Apple Lowering iPhone Prices in Some International Markets to Boost Sales

[benjo765]

Its okay Apple; no one likes to admit they were wrong.
The fact remains that human bodies only contain so many spare organs to viably trade for new iPhones.

 

[jgdeschamps]

Way too expensive in the UK. I'm still clinging onto my 6S, as I can't get anything worth upgrading to for under £50/month on contract.

Mexico too. If you let me suggest this, but last weekend I renewed my cell phone contract and they offered me a Huawei Mate 20 Lite for something close to $10 dollars a month for two years, and I accepted. Let me tell you, it is a fine phone for what I'm paying, and it even includes a transparent case and a screen protection film... though I still can't get used to that big screen. I'm carrying both phones with me: this huge phablet and my iPhone SE, just in case I need info inside of it. But man, feature wise it's all there too. Sometimes the same, sometimes very different, but it's there. I don't want to start a pissing competition, but like I said a few months ago in another topic, our only resource is to vote with our wallets to make them wake up. I liked Apple 6 years ago, coped with the current Apple up until last weekend. Not buying their stuff for a while because they are not worth the asking price, and in my opinion their "ease of use" is not there anymore. It was changed by "the ease of use comes with a separate adapter/accessory/case that costs $XXX.XX."

 

[Jimmy Bubbles]

So basic economics 101; as you do. If consumers won't buy a product at a given price, you lower it to a threshold in which the price meets the perceived value of that market.

 

[Juicy Box]

You were justifying to another poster that an extra $100+ on the price of an iPhone is to offset cost of warranty claim costs.

It was just a illustration of how it works, not using real life figures and doesn’t list all variables involved.

The % absolutely matters.

No they don’t.

Even if all the processing etc on a replacement that is $600 cost price raises that to $2000.

Again, just made up numbers that don’t matter.

2 year warranties make AppleCare, if it is even available, not a good option in UK/EU

Then don’t get AC+.....

I am not even sure what you are upset about anymore. Are you upset about:

The iPhone’s perceived price difference between the US and UK?

This was explained with VAT, the cost of doing business in that location (consumer protection laws, regulatory fees, etc.,), and the fact that Apple can charge what they want....

Or...

Are you upset about the price of Apple’s products, no matter the location?

Again, Apple can charge what they want....

You if you don’t like the price, let Apple know by not buying their stuff.

 

[Baymowe335]

I see, so Apple has only half screwed up? Got ya.

Global business is complex. What might be a "Screw up" in some markets, might not be in others. That's what we are seeing. You have to understand the whole picture or you're just using certain pieces of data to support an overall negative narrative.

China wasn't good, many markets were.

US set record revenues.

iPhone wasn't good, non-iPhone grew 19%...which is the direction the company is heading.

Installed base was up 100M.

Services were insanely good.

Forex was a major headwind.

Etc.

 

[Gilligan's last elephant]

It was just a illustration of how it works, not using real life figures and doesn’t list all variables involved.


No they don’t.


Again, just made up numbers that don’t matter.


Then don’t get AC+.....

I am not even sure what you are upset about anymore. Are you upset about:

The iPhone’s perceived price difference between the US and UK?

This was explained with VAT, the cost of doing business in that location (consumer protection laws, regulatory fees, etc.,), and the fact that Apple can charge what they want....

Or...

Are you upset about the price of Apple’s products, no matter the location?

Again, Apple can charge what they want....

You if you don’t like the price, let Apple know by not buying their stuff.

Don't worry. I won't buy there stuff It's my wife that wants their stuff.
I am also not "upset". Not sure where you got that idea. It's amusing reading all the excuses people come up with for extra charging in certain markets. And basically your last few posts were you just picking random numbers out of the air and spouting them

 

[youdontsay]

It looks like the warranty that comes with the iPhone is two years, the warranty that comes with the iPhone in the US is only 1 year. That could explain the 107€ (122$) difference.

It makes sense… on a business standpoint. But let's be realistic. How many 1000$ phone have defect within two years ? I'm guessing not that much, or Apple business would not be that great. So they should remove the 107€ and just let the Applecare+ choice to consumer. But it's not how business work, I guess.

 

[jgdeschamps]

Are you upset about the price of Apple’s products, no matter the location?
Again, Apple can charge what they want....
You if you don’t like the price, let Apple know by not buying their stuff.

I completely agree with you: don't buy 'em if you don't think they are good enough. That will make them change. Also, I would like to tell you that -without engaging in aggressive discussions- people are upset not because Apple asks a lot of money for their devices and computers. They have done this all the time. They are upset because the current asking price is not in accordance to the perceived added value over competitors.
20 years ago the PowerPC architecture was the differentiator between Macs and regular Windows PCs. Plus, the actual usage for most content creation tasks was more responsive and faster than using the same software on a PC. Not anymore.
2007, iPhone is presented and changes everything. Today, all phones have the same tech and features and Apple has done nothing to differentiate themselves except setting higher prices to make the market perceive them as "better because it's expensive." Not enough, in my opinion. Let's pinch their butts and not buy their stuff if they don't actually work to take our hard earned money.

 

[Juicy Box]

I completely agree with you: don't buy 'em if you don't think they are good enough. That will make them change. Also, I would like to tell you that -without engaging in aggressive discussions- people are upset not because Apple asks a lot of money for their devices and computers. They have done this all the time. They are upset because the current asking price is not in accordance to the perceived added value over competitors.
20 years ago the PowerPC architecture was the differentiator between Macs and regular Windows PCs. Plus, the actual usage for most content creation tasks was more responsive and faster than using the same software on a PC. Not anymore.
2007, iPhone is presented and changes everything. Today, all phones have the same tech and features and Apple has done nothing to differentiate themselves except setting higher prices to make the market perceive them as "better because it's expensive." Not enough, in my opinion. Let's pinch their butts and not buy their stuff if they don't actually work to take our hard earned money.

I completely agree and feel very similar about Apple, especially in the past 5-6 years.

I think that Apple used to sell a premium product at a premium price. There was a gap in quality in both HW and especially SW between Apple’s products and their competition.

The gap is now closing, but the products are still premium priced.

The reason why I asked why that person was upset is because they originally was talking about the difference in price between the US and other places, which was easily explainable.

They then started to complain about the prices in general, which is a completely different situation.
[doublepost=1548869529][/doublepost]

And basically your last few posts were you just picking random numbers out of the air and spouting them

Um.... what posts were these?

 

[jgdeschamps]

I completely agree and feel very similar about Apple, especially in the past 5-6 years.

I think that Apple used to sell a premium product at a premium price. There was a gap in quality in both HW and especially SW between Apple’s products and their competition.

The gap is now closing, but the products are still premium priced.

The reason why I asked why that person was upset is because they originally was talking about the difference in price between the US and other places, which was easily explainable.

They then started to complain about the prices in general, which is a completely different situation.
[doublepost=1548869529][/doublepost]

Um.... what posts were these?

I see. Also, remember that many jumped to the Apple ship due to iPhones or iPads, so they don't have the complete picture on why many preferred the Mac and its integration with pro cameras, large format print systems, music DAWs and their AD/DAs, some medical and research applications, etc.
Apple marketing changed the perception of their products from a rebellious and reliable computer company, to a fashion phone manufacturer and its related subscription services.

 

[Juicy Box]

But it's not how business work, I guess.

Yup, that is not his business works.

The same could be said in the US, if Apple sold their phones warranty-free at a lower price instead of the 1 year warranty, but that won’t happen.

I just think it is nice that they give the option for the two year warranty instead of forcing it on us.

 

[Gilligan's last elephant]

I completely agree and feel very similar about Apple, especially in the past 5-6 years.

I think that Apple used to sell a premium product at a premium price. There was a gap in quality in both HW and especially SW between Apple’s products and their competition.

The gap is now closing, but the products are still premium priced.

The reason why I asked why that person was upset is because they originally was talking about the difference in price between the US and other places, which was easily explainable.

They then started to complain about the prices in general, which is a completely different situation.
[doublepost=1548869529][/doublepost]

Um.... what posts were these?

To quote your words

"Again, just made up numbers that don’t matter" .

 

[Juicy Box]

Apple marketing changed the perception of their products from a rebellious and reliable computer company, to a fashion phone manufacturer and its related subscription services.

This is true..

I know people complain about Apple’s prices, and talk about losing market share, but I always thought that Apple was a better company and had better quality products and customer service when they had a tiny market share.

 

[gmm421]

why not lower prices in the US as well? I mean damn, we make up most of their sales.

Ah, that is exactly why he would be reluctant to do it here. Make less money where you are established? Not. Entice other markets with cheaper phones? Yep.

 

[Juicy Box]

To quote your words

"Again, just made up numbers that don’t matter" .

Um... what??

I asked what the posts you were referencing here:

And basically your last few posts were you just picking random numbers out of the air and spouting them

 

[2GoldFish]

Global business is complex. What might be a "Screw up" in some markets, might not be in others. That's what we are seeing. You have to understand the whole picture or you're just using certain pieces of data to support an overall negative narrative.

The whole picture that I am seeing is that growth is in the red.

I look forward in seeing what Apple has in the pipeline to turn this around.

 

[OlliFlamme]

And they should start with Europe, where the iPhone XS starts at 1149€ ($1299) as opposed to US' $999.

That is including VAT in Europe, whereas the advertised price in the US is not, but still...

 

[trillionaire]

It's important to cater to the market you're selling in. If they want to achieve greater sales numbers they have to appeal to a larger population. I'm just curious when they'll start doing what other companies have been doing for a while now and start delivering the same products with different components depending on the market they are shipped to.

It's been happening for a while in foods and cosmetics and it's bound to happen in technology as well. Though I don't think it's as easy to do in the technology sector and I don't think a company like Apple would try something like that, but you never know.

 

[Baymowe335]

The whole picture that I am seeing is that growth is in the red.

I look forward in seeing what Apple has in the pipeline to turn this around.

Yes, high level, revenue was down 4.5%. But you have to understand why. Basically, China fell off a cliff. If China were good or even mediocre, Apple would have had at worst, flat revenue overall. Then people would just be crying Apple didn't make yet another record revenue quarter.

The fact is, China was down $4.8B. That's crazy and notable. Apple did $88.1B last year and $84.3B this year. Add another $4.8B to revenue and you have another record breaking quarter and Apple hits guidance.

So yeah, growth is in the red, but it's JUST for iPhone and it's MAINLY China. That matters.

Non-iPhone biz was up 19% and several markets like the US and Asia Pacific were up. Germany, Italy, Spain, Korea, Netherlands, Mexico, etc were all up too.

Now iPhone is a big deal, certainly, but this isn't a situation people are leaving Apple in droves or there is a competitor product killing the iPhone. This is basically market saturation, people keeping devices longer, and China. They certainly aren't leaving Apple. Active base went from 1.3B to 1.4B devices and Apple noted they have a 90% loyalty rate on iPhone.

 

[JayMBP]

Cook is too focused on numbers and getting its direction wrong.

If you want to focus on SERVICE, you'd actually want to price your hardware as affordable as possible (while maximizing the economic profit in an economic sense of course) to your target market. Hence MORE devices would be using the damn service.

They are pricing iPhones into the stratosphere and saying that the reason for lowering guidance is because of a disappointed adoption rate of new models???

Cook needs to remember that Apple commands such a negotiating power BECAUSE it can push the volume needed. The moment Apple starts losing such volume, it would drive up its costs significantly because no one wants to lower their margin anymore to get Apple as their client.

It's not too late yet. But if they keep down this trend, they'd lose to even the now seemly lower tier players like Xiaomi which is pushing on a pure volume basis. Think the example of HTC. That's how they went from a dominant player to "others". Because their didn't make the adjustment needed. And when they lost the volume, they lost all their suppliers (well, they became second-tier)

 

[mbp-m2010]

They should better start with Turkey. Price tag of a 256gb Xs Max with current rates!

 

[2GoldFish]

Yes, high level, revenue was down 4.5%. But you have to understand why. Basically, China fell off a cliff. If China were good or even mediocre, Apple would have had at worst, flat revenue overall. Then people would just be crying Apple didn't make yet another record revenue quarter.

The fact is, China was down $4.8B. That's crazy and notable. Apple did $88.1B last year and $84.3B this year. Add another $4.8B to revenue and you have another record breaking quarter and Apple hits guidance.

So yeah, growth is in the red, but it's JUST for iPhone and it's MAINLY China. That matters.

Non-iPhone biz was up 19% and several markets like the US and Asia Pacific were up. Germany, Italy, Spain, Korea, Netherlands, Mexico, etc were all up too.

Now iPhone is a big deal, certainly, but this isn't a situation people are leaving Apple in droves or there is a competitor product killing the iPhone. This is basically market saturation, people keeping devices longer, and China. They certainly aren't leaving Apple. Active base went from 1.3B to 1.4B devices and Apple noted they have a 90% loyalty rate on iPhone.

"Add another $4.8B to revenue and you have another record breaking quarter and Apple hits guidance"

• Hit guidance? Yes, but even at that, its y/y growth would still be less than the year before.

"Non-iPhone biz was up 19%"

• Correct, but not enough to offset decline in iPhone sale.

"Now iPhone is a big deal, certainly, but this isn't a situation people are leaving Apple..."

• Is this a fact? Or is it your mere opinion? Apple no longer publish unit sold unfortunately. iPhone sale has reduced while the average iPhone sale price has increased. You sure that Apple is still selling as many iPhone as they did?

 

[Baymowe335]

"Add another $4.8B to revenue and you have another record breaking quarter and Apple hits guidance"

• Hit guidance? Yes, but even at that, its y/y growth would still be less than the year before.

"Non-iPhone biz was up 19%"

• Correct, but not enough to offset decline in iPhone sale.

"Now iPhone is a big deal, certainly, but this isn't a situation people are leaving Apple..."

• Is this a fact? Or is it your mere opinion? Apple no longer publish unit sold unfortunately. iPhone sale has reduced while the average iPhone sale price has increased. You sure that Apple is still selling as many iPhone as they did?

The units sold have nothing to do with the installed base. That is where my opinion is based. If installed base is increasing, I am happy. It increased 100M. People will eventually buy another Apple product and because they are waiting longer to do so isn't the end of the world, particularly if the iPhone they are using is active and using services which is clearly the case with the services growth of 20%.

Also, all factors considered, the profit was basically the same as last year at $20B, a lot is thank to higher revenues in higher margin services. EPS was up over 7% thanks to the solid profitability and buyback.

Apple doesn't necessarily need to grow revenue every single quarter. If they can grow their higher margin businesses while iPhone sales contract some, you can see their profitability is still insanely good.

Loyalty rates to iPhone were mentioned at 90%.

Don't confuse iPhone sales declining to people leaving the platform. That's not what's happening and that's based on fact. People just aren't upgrading as fast.

 

[2GoldFish]

The units sold have nothing to do with the installed base. That is where my opinion is based. If installed base is increasing, I am happy. It increased 100M. People will eventually buy another Apple product and because they are waiting longer to do so isn't the end of the world, particularly if the iPhone they are using is active and using services which is clearly the case with the services growth of 20%.

Also, all factors considered, the profit was basically the same as last year at $20B, a lot is thank to higher revenues in higher margin services. EPS was up over 7% thanks to the solid profitability and buyback.

Apple doesn't necessarily need to grow revenue every single quarter. If they can grow their higher margin businesses while iPhone sales contract some, you can see their profitability is still insanely good.

Loyalty rates to iPhone were mentioned at 90%.

Don't confuse iPhone sales declining to people leaving the platform. That's not what's happening and that's based on fact. People just aren't upgrading as fast.

"People will eventually buy another Apple product"

• Again, this is based on your own opinion. Whether people will chose to op for another Apple device would not be apparent until their upgrade is due. Your current (historical) data is meaningless.

You might be happy if Apple can deliver you with X, but a lot of people (including the current market) are expecting X+Y. Everything is relative.

ps* Good luck with growing service revenue 13% ($10.9B) to offset decline in iPhone sale 62% ($52.27b). Maybe one day, people will subscribe to Apple services using their Android phone. O wait, is that why Apple music is available to Amazon Echo?

 

[Baymowe335]

"People will eventually buy another Apple product"

• Again, this is based on your own opinion. Whether people will chose to op for another Apple device would not be apparent until their upgrade is due. Your current (historical) data is meaningless.

You might be happy if Apple can deliver you with X, but a lot of people (including the current market) are expecting X+Y. Everything is relative.

ps* Good luck with growing service revenue 13% ($10.9B) to offset decline in iPhone sale 62% ($52.27b). Maybe one day, people will subscribe to Apple services using their Android phone. O wait, is that why Apple music is available to Amazon Echo?

Apple told us they have 90% retention on iPhone, so I'm confident people will stay with Apple, because they have so far.

Based on their new margin disclosure for services, the services revenue is literally twice as profitable as hardware revenue, so they don't have to grow at the same rate to be more profitable over time. Think of that?

Also, hardware sales can spike up depending on features offered, promotions, and other consumer behavior. The rate of decline they saw this quarter is not likely to happen over time. Services revenue has been shown to be much more stable, which is why Apple is moving in this direction.

If Apple services are available on other platforms, that's great for the services narrative. They can provide their services to even more people and entice them to come to iOS for the "full" experience. They can bifurcate features, etc. I would be in favor of this because I believe in the services narrative. It's extremely powerful and will command a higher multiple for the earnings.

Microsoft has done this brilliantly, as an example. In fact, Microsoft is valued higher than Apple and just made $8B in profit to Apple's $20B. If Apple can get the Microsoft valuation over time, the stock will increase 3X.