Apple’s (APPL) iPhone X release went over so well that I’ve been hearing carrier promotions that feature older iPhone models. In addition to being chalk full of features that are beyond most users’ needs, its whopping $1,000 price tag is as much as an IBM (IBM) desk top, which confirms that it’s time for consumers to demand less.
The computer battles of the 1980s were about trying to get their consoles into consumers’ hands. Each system was slightly different from the others, which led to price wars, exclusive software promos, and lots of computer company asset liquidations. Even though Apple had the Apple IIE, it basically abandoned the space and focused on the iPod and iTunes.
The console wars opened the door for Michel Dell to rollout one of the great technology business models. Dell realized that most computers were basically the same, so he created Dell Computers to allow consumers to customize their machines, including their own hardware; it’s time for history to repeat itself.
It’s time for a cell phone revolution and the consumer needs to challenge some of the planet’s most iconic brands. They differentiate their phones with slightly different gimmicks, but they’re basically the same and, since the laptop is no longer enough, we have it us all the time.
Until one of these phones can walk the dog, or do the laundry, cell phones have basically reached peak utility. All of the phones now boast similar cameras, similar screens, similar colors, so the big difference is the payment terms and some of the preloaded software.
Tim Cook, Apple’s CEO, boasted on Jim Cramer’s “Mad Money” show that 1,530,000 jobs can be attributed to the “App Store ecosystem,” but most of the apps, even the prepackaged, are garbage. The device manufactures do this to create the consumer value proposition myth, so I long for the day when I can get a blank phone and customize it to my needs.
The iPhone 10’s price is obnoxious. Apple’s bean counters must have known that demand was too weak to justify this price, so it appears that they intentionally slowed older phones to try to drive demand. Most users are incapable of utilizing the full power of smart phones that existed 5 years ago, but slow it down to first generation speeds and it’s time to throw it out for a new unit!
According to some estimates, the iPhone X includes about $370.00 in parts for each phone and that doesn’t take Apple’s purchasing power and bulk discounts into consideration, so the actual cost must be much less.
Purportedly, it uses a $110.00 Samsung (KRK) display screen, which brings me to my next point. Samsung, Google Pixel (GOOG), and Droid (MSI) are so alike, in almost every way, that there really isn’t much competition, so the space has been devoid of practical innovation or advancements for years.
It’s hard to believe that better cameras, and filters that can make even the most average person look great, are enough to drive the market, but, Apple appears to be the first to harness this trend, followed by Samsung and Motorola, and, in a vapid world where way too many people are focused on trying to make friends jealous, by posting the perfect picture on Facebook (FB), it seems like Apple tapped into the selfie craze and delivered the most addictive piece of hardware ever developed.
I’m not going to get into how the iPhone has affected the dating world, everyone reading this probably has a story or two, but we can just leave it at, “best camera and filters ever.”
I’m not sure how the phone market will survive by pumping out software gimmicks most consumers don’t need, use, or even want taking up space. Not to mention that these behemoths control how your internet searches and what ads you will see. They also determine your privacy level and hold most of your data, which they sell to advertisers. Yes, they actually build profiles and sell your data, which you give them for free, and make billions of dollars from that.
If the $1,000 smart phone is here, then we’re well overdue for someone with Dell’s vision to step up and let us custom build our phones, with the type of camera we want, as well as memory, chips, screen, operating system, and the software we want.
Imagine a website that will build the phone to your specs, giving you the choice on how it’s going to work and allowing you to tailor it for your exact needs. This way, consumers that are willing to spend a grand will, at least, get the gadgets they want, or just enough so your child can have a phone for an emergency, or play games and watch “Stranger Things” on Netflix.
A customized phone, built with the hardware, operating systems, and encryption levels you want, as well as allowing the owner to choose their carrier and/or cloud. This would put the consumer in control of their data and provide many other benefits. This is where the next innovation in this space will be and it will take an outsider to make it happen.
After all, the biggest innovation in this space will be choice, so where is the next Michael Dell? This market is your calling.
I don’t own any of the stocks mentioned in this report. I do use some of the products!