Does the iPhone 8 have what it takes to be a success?

Source: ¿El iPhone 8 tiene lo que se necesita para ser un éxito?

The above interview was conducted October 17 with Carlos Morales
Editor en Jefe, Forbes Digital (Mexico).

The source questions and my answers in English are below:

How can we read the fact that the new iPhone lineup raised so little noise? There was no massive lines outside the Apple Stores and people demonstrated almost zero interest in the new models compared with the hype motivated by the iPhone 7.

I don’t know about you but I don’t like waiting in lines. I don’t think Apple considers waiting in lines to be a good user experience for its customers. Over the years Apple has been able to improve availability and online orders so that lines can be eliminated. I suggest a better way to gauge interest in new models and that would be to look at sales. Sales seem to be going up even as lines have been going down.

The iPhone 8. What do you think of the fact that the iPhone 7 is outselling the iPhone 8?

Is it a fact? I think this notion is coming from a survey of operator stores in the US over a short time period. The mix of phones has never been known and is a matter of speculation. The only data we do have is the average selling price derived by dividing the revenues by the number of units sold (and ignoring deferrals). This price set a new record during the last 12 months. Expectations are that it will increase to another record again next year. I might add that this has never been observed in the phone business as far as I know. The opposite has been the trend.

Whats the outlook for the the iPhone 8 vs the iPhone 7 and the iPhone X?

The iPhone 8 is likely to be the best selling model over the next 12 months. The iPhone X will be the best seller in the first quarter but I expect it will come second during the following quarters. The iPhone 7 will end up 3rd.

What do you think about the smartphone prices, aren’t they too high? How far can they be stretched ?

Smartphone prices are very low. World-wide, average smartphones sell for less than $300. You can see a break-down by region here.

iPhone prices are, on average, more than double the average of all smartphones. Note that apple’s latest line-up also includes the cheapest iPhone ever with the SE now starting at $350.

I don’t think the average selling price will increase in 2018 globally. It will probably decrease as it has for a long time. Average iPhone prices will increase but probably only by $10 or so.

The iPhone price tiers are well understood. I published an analysis here:

More important however is that the iPhone remains priced at about $1/day, no matter the model, and as such the value users perceive is very high. The most expensive iPhone costs about 8 cents per hour of use, 1.4 cents each time you unlock it and 1 cent for ever 25 interactions you have with it (touches or taps). On a per use basis the iPhone is extraordinarily cheap. I know of no consumer product that is cheaper. This is determined partly by the intensity of use and by the high resale value (I assume 30% residual value after 2 years).

Do we really need a borderless OLED display in a smartphone? What about the face recognition technology?

Having no borders means you can get a screen that is bigger than the iPhone Plus in a phone the size of an iPhone. I think users will value getting more screen in a smaller phone. I certainly would. Having OLED means it can be curved a bit and also have nicer, truer black.

Face recognition saves time and is more secure. I don’t know another way of making the experience better for something that you do 30,000 times a year.

What do you think about the Apple Watch, which seems to be—finally—on the right track?

The Apple Watch has been on the same track for 2.5 years. I don’t see any change in that trajectory.