iPhone 7 and Apple Watch Series 2 underwhelm, but still hit the mark

The yawning, eye-rolling and laughs of derision were understandable. The iPhone 7 launch was classic Apple; making a virtue out of features and functions that other vendors have long had in the market, or the one everyone had, but Apple has removed. The seductively-voiced video where Jony Ive explained in great detail the multistage polishing process to achieve the glossy Jet Black colour, was almost a parody of itself. Apple was also adept at glossing over areas where iPhone 7 doesn’t quite measure up to the competition on a spec for spec basis.

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The new Apple Watch Series 2 includes meaningful upgrades on the first generation Apple Watch. And it now also includes features and functions that competitors have had for years – like water resistance and GPS. However what was less obvious is the point of Apple Watch. It still seems like a solution looking for a problem to solve. Nevertheless, Apple is a major force in the broader watch market including all watches, not just connected smart watches.

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But however much fun it is to call Apple on these traits (…why would iPhone 7 NOT be the best iPhone ever?) — it misses the point. Whether or not iPhone 7 is the best iPhone ever or even the best smartphone ever, is really moot. When the original iPhone was launched in 2007, the management teams at Nokia and BlackBerry (Research in Motion), openly derided the upstart newcomer for what they perceived as the product’s shortcomings and Apple’s naivety. But look where they all are now.

Apple has amassed a huge installed base of iOS users – numbering well over 500 million. It has cumulatively sold over 1 billion iPhones. And this is where the real difference between Apple and all other smartphone vendors and smartphone platforms, is to be found. Those users have downloaded apps from the Apple App Store 140 billion times – an astonishing number.

Developers are not stupid. They will follow the line of least resistance. Developing for Apple iOS first makes absolute sense. It’s a stable operating system with a clear business model and good support structures. And the richer and more capable the iPhone gets and the more Apple opens the Watch to developers, the more capability developers can build into their applications, which makes them more attractive to the captive user base, which, in turn, drives developer revenue. And that’s before we have even started to talk about Home Kit and the latent ability to control a burgeoning list of connected home appliances from an iOS device.

We may chuckle at Apple singing the praises of a feature that has been available on Android for some months. However iPhone users are not Android users, so the feature is new to them. And Apple’s increasingly vertically integrated model – for example getting rid of the 3.5mm jack socket — likely means more revenue and profit is retained within the walls of fortress Apple.

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But perhaps the most important announcement in the whole launch event, came near the end and took all of 30 seconds. It was the announcement that Apple’s Upgrade program is being extended to a few new countries including the UK and China. The market for second hand and refurbished iPhones is huge, valuable and growing strongly. The changes to the product that Apple announced – for example the anodised aluminium body and IP67 water and dust resistance – mean it will be easier to keep an iPhone in good condition. That means its value as a pre-owned device will be more resilient.

iPhone 7 and Apple Watch Series 2 underwhelm, but still hit the mark

Savvy consumers will look not at the high initial price for buying an iPhone, but at the lifetime cost of ownership. Once the strong resale value is factored-in, that high initial price starts to look a lot more reasonable. So, will the iPhone 7 cause a broad scale migration from Android to iOS? We doubt it. Will iPhone remain the best selling smartphone on the planet? Absolutely, it will.