Apple keeps fragmenting the iPhone because it pays
In the beginning, there was the OG iPhone way back in the 2007 fiscal year, and it appeared as Apple's sole handset warrior all the way to the iPhone 5 in 2012. Then it was joined by the first iPhone 6 Plus model with larger screen in 2013.
The iPhone SE joined for the ride to carry the torch of smaller iPhones for the nostalgic types in 2016. The next year, there were three, and one of them - the iPhone X - had a notch abomination, but an OLED screen, so it was the one to get, and it got budget XR and Max versions afterward, too.
Enter the new iPhone 12 mini form factor that Apple gave up on a few years later, but not before it started releasing not one or two, but four new iPhones each year, and it is now setting them as far apart as it can to push for ever higher average selling prices.
The 6 Plus days when iPhone fragmentation started taking off
Apple fragments the iPhone franchise
Those were barely different from each other, save for the screen size, and even the next split between an iPhone 14, Plus, Pro, and Pro Max models wasn't really all that distinctive when it comes to specs, design, or functions.
Still, it was a harbinger of the fragmentation to come for Apple's phones. Not only did the lowly iPhone 14 and 14 Plus come with slow screens and worse cameras, but also with last year's processors. This was something unheard of in the Apple realm, where fans were used to get the latest and greatest processor each year with every new iPhone, even the tiny 13 mini which was powered by the same chipset as the mighty Pro Max version.
Fast-forward to the iPhone 15 series, however, and Apple's commercial strategy to set iPhones further apart in order to nudge folks towards its more expensive handsets became abundantly clear.
The screen, chipset, memory and size differences remained, but Apple anointed only the iPhone 15 Pro Max with its big new thing, a periscope zoom camera, exclusively for the Max.
And what about the iPhone 16 series, which are going to come in four different screen sizes?
Apple Intelligence will fragment the iPhone even further
The specs and physical characteristics of the iPhone are one thing, but Apple will apparently start pushing iPhones to drift apart from each other in software capabilities as well. The Apple Intelligence AI suite that it announced at the WWDC 2024 keynote will only run on the iPhone 15 Pro and 15 Pro Max at the moment.
Interestingly enough, even the arrival of the iPhone 16 series may not change that, despite the rumor that the iPhone 16 and 16 Plus will be powered by an Apple A18 chipset just like their more expensive Pro siblings.
According to reputed Apple analyst Ming-Chi Kuo, the reason that the iPhone 15can't run Apple Intelligence features is not the processing power, but rather the limited amount of RAM that Apple's cheaper handsets have.
In the future, Apple Intelligence’s on-device AI will certainly upgrade (most likely to a 7B LLM), which will require larger DRAM to operate. It is worth watching whether Apple will use this strategy to differentiate between high- and low-end models.
- Ming Chi-Kuo, Analyst, Medium, June '24
Not the processing power, because the M1 chip on which Apple Intelligence will run is slower than the 17 TOPS of the A16 in the iPhone 15. The devices with the M1 chip, however, as well as those with the A17 Pro in the iPhone 15 Pro and 15 Pro Max, come with at least 8GB RAM.
We are not holding our breath that Apple will splurge on the iPhone 16 with its slow display and paltry dual camera, to equip it with 8GB RAM. It may surprise us, but so far Apple has been very stingy with the specs of its cheaper iPhones. Unless it raises the iPhone 16 and iPhone 16 Plus prices, of course, then Apple Intelligence will have done its fragmentation role even better.
Apple fragments the iPhone for profit
The fact that Apple's relentless iPhone fragmentation spree will only increase with the iPhone 16 series, each of whose four members will not only differ by specs, price, and software features, but also now by screen size for the first time, comes to show that the strategy works.
Apple is setting its iPhones so far apart from each other because this approach is bearing fruit, and people are increasingly buying the most expensive iPhones while scoffing at the cheaper models.
The trend started with the iPhone 14 series, where specs of the Pro models started drifting away from the regular ones. The iPhone 14 Pro versions sold almost twice better than, say, the iPhone 11 Pro models for a year on the market. As per Statista, the 14 Pro Max hit the highest adoption rate early this year, too:
iPhone 14 series adoption rates (image - Statista)
The trend now continues with the latest Pro models of Apple, but at an even greater skew towards Apple's most expensive iPhone. According to Counterpoint, the iPhone 15 Pro Max is now the world's bestselling handset, and the fact that it is Apple's most premium and expensive iPhone that costs north of a grand just shows how relentless fragmentation is padding its bottom line.
Apple's most expensive iPhone tops the charts because fragmentation works (image - Counterpoint)
In any case, the "AI for the rest of us" slogan rings hollow for now, especially when Apple's strategy is compared to that of companies like Oppo which vowed to democratize AI, and will be releasing the first midrange phones to sport the same AI functions as flagship handsets next week.
By now, it has become clear that Apple will continue fragmenting its iPhones to nudge people towards its most expensive tiers, simply because it works.
Fragmentation paid off, and the exclusivity of Apple Intelligence will only exacerbate that trend to squeeze extra revenue from the iPhone's already record average selling price.
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