iPhone X Game Changer or Piggy Bank Breaker?

iPhone X Game Changer or Piggy Bank Breaker?

The 10th Anniversary iPhone countdown: September 12, 2017

Published: August 31, 2017
Last updated: September 7, 2017
iPhone 8

Or will the Apple 10th Anniversary iPhone be called iPhone 8

iPhone X

iPhone X – the 10th Anniversary Apple iPhone

This year marks the 10th Anniversary of the Apple iPhone. It’s hard to imagine hoe fast time flies because it seems like just yesterday I was watching the announcement streamed online as Steve Jobs revealed the iPhone. And the rest is history. Now approaching the tenth anniversary, is the iPhone X Game Changer or Piggy Bank Breaker?

Within just a few short months, the iPhone became the fastest selling phone and carved our the smartphone market away from Blackberry and Microsoft. The one change factor that shifted the market: touchscreen perfection. Yes, it was reminisce of the former the Newton MessagePad released in the mid 1990’s but Steve Jobs added the entertainment factor of the iPod and iTunes with great cell phone features (call and text) all on a beautiful color display. It was magical. It worked so smooth and intuitive, even kids could figure it out. And to make it even slicker and more productive: it soon had apps. This opened the ecosystem for 3rd party companies (like mine, when I started QWASI and CellSigns) to develop an App and market it direct to Apple’s core base. It was brilliant and so exciting to be a part of this new phenomena. In the midst of growing a mobile technology company that focused on interactive SMS, we also jumped onto the App marketplace and quickly found our App featured as an Apple Editor pick as soon as it was released.

Not the same since iPhone 5…

Phone 4

The iPhone 4 was the last iPhone introduced by Steve Jobs in 2010.

Over the years, we watch Steve Jobs present the next must have: the iPhone 3, 3gs, 4… Unfortunately, Steve Jobs had to watch the unveiling of his last iPhone, the iPhone 4s from his home. He had stepped down on August 24, 2011 because of his health. Yet it has been noted that he had worked on future iPhone designs including the iPhone 5 and iPhone 5S before he passed away.

Over the next several years, Tim Cook, as Apples new CEO, helped oversee the company’s flagship product and launched the iPhone 5, 5s, 6 / 6 Plus, 6s / 6s Plus and in 2016, released the new iPhone 7/ 7 Plus.When we study the designs over that time, we notice that the iPhone quickly innovated during the early years of Steve Jobs leadership while we only see the true solo effects of Tim Cook since the iPhone 6 and later models have been released. What is fascinating as an iPhone fan is the innovation seems to have fallen off and leadership taken by the likes of Google (thru their Android Operating System) and Samsung (as a hardware provider). But the iPhone Pricing History tells a different story.

Here’s the innovation Tim Cook and Apple’s Chief Design Officer, Jonathan Ive have brought to the iPhone over the past five years.

iPhone 6 / 6Plus (2014)
– larger size (iPhone 6 increased from 4″ to 4.7″ screen) and super-sized screen (6 Plus w/ 5.5″ screen)

iPhone 6s / 6s Plus (2015)
– reduced bending in the iPhone 6s models but introduced 3D touch

iPhone 7 / 7 Plus (2016)
– larger storage option & water resistance, removed camera bump

Hmmm, notice a trend? Since the iPhone has been in the hands of Johny Ives and Tim Cook (exclusively since iPhone 6 onward), there has been zero innovation. Larger screens, hard drives and better cameras. Snore – zzzzzz. That’s why we must ask if it’s an iPhone X Game Changer or Piggy Bank Breaker showdown in just a few days.

The CFO Monitors Pricing

What also has changed over the years is the way the iPhone has been priced. When first introduced, many forget that here in the United States, AT&T had the exclusive on the phone for the first 2-3 years. When Steve Jobs first introduced the phone, it was also substantially priced higher until they adjusted the price and even dropped a model. The iPhone 3G (named for the ability to use 3G towers for higher data speeds) dropped the 4gb model. So the sole model became the 8gb model and the price dropped from the initial $599 to $399. The reason was the carrier subsidy. This helped price the iPhone under $200 for subsequent years until 201-2011 the carriers started removing the subsidy and Apple began offering an unlocked version you could take to your carrier direct. The demise of the cellular contract severely impacted phone pricing as the subsidy went the way of the customer as they began switching carriers more frequently to the one that gave them better calling, texting and the coveted unlimited data plans.

iPhone Pricing History

The pricing of the iPhone continue to follow a formula established early on in Apple’s history. Once you establish a price, you keep using it until it’s time to bump it up justified by better features. And what allows Apple the gravity to change price at their discretion: Apple’s loyal fanbase. I consider it the most loyal of any major brand today because of the volume they sell year over year throughout the world. Everyone seems to want the latest iPhone and Apple gadget.

What allowed Apple to command and drive their price however is innovation that was far superior to the competition. Today’s smartphones are very similar to each other. In fact, the Samsung Galaxy 7 & 8 have actually feature for feature been ahead of Apple – first to market with superior screen size options, cameras and waterproof features. In order for Apple to stay competitive, they must innovate again with the iPhone X, otherwise, they cannot realistically command a greater price in the marketplace. We now question is the iPhone X Game Changer or Piggy Bank Breaker?

iPhone Release Timeline

2007iPhone (1st generation)
2008iPhone 3G
2009iPhone 3GS
2010iPhone 4
2011iPhone 4S
2012iPhone 5
2013iPhone 5S & iPhone 5C
2014iPhone 6/ iPhone 6 Plus
2015iPhone 6S/ iPhone 6S Plus
2016iPhone 7/ iPhone 7 Plus & iPhone SE
2017iPhone X/ iPhone X Plus & a Special Edition?

In order to hit lower price points, Apple began rebadging older models like an updated iPhone 5S as an iPhone SE or taking year prior models and discounting them $100 to bring them into a more affordable price range. However, even in spite of the specs, the average price continues to increase year over year while Apple typically enjoys a comfortable margin of

For example, the iPhone 7 component breakdown by outside firm IHS Market showed that it could cost about $225 for Apple to produce its $649 32gb iPhone 7 and is reported to cost $36.89 more than the 6S model to produce. This seems right as Apple has experienced a margin decrease in iPhone sales of nearly 14% over the past 5 years. Many of the expected features the market expects has been costly to Apple: a larger battery, brighter & higher resolution display and upgraded storage.

iPhone X expected to be priciest yet

iPhone X Game Changer or Piggy Bank BreakerThe new 10th Anniversary iPhone (iPhone 7s or 8 or perhaps iPhone 10 or what I believe will be called the iPhone X) is expected to follow the recent price model starting at $649, $749 and $849 for the base unit with varied storage options and perhaps for the larger Plus model starting at $799, $899 and $999 depending on storage capacity. Some also speculate a special edition of the iPhone Anniversary edition will start @ $999.

If that holds true, we are looking at our first ever $1000 iPhone hitting the market. And when that happens, people should wake up to this day in history when a coveted cell phone is a thousand dollars. Yes, the same price as a full featured MacBook Air computer. And nearly the same price as a full-featured iPad Pro 12.9″ Retina display with 256gb wifi + cell tablet. Try holding up an iPad Air to your ear and you’ll soon realize that the iPhone is the same as your oversized iPhone we call an iPad Pro.

The real question: do you need a $1000 iPhone?
The sticker shock alone woke me up and I have to say… no. Since carriers no longer subsidize my smartphone and it’s all out of pocket, it causes me to closely consider these purchases. Sure, work can pay for my new iPhone 8 or iPhone X (I prefer that name for the anniversary phone but will stick with the rumored iPhone 8 name). However, if I have to pay for my iPhone 8, I may opt for a certified refurbished iPhone 7 before taking a bath (I mean plunge) on the latest tech that may only give me better waterproofing that Samsung phones already have in theirs…

Will the iPhone X be a Game Changer?

One More ThingPerhaps the new iPhone will innovate and take the iPhone to a coveted leadership position by future proofing my purchase with everything I want and need in my be-all, end-all device. I sure hope it’s a game changer. I just can’t help as my mind wanders and I begin dreaming about having the latest iPhone in my hand or pocket. Why I am a skeptic this won’t be the year for the big wow? One reason: a true CFO is leading this company forward. Tim Cook still hasn’t proven himself as an innovator or genuine risk taker. So I am pessimistic on the future of the iPhone. Have you ever noticed how he always refers to “one more thing” as the way to tease us with nominal features? Will this year’s “One More Thing” be a shocker or something expected?

As far as I am concerned, the iPhone today under their CFO’s leadership is cautious and risk-adverse. Apple would rather follow than lead or get out of the way. If it wasn’t for Samsung, I am convinced we would still have small screens on our iPhones and the would be prone to severe water damage from just going on a jog in my running shorts from simple sweat. Competition is good. I just want my expensive computer I use as a phone to last for several years and be the last one I should need for the next 4-5 years. Doubt that could ever happen, but a nice wish nonetheless. So is the iPhone X a Game Changer or Piggy Bank Breaker?

One thing is sure, the iPhone X may not be innovative or revolutionary as it was during the days of Steve Jobs, but the pricing may just knock your socks off because you’ll have to go sockless for a few months to pay off your new iPhone. You may just have to break the bank to buy this phone.

Some expected iPhone X features:
– 5.8″ OLED display
– Faster A11 processor
– Glass body
– Edge-to-edge display
– Facial Recognition, perhaps replacing Touch ID
– No Home button
– Wireless charging
– Three models: One OLED, Two standard
*According to sightings, rumors and speculation.

No one knows exactly what the device will bring on September 12. So let the countdown begin… September 12, 2017 will be proceeded by drum rolls and I hope fan fare following with strong sales for Apple. You only get one 10 Year Anniversary – so make it count Apple. We certainly hope the answer to our question: Is the iPhone X Game Changer or Piggy Bank Breaker? is a definite game changer. Fingers crossed.

iPhone Price History:

Carrier Agreement
iPhone Pricing
Unlocked iPhone Pricing
YearModel4gb8gb16gb32gb64gb128gb16gb32gb64gb128gb256gb
2007iPhone
(1st Gen)
$499$599
X$399
2008iPhone 3G$199$299
2009iPhone 3GS$99$199$299
2010iPhone 4$199$299$649$749
2011iPhone 4S$199$299$399$649$749$849
2012iPhone 5$199$299$399$649$749$849
2013iPhone 5S$199$299$399$649$749$849
iPhone 5C$99$199$549$649
2014iPhone 6$199$299$399$649$749$849
iPhone 6 Plus$299$399$499$749$849$949
2015iPhone 6S$649$749$849
iPhone 6S Plus$749$849$949
2016iPhone SE$399$499
iPhone 7$649$749$849
iPhone 7 Plus$769$869$969
2017iPhone X?$649$749$849
iPhone X Plus?$799$899$999

DID YOU KNOW?
It was on June 28, 2007, Steve Jobs unveiled the iPhone? It was initially priced at US $499 and US $599 for the 4GB models and 8GB. However, on September 5, 2007, the 4GB model was discontinued and the 8GB model price was cut by a third, from US $599 to US $399.

Carriers use to subsidizes the iPhone?
With the July 11, 2008 release of the iPhone 3G, Apple and AT&T changed the US pricing model from the previous generation. Following the standard pricing model for mobile phones in the US, AT&T would subsidize a sizable amount of the iPhone’s upfront cost for the iPhone 3G, followed by charging moderately higher monthly fees over a minimum two-year contract. This would help consumers for the next several years as carriers fronted the iPhone with 2-year minimum contracts. Today, carriers often require an upfront deposit and a monthly fee until paid in full or traded in for the year’s next model at a discount.

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iPhone X Game Changer or Piggy Bank Breaker?
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iPhone X Game Changer or Piggy Bank Breaker?
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iPhone X Game Changer or Piggy Bank Breaker? Read about how Apple prices the iPhone based on features & innovation - it's the new 10th Anniversary iPhone 8.
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GMG
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