The iPhone with a laptop price tag: Will Apple's iPhone XS Max convince business pros to upgrade?

Jason Hiner and Bill Detwiler discuss Apple's latest mobile hardware, including the most expensive iPhone ever and the increasingly health-conscious Apple Watch Series 4.

The iPhone with a laptop price tag: Will Apple's iPhone XS Max convince business pros to upgrade?

Jason Hiner, global editor-in-chief of TechRepublic and global long form editor of ZDNet, and Bill Detwiler, managing editor of TechRepublic, discuss Apple's latest mobile hardware, including the most expensive iPhone ever and the increasingly health-conscious Apple Watch Series 4. The following is an edited transcript of the conversation.

Bill Detwiler: At their September 2018 event, Apple unveiled new versions of the Apple Watch and iPhone, including a new lower cost, LCD-based iPhone ten. Were the new devices enough to convince business pros to ditch their old devices and upgrade? For TechRepublic and ZDNet, I'm Bill Detwiler, and here to provide his insights on this question is Jason Hiner, global editor-in-chief of TechRepublic and global long form editor of ZDNet.

So Jason, what did Apple announce about the new iPhone Xs, not the XS, that business pros will care about?

Jason Hiner: When you say, iPhone Xs, iPhone XS, all's I think is INXS. Showing my age. Showing my age.

Bill Detwiler: Me too. That's all I think about too.

SEE: Mobile device computing policy (Tech Pro Research)

Jason Hiner: They announced the iPhone Xs and the Xs Max. The Xs Max is the same size as last year's 8+, but with that edge-to-edge screen. It's a monster. And then of course, they announced the Xr as well, which is the lower priced version with an LCD screen. But it has a lot of the same features, and certainly a lot of businesses are gonna wanna think about that one pretty seriously, because it has a lot of the same capabilities that the larger devices have.

But the real thing about these larger devices is that Xs Max has a 6.5-inch screen. So it is gonna have a lot more real estate for business professionals, people who care about productivity. There is a lot more workable, usable space on there. I'm sure a lot of those users who want the latest and the greatest, that's gonna be their favorite device. It also has the nerdiest thing about it, is the new A12 bionic processor, which it says, it can manage an upgrade from 600 billion processes per second in last year's model to five trillion processes per second in this model. So where that matters is things like machine learning, so AR capabilities, which these devices are trying to play up. Well it says it's also gonna do app speed, so app speed is supposedly 30% faster in launching to run that.

SEE: Apple iPhone XS, iPhone XS Max, iPhone XR: Features and specs compared (ZDNet)

Bill Detwiler: So when you open and close your apps, it will be faster?

Jason Hiner: Yeah, and then in running some of the high-powered apps as well. And then, also in the camera. So it's taking a Note similar to what we heard from Samsung in the Note 9. It's taking a note out of Samsung's book in this case.

Bill Detwiler: A note from the Note, okay.

Jason Hiner: Exactly. Where they are using software, to help make your photos better. And Apple's kind of always done this, but what it's doing is, it's saying it takes that image signal processor with its Neural Engine, which is really the software that powers a lot of machine learning, a lot of data driven, to figure out what kind of picture you're trying to take, and then it's gonna use the software to help make that picture better. So in dark areas, in knowing whether you're doing a close-up, of course, in its very sort of bokeh driven photos where the background is blurry, and puts the focus on the subject, so for portraits in its portrait mode.

And it says it's doing what it calls "smart HDR." So it'll take up to four pictures every time you take a photo in that mode, and it will combine those pictures. So it'll take one long exposure, it'll take one sort of short exposure, and it'll try to fill in some of those shadows. It'll try to make that photo look really great without you having to do anything, change any settings, or anything like that.

So that's where we're gonna see some of that power show up. People that really care about photography and use these as their primary cameras, will of course love that. And we did hear from Apple that more and more professionals are adopting these, and they pointed to the fact that Time magazine for the first time using iPhone photo for its cover photo, which no one knew about until they announced it in this as far as we know. So that's a big deal.

SEE: 4 secrets: How to take professional photos with your smartphone (TechRepublic)

Bill Detwiler: So pretty soon we'll be filming all our ZDNet and TechRepublic videos on an iPhone, right?

Jason Hiner: I mean, we did joke about that,-

Bill Detwiler: Well, maybe not, but ...

Jason Hiner: ... even before they started. You never know. You never know. So it's getting much, much better.

Bill Detwiler: Right.

Jason Hiner: ... that has a big impact. Again though, that's really focused around the Xs and Xs Max, which have that dual camera. The Xr, which is $750, so $250-

Bill Detwiler: So that's gonna be the lower cost version of a X?

Jason Hiner: Yup, that has an LCD. That one still has only one camera, but it still has a lot of that same functionality built into it. And when you saw the photos that they showed, the examples that they showed in the keynote, it was hard to tell the difference between those Xr photos and the Xs, and Xs Max. So I think you're gonna see a lot of people go for those. Also, they kind of have some nicer finishes. They have more colors, and the colors, especially like the red and the blue one, it's red and blue all the way around the edges, and the bezels and everything. And so, they look really, really sharp. I think you're gonna see a lot of people, and especially businesses if they're handing out devices, they're gonna really consider those, because you're saving $200-$250 per device, when you add it up, and you're handing out hundreds or thousands of these. It makes a difference.

SEE: The iPhone's 21 most important apps of the decade (TechRepublic)

Bill Detwiler: So let's talk about pricing for a little bit here.

Jason Hiner: Okay.

Bill Detwiler: We have the lower cost iPhone Xr, and then we have the regular iPhone Xs, and it's all its different variations.

Jason Hiner: Yup.

Bill Detwiler: And what I thought was really interesting is, the top end iPhone Xs Max, right? So as expensive as you can get, we're pushing 1,500 bucks here, right?

Jason Hiner: Well, $1,099 is the starting price.

Bill Detwiler: Well, for the 512, like, I don't really see anyone buy it.

Jason Hiner: 64, you know what I'm saying.

Bill Detwiler: If you're dropping $1,100 on a phone, right ...

Jason Hiner: You're gonna upgrade.

Bill Detwiler: ... why are you gonna get a 64-gig phone. You're just gonna go with the 512, you're just gonna go all-in.

Jason Hiner: Okay.

Bill Detwiler: So if you're all-in, around like what, 1,500 bucks, right? 14-

Jason Hiner: It's probably gonna go $1,099, and $1,299 and $1,499.

Bill Detwiler: ... so, you're talking-

Jason Hiner: $1,299 for 256.

Bill Detwiler: Right.

Jason Hiner: Probably $1,499.

Bill Detwiler: So, we're talking 1,500 bucks, so it seems to be that as Apple sees, you and I have talked about their shift from Macs a lot into iPhone.

Jason Hiner: Yeah.

Bill Detwiler: This isn't just this year. But as they move to their profits being made from their mobile devices, and more so than their laptops, and their desktops certainly. It seems like they're just replacing the cost of a Mac with an iPhone, right? You can now buy a Mac for less than you can an iPhone.

Jason Hiner: It's pretty crazy, yeah. That $1,499, their top-end iPhone Xs Max, with the half of Terabyte of storage at $1,499, that is more expensive than a laptop. It's pretty amazing. The thing is, you only replace your laptop every three to four years. Sometimes five years now, whereas these phones, you're typically replacing on this two to three year upgrade cycle. You're seeing more people trying to hold on to them longer, so maybe we get to that four to five year replacement cycle being similar, when you're paying this much for one of these devices. Also, the carriers aren't subsidizing them the way they used to. So you're typically leasing or paying for all of that upfront.

SEE: Why iPhone XS is worth going in debt for 28M Americans (TechRepublic)

Bill Detwiler: And Apple mentioned that during the call. I thought that was really interesting. There was a segment of the call, where they talked about their recycling efforts, the manufacturing efforts that they're going through to use recycled components, recycled tin in their main system boards, recycled plastic, certain percentage of recycled plastics in some of the components inside the phone. They talked about their programs to allow you to turn in your old iPhones, and you've seen them mention that a little bit in the past, at other events, but this year seemed a little different because they were pushing that "we know these devices are expensive, but we expect you to keep them longer" message, and that seemed a little new to me.

Jason Hiner: Yeah.

Bill Detwiler: You know it's odd to see a device manufacturer telling people, "it's okay if you don't upgrade every year" at all these events. It's very engineered obsolescence, we want you to buy the newest and the greatest every single year. And there seems to be a little bit of an acknowledgement now that because these devices are so expensive, because they are computer replacements that it has become a little unrealistic for Apple to expect everyone to buy a brand new top tier iPhone every year.

Jason Hiner: I think you're right, and I think that the market though has gotten so big, right, they sell so many of these, they have so many customers, that now they can bet on a fact that you probably gonna buy one every other year. So there is enough people on upgrade cycle, it's kind of staggered that they're like, "Okay, we're selling you on one if this is your sort of upgrade kind of year."

Bill Detwiler: And still make and still satisfy Wall street.

Jason Hiner: They can still make enough profit on that. They make a very good profit margin on these devices. They sell such a large volume of them, and there are roughly four billion people in the world in 2018 that have smartphones. By 2022, that's expected to be six billion. So that market is gonna grow by 50% just over the next few years, so you figure, if they can grab, like they do, the most valuable skim off, the most valuable chunk of that off the top, it's a lot more iPhones for them to sell.

SEE: New equipment budget policy (Tech Pro Research)

Bill Detwiler: All right, let's switch gears, and lets talk a little bit about the Apple Watch, the other main event here at the show. What, from your perspective, what upgrades in the the Apple Watch did we see that are important for business professionals, or businesses themselves?

Jason Hiner: Yeah, we know that a lot of the people who are buying the Apple Watch are professionals, right? They're people that are getting of a certain age, or are professionals, and coming into some disposable income if they're younger people. And they like a device like that, like the Apple Watch, that is a bit of a fashion accessory, but they also really like it for its fitness capabilities.

When it first came out, and I've said this many times, but it was often talked about like it's a computer on your wrist. It's really not that it's just a slightly smarter Fitbit. And Fitbit and others are now getting closer, right, with the Versa, Samsung just came out with a new watch of its own. These devices are getting closer to the Apple Watch, but it is still the gold standard, still the best-selling of the smart watches.

And Apple's found its niche in two things: fitness and healthcare. And fitness, it does a great job of serving that market runners, although a lot of hardcore runners still like things like GPS watches, Garmin, and that kind of thing. But the little bit more casual runner, of which there is a lot more of them, it does pretty well with them, as well as other people that care about fitness. And now, they're finally doing the thing that I said would be great, before they even launched the watches, they're making it so that you can go into your gym, and you can just tap your Apple watch on it, and it will record your workout off of that machine, if you go into a different gym.

So they're working, and doing more things for fitness, but healthcare is where they're really making a big bet. And this one had some really powerful things that they announced.

SEE: Apple Watch 4: Why digital health's future depends on Apple finding a cloud partner (ZDNet)

One is, it will now both with the new hardware that they announced, and their software that they're doing, it will detect falls. So if you fall, it can automatically dial emergency services, for example. That's a big deal, as we know for people that-

Bill Detwiler: Especially for people who have elderly relatives-

Jason Hiner: ... exactly.

Bill Detwiler: ... or if they are prone to falls themselves. Those fall risks are a real danger, and so it's important to have a system that allows you to detect that. And if this can do that and alert somebody, that could be a key selling point.

Jason Hiner: Yup, that's a powerful thing. And obviously, that's a much different market than sort of the younger, middle-aged, exercise kind of fitness folks.

The other thing that is a bit a breakthrough with this, we heard some rumors of it, the new Apple Watch will actually take an ECG, an electrocardiogram. That is pretty significant, you would have to go in to a healthcare provider to get something like this done. It takes about 30 seconds, it's not automatic. It can do some automatic heart detection in the background, can detect some-

Bill Detwiler: A low heart rate, we saw.

Jason Hiner: A low heart rate, yeah.

Bill Detwiler: It can also detect, they were talking about AFib.

Jason Hiner: AFib, yup.

Bill Detwiler: And again, as someone who has had a relative that has gone through these events before, it would have been really helpful to have a device that was monitoring that heart rate over time, and do early detection of these conditions, because what you find is, even if you're going in to see a cardiologist, if you're going in to see your GP, once a month, or once a year, or every six months, whatever it is, the condition may not be manifesting itself during that visit, so whereas you may go in and out of AFib, or you may have a low heart rate that comes back up at the time when you're standing or when you're at the doctor's office. So having a device that can detect these conditions continuously, and then show your doctor, "Oh, for the last six months, you've been in and out of AFib for this."

Previously, like you said, you were only able to detect that with devices like a pacemaker, or implantable defibrillator.

SEE: Gallery: The September 2018 Apple event in pictures (TechRepublic)

Jason Hiner: some kind of very expensive, experiment or challenge and response kind of methodology, where you have to go to a healthcare provider. They're like, "Great! We're gonna send somebody out to monitor you for the day or we're gonna put you in a lab, and we're gonna monitor how this goes for a certain amount of time." Very expensive, also limited in time, so this kind of thing is pretty significant.

You know, they didn't announce the mother of certain technology things, the screen itself is much larger. It goes more edge-to-edge, because of that it has more complications on the watch face, other more, basically, things that you can put on from six up to eight or even nine on there. So you can more customize the data that's on your watch.

So things like that, because it has that little bit larger screen in the same form factor, although it's actually a little bit slimmer, so one of the arguments against the device is that it's not the best looking device, it's a little chunky for what it is. I'm sure over time of course, technology gets smaller, and more powerful. But they are making some small strides there.

Also, the big red button is no longer big and standing out, but it's more like a red circle. They announced some haptic feedback on some of those buttons. So some small tweaks and improvements that make usability better, make it a little smaller, the design better.

So, those things were there as well, but the big upgrades is that healthcare stuff. That is significant.

Bill Detwiler: Okay.

Well, those are great insights for all our Apple news and analysis. Be sure to check out ZDNet, and for our all our how-to's, and Mac tips check out TechRepublic and be sure to subscribe to our Apple and the Enterprise newsletter.

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