Apple is comfortable not selling you a new iPhone every year
Apple updated its iPhone XR and iPhone XS lines yesterday to the iPhone 11 and iPhone 11 Pro models. Compared to last year's phones, there isn't really a whole lot on the hardware side to get consumers excited. But that’s fine and I’ll get to that.
The two highlighting features from the iPhone Pro models are the new triple-lens camera system and the update to battery life. Apple claims that the iPhone 11 Pro lasts four hours longer than the model it replaces while the iPhone 11 Pro Max lasts five hours more than its predecessor.
Coming to the camera system, Apple is playing catchup with Android phones with both software and hardware. Samsung and Huawei already sell phones with triple-cameras while Huawei and Google have pushed low-light and computational photography to new levels over the past couple of years. I'm definitely interested to see how the new iPhone cameras compare to its Android rivals.
A new direction
These iterative upgrades give us an indication on the direction Apple is headed in. It's no secret that the mobile phone industry has matured and consumers are not replacing their phones as often as they did five years back. Apple gets that and is likely not interested in overhauling the iPhone every couple of years.
But then, how does it continue to grow if it can’t sell you a new iPhone every year? It’s by shifting to a service model- something Apple has already acknowledged in investor calls. What started with iCloud and Apple Music is now continuing with Apple News Plus, Apple TV Plus and Apple Arcade.
The pricing for Apple News Plus was already disclosed at $9.99 per month, but we were unaware of the pricing for Apple TV Plus and Apple Arcade until the iPhone 11 launch event, each of which is now set at $4.99 (AED 19.99) per month. To me, that was the biggest news from the launch event.
Apple has definitely priced these services to sell and I think Apple TV Plus would have quite a few takers at that price. To make it even more lucrative, Apple is giving one year subscription of Apple TV Plus free with the purchase of any new iPhone, iPad, Mac or Apple TV.
It's all about software and services
Software and services are the most important areas in Apple's next era of growth and we will see it get more aggressive on these fronts. There’s no doubt that Apple will continue releasing new hardware but the primary aim for these devices will be to provide an unmatched experience for its software and services – quite the opposite for the company that made software so it could sell hardware.
In fact, it might only be a matter of time before Apple starts selling products as a service. We’ve already gotten hints on an upcoming augmented reality device referenced as StarBoard in iOS 13 and the technology needed to power such devices will rapidly evolve year after year.
It could make sense for Apple to test this AR kit as a service and move its entire customer base to a new platform with every iteration. This would eliminate platform fragmentation completely and provide every user of that product the best experience Apple can develop.
That's quite a change from its current business model but Apple has shown us time and again that it is capable of reinventing itself. And this time around, they’ve even told us exactly how they’re going to do it: By innovation only.