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Why Apple are moving backwards, to stay ahead.

by Michael Craddock

October 22, 2020

Despite the difficulties of the pandemic, there have been an abundance of tech announcements, reveals and releases this autumn. October, appropriately nicknamed ‘Techtober’ by enthusiasts, is in full swing.

There’s no doubt, the most interesting announcements this year are in the smartphone market. Apple have of course joined the party. However, the trillion-dollar company has seemingly changed strategy and their reason for change is more interesting than you might imagine.

Apple have announced their widest selection of phones on release ever. These include the iPhone 12 Mini, iPhone 12, iPhone 12 Pro and iPhone 12 Pro max. Apple as a brand, is synonymous with luxury. Therefore, the new iPhone 12 Mini, coming in at £699, is curiously priced. Let me explain why…

It’s a whole new world…

In the last few years, smartphone devices have slowly become more expensive. Now, most flagship devices are above and beyond the thousand-pound mark. In 2020, the story is no different. A quick glance at the iPhone 12 Pro and iPhone 12 Pro Max, show a commanding £999 and £1099 price for its lowest storage models. Meanwhile, the new Samsung Galaxy S20+ and S20 Ultra models are similarly priced. Samsung’s Note series is much the same and if you want to buy the new Samsung Galaxy Z Fold2, it’s going to set you back a staggering £1800.

Consequently, as the market altered, other brands followed suit. In 2019, Google, OnePlus and Huawei have all sought to challenge Apple and Samsung’s highest end devices. However, 2020 has seen an interesting change in tac, from all the biggest smartphone companies. Generally speaking, reveals this year suggest the battle is in the mid-range to high-end market…the £500 to £800 bracket. But why?

COVID-19 has had its say

In 2016, the iPhone 6 started at £649, a lot more affordable than the current flagship prices. Nonetheless, when phone prices slowly increased, people were happy to pay premium prices. Yet, in 2020, the attitudes of smartphone companies have changed. Now, because of coronavirus and the financial struggles of individuals across the globe, the biggest brands think consumers are simply not willing to spend considerable amounts of cash on new smartphones.

In the UK, unemployment rates are at their highest for three years. In the USA, iPhones most successful market, WalletHub state 40% of Americans plan to reduce mobile phone costs. As well as poor unemployment rates in the UK, the unemployment rate in America sits at 7.9%, with total credit card debt at a staggering $1 trillion. Evidently in the USA, "buying a new iPhone is an even bigger decision for consumers than usual," WalletHub said.

What do the latest smartphone releases show?

For 2020 at least, it seems the pandemic has had a lasting effect on the phone market. Smartphone companies are still releasing immensely expensive products but they’re also increasing efforts to push cheaper options.

Just look at the big brands: Samsung are strongly pushing the Galaxy FE, currently at £599, OnePlus has recently released the extremely competitive Nord at £379, Google's new ‘flagship’, the Google Pixel 5, starts at £599, while their cheaper model is just £350 and Apple have announced the iPhone 12 Mini at £699 and iPhone 12 at £799. Clearly, this is what smartphone companies believe most people want in 2020. Most likely, it’ll be the area of the market where a greater number of smartphones will be sold.

Not only are there more payment options but more payment plans. A peak at Apple’s website shows the extent of the finance options available to consumers. Every product, from the brand-new iPhone, to the new MagSafe charger, worth £39, has payment options. Apple seems to understand the difficulties for buyers in the current situation.

Is it all to do with money?

In short no, but also, yes. Confused? This should clear it up…

It’s not just the monetary price of the initial product, but also its actual value for money. In short, the mid-range market has caught up with the technology of the high-end devices and the consumers have clicked. Unfortunately, technology in smartphones in the last couple of years has not been advancing at a fast pace. Consequently in 2020, you can buy a great phone, perfect for the average consumer, at a reasonable price.

Currently, most of the latest devices, at the most popular brands, have good screen panels with minimal bezels, good refresh rates, good processors, fast charging, good enough cameras and seamless software experiences. Undoubtedly, a brief look at the specs of many low-cost devices will reveal some fantastic deals.

Ultimately, no brand can really divide itself from the pack and it’s become increasingly difficult to stand out. The features that do stand out, and create higher prices for smartphones, are not useful for the average consumer. Therefore, consumers are content to spend a little less, but still receive a great experience.

Does all this make a difference to Apple?

While there’s no doubt Apple’s strategy is different this year, most likely it won’t affect their performance. In fact, early signs show they have exceeded expectations in early pre-order performance compared to the iPhone 11. Although, nothing is quite certain yet.

A step in the right direction for Apple?

Apple offering cheaper phones can only be a good thing for the phone market and consumers alike. Undoubtedly, Apple still has a considerable impact in the smartphone world and the trends they set, or at least join, become mainstream because of Apple. Alongside the cheaper iPhone 12’s, Apple have continued the iPhone 11, XR and SE. Now, they have more options than ever before.

Recently, Apple have made steps towards becoming a more flexible software experience. Widgets and customisable home pages have become possible on IOS. A feature long asked for by the community. Also, users are able to change their default web and email browsers for the first time, creating a more personal user experience. It may seem small, but this, plus their more all-rounded iPhone line-up, suggests small steps of promise. For a system historically closed off to outside influence. It’s a start.

Will the more affordable phone trend continue?

For as long as COVID-19 rears its ugly head, it’s a trend that looks likely to remain in the tech world. As well as smartphones, it would be no surprise to see other products follow suit. Perhaps unexpectedly, the next-gen consoles, due to be released imminently, were announced to have competitive and affordable prices. The new Xbox’s Series S is just £249.

In all likelihood, the coronavirus pandemic has been the catalyst for more competitive pricing across all markets. Whether this trend continues, remains to be seen.

Tags

Apple
Tech
marketing