IS APPLE OUT OF TOUCH WITH $1,000 IPHONE?
The Apple Event last week, in which the world’s largest tech company debuted several significant new products, begins with a tribute to late founder Steve Jobs, then pivots about six minutes in to an acknowledgment of the devastation brought by Hurricanes Harvey and Irma.
“You’re in our thoughts. We send you our strength. You’re in our prayers,” Apple CEO Tim Cook said. The company was among the first major tech companies to create a way to donate to relief efforts easily when it added donation buttons to iTunes, the App Store and its home page. In the presentation, Cook urged viewers to tune in to the Hand in Hand benefit telethon, also last week. Cook didn’t mention it, but the company directly contributed $5 million to hurricane relief.
If Cook lacks some of the showmanship that Steve Jobs brought to the job, he sometimes makes up for it in gravitas and sincerity. This was one of those instances; it was a well-crafted acknowledgment that Cook’s company is committed to ongoing relief efforts helping those affected by the storms.
About 45 minutes later, the part about the new iPhones, the section of the Apple Event that was most anticipated, began. Because of the increasingly porous state of leaks and rabid online digging on what Apple has in the works, there
weren’t that many surprises. Rumors that Apple would debut an iPhone 8, an 8+ model as well as a more futuristic phone called the X (pronounced “ten,” skipping 9 altogether) were all proven true.
The other running narrative leading up to the Apple Event — that for the first time, Apple would introduce a phone with a price tag edging on $1,000 ($999 to be exact) — also was true. And that’s not even the whole story: The iPhone X starts at $999, but the price for one with a sufficient amount of memory for people who use lots of apps and want to take a lot of 4K-quality video is actually $1,149. Plus tax.
Even the more modestly priced 8 and 8+, which start at $699 and $799, hit close to that $1,000 line of demarcation when you factor in the $150 cost of getting a 256 GB version (for those of us using 128 GB and pushing that size limit, there’s no other option), plus tax of about $80-$90. For many buyers of Apple’s new phones, it’s going to cost about $1,000 or more even if they opt for the iPhone 8.
That kind of pricing is not completely crazy, as several tech writers have assured us. Samsung’s competing Galaxy and Edge phones are comparably priced (although you can typically get free add-ons such as VR gear, memory card or a 360-degree camera device when you buy a new Samsung phone). iPhone customers can trade in their current devices to knock a few hundred dollars off the price. And wireless carriers as well as Apple offer upgrade payment plans to spread the cost out over a year to 24 months.
But what occurred to me, as I weighed my own phone options (I have an increasingly slow and beaten-up iPhone 6 and have been shopping around) was how far Apple’s messaging about its iPhone X “Phone from the future” was from that plaintive opening about hurricane relief. There was a world apart from the minutiae of how much refinement has gone into improving every detail of Apple’s smartphones from that discussion of a country rebounding from multiple disasters.
It was, perhaps, an unavoidable and regrettable disconnect, one that, judging from a few Google searches, didn’t really get picked up on by the tech press. Was it a stretch to think about how many people affected by the storms will be in no financial position to afford a new phone anytime soon, or that the country as a whole has been walloped with about $150 to $200 billion in property damage and lost productivity?
This is not to say that Apple should have postponed its event, slashed prices on its new phones or even thrown in a wireless charger as a goodwill transition to one of its newly included features. (That would be nice, but uncharacteristic of Apple, which doesn’t need sales gimmicks to move phones amid rabid demand.)
It’s not even to say that the rise of smartphone prices, including Google’s Pixel, is some kind of unreasonable sin. Think about how often you use your phone in relation to your car, your kitchen appliances, even your home itself. Many people touch their phones literally thousands of times a day. When you consider how much use your phone gets in the course of a year or two years, $1,000 doesn’t seem so crazy, especially if you have the option to upgrade or trade in when the device runs its course.
Perhaps it’s because Texans and Floridians have lately seen how easily all the possessions we pour money and care into can be washed away or destroyed. A $500 blender won’t save your life in a hurricane, but a phone with a long-lasting battery and a strong cell signal might. These are life-companion devices, and we put a lot of faith in them to store our memories, keep us in contact with family and to keep us engaged and entertained. (Is that bad? That’s a debate for another column.)
A lot of people will buy the new iPhones; preorders will likely outstrip supply. But many others will simply look at the pricing, look at their finances, and decide to sit this round out or seek older discounted models. Some people won’t upgrade their phones at all this year or next. Their lives are not at that place. They won’t be in a position to do that for a long time.
We’re in the era of $1,000 cellphones now, and this hurricane season has never made the contrast between those who can consider such a purchase and those who have next to nothing more clear.