iPhones are the closest thing to a hardware annuity stream tech has ever seen, as they're a known quantity, dependable, and nearly all users will buy again
@stratechery https://stratechery.com/... Steven Sinofsky / @stevesi : The iPhone Franchise http://stratechery.com/... @stratechery // Smart. Interesting to consider the iPhone annuity stream relative to historic (pre-OS X) Mac “annuity” stream. This is another double-secret playbook that has been out in the open all along, but different this time. 1/ http://twitter.com/... Steven Sinofsky / @stevesi : Apple A12: • 7nm • 6.9B transistors • 6 CPU cores • 4 GPU cores • 8 “neural” cores • 5 trillion ops/sec • 512GB addressable storage • Oh and the rest of the “stuff” for a SoC tl;dr Apple is the leading chip innovator and creator in the world. Benjamin Mayo / @bzamayo : The new iPhone XS line is pretty, but more sumptuous than substance. XR gonna sell really well so it doesn't really matter. Harry McCracken / @harrymccracken : In retrospect, with three iPhones on the agenda there wasn't room to talk about iPads or MacBooks. Neil Cybart / @neilcybart : iPhone Xs Max feels good in hand. Felt similar to iPhone X in terms of weight. Brought back memories of using iPhone Plus with one hand, but the additional screen real estate is huge. Ron Miller / @ron_miller : Geez Apple you're a trillion dollar company, and you can't give your customers a freaking dongle for free? http://twitter.com/... Steve Troughton-Smith / @stroughtonsmith : Apple Watch Series 4: heck yesDon't think I'll be upgrading the iPhone X to an XR or XS Max this time round (though the XR is way more tempting than it should be). Now, just need the massive iPad Pro redesign next month Martin Bryant / @martinsfp : There will be people who will miss a small iPhone in the range. The SE's size was as appealing as its price. http://twitter.com/... Jim Roberts / @nycjim : Max storage of 512GB takes prices to $1300. Add a case and taxes and well, you get it. https://twitter.com/... Geoffrey A. Fowler / @geoffreyfowler : The iPhone XS Max is not only the largest iPhone ever, it is also the most expensive. $1099 and up. As we hang on to our phones longer, Apple's goal is to get us to at least spend more money on them #appleevent https://wapo.st/2QrDQGz pic.twitter.com/SppiOqNyB0 Aaron Pressman / @ampressman : Cheapest new iPhone goes from $700 to $750. Most expensive iPhone up from $1150 to $1450 for 512 GB model XS Max. Matthew Panzarino / @panzer : iPhone Xs starts at $999, iPhone Xs Max starts at $1099. Pre orders September 14th, ships September 21st in a bunch of markets. September 28th in a bunch of new markets. 64GB, 256GB, 512GB. http://twitter.com/... Rene Ritchie / @reneritchie : IPhone Xr battery life: 90 minutes longer than iPhone 8 Plus.(Relative measures aren't great. I suck at math on the fly. Give me absolutes please.) @macrumorslive : “We are so excited to introduce you to the iPhone Xr.” Comes in white, black, blue, coral, red, and yellow. Features an edge-to-edge screen, 7000 series aluminum casing. pic.twitter.com/PtUYZv2g8w Ian Sherr / @iansherr : So, basically an iPhone XS without the OLED screen, cameras or 3D Touch. https://twitter.com/... Rene Ritchie / @reneritchie : Same 7nm A12 bionic chip in iPhone Xr as iPhone X's.(That's great for both customers and developers) @techcrunch : No 3D touch in this model. But it does get 120Hz touch responsiveness, True-Tone and tap-to-wake on an LCD. Previously this was hard to do with LCD because of power. Instead of 3D Touch, this gets ‘Haptic Touch’ that gives physical feedback.http://techcrunch.com/ ... #AppleEvent http://twitter.com/... @techcrunch : iPhone XR has aluminum casing in white, black, blue, coral, yellow. iP67 water resistant. LCD edge to edge on this - not OLED like the other phones. It's a bigger display than the 8 Plus but physically smaller than an 8 Plus. https://tcrn.ch/2CN27nl #AppleEvent pic.twitter.com/XDePEhwjIg Rene Ritchie / @reneritchie : Next challenge is to eliminate the need to mine new materials. Will require responsible sourcing, replying. IPhone X's uses recycled tin in logic board. Better plastics program. Bio based materials. Better for the planet, also performs better. Raymond Wong / @raywongy : Apple says it wants to stop using mined resources to build its devices. iPhone XS uses recycled tin in the logic board. Speaker enclosure is made with 35% recycled plastic Cover glass frame more biodegradable #appleevent Rene Ritchie / @reneritchie : Lisa Jackson now on stage to talk environmental responsibility. Apple now runs on 100% renewable energy worldwide. Includes Apple Park, Data Centers. Send iMessage, make FaceTime, clean energy is being used to make that happen. pic.twitter.com/0FPNdCRHl3 Connie Guglielmo / @techledes : New feature Dual SIM Dual Standby — DSDS — allows for you to switch between SIMS. Apple also bringing eSim technology from iPad to iPhone XS. Requires support from carrier. #AppleEvent Geoffrey A. Fowler / @geoffreyfowler : Hurray for slightly longer battery life in the iPhone XS, Apple claims. (And 1.5 hours longer on the XS Max.) #AppleEvent pic.twitter.com/eBX5htxkkg Alex Russell / @slightlylate : You know what's gotta suck? Launching an Android in this wake. Nobody else is making chips anywhere near this fast, particularly not @Qualcomm. Phones packing 845s are roadkill. http://twitter.com/... Safwan Ahmedmia / @supersaf : FINALLY! Stereo recording on the iPhone Xs! #AppleEvent pic.twitter.com/Cpg1eUacV6
Context & Ripple Effects
Steven Sinofsky's Stratechery piece frames the iPhone as the closest thing tech has to a hardware annuity: a known quantity users reliably rebuy, echoing the pre-OS X Mac franchise but at a scale Apple never had before. The 2018 lineup is the thesis in motion — Apple split the franchise into XS, XS Max, and an iPhone XR deliberately segmented to be close enough to the best to sell for years.
The proof points arrived over the following months: after early demand worries, CIRP found the XR took 39% of US iPhone sales in its first full quarter, making it the best-selling model — exactly the broad-appeal outcome Phil Schiller described when explaining the choices behind the R.
First-order effects
- Apple converts its upgrade base into forecastable revenue by tiering one franchise across three price points, with the A12 Bionic — 7nm, six CPU cores, eight neural cores — as the shared performance floor that keeps even the cheaper model 'close enough to the best'.
- Carriers are pulled into the annuity mechanics directly: Dual SIM Dual Standby and eSIM support require carrier cooperation, tying distribution partners tighter to each upgrade cycle.
Second-order effects
- Rivals face a pricing squeeze at the mid-tier, where the XR's broad appeal undercuts Android flagships without Apple sacrificing margin on the XS line above it.
- AnandTech's finding that Apple is underselling A12 performance — desktop-class margins off the best CPUs — forces competitors to answer on custom silicon rather than spec sheets alone.
Third-order effects
- If the pattern holds, premium smartphones consolidate into annuity franchises where value accrues to whoever owns both the silicon and the customer relationship, and single-model launches give way to permanently tiered lineups refreshed annually.
- The eSIM/DSDS push signals a longer shift in which Apple's hardware annuity increasingly sets terms for carrier distribution rather than the reverse.
The trend: Smartphones are maturing from category growth into replacement-driven annuity businesses, where custom silicon and deliberate product-tier segmentation — not new device categories — sustain the franchise.