Apple (NASDAQ:AAPL) is widely rumored to be planning to launch three new iPhone models this year. The first device is expected to be a relatively cost-sensitive model that'll include the same core features as the higher-end models, but will use less advanced display technology as well as a cheaper aluminum construction.
The middle device is predicted to be a direct successor to the current iPhone X -- think similar appearance and display size but with upgraded internal specifications. The highest-end model, meanwhile, is thought to be a bigger version of the successor to the iPhone X, with a larger 6.46-inch display.
Since Apple began offering standard and Plus-size versions of its iPhones in the fall of 2014, the company has historically endowed the latter versions with unique features and improved specifications compared to the standard-sized models.
Take, for example, the current iPhone 8 and iPhone 8 Plus. While the devices are mostly similar, the iPhone 8 Plus has the following enhancements compared to the iPhone 8:
- Sharper display
- Dual rear-facing camera
- Plus-specific software features (e.g., landscape home screen, split-screen view in several common apps)
- More RAM (2GB in iPhone 8, 3GB in iPhone 8 Plus)
Based on a set of credible leaks from both KGI Securities analyst Ming-Chi Kuo and Bloomberg, it's clear that Apple has no intention of differentiating the updated iPhone X from the iPhone X Plus in any meaningful way.
According to Kuo, both the iPhone X and iPhone X Plus will have the following features in common:
- 4GB of RAM
- Dual rear-facing camera
- Stainless steel frame
Moreover, a recent report from Bloomberg claims that the iPhone X Plus will have a display resolution of 2688 x 1242, suggesting that the display on the device will have a pixel density of 458 pixels per inch -- identical to that of today's iPhone X.
So, from what we know so far, Apple won't differentiate the next iPhone X from the iPhone X in any of the ways that it previously did with prior flagship models.
Although Apple could still distinguish the two devices in ways that have yet to be disclosed, I am inclined to believe that its goal truly is to offer the same basic specifications in both sizes of the iPhone X.
Pros and cons of this strategy
There are both pros and cons to Apple's apparent strategy to keep the hardware features of the next iPhone X and the iPhone X Plus largely identical.
On the positive side, Apple's supply chain management becomes easier (since both devices will use the same components) and loyal Apple customers who are willing to pay top dollar for new iPhones don't feel that they are buying an inferior device by picking the smaller of the two iPhone X models. Additionally, by using the same basic components, Apple minimizes the bill of materials increase from the standard iPhone X to the iPhone X Plus, which minimizes the premium that Apple must charge to maintain similar profit margins on both devices.
As far as negatives go, Apple misses out on the opportunity to improve the competitiveness of its larger-screen model, as there are features that are easier to implement in larger devices with bigger batteries than they are in smaller devices with commensurately smaller batteries.
Apple also misses out on the chance to drive iPhone enthusiasts who prefer the size of the standard iPhone X to buy the more expensive iPhone X Plus in pursuit of Apple's best technology and features. This could mean slower iPhone average selling price growth than would've otherwise been the case.
Ultimately, though, considering that even the smaller of the two iPhone X models should be quite pricey, Apple management probably thinks that it shouldn't make any buyers of its smaller-but-still-premium iPhone feel that they were cheated out of getting Apple's best technology.
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.