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  • The Panic Room Report: Danger, Danger, People Love their iPhones

    March 1st, 2018

    At one time, it was common to exchange or replace a smartphone around the two-year mark. This was particularly true in the U.S., where wireless carriers would tie you in to a 24-month subsidy contract, where you’ll pay a small down payment — or no down payment — and take home your new phone. Only thing is that you had to hold onto it for two years, or at least keep your account active for that period, to avoid a stiff early termination fee.

    If you just decided to keep the phone after the contract expired, you’d still pay the same fee. It wouldn’t go down, meaning you’d end up paying extra for an aging device.

    The situation became fair, more or less, beginning with T-Mobile’s “Uncarrier” promotions. You’d buy your service plan, including talk, text and data, and pay separately for the phone. The usual deal was a full payment or a lease/purchase plan where you’d pay it off within two years or so, plus a small down payment. Some plans would allow you to exchange the handset for the new model every year or two.

    You would be paying the standard price, minus discounts, but at least you know that you’d some day pay off the loan. Seeing your monthly payments go down must surely have encouraged some people to hang onto what they had for a while longer if it still worked all right. With iPhones, you can routinely install the latest iOS on devices over four years old. Sure, maybe performance wouldn’t be great shakes, but it worked, and it certainly encouraged people to hang onto what they had. My wife, for example, still has her iPhone 5c, which is actually stuck in the iOS 10 zone. But it is small enough to fit into a tiny purse, and still makes and receives phone calls with good quality. She’s happy with it, and only lately has she been  hinting that she’d like something new or newer for her next birthday, in December.

    But that doesn’t mean that Apple has been free of the fake charge of deliberately making iPhones obsolete to entice you to buy next year’s model. This comes at a time where the iPhone 6s, first introduced in 2015, is still being sold.

    The charges became more intense when it was discovered that an iOS update throttled iPhone performance if the battery was failing. The theory was that the performance cut wasn’t about batteries but about fooling you into buying a new device. Although there are several dozen class-action lawsuits in force over this issue, it appears to be more a matter of poor communication with customers. If Apple had fully explained the decision to reduce performance when battery capacity had deteriorated to prevent unexpected shutdowns, there may not have been so many complaints.

    One claim is that Apple also hid the ability to replace an iPhone battery, which doesn’t make sense, since there are a number of customer support documents on the topic that include pricing. Plus independent dealers promote the ability to replace batteries at prices that are lower than Apple’s. One dealer, a five minute drive from here, boasts that they can do it in 10 or 15 minutes, while you wait. To them it’s no big deal. A nearby Walmart has a smartphone/PC repair concession that will also happily replace the battery on any popular mobile handset with a full warranty. It’s even possible to do it yourself with the right tools and flexible fingers.

    So much for conspiracy theories. But these days, you can replace the battery on a number of iPhone models for $29 from an Apple Store if you’re willing to wait. The iOS 11.3 update, being beta tested now, includes a battery health tester and the ability to switch off throttling if you want to take your chances. When asked if he was concerned that fewer people would upgrade their iPhones with cheap replacement batteries available, Apple CEO Tim Cook said he didn’t care.

    Meantime, a certain financial newspaper has run an article suggesting that slumping smartphone sales are the result of people buying refreshed phones because new phones are too expensive, that customers are “balking at price tags for new phones pushing $1,000.” We know what phone that is.

    The theory, however, is not tenable. Apple, for example, sells five different lines of iPhones starting with the SE at $349. The iPhone 6s is $449, and it’s not so different from today’s iPhone 8 that it will disappoint many users. Apple is clearly quite aware of the need to offer iPhones at different price points. Samsung sells lots of cheap stuff, at prices less than half that of an iPhone.

    So if you are on a budget, and can put up with last year’s model, or one a year or two older than that, you can get a perfectly satisfactory iPhone that’s brand now, or factory refurbished, without having to buy someone’s used handset instead, even if it was properly serviced.

    What’s more, the fact that the average sales price of iPhones soared with the arrival of the iPhone X, despite so many cheaper options available, makes it clear that pricing is not deterring users. It’s very likely more about high quality products that will deliver reliable performance for several years, unless badly abused, and the obvious fact that prices go down when a loan or lease is paid off.

    But Apple critics, even when they work for publications with millions of readers, won’t let facts get in the way.



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