Back in May I tried to calculate the benefit to Apple in stretching out the current iPhone’s life another year. The bottom line was that I estimated Apple could reap an additional $23 of gross margin on each iPhone if they kept things basically the same. Or what might be more Apple’s style, they could add another pricey component that they would never be able to do if they stuck to a two-year cycle. Going one extra year allows them to do something special without cratering gross margins on their most important product.
But what could they offer with this newfound budget? At the time I thought maybe it had something to do with the camera. But after all this talk about Apple removing the headphone jack, I’m wondering if Apple may just decide to include wireless headphones in the box with every new iPhone sold.
The vast majority of people who buy iPhones are happy with the EarPods that it came with. That could be a problem for Apple if they perceive the user experience to be much improved with wireless headphones and they realize that they themselves are the main obstacle to their own market from ever finding that out. So what happens if Apple starts shipping wireless headphones with their iPhone? Will the vast majority of iPhone users give up on wired headphones? I’m guessing once that they experience the freedom from wires they won’t ever want wired headphones again unless it’s a last resort.
Normally, I’d say that there is no way that Apple is going to offer wireless headphones in the box. I have a hard time believing that Apple would sell any more iPhones if they did, so why take the gross margin hit? And that’s always what it comes down to. Any new feature is always measured for return on investment.
But this year is different due to the lower fixed costs on the new three-year cycle. Apple could have some room to maneuver on the component side without upsetting their stockholders. They could potentially offer a big upgrade on the hardware side and not suffer at the gross margin level.
I hope they make the wireless headphones standard. Most customers will be so delighted with wireless headphones that they’ll forget all about the absence of the headphone jack. The headphones could even become the equivalent of the new iPhone color. In the recent past everyone wanted the white, gold, or pink iPhone to show off that they had the latest hotness. Maybe next year the new wireless Apple earbuds will be the new status symbol?
The vast majority of people who buy iPhones are happy with the EarPods that it came with. That could be a problem for Apple if they perceive the user experience to be much improved with wireless headphones and they realize that they themselves are the main obstacle to their own market from ever finding that out. So what happens if Apple starts shipping wireless headphones with their iPhone? Will the vast majority of iPhone users give up on wired headphones? I’m guessing once that they experience the freedom from wires they won’t ever want wired headphones again unless it’s a last resort.
Normally, I’d say that there is no way that Apple is going to offer wireless headphones in the box. I have a hard time believing that Apple would sell any more iPhones if they did, so why take the gross margin hit? And that’s always what it comes down to. Any new feature is always measured for return on investment.
But this year is different due to the lower fixed costs on the new three-year cycle. Apple could have some room to maneuver on the component side without upsetting their stockholders. They could potentially offer a big upgrade on the hardware side and not suffer at the gross margin level.
I hope they make the wireless headphones standard. Most customers will be so delighted with wireless headphones that they’ll forget all about the absence of the headphone jack. The headphones could even become the equivalent of the new iPhone color. In the recent past everyone wanted the white, gold, or pink iPhone to show off that they had the latest hotness. Maybe next year the new wireless Apple earbuds will be the new status symbol?
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