Last week Apple revealed the newest iPhone, the iPhone 7. Many people more qualified than myself have reviewed it, that’s not what this article is. This post is about the shrewd business move Apple made to increase product sales and edge out competition in two different verticals.
First, the obvious – Headphones
Let’s start with some facts: Apple’s current strategy for encouraging adoption of new products is to make the older devices (seem) obsolete, either through new functionality, better aesthetics, or improved performance. Apple also owns Beats by Dre. The Lightning port is for more than just charging, it can also handle data transfer, which means it can handle audio.
These three facts put together gives Apple some very good reasons to remove the headphone jack, namely, how do you get people who already own a set of premium brand headphones to buy a new one? Require a different cable, or no cable. You can buy some very cheap headphones if you wanted to. If you already own headphones you use with your Android phone and then change to an iPhone (I know, I don’t get why people do it either, but some people make that switch) you can use those same headphones, until now – now they must be either Lightning or wireless. This requires people to buy new headphones when they upgrade or move to the newest iPhone while edging out lower-end competitors, such as the non-Beats AirPods. This will also encourage tablet users to switch from inexpensive Android devices to iPads so that they don’t need two sets of audio hardware. But what about people switching from and iPhone to an Android phone because of the change? Ha, good one! Mac users are fiercely loyal, the only people that might consider it are also considering switching to the Jitterbug.
Second, the devious – ApplePay
It isn’t just a “headphone jack”, the 3.5mm jack is a very easy to use, low-cost technology that payment gateway providers have been using since smartphones overtook flip phones as the dominant mobile device. Have you ever heard of PayPal or Square? Have you ever swiped you credit card through something attached to someone’s phone or tablet? Hardware sales are nothing compared to the opportunity that is financial services. Other transaction companies will have to either release new device accessories or update their platform and mobile apps to use NFC (for example) which is already built-in to many iPhones and Android devices, but not all! So someone like PayPal will have to decide between maintaining multiple payment systems for mobile devices or decreasing the number of supported devices. How does this affect the “normal user”? It doesn’t. It does affect tons of small businesses accepting credit and debit payments via mobile devices, such as food trucks.
So, Apple has gotten rid of the headphone jack on iPhone 7, and you can expect iPads and MacBooks to follow suit; but the users will adjust, business partners will adjust, and this will just be a footnote in the progress of mobile technology. This move tests some users by shrinking their comfort zone a little (the majority of people do not use headphones though) and makes business partners perform some acrobatics to stay compatible, but when the digital dust settles Apple will still be on top.
Apple called it brave, some call it ballsy, I call it a calculated business decision.
*The featured image at the top of this post came from Apple’s website.*