I haven’t bought one but after you read this you might end up regretting it…
Last week, Apple came out with their new line of iPhones, right on time. The iPhone 11, iPhone 11 Pro and iPhone 11 Max. Every September they release a brand-new lineup of phones with incrementally better features across the board and apparently an additional camera every year…
The new features and hardware upgrades are always pretty good, and Apple is definitely top of the line amongst its peers, but in recent years the new releases have been less ground-breaking. Apple just expects that some small percentage of their customers will upgrade every year, and almost everyone else will upgrade every two years when their wireless contracts run out. Especially since the top-of-the-line iPhone has increased in price from about $600 to $1999 Canadian Dollars ($599 to $1449 USD) over its lifetime.
With rising prices and the iPhone 11 series just out, I want to highlight how much money can be saved by waiting until next year to upgrade to your next iPhone. Using the case of an annual upgrade as the baseline, I’ve compared the savings created by switching your upgrade habits to bi-annual upgrades, upgrades every three years and upgrades every four years. I’ve illustrated the savings over 12 years and 36 years in the two charts below.
Obviously, the most savings are generated by not over-upgrading the highest end phones and from making the switch from upgrading every year to upgrading every other year. However, even in the least fruitful scenario of changing your habits from buying the bottom-of-the-line phone every three years to buying the bottom-of-the-line phone every four years, you will generate savings of almost $10,000 over 36 years. In the best-case scenario, if you are upgrading to the top-of the line phone every year and change your habits to hold onto it for four years going forward, you will save $247,000 over 36 years-that’s right, almost a quarter million dollars.
The average person who upgrades every two years and buys the average-priced iPhone will have an additional $22,000 over 36 years if they keep their phone for three years, or $33,000 if they keep their phone for four years before upgrading. This assumes that you will put the extra money into long-term investments that earn an average 7% per year.
Who knows if we’ll still be buying iPhones in 36 years but we’ll be buying some sort of gadgets and if you adopt the mentality of trying to get the full life out of your technology products then you’ll be much wealthier.
I was telling my friend Noah about this article and he is one who upgrades quite regularly. He argues that you can resell your used phones and he’s right. If you are one of these people, then you can mute these results a little bit. However, I’ve decided to leave this out of the numbers as my research shows that most people do not resell their used phones. I’ve also not even included the cost of Apple Care or repairs, nor accessories like chargers and phone cases, which would further increase the cost of upgrading more frequently.
Full disclosure:
I’m an Apple shareholder and a long-time fan of the company. If everyone wants to buy their phones every year then the stock will do great, but I’d prefer that we take a moment to think about how that affects the environment and, of course, our savings.Apple is actually a leader in sustainability for a company of its size and it makes the most sustainable smart phones of the large manufacturers. This is one reason I include AAPL in my portfolio, among others. The Apple team are forward thinkers when it comes to sustainable manufacturing. They follow the philosophy that being the most sustainable company possible is both good for the environment and their bottom line. As the most profitable public company on the planet, this approach seems to be working.
All that being said, there are still emissions associated with manufacturing iPhones. Buying less of them will be phenomenal for your bank account and great for the planet, as well. According to the Apple Environmental Report, the new top-of-the-line iPhone 11 Pro Max requires 117kg of CO2e emissions to make, package and ship, and use. In the most fruitful scenario described above, you will divert more than three tons of CO2e from being emitted while saving a quarter million dollars.
So, will you regret buying the iPhone 11? My answer is that if you can wait another year and upgrade to the iPhone 12 instead then please do! Both for yourself and the planet.
I’m motivated to help people see that sustainability goes hand-in-hand with creating wealth. If you found this at all helpful, please share on your social media and email them to anyone you think might enjoy or gain something from the read. If you know someone who’s thinking about buying the iPhone 11, iPhone 11 Pro, or iPhone 11 Pro Max, please make sure they read this article first.