Apple didn’t make much off those USB wires it made you buy
The timeline of the Apple universe can be measured as B.C. and A.C.: That is, before its popular MacBook and MacBook Pro laptops had only USB-C ports, and after, when it became your only choice. The decision to ditch the traditional USB port was announced October 27, and the Apple congregation quickly split into two camps. Some fantasised that it was a cagey profit ploy to sell more adapters — or “dongles” as the lexicon goes — while others thought the switch was just classic Apple. Here, yet again, was the prescient master nudging its adoring customers out of the nest, forcing them to adopt technology slightly before they — and their many devices — were ready.
It turns out the conspiracy theorists were very wrong (though this viral take on the strategy remains hysterical). In the quarter ended December 31, revenue from dongles, headphones, and “other products” actually fell, Apple reported on. The Cupertino, California-based giant is still, for all intents and purposes, a one product-company. The iPhone captured 70 per cent of revenue while adapter cords, watches, and TV boxes accounted for just five per cent.
No Apple fanboy worth his AirPods should be surprised at the UBS-C hardware decision. Time and again, the company has marched its followers down the path of progress. Its iOS operating system all but killed Flash web sites. The introduction of its lightning port offered a much sleeker solution to charging a device. Most recently, Apple stripped the headphone jack from its iPhones, making corded ear-goggles as suddenly irrelevant as compact discs a decade ago.
This time, however, things worked out a little differently. First, Apple seems to have out-evolved itself: its newest iPhone still has a lightning port, so it requires an adapter to charge on the new MacBooks. Secondly, the company’s booming accessories business stood to gain from the extra cords required, since most cost between $20 and $40. Someone who wants to do a few things at once — say charge an iPhone while listening to music, could easily pay more than $100 for the privilege.
Since the unveiling of its latest MacBooks, a wave of gripes and grumbles washed over social channels under the tagline #donglelife. For a small set of geeky folks, a picture of a bundle of white cords became the Instagram equivalent of avocado toast. Perhaps realising the potential PR damage, Apple quickly slashed prices on the adapters. It also threw in a 25 per cent store discount on those made by third-party suppliers like SanDisk. The company no doubt left some money on the table, but it’s relative chump change in the broader Apple economy.
“We doubt it will move the needle on earnings,” Morningstar analyst Brian Colello said after the October announcement. “Apple’s price cut on these accessories was likely an attempt to show consumers that technology, not profitability, drove the changes to the ports and connectivity.”
However, to a small(ish) online retailer like Monoprice, the dawn of the USB-C has been a windfall. Monoprice launched a new line of the adapters just before the big Apple pivot. In the final quarter of 2016, that part of Monoprice’s business tripled over the year-earlier period. It’s now shipping 20,000 cords and adapters a month.
Shane Igo, that company’s senior director of product, said Monoprice has struggled to keep up with demand, particularly as USB-C is adopted by other manufacturers. Almost every major laptop manufacturer uses the port now, as do 40 types of Android phones.
“It’s the only cable anyone will need for the next 10 or 20 years,” Igo explained. “I think it’s the first piece of technology that has a chance of being owned by every human.”
In its defence, the USB-C port transfers files about twice as quickly as a traditional USB, charges devices much faster and — perhaps most importantly — receives plugs in either orientation (as in, there is no “upsidedown”). Apple’s pitch: “As long as we were including a port for charging your MacBook, we wanted to make sure it was the most advanced and versatile one available.”
Of course, Apple was going to get peppered with a cloud-full of flack no matter what direction it went. That’s what happens when organisations are in charge of things that people love.
“USB specifications are not the sexiest thing in the world,” Igo said. “But once people learn more about it, they’re going to like it.”