If it isn’t broken, then don’t fix it.
That’s what Apple (APPL) management is telling us with the brand-spanking new iPhone 14.
When we boil it down, upper middle-class Americans love Apple products, and the company is taking advantage of that by betting they aren’t willing to move on from their shiny iPhone and iOS.
Apple doesn’t have a monopoly, but the closest thing to it.
Apple product launches once revealed exciting new design features such as touchscreens and Face ID, this event’s debut of a better camera, new notch design, and satellite-enabled emergency calls received a lukewarm critique by reviewers.
This is a change from what used to happen – there used to be way more innovation in the phone but it's not important.
I don’t buy it either when people say there’s not much more a smartphone can do.
That’s not necessarily true.
There is still a lot a smartphone can do, the builders and developers of it just haven’t thought about it yet.
The lack of big changes to the phone design becomes an even bigger issue when you take into account the ‘‘eye-watering’’ price tags attached.
Available for pre-order on September 9, prices for the iPhone 14 start from $1399, and the iPhone 14 Pro from $1749. Price hikes were high in countries with strong Apple brand loyalty like Germany, Japan, and the UK while the prices in America are the same as the last iPhone iteration.
Not everyone is on board with how the new products are rolling out.
Just the other day, the Brazilian government suspended the sales of iPhones without chargers.
Apple is also facing a $2.5 million fine from Brazil's Ministry of Justice and Public Security (MJSP). This is on top of a reported $2 million fine Apple incurred in 2021 after announcing its first smartphone to ship without a power adapter in the box, the iPhone 12 series. Apple can appeal Brazil's decision.
Imagine if houses start to get sold without the car garage door.
Governments are fighting back in some instances, and in some cases, not at all, but people can’t refute that iPhones sell themselves even without a charger, earphones, cover, and whatever you want to strip out of it.
They are high-quality products and priced as such.
Ultimately, this is genius by CEO Tim Cook who oversaw Apple earnings of $275 billion in revenue in 2020 and did $365 billion in annual revenue in 2021.
Not many companies can add an extra $90 billion in revenue in 365 calendar days.
If a CEO can get by with selling basically the same product at a higher price and the consumers agree to it, then I believe that’s magic by a CEO who knows how to sell effectively.
Apple can get away with it.
Competitors aren’t so far ahead where the new product innovations can supersede the power of the Apple brand.
Also, it means billions of dollars saved in not trying to improve the product through research and development.
This money can be used to buy back stock, execute stock splits, issue higher dividends, and pay executive salaries. Cook’s salary is only $3 million annually, but his restricted stock options each year are almost $100 million.
Top level tech CEOs are handsomely paid and worth every cent.
Nobody ever said Tim Cook was Steve Jobs, he’s not a creative talent. Cook will never revolutionize technology or the internet.
Yet, he knows how to milk products others created like the iPhone for maximum profits which Jobs could never do.
And that’s what he is here to do until infinity. Last time I checked, we all need our smartphones to function in the world, so demand won’t fall off a cliff.
I am bullish Apple stock, and I can’t wait for my $2,000 iPhone 14 PRO. I’m also buying 2 extra chargers.
