Thursday, July 7th, 2016

Apple Makes iPhone 7 $100 Cheaper?

Narada Desk | July 7, 2016 5:36 pm Print
The revelation also backs up a number of smaller leaks already reporting this change, but the WSJ is by far the most influential site to speak out and its track record is impeccable. Like other sources, the WSJ also claims Apple will rearrange the other iPhone tiers so out goes 16/64/128GB in favour of 32/128/256GB.

Something very important emerged yesterday and its biggest implication was missed by many people: Apple AAPL +0.55% just made the iPhone 7 $100 less expensive…

That’s the exciting news following the Wall Street Journal’s ‘confirmation’ that the iPhone 7 and iPhone 7 Plus will scrap the 16GB entry level tier in favour of a 32GB model.

The revelation also backs up a number of smaller leaks already reporting this change, but the WSJ is by far the most influential site to speak out and its track record is impeccable. Like other sources, the WSJ also claims Apple will rearrange the other iPhone tiers so out goes 16/64/128GB in favour of 32/128/256GB.

This should work out as follows:

iPhone 7: $649 (32GB), $749 (128GB) and $849 (256GB)
iPhone 7 Plus: $749 (32GB), $849 (128GB) and $949 (256GB)

So how does this make the iPhone 7 $100 cheaper?

Running The Maths

With the launch of the iPhone 6S, I argued the 16GB model was now unusable due to its increased camera and video resolutions and it forced millions of customers to pay $100 more for the 64GB model.

How come? Well here’s a breakdown:

iOS consumes 3GB leaving just 13GB before you start
iOS needs circa 1GB kept free so it can update
Individual iOS games can use up to 4GB of space
An iTunes HD movie download is 3-4GB
4K video consumes 375MB per minute (1080p video consumes 200MB per minute)
12MP photos are 3-4MB, Live Photos double that to 7-8MB

So whichever way you break this down for your own particular usage pattern, a 16GB iPhone leaves things incredibly tight – especially with the average ownership period now over two years.

Yes you can take countermeasures. You could dial down the photo and video resolutions, but that negates key photo and video upgrades. You could also spend more on iCloud storage but the amount of data you end up sending of cellular can easily get out of hand without vigilance.

32GB Changes Everything

But that all changes with a 32GB base model iPhone 7.

For example, you’ll have 28GB of free space to start with (29GB minus 1GB of space for iOS upgrades) and 6GB for apps (a healthy amount) leaving 22GB for video of photos – that should prove ample for most mainstream consumers.

Furthermore these benefits continue up the tiers. Hardcore users will always buy the top model, but 128GB at the mid tier is generous and more than enough to dissuade millions from paying extra for 256GB which they aren’t ever likely to fill.

What about the iPhone 7 Plus? It benefits should be the same, but as this model is moving to a dual lens camera we can’t say for sure until we know how this new module affects photo and video file size.

Regardless, given the iPhone 7 and iPhone 7 Plus are likely to be incremental upgrades on the iPhone 6S and iPhone 6S Plus, I would argue this extra storage will be the biggest practical reason for users to upgrade from an iPhone 6 or iPhone 5S.

With sales falling year-on-year for the first time in iPhone history, Apple may be counting on this – even if it costs them $100…

#Forbes

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