Apple recently introduced its new phones for 2020. Which, for the first time, include four different models. The iPhone 12 mini, iPhone 12, 12 Pro, and 12 Pro Max. Back in the early days, from the original iPhone to the iPhone 5, they only introduced one new model per year.
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But starting in 2012 with the 5s and 5c, Apple began releasing two iPhones. And in 2017, three new models. And their decision to release multiple iPhones has been met with some criticism. You’ll often find complaints on social media that buying an iPhone has become more confusing than ever. Since customers are forced to browse through several tiers of iPhone models with different features and prices, whereas Apple used to offer a one-size-fits-all solution that was much simpler for customers to understand.
Alright now let’s start off with the number one reason why Apple is selling so many iPhone models today, and it has to do with how the smartphone market has changed since 2007. Back then, there was only one iPhone. And no other manufacturer was selling anything like it.
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Other smartphones like the Nokia E62 featured plastic keyboards with small low-quality displays and clumsy operating systems. So if you were shopping for a smartphone and wanted a touchscreen, the iPhone was your only option. But its groundbreaking new technology didn’t come cheap. Its retail price was $500, which was already expensive compared to the average $300 smartphone. But if you include the required 2-year contract with AT&T, the iPhone’s total cost was over $900. Which was insanely expensive back then. But as competitors caught up and smartphone technology matured, Apple reduced the iPhone’s $500 price to 200 with the 3G model.
In 2010, the smartphone industry had already changed dramatically compared to two years prior. Google’s Android operating system was running on dozens of devices as manufacturers tried to cut into the iPhone’s market share. And they did this by offering features that the iPhone didn’t.
Take, for example, the HTC Evo 4G. It had a 4.3-inch display and faster 4G cellular connectivity, whereas the iPhone 4 featured a 3.5-inch display and was still using 3G. Not to mention customers could get those extra features on the HTC Evo for the same price as an iPhone. This marked the beginning of something I call the spec race. Where smartphone companies would try to outdo the other by including beefier specs or bonus features like a kickstand or stylus. It didn’t really matter how well the smartphone worked, as long as each model contained a cool gimmick that separated it from the pack. This wasn’t how Apple viewed things, though. And these two opposing approaches to creating a smartphone would influence how the industry developed through the next decade.
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For example, in 2011 alone, over ninety-three new Android phones were released. Whereas Apple continued to offer just one new model: the iPhone 4s. And flagship Androids of that year had some pretty impressive specs. The most common being large displays. The Galaxy S II, HTC Rezound, and Motorola Droid Bionic all had 4.3-inch displays, while the Galaxy Nexus took things even further with a 4.65-inch display. Which made the iPhone 4s’ 3.5-inch display look tiny in comparison. And this differentiation helped Android outsell iPhones for the next few years.
In 2012 Apple did their best to keep up, though, by increasing the screen size of the iPhone 5 to 4 inches. Although by that time, most customers felt it wasn’t enough, while journalists questioned why Apple didn’t go bigger. And the reason why they didn’t have everything to do with Apple’s design philosophy. They didn’t believe that making a phone bigger would necessarily make it better for users. Instead, they believed a phone should be designed around the thumb, which is why the iPhone 5 offered a display that was slightly larger, but still easy to navigate one-handed. In fact, they released this ad to illustrate their point.
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But while the iPhone 5 was on sale, customers made it clear that they preferred bigger phones with bigger displays. With Android devices outselling iPhone about four to one.At this point, Apple was faced with two problems. First, consumers shopping for a premium smartphone wanted one with a large display. Second, low-cost phones were selling better than ever, especially in emerging markets like India and China. Now, consider the iPhone 5. It was one of the most expensive phones on the market, with one of the smallest displays. So it didn’t really satisfy customers of either demographic.
Apple was trying to design a one-size-fits-all smartphone for customers with opposing needs. It was clear that they needed to take a new approach with the iPhone. And that’s when they decided to create the iPhone 6 and 6 Plus. But these models wouldn’t be ready until two years later in 2014. So in the meantime, Apple released the iPhone 5s and 5c in 2013.
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This was the first time ever that Apple offered more than one new iPhone model. And it was their attempt at attracting customers looking for a more affordable smartphone.
You see, at the time, smartphone data plans were much more expensive than they are today. With some of the most affordable plans charging $70 for unlimited data. So it was important for budget-minded customers for iPhones to be priced as low as possible.
Alright now when it came to the affordability of the 5s, it’s price started at $200 with a two-year contract, while the 5c was $100. But that savings came with several compromises. The 5c had old technology from iPhone 5 except with a cheaper plastic housing instead of metal. Because of this, Most customers opted to pay the extra $100 for the 5s, and Android users still weren’t tempted by the device’s smaller 4-inch display.
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But in 2014, Apple was ready to unveil its completely new iPhone strategy that was two years in the making. With the iPhone 6 and 6 Plus. Priced at 650 and 750 dollars with no contract, it was clear that Apple was aggressively targeting the premium market.
Not only was the 6 Plus the most expensive iPhone since the original. But it featured a dramatically larger display at 5.5 inches. And 4.7 inches for the 6. Apple had finally delivered iPhone models that rivalled other premium Android devices, and the customer’s response was overwhelming. The 6 and 6 Plus achieved record-breaking sales numbers.
With a 41% increase in its first-quarter compared to the 5s. From that moment on, it was clear not only to Apple but every other smartphone manufacturer, that customers weren’t afraid to pay more for premium features. And that pushed the industry in a completely new direction. With the iPhone 7 being the last flagship model with a 650 dollar starting price.
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In 2017, Apple began its price hike strategy. Testing just how much customers were willing to pay for a premium smartphone. They released three new models for the first time. The iPhone 8 started at $700. While the 8 Plus was $800. But neither of those compared to the iPhone X, which started at $1,000. Now, this was a pivotal moment in the iPhone’s history. Not only for its record-breaking price but also a record-breaking number of new models.
And Apple received a huge amount of criticism. People complained that the iPhone 8 essentially had the same design as the 7, and that the X was priced way too high. But despite these concerns, the iPhone again enjoyed a record-breaking year, with the X becoming the best-selling smartphone in the world for 2018. And helping Apple achieve a 15% boost in revenue compared to the previous year.
Now in 2020, Apple took things even further by releasing five new models. The SE in the spring, and the 12 mini, 12, 12 Pro, and 12 Pro Max in the fall. It was the most iPhone models ever released in a single year and finally allowed Apple to cover both customer groups that they failed to satisfy with the iPhone 5. Premium smartphone customers could have a super large display and the best camera system available for $1,100 with the 12 Pro Max.
While budget-minded customers could purchase the SE, which had much of the same technology as the 8 with the processor of the 11, for just $400. And since that made the iPhone SE more powerful than $1,000 Android devices, the model was a huge success. Fueling a 13% rise in smartphone shipments for Apple at a time when the entire market was experiencing a 16% decline due to COVID. So by offering more models, Apple is no longer forced to make the iPhone a one-sized-fits-all device. Which would be very difficult in today’s market where customers are more segmented than ever. Some people prefer a device with the biggest display and battery possible, while others prefer a more compact device that’s easy to use one-handed.
And of course, there are people who just want an iPhone for the lowest price possible.