The iPhone is stuck in a very successful rut

Macworld

Steve Jobs took the Henry Ford approach to listening to customers, which is to say that he unashamedly didn’t listen. “If I’d asked customers what they wanted,” the carmaker is reported to have said, “they would have asked for a faster horse.” And tech fans in the 1980s might have asked for a faster IBM. But Jobs’ Apple had other ideas.

The problem is, customers can be quite insistent. Earlier this fall, Apple launched another bold and groundbreaking product in the form of the iPhone Air. However, multiple reports suggest it’s sold very poorly, so poorly, in fact, that the company is believed to have cancelled plans to launch a 2nd-gen model in 2026. And last week, another report claimed the iPhone 16e is also a flop as the “attempt to lower prices has failed.” I doubt that the 16e’s problem was being too cheap, but we’ll come back to that later.

Figuring out what customers want before they do is a lovely idea, but ultimately, they’re the ones with the casting vote. You can tell them what they really want is an ultra-slim smartphone as many times as you like, but you can’t force them to buy the thing.

Which leaves Apple in a strange position. The most traditional iPhones—the 17, the 17 Pro, and the 17 Pro Max from the current generation—are selling just fine. It’s the outliers and experiments that are struggling. And that’s been the case for a while: the mini format didn’t work, the Plus format didn’t work, and now the Air and e formats don’t seem to be working either. The iPhone is a product of era-defining commercial dominance, but only within quite narrow parameters. And whenever Apple tries to break out of those parameters, it fails.

Based on recent sales activity, it would appear that what customers want from their iPhone is a medium to large screen, a state-of-the-art camera, excellent battery life, and premium processing power. What they’ll settle for is a basic phone at a bargain price. But an iPhone that compromises on those key criteria for the sake of a middling price and AI support (like the 16e) or an absurdly slim chassis (like the Air) is going to be given the shortest of shrifts.

In the short term, this is obviously fine, and both Apple and the iPhone line remain enormously profitable. But the fact that the company keeps trying to find the elusive fourth format shows how aware it is of the long-term danger.

The traditional iPhone is clearly what customers want now, but they won’t want it forever. Or rather, Apple won’t be able to keep making noticeable improvements to that format forever. The yearly refreshes barely register as it is, and at a certain point, customers are going to realise that they don’t need to pay big to get what they want from a smartphone. They can just hold on to their existing handset for longer, buy a cheaper model from Apple’s range, or worst of all, buy at a lower price from an Android manufacturer. Apple will need to woo them with something new.

And despite the failures, the company must keep trying. We don’t know what will come next, but Apple won’t prosper as a business if it can’t grasp the opportunity when it arrives. With the trinity of boring iPhones bringing in the money, the loose-cannon fourth model is free to experiment unprofitably. And to find the key to the smartphone’s future, whether that means lower prices, thinner handsets, folding or curved screens, AI, or something else entirely. Just don’t ask me what that something is. I’m waiting for Apple to figure it out.




Foundry

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