Dec 2nd, 2018 - Category: Apple
Fifty years ago, two comedians wanted to make a strong statement of displeasure on national television by giving Congress “the middle finger” on the air. Their gripe ironically was that Congress was not taking action on the issue of gun control. However due to the TV censorship laws of 1968, Rowan and Martin had to get creative and “The Flying Fickle Finger of Fate” was born.
Over the years, they bestowed this “award” on various branches of government, celebrities, and in general, particularly ridiculous people doing particularly ridiculous things. If the award were still around today, would they be considering Apple as a possible recipient? The world’s first trillion dollar company is certainly not in any immediate trouble, but uncharacteristic storm clouds are definitely gathering on the horizon. Personally, as I wrote in an article over a year ago, we didn’t upgrade to the iPhone X and now we’re not upgrading to the XS, XR, or XS Max. We also didn’t upgrade to the iPad Pro 10.5’ last year, the most recent 11’, or the Apple Watch Series 4. Are we rebelling against Apple’s higher prices, or the idea that they might be turning into a luxury brand, or abstract accusations of “elitism?” In short, no, but some recent news stories seem to reflect a growing uneasiness even amongst hardcore Apple lovers. Is Apple being ridiculous at the pinnacle of their success?
One example is last week’s Medium post, “Apple’s Higher Prices Are Pure Greed.” Bizarrely, it was written by a relatively unknown person named “Paris Marx” who is a self proclaimed “socialist, traveller, urbanist.” The post was mediocre at best, but the fact that it inspired a storm of 2,700+ Reddit comments was amazing. They ranged from “I’m the biggest apple fan but their pricing just does not justify it anymore. So unfortunate…” to “I get uncomfortable when a ‘socialist’ complains about others making too much money” to “No one is forcing you to get the latest gen. Expecting it to be the same price as last gen is consumer expectation.”
Clouding the issue is the fact that Microsoft passed Apple as the world’s most valuable public company last week as well. This Reddit post has received over 1,200 comments in 48 hours with quite a few singing the praises of Microsoft “Surface Pro” tablets and saying things like “windows 10 is a really forward system.” Really?! After a Windows update last month caused data loss as well as a variety of other user woes, this is a bit hard to believe, but it was echoed by quite a few others so it can’t be ignored.
Do these developments mean that the Flying Fickle Finger of Fate will be pointing squarely at Apple soon? As usual the answer is “Yes, No, Maybe.”
Yes, it does seem that Apple has finally raised their prices above that magic number that makes people think twice about upgrading to their “latest and greatest.” The fact that the lowest cost iPhone XR seems to be the best selling model is evidence of this.
No, Apple continues to push the entire market ahead as an innovator. Their Q4 2018 results were excellent and their commitment to privacy and security benefits the entire tech world. Also, Apple products have incredible longevity. An iPhone 5s purchased five years ago for $850 can run the most recent version of iOS 12 as opposed to many “low cost” Android phones from just a year ago that cannot be upgraded due to technical and carrier restraints. Even if the Android phones were half the cost, they would not be a good deal. As for Microsoft, their growth has more to do with their cloud computing and recurring revenue from enterprise products such as Windows / Microsoft Office than anything in direct competition with Apple.
Maybe, and I would really love to somehow confirm this is true, Apple is moving upmarket to proactively reduce demand for its newest products. Keep in mind that Apple sold over 200 million iPhones in 2017. If every iPhone upgrade cycle means that tens of millions of old phones end up in landfills, getting consumers to keep their phones even one more year is a huge win for the environment. Many of the comments in the Reddit posts mentioned above confirm that iOS 12 supports this idea by making old iPhones viable for everyday use. “I’ve got a 6S plus that’s running 12 beautifully. I can get through most of the day on battery…”
So let’s hold off awarding that Flying Fickle Finger of Fate to Apple just yet. We will continue in the next post with more details on some of the psychological aspects of this shift.