I am not going to run through predictions or spec leaks. There are plenty of sites better positioned for that. What I do want to talk about is something that deserves more direct attention: the death of the sub-$1,000 smartphone.
The iPhone has been around for just over ten years. In that time, the price has climbed steadily while the subsidized carrier model that once softened that climb has quietly disappeared. Today you essentially have two realistic options: buy the phone outright, or spread the same full retail cost across 12 or 24 monthly installments. Either way, you are paying the same amount. The installment plan just makes it easier not to notice.
I bought an iPhone X outright last year. $1,200 for the 256GB model, before tax, plus whatever time I spent waiting in line. Apple's cost to manufacture that phone was approximately $400. That is a $600 margin on a single device.
Here is how the numbers have looked across every base iPhone model over the years:
Model Date Build Cost Retail Price iPhone Jun 2007 $220 $499 iPhone 3G Jul 2008 $174 $199 iPhone 3GS Jun 2009 $179 $199 iPhone 4 Jun 2010 $187 $199 iPhone 4S Oct 2011 $188 $199 iPhone 5 Sep 2012 $194 $199 iPhone 5C Sep 2013 $173 $99 iPhone 5S Sep 2013 $198 $199 iPhone 6 Sep 2014 $211 $199 iPhone 6S Sep 2015 $211 $649 iPhone 6S+ Sep 2015 $236 $749 iPhone SE Mar 2016 $160 $399 iPhone 7 Sep 2016 $224 $649 iPhone 7+ Sep 2016 $277 $769 iPhone 8 Sep 2017 $247 $699 iPhone 8+ Sep 2017 $295 $799 iPhone X Sep 2017 $370 $999 iPhone XS Sep 2018 — $999 iPhone XS Max Sep 2018 $370 $1,099 iPhone XR Sep 2018 — $749
The pattern is clear. Carrier subsidies began disappearing around the iPhone 6 era, a transition that started in 2013 and was essentially complete by the time the iPhone 7 launched. Retail prices jumped immediately and have not looked back.
The XS, XS Max, and XR were all announced today. The era of the sub-$1,000 iPhone is over.
There are alternatives worth considering. OnePlus continues to produce excellent Android hardware at prices that make Apple's lineup look difficult to justify on value alone. But if you are deeply embedded in the Apple ecosystem and have no interest in leaving it, you are going to keep paying. The ecosystem lock-in is real, and Apple knows it.
The Apple Watch tells a similar story. I bought a Series 3 with cellular last September for $429. Today Apple announced the Series 4, and the base model without cellular starts at $429. Add cellular and you are at $529. That is a $100 increase for the same feature I was already paying for.
To refresh both my phone and my watch in 2018 would cost me somewhere around $1,800.
Here is where I landed. The Series 4 watch is worth the upgrade. The EKG capability alone justifies it for me. The phone is a different calculation. The XS is an "S" year, which historically means refinement rather than reinvention. I am going to wait for the reviews, specifically around camera performance and the practical value of the upgrades, before I decide whether the cost is worth it this cycle.
Apple makes extraordinary products. But at some point the value conversation has to happen honestly, and that point is now.
