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 u...