Gene Munster: Apple keeps increasing value to consumers at largely consistent prices

Apple’s “California Streaming” special event was another iteration of providing products with increasing value to consumers at largely consistent prices, Loup Ventures’s Gene Munster writes.

iPhone 13 Pro and iPhone 13 Pro Max will be available in four stunning finishes including graphite, gold, silver, and sierra blue.
iPhone 13 Pro and flagship iPhone 13 Pro Max will be available in four stunning finishes including graphite, gold, silver, and sierra blue.

Apple on Tuesday announced a slew of new products: iPad (9th gen.), iPad mini (6th gen.), Apple Watch Series 7, iPhone 13 mini, iPhone 13, iPhone 13 Pro, and the flagship iPhone 13 Pro Max.

Gene Munster and Andrew Murphy for Loup Ventures:

Apple’s annual flagship event was another iteration of providing products with increasing value to consumers at largely consistent prices. This is what we refer to as a virtuous cycle of mutual benefit. A product provides increasing value to the consumer at the same or lower price point, while more value accrues to Apple as it continues to grow its monetizable device base. Companies that participate in this virtuous cycle are most likely to continue to gain market share and expand market cap.

Apple has made annual upgrades seamless. And herein lies the beauty of Apple’s seemingly boring annual upgrades: annual upgrades! Pulling customers into a faster upgrade cycle. Combine all this with Apple’s advertising (from the event itself to 30 second spots to product placement in Ted Lasso), and the company’s world class marketing capabilities are clear and obvious.

What is less obvious is the juggernaut they’ve created with these annual upgrades. Apple enjoys increasingly recurring spend on a growing share of consumers’ wallets with expanding optionality from related services and accessories. Also important, the upgrade 5G rising tide will continue in FY22. We estimate 400m iPhones are over 3 years old, a base that gives Apple a head start in meeting Street expectations for 260m iPhone unit sales over the next 12 months.

MacDailyNews Take: As with Munster and Stokman, we await Apple’s hardware subscription plan: Apple One for services plus iPhone, Mac, iPad, and/or Apple Watch hardware for a single monthly fee, with built-in upgrade schedules for hardware. Depending on which hardware subscription plan they choose, users would always have current or near-current hardware.

Oh, BTW:

$500 full-subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine.Steve Ballmer, January 17, 2007

11 Comments

  1. “And herein lies the beauty of Apple’s seemingly boring annual upgrades: annual upgrades!”

    No Gene, herein lies the problem of same old same old boring iterations of existing products.

    Next up, lipstick on a pig…

          1. And all those who follow Cook will be caretakers, as well. Those with “original Apple DNA” in them will all be retired within the next 5 to 10 years.

            Perhaps GoeB and Dave know of a more suitable CEO. Please, do tell!

            1. I been saying it for five years or more.

              Dump Cook and bring back the SECOND Apple prodigal son, the creative genius and right hand of Steve Jobs, who co-developed many of Apple’s best devices, the milquetoast caretaker only watches over the money flowing in.

              Drum roll please 🥁, the legendary 😲, a toast 🥂, to the one and only💡– Scott Forstall!… 👏🏻👏🏻👏🏻👏🏻👏🏻

  2. With a device like the iPh, iterative releases are expected–to a degree. To think Apple would release a non-iterative device every other yr, or even every 3-5 years would be close to supernatural. What is of a real concern, which will call for some distinguishing technology, is the competitors getting closer each yr to setting themselves apart from Apple w/ their own non-iterative tech. With the iPh being the company’s bread and butter, no subscription service, new show, or woke emoji offering, will buoy in the end and sometimes Apple’s energy seems directed to these things.

  3. MDN: A subscription service for Apple hardware: iPhones, iPads, Macs, etc.? Absolutely no way. (I’m tempted to use much, much stronger language laced with expletives on that!)

    If I want to buy a new MacBook Pro every time a new version comes out or buy a new one after seven or eight years that’s my choice. If I want to hang onto my Mac Pro for 10 years because it’s “good enough” or buy one the instant a new version comes out that’s my choice. If my Apple TV has all the functionality I want then why should I pay Apple a monthly fee to be able to buy a new Apple TV that I don’t need or want?

    I don’t need or want a subscription service for Apple hardware. If anything would get me to jump ship from using Apple hardware to some other platform a subscription service for Apple hardware would do it — and that’s from someone who has been using and owning Apple hardware since the late 70s.

    1. I imagine a hardware subscription would include phones, watches, headphones, (maybe even an iPad). Subscriptions would work better when the replacement rate and specs of the hardware can be more easily standardized.

      Though now that you mention it, the idea of a Pro subscription including pro-level hardware is interesting. At the right price point I could see them including a MacBook or iPad Pro.

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