Apple has a clear strategy with its newest products—and the mid-range is losing out.
With the launch of the new iPhones and Apple Watches, the annual fall season of the latest Apple tech is now fully upon us. But though the September event may be the first and most prominent in the run-up to the holiday season, there’s almost certainly more waiting in the wings.
When we look forward at what to expect from subsequent Apple announcements, it can be instrumental to look at the way Apple is positioning the products it’s already released this year. In particular, both the Apple Watch and the iPhone lines saw “main” models (the iPhone 14 and the Apple Watch Series 8) that received less substantial updates, while the company took much bigger swings for its top-of-the-line models (the iPhone 14 Pro and the Apple Watch Ultra).
What Apple does with these device families can help us understand how the company might approach the other products it sells—in particular when it comes to the extremes of the low-end and high-end.
Lowering the bar
Apple took a decidedly different strategy with this year’s iPhone line: namely, making the mainstream iPhone 14 a more ho-hum update, including a mildly improved version of the previous year’s processor, while incorporating both bigger hardware and, crucially, software advances into the more expensive iPhone 14 Pro.
Meanwhile, on the Apple Watch side, the company’s managed to create a compelling low-end product, the Apple Watch SE, by dropping its latest wearable chip in a device that has most of, but not all, the most modern features of its main model. And by lowering the price to $249, the company’s made a very tempting entry-level product that’s sure to usher in more Apple Watch customers.
That’s why I’m most interested to see what a revamp to the base-level iPad will bring this fall. Apple’s likely to take a page from the Apple Watch SE and iPhone SE strategies, incorporating a powerful chip—though probably an A-series model, to differentiate it from the M1 in the Air and Pro—as well as many of the most modern features of the rest of the iPad line: support for the Apple Pencil 2, USB-C, perhaps even a smart connector to enable use of the Magic Keyboard.
But all of this raises a question about the design. Part of the way Apple can keep the costs low on the Apple Watch SE and iPhone SE is by using older case designs that the company has gotten very efficient about making. But eventually, that has its own cost, as it means using older components and designs that you’re not using anywhere else. Plus, why build all of these new features into an old design?
The base-level iPad is the last model with a Home button, and its stylings are decidedly out of step with the rest of the iPad line. Apple would no doubt like to move it into the modern era; the question is simply whether the cost balance has finally reached a point where it’s more efficient for all of its production lines to be using the same case design. I think we might be there this year.
For me, the most interesting new product Apple has rolled out this fall is the Apple Watch Ultra. Previously, when Apple sold a high-end Apple Watch (often dubbed the Edition), it focused on case materials to the exclusion of all else: 24-karat-gold, ceramic, titanium. Such products were sold with an eye towards fashion, but in the last couple years, the Apple Watch’s focus has settled on its core utility of health and fitness, so instead of trying to sell a high-end watch to a totally different audience, the company opted to go even deeper in the audience it already had.
It wouldn’t have been surprising if that move had also carried with it a premium Apple price; that is, after all, a central tenet of the company’s playbook. But by undercutting expectations of a device that seemed like it might cost just under $1,000—perhaps the most surprising pricing move since the original iPad was revealed at $499—Apple positioned the product to appeal to those who will never actually use it for mountain climbing, ultra marathon running, or scuba diving. At $799, the Ultra is just $50 more than the starting price for the larger stainless steel Apple Watch, and often on par with the price, depending on the band.
This pricing strategy is much closer to the way Apple already handles iPhones and iPads, tempting people into getting more expensive products by positioning them just within reach. When the choice is between a $500 Apple Watch and a $1,000 Apple Watch, well, most customers aren’t going to shell out double just to have a fancier device. But $50 over the existing high-end is well within reach for many, and the idea of how much more you get for that additional cost is definitely tantalizing. That same kind of price overlap, for example, helps move potential customers for the iPad Air to the iPad Pro.
Pricing the spectrum
Apple’s always been very smart about pricing and positioning its products along a spectrum. There was a time when you could easily sort the products Apple made into good, better, best (and a time when Apple even used those descriptors itself). In some ways, Apple has moved away from that neat ordering, just as it moved away from the simple four-quadrant Mac product strategy.
But looking at the Apple announcements we’ve seen so far this fall, it seems like the good-better-best strategy is back in force. And given that the iPad Air is the only model that’s already been refreshed this year, it won’t be surprising to see the low-end and high-end of Apple’s tablet lineup getting a lot of love, perhaps leaving the “main” model looking a little ho-hum by comparison.
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