Hey, did you get pre-notified for the pre-orders of the iPhone 20L+ yet?
Is this what we’ve become? Shepherded like “sheeple” into lines waiting for the newest iPhone release, update, and incarnation? Well, Apple knows that the forecast is slowly changing on the world of upgrades, and they see the writing on the wall. People are using their iPhones for longer periods of time without opting in for upgrades.
The downtrend in buying the latest and greatest is bringing with it fears among tech companies and component suppliers for Apple like Lumentum. The thought is that dwindling sales will unleash a title wave of sinking quarterly reports, layoffs, and jumps in product prices. But Apple has a beautiful scheme to keep customers hooked and shelling out cash.
“Longer-lasting products could lead to higher customer satisfaction, potentially enable Apple to charge higher prices for its devices, and would help fulfill the company’s environmental objectives.” ~ Toni Sacconaghi, Analyst at Sanford C. Bernstein & Co.
People are taking care of their investments and rather than upgrading to the newest market offering, the bug-fixing updates and well-thought-out user experience of their current iPhone are proving to be just perfect for the average consumer. This movement has caused Apple shares to drop 5%
So what’s the grand master plan to keep Apple ahead of competitors? Simple: downsize component orders, hike up current phone prices, and ride the wave of in-app purchases.
“Apple is no longer a traditional hardware business. The Apple investment paradigm is moving away from a focus on device sales toward a more predictable services-driven business.” ~ Gene Munster, Apple Analyst
The unexpected upside to these longer wait times between product purchases is that it tells a story of customer loyalty and predictable future sales. If a customer’s current iPhone is performing well and the released updates are making the experience even better, then when it is time to put Ol’ Yeller down and get a new pup? Chances are it’s going to have a half-eaten apple for a logo.