I didn’t word the hypothetical that well. A better way to think about it would be a brand new iPhone 5 that to you looked and felt like an iPhone 5, but magical

I didn’t word the hypothetical that well. A better way to think about it would be a brand new iPhone 5 that to you looked and felt like an iPhone 5, but magically appeared like an iPhone X to everyone else. The “fashion effect” is the zero sum feeling someone has from having the latest version of a product. The actually dimensions / screen size and screen to body ratio of the iPhone X are actually technical improvements. My argument is people would not pay that much for an iPhone 5 that looked like an X to other people and hence conferred its status. If people really were willing to pay close to the price of the X in such a situation it would be an argument that the fashion effect plays a significant role. I don’t deny it has some influence, only that technical improvements are the main influence of prices. If you are still willing to pay more than 41% of the price of an iPhone X for an iPhone 5 that everyone thought was a X, I think that would make you pretty unusual. Used versions of the iPhone 5 seem to be going for under $100 on eBay. Even assuming a discount for new vs used, that would mean you value the iPhone 5 about $200-300 more than a typical eBay buyer. In response to your Android hypothetical I would argue that Android phones have advanced more rapidly than iPhones over the past 5+ years, and that there is some system lock in. Also I don’t really want to get into the quality debate in this area, though I would note that Android phones exhibit year over year price depreciation similar to iPhones.