When Steve Jobs took to the stage to introduce the original iPhone, he famously repeated the key functionalities consumers want in a mobile device: a browser, a phone and a music player.  Jobs would repeat this mantra several times before he revealed that all those features were actually combined in one device. This seminal piece of industry history has now led to 1.5B iPhones sold worldwide.

On Sept. 10th, 2019, some 12 years removed, Tim Cook laid out a new mantra for the venerable Cupertino brand: hardware, software and services.  Drawing the parallels in these two presentations helps to illustrate the ever-changing smartphone industry landscape and how Apple is evolving to keep ahead of the competition.  

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Arguably, Apple can no longer claim to be the first to some leading smartphone innovations.  In fact, features such as triple cameras, night shot and computational photography featured in the iPhone 11 has been pioneered by other brands such as Samsung and Huawei.  What Apple is doing today with the mantra of hardware, software and services is to acknowledge that to remain competitive in the marketplace, the company must expand beyond being just a hardware company in a more aggressive way.   

The iPhone has been a tremendous product for Apple over the past decade and still contributes to nearly half of their quarterly earnings.  However, as the smartphone industry matures, growth is becoming harder to achieve. Unit shipment numbers are falling, and high prices have made older iPhone more appealing to buyers.  With its latest models, Apple is trying to address its challenges in two ways: changing its pricing strategy at least for part of the new portfolio and bringing the camera experience up to speed with most Android OEMs in 2019.  

Beyond the device-specific improvements, Apple is attempting to execute a big business model pivot to monetize the enormous iPhone user base it has created and sell users on services and content (I.e. iCloud, Music, Apple Pay/Credit card, original programming with Apple TV+, etc.) to create new streams of revenue as iPhone growth tapers.  

Leading the charge for Apple’s push for user base monetization are the new iPhones: iPhone 11, iPhone 11 Pro and Pro Max. This can be seen in promotional offers that Apple announced: free Apple TV+ subscription for a year with any new iPhone purchases. These new [LTE] devices come at an interesting time for Apple as the industry evolves in popular design and begins to transition into 5G cellular connectivity. 

Specification overview:  


iPhone 11 

iPhone 11 Pro 

iPhone 11 Pro Max 


6.1 inch Liquid Retina LCD display  

5.8 inch XDR OLED, HDR  

6.5 inch XDR OLED, HDR  


A13 Bionic  

A13 Bionic  

A13 Bionic  


Rear: 12mpx wide,
12mpx ultra-wide (120o angle).  

Front: 12mpx.  

Rear: 12mpx wide,  

12mpx ultra-wide (120o angle), 12mpx telephoto.  

Front: 12mpx.  

Rear: 12mpx wide,  

12mpx ultra-wide (120o angle), 12mpx telephoto.  

Front: 12mpx.  


64GB, 128GB, 256GB  

64GB, 256GB, 512GB  

64GB, 256GB, 512GB  


From $699  

From $999  

From $1099  


Pre-orders from this Friday, general availability September 20th (depending on market) 

Challenging market  

Apple’s latest smartphones launch at a time, when the company’s unit shipments have faced declines, going from 41.3 million units in Q2 2018 to 35.3 million Q2 2019 – falling behind Samsung, Huawei and OPPO in global units shipped. 

With iPhone 11, Apple is lowering the entry price of its latest models to $699. This is the first time since iPhone 3GS that Apple pegged the entry-level price of a new iPhone model just under $700. Over the last two quarters, iPhone XR has been Apple’s most successful individual model, according to IHS Markit’s Smartphone Model Market Tracker. Furthermore, iPhone 8 was the second most successful model in terms of shipments.  

Another indicator that Apple is looking for a way to address the hurdle its premium pricing presents for continued unit growth is the reduction of the company’s portfolio going forward to the new models, as well as iPhone 8 and iPhone XR at reduced prices. This is the first time Apple reduced the price of old models by $150. Now, a one year old iPhone XR price is $599, which was originally priced at $799. The iPhone 8 and iPhone 8 Plus also get a $150 discount - to $449 and $549, respectively. We believe it’s a bold move reflecting Apple’s intention to push for volume growth from the old models. Although Apple is now emphasizing its service business more, iPhone is still the most important device and increasing the number of iPhone users grows the addressable market for Apple content.  

Technology catch-up 

Apple is creating a wider price separation between the Pro versions and the standard iPhone 11. Whereas before, screen size and was a key differentiator between versions, now camera capabilities become the new differentiation strategy.   

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While other OEMs have already integrated triple/quadruple & Time-of-Flight (ToF) lens set-ups in their devices for some time, Apple is betting that it can use the enhanced hardware together with its processing software capabilities to significantly upgrade the photo and video experience on the new devices. OEMs like Samsung, Huawei and Google have successfully pushed their own imaging technology capabilities, making a significant response from Apple overdue.   

While the triple camera on the Pro series is the headliner, the new dual cameras on the standard iPhone 11 also present a significant update to precious camera versions. Both represent a marketing message which Apple should use to drive upgrade buys from owners of two or three-year-old devices, if not several owners of iPhone X-generation phones. The camera lenses present an easy to discern difference to previous device generations, whereas a continued evolutionary design is making it increasingly hard to tell the difference between new and older devices.  

Apple’s strategy to grow its services business is coming into focus  

Apple TV+ will be bundled for free for one year after device purchase. Beyond that, the service costs $4.99 per month, just like the company’s Arcade gaming subscription.   

The basic trim of the new Pro series starts with a 64GB storage option.  This level of NAND storage indicates Apple is cautious not to cannibalize its iCloud services business. With a focus on 4K video recording on the front and rear camera, 64GB of storage will easily consumed by consumers forcing users to look towards iCloud as their storage solution.  

The new iPhones feature new camera technology which sets them apart from all previous device generations. While Apple is not moving away from its premium pricing strategy, even with a $699 entry level price, the company is looking to highlight its trade-in and financing options more than before – including them in the keynote itself. The result of these efforts is to push the payment to around $30 per month on a 24-month installment plan. Not too different from the price range flagship devices have been priced at for monthly payments for the last few years.  


With its latest iPhones, Apple is trying to straddle the need to grow the addressable market for its growing services business with its premium brand, which requires premium hardware pricing.  

The company is acknowledging that it must react to changing market conditions by lowering the entry price for the latest models compared to previous year’s.  Apple is keen to show Wall Street as well as consumers that the company can reduce cost while improving smartphone technology. Additionally, Apple is lowering the price of the older iPhone models remaining in its portfolio, the iPhone 8 and Xr, by $150 instead of the $100 price drop usually seen when a new generation launches.  

Apple also spent significant time highlighting bundles and incentives for buyers to purchase new devices. Trade-in and financing details were mention in the keynote, as was the one-year free trial to Apple’s TV+ service, which usually costs $4.99 per month. 

The new camera is a significant upgrade to previous versions which, combined with a new pricing strategy, should see Apple be able to address some of its global unit volume challenges and fend off competitors.