve all said they’re buying XRs, because the XS, though admittedly way nicer, doesn’t come in yellow or red or choral.

And, guess what, not only do they generally buy mid tier storage or the largest, they also buy Apple cases, and, to your assumption above, pay for extra iCloud storage to easily back it up, and some subscribe to Apple Music and all buy (and use numerous times paying deductibles) AppleCare.

Yes, of course they are doing more on mobile; everyone is doing more on mobile as software apps mature and become closer to desktop replacements, and hardware becomes fast enough to support them; but they still have laptops and desktops. Those businesses I talked about? They buy MacBooks and MacBook Pros, but they won’t buy Macs for the aforementioned reasons. They buy MacBooks less often because of the lack of compelling features and improvements; indeed, even loss of features and “improvements.”

You want to talk about pent up demand? It’s there, believe me. These companies buy Dell and HP every 24 months on average, 36, tops; and would rather buy Macs if they were as flexible as fast; cost isn’t the primary issue, at all; they know they’ll get 36 -48 months out of a Mac, and they’ll still do 24-36 and instead reap the resale value to keep their employees happy and productive.

Now you’re getting it! And all you have to add is current, best in class CPU/GPU and flexible expansion, and lots of ports, and less Courage, and you’re back in with a huge PC buying market.

If anyone is arguing Apple is supposed to cut costs, prices and corners here, it’s you, not me. I’m 100% for Apple maintaining its traditional 36%-42% margins, but they need to apply them to products that deserve to cost more than the competitors can offer using the same chips from the same vendors built by the same assemblers and suppliers. If Dell, et al, can design and produce a new mobo every year that fits in the same case, and operate on less than 15% margins, so can Apple, and I’m sure do it better. Other vendors just use Intel reference boards, and they stay in business, too, on sub-10% margins.

Apple could stuff an Intel Nuk board in an existing Mac mini case with two 2.5” drive bays and sell them for 50% more, and people would eat them up because of no other reason than it runs macOS and is supported by Apple.

Apple could’ve kept the cheese grater form factor through till today, if they just kept stuffing it with faster internals and busses; a 2014 Mac Pro full tower with even the speed-hampered Xeon available, but with SATA III, PCI 3.0, Thunderbolt 2, USB 3, Bluetooth 3, and WiFi g/n would’ve sold five times or more what the trash can did. A 2016/17 with NVMe, TB3, USB 3.1 and BT4 and terabit Ethernet would cycle yet again. And 2018? With the Xeons Intel finally delivered, along with the Samsung Polaris controller in the iMac Pro? And an nvidia 1080 Ti option?

Apple has been leaving massive margins and increased profits on the table for most of eight years; six, for sure. Longer if you add in that midtower market we all know exists that would barely cannibalize the Pro market, but would more than make up for it with PC and hackintosh switchers.

Respectfully, and Cheers

F

I think we should wind down this discussion of the iPhone SE and smaller form factors—it’s veering into the weeds.

but I was merely trying to make the point that it’s not just an online phenomenon

I did understand your point, although I do at times think that Ithaca is a VR representation of an Internet forum.

Apple didn’t sell them until last week because they weren’t selling

Yes, that’s what I’ve been saying. Anecdotal or “they’re telling me in email” is not really evidence of anything else. The bottom line is – thousands of words aside – if there was a substantial market for sub 4.5 inch phones, SOME manufacturer would be aiming for it with a frontline model.

They’re not.

They will now.

Apple was the only company who got it to work. They had shoved everybody else out of the market for small quality phones. They totally owned it.

And now they gave that up. Watch others gladly try to gobble up that slice of the pie.

OK, no more posts about the iPhone SE. If anyone wants to talk about what’s actually new, that’s fine, but I’m going to delete all future iPhone SE posts in this thread.

What I think got lost in the kerfluffle is that Apple no longer thinks of screen size as going along with price. The XR – the new budget model – is larger than the XS. They think the vast majority want a larger screen, and they’re differentiating on other things now.