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(Screenshot of Tim Cook on Apple HQ courtesy of Apple)
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The non-iPhone product announcements, which were very quick, included a cheaper Apple Watch, three bundled services on offer, and more “Pro” capabilities for its cheaper full-size iPad. As part of a larger push for lower-cost offerings, it marks a timely shift to accommodate a large portion of the market facing financial distress and / or the demands of work-from-home / study-from-home life.
The value boost began this spring, with the debut of the iPhone SE Generation 2. It came when the pandemic, lockdown and economic freeze first hit the United States, with a speech perfect for the moment: “Much to love. Less to spend. ”
Longtime Apple analyst and observer Ming-Chi Kuo predicted before launch that the $ 399 second-generation SE would sell as much as 30 million units in its first year, as much as its predecessor. The company hasn’t broken down sales of the SE Gen 2 yet, but anecdotally it seems to be a hit with millions of people who like smaller, cheaper phones that work in Apple’s sticky ecosystem.
At $ 399, Gen 2 is the cheapest iPhone since Gen 1, with a fast processor and a decent 12-megapixel camera, but a 4.7-inch screen using older LCD technology. That screen is one of the big compromises that Apple made to lower the price, since it did not include the charging block and a wireless charging disk.
Apple will now stop including chargers with other lower-cost products as well, though during Tuesday’s announcement, it billed the cost-saving measure as simply good for the environment.
Those cheaper products now include the Apple Watch SE, announced this week. At $ 279, it’s $ 120 cheaper than the base model of the Apple Watch 6 that was also announced, and it lacks some of the 6’s high-end sensors, such as a blood oximeter and an EKG.
In this case, the obvious market is older people and young children who don’t have / want / can’t manage an iPhone. Instead, the SE with an additional cellular plan could work on the company’s new Family Setup app, which shares schedules, tracks sudden drops and allows communication without a phone.
There’s also the old Watch 3, at $ 199, but without cellular capability or the ability to use Family Setup.
In its way, Apple’s announcement of the $ 329 8th-generation iPad ($ 299 for education buyers) was also a value game. Powered by an A12 Bionic chip, Apple boasted that the tablet is up to six times faster than competitive best-selling tablets and laptops running Windows, Android, and Chrome.
The real value, however, was the low-end iPad’s ability to use various high-end Apple add-ons, including the stylus and smart keyboard, which used to work only with the company’s expensive iPad Pro line, and new features. iPadOS as the Handwriting Recognition Software.
The highest value announcement Tuesday may not have even been hardware. Rather, it was for Apple’s burgeoning services business, which surpassed $ 13.2 billion in revenue last quarter and will add a new Fitness + service sometime this fall, along with three different Apple One bundles of your subscription offers.
Fitness + will cost $ 9.99 a month or, speaking of value propositions, will become part of One’s $ 29.99 a month family package. If you’re a clan of hardcore Apple users already paying up to $ 45 a month for iCloud, TV +, News +, Music, and Arcade, that’s a deal, especially with an added fitness app.
Apple Music competitor Spotify immediately filed a complaint with the European Union that Apple was abusing its market power by offering One packages. Millions of users prefer Spotify to Apple Music, but add it to a savings package. of money with a host of other useful services (if not the best in the world), and the calculation of value is sure to change for many.
Not everyone thinks the value drive makes sense for a company long known for making high-end aspirational products. I’m part of a weekly Zoom meeting that includes marketers from some of the biggest names in consumer products. For them, a value game represents a strange departure from Apple’s long-standing value proposition.
But in a year in which the lives of billions have been disrupted and tens of millions are still out of work amid the stuttering US economy and looming concerns about a second winter wave, offer your customers options Economics could be the right time and message for one of the world’s most successful companies.
