When choosing your next iPhone, I bet you don't think, "Which one is the cheapest?" In fact, there's empirical evidence (opens in new tab) that you go for the best money can buy. What's more, Apple knows it. It's why the Cupertino tech giant can charge a premium for its best iPhone 14 and you'll pay it, no questions asked.
During Apple's most recent earnings call (opens in new tab), in which the company reported vacuuming up $65 billion consumer dollars for its iPhone line (actually a dip from last year's performance, if you can believe it), Apple CEO Tim Cook addressed a question about the rising average selling price for devices (an indicator that people are generally spending more to get the iPhone they want).
Could, one analyst wondered, this trend sustain in the face of tougher economic times? I thought Cook's response was telling on numerous levels:
"I wouldn't want to predict, but I would say that the smartphone for us – the iPhone has become so integral into people's lives. It contains their contacts and their health information and their banking information and their smart home and so many different parts of their lives, their payment vehicle – for many people. And so I think people are willing to really stretch to get the best they can afford in that category."
Put another way, the iPhone may be immune to macroeconomics because it's as important to our daily lives as water and the air we breathe.
I know, that's an oversimplification. But Cook isn't wrong. The iPhone, really any smartphone in the 21st century (yes, Samsung's most popular Samsung Galaxy S22 is the equally pricey Galaxy S22 Ultra), isn't simply some nice-to-have accessory. Watch someone drop their phone and what happens in the immediate aftermath. There's shock, fear, panic, and a rush to stop or undo the drop. If the phone drops out of sight, the impact is even worse.
The absolute horror
Recently, I was on an airplane and forgot that I had rested my iPhone 14 Pro on my lap. It's not something I normally do, in fact, I'm incredibly careful with my technology. I blame post-vacation stupor. In any case, I stood up and then the phone was gone.
I scrambled under my seat and the seat behind me, wordlessly pointing at the passenger's backpack as they, sensing my distress, pulled it aside and helped me look. This went on for two solid minutes as I imagined the device somehow sliding under all the seats until it rested near the rear galley and then, inexplicably, got sucked out into the clouds.
Then I saw the phone resting on my seat in a tumble of sweatshirts and jackets. The relief was immense.
Our lives are on our phones and, as such, it's not enough that they are adroit at the basics or even dependable. Our smartphones must be excellent, or as close to excellent as we can afford. It is an area where we stretch our dollars to the breaking point because we want the best possible handset to hold, manage and access all our digital stuff.
And Apple totally knows this.
It's a business
The thing about earnings calls is that, unlike product launch events where Apple might emphasize how they are putting the consumer first, this is primarily about how the company is prioritizing business success; the kind of message stockholders desperately want to hear. It's clear from Cook's statements that Apple understands its consumers' desires to own not just a basic iPhone 14, but something that promises the maximum effort when it comes to your needs.
A lot of people listening in on the call surmised that Cook's statements were about the inevitable and probably even more expensive iPhone 15 Ultra. That seems reasonable. It's not because Apple necessarily wants to make an Ultra phone. it wants to make more money in its iPhone category and the best way to do that is to produce ever-more premium phones and sell that at premium prices that you will gladly pay.
If you ever wondered why smartphone startups with more affordable smartphones don't wipe the floor with the pricey Apple iPhones it's because most consumers don't want a bargain - at least when it comes to something "so integral to their lives." They will pay more for a device that promises leading-edge technology not just across one aspect, but wholistically. Apple doesn't just charge more for its cachet (though that's part of it). It builds the best phone it can to fulfill your needs and make you feel secure in the knowledge that you didn't skimp where it matters.
So when you ask why the iPhone 14 Pro Max costs $1,099, know that, in the end, we did this. We showed Apple what matters to us and what we would pay. It's probably more than we can afford - especially now - but we always think, "It's worth it, right?"