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  • The iPhone X and the Thousand Dollar Freakout

    September 14th, 2017

    The other day, I made some pointed comments about a certain national newspaper that ran a silly article about alternatives to the iPhone 8 before it was outed as the iPhone X. The argument was solely about buying something other than some — as yet — unannounced Apple product. It feel apart real quickly when the blogger tossed in Andy Rubin’s Essential smartphone even though it had what he admitted was a subpar camera.

    Now that the rumors have been mostly confirmed about Apple’s new stuff, one criticism won’t go away. Indeed, the fears have been confirmed. Apple is daring to charge just one dollar short of $1,000 for the 64GB iPhone X. The 256GB version will be $150 more.

    Outrageous!

    Or maybe not!

    Remember, Apple is the company that charged over $10,000 for an Apple Watch before taking a more measured approach beginning with the second version last year. But there will be an iMac Pro that will cost nearly $5,000 for the entry-level model, and match the price of a compact car when maxed out. The Mac Pro’s price will be off the charts!

    But you have to put these things into perspective. Professional movie makers, scientists and other power users demand the most powerful personal computers on the planet. Intel charges up to $13,000 for a single 28-core Xeon processor, all by itself, although Apple pays far less than the retail price. Such chips are used for servers and workstations. Add it all up and these machines will be very expensive even when they don’t bear the Apple brand name.

    The complaints against a $1,000 iPhone X ignore reality. Last year, Apple was already selling iPhones priced over $969 for an iPhone 7 Plus with 256GB storage. This year’s similarly equipped iPhone 8 Plus is $949. So selling an iPhone X, a higher-end model, for $200 more, isn’t out of the question. The $999 payment gets you the 64GB model; the 256GB model is $1,149.

    But Apple is not the only company to sell smartphones for over $900. The Samsung Galaxy Note 8, which is more directly compared to the iPhone X although it has a larger display, lists for $949.99.

    I’ll leave it to the reader — and the critics — to decide whether Apple has the right to charge $49 more. Obviously they have the right to charge whatever the traffic will bear. Business 101 and all that.

    If you buy your iPhones with a credit card — or via one of the lease/purchase programs from Apple and various wireless carriers — the difference in the monthly cost is trivial. All right, some carriers are evidently liquidating Samsung smartphones with a two-for-one deal. Evidently it’s more important to push product than to make a decent profit from every sale.

    Now I’m not aware of tech pundits — or industry analysts — going around doing surveys as to whether you’d should pay over $900, or close to $1,000, for a Samsung handset. It never seems to come up. But if Apple releases a premium-priced gadget, even if it’s only a tad more expensive, that’s some sort of moral transgression from those greedy so-and-sos. How dare they?

    Again, when you consider a $1,149 iPhone X, remember that Samsung isn’t offering a Galaxy smartphone with 256GB storage. If they did, you can be reasonably assured the price would increase by roughly the same amount for the added storage. In the words, a Galaxy Note 8 might indeed cost $1,099.99, based on its cost difference for the iPhone X.

    In the real world, most people aren’t going to want to pay a few dollars more, or a few hundred dollars more, for the 10th anniversary iPhone. That’s only logical. But Apple also cut the price of the 4-inch iPhone SE to $349, with monthly payments reduced accordingly (less than $12 a month at AT&T), if the top-of-the-line is too rich for your blood.

    I’m also reminded that, due to currency exchange rates, shipping costs and other factors, the price differences may be larger outside of the United States.

    But what this means is that there are more options than ever from Apple, from a moderately priced iPhone to something that’s a little more expensive than premium smartphones from other companies.

    Now I wouldn’t predict what sort of sales Apple might achieve with the iPhone X. I expect the iPhone 8 and its big brother/sister will do quite well, and that the premium model will be backlogged for months due to high demand. Or maybe Apple is holding out until November 3rd to be sure there is enough stock at hand to fill orders without undue delay during the holiday season.

    Of course, the blogger alluded to above imagines that November 3rd lies in the middle of the holiday buying season, which is bound to mean lots of trouble for Apple. Maybe he didn’t learn about Thanksgiving when he went to elementary school. But if Apple can deliver millions of them for Thanksgiving delivery, that ought to be fine.

    Besides, why should it matter to anyone but Apple and Apple customers?

    I’m not sure whether all this carping is genuine, or just something fed by Apple’s rivals. Either way, it’s nonsense. People can decide for themselves how much they can afford to pay for a new gadget, from Apple or another company. They can decide whether paying $49 less for the Samsung Galaxy Note 8 instead of an iPhone X is a better choice.

    But when the sales are tallied, assuming Apple can get a decent number of the 10th anniversary iPhones into the channel, the sales figures ought to be pretty high. After all, the iPhone X — then known as the iPhone 8 — has been talked about since last year, even before the iPhone 7 came out. Demand has to be off the charts regardless of the price.



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