Diet iPhone: Could a new formula refresh Apple's bottom line?

Cupertino needs a "just right" mobile device for an upgrade-averse generation that has the same great taste but is less filling.
Written by Jason Perlow, Senior Contributing Writer

In case you haven't heard, Apple missed on its Q1 revenue target: A shortfall of an estimated $7 billion on total revenue of $84 billion due to a slowdown in iPhone sales.

Also: Apple cuts Q1 revenue outlook due to weak iPhone sales

Why aren't people upgrading to the new iPhone models? Well, there are a lot of reasons. Part of it is that the old iPhone models work perfectly, or at least good enough. They spent a lot of money on their old phone and don't necessarily see the new functionality being a must-have.

Thanks, but no thanks

I have my own anecdotal stories to refer to as possible evidence of this; I know plenty of folks who have iPhone 6 and iPhone 7 and are more or less happy with what they have, especially if they have the higher end versions of the models with lots of memory on them. 

My ZDNet DIY-IT and Government colleague David Gewirtz has a 128GB iPhone 6S Plus. He was on the upgrade program, and hasn't had to make a payment in almost two years. It still works fine for him; why should he switch and get a new loan? Plus, he uses his headphone jack all the time and the new phones don't have one.

I'm actually kind of surprised by this, because Gewirtz is as much as a techie as I am. But he doesn't feel like being an early adopter of Apple's current technology. If his stuff isn't broken, then why should he fix it? I get it.

ZDNet Windows and Microsoft columnist Ed Bott and his lovely wife both have the iPhone 7 Plus -- but every time he considers doing a $300 trade-in for two equivalent iPhone XR models, the out-of-pocket cost for the two devices (after trade-in) would be $499 and $599, for the 128GB and 256GGB models he would have to replace, respectively. 

Also: Apple's Q1 revenue miss: Here are the 5 takeaways

After sales tax in his state of residence, that's $1,188 to replace two phones that are working just fine. Thanks, but no thanks. Close browser!

I recently managed to convince my dad to go from an iPhone 6 16GB to an iPhone XR 64GB, because he wanted the bigger screen and the better camera, and he uses a ton of apps and wasn't particularly happy with the performance of iOS 12 on his old phone.  

Top 10 iOS 12.1 features you should try out today

On the other hand, my mother, who has the same device and doesn't use apps, isn't upgrading. She mostly texts on it and makes phone calls. She doesn't even like to use Facebook on it; that's what her PC at home with a 24-inch monitor is for. 

But dad utterly hates the new all-touch user interface. The 74-year-old retired dentist loves his home button and the TouchID that he still uses on his 2017 iPad Pro 12.9. It's familiar to him, it's intuitive, and it's a muscle memory he has developed that is now second nature to him as to how he uses his devices. He's adapting and is now taking classes at the Boca Raton Apple retail store, where he can ask the Geniuses to his heart's content how to use it. Better them than me!

This is why Apple doesn't want you fixing your smartphone

You know what? I don't blame him. I'm on my second iPhone X-style device, having been an early adopter with the iPhone X, and am now using an XS Max. And there are still a number of things that I really do not like about the way the new phones work.

Annoying things about the new iPhones

Let's get this out of the way: FaceID is far from perfect. It doesn't work reliably all of the time, especially if you are in certain lighting situations and if you are using sunglasses or if you have a beard that grows out and you clip it down every few weeks because you work from home and nobody has to look at you. 

Yeah, you can have an alternative face profile, and you can turn off the attention stuff, which definitely speeds things up (I did this on my new 2018 iPad Pro 12.9 because I never take the thing out of the house) but essentially bypasses the security. It still doesn't work in a foolproof, always-works way. 

I really liked Touch ID. It was fast, I liked how the authentication mechanism in iOS worked when making purchases. With FaceID, you have to double click the side button to confirm, and if you have a thick rubberized case on it like the OtterBox, it doesn't work all the time and then you get the AppleID prompt to type in your password, which is annoying as hell. 

Also: iPhone deals ahead? Bad news for Apple is good news for you

But the big annoying thing about the new iPhone models? They just cost too freaking much. Period.

Apple needs Diet iPhone

What Apple really needs is an iPhone that is an entry-level model. One that keeps people in the Apple ecosystem, that provides them the fundamental user experience, and has the current operating system that allows them to run current apps well. It needs a good enough camera, good enough screen, and enough storage -- at a price point everyone can stomach.

Apple is not the only big brand that has had to do this or has had to go back to fundamentals when a new product is rejected. In 1985, Coca Cola decided to get innovative as well and switched its formula, because it was facing stiff competition in the Cola Wars from Pepsi, which was spending a ton of money on advertising and challenging its legacy customers to try their product instead.

New Coke was formulated to taste more like Pepsi.

Does this antagonistic battle between two industry giants sound familiar? This is the problem, in a nutshell, that Apple is facing with iPhone XR and the XS models.


The Samsung S8, unlocked, is now under $500. That's an N-1 generation, top-of-the-line Android phone from a Tier 1 OEM that is considerably less expensive than Apple's current "budget" iPhone. And that's only one of the better Android devices on the market at that price point. 

"Pepsi" is challenging. Big time.

What ended up happening at Coca-Cola in 1985 was that New Coke was very quickly scrapped and so were the executives who launched it. The very same who were responsible for the most successful new product in their entire history: Diet Coke, in 1982. 

They went and launched Classic Coke next. The original formula. And that's the product that still exists today, along with Diet Coke.

Apple needs Diet iPhone. It needs the OS and phone platform that tastes great, with great apps that is less filling. Because with a less expensive iPhone, you can also afford to buy Apple Watch and also more Apple content from iTunes and in-app purchases. That's a hell of a lot better than no upgrades and potentially defections to Pepsi.

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How Apple should pitch it

So, what kind of product are we talking about? It basically already exists as the iPhone 8, which is Classic iPhone. The old school home button with TouchID.

But I think it should also use the latest A12 SoC as well as the les- expensive LCD screen technology from the iPhone XR with no 3D Touch. It should have a basic aluminum casing, 64GB of storage, and come in a single SKU. 

No Plus version, no other storage configuration. No options. Any color you want it in as long as it is space grey. But most importantly? It should cost $499. $549 tops.

The entry-level iPhone anyone can own. Like what Mercedes-Benz does with its A-Class cars. Mercedes pitches this as the way to get MBUX, the Mercedes-Benz User Experience. 

Also: Five major challenges facing Apple in 2019

That's exactly what Apple could pitch: You get the full Apple user experience, including superb build quality, at a price point that is $100 above the mid-range Android models.

Apple has tried to have cheap iPhone models before. The iPhone 5C was a flop, because at the time the market was shifting to larger phones and this was a knock off of the smaller model that the market was moving away from. So, it was the right idea but the wrong size.

On the other hand, the iPhone SE was a pretty good seller by all accounts, and the press loved it for the value it presented. Yet Apple did not decide to make a new version of that phone. It may have been a serious mistake on its part not to refresh it.

What would Apple call this thing? 

Well, it can't call it the X-something, because clearly it's not a FaceID device. You don't want to call it an 8-something, because it would sound like an old phone.  

iPhone Freestyle? iPhone EB (Ed Bott?) iPhone ET (Esprit Turbo?) iPhone JS (Jumbo Shrimp?) 

iPhone 9: The missing link! I kind of like Diet iPhone. Would you buy one, though? Talk Back and Let Me Know.

iPhone XS and iPhone XR cheat sheets

Previous and related coverage:

iPhone XS Max review: The iPhone's future is big and bright

Apple's iPhone XS Max is as big as it gets.

iPhone XS review: Everything Apple has to offer, but in a smaller package

The iPhone XS is the smallest of Apple's 2018 iPhone lineup, but don't discount it.

Apple iPhone XR review: Lower cost comes with camera, reception compromises

Apple switched up release strategies a bit in 2018 with the two high end $1,000+ models released initially, followed by one priced $250 to $350 less. The iPhone XR arrives in six color options and honestly it may be the best option for the masses.

Apple iPhone X review: This is as good as it gets

Face ID, an impressive display, new interaction methods, and solid performance put the iPhone X on top.

Apple iPhone SE review: Back to the future with a 4-inch powerhouse

As soon as Apple announced that it was planning one of its mystery product launches at the end of March, the perennial rumours about a 'low-cost' iPhone surfaced yet again. And, in due course, Apple went out of its way to emphasize the fact that the new 4-inch iPhone SE is "the most affordable new iPhone we've ever released".

Apple iPhone 5c review: A colourful iPhone 5 with a better battery

iPhones have always been aspirational, high-end products, for which people have been prepared to pay a hefty price in order to join the (not particularly exclusive) club. With Apple's 2013 handset launches that approach has changed slightly: the flagship iPhone 5s occupies the traditional premium-product slot, while the iPhone 5c, reviewed here, comes in for those with less money to spare.

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