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Apple Just Proved These Critics Wrong


Conspiracy theories abound that Apple (NASDAQ: AAPL) intentionally slows down its older devices -- particularly iPhones -- in a bid to get people to buy newer devices at a faster pace. Those theories seemed to gain credibility when it was revealed that Apple -- in order to avoid unexpected shutdowns of the devices -- was throttling back the performance of older iPhones that had significantly degraded batteries.

However, seemingly in response to public backlash against this practice (a backlash that I disagreed with), Apple did two things: It offered users of older iPhones cheaper battery replacements through the rest of 2018 and it added some battery-health monitoring functionality to its iPhones as well as the ability to disable the performance throttling on devices with degraded batteries.

Although Apple's moves should've been enough to quash the "planned obsolescence" narrative, some remained unconvinced. However, after Apple's announcements at its Worldwide Developers Conference , it should be abundantly clear that the company isn't trying to force customers off their old devices.

Allow me to explain.

Two Apple iPhone X devices.

Image source: Apple.

Apple's iOS 12 is for all iPhone users

At its developers conference, Apple announced iOS 12, the next iteration of its iOS operating system that powers iPhones, iPads, and iPods. According to the company, iOS 12 "is designed to make everyday tasks on iPhone and iPad faster and more responsive with performance improvements across the system."

The "camera launches up to 70 percent faster, the keyboard appears up to 5 percent faster, and typing is more responsive," the company said in a press release. "Even when there is a lot going on across the system, apps can launch up to twice as fast."

More important, during Apple's keynote at the developers conference, the company specifically highlighted the performance gains on an iPhone 6. This is a phone that's far behind the current flagship iPhones in terms of performance and capabilities, and it'll be even further behind Apple's best when the company announces its newest iPhones later this year.

Despite the fact that Apple wants to sell people new devices as frequently as possible, the company is still investing heavily in the basics of its software. And it's bringing those improvements to devices that have been available for as long as five years. Even more telling is the fact that all devices that were compatible with iOS 11 will be compatible with iOS 12. Apple's not leaving any customers behind with this update.

Now, if Apple's goal was to make older devices obsolete as quickly as possible, would it have invested all of the engineering effort into making sure the latest versions of iOS were less taxing on the hardware and would dramatically speed things up for older devices? I don't think so.

Apple's move is the smart one

Apple is thinking about the long term here at the expense of the short term. Apple could, presumably, accelerate the pace at which iPhone users upgrade by reducing the number of iOS updates that they get for a particular device. That acceleration could lead to boosted revenue and profits in the short term.

However, it would be a long-term mistake.

Remember that Apple sells premium devices and that its iPhones' average selling prices are substantially greater than those of the competition. Customers have happily paid that premium because they believe they're getting a differentiated product in terms of hardware and software quality, as well as in customer support.

By making sure that each iOS device lasts as long as technically feasible (the iPhone 5s and the iPhone 6 both still pack plenty capable hardware), Apple is letting its customers know that when they choose to buy an iPhone, they're going to be taken care of for a long time.

Apple's giving up a short-term opportunity to accelerate the pace at which users with older devices upgrade, but it's benefiting over the long term by selling them truly differentiated devices that are built to last and stay fresh. This can ultimately serve to boost market share, retain current iPhone customers, and keep those customers within Apple's hardware and software ecosystem (fueling sales of other devices like Macs and iPads, as well as software like apps).

Keep it up, Apple.

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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: AAPL



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