IPhone 16E puts it down: Apple is no longer a luxury company

You often hear people complain that Apple’s “Luxury Gadgets” is too expensive for them. If they talk about a $ 1,599 iPhone 16 Pro Max or a $ 2,299 iPad Pro, this view is understandable. But strictly speaking, even the most expensive of Apple’s Pro devices is premium products, not luxury. There is a big difference.

Want to see a real luxury product? How about a $ 8,900 Gucci jacket. Or a $ 10,000 Dior bag. Or an Apple Watch of $ 17,000. Real luxury is about exclusivity and just as much about the number of people who Don’t do it Buy your product. But with more than 200 million iPhones sold a year, the luxury niche tag simply no longer applies to Apple.

Take the new $ 599 iPhone 16E. It’s a solid but spartan -equipped smartphone with an older design and only a camera (which doesn’t offer a really optical zoom, no matter how often Apple claims this). 16E is not a luxury product. It is part of a growing group of Apple devices intended to appeal to a mass market looking for a nice product at a decent price. It’s J. Crew, not Cartier.

Of all Apple products, only a handful – iPad Pro, Mac Pro, iPhone 16 Pro Max – can really be described as premium. In addition to Apple’s brand image and good design, the iPhone Pro and iPad Pro offer unique performance and ease of use. And Video Professional or App Developer, which uses big on a MAC Pro, can be sure they get high stability and first -class hardware in return. But it is difficult to find luxury in a product that essentially offers the same experience as one that costs thousands less.

Is Apple still a Premium manufacturer?

Apple is launching more and more affordable products every year. Although this is first-class products, they are more aimed at the mass market and are significantly cheaper than other Apple products.

• The M4 MAC Mini is often available for during its $ 599/£ 599 MSRP. Even at full price, this is an excellent deal, but despite its many strengths, this is hardly a premium computer.
• Apple Watch SE is not a luxury smartwatch, nor can it even be described as prize compared to the Apple Watch series 10. But you can pick up one for as little as $ 199/£ 189. It is primarily intended for younger family members who joining the Apple world at an early age.
• A colorful HomePod Mini is available for just $ 99, $ 250 less than the classic HomePod. This sweet smart speaker has its charm, although the sound quality is relatively weak at the base end.
• The current Apple TV delivers a first -class home theater experience, voice control and intuitive remote for $ 129.
• AirPods 4 offers AirPods Pro-level sound quality with ANC for $ 179.
• For $ 349 (and often for sale) 10th-Gen-IPAD is clearly targeted at budget buyers. It costs almost a thousand dollars less than 13-inch iPad Pro.

Apple had to make a decision years ago. Should it remain a pure premium producer, a kind of Porsche among consumer technology manufacturers, by offering only the best to people who are willing to pay for it? This would have been risky because it would mean that the company’s survival is on success with a very small number of expensive products. (As an illustration of these risks causes errors in product development at the moment the aforementioned German sports car manufacturer serious difficulties.) So Apple chose another path.

Foundry

Less luxury, multiple shipments

Apple has obviously decided to become a mass producer offering a wide range of products serving all income fittings. Premium -Units such as the iPhone 16 Pro Max may provide the largest profit margin but less profitable devices such as iPhone 16E ensures a large number Users. This in turn leads to strong revenue through services such as iCloud+, AppleCare+, Apple Music, Apple Pay and last but not least the App Store. Even growth regions like India cannot be conquered with Premium units alone.

A wide customer base brings another advantage: economies of scale. The greater the turnover, the higher the number of shipments, the more benefits you get in areas such as development and marketing. It makes a little financial sense to develop your own iPhone CPUs and operating systems for a few customers. But if you sell 230 million smartphones a year, you can negotiate completely different conditions with companies like TSMC.

It is possible that this strategic shift will have consequences: Apple could find out that the Premium part of its brand is reduced in the coming years when people choose value rather than prize. But I will bet that Apple will be fine with it.