Ever notice how the really sweet iPhone upgrades appear in the middle of your two year contract?
There's a reason for that.
With the iPhone 4GS, we've now gone through four iPhone upgrade cycles, and from in the process we can now make a guess as to Apple's overall iPhone business strategy.
First, let's take a look at the major feature upgrades across versions:
The original iPhone: Touch-screen. iOS. 2MP camera. EDGE.
iPhone 3G: New form factor. True 3G support. GPS. Faster. Better battery life.
iPhone 3GS: Same form factor as 3G. 3MP camera. Video. Compass. Faster. Better battery life.
iPhone 4: Brand new form factor. IPS Retina display. 5MP camera. HD 720p video. Front-facing camera for use with Facetime. Faster. Better battery life.
iPhone 4S: Same form factor as 4. 8MP camera. Siri speech recognition. Faster. Better battery life.
So, starting with the 3G it would appear that we're in a two-year cycle: New form factor, then upgrades. New form factor, then upgrades.
Two year cycle? Hmm… What else runs in two-year cycles?
Oh, yes. Cell-phone contracts. So what happens if we look at things from the perspective of a user that bought the original iPhone on a two-year contract?
You purchased the original iPhone.
Then the 3G comes out with drool-worthy features (new body, 3G, GPS). Then the 3GS comes out with the same body. So if you went for the drool factor, you upgraded to the 3G. If not, you went with your contract and then upgraded to the much better 3GS.
Then the iPhone 4 appears. New body. Retina display. 5MP and HD. Drool worthy. If, however, you again stuck with your contract, you waited and can now get the 4S upgrade.
From our perspective, it appears that the new body styles and the majority of the important new features are placed in the "mid-contract" period, enticing current owners to spend more in order to upgrade early, in mid-cycle. We call this "major" cycle.
Major cycle: 3G to 4 to 5.
The "upgrade" periods occur during years where, for many, contracts expire and subsidized upgrades are available. No need for major new features, since people will be upgrading to the newest version of the old form factor anyway.
This is the "minor" cycle: 3GS to 4S to 5(x).
So, major changes for mid-contract upgrades. Minor end-of-contract upgrades.
But lets say uou bought a 3G. Then you're getting the major form factor changes and the majority of the major new features the year they occur, and of course you're going to upgrade.
On the off years, however, you're left pondering whether or not the "upgraded" version is worth the trouble.
Probably not. Then again, maybe you're into photography and the BSI 8MP camera has your blood pumping. Upgrade away.
Or you came in at 3GS, in which case you just started the minor cycle in the middle.
There are, of course, other reasons to maintain existing body styles. Maintaining the same style reduces manufacturing costs, and it keeps case makers from having to retool each and every year.
Still, if we get form factor redesign, a larger screen and another major new feature or two in 2012, then that places many of us back to considering yet another mid-contract "drool worthy" upgrade.
So, when that happens, will you upgrade mid-contract, or will you wait until next year?
Either way, Apple wins.
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