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Apple CEO Tim Cook: 'I Do Think Price is a Factor' in Declining iPhone Upgrades
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My last upgrade was iPhone 6S, and I'm hanging onto it for dear life. - I won't 'upgrade' for a stupidly expensive iPhone, with no headphone jack and a stupid notch. Happy with my iPhone 6S thanks.
If Apple released a 6S form factor with updated internals, a headphone jack, touch ID and at reasonable cost, I'd maybe consider upgrading. Then they can also release a higher tier phone for people with money to burn with a stupid notch, Face ID and no headphone jack - but I won't be buying it.
If Apple released a 6S form factor with updated internals, a headphone jack, touch ID and at reasonable cost, I'd maybe consider upgrading. Then they can also release a higher tier phone for people with money to burn with a stupid notch, Face ID and no headphone jack - but I won't be buying it.
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DO YOU REALIZE THIS NOW????????????????
DO YOU REALIZE THIS NOW????????????????
Apple introduced the X, XS and XR as high price premium line. From the comments in this forum and the comments of all my colleagues and friends the phones are considered way to expensive in absolute price and in value for money. And this in an economy that is doing great for many of us (of course not all of us). What will happen when the economy is going down as many expect to happen in the next few years? Premium brands with high prices often are doing well even during a recession. However, other premium brands don't need 50% of the customers to buy their products. Without attractive phones (and computers) in the mid and low price points this could lead to a significant market share loss.
i think size is the matter.. i think XS, XR XS-Max are all to large.. SE 2 , 4 inch ..where is it?
Sometimes I think Tim Cook is actually a supply chain robot with the optional social justice add-on pack (beta version).
Could be the new tick-tock cycle of phones. One year you praise the decline of sales in some way - the next year you admit your mistakes for the decline in sales.
Here's the problem with the pricing strategy and why I Think Cook has shown cracks in his understanding of markets.
The Smartphone market is mature. The vast bulk of entries in this segment are parity products. This does include Apple iPhones.
In virtually all examples of maturing markets, vendors need to compete directly against each other for pieces of the pie that is no longer growing. That means, taking business away from the competition.
To do that, you either need to compete on differentiation, or price. If you are not sufficiently differentiating yourself from your competitors, than you cannot charge prices outside of the market's expected range.
Apple's iPhones are great, but unlike 5-10 years ago, there's very little feature set that stands out above and beyond everyone else in the market to warrant such a massive price difference. 5-10 years ago the argument about the App store being bigger and better was valid differentiation. The quality of build was a product differentiation. Feature set and functionality of the OS was a massive differentiation. However by 2018, for the most part, the competition is just as good as Apple in many of those categories, removing it as a mainstay of differentiation. So without a massive product differentiating feature set, Apple would need to compete at the price. Something Tim has refused to do.
Maybe he's under the illusion that the iPhone is still different enough? Maybe he truly believes that the iPhone is a designer product, like a prada handbag of the phone world. I don't know, But I think he's missing something important in the current strategy. The 2018 strategy seemed to be purely fueled by avarice than logical decision making.
Then you tie the pricing in, lack of differentiation from it's competitors, of course users are going to hold onto their devices longer. if you want to convince users to upgrade, you need to give them something truly wonderfully new and give it to them at a price point that's not going to feel like a barrier.
I also wonder if it's going to get better or worse in 2019. we'll see if there's a shift in pricing strategy or not .But I think with the current world economy, consumer spending and confidence was down at the end of 2018, having an extremely high priced entry position is not helpful to Apple.
The Smartphone market is mature. The vast bulk of entries in this segment are parity products. This does include Apple iPhones.
In virtually all examples of maturing markets, vendors need to compete directly against each other for pieces of the pie that is no longer growing. That means, taking business away from the competition.
To do that, you either need to compete on differentiation, or price. If you are not sufficiently differentiating yourself from your competitors, than you cannot charge prices outside of the market's expected range.
Apple's iPhones are great, but unlike 5-10 years ago, there's very little feature set that stands out above and beyond everyone else in the market to warrant such a massive price difference. 5-10 years ago the argument about the App store being bigger and better was valid differentiation. The quality of build was a product differentiation. Feature set and functionality of the OS was a massive differentiation. However by 2018, for the most part, the competition is just as good as Apple in many of those categories, removing it as a mainstay of differentiation. So without a massive product differentiating feature set, Apple would need to compete at the price. Something Tim has refused to do.
Maybe he's under the illusion that the iPhone is still different enough? Maybe he truly believes that the iPhone is a designer product, like a prada handbag of the phone world. I don't know, But I think he's missing something important in the current strategy. The 2018 strategy seemed to be purely fueled by avarice than logical decision making.
Then you tie the pricing in, lack of differentiation from it's competitors, of course users are going to hold onto their devices longer. if you want to convince users to upgrade, you need to give them something truly wonderfully new and give it to them at a price point that's not going to feel like a barrier.
I also wonder if it's going to get better or worse in 2019. we'll see if there's a shift in pricing strategy or not .But I think with the current world economy, consumer spending and confidence was down at the end of 2018, having an extremely high priced entry position is not helpful to Apple.
Price went up, value went down. NOKIA makes premium phones for around 400 EUR and I'm more than happy with it. Because I'm human, I drop and lose items, and because I'm not an Apple shareholder, I can't put down 1000 EUR each time I have to replace my phone.
I really used to like Apple products, but the fact that they charge a different price in different markets, and not just apply exchange rates and shipping costs, is just a sick business model. Good luck in the wrist band factory!
I really used to like Apple products, but the fact that they charge a different price in different markets, and not just apply exchange rates and shipping costs, is just a sick business model. Good luck in the wrist band factory!
It is atleast in my place! iPhone XR 64 is $1000, XS MAX 256 is $1950. Note 9 512 GB 8GB RAM is $900 with additional 512 GB UHS card discounted for $75 as an offer. S9 Plus series is even cheaper....I would buy iPhone XS Max 256 for $1000 including taxes...
A lot of ppl in here don't understand that.
Could you imagine buying a designer bag in monthly payments? How silly does that sound?
Other companies offer good performance, with nice features for a fraction of the price. I hope they wake up someday and see how they got the pc market and let it go just because. And the story might be the same again...
Completely agree. $1000 for a phone every two years is a lot for most people. Add to it, the taxes and applecare, it all adds up to almost $1400. Throw in the fact that apple doesn't innovate as much as it used to earlier so there is no compelling reason for consumers to upgrade every two or three or even four years. I was on iphone 6s earlier. The subsequent releases like iphone 7, 7s, 8 etc offered no perceptible changes at all. So I held on it until iphone X came out. And now XS feels like the same phone as X. In some of the benchmarks, XS actually comes out weaker than X. Why would anybody like to upgrade?
in some way that is a good thing because we can use our phones for 3-4 years and only upgrade when we want. however the sticker shock of a 1000 dollar phone with ghe risk of losing/braking it is not very appealing. its a phone, a tool, not a spare kidney.
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I went ahead and upgraded to the XS after waiting, but I wish I had waited longer, Apples trade in would have been a better deal than the $300 I got from Verizon for my pristine 7+ 128gb.
We still have two SE's in the family that need to be upgraded...
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I went ahead and upgraded to the XS after waiting, but I wish I had waited longer, Apples trade in would have been a better deal than the $300 I got from Verizon for my pristine 7+ 128gb.
We still have two SE's in the family that need to be upgraded...
In Canada the iPhone Xr is a little over $1000 Cdn. This is the cost of the Apples phone for the masses... $1000 plus. It isn't just emerging markets that balked at the price. I'll hang onto my iPhone SE. Still works perfectly fine and suits my needs. I'll probably wait till 2020 for an upgrade.
Tim,
No s**t they're too expensive when the manufacturer expects them to be replaced every 2 to 3 years!
While you're at it bring the MacBook Pro back to sensible pricing levels. They're nearly double the price of one in 2011. £2.5k+ for a "disposable" laptop with a unreliable keyboard. LOL.
No s**t they're too expensive when the manufacturer expects them to be replaced every 2 to 3 years!
While you're at it bring the MacBook Pro back to sensible pricing levels. They're nearly double the price of one in 2011. £2.5k+ for a "disposable" laptop with a unreliable keyboard. LOL.
Pointless response. I never claimed to have agency over anyone beyond myself, nor could anything I said be construed as such.
I expressed my experience, much like many other people here. It may not Ben your experience, but that it no way implies I’m acting as a spokesperson.
Happily, you don’t need to. If you have high quality gear, you can probably drop a couple of bucks to get the lightning to 3.5mm adapter. As a bonus, if you have any of the 8 or X series phones, you can use a Qi charger to charge and use the 3.5mm adapter at the same time.
If Apple indeed wants to keep their phones as expensive as they are they're going to have to give the option to extend out the payment period lengths of their Apple Upgrade Program.
Right now under the current program you have two years to pay off the device, after one year you have the option to start all over again and get a new device. They're going to have to extend that out to be a four year pay-off period with an option to upgrade after two years. That will essentially make affording the device easier on the pocket.
Or... you know, drop the price! Shave $300 to $350 off the cost and people will be more willing to pay for a new device.
Right now under the current program you have two years to pay off the device, after one year you have the option to start all over again and get a new device. They're going to have to extend that out to be a four year pay-off period with an option to upgrade after two years. That will essentially make affording the device easier on the pocket.
Or... you know, drop the price! Shave $300 to $350 off the cost and people will be more willing to pay for a new device.
I agree, completely. I was a 6+ user for 3 years and am happier with my 8. One-handed use still matters to me.
That, and trying to convince us that Face ID is reason enough to upgrade; when, in fact, it's a downgrade IMO.
A 4.7" screen in a SE-like body with Touch ID would give me reason to upgrade.
What Apple is doing not implicitly is canceling the unit numbers because is not convenient to report them anymore due to the slow of sales. That is a fact. Obviously, it will not be the highest priority (since sales are slowing), but it actually should be, since units sales is what increase market share.
I bought my iPhone X in full in 2017, so i don't have to "deal" (more like fight) with the Canadian carriers for a decent reasonable priced phone plan. If I'm going for the new iPhone 11 this year, I would not take $2K out of my bank account. Its better have the $2k in the bank account as the economy may go soft this year... Let's see iPhone 11 is a killer iPhone, if it is, I may have to get and endure a 2 year contract (plus $500 down).
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Totally. I've even starting finally using Bluetooth headphones, so I guess I could deal with no headphone jack, but the size of the new phones is killing me. I should have bought another SE when they were available last week. My SE has a broken selfie-camera lens, the touchscreen doesn't work in the corner from a drop, and Safari kills my battery life, but I'm still holding on. I tried a new iPhone and returned it in 2 days. Way too big.
I think pricing is even worse in Europe. Today the iPhone XS is $999 in the U.S. and €1.149 in Europe which based in the currency exchange rate is about $1.300 (+30%!).
Okay, this might be due to the reduction "in ermerging countries"
My point is, however, that for every single item in the Apple Store down to a plastic cover for $20 the amount Euro is the exact number as the amount in U.S.
In other words: an item that costs $1.000 in the U.S. costs €1.000 in Europe which is an increase or $140 or 14%!
Let me add, like others did in this thread: I also bought an XS but I didn't like the haptic in terms of size, thickness and weight. I gave it to my wife (seriously) and am waiting now for the next SE or 4" model.
As a replacement for my SE, which was no longer sold (I know it is now in the U.S.) I bought a 7 and will stick to it as long as possible!
Bert
Remember US prices don’t include taxes, I’m not sure about all of the EU but the UK prices include tax.
Even if you can afford the diamond encrusted phone, if the size/form factor is wrong (girlfriend with small hands) it doesnt matter what the masses say about the fine fine diamond encrusted phone, its not going to sell to some people. They just dont get it, for every home run they hit, they strike out twice. but they think they homered 3 times.