Let’s Talk About the iPhone XR (Premium)

The consensus on the new iPhone lineup is that they have bigger screens and bigger prices. But hold on a second there.

I had originally intended to write something I’m calling Analysis: Apple’s September 2018 Announcements, modeled in large part after something I wrote last year in the wake of Apple’s September 2017 event. And … I may still publish that, since I’ve written most of it. But in the process of that work, my mind kept returning to the iPhone XR. I feel that this is the sweet spot in Apple’s new iPhone lineup. And that it bucks the “bigger prices” part of the conventional wisdom.

That the new iPhones represent a step up in price is no surprise and is not wrong, generally speaking. Apple saw flat sales of iPhones year over year this past year and was known to be plotting more expensive prices in order to raise its ASP and grow revenues. And they just followed through on that: As Brad reported yesterday, each new iPhone is $50 or more expensive than the iPhone it replaces.

Beyond this, there are some hidden additional costs to the new iPhones, too. Apple will no longer bundle a Lightning-to-headphone jack dongle, for example. And Apple is raising the price of screen repairs on these new models to an astonishing $270 to $329 (out of warranty, sans Apple Care+, which is also more expensive for the new devices).

OK, we get it. Apple’s products are expensive. They have always been expensive, will always be expensive. There’s no use being indignant about it.

But there are different ways of looking at cost. And this is something I think about a lot. Like most of you, I’m not independently wealthy and I don’t have an extra $1000 burning a hole in my pocket or my bank account. It is mind-numbing to me that the devices are so expensive, and when I use a phrase like “the sweet spot,” I’m referring to many things: Size, form factor, performance, and, yes, price.

I used to hold up Google as a great example of the sweet price. The Nexus 5 handset hit the sweet spot. The Nexus 6 did not, but when Google came back a year later with the excellent Nexus 5X and Nexus 6P, those devices absolutely hit the sweet spot. They were flagships handsets at mid-market prices. I celebrate this kind of win, and I love being able to communicate it to others.

That Google has jumped the shark from a pricing standpoint with its Pixel handsets—both generations so far—is hugely disappointing to me. And that is reflected in my writing: I’ve complained many times that Google simply doesn’t have the reputation or market penetration to justify these prices. And as I did with Microsoft when it was still making phones, I strongly recommended—and still recommend—to the company that it lowers its prices.

But Google has chosen its premium path. And a new Pixel 2 XL has the same basic pricing structure as the iPhone X and Samsung Galaxy S9+. It’s inexcusable. So today I point instead to companies like OnePlus, which price its phone as Google used to. And I look to even lower-cost possibilities like the recently announced Xiaomi Poco F1. There are tremendous deals to be had, money to be saved.

And yet.

Many people want an iPhone. Want, more specifically, a powerful and modern iPhone. And if the $999 starting point of last year’s iPhone X was a bit too heady for their tastes, they had options (beyond a two-year, hopefully 0 percent interest loan or the iPhone Upgrade Program). The iPhone 8 started at $699, a $300 savings, and the bigger iPhone 8 Plus started at $799.

Too expensive? Last year, you could still buy older iPhone 7 and iPhone 6 models for even less, or an iPhone SE for less still. You could also see what was available from Apple’s refurbished iPhone store, a great tip for anyone looking to save money. I routinely buy Apple products this way. A refurbished 32 GB iPhone 7 is just $379 right now, for example.

This year, prices are up. Apple has shifted its product line such that the oldest iPhone you can now buy, the iPhone 7, starts at $449, and it has, for the first time in recent years, removed last year’s flagship, the original iPhone X, from the lineup. I suspect it is because that iPhone would have been the new sweet spot and it didn’t want to cannibalize new iPhone sales.

So, let’s think about the iPhone XR.

It’s starting price of $749 is ostensibly $50 more expensive than the original price of the phone it sort of replaces in the iPhone lineup. But that’s not a fair comparison. The iPhone XR is a modern iPhone, with the design and form factor pioneered by the iPhone X. It comes with 64 GB to 256 GB of storage. It comes in a vibrant range of color choices. And it has exactly the same internals, including the powerful processor and True Tone display capabilities, as its far more expensive XS and XS Plus siblings.

The only major real-world difference, really, is its single 12 MP camera, where the iPhone XS/Plus have dual cameras. But that camera is going to be excellent. Last year’s single-camera iPhone, the iPhone 8, scored a 92 over a DxOMark, just below the 94 scored by the dual-camera iPhone 8 Plus. So if this camera is unchanged from last year—and it’s not–that is still solid. (The iPhone X scored 97, just below the Pixel 2 XL whose camera I prefer.)

We don’t know how Google will price the coming Pixel 3 XL. I’m worried that it will actually be more expensive than the Pixel 2 XL, but let’s just use that phone for comparison purposes. A 64 GB Pixel 2 XL today sells for $850. That’s fully $100 more than a 64 GB iPhone XR.

One. Hundred. Dollars. More.

And if that price differential isn’t enough to make you reconsider the iPhone XR, to look at this seemingly expensive new phone in a new way, consider the following. The iPhone XR is more powerful than the Pixel 2 XL, with much better performance that will not degrade over time. It is part of a phone lineup that has been extremely reliable, whereas the Pixel 2 XL has endemic reliability problems, some of which I’ve experienced first-hand. The iPhone has better apps and media ecosystem than does Android, from a quality perspective.

You can and should compare the iPhone XR to other high-end Android handsets, too, of course. But just remember that each comes with its own compromises. Samsung handsets are as or more expensive, but they are often on sale. The OnePlus 6 costs just $529 for a 64 GB model, and a 6T is on the way. So, yes, as noted, there are always deals to be had.

But if you want an iPhone, a new iPhone, and you aren’t super interested in paying premium price points or compromising on capabilities, the iPhone XR is the new sweet spot. And while some are spitting mad that Apple just raised prices yet again, I look at the iPhone XR and I see great value. And this is not something I see at all when I look at the Google handsets I’ve been using.