Tim Cook's priority customers are the investor shareholders, this being very obvious. And is shown in the high prices, cut products, hobbled updated products, not-updated products, messy product ranges, not only hardware but software too, reduced quality control, decimating mac development teams, no vision for Apple TV except as a steaming device and much more. Tim Cook is not the CEO to lead Apple into the future.
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Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated
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I am saying it for years already... Drop the prices of those damn phones and offer an iphone at a proper budget price! $750 for a "cheap" iphone is NOT cheap! I can't believe they are selling the ipad 2018 at $299, but the cheapest current-gen iphone is more then double that.
The smartphone market is saturated and in a saturated market you cannot raise prices! Your product becomes a cash cow and therefor needs to be lower margin as well. Anybody who knows the BCG matrix can tell you this, its not rocket science! Apple should actually increase their user base by selling cheaper iphones and make the profits with their services that people start using once they have an apple product.
They did the same thing with the ipod before and made the big profits on itunes...
I had to buy the new iphone xr, since my iphone 6 got stolen... and while I love the new xr, I would have continued using my 6 if I still had it!
The smartphone market is saturated and in a saturated market you cannot raise prices! Your product becomes a cash cow and therefor needs to be lower margin as well. Anybody who knows the BCG matrix can tell you this, its not rocket science! Apple should actually increase their user base by selling cheaper iphones and make the profits with their services that people start using once they have an apple product.
They did the same thing with the ipod before and made the big profits on itunes...
I had to buy the new iphone xr, since my iphone 6 got stolen... and while I love the new xr, I would have continued using my 6 if I still had it!
It also doesn’t take ‘rocket science’ to figure out your post is referencing the *highest* priced iPhone and iPad , the most expensive iPhone with the highest storage is $1500 and the most expensive iPad with the highest storage is $1800, those are _not_the base model prices for those two products you have listed in your post. The iPhone XS starts at $999 for the base storage model for example.
Seems you don't understand reducing prices by 20% will result in a significant reduction in GPM. That's not sustainable and Apple's stock would really crash.
No executive would act so recklessly.
All the reasons I've been voting against him for a couple years now. He needs to go NOW. He is not the CEO that Apple needs and they need another true visionary.
Down from 38+%. Look at your data above. And significantly less from 8-9 years ago.
I'm not sure if cheap iPhones can exist. At least no good, cheap iPhones.
Also, I think TheRegister had an article a while back that pointed out that the Apple ecosystem as we know it can only exist on high-margin products: the volume for low-margin just isn't there - and the whole Apple-Store thing doesn't really work with high-volume low-margin phones anyway.
They'd need far more stores and cheap products have far too few margin to finance those.
However, we'll have to see how Apple works with people using their iPhones for 5+ years.
It's IMO paramount that the "5 years of iOS support" is maintained. Otherwise, a really large group of people will question the value proposition of the Apple platform.
Also, as someone who is soon going to have to abandon the iPhone 4S for an Xr (which I chose solely on battery-life and the fact that it was cheaper, not because I liked the size), the SE2 is not likely going to happen.
Cook said, China is the problem. And in China, people don't care for the SE form-factor.
Why produce a phone that doesn't "work" in the one market it really needs to?
Also, I think TheRegister had an article a while back that pointed out that the Apple ecosystem as we know it can only exist on high-margin products: the volume for low-margin just isn't there - and the whole Apple-Store thing doesn't really work with high-volume low-margin phones anyway.
They'd need far more stores and cheap products have far too few margin to finance those.
However, we'll have to see how Apple works with people using their iPhones for 5+ years.
It's IMO paramount that the "5 years of iOS support" is maintained. Otherwise, a really large group of people will question the value proposition of the Apple platform.
Also, as someone who is soon going to have to abandon the iPhone 4S for an Xr (which I chose solely on battery-life and the fact that it was cheaper, not because I liked the size), the SE2 is not likely going to happen.
Cook said, China is the problem. And in China, people don't care for the SE form-factor.
Why produce a phone that doesn't "work" in the one market it really needs to?
But it also serves as a standard USB-C port that doubles as a charging port. So now you no longer have to use an Apple-supplied charger.
Revenue was my measure for best, so now I’m clarifying. The reason I used revenue as the measure is because this thread is discussing the financial side.
Some people might think the Twinkie is the best product of all time. I’m using a number because it’s objective and measurable.
Amazon survived for decades making 0 profit. AWS is the only division of Amazon that makes significant profit...
Sigh...the usual chorus of “prices are too high” is out in full force, I see. But (as usual for comments on here) that conclusion doesn’t necessarily follow from the revised guidance. In fact, it could be flat out wrong.
The correct question is whether lower prices would yield higher earnings overall. I’ve yet to see any public substantiation of that theory. I’d love to get my hands on a conjoint analysis that has been done by someone out there. That’s pretty much the only way to know.
The secondary question is whether this is a temporary aberration, or if that’s just Apple corporate spin. We know there is softening demand in an over saturated market. How much is attributable to A versus B?
Those questions remain highly speculative.
A final note: let’s remember what corporate guidance is and is not. It’s a public projection for investors. No more and no less.
The correct question is whether lower prices would yield higher earnings overall. I’ve yet to see any public substantiation of that theory. I’d love to get my hands on a conjoint analysis that has been done by someone out there. That’s pretty much the only way to know.
The secondary question is whether this is a temporary aberration, or if that’s just Apple corporate spin. We know there is softening demand in an over saturated market. How much is attributable to A versus B?
Those questions remain highly speculative.
A final note: let’s remember what corporate guidance is and is not. It’s a public projection for investors. No more and no less.
And that's fine for Amazon, which is a very different company.
You may wonder why Samsung's GPM is 47% and Microsoft's is 66%.
Both astonishingly greedy, right?
And Oracle...Holy Smokes, 80%!
A large company is going to spew out large numbers. Doesn't mean that all is well. GE's expected revenue's this coming quarter is $30 billion. No one is saying their prospects are half as good as Apple's.
I believe price is the excuse rather than the reason for people’s dwindling enthusiasm. If Apple had charged $1,000 for the iPhone 5, people would have paid it. The novelty of those early phones was exciting. Now smartphones, in general, are old fare. They are as unnoteworthy as the microwave oven. People can’t function without them, but they don’t speak fondly of them either.
Not clear how that could be the case when there are over 2 billion people using android.
Secondly how about the internet?
If you do a search on the inventions that have had the greatest impact on civilization, iphone will never be at the top.
My iPhone 7 is also going to head to down the (at least) 3 year cycle, instead of my normal 1-2 year cycle.
ONLY two reasons:
1) eSIM is not supported in Australia or Italy. If they had released the Dual (physical) SIM version elsewhere instead of only in China, I would have bought it!
2) Price! The only feature from the new phone that I really need is the Dual SIM. So, I personally can't justify the high prices. Otherwise, my iPhone 7 does everything that I need. I'd rather spend that money elsewhere.
ONLY two reasons:
1) eSIM is not supported in Australia or Italy. If they had released the Dual (physical) SIM version elsewhere instead of only in China, I would have bought it!
2) Price! The only feature from the new phone that I really need is the Dual SIM. So, I personally can't justify the high prices. Otherwise, my iPhone 7 does everything that I need. I'd rather spend that money elsewhere.
A company has no right expecting higher earnings when delivering the same-old, same-old, and simply charging more for less value. What Wall Street considers a successful product is solely based on sales dollars. You can sell more of something cheaper and make more money, or sell less of something more expensive. Apple is learning towards the latter with their lack of innovation.
Which is exactly why your comment makes no sense, that "drop" is insignificant compared to other fluctuations in other periods, for all intents and purposes Apple's profits have stayed around 38% for several years now.
Here's the issue though, Apple is not innovating as they did 8-9 years ago, hence they can't keep milking the userbase with the same profit margins. It's time to either make another leap like we got with iPod, iPhone, iPad, or readjust the greed.
It sounds like you are not aware that GPM swing for most companies is usually very small from year to year. You may also not understand why Samsung's GPM is 47% and Microsoft's is 66%. For the last couple of years while Jobs was alive, GPMs were >40%.
What kind of "innovation leaps" on the order of the iPhone would you suggest? Feel free to recommend a few that are at that level that Apple should be pursuing.
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I paid 1350 for a brand new top of the range iPhone 4, cash, no subsidy. Flagship, as they still sold the 3gs as the cheaper base.
Current top of the range iPhones swing from 1900 to 2800.
Thee cheapest iPhone is 900$, which is dearer than the Original SE by 150$.
I remember watching Apple’s keynote addresses over the years being wowed. Their dope floating images over pseudo tech music. The close up shiny images of their devices and then one of their “engineers” comes out to give us a long winded elaborate breakdown of what time and effort it took to go into these devices has ran its course with me. Begrudgedly I upgraded to the XS Max and no one put a gun to my head but I do want more from my devices. Apparently so to others based on the news...for a lot less cheaper too.
How in the name of Zeus was that CNBC thing I just watched in "interview"? It looked more like a PR stunt. No hard-hitting questions, no clarifications, not a *single* question that forced an answer above and beyond what Cook/Apple have already disclosed. This "journalist" should be ashamed.
None of my iphones have been subsidised by carriers. Prices currently are significantly higher, and ahve been going that way for a few years. Except when I got the SE. That was a great phone.
Eloquently written!
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Or Move not a stunt. Nothing was tested, this was save the stock from dropping below $100!