Apple Inc. (NASDAQ:AAPL) launched three new iPhones yesterday – iPhone XS, iPhone XS Max and iPhone XR – along with Apple Watch Series 4. Alongside the launch, the company also made a surprising move that the world didn’t notice much. Apple killed iPhone X, once and for all, and quite silently. About the decision to kill iPhone X, Tim Cook neither uttered a word during his 2-hour long presentation nor talked about it during the post-event media briefing.
While many industry experts don’t see any reason why Apple should continue to sell iPhone X now – and they are correct to a large extent as well – we are wondering why the world’s most valuable company kills its most selling iPhone which was introduced barely 10 months ago.
In February, Tim Cook boasted enough about iPhone X being the world’s most selling smartphone. He also touted iPhone X as the most advanced iPhone packed with powerful A11 Bionic chipset Apple has had ever made. It is also reported that iPhone X was the most selling iPhone each week that brought in the maximum revenue as well the profit for Apple.
This leads us to think why would a company kill its most revenue generating smartphone in less than a year of existence? Generally, Apple sells at least two or three generation old iPhones before deciding to discontinue those. Then, what made Tim Cook and Team believe that it’s a perfect time to kill iPhone X?
iPhone X vs iPhone XS
The answer lies in the response received by iPhone X from the market and specs of iPhone XS and iPhone XS Max.
Yesterday when Apple announced iPhone XS and iPhone XS Max, it was immediately clear that Apple didn’t want to compromise with the profit margin it has been garnering for years. Various sources claim that Apple maintains 40% – 42% net margin on each iPhone retail price.
Apple has price tagged iPhone XS with $999 and iPhone XS Max with $1099, making the latter one the most expensive iPhone the company has launched ever. The availability of the successor of iPhone X almost at the same price of iPhone X would have had forced Apple to slash the price of iPhone X by 30% – 40%. The strategy would have resulted in four iPhones X available in the market for customers to choose from – iPhone X price tagged at $700, iPhone XR at $749, iPhone XS at $999 and iPhone XS Max at $1099.
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|Features & Specs||iPhone X||iPhone XS||iPhone XS Max||iPhone XR|
The major difference between iPhone X and iPhone XS is the chipset; iPhone X holds A11 Bionic chipset under the hood while iPhone XS has got new A12 Bionic Chipset. Besides, RAM is another major difference between these two iPhones. Rest all the features in $999 iPhone XS are either identical or have minuscule upgrades. Therefore, unless and until you are not falling in love with A12 Bionic Chipset – launched with much of fanfare – you are not going to have the feel of owning new iPhone at all. The identical look, same fell form factor, identical display, equally capable camera creates a very narrow difference between iPhone X and iPhone XS. The more powerful Chipset doesn’t hold much of merit in buying iPhone XS considering iPhone X never have had any reported problem of lagging, hanging or slowing down, barring issues rated to software and app level.
Apple is equally aware of these equations. The just-launched iPhone XS may find it difficult to lure customers if Phone X is available next to it on the shelf, that too at 30% – 40% lesser price. At nearly $700 price tag iPhone X offer more value for money than iPhone XS. In no circumstances, Apple would want iPhone X to compete with iPhone XS and iPhone XS Max. Hence, the only way to keep the newly launched iPhones refrained from such nasty competition was to kill iPhone X, at once and for all.
With an immediate effect, Apple has removed iPhone X from its website. However, the company has committed to releasing all the latest iOS updates to iPhone X for the next few years. That makes iPhone X more economical yet equally powerful as iPhone XS and iPhone XS Max. The only challenge for iPhone X customers could be the replacement of parts in case of any physical damage.
It would be interesting to see that despite Apple’s decision to kill iPhone X, how the market reacts to it. The stock clearance sales and strong resale value of iPhone X may show the increasing love for iPhone X as the device would offer much more value for money at the possible reduced price.
Though it’s little too early to be conclusive with anything, it would be interesting to see how much value people find in the successor of iPhone X. But one thing is certain – Apple iPhone X looks more adorable than ever before now.