How Apple Plays the Price Game
The XS is the season's gotta-have gadget. Except that you really don't need it. The company is brilliant at adding features without much function and charging a premium for them. In other words, this is a sucker's game.
Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology
Christmas came early this year, which is not very good news for the toy makers, whose businesses and sales are still pretty much in the toilet across the board. And here's the thing: the toymakers can blame technology all they want and complain about all the kids with their noses glued to the screens. But they're pointing to the wrong part of the problem. It's not that the kids aren't excited about getting a pile of new presents; it's that their parents are much more concerned with buying the new and very expensive "tech toys" for themselves. Let the kids wait until December; the starting gun for their parents' shopping sprees is the annual Apple announcement of the latest and greatest new phones and watches. And this year's race is on.
Once again, Apple is leading the charge toward the inevitable cliff's edge in a breathtaking game of "consumer chicken" that would scare even Evel Knievel if he were still around. Just how high can these prices go for no good reason? Apparently, at least for the moment, there's no end in sight. This reminds me of the early days of the Intel Pentium chips when new chips kept rolling out even though the alleged incremental benefits in speed and processing power weren't apparent to most humans--at least none that I knew. Of course, that didn't keep the geeks (and anyone not on a budget) from upgrading to the newest versions-- see it, need it -- or not. In fact, this dependable and consistent buyer response (a market-driven version of the Moore's law belief that things just keep getting better and more powerful) set the behavior curve for the tech industry and its customers for years thereafter. Honestly, things aren't that much different even today.
Mom and Dad don't care about cornering the market for Bobby or Betty on this year's Beanie Babies. They'd rather brag to their neighbors and their carpool cronies about their new giant iPhone XS MAX with a new Series 4 Apple Watch on the side. Apple can try all they want to call this monster the "X-S", but what leaps immediately into your head is "EXCESS" and that says it all. Big dollars, big size, wretched excess at its finest. However, knowing that this gotta-have behavior makes no economic sense and keeping yourself from falling once again into Cupertino's clutches are two radically different things.
In the old days, we used to complain about planned obsolescence in the auto industry; then we witnessed the same thing in the mobile phone world when our phones' performance suspiciously degraded right before new devices rolled out. Apple has also mastered the art of foolish functionality. The Watch is already approaching a level of complexity (like any other over-engineered product) where most of the embedded functions are unknown to most mortals and basically unusable by the vast majority of the users. The additional 8 or 9 features that are displayed on the face of the new Watch are called "complications." A complication is a traditional watchmaker's term for an added feature, but in this case it's more like unintended irony. And the beat goes on. We're buying into the new stories against our better judgment and even when we know that the things are no great shakes and not really doing the jobs that we need done.
And, the really sad thing - particularly about the Watch with all its new bells and whistles - is that the battery life still basically sucks. How about fixing what's not working every once in a while instead of adding more battery-sucking functions that no one asked for. What good is a tracking device of any kind (especially one that's increasingly positioned as a medical management tool) if you can't count on it to last the whole business day and when you have to take the thing off every night and recharge it? Makes it a little bit challenging to measure your sleeping behavior if your Watch is sleeping beside you on the bed stand. I wrote about this angst a while ago and things haven't changed a bit. If your tracker isn't tracking, what's the whole point?
Bottom line: No matter how much steak sauce you put on a hot dog, it's still a wiener.