We all remember the lines. Before the launch of a new iPhone, eager customers would wait hours, days, even weeks to get their hands on one of the cherished devices. The notion of consumers lining up for a new device wasn’t new when the iPhone debuted in 2007 — people lined up at midnight to buy Windows 95 — but Apple was the first to make this type of frenzy an annual affair.
These days, though, the lines are diminishing. People are holding onto their phones longer, partially because the way we buy our devices has changed and partially because Apple is finding it harder and harder to dazzle the general public with must-have new features.
In the iPhone’s early days, every new iteration seemed to introduce a tectonic shift. The iPhone 3G introduced the App Store. The iPhone 4’s front-facing camera made selfies ubiquitous. The iPhone 4s put artificial intelligence in our pockets via Siri. Each of these advances was paired with slick marketing that clearly explained to tech novices why the new iPhone mattered.
Over time, the iPhone made the extraordinary seem normal — the problem is that no one wants to shell out $650 for “normal.”
“If it’s just more memory and a slightly better camera, then there’s less motivation [to upgrade],” says Chetan Sharma, a mobile analyst and CEO of Chetan Sharma Consulting. “This year might just be a small bump in terms of the upgrade cycle.”
Aside from the normalization of the iPhone’s magic, Apple’s early partnerships with cellphone carriers ensured that the iPhone at least appeared affordable to customers. The devices were heavily subsidized by the carriers, who would bake the full cost of the devices into customers’ monthly bills. Both Apple and carriers used marketing that implied that an iPhone cost just $200, $100, or was available for free, depending on how new it was.
But times have changed — quickly. Since the 4s, Apple’s innovations have been less groundbreaking. The iPhone 5 was the thinnest iPhone yet. The iPhone 5s had … a fingerprint scanner. The jumbo-size screens of the iPhone 6 and 6 Plus brought a big sales spike and massive lines once again, but the response to the 6s — a rose gold finish was a primary selling point — was more muted. “It’s a testament to how good phones have become that any incremental gains aren’t necessarily attracting people to go out and buy a new phone,” says Wayne Lam, a telecom analyst at IHS. “You have to have a compelling reason to upgrade.”
At the same time, two-year cellphone contracts have been almost entirely phased out in favor of more transparent monthly installment plans. The cost to the consumer is often largely the same, but the psychology of the purchase is different. “They’re realizing they’re paying $600 for the device, so when a new device comes up, a larger segment of the base has to justify whether it makes sense for them to upgrade or not,” says Sharma.
The two-year contract was undone by T-Mobile in 2013. As the last-place carrier in the U.S., the company launched an ambitious “Uncarrier” campaign that brought more consumer-friendly policies to areas such as contracts and data caps. Now that the other carriers have followed suit, contracts aren’t coming back, experts say. “Operators never liked this whole subsidy model. It was kind of perceived as a necessary evil,” Sharma says.
According to Sharma, these factors have pushed the average smartphone user to now upgrade their phone about once every 30 months, compared with once every 18.5 months between 2010 and 2012. Other consumer tech products, such as PCs and tablets, have also seen their upgrade cycles lengthen as users determine that “good” is “good enough.”
Apple is making some efforts to get people to upgrade more often. Last year, the company launched its Upgrade Program, which lets customers get a new iPhone every year if they pay a monthly installment toward the cost of the phone (the major carriers all offer similar programs, for what it’s worth). Apple can no longer take it as a given that its customers will go out of their way to get a new phone without a serious financial incentive. So while the concept isn’t new, it’s telling that Apple has released its own version of the policy to try to spur consumer interest.
But the real way to get people to open their wallets, of course, is to open their imaginations. It was the limitless possibility that people saw in the original iPhone, in the App Store, and in Siri that attracted them to those products. Right now, the most hyped feature of the iPhone 7 is actually a drawback (at least in consumers’ eyes): Apple is expected to remove the headphone jack from the device, which might actually encourage users to hold onto their old phones even longer. If Apple wants to reverse the iPhone’s slumping sales and get us standing back in line, it’ll have to do better than eliminating a feature (especially one that we’ve bought expensive headphones to work with).
“If we just see incremental changes from the two major OEMs [original equipment manufacturers], Samsung and Apple, then I think [time between upgrades] will keep on inching up,” Sharma says. “But if you see a major shift in design or functionality of the device that is the next must-have device in the U.S., then you could see a shift.”
Maybe next year, when the iPhone celebrates its 10th anniversary, it will wow us again. But this week? Expect a very good device that doesn’t have you desperate to line up at midnight.