Profiteering Apple remains a friend to the consumer

Firm with GDP of Denmark has raised iphone 14 price but will fight regulators and telecoms industry for us

Apple is helping us through the cost of living crisis in its own special way. Last week, it raised the price of its newest iphone in the UK and Europe by 15 per cent.

To add insult to injury, the new model is indistinguishable from last year’s model. The iphone 14 uses the same display, chassis and battery as the iphone 13 and, for the first time in the iphone’s history, the same chip as its direct predecessor, too.

Even Steve Jobs’s youngest daughter, Eve, joined in the mockery. She posted a picture of a man unwrapping a gift of the same shirt as he was wearing, with the caption: “Me upgrading from iphone 13 to 14”.

Apple’s new iphone Pro model is now £150 more expensive than last year. Lucky US consumers haven’t seen any price rises at all, for they reflect the mighty dollar. But you don’t reach $167bn in annual profit, as Apple has done, by being sentimental with the Old World, and the company’s accountants aren’t cutting us any slack.

On the surface, complacency and profiteering would seem to guide Apple’s strategy. But surface appearances can be deceptive. Apple’s annual revenue gives it the GDP of a developed country – a Denmark, a Singapore or a South Africa – and behind the scenes, the Goliath is putting that influence to some good use. It’s gearing up for fresh fights with regulators and the telecoms industry, and these are fights where, if Apple comes out on top, the consumer should ultimately be the winner.

For now, the iphone price rise will simply give cash-conscious smartphone owners a further reason to stick with what they’ve got. It has been a very long time since fans camped overnight on the streets to be the first to get the latest iphone. “Waiting for the #iphone14 to drop, so that iphone 13 price drops, so that iphone 12 price drops, so that I can buy iphone 11” one tweeted, in a great reflection of how little really changes from year to year.

So, economising on technology purchases is one of the easier household budget decisions we can make as winter nears. Nevertheless, on closer examination, the new iphones give us a hint of some dramatic change to come.

First, Apple has begun to remove the physical SIM card slot, beginning with the new iphones sold only in the United States. Apple has wanted to do this for a decade, having filed its first patent for an electronic SIM, or ESIM, in 2010. Originally the size of a bank card, this has long since outlived its usefulness. Back in the late 1980s, when it was conceived, the world was beginning to extract itself from the dominance of state-owned telephone companies, where the monopoly supplier of the phone service was also the monopoly supplier of the phone itself.

The pioneers of the mobile industry wanted to encourage a market on both sides, and the SIM card helped enforce this openness, and therefore competition. It meant you could switch service without losing the phone, or switch to a new phone without losing the service, or having to change your phone number. But today, all that can be done without the pesky plastic or the tray.

One group which objects very strongly to ESIMS of course, is the mobile networks. A virtual SIM makes switching networks as easy as waving your phone’s camera at a barcode. Mobile operators regard this with horror, as customer churn is expensive, and so we can expect to see the industry respond with carrots and sticks. Carrots in the form of inducements for loyalty, and sticks in the form of ever-longer and stickier contracts.

A more dramatic re-ordering of the mobile industry is hinted at with the introduction of satellite reception into iphones. At first this will be very limited: the new models will support an emergency SOS service that connects the owner to the rest of the world in a location where no mobile network can reach them. Even this bare bones service – it can’t handle text, only exchange canned responses – has taken years to assemble.

The emerging space communications market is complex and multi-sided, and we’re only just beginning to see the tectonic plates move. The consumer and auto industries, allied to the burgeoning space industry, must grapple with national and international regulators and legacy telecoms interests.

In other areas, telecoms companies can use the new fleets of satellites to make their networks more resilient, or even deliver service directly. For example, one ambitious venture by Vodafone and satellite company AST sees vast tennis-court sized vehicles unfold in space, that beam signals directly to a standard handset. Another, Lynk, wholesales Apple’s SOS to any mobile operator. But one key battleground will be the radio standards body the ITU-R, where Apple and satellite companies want the internationally regulated power of satellite transmissions to be increased. “Only Apple has the weight to make this happen,” one expert tells me.

An irony emerges. Apple is under competition scrutiny like never before, and the burgeoning “hipster antitrust” movement has declared war on anything big. They don’t come bigger than Apple, of course. But when it comes to breaking down regulatory barriers and disrupting industry inertia, only a giant has the muscle to make it happen.

Good Apple or Bad Apple? It’s both at the same time.