The middle of Apple’s lineup is usually the right one to get
Even though Apple didn’t announce new iPhones yesterday, the event was a jam-packed hour. Apple announced four new hardware products, a major new service, and a new bundle. By any objective standard, that’s a big day. As I’ll note below, the most important products might not be the hardware, but Fitness Plus and the ability to make an Apple Watch a kid tracker.
Besides those announcements, the main thing that struck me is that Apple seems to be making a subtle but important shift in its product strategy this year. You may have heard of the “Good, Better, Best” pricing strategy — it’s been applied to Apple a bunch. I think what Apple is doing this year is making the “better” option …better — and also a little more expensive. It’s the “better better” model.
The old among us have Steve Jobs’ famous Mac product grid indelibly marked in our concept of how Apple approaches products. On one axis was “Consumer vs Pro” and the other was “Desktop vs Portable.”
But it’s not really applicable anymore on either axis and it certainly doesn’t work for the many kinds of products Apple makes now. There simply are more tiers than just “consumer” and “pro” for most product categories. Plus, in Apple world, the word “pro” itself doesn’t really mean “for professionals” so much as “the best thing” these days.
Take the Apple Watch announcements. Apple announced both a flagship Series 6 line of watches and a lower-cost SE line. At first, I thought of the Apple Watch SE as parallel to the iPhone SE. So it seemed to me that the trend is Apple needing to make more inexpensive products that are technically new because it’s harder to get consumers to buy last year’s model. But after some thought, I think that’s not quite right.
The Good, Better, Best cadence for the Apple Watch just happens to go by different names compared to the iPhone. The SE naming scheme just threw me. Here’s how I think it goes:
Good: Apple Watch Series 3 / iPhone SE
Better: Apple Watch SE / iPhone 11
Best: Apple Watch Series 6 / iPhone 11 Pro
The “good” option at the bottom of the lineup actually serves two purposes. It’s a killer deal and makes Apple’s products more accessible. But it also makes space for the better option to be more advanced and pricier. Last year, Apple likely sold a kajillion Series 3 watches at its low price — this year it has a very clear upsell in the SE.
The same basic logic applies to the new iPad and iPad Air. The new iPad Air takes on a lot of the things that make the Pro compelling — so much so that unless the words “ProMotion” and “LIDAR” mean anything to you, the Air is a better choice. It’s also $100 more than the iPad Air was last year.
I think Apple’s not too worried about the iPad Air cannibalizing the iPad Pro — it’s still selling you an iPad, after all, and it’s surely making a good margin because that’s what Apple does. In fact, I suspect “margin” is often the answer as to why the better option is missing a feature the best option has. The Apple Watch SE is a Series 6 with less expensive components too: no blood oxygen monitor, always-on display, or the newest chip.
Put another way, all I’m talking about here is upselling. The quality of the “good” option gets you in the (now metaphorical) door and the upsell to the better option is sitting right there. Apple’s trick is to make that upsell a variant of its best thing instead of an improved version of the good thing. The Apple Watch SE is based on the Series 6. The iPhone 11 is closer to the 11 Pro than to the iPhone SE. And the iPad Air is now more like an iPad Pro than a basic iPad.
Like any model, this idea can break down with too much rhetorical pressure. I don’t know how it applies to the MacBook lineup, for example, but that lineup is in such flux right now with the impending Arm chips that I think it gets a pass. To me, this model is what Apple is striving for, but depending on where any given product line is at the moment it might be difficult to achieve.
Every time Apple releases a new product in a line, there’s always some variant of the question “Why does this need to exist when it’s so similar to that other thing?” I was asking it myself with the iPad Air and the Apple Watch SE yesterday. And now I think the answer is to make sure the “better” one is better — and it doesn’t hurt Apple if that means it’s just a little more expensive too.