Apple phone business may be in trouble

Since 2007 Apple has released new phones and each of them is way better than the previous one. Yes, some releases were not as impressive as others but in general, each phone has been an upgrade over the previous generation. Moreover, if we compare each phone with 2-3 generations behind we will see that it was quite a decent upgrade.

For example, when I switched from iPhone 4 to iPhone 5 it was a huge improvement. I went from slow as a slow-as-a-turtle phone to extremely fast one. The same was true when I was switching from iPhone 5 to iPhone 6 Plus.

This principle is still working but we get to the moment then performance is simply enough for most user cases. Regular apps open instantly as do many casual types of games. And nobody sees any improvements if Instagram opens in 3 or 2.9 seconds. The biggest delay will be on the web server side anyway.

Performance differences are only visible in very heavy 3D games but a phone is not the best device to play them. Sure you can, but the experience will be mediocre at best. The phone screen is small, quickly heats up and the battery will discharge very fast. And considering that your phone is a typically quite important communication device, it will be quite bad to completely discharge it.

As a result, there are not many reasons to spend $1000 to upgrade your phone. For example, I still have an iPhone 8 Plus and I’m quite happy with it. The only negative thing I noticed is that the game I typically play loads around 5 seconds longer. But it loads around 30 to 45 seconds anyway, so it is not a big deal. Everything else is fine. Obviously, I had to replace the battery because 7 years for a single battery is too much.

Let's compare my phone with the iPhone 15 that I have in my family. iPhone 15 has a better screen with 120 HZ refresh rate and it is noticeable if you go from my phone to iPhone 15. But if you only use iPhone 8, you don’t really miss it.

It has FaceID but fingerprint works just as well. Well, almost as good, because it does not work when my fingers are wet and I have to enter the PIN code. But I can unlock it in any position which is also good. So I would say they are about the same.

iPhone 15 has a way better camera, but I use the camera only to take photos of documents. I rarely take any real photos of people or scenery. I agree that a lot of people do what I don’t, but we haven’t many improvements in this area recently.

I think the iPhone 15 has better battery life but it is not a critical one. It would be critical if it would hold a charge a several days but it is about 30% to 50% more. Most people will change a phone earlier anyway.

But not everything is great in iPhone 15. The iPhone 8 has a great advantage over the iPhone 15 because it has a dedicated mute button that instantly mutes it and you can always tell if a phone is muted. iPhone 15 has a button, but it is harder to use in general because you need to hold it and you cannot see its state when the screen is off.

As you can see, there is a big difference between iPhone 8 and iPhone 15 but not so much if you compare iPhone 13 and iPhone 15. I’m pretty sure there will be even fewer differences between iPhone 14 and iPhone 16.

What is new in iPhone 16? I checked the rumors and so far everything else is quite mediocre. I meant why would anybody sell iPhone 14 or iPhone 15 and buy iPhone 16? There are simply not enough features. Not because people at Apple are lazy, but because it is hard to imagine what else they can add or improve.

As a result, people will keep their phones for many years until they physically die. And here is the problem. The price of the typical phone stays mostly the same while R&D costs are higher each year and soon it will be quite hard to add anything new without significantly increasing the costs. But that will lead even to less sales and people will keep their phones even longer or switch to cheaper alternatives.

What I’m trying to say is that eventually iPhone will become a commodity and there will not be hype anymore. People will just buy them because the old one stopped working. That is pretty much what already happened with computers.

All of the above can hurt Apple’s phone business quite a lot in the near future. I’m sure they have a couple of ideas for a rainy day. In the worst case, they can always make the battery better. But eventually, they will run out of ideas and it is when hype will be over.