Tuesday 13 September 2016

Apple's iPhone 7 pricing strategy is really weird


As you'd expect, The iPhone 7 has a premium price tag, but Apple's price strategy is very confusing if you're looking for the "best value" iPhone.

Apple cranked up its hype machine during the event, complete with presenters talking up how magical and wonderful all its new features are going to be.

For the most part, while the iPhone 7 should comfortably fit in the pantheon of premium 2016 phones, features such as stereo speakers and water resistance aren't astonishingly new, and dropping the 3.5mm headphone port is likely to be as divisive as it may be forward-looking.

The pricing story for the iPhone family is now exceptionally mixed, thanks to some unusual moves by Apple in terms of pricing, models and especially storage capacities.

For previous iPhone generations, the general rule has been to make the older models available with low 16GB storage only, at a slightly reduced price compared to when the device launched. 16GB is lousy for iOS even if you don't install that many apps, because it doesn't take too many photos or videos to fill that meagre space, so it was always the poor phone buyer's choice.

Frankly, if you couldn't scrape the funds together for a 64GB iPhone, you were better off looking at Android alternatives.

This time around things are different. Apple has dumped 16GB as the baseline for older models, not just the new releases. The smallest new model of last year's 6s is now the 32GB NZ$999 iPhone 6s, with a 128GB model available for NZ$1199. The 6s Plus will run you NZ$1199 for 32GB or NZ$1399 for 128GB.

The only place the 16GB storage option is available is the iPhone SE, which powers on with a 16GB variant at the same NZ$749 price as it was selling for earlier. Rather quietly, though, Apple has cut the local price of the 64GB iPhone SE down to NZ$849. In other words, if you want an iPhone SE, buy that one and pretend that the 16GB model doesn't exist.

As for the actual new iPhone 7 models, they predictably sit at higher price points.

The standard 7 is available at NZ$1199 (32GB), NZ$1399 (128GB) and NZ$1599 (256GB), while if the iPhone 7 Plus tickles your fancy you're looking at NZ$1429 (32GB), NZ$1629 (128GB) and a hefty NZ$1829 (256GB).

Overall, Apple's pricing strategy is downright weird.

Walk into a store from Friday with NZ$1199 in your pocket, and you could walk out with either a 128GB iPhone 6s, a 32GB iPhone 6s Plus or a 32GB iPhone 7.

The iPhone 7's arguably the best buy with an overall longer expected shelf life in terms of iOS upgrades, but why is Apple keeping prices on older iPhones so high?

The only major consumer benefit there is that if you're thinking of selling your older iPhone, especially if it's a high-capacity model, you can expect higher prices than if Apple offered the 6s range at more realistic price points.

Your other option for iPhone acquisition is for contracting to a telco for it. It's not rocket science to predict that you'll pay a hefty handset repayment fee on top of your access costs on lower priced plans, because that's long been the iPhone strategy.

For higher-capacity phones though, and especially for a phone that costs NZ$1829, a contract buy might be your most sensible option.

Alex Kidman is the telco editor for comparison site finder.com.au.

Resource: http://www.stuff.co.nz/technology/gadgets/84191979/apples-iphone-7-pricing-strategy-is-really-weird

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