About Apple Product Cycles

January 29th, 2016

Amid all the concerns about flat and falling iPhone sales, Apple has seemed somewhat predictable in recent years. This is particularly true with the iPhone, where there’s a major refresh with a new case design one year, and a “minor” refresh with internal changes the following year.

Although the actual improvements in an off-year iPhone may have been more extensive, the general perception is that, if it looks the same, the changes don’t amount to much. Other than economic headwinds around the globe, is the lack of compelling new features one reason that sales of the iPhone 6s and iPhone 6s Plus aren’t growing as fast as their predecessor? I suppose, but it’s also true that most people don’t upgrade smartphones every year. The traditional two-year contracts have resulted in comparable cycles.

That’s changed with such marketing schemes as T-Mobile’s “Uncarrier” plans, in which the price for the phone and the service was essentially unbundled. You bought the handset upfront, or the payments were extended. They do not remain the same once the phone is paid off. In contrast, when you signed up for a traditional two-year contract, you may have paid an upfront fee, equivalent to a down payment, but the remainder is paid and paid regardless of whether the handset is paid off.

The Uncarrier scheme is actually better for the customer. When your handset is paid off, you can continue to pay and get a new one, or see the price drop. There are alternative “upgrade” payment methods, or leases, where you can upgrade every 12 or 18 months and always pay exactly the same rate ad infinitum. Or until they change.

If your mobile handset is paid off, meaning you own it lock, stock and barrel, and it’s working just fine, you might be tempted to use it till it stops working. You want to ask yourself whether the new features are must-haves, or whether you can stick with your present equipment for a while longer. iPhone users who don’t care about larger handsets may just be staying put until Apple produces an updated 4-inch version. That’s rumored for this spring, and that may be the reason, to jumpstart sales and satisfy a customer base that didn’t want to be forced to buy a two-year-old model to stick with a smaller handset.

If that spring — or March — media event occurs as predicted, Apple may also introduce an iPad Air 3 with some hardware enhancements. For some reason, Apple avoided the refresh of the mid-sized iPad this last cycle. Was that the result of the expectation of tepid sales? Or did Apple have a more expansive refresh in mind and needed more time to make it happen?

It may also be that Apple will consider more frequent product refreshes to goose sales. A full year gap between iPhone and — up till now — iPad refreshes, may not create enough demand to move product to people who don’t just upgrade without a lot of persuasion.

Now Mac upgrades have already occurred year-round, so there’s nothing new expected there. In a climate where PC sales are down, Apple has sort of held sales at a fairly constant level, plus or minus a few points, which is actually a good thing.

Another question, or concern, is whether last year’s product releases were compelling, and that’s a huge question. The MacBook was an interesting product, and it may truly point in the direction of future note-book designs. Maybe. a 4K 21.5-inch iMac was a nice upgrade, but otherwise there was nothing particularly notable. The new input devices are more expensive, but the higher costs don’t seem justified, not even the Magic Trackpad 2. Is Force Touch so important? What about the enhanced version, 3D Touch, which premiered on the newest iPhones?

The Apple Watch has been a mixed bag. Customers seem satisfied, but the product may not be pacesetting enough to attract loads of buyers once early adopters are satisfied. That Apple said December quarter sales were the best yet means little without actual figures. They could have sold a few hundred or thousand more, and still hit a record.

Does the Apple Watch make the grade as a first-generation product? Well, you could use the first iPhone as an example of a promise without fulfillment. But just about everything worked well on the 2007 iPhone. The first Apple Watch had software limitations that resulted in sometimes poor performance and glitchy behavior. Within six months, there was a major OS upgrade.

The fourth-generation Apple TV may also have had unspecified record sales, but it doesn’t stand that far apart from existing gear, except for the higher price. Both the current Amazon Fire TV and Roku 4 support 4K; the Apple TV doesn’t. Yes, there may be valid reasons for the lack of support. 4K standards are evolving, and Ultra HD Premium, with improved contrast and color, promises a far better picture than the resolution advantage would offer by itself. The other streamers don’t have it, and that might be one reason why Apple didn’t jump into that segment.

Or maybe it was the lack of 4K content in the iTunes Store. A fifth-generation Apple TV with the promise of relatively inexpensive 4K movies and TV shows, along with Ultra HD Premium support, would be a compelling product. But would it be possible for fourth-generation units to be upgraded via the OS and firmware? If not, wouldn’t customers who paid up to twice the price of the previous Apple TV be upset?

Does Apple have a game plan to deal with the limitations of the current Apple TV without forcing you to buy another? That remains to be seen.

Apple clearly understands the problems. I’m curious to see how they resolve them.

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