Why will the iPhone 11 be the hardest selling Apple?



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I think it's safe to say that the iPhone 11 is the most anticipated gadget of the year and certainly the most anticipated phone. Everyone will talk about it as Apple big September 10 The event begins and continues to speak even after Tim Cook finishes his work on Tuesday.

But there is a big difference between reading the rumors about the iPhone 11 during your lunch break and going from $ 750 to $ 1,100 – or more – for a new handset.

In fact, some warning signs indicate that the iPhone 11 could be the most difficult to sell for Apple for years. Maybe never.

"We are currently forecasting an annual decline in iPhone sales in 2019," said Annette Zimmermann, vice president and analyst at Gartner. "Apple had a tough 1Q19 and if the 2Q19 seems to be a bit better, it will be very difficult, if not impossible, to make up for that in 2H19."

"We are currently forecasting an annual decline in iPhone sales by 2019."
– Annette Zimmermann, vice president and analyst at Gartner

This forecast is based in part on the Gartner analyst who predicts that "we will see another slight increase in prices compared to last year's flagship products." This is certainly possible for both supposed models of the iPhone 11 Pro, which Apple could establish as a separate level of the standard iPhone.

Here's why Apple faces a tough battle to get people to buy new iPhones – and what it can do to change its destiny.

A new apple

In the last quarter, IPhone sales fell 12% from the previous year, making Apple's estimates of Wall Street miss. And it happened something that has not happened for seven years: the iPhone accounted for less than half of Apple 's quarterly business figure.

(Image credit: Noah Berger / Getty)

But this news is not entirely negative, because Apple is seeking to become a service-oriented company. Apple places big bets on things like Apple TV +, Apple Card, Apple Arcade and other initiatives generating recurring revenue instead of the single purchase of a phone. Meanwhile, accessories like the AirPods 2 and Apple Watch continue to skyrocket in sales.

"Let's be clear about this, Apple is really in great shape, "said Avi Greengart, senior analyst at Techsponential. "Some of Apple's accessories would only be Fortune 500 companies."

But do not get me wrong, Apple is keen (and needs) that the new iPhone be a success because it remains the backbone of the company's ecosystem.

Innovation or iteration?

The Apple invitation includes a promise that says "By innovation only". But analysts use another word "me" that should thrill Tim Cook: iteration.

"I think the cycle is pretty well known and understood by consumers that it is iterative," said Ben Bajarin, an analyst at Creative Strategies. "We are at the point where they do not have to be blown out of the water."

So, how does Apple plan to innovate and shake up the perception that it will not just act from another iPhone? According to reports, Apple will launch three new iPhones in the iPhone 11, the iPhone 11 Pro and the iPhone 11 Pro Max. Similar to the iPad Pro, iPhone 11 Pro models will occupy a higher level in the Apple lineup, perhaps more than the previous one. iPhone XS and iPhone XS Max.

(Image credit: Future)

For example, only iPhone 11 Pro phones are supposed to feature triple rear cameras, one of which will probably be a very wide angle lens. Apple will apparently use the AI ​​to add possibly cut subjects to the frame. There are rumors that the company has also begun to use live video effects that shame other phones, including the ability to remove backgrounds.

In addition, the iPhone 11 Pro could offer Apple Pencil support, similar to the iPad Pro. This would put the new high-end iPhones into more direct competition with the Galaxy Note 10 and Galaxy Note 10 Plus and their S Pen. But not everyone is buying that Apple will take this route.

"I just do not think that they are sold that a lot of people want [an Apple Pencil] "I think that ideally, they would prefer that you get an iPad." said Bajarin.

The biggest enemy of Apple: consumer complacency

(Image credit: Brittany Hosea-Small / Getty)

"We are at the stage where most of [smartphone] the improvements are gradual. "
– Avi Greengart, Senior Analyst, Techsponential

Whatever the great features of the iPhone 11, they might not be enough to defeat the supervillain who hangs out in the phone business – a pretty good syndrome. People just keep on their phone longer.

according to Gartner, the duration varies slightly by region but, in general, the company expects the average lifespan of high-end phones to increase from 2.6 years to 2.8 years by 2023 .

Another recent investigation by mobile phone operator Ting proclaimed the end of the two-year cell phone upgrade cycle, claiming that 55% of people kept their phones for three years or more.

"Smart phones are mature, as long as they're not broken, there's less of a need to upgrade early," Greengart said. "We are at the stage where most improvements are progressive."

Soften trade agreements, but will Pro be too expensive?

Now that mobile operators have virtually ended the subsidies granted to phones, the industry is turning to recovery agreements to facilitate the purchase of a higher quality smartphone. For example, if the iPhone XS at 999 USD was available at a price of 729 USD with an Apple Exchange, it's the difference between 30.99 USD per month and 42 USD per month for your phone.

(Image credit: Nood)

Gartner's Zimmermann says Apple should continue to do more to spur upgrades, including expanding its takeover program.

Assuming that Apple keeps the regular iPhone 11 priced at $ 749 from the iPhone XR, the iPhone 11 Pro models could take a risk by raising prices above the $ 999 and 1 $ 099 already practiced last year for the iPhone XS and the iPhone XS Max. But it will really justify the premium to make such a gesture when the smartphone market is expected to decline 2.5% in 2019.

MORE: Best phones of 2019

"As long as Apple will maintain the convincing replacement of the XR, it will leave room for price differentiation as it can add a lot to the super-upscale and not worry that its price is too high for the large user. public because aimed at the consumer user, "Greengart said.

Bottom line

The launch of the iPhone 11 poses many problems to Apple. The company will have to fight against the perception that its new handsets are iterative and that it can still innovate and surprise its customers. And the company must also fight the sobering reality that iPhone owners – and all smartphone owners – keep their phones longer.

Then there is the fact that Apple apparently jumps 5G this year and that technology will not appear in iPhone until 2020. This decision makes sense since 5G networks will not be generalized until next year. "We expect the iPhone 5G in 2020 to induce more upgrades." But people looking for a 5G device as the next phone might be tempted to miss this upgrade cycle.

In the end, Apple continues to have an advantage over the competition that it would be wise to take advantage of the company: its ecosystem. And this includes not only his new services, but also his accessories. For example, Apple may be able to show that its Apple TV + service will work better with the screens of the new iPhone 11 or iPhone 11 Pro. Or that Apple Arcade games work better with the A13 processor of the A11. Or, an optional Apple pencil can unlock the features of the iPhone 11 Pro.

But because iOS 13 will be deployed on most modern iPhones, and because all new Apple services will work with existing iPhones, and that battery replacement and opening Repair of the iPhone in third-party storesit's getting harder and harder to persuade people to upgrade their iPhone than to keep it. In other words, iPhones may have become too good for the good of Apple.

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