Hilarious blaming battery replacement program. So expecting their products to be more disposable than retained? Seems like their quality or standards is heading towards disposable electronics. Premium pricing and short life cycle. Now we’re talking Tim’s vision.
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Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated
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Actually, Wall Street primarily cares about earnings, not sales (revenue) dollars. That is how corporate valuation is conducted.
And that was the point of my post. Apple’s prices are proportional to teardown costs, and those numbers have remained stable for about a decade now.
Strong dollar was mentioned by Tim himself. That means that there certainly was an issue with price overseas.
Margin was estimated to be higher on the iPhone X. About 5% higher than the iPhone 8 based on Tech Insights teardown
LoL blaming the 29 dollar battery replacement program... seriously? So your business plan is to build cheap components that fail in a couple years to force people into upgrading? Yeah, how about sell phones at a compeditive price (sure might cut into your huge 34% margin) and don't make them fail after a couple years to gain back trust from customers... then you will sell more.
Maybe better quality control of batteries would have prevented this problem in the first place. The batteries of my Apple Watch 4 and iPad Pro failed after 2 and 10 months. I've been using Apple products for a long time but something like that has never happened before.
I've seen various teardown estimates with a rather broad range. But anyway, when I ran various numbers a while back, I found the MSRP markup numbers to be really similar across the 8, 8 Plus, X, XS and XS Max. It was about 2.8x across the board.
Given that the standard deviation on gross margins has been about 2% for the last decade, a ±5% margin on a product seems reasonable. After all, regardless of the component costs, it's a safe bet you'll have a US price for a standard model that ends in "99," and a certainty that if not that then it'll end in "49."
GPM for software is hugely different. Apple and Amazon (even though I disagree about Amazon) are considered tech companies that sell products....
Glad Apple is having a hard time.
Their price structure is out of touch on the entire line up.
HomePods are $150 more than they should cost.
MacMini with 8gbRam/126gb at $799 it’s a joke.
IMac Pro at $5k base model.
iPhones costing as much as MacBooks.
Etc.
I can keep going on and on.
Time to drop prices and come back to reality.
Their price structure is out of touch on the entire line up.
HomePods are $150 more than they should cost.
MacMini with 8gbRam/126gb at $799 it’s a joke.
IMac Pro at $5k base model.
iPhones costing as much as MacBooks.
Etc.
I can keep going on and on.
Time to drop prices and come back to reality.
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Did you really expect that? Most "news" is really scripted as if you make them sweat you never get another interview. Hence, "fake news".
That's the point I'm making. What works for Amazon (especially with Bezos owning 43% of the company) wouldn't work for Apple . And for other companies.
How about Samsung? Super greedy at 47%?
Companies live/die by Wall Street analyst reports, which are hugely a function of GPM. The *hardware company* I last worked for had GPMs around 60+%. I couldn't launch a new product unless I could show 80% GPM.
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Margin was much higher on the flagship phones that the numbers being bandied about in this thread though.
And again, YOU are talking about something omitting a constraint I explicitly and deliberately included. That’s dishonest tepresentation of both what I said and your argumentative reply. And if you bother to address my entire statement and the all-in costs I wrote of, you’ll see your bad math. But you won’t.
Here's the link to the back-of-the-envelope ones I posted in another thread here about a month ago—pretty darn consistent I think:
https://forums.macrumors.com/thread...expected-demand.2155834/page-25#post-26850005
Also one thing to keep in mind is that—and I'm replying what you posted, and I don't recall having read this article, so this may not be relevant—5% more from MSRP-to-components would yield a tiny difference rather than 5 percentage points on gross margins, which would be huge.
Apple discontinued the SE because of poor sales, so the odds of that are zero. I never even seen an SE in the wild.
Combined revenues for September and December quarters:
2017: 45.5 + 88.3 = 133.8
2018: 62.9 + 84(+) = 146.9
So in total, revenues for these two quarters (impacted by new iP release) are UP by 10%, not so bad when you look at it this way.
This is clearly due to the delivering millions or even tens of millions of iP Xs in the final 10 days of September.
Issues are clearly China related, and I think there are two components in this. First one, general slowdown in China, hopefully will be resolved soon if the trade war ends in the following months.
Second problem is Huawei. Chinese people are increasingly proud of it, and they are buying more of their phones. Not because they are better than iP (they are not), but simply because they are their own brand. That is understandable, but at the same time we should act the same and stick to Apple products instead of trying to find a flaw in everything they do. If they were so bad as some here are claiming, for sure 80% of phone manufacturers would not be desperately trying to copy their design and functionality.
2017: 45.5 + 88.3 = 133.8
2018: 62.9 + 84(+) = 146.9
So in total, revenues for these two quarters (impacted by new iP release) are UP by 10%, not so bad when you look at it this way.
This is clearly due to the delivering millions or even tens of millions of iP Xs in the final 10 days of September.
Issues are clearly China related, and I think there are two components in this. First one, general slowdown in China, hopefully will be resolved soon if the trade war ends in the following months.
Second problem is Huawei. Chinese people are increasingly proud of it, and they are buying more of their phones. Not because they are better than iP (they are not), but simply because they are their own brand. That is understandable, but at the same time we should act the same and stick to Apple products instead of trying to find a flaw in everything they do. If they were so bad as some here are claiming, for sure 80% of phone manufacturers would not be desperately trying to copy their design and functionality.
Maybe he will go find something in Android-land? That's just constantly boiling with scrappy OEM's trying every possible gimmick and game under the sun.
Tech Insights has the X gross margin at 64% v 59% iPhone 8. Again if we take the lower of those two figures its still much higher than it is being spun in this thread.
Pick up a 2007 iPhone and compare it alongside any new iPhone, and the reason for the price increase will be obvious.
I am so loving this. Tim totally deserves this...it's time to get out of that bubble and back to reality.
Issue is - everyone is missing the whole point.
This tweet sums it up.
https://twitter.com/reneritchie/status/1080605678706790410
The high-end smartphone market is getting saturated. In this context, Apple’s current strategy (higher prices, more accessories, services) is absolutely the right thing to do in terms of growing revenue from a business standpoint.
And all signs point to that working. People are still buying iPhones, and that serves as a springboard to sell more smart watches, airpods, iPads, plus music streaming subscriptions.
And all signs point towards the Apple Watch eventually replacing the iPhone as the next growth driver.
That they all don’t like this is besides the point. Yes, Apple probably lost a few sales by raising their prices, but I am willing to bet that any lost sales is still more than offset by the higher prices.
But yeah, the next few days is going to be a bloodletting for all the critics here who have no doubt been frothing at the mouth for precisely this sort of event.