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The big iPhone 8 changes will likely cost you more than ever


After three years, the iPhone redesign is finally on its way. But it may not be for you.

Apple on Tuesday is widely expected to launch its next flagship phone, which, if rumors are true, will end up coming as three different models. One -- a pricey version commonly dubbed the iPhone 8, iPhone X or iPhone Pro -- is expected to feature a radically new design that ditches the home button in favor of facial recognition and gesture controls. It's also expected to have a fancy new OLED screen and cost upwards of $1,000 compared to the $769 starting price for the iPhone 7 Plus.

The other two, likely to be called the iPhone 7S and 7S Plus, are expected to include faster processors but have the same design as the past three generations of iPhones: Last year's iPhone 7 and 7 Plus and the older iPhone 6S/6S Plus and iPhone 6/6 Plus. All three models, which come during the 10th anniversary of the first iPhone, also will feature new augmented reality apps that overlay the digital world on top of the real world.

This marks a more dramatic break from co-founder Steve Jobs' original concept of the iPhone as the one phone you need. Apple began splitting its flagship line up with the debut of the iPhone 6 and iPhone 6 Plus in 2014, and last year added a feature -- the iPhone 7 Plus' dual-lens camera -- that you could only get in the bigger model.

The rumored gap between the basic iPhone 7S and iPhone 8 is wider than ever.

Not everyone wants to drop a grand on a phone. The question for the average buyer is whether Apple will do enough with the iPhone 7S and 7S Plus to make you want to upgrade.

"There's room for that more expensive device that is not going to be for everybody," Creative Strategies analyst Carolina Milanesi said. "But for a lot of consumers, what they have today is great."

Still, the newly designed iPhone can't come soon enough. More than two thirds of Apple's sales come from its popular phone, but iPhone sales dropped for the first time last year. Companies, Apple included, haven't been making dramatic changes to their devices, people haven't been upgrading as often as before and the overall phone market has been slowing down.

This year has been different when it comes to dramatic changes. Apple's chief rival, Samsung, has been experimenting with new displays and materials. The Galaxy S8, which hit the market earlier this year, features a curved display that stretches across the entire front of the phone. The physical home button no longer exists, with Samsung opting instead for a virtual button that appears when you need it, as well as iris scanning and facial recognition to unlock the device. Much like Apple's early iPhone releases, it's easy to tell when someone has the newest device just by looking at it.

That puts more pressure on Apple's new trio of devices.

Apple didn't have a comment ahead of Tuesday's event.

Back in the day

It's hard to remember what life was like in 2006. There was no Instagram, no Twitter, no Uber. Facebook wasn't the pervasive behemoth it is today, and Google wasn't known for much beyond its search engine. Amazon Prime was just for two-day shipping, and Microsoft was getting ready to launch Windows Vista.

When it came to our mobile devices, we used flip phones such as the Motorola Razr or LG Chocolate. Nokia was the world's largest phone maker, and white collar workers carried a Blackberry to check email when away from the office.

Then Apple made the iPhone.

When CEO Steve Jobs unveiled the $499 device on Jan. 9, 2007, he called it "a revolutionary and magical product that is literally five years ahead of any other mobile phone." A mobile phone, music player and internet device all in one, the iPhone was something the market had never seen before. It dramatically changed the way we live, created entirely new industries and spawned scores of copycats.

Those early annual updates kept us riveted with constant design changes and features big and small. Remember how much applause "cut and paste" got?

Fast forward 10 years. The iPhone remains the top-selling mobile phone model in the world, but it's harder to get excited. Phones in general, particularly the premium line from the likes of Apple or Samsung, are powerful enough that it's harder to justify an upgrade.

Last year marked the slowest growth rate for the phone industry since it began, and Apple's iPhone sales dropped for four straight quarters. Total industry shipments rose just 2.5 percent to 1.47 billion, according to IDC, and they should increase only 1.7 percent this year. The firm expects phone shipments to keep growing through 2021, but the real boom days are over.

"Even though we see terrific volumes, [annual] growth will be small," IDC analyst Ramon Llamas said.

Upgrade dilemma

So it's a bit unusual to see Apple release three different iPhone models. It used to introduce only one new iPhone every year until 2013, when it started selling the less expensive, plastic iPhone 5C alongside its premium iPhone 5S. The 5C didn't catch on, though, and Apple never made a follow up. The iPhone SE, introduced in early 2016, is the only new, smaller screen phone it has built since 2013.

As for its flagship model, it wasn't until Apple added the dual camera in its iPhone 7 Plus that it saw demand for the larger phone soar.

All of this makes it tougher to figure out which iPhone you want. Or if you want one at all.

There aren't quite as many rumors -- or excitement -- surrounding the iPhone 7S and 7S Plus as there are around the iPhone 8. Those devices could get wireless charging capabilities, faster components and new color options, reports say.

Whether those features will be enough to get you to upgrade depends a lot on the phone you already have. If you have an iPhone 6 from 2014, you can't access new augmented-reality apps and don't have capabilities like a waterproof design. But you can do most other things.

"If I just use Facebook, check my email, do web browsing, my phone from two years ago does that well," IHS Markit analyst Ian Fogg said. "Four years ago, that wouldn't have been the case."

If Apple's changes to the iPhone 7S and 7S Plus are minimal -- and the iPhone 8 is too expensive and experimental for mainstream users -- Apple could see more customers than before opting for its older devices instead of its newest models, Bernstein analyst Toni Sacconaghi noted.

"It will be interesting to see whether Apple will take deliberate actions to further differentiate the 7S-Plus from the 7 … and whether iPhone 8's features are compelling enough to skew more consumers to [opt] for Apple's highest priced model," he noted.

But if you're looking at the iPhone 8, you might want to consider pinching your pennies now.

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