WHAT’S THE IPHONE X
Starting at $999, the iPhone X is the most expensive iPhone ever released. It’s $200 pricier than the base model iPhone 8 — which itself is more expensive than Apple’s previous highest starting price for a base model phone.
The iPhone X has an edge-to-edge OLED screen, facial recognition technology and a display more vibrant and vivid than other models. But its guts aren’t too different from that of the iPhone 8 or the larger iPhone 8 Plus. Both phones have the same A11 Bionic chip, can support augmented reality apps and can be charged wirelessly using Qi standard technology.
That’s a big departure from the last time Apple introduced a lower-spec phone: the iPhone 5c, which debuted alongside the more sophisticated 5s in 2013.
“The iPhone 5c was a ‘good enough’ phone for developing markets. It was to get into China, India and Latin America,” said Jefferson Wang, a senior partner at IBB Consulting. “Here, the iPhone 8 is still the flagship phone. They haven’t bumped anything down. They created an ultrapremium layer.”
It’s a strategy that could help re-establish Apple as the premium smartphone brand. Apple products have traditionally been more expensive than comparable offerings from competitors, creating a sheen of exclusivity that has led to higher demand from those who want the latest and greatest. But
as the market for smartphones has become saturated and once-emerging markets such as China have matured, the iPhone has lost some of that sheen.
“Apple’s introduction of a $1,000 iPhone is consistent with its business strategy of differentiation and exclusivity,” said Loizos Heracleous, a professor of strategy at Warwick Business School. It’s “targeting the higher end of the market rather than just aiming for a larger base of users.”
The approach also has to do with market maturity. About three-quarters of Americans own a smartphone, according to the Pew Research Center. When everyone who wants the latest and greatest phone has gone out, lined up and bought it, it’s time to reach the people who don’t care as much.
With the announcement of the iPhone 8 and the iPhone X, Apple did not indicate that it would discontinue any previous models. That means the company now offers the 2015 generation of iPhone 6 and iPhone 6 Plus, the 2016 models of the iPhone 7, the iPhone 7 Plus and the iPhone SE, and the 2017 models of the iPhone 8, the iPhone 8 Plus and the iPhone X. “That means they’ve got the widest range of prices and models Apple has ever offered, (and) they’ve created five tiers of phones starting at $350,” said Frank Gillett, a principal analyst at Forrester Research. In other words, an iPhone for everyone — wealthy or not, earlyadopting fanboy or not. Having so many phones on the market complicates Apple’s supply chain, but the pricing strategy could help counterbalance material shortages, Wang said. For example, the OLED
screens in the iPhone X are scarce, which means Apple might not be able to produce enough to meet demand. A price hike, in part, could help restrict demand until supply ramps up. At the same time, Apple wants lots of people using its new augmented reality software, which is one of the key things that differentiate its newest phones from iPhones’ past and from competitors’ offerings.
“If they just launched the iPhone X and not everyone can get the X, they’ll have limited their differentiator,” Wang said. By equipping the iPhone 8 with similar insides that support augmented reality apps, it gives people ready for a phone upgrade another Apple option.
Other things the two new phones share: glass backs that enable wireless charging. The company isn’t selling its own proprietary charging dock. Phone owners will be able to use any charging dock that supports Qi wireless charging, which is the same standard for Samsung devices. At its keynote event, Apple announced that it was working on a charging mat called AirPower, expected to launch next year, that will simultaneously charge an iPhone, Apple Watch, and AirPods.
Apple also announced that Apple TV is getting 4K and HDR (it will cost $179) and that a new Apple Watch comes with 18 hours of battery life and built-in cellular service — a boon to athletes who want to work out without toting a phone (starting at $399, no cellular pricing plan announced).