Internal Apple documents from last April shown in court today paint the picture that the company was scrambling to identify and determine ways to compete with devices running Android, as well as keep sales of the iPhone from petering out amid growing competition.
Pages from a 2014 planning document last April, shown during a cross-examination of Apple’s marketing chief Phil Schiller, noted that smartphone growth rates were declining, something that could impact iPhone sales. Worse yet, the document said, was growing consumer interest for less expensive, larger-screened smartphones, with a headline on the page reading “consumers want what we don’t have.”
Apple is doing just fine in the US. In large parts of Europe and the rest of the world – not so much. I don’t mean to say they are in trouble or will die – so let’s get that strawman out of the way straight-up – but Apple’s leadership (unlike some others) is smart enough to know that what matters is not last year, this year, or even next year – what matters is five years from now. Once people get accustomed to relatively cheap, non-iOS devices with large screens, they won’t be going back to a phone with a tiny (by comparison) display that costs twice as much.
So yes, those larger-screen iPhones are coming.
Some declining growth can be expected due to market saturation. Even all the kids in middle school have iPhones now so an 8% year over year growth rate from where things are today is still a win.
With that said, current Android phones don’t have a lot of room left for improvement aside from maybe camera and battery life. As things start to level off in terms of being “good enough” we could definitely see a rise of people opting not to spend $650 on flagship phones.
As it stands now, at least in the US, monthly bills for a phone are almost $100/month and it includes with it an almost $20/month payment towards a 2 year $400 phone subsidy so people don’t mind paying an additional $200 or $250 for the best phone.
Without the subsidy cheaper phones like the $400 Moto X would be a lot more popular but as you pointed out, that shift might not matter much for another 5 years.