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Editor’s note: From the “innovation” invitation to the new iPhone, which has not been upgraded so much, many people complained over and over again. This is a boring press conference. But is this conference really boring? After the Apple conference, the famous analyst Ben Thompson wrote an article explaining the Apple conference. An interesting footnote is that at this year’s Apple conference, Apple officials also cited his previous analysis and comments on Apple.
In his opinion, is nothing more than making the iPhone itself a service, indicating that Apple is a service company, at least in terms of customer relationships. You can say that it is innovative. The original title of the article is “The iPhone and Apple’s Services Strategy“, compiled by, hope to bring you inspiration.
Every time Apple’s press conference ends, many people complain that it’s very boring, which is normal, especially when Apple announces such a press conference:
Apple Conference Invitation: “To Innovation”
Mark Gurman, an excellent journalist who reports on Apple, is not a fan of this:
Any product launched today is not enough to meet people’s expectations for “innovation”: Apple has introduced the smallest iteration of watch updates, screensA slightly larger iPad, and an iPhone with a camera equal to or lower than other devices. Apple needs a big breakthrough in 2020.
With regard to the highly iterative nature of hardware updates, German is not necessarily wrong (although I think the Apple Watch with a dial is a big deal), but that doesn’t necessarily mean his understanding of innovation. is correct.
To figure this out, we first need to define what innovation is.
Beyond the iPhone, revisit
In 2016, Apple released the iPhone 7 and the second generation Apple Watch. At the time, technical columnist Farhood Manjoo wrote in The New York Times:
Apple wastes its edge in hardware and software design. While the new iPhone has some new features, including waterproof and upgraded cameras, they look just like the old ones.
The same is true for the new Apple Watch. As competitors learn from and even begin to surpass Apple’s best design, the iconic features of Apple’s mobile phones, computers, tablets and other products are starting to look ordinary…
At the time, I quoted Wen’s article and further explained why I thought that the keynote speech that year was very meaningful, especially because of the release of AirPods:
However, the most interesting thing is what I call “the real wireless future.” What happens if we assume that the progress from Touch ID to Apple Pay also applies to AirPods?
Keep in mind that one of the devices paired with AirPods is the Apple Watch, which receives updates on its own, including GPS.
The addition of GPS is a part of the importance of health and fitness, but it is another step toward a watch with its own cellular connection. When this future comes, the iPhone will be indispensable. Optional.
As long as you wear your watch, have your AirPods in your ear, and with Siri, you have everything you need.
The future is here, although it is still very rough (especially Siri, which is the main focus of that article); Apple’s financial performance will certainly benefit a lot.
In the past three years, Apple’s “wearable devices, home and accessories” category, mainly Apple Watch and AirPodIn the past 12 months, it has doubled from $11.8 billion to $22.2 billion.
In other words, based on the final measurement of the standards of all companies, the theme of 2016 and the future it points to are indeed very innovative.
Apple’s service story
Wearables are not Apple’s only growth area: in the same three years, the service business’s revenue growth rate has grown by nearly 90% annually, from $23.1 billion to $43.8 billion. .
At the same time, many people have said that this kind of innovation is a bit annoying, especially considering the monopoly nature of the App Store.
Of course, this is not entirely fair. Apple’s App Store is one of the most innovative things Apple has created from a product perspective. If you return to measuring by income and profit. Apple is positioning itself to profit from this innovation indefinitely, which is itself innovative,
Nevertheless, the idea that Apple became a service company has always been difficult to accept.
When Apple first launched a “service story,” I claimed that Apple is not a service company:
Services (horizontal) and hardware (vertical) companies have very different strategic priorities: the former should maximize their target market (say, make cheaper iPhones), while the latter should maximize their differences Chemical.
But Cook’s answer clearly shows what Apple’s focus is.
The answer is to continue Apple’s pricing strategy. At that time, the price of the new iPhone was above $649, and the old iPhone was reduced by $100 per year in the market. Cook’s specific statement is “I don’t think we will deviate from this strategy.”
In fact, Apple did make adjustments, but the opposite is true: In 2017, the company launched a high-end iPhone X for more than $999, raising the price of the mid-range iPhone 8 to over $699. I wrote at the time:
The iPhone X is sold to the two markets I mentioned above:
Customers who want the best mobile phones
Those who want to have the highest-end phones on the market
Please note that both markets are relatively price insensitive. So, $999 (or more realistically, the 256GB version of $1,149) is not really a barrier.
For the latter market, this can be said to be a positive factor.
This strategy is definitely not intended to expand the target market for services.
When it comes to Apple’s strategic direction, it is definitely not a service company.
Apple mobile phone price reduction
This leads to the biggest news I have seen: Apple has cut prices.
This is easy to ignore. The iPhone 11 Pro is the successor to iPhone X and XS. Its price has not changed: the starting price is still $999 (Max model is $1,099) and the highest is $1,449. If you want the best, you will pay for it.
Perhaps the most interesting thing about the keynote is that most Apple users are not willing to pay for the best products for the first time. Tim Cook said:
Last year, we released three incredible iPhones (XRs). They have become the most popular iPhone in the world and the most popular smartphone. We also released the iPhone XS and iPhone XS Max, the most advanced iPhone we have ever had.
This is nothing surprising. The iPhone XR is a very powerful phone with the same industrial design, the same FaceID and the same processor as the iPhone XS. The main difference is the size, one less camera, and the LCD screen instead of the OLED screen. This does not seem like a sacrifice to save $250.
However, although I say that Apple’s strategy is “nearly overconfident,” I still fully expect the iPhone XS to be the best-selling phone like the previous iPhone X, which is the determination of Apple customers to buy the flagship iPhone.
However, even Apple can’t get rid of the “good enough” attraction – that’s why price cuts are so important.
There are two ways to see Apple’s price cuts, first, through the iPhone model:
Second, through the year:
In the second chart, you can see that in 2017, Apple not only significantly increased the price of the flagship model, but also increased the price of the mid-range model compared to the previous flagship model.
This is important because it’s these mid-range models that replace Apple’s usual way of selling old flagships for $100 a year.
This means that the price increase in 2017 continued until 2018, when the “one-year model” rose from $549 to $599.
At the same time, this also means that there have actually been three price cuts this year:
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First, the mid-range iPhone 11 launched this year is $50 cheaper than the iPhone XR.
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Secondly, the iPhone XR was cut by $150 after one year of release, not Apple’s previous $100.
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Third, the price of the iPhone 8 dropped by $150 after two years of release, instead of Apple’s previous $100.
Fairly, this doesn’t necessarily mean that today’s product line looks a lot different than it used to be: the only different price point is the iPhone 11 vs. XR.
This is because, assuming Apple wants to continue along this path in the future, those previous price increases will take some time to get out of this model.
They should know that the success of the iPhone XR is a powerful indication that the iPhone market is more resilient than ever. Apple’s sharp price cuts in China earlier this year have also been a huge success. I wrote after Apple released the earnings report for the second quarter of FY 2019:
The available evidence strongly suggests that the iPhone’s demand in China is very flexible: if the iPhone is cheaper, Apple sells more. If the price is more expensive, Apple sells less.
Of course, this is not surprising, at least for merchandise. Apple’s problem in China is that the iPhone’s differentiation in China is lower than in other places, making it more sensitive to factors such as new design and price than others.
As I pointed out, China is unique, but the debate about commodities is a variant of the “good enough” argument I mentioned above: although Apple does not necessarily need to worry about iPhone users outside China turning to Androi