Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates

[827538]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

You and I both. I used to upgrade every two years but now they've gone from asking £600 to £1000 while my iPhone 6S runs great I can no longer justify the cost to myself so I just end up putting the money into more shares or something boring like that.

The XS should really be around $849 in my opinion, then I'd probably go back to a two year cycle.
My sister got the XS Max and she just does not like FaceID and I cant say I blame her. My wife won't upgrade until there's a phone the size of her SE as even the smallest iPhone now is far too big for her.

Also technology is supposed to come down in price, not increase.
Sure the 7nm A12 is quite something and the OLED display is impressive but the prices are outrageous. It wouldn't surprise me if next year we see a price drop to $899. But then again, this is Tim Cook we are talking about. I feel Apple and Cook are succumbing to hubris.

 

[thomasguide]

Last year I bought an iPhone X, a series 3 Apple Watch and a 10.5 inch iPad Pro with accessories. This year the price points have all just tipped past what I can justify. I’ve bought an XS max and wanted a new watch and iPad. I would have probably got them if they and the phone hadn’t all stepped up their pricing. I’m an apple fan boy, but even I’m now starting to think updating every other year is going to be my limit and a move which will actually see me spending less with apple overall.

Fair enough that they want to increase per unit profit, but if that means the number of units sold drops below the balance point then so will their income. Hopefully to a degree that they start lowering prices which they can surely afford to do.

So you're only going to upgrade every other year? Wow you really know how to stick it to apple.
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As I type, Apple has lost $100 BILLION in pre-market trading. Apple will have to sell twice as many of everything to get that value back.

Thats usually temporary, the stock bounces back in a few days or weeks.

 

[Cobalt50]

New MacBook Air 256gig: $1400, Tax in my area: $140, AppleCare (because I don't trust the butterfly keys): $250, new carrying case and or cover: $150

So total (more or less): $1940.

No way! I remember buying a MBP for less that that. I can't justify the price. Apple says they only want to sell to high end customers (low volume/high margin). Well, tech wise, I am high end. But that is too much for too little.

 

[-BigMac-]

Yea nothing to do with the climbing Apple Tax..

 

[haikujim]

New mac mini is nice. But very expensive, at least for me. Same with all the current iphones. Apple products usually last longer than other pc makers, but the price jumps are hard to take. I don't know what the prices for these things 'should' be, but I know that the prices they charge now, across the product line are too high for me.
Not reporting individual sales is fine, and I agree with the new concept of only reporting earnings once or twice a year, rather than very 3 months.

 

[JPack]

Apple didn't spell out the unit sales for individual iPhone models before either.

Given this quarter's ASP of $793 and the 16% growth in China, I think it's pretty clear the Max is a popular product.

The last time we saw this ASP was last year, when iPhone X came out.

 

[Cosmosent]

NOT Rocket Science, it's just poor product planning on AAPL's part.

 

[neliason]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

I think the hardware price has gotten too high, but if the ecosystem really delivered on a smooth, reliable experience then I might not feel that way. Unfortunately I just encounter too many problems and annoyances with the software. It doesn’t work as well together as promised. In fact I am consistently having problems specifically because I am in the Apple ecosystem.

 

[Zackmd1]

It is very telling when every new product Apple launched this year saw a price increase in some way....

Apparently to Apple, any new design change or spec increase requires a bump in price now.... Before you really only saw price bumps with "revolutionary" specs like the retina display and so on. The common trend before was that first gen prices were high but then fell over time. That is no longer the case. I agree with everyone here, the problem is that Apple is pricing a signification portion of the population out of their products.

Apple's issue IMO is that they have zero direction. The mac line is a perfect example.... 2 years ago they announced that they were ending the Macbook Air line, Tuesday they announced a new macbook air.... That product could have been part of the Macbook line with a decrease in the 12 inch Macbook price. That did not happen. The Mac Mini took 4 years to update with little design changes. The Mac Pro has not had a meaningful update since 2013. The iMac line still has the same tired design from 2012 with a new "Pro" model that does not fit anywhere in the lineup...

I was set to buy a Mac Mini before the keynote, after the keynote I am going to pass due to the fact that the price increased by $300 for specs that are mediocre at best for a 2018 desktop.

Apple's product lineup is a mess with over inflated prices Tim.... That is why you are seeing a decline in sales. Stop trying to blame external factors and fix the internal ones....

 

[citysnaps]

Amazing how so many will read a headline and make stuff up concluding Apple’s products are priced too high.

 

[arvinsim]

The mental gymnastics that people do to justify the high prices would win the Olympics for sure.

 

[2GoldFish]

And relatively, Apple is guiding for 6% higher sales than last Xmas, grew this quarter’s revenue 20% higher, and grew earnings 40% y/y.

Relative being;
1/ Relative to how other competitors are doing
2/ Relative to Apple internal and external stakeholders expectations
3/ Relative to analyst estimate/outlook

 

[ryanwarsaw]

So you're only going to upgrade every other year? Wow you really know how to stick it to apple.
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Thats usually temporary, the stock bounces back in a few days or weeks.

That's nothing! I am going to go at least 5 years between upgrades. Because I have a feeling in the year 2023 prices will be lower.

 

[albusseverus]

Maybe they should look in their own backyard and ask if they've overpriced the phones to over glory?

MacWorld figured out Apple is jacking up prices 20% per year at the moment (Phone, Watch Mac, everything). As you wrote… couldn't possibly be the zillion dollar hippie (Apple) thinks everyone lives in San Fran, where they won't even pay teachers enough to live! (The don't care about their children's education, they won't give a stuff about YOU.)

It's your prices Apple, not currency fluctuations! The world has put up with currency fluctuations on Apple products for decades, it's not that!

 

[marcelvelky]

blah blah blah, ridiculous pricing all the way, so shut up apple!

 

[sw1tcher]

Apple's $89 to $93 billion revenue forecast for the first fiscal quarter of 2019 is rather also cautious, which Apple blamed on foreign exchange costs, issues with supply/demand balance, and weakness in emerging markets.

Apple jacking up the starting prices on the new Mac mini and MacBook Air (and using a Y instead of U series chip) isn't going to help with sales either.

I don't need to, but I would have liked to upgrade and would have bought 1 of each. That plan's now been put on hold.

 

[RickInHouston]

I always buy a new iPhone every 24 months but I've skipped the iPhone XS. It just costs too much, simple as that. Maybe I'll switch to upgrading every 36 or 48 months. If the iPhone XS Plus was £819 I would have bought one day one simple as that.

I just replaced my phone from a two year old phone. It really didn't need replacing. Battery life was excellent. It just looked a bit tired. This new one should easily make it three years, I'm thinking. So, yes, cycles are extending.

 

[Duncan-UK]

I do find it slightly amusing that some of those lambasting the prices have their “show off list” of up to date expensive kit at the bottom of their posts...

 

[ONJ]

You have to be kidding me!

In Australia...Try $2369 for the XS Max@512GB. An absolutely disgusting price with Apple Care+
For the XR imagine this...$1479.

What's ironic is that there are no cases to protect these glass units available from Apple. Do they want us to drop them accidentally so we now have to pay hundreds and hundreds of dollars so that Apple can make more money?

20% increase it seems across all Apple products. Australia has a low dollar..but what I am saying is, why the hell is Tim Cook allowing the prices of Apple products go so high when you look at the US dollar value? It doesn't make sense. No headphone dongle included, no Magsafe, etc etc. Money pinching to the Max!

Though iPhone revenue was up in 4Q 2018, fourth quarter iPhone XS and XS Max sales were not as strong as expected, and iPhone sales growth was essentially flat. Apple sold 46.9 million iPhones during the quarter, compared to 46.7 million in the year-ago quarter, missing analyst estimates.

Apple's $89 to $93 billion revenue forecast for the first fiscal quarter of 2019 is rather also cautious, which Apple blamed on foreign exchange costs, issues with supply/demand balance, and weakness in emerging markets.

"Virtually every foreign currency has depreciated against the dollar over the last 12 months," said Apple CFO Luca Maestri. "That adds 200 basis points of headwinds to the tune of $2 billion to our revenue."

Uncertainty in emerging markets is also a factor. "There's some level of uncertainty at the macroeconomic model in some emerging countries where consumer confidence is not as high," said Maestri.

Maestri also said that Apple has launched an "unprecedented number" of new products over the course of the last six weeks, and Apple has "some uncertainty" around supply/demand balance for some of these products. The launch timing of the new iPhones is also a factor, with the iPhone XR coming later than the XS and the XS Max. This had an effect on Apple's Q4 revenue and will also impact Q1.

Despite the cautious guidance for the first fiscal quarter of 2018, Apple is "very excited" about its lineup of products and services entering the holiday shopping season, and Maestri said that Apple has the "strongest lineup" it's ever had.

Going forward, Apple does not plan to break down unit sales of the iPhone, iPad, and Mac, a major change to the way that earnings data is presented. Apple will, however, continue to provide details on overall iPhone, iPad, and Mac revenue.

Apple CEO Tim Cook and Apple CFO Luca Maestri explained during today's earnings call that Apple does not believe that providing unit sales is relevant for the company at this point.

Article Link: Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates

 

[0388631]

I often wonder how much each handset costs once you factor in manufacturing costs and R&D trickle. In simpler words, how much profit do they make on each handset? At some point, mobiles are going to cost as much as they did in the 80s.

 

[Glideslope]

How about they are simply too dam expensive, and people are keeping their devices longer. Seems spot on to me Tim.

 

[EugW]

What's ironic is that there are no cases to protect these glass units available from Apple. Do they want us to drop them accidentally so we now have to pay hundreds and hundreds of dollars so that Apple can make more money?

You can get third party cases all over the place, and you could even before launch.

 

[ramm24]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

Mmm.. significant disposable income.. can i be your friend?

 

[ONJ]

You can get third party cases all over the place, and you could even before launch.

Actually not true I'm afraid. I went to Best Buy and several other stores including Verizon, AT&T to buy a film protector and an XR case. They didn't have anything available in Manhattan despite what their website said for availability.
[doublepost=1541123254][/doublepost]

It is very telling when every new product Apple launched this year saw a price increase in some way....

Apparently to Apple, any new design change or spec increase requires a bump in price now.... Before you really only saw price bumps with "revolutionary" specs like the retina display and so on. The common trend before was that first gen prices were high but then fell over time. That is no longer the case. I agree with everyone here, the problem is that Apple is pricing a signification portion of the population out of their products.

Apple's issue IMO is that they have zero direction. The mac line is a perfect example.... 2 years ago they announced that they were ending the Macbook Air line, Tuesday they announced a new macbook air.... That product could have been part of the Macbook line with a decrease in the 12 inch Macbook price. That did not happen. The Mac Mini took 4 years to update with little design changes. The Mac Pro has not had a meaningful update since 2013. The iMac line still has the same tired design from 2012 with a new "Pro" model that does not fit anywhere in the lineup...

I was set to buy a Mac Mini before the keynote, after the keynote I am going to pass due to the fact that the price increased by $300 for specs that are mediocre at best for a 2018 desktop.

Apple's product lineup is a mess with over inflated prices Tim.... That is why you are seeing a decline in sales. Stop trying to blame external factors and fix the internal ones....

Well said mate!

 

[mistasopz]

New iPhones cost more than premium laptops now. Prices are out of control.