
The iPhone Franchise - smackay
https://stratechery.com/2018/the-iphone-franchise/
======
HSO
I see a lot of complaints here about the size (trend) and lack of smaller, SE-
like option. But if product cycles really do take around 3 years (from
conception to release), then 2019 might be the year. The SE was released in
2016 and was supply-constrained for quite a while. Obviously this is pure
speculation but if Apple was sufficiently surprised by its success, maybe they
decided in that year to "completely re-imagine" (sorry :) that form factor.
And retiring the SE this cycle, given the apparent absence of good
alternatives in the Android camp, might store up some demand to boost next
year's sales. Like I said, pure speculation, but I wouldn't give up hope just
yet.

[addendum: I'm just listening to the latest ATP podcast episode to put myself
to sleep, and lo and behold John Siracusa takes pretty much the above position
while Marco Arment takes the opposite side. So now they've got a bet going on.
Fun little coincidence. Check out the podcast if you don't know it yet, it's
right in the ballpark for people who would comment on this article.]

~~~
jonhohle
After lamenting the size of the 6🅂 following my iPhone 5, I was happy to get
an iPhone SE as a burner for DEF CON this year. I was shocked at how small it
felt. I've gotten so used to the extra space afforded by the 6-8 form factor.
I still think the 6/SE is my favorite design, but would find it hard to go
back to it as my daily driver.

Now I'm looking at the X🅂 and have the same reservations. I don't want a
larger device in my pocket (and have pockets that the 6🅂 is already unsuited
for), but will probably like the extra screen space once I'm used to it.

~~~
wink
Call me out of touch if you like, but why would you buy a burner phone at a
price point that's higher than what many Android users are willing to spend on
their main phone for 2 or more years?

~~~
BMFX
Because at DefCon, you are likely more secure on iOS over Android...

~~~
wink
That's the only reason I could think of, yeah. And sure, DefCon is expensive
anyway, but... do you need a smartphone if you can bring a burner laptop for
<200 bucks?

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ClassyJacket
I can't beliebe they don't even mention the iPhone SE, arguably the best value
'out of band' iPhone

~~~
sxg
The iPhone SE is essentially non-existent in the US. Its primary target is
developing markets like India where the phone is made. Most people I know
aren’t even aware the SE exists. If they see it in stores, they just assume
it’s one of the older iPhones. Hacker News is the only place I see the SE
getting any significant attention.

~~~
jsjohnst
The iPhone SE is very popular with _many_ women I know due to its size and
ability to fit into women’s pockets. Women’s pockets are terrible in general.
Many further refuse to buy a new iphone until another smaller one comes out.

Happy to provide links to articles on the topic, but <insert search engine of
choice> will easily find them too.

~~~
parkersweb
True - exactly why my wife chose one earlier this year. Her main criteria was
"it has to fit in my back pocket" \- which meant 4.5" screen. There's so few
of those devices in the modern smartphone market - and yet I wonder why? I'd
happily keep my phone small if it didn't mean compromising on performance...

~~~
bunderbunder
Performance gets mentioned a lot, and I'm curious what people are doing with
their phones that demands so much of it.

Is the iPhone suddenly everyone's preferred device for playing Fortnite or
something?

~~~
empthought
Do you not use the modern web?

~~~
binomialxenon
I used a Moto G 2015 until earlier this year. With Firefox and uBlock Origin,
browsing didn't seem slow to me at all. I browse a lot of sites but not a lot
of webapps. I used native apps (Slide and Materialistic) for this site and for
reddit.

------
ynniv
Ok, but lets actually measure the temperature of the pot every now and then. I
just bought an iPhone 8 _pre-announcement_ because my phone was broken and in
the store I realized that the (original) iPhone X is just too large. And there
wasn't going to be a better, smaller phone after the announcement. The trend
might be for larger phones but extrapolated ad absurdum they will be tablets
and people will wonder why they don't like phones anymore. I would have paid
_more_ for a _smaller_ iPhone X, but that doesn't seem to be an option Apple
will entertain.

~~~
coryfklein
The iPhone SE, while not the market maker by any means, still carries a non-
negligible share of that market. It seems silly for Apple to just drop that
entire size offering when there is clearly market demand for it.

Remember the iPod Nano and iPod Shuffle? Historically Apple has known that
users care about device size, and us users do still do.

Here's an idea: take the iPhone SE, shrink it 1/4" but retain the screen size
by giving it that edge-to-edge screen look like the others. Now you have a
sexy iPhone Nano that you can offer to that customer segment before they look
elsewhere.

Disclaimer: I am a male with normal sized hands that loves his SE.

~~~
IggleSniggle
Too late, I’m already looking at Sony Compact again.

~~~
calferreira
Sony Compact phones although are powerful on the spec sheet, they usually
perform badly in comparison to SE, specially on the camera department.

------
dkrich
The mistake that I see most analysts make with regard to the iPhone launch
events is that they make them right away, based on their initial gut reaction
to the keynote. While their analysis may make sense and be completely
reasonable, there is a very big difference between the thought process one has
when viewing the new models side-by-side at the keynote and viewing them side-
by-side on the Apple site or in an Apple store with an intent to purchase.

While it may seem completely irrational to pay more money for a smaller screen
with the exact same processor (XS vs XR), the truth is that lots of people
(the type of people who buy iPhones at launch) typically gain a lot of their
identity from their phones. They want the best model and getting the cheaper
model just won't do. There is a practical argument to be made here as well:
most people use their phones more than any other device they own. What's an
extra $150 over the course of 2-3 years to have a better screen, camera, and
construction?

If I were to buy a new iPhone right now, I would probably go for the XS over
the XR. My reasoning would be that the XS+ is too big for my day-to-day use,
but I would rather have a better camera and display. But even if I went for
the XR, that's still a win for Apple. They want to remain top of the market in
smartphones, but they also want to capture as much of the TAM as possible
while doing so. What they have achieved and why I like the strategy they are
using here, is that they are capturing max TAM at the top of the market. They
aren't interested in competing with commodity phones at the lower ends.

Normally one could make the case for this being the definition of the
Innovator's Dilemma and they are ripe for disruption. However I don't believe
this applies to Apple because they have tie-ins due to software and services
that make switching to another device extremely painful. There are lots of
phone manufacturers who have been able to compete with Apple on hardware for
years. But without the software and ecosystem, Apple customers will not
consider switching. So it's not really a question of whether customers will
leave Apple for Samsung/Google/Other, it's a question of whether customers
will switch from one iPhone to another. I believe that even if this ever
happened, say a surprisingly large number of XR's sold compared to XS's and
the ASP came down, Apple would have lots of levers to pull to correct this and
they'd still be in pole position. They could cut features from future base
models or axe a third base model all together in the next cycle, for example.

~~~
fossuser
I'm not even sure that other manufacturers can effectively compete on
hardware.

I used Android for years (mostly Nexus devices), but eventually gave up
because Apple's phones had higher build quality along with fewer bugs. Their
security posture and snappier response time (when I switched at least) were
just bonuses.

When they finally had text forwarding and iMessage after Google let Voice
languish for years in favor of an ever increasing amount of not very good chat
applications there was no longer anything I missed.

At best the other devices are at par, mostly they're just cheaper with trade-
offs in quality.

------
abraham_lincoln
Anybody know where to get nice-looking iPhone SE 128GB, unlocked?

~~~
mft_
I'd recommend to give the next size up a chance.

I had a much-loved, carefully-charged and -protected iPhone 5 for about 3
years. I thought it was perfect and that it was all I needed.

When I finally upgraded I was given a 6s, and it took about 3 days for me to
realise it was just much better. I still have the 5 somewhere, and it makes my
hands want to cramp just thinking about going back to typing on it! The screen
real estate is also a huge improvement for just about everything.

~~~
aczerepinski
With the removal of the SE form the lineup, none of the phones that Apple
currently sells fit in the average women's jeans pocket.
[https://pudding.cool/2018/08/pockets/](https://pudding.cool/2018/08/pockets/)

That's straight up crazy. I can't believe the market decided "ability to
easily place in pocket" is no longer an important feature of cell phones.
Especially with Apple's multi-decade history of telling us that thinner and
smaller are objectively better when it comes to computing devices.

~~~
vinceguidry
If the margin on bigger-screen phones is a multiple of the margin on small-
screen phones, then that gives Apple a strong incentive to pretend that people
want big-screen phones even when they don't.

Also, being a company that relies so heavily on hype and branding, maintaining
more than three or so offerings in a market segment is totally against their
DNA. We're being dragged kicking and screaming into Apple's vision of it's
future cash pile.

One more reason why I preordered a Librem 5.

~~~
mgkimsal
but... just offer the same price then (or bump the price slightly to protect
the margins). margin alone doesn't really explain enough.

Having an SE and an 7 for the same price would still give people choice, and
possibly even _bigger_ margins on the SE.

~~~
vinceguidry
I thought I had answered that in my second paragraph. Apple just isn't the
kind of company that can offer real choice. Have you ever gone to a restaurant
that had like a hundred different menu items? The chances of any one being
really really good is practically zero.

Apple has a lot of product lines already. Phones, laptops, desktops, watches.
Too much diversification of one product line effectively makes it two product
lines, each of which needs its own department and management structure.

If Apple wanted to be Samsung, sure, I guess they could do that. But they
don't.

~~~
abraham_lincoln
Cheesecake Factory?

~~~
vinceguidry
Not an exception. They do everything somewhat well, not very well, and even
that level of quality is subject to human vagaries like how well the cooks are
trained or even how well they're feeling today.

Whereas I can go to my local bar with like 3 main entrees and a rotating
special and know that no matter what I order, it's going to be awesome.
Seriously, I never knew how good sliders could be until I let them show me.

The Cheesecake factory is Samsung, and my bar is Apple, at least back when
Apple was still great at everything.

------
oh_hello
Since the event yesterday I've been thinking about how these new models play
out with Apple's history of selling the older phones at a discount for two
years. The X was replaced by the Xs and is no longer for sale. I wonder if
this trend will continue with only the Xr line remaining for sale for the
following years. It would mean producing half the number of models of older
iPhones going forward. Instead of 7, 7 plus, 8, 8 plus they would only have Xr
and Xr 2019 replacement two years from now. Would this save them a significant
amount of money?

~~~
sgloutnikov
I think the X is not for sale because the Xs is an identical phone, except for
the newer A12 chip and increased water resistance by 1m. If they were to sell
the X it would have to be at a lower price point, then who would buy the Xs at
$1000?

~~~
binomialxenon
They've generally kept older models around, haven't they? The 7 is nearly
identical to the 8 and didn't get discontinued last year.

~~~
pilif
The X is too expensive to make for them to be able to significantly lower the
price and keep selling it.

This is mostly caused by the OLED screen which is why this years lower end
introduction has an LCD screen

------
oh_hello
Many have made fun of the new names using roman numerals and moving to "Max"
instead of "Plus", but I think it all makes a lot of sense when you look at
the larger picture. They are clearly making a major change to the product line
and the way we all think of the product line. They don't want the Xs Max to be
seen as the newer 8 Plus, it's a completely new, higher-end product.

~~~
wvenable
They needed to move to "Max" instead of "Plus" because it's significantly
larger than the "plus" model phones. They should have just gone with iPhone
XS++. :)

~~~
ltc5505
iPhone XS with classes.

------
ElBarto
I have a cheap-ish (certainly compared to iPhones) Huawei and the design and
quality of manufacturing is on par with Apple.

IMHO, Huawei is going to turn out to be a tougher competitor than Samsung.

Edit: I thought this was a mature place... Apparently not. Or you guys all
work for Apple.

~~~
burntcookie90
> design and quality of manufacturing

This is not all you get with Apple.

~~~
superflyguy
You don't only get it with Apple. Check out the Nokia 7 plus, or the Honor
Play. See what you get for your money there too.

Also, not everyone thinks Apple stuff looks that great. Always looks boring to
me, like expensive cars. Designed for people with money but no taste.

~~~
dougmwne
You do realize you're talking about featureless slabs of glass, right? Yes,
I'm making a joke, but out of all possible objects acquired for reasons of
taste, a phone has got to be one of the least personal fashion accessories. I
suppose you could always put a colorful case on it.

------
dest
Real link: [https://stratechery.com/2018/the-iphone-
franchise/](https://stratechery.com/2018/the-iphone-franchise/)

~~~
dang
Thanks. Changed from [https://stratechery.com/](https://stratechery.com/).

------
eertami
Articles like this are so far removed from reality it's hard to take
seriously.

The screen on the XR is absolutely indefensible - it has the same PPI as an
iPhone 4. It is worse than the 8, which is already worse than the screen in my
3 year old £200 Oneplus X. I have both and I would happily replace the 8 in a
heartbeat if it wasn't a work requirement.

Yeah people will buy it because they've convinced themselves they're somehow
cooler if they do, but not because it is in anyway a competitive product.

~~~
Synaesthesia
It’s 326 ppi which has been the default on the iPhone 4 up to 8 and I think
it’s fine. You can’t discern pixels on it (Typing on my 6S)

~~~
ClassyJacket
I absolutely can discern pixels on it. The comparison to an S8 is just not
even close. It's an inexcusable PPI for that price in 2018 even being the
"cheap" iPhone. I'm sure the X is fine but I haven't really used one much.

~~~
Synaesthesia
Yes you _can_ if you scrutinise it at 4cm and have good eyes but for everyday
use at normal distances, you can't.

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greatabel
With more powerful competitors and increasingly rational consumers, the
question is how long can apple play this game?

~~~
_Simon
Are you suggesting that they are, as it were, doomed?

~~~
macintux
Apple will only truly lose the "beleaguered" label when they finally perish,
no matter how dominant they become.

------
martijn_himself
Sure, Apple still makes the best smartphones and will sustain its current
momentum and cash flow for the foreseeable future.

It has gone from a company built around its products to a company focusing on
its shareholders with a CEO that is absolutely clueless when it comes to
product development.

It's sad but surprising? No.

~~~
gumby
> with a CEO that is absolutely clueless when it comes to product development.

I know, if only they'd appointed a CEO who would have developed new products
beyond the things Steve Jobs had imagined, we might have had a popular smart
watch, or maybe wireless earbuds that didn't suck.

And sarcasm aside, the homepod seems like some sort of me-too misfire, but
it's not like apple hasn't had those for decades as well (apple tv, ipod hi fi
dock... performa after performa...) not to mention actual misfires like the
controlless ipod.

Whatever legitimate complaints there are to trot out, an inability to do
product development can hardly be among them.

~~~
martijn_himself
I agree with you on the smart watch and wireless earbuds (although perhaps the
latter can hardly be called an achievement given the amount of resources Apple
has).

They also managed to all but ruin their computing product line, to the point
where people prefer to use ancient machines over recent ones.

~~~
gumby
> They also managed to all but ruin their computing product line, to the point
> where people prefer to use ancient machines over recent ones.

The unhappy folks are pretty vocal, but I'm pretty sure Apple have good user
data about how the machines are doing: as you say they have a lot of money to
spend on the marketing. And historically they have been pretty unromantic
about abandoning things that don't do well (iPhone 5c is discussed in this
article).

FWIW I am typing this on a 2018 MBP and it's pretty good -- well worth the
purchase to me (I can understand if other peoples' mileage may vary). The
touch bar is plainly not aimed at me (it would require looking at the keyboard
to use, and as I'm a software developer I have never used a function key in my
life) but I simply ignore it. And I don't post about it in prominent sites. I
don't use the thunderbolt ports either but I also don't wrote about that.

~~~
fhood
> as I'm a software developer I have never used a function key in my life

Gasp! How do you skip to the next song!

~~~
ssijak
I press a button on my Bluetooth headphones :)

