4 Half-Baked Thoughts About the $999 iPhone X and Higher Ed Costs

What Apple’s expensive new phone might, or might not, say about the economics of postsecondary education.

September 13, 2017

There exists in someone’s brain a brilliant insight about what the $999 iPhone X teaches us about how to think about the costs of higher education.

Alas, that brain is not mine.  Luckily, my own deficits in cognition have rarely stopped me from declaiming on all things related to technology and higher education.

With the hope of leveraging the wisdom of our IHE crowd, here are my own half-baked thoughts on the relationship between Apple’s new $999 iPhone and the economics of postsecondary education.

1 - Why Most Everyone Welcomes a $999 SmartPhone, But Freaks Out About College Prices:

The general reactions to the iPhone X seem to be positive.  Business Insider opined that "I used the iPhone X, and I can already tell it'll be worth its $1,000 price”.   MarketWatch claimed that the "$1,000 iPhone could be a genius move for Apple”.  Everyone loves the gorgeous end-to-end OLED screen, the fancy cameras, the wireless charging, and the super-powerful processing.

Why is it then that so many folks are apparently willing to accept paying $1,000 for a phone, but think that college costs have become so unreasonable?

Is this a story of perceived value?  Does the iPhone X seem like a good investment, while higher education does not?  This is despite the fact that a college graduate will earn, on average, about $1 million more dollars than a high school graduate during their career (in today’s dollars).  Perhaps those of us in higher ed should be talking more about the value of the college experience.

2 - Conspicuous Consumption and Inequality:

There are some who say that buying an iPhone X is a form of conspicuous consumption.  There are others who say that paying full-price at an elite private institution is also status signaler.

My perception is that the idea of conspicuous consumption is overrated.  Perhaps this is because I don’t know anyone personally who uses spending to cement their social status.  In the world that I live in, everyone is trying to make the best decisions they can based on the resources that they have.

In that sense, I think that the decision to either by an expensive phone or stretch to pay for an expensive college (including taking on debt) is a decision based on perceived value.  Folks work hard in order to afford the best that they can for themselves and their families.

Where I think we should be more concerned is about what high college costs - and yes the cost of the iPhone X - says about inequality.  It is clear that the highest priced goods and services are increasingly restricted to only the most well-off of our society.  The iPhone X shows that it is possible to build a very good business around a very few number of people - that small percent who have benefited economically while almost everyone else have seen their wages stagnate.  A high quality education system for the few is not one that benefits our society.

3 - Private Consumption Vs. Public Goods:

The iPhone X is a private good.  The benefits of the iPhone X accrue only to the individuals who purchase the device.

Higher education is very different.  Higher education is a public good.  A quality postsecondary system benefits everyone by creating the educated workers and citizens that our society needs - and the research that we rely on to live healthier and more productive lives.

There is a real tragedy going on when our society celebrates ever-more expensive consumption goods such as the iPhone, while at the same time failing to halt public disinvestment in higher education.  (See A Lost Decade in Higher Education Funding State Cuts Have Driven Up Tuition and Reduced Quality).  

Shouldn't it drive us nuts that a phone for the rich, put out by the world’s wealthiest company, get so much attention?  While at the same time, the fact that so many colleges and universities are being forced to make cutbacks and raise tuition costs due to declines in state funding gets so little press and attention.

4 - Consumer Vs. Educational Experiences:

A final thought on the iPhone X and higher ed is about consumer and educational experiences.  It is hard to deny that the iPhone has improved at a much faster rate over its 10 year life than has higher education.  Every college and university that I know is working like crazy to make the experience of being a student better and better, and yet there is no way to keep up with a consumer good like the iPhone.

Might it be the case that our experiences as consumers (and technology consumers) is throwing off our expectations about what other experiences should be like?  Making big jumps in the quality of consumer technologies is challenging, but it is doable.  Big jumps in the quality of higher education may be out of reach.  Higher education is infinitely more complicated than any consumer good.  There are way too many roles and expectations that colleges and universities fulfill, and way too many stakeholders, for higher education to change at the rate that consumer technologies can.

This might all mean that trying to say anything about higher education in relationship to any new consumer technology - and in particular the iPhone X - is a fool's errand.

Okay…those are 4 not fully-formed thoughts about higher ed inspired by the iPhone X announcement.

Please do better.


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