Tech: There's a good working theory about why Apple discontinued the iPhone X, the best phone it's ever made, only a year after announcing it (AAPL)

Everyone who bought an iPhone X in November was probably an Apple superfan.

In a rare move, Apple is discontinuing the iPhone X, the phone that marked the iPhone's tenth anniversary and heralded a change in how Apple names its devices. Here's the leading theory on Apple's unusual move.

  • Apple is no longer selling the iPhone X.
  • That may be because the new iPhone XS has the same starter price, meaning Apple would have to offer the iPhone X at a discount.
  • There's a good working theory that it was experimental phone which cost a lot to produce, and Apple chose not to make the iPhone X available at a discounted price to avoid cannibalizing sales of the XS.
  • The two phones are almost identical in design and features, with the XS being a refinement on last year's phone.

When Apple released the iPhone X last year, it was widely considered to be the best smartphone the company had ever made, marking a major step forward with features like Face ID and a high-end camera to rival the Huawei P20 Pro and Google Pixel 2.

But one year later, Apple is discontinuing the phone that marked the iPhone's tenth anniversary and heralded a change in how it names its devices.

Try searching for the iPhone X on Apple's website, and you're redirected to a landing page showing off the 2018 range of the iPhone XS Max, the iPhone XS, and the iPhone XR. There's no longer anything showing the iPhone X.

It's pretty unusual for Apple to discontinue phones. Its normal route is to dock the price of previous year's models by $100 and to continue selling them, which is what it has done for the iPhone 8 and iPhone 7 this year. The last time it discontinued an iPhone model a year after announcing it was the iPhone 5, released in 2012 and canned in 2013.

So why bother discontinuing the iPhone X, its most significant phone upgrade in years?

Apple hasn't publicly explained itself, though chief executive Tim Cook may explain the firm's thinking in a future earnings call.

One compelling theory is price.

The new iPhone XS is the successor to the iPhone X, and its starting price is the same as what the iPhone X had previously started at: $999.

The iPhone XS barely differs from its predecessor. They are the same size. Both boast a dual-lens 12-megapixel camera, both come with the facial recognition feature Face ID. The overall design is much the same. The XS comes with a better chip under the hood and is more waterproof, but for most people, the differences will feel incremental.

Here's the theory: If Apple followed its usual protocol and offered the $999 iPhone XS, as well as a phone that was almost exactly the same but $100 cheaper, it would likely confuse customers and cannibalize sales.

We know that the advanced custom OLED screen on the iPhone X was extremely expensive. According to reliable Apple analyst Ming-Chi Kuo, Apple paid between $120 and $130 per screen unit, which was about twice as much as it normally pays for screens.

We also know that maintaining high margins — which Apple is increasingly trying to achieve with high prices — is important as fewer people now upgrade their phones on a regular basis.

Both of these factors might explain Apple's thinking. It makes little sense to jeopardize those high margins only a year after getting OLED screens onto the iPhone for the first time. Why pay $999 for the amazing screen on the iPhone XS or iPhone XS Max when you could effectively buy the same phone for $100 less?

Kuo, the reliable analyst, predicted this would happen back in January. "iPhone X would hurt product brand value & lineup of 2H18 new models if it continues to sell at a lower price after 2H18 new models launch," he wrote in a research note.

For any iPhone X owners worried about whether the discontinuation will dent the resale value of their phones, Forrester analyst Thomas Husson has some reassuring words.

"Apple brand aficionados, who want to own the latest device and own the X, will be ready to pay anyway to get the XS or XS Max," he told Business Insider via email. "[For] the majority of the others, who do not renew their smartphone every year or so, the X is still largely good enough for their needs. I don't think [discontinuation] will impact its resale value."

Source: Pluse ng

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