Save Apple, win big prizes: Trying to understand Apple’s plan

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A great way to perpetually criticize Apple, it turns out, is to perpetually misunderstand the company’s business tactics. That way as the company blithely goes about making more and more money, you can complain that they’re doing it all wrong forever.

Writing for the Forbes contributor network and Monkeytown-Bananaville Board of Tourism, Ewan Spence says — and here the Macalope is legally required to advise you to swallow any liquids in your mouth before reading further as he and Macworld are not legally liable for any screen or keyboard damage incurred by uncontrollable spit-takes — the “iPhone X Plus Mission To Save Apple Will Fail.” (Tip o’ the antlers to Peter, Nick, Chris, Michael and Daniel.)

Save…

…Apple.

Save Apple.

Save.

Apple.

What is it Apple is supposed to be saved from? A record high valuation? Being buried in profit?

Apple may have had bold expectations for sales of the iPhone X, but while it was the ‘best selling iPhone each week’ the year on year growth of the iPhone family has been disappointing at best.

Define “disappointing”. Every sale of an iPhone X is a sale of the most expensive iPhone. So, that’s pretty good. Sure, unit sales didn’t skyrocket, but that isn’t a problem just for Apple. It’s a problem for the whole smartphone industry. We’re starting to get to the point where everyone already has one. And, unless the latest leak of images of the upcoming iPhones means Apple is going require people to buy two phones, growth is going to continue to be hard to come by.

But somehow Apple is the only company to figure out how to make not just premium phones, but premium premium phones.

Will the presumptively named iPhone X Plus kickstart a super cycle of growth? That’s the plan, but can it work?

Is that the plan? According to who? We went through the exact same thing last year with the iPhone X but every year is brand new in Punditland where no one learns anything. You’d think it would be self-evident that a very large and likely very expensive premium premium phone is not going to spark a so-called “super cycle”.

Does it make even a lick of sense to think that Tim Cook is sitting around wringing his hands about unit sales so the brilliant idea he and his team come up with to sell a bazillion phones is to make them more expensive? No, it does not.

The plan is to make more money. And they will. If they also happen to sell more phones thanks to the cheaper models that are expected to be announced alongside the gigantophone, so much the better.

If you’re looking for double-digit year on year growth in the iPhone family…

…you’re out of your gourd.

What’s odd is that Spence seems to think that while he’s aware that Apple’s not going to sell a monstrous number of gigantic, expensive phones, Apple’s executive team isn’t.

The new phablet…

Bite your tongue.

… is unlikely to move the unit sales needle, but the high retail price and Apples’ historically aggressive margins should ensure that it can trade lower sales for higher profit margins…

Yeah, that’s the actual plan. Not the thing you said up top.

…a strategy that is becoming increasingly harder to implement each year.

Hey, they may run out of tricks to squeeze more revenue and profit out of the smartphone market some year. But that year does not appear to be 2018.

  
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