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Have they gone too far?

It seems the days of the excitement and high expectation over the next mobile launch is well and truly over.

When I started in the industry in the mid 90’s, we had perhaps three or four launches to attend a year. Every launch cycle offered innovations and great leaps forward in tech. We started with brick phones and monochromatic screens, moved to the tiniest phones with colour and changed from numeric keypads to full qwerty keyboards and now to full touch.

I can still remember the excitement of holding that curved Nokia 8110, the tiny Ericsson 788, seeing the colour screen on the Siemens S10 and showing off my Nokia 9110 Communicator with its full keyboard, the Samsung D500 slider… the list could go on and on!

This excitement carried over to the revolution heralded by the Apple iPhone, and it appeared this excitement curve trajectory would continue unabated.

Alas, it appears in the last two years, the mobile magic has gone.

I had no desire to upgrade my iPhone 7 when the iPhone X launched, partly because it always has better to wait for Apple to iron out any kinks in their “S” version but mainly because the price differential between new and old had become somewhat glaring.

In my wait for the next Apple launch, I have been using a Huawei P20 Pro and, after five months, I haven’t had a reason to move back. That was of course until the lead up to the Apple announcement on the 12th of September. Ohhhh I thought, perhaps the new model is going to be awesome, maybe we could fall in love again…

After the announcement, I was left feeling even more disappointed. The price of the new iPhone is sky high and, I feel not much has been offered to enhance my user experience. I find myself thinking… has Apple gone a step too far this time?

Apple and Samsung have been chasing the title of world’s best smartphone for the past ten years, with Apple always commanding a premium for its devices. Samsung, in hot pursuit, began increasing the prices of its iconic top-end phones to try and mirror the exclusiveness of the Apple brand.

In November IHS Markit estimated it cost around $370.25 to make the iPhone X which retailed at $999, that’s a massive $628.75 in profit per device. Understandably for most manufacturers, you spend a lot on R&D and then advertising and marketing, but a 170% markup is astronomical.

Much of the R&D tech is licensed or on-sold to other manufacturers. For example, Samsung is the biggest supplier of screen components for electronics. Sony provides camera tech to many manufacturers. Through technology licensing, R&D costs are recovered and often become profit centres. Face recognition and fingerprint tech were initially introduced exclusively on premium devices, but they were quickly adopted in mid-tier devices. The economies of scale made the tech cheaper for everyone.

Now, Samsung and, more recently, Apple have announced their new iconic premium devices, both starting at $999 and with little in the way of advances over their predecessors. I once again question the sustainability of launching a premium device annually with little more than a few tweaks.

My MacBook Pro has lasted me five years, and my iPad is pushing its 3rd year of use. With Mac and iPad offering a pleasing level of performance for an extended duration, they were shrewd buys. I don’t mind paying a premium for this longevity.

With that said, has the need for the latest iPhone quietly died and been replaced with a more sombre approach to affordability and lifetime usage. I predict it has. Perhaps the mobile industry needs to rethink its obsession with launching a flagship phone every year to try and push more profits and focus instead on sustainability.

Much like the car market, most supercars can go 0-100 in under five seconds. If you can afford it, you buy the brand that appeals to you the most – be it a Porsche, Lamborghini or a Ferrari. For those of us that can’t, you can still buy a car for way, way, way less and still be a happy robot racer.

With basic usage and functionality remaining almost on a par, consumers will seek a solid middle ground. So, this year I won’t be getting a new iPhone XS or the Samsung Note 9. But, I will consider upgrading my MacBook Pro or my iPad – at least that’s a sensible long-term buy.

By Chris Henchel

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