In its 11 years of existence, the iPhone has grown into one giant contradiction.
On one hand, especially after last year’s price increase for the flagship model, the iPhone is a luxury item. People save up to buy it, and they measure their social and economic standing with it. In a sea of smartphones that do roughly the same thing, Apple’s particular smartphone commands a prestige premium. This is a familiar description for fashion or jewelry brands and products, but it finds few parallels in the tech industry.
The other side of the iPhone coin is that we keep replacing it like it’s a basic consumption good. If I buy a luxury watch for $1,000, I’d expect to have it for a decade or longer, whereas Apple somehow keeps enticing people to buy a pricey new iPhone every two or three years. It’s like the company is selling sneakers but charging the price of dress shoes.
The iPhone has always been expensive relative to the market around it, perhaps never more so than when it first became available to buy. There was cachet and exclusivity to be gained from a phone most people couldn’t afford and which was tied to just one network. (AT&T in the United States and O2 in the United Kingdom had exclusive deals in the early years.) Tie that in with Apple’s “Think Different” reputation, Steve Jobs’ charisma, and the iPhone’s technical uniqueness, and you have the formula for a true status symbol.
As the smartphone has become ever more central and essential to our daily lives, price increases and more regular upgrades at the top of the market are logical things to expect. But Apple hasn’t merely been the beneficiary of structural changes, it has driven them. Whenever smartphones have grown more expensive, the iPhone has led the way. Whenever smartphones have grown more disposable — such as with the sealing of the battery inside or the fusing of the display panel and the glass on the front — the iPhone has again led the way. A contradiction, indeed.
Samsung and other smartphone makers have benefited from Apple’s normalization of the rapidly replaced tech luxury. Especially in the US and Western European nations, Apple’s pricing establishes the market that everyone else fits into. That can make it seem like they’re competing for the same audience, but they’re really not. There’s the iPhone user, whether existing or aspiring, and then there’s everyone else. Samsung’s entire ascent to becoming the world’s biggest smartphone vendor happened after the iPhone’s launch, and similar growth spurts have been experienced by Huawei, Xiaomi, and others — all of Android has flourished, in fact, and Apple’s iPhone sales have kept expanding rather than shrinking.
Whether it’s iMessage, Apple Maps, or simply the internal logic of how an iPhone works, there are a great many people who simply will not consider another type of smartphone. Entire families depend on the Apple ecosystem to keep their communications in order. This stickiness is a combination of good branding and good user experience, and it’s what allows Apple to get away with issuing “S” models, iPhone iterations that retain the prior year’s design and only make iterative improvements. 2018 has underlined the iPhone’s uniqueness in this respect by showing that no other phone company can afford to have an “S year,” as Samsung’s Galaxy S9 and LG’s G7, both incremental upgrades on their predecessors, have both had disappointing sales.
Among other factors sustaining Apple’s strong sales through S years is the mobile carrier contract cycle. The typical deals people sign up for last two years, so iPhone owners often find themselves in a convenient spot of having their contract expire just as a new iPhone arrives. It’s a nice bit of synergy between Apple, the carriers it works with, and the human urge to just get the shiny new thing.
I’m excited for the annual Emotional Rollercoaster that is, “I’m so excited about this slightly different iPhone and I’m going to check my bank account haha just kidding, my completely smashed 6 will do for another five years” Apple event.
— Julia Alexander (@loudmouthjulia) September 12, 2018
There’s also the iPhone’s consistently high price, which ensures demand for Apple’s devices is more evenly distributed across the year. We’re not even close to being able to say that everyone who wanted an iPhone X has one yet, but those same people will be accessing a more favorable market once today’s iPhone XS varieties become official. And they may be able to finally afford the phone they want, adding to Apple’s sales numbers.
So, to answer my own question, I don’t think the iPhone’s popularity faces any imminent threat in the places where it already exists. It benefits from the same consumer culture that drives people to buy dozens of pairs of branded jeans and sneakers and just as many handbags and watches. Sure, Apple’s struggling to penetrate India and China’s growing phone markets, but its greatest strength is the vast population of people already inside its ecosystem — all those who look upon Android innovations and improvements as interesting ideas, some of which might be nice to have on the iPhone. It’s a corporate sort of tribalism that continues to serve Apple well.