Apple Reportedly Plans to Cut Price of iPhone XR in Japan Due to Poor Sales and Restart iPhone X Production

[ConfluxNZ]

I was really looking forward to upgrading to the new form factor this year, but after seeing the horrendous pricing on the XS Max (equivalent of US$1750 for the 256GB version + AppleCare in Australia) I am voting with my wallet and will not be buying a new phone until 2020. Apple needs a reality check; fingers crossed customers the world over give it to them during the next 12 months.

 

[Rob_2811]

The issue is not his accuracy about upcoming products. It’s about his inaccuracy in regards to sales.

The issue is whether Apple is going to discount the Xr in Japan and has restarted iPhone X production due to poor sales, no?

Only Apple is going to have exact unit sales numbers its unlikely that suppliers would even be privy to that, but if sources within the supply chain are indicating that component orders are being cut on the new models and production has restarted on the iPhone X you don't have to be Tim Cook to work out why that is happening.

Its naive to think that people within that supply chain haven't got an informed picture of how sales are going, maybe not down to the unit amount but broadly.

 

[tromboneaholic]

Its naive to think that people within that supply chain haven't got an informed picture of how sales are going, maybe not down to the unit amount but broadly.

Wouldn't it be more naive to believe the same sources that were wrong when they reported similar supply chain info last year?

 

[Rob_2811]

Wouldn't it be more naive to believe the same sources that were wrong when they reported similar supply chain info last year?

No idea, I don't really follow these reports what did WSJ report last year? Any links?

EDIT: Just looked it up, it seems Wall Street Journal, KGI and Nikkei were all reporting in January this year that iPhone X sales were weaker than expected. Cant find any proof of this being untrue.

 

[tromboneaholic]

No idea, I don't really follow these reports what did WSJ report last year? Any links?

EDIT: Just looked it up, it seems Wall Street Journal, KGI and Nikkei were all reporting in January this year that iPhone X sales were weaker than expected. Cant find any proof of this being untrue.

They were citing supply chain checks that showed drastic cuts in iPhone X production, but Apple's quarterly results never reflected any drastic cuts or even "weaker than expected" demand.

https://appleinsider.com/articles/1...sleading-iphone-supply-cuts-story-from-nikkei
https://appleinsider.com/articles/1...phone-x-production-cut-story-add-new-fictions

February 1, 2018 PRESS RELEASE Apple Reports First Quarter Results Apple reported its first quarter financial results for the fiscal year after the market close on Thursday, February 1, 2018.

May 1, 2018 PRESS RELEASE Apple Reports Second Quarter Results Apple reported its second quarter financial results for the fiscal year after the market close on Tuesday, May 1, 2018.

July 31, 2018 PRESS RELEASE Apple Reports Third Quarter Results Apple reported its third quarter financial results for the fiscal year after the market close on Tuesday, July 31, 2018.

November 1, 2018 PRESS RELEASE Apple Reports Fourth Quarter Results Apple reported its fourth quarter financial results for the fiscal year after the market close on Thursday, November 1, 2018.

 

[Rob_2811]

They were citing supply chain checks that showed drastic cuts in iPhone X production, but Apple's quarterly results never reflected any drastic cuts or even "weaker than expected" demand.

https://appleinsider.com/articles/1...sleading-iphone-supply-cuts-story-from-nikkei
https://appleinsider.com/articles/1...phone-x-production-cut-story-add-new-fictions

February 1, 2018 PRESS RELEASE Apple Reports First Quarter Results Apple reported its first quarter financial results for the fiscal year after the market close on Thursday, February 1, 2018.

May 1, 2018 PRESS RELEASE Apple Reports Second Quarter Results Apple reported its second quarter financial results for the fiscal year after the market close on Tuesday, May 1, 2018.

July 31, 2018 PRESS RELEASE Apple Reports Third Quarter Results Apple reported its third quarter financial results for the fiscal year after the market close on Tuesday, July 31, 2018.

November 1, 2018 PRESS RELEASE Apple Reports Fourth Quarter Results Apple reported its fourth quarter financial results for the fiscal year after the market close on Thursday, November 1, 2018.

They don't break out iPhones by model so there is not really any way of being able to tell how well a particular model was selling vs what they expected. They had something like seven separate models of phone on sale at one point last year.

Perhaps there is some premature reporting by some of these outlets but Apple know which way the wind is blowing hence them not reporting unit sales for iPhone, iPad and Mac, why do this now?

 

[Bacillus]

I seriously can't tell if you are trolling or just have an agenda.

You keep shifting like a flag blowing in the wind while editing your posts when you are caught lying, and conflating EU regulation with customer satisfaction.

Whatever my agenda is - it is too busy to spoil my time explaining a bunch of Rosy-glass oneliner thinkers with a 60 second concentration span the correlation between customer care, aftersales service, and customer satisfaction.
And why would I, being called a liar every other sentence.
Target your ambitions to Black Friday, Santa Claus (that seem the upper limit currently), or get a primary in business education, learn to Google, and then come back to me.

 

[aristobrat]

They don't break out iPhones by model so there is not really any way of being able to tell how well a particular model was selling vs what they expected. They had something like seven separate models of phone on sale at one point last year.

They don't officially break them down nor mention "actual vs expected", but you'll sometimes see comments like this made during earnings releases.

"Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter," Tim Cook said as Apple announced earnings on Tuesday.

https://appleinsider.com/articles/1...s-top-selling-iphone-every-week-since-release

 

[tromboneaholic]

span the correlation between customer care, aftersales service, and customer satisfaction.

This is the part you are missing. Apple is the top-ranked tech company for customer satisfaction in this area, in addition to customer satisfaction with their products.

The EU issues fines all the time, bigger fines to Apple's competitors. That's unrelated to customer satisfaction rates overall.

 

[ImAnAgent]

And the repairs that make you buy it...

They're not making anyone buy Applecare+ at all. We bought two 512GB Max phones and didn't get Applecare for either one. Never needed it on any iPhone going back to the original. I refuse to ever buy this on any Apple device.

 

[Rob_2811]

They don't officially break them down nor mention "actual vs expected", but you'll sometimes see comments like this made during earnings releases.


https://appleinsider.com/articles/1...s-top-selling-iphone-every-week-since-release

Yes I saw that, suggests that it was the best selling iPhone but that's all you can really take from that. It doesn't necessarily mean it was as popular as they were anticipating.

Could be that they were expecting blockbuster X sales that outstrip the 7/7plus and 8/8plus by a distance and that didn't happen. It outsold the older models but by how much?

Only Apple can say but they certainly seem to want to shift the focus from iPhone sales. Hence the decision to not report unit sales anymore. How else do construe that move other than an attempt to hide potentially negative sales numbers?

 

[tromboneaholic]

Yes I saw that, suggests that it was the best selling iPhone but that's all you can really take from that. It doesn't necessarily mean it was as popular as they were anticipating.

Could be that they were expecting blockbuster X sales that outstrip the 7/7plus and 8/8plus by a distance and that didn't happen. It outsold the older models but by how much?

Some of the reports indicated 40% production cuts. That would have been reflected in Apple missing their guidance for one or two quarters, which didn't happen.

 

[run1976]

They're not making anyone buy Applecare+ at all. We bought two 512GB Max phones and didn't get Applecare for either one. Never needed it on any iPhone going back to the original. I refuse to ever buy this on any Apple device.

Of course you don’t literally have to buy it. But repair costs out of warranty climb even faster with each generation than the products price and Apple Care prices. So they make it more attractive by making out of warranty repair ever more painful.

 

[BenTrovato]

Looks Apple pushed the envelope too far. I don't think this is a bad thing, they had to keep raising prices to find out how far people would be willing to go.

 

[Rob_2811]

Some of the reports indicated 40% production cuts. That would have been reflected in Apple missing their guidance for one or two quarters, which didn't happen.

Sure, but some sources over stating the situation doesn't make all of the claims of price drops/production cuts/production of discontinued models false.

Again, Apples own reporting changes suggest that something is not quite the good news story that they hoped it would be and that they are trying to shift the narrative.

 

[tromboneaholic]

Sure, but some sources over stating the situation doesn't make all of the claims of price drops/production cuts/production of discontinued models false.

Again, Apples own reporting changes suggest that something is not quite the good news story that they hoped it would be and that they are trying to shift the narrative.

They have been trying to focus on revenues for some time, but Wall Street keeps focusing on iPhone units sold. iPhone sales have been flat since 2015 or so. Apple wants to change the narrative away from unit sales. There is a good reason for this I think.

If you look at Apple's stock price vs their earnings (PE Ratio) it''s around 15.

Google PE (Alphabet) is around 23. Netflix and Amazon PE are both around 90.

It would seem that Wall Street has undervalued Apple stock by focusing on unit sales instead of revenue. Apple's stock gets dragged down by analysts worrying about quarterly shipments rather than discussing Apple's long-term revenue growth.

 

[Rob_2811]

They have been trying to focus on revenues for some time, but Wall Street keeps focusing on iPhone units sold. iPhone sales have been flat since 2015 or so. Apple wants to change the narrative away from unit sales. There is a good reason for this I think.

If you look at Apple's stock price vs their earnings (PE Ratio) it''s around 15.

Google PE (Alphabet) is around 23. Netflix and Amazon PE are both around 90.

It would seem that Wall Street has undervalued Apple stock by focusing on unit sales instead of revenue. Apple's stock gets dragged down by analysts worrying about quarterly shipments rather than discussing Apple's long-term revenue growth.

Thats because the iPhone is three quarters of their revenue and most of their long term revenue growth is tied to it.

Apple likes to spin the "Services" line. Where do most of their services revenue come from? For the most part, iPhone users.

if iPhone sales start to dwindle so do the long term prospects of their services.

 

[RickInHouston]

Hopefully we’ll also soon see the end of morons waiting in line every single year for the latest iPhone. One of the most vapid consumer-focused-society traditions ever:

Good thread... All the things Apple that make you eye-roll:

An Apple watch on a 75 year old. Lame.

 

[nottorp]

Well... just as I was warming up to the idea of getting a larger phone than my SE... Apple comes and discontinues everything except two horrendously large and one too large model. And even if you can afford the XS price, you begin to wonder why the hell? Especially with the OLED display that may not last.

If I upgrade (sadly I probably do need a larger screen due to eye sight), it will be to an iPhone 8. Still manageably large. Also reasonably priced.

 

[tromboneaholic]

That because the iPhone is three quarters of their revenue and most of their long term revenue growth is tied to it.

Apple likes to spin the "Services" line. Where do most of their services revenue come from? For the most part, iPhone users.

if iPhone sales start to dwindle so do the long term prospects of their services.

iPhone is closer to 50% of Apple revenue these days, but it's still a large portion.

No one is credibly predicting iPhone sales dwindling, just that growth is flat or in the single digits.

Wall Street views a lack of growth as a slowdown. Even if Apple's iPhone sales remain flat, they can grow revenue through Services, Wearables, and new products in the pipeline.

If you look at Amazon's PE of 90, no one is asking Amazon how many items did your customers have in their carts. They want to know Amazon's revenue.

 

[decafjava]

While like some others I have questions and issues about Apple's pricing strategy, I think a large part of the problem is Wall Street and a system that seems based on speculation and disconnected from the real world.

 

[XtremeArtists]

Good thread... All the things Apple that make you eye-roll:

An Apple watch on a 75 year old. Lame.

Older people are exactly the ones who will benefit from fall detection and heart rate alerts. I would hope that would make people happy, but it makes me sad to see such a lack of compassion.

 

[Rob_2811]

iPhone is closer to 50% of Apple revenue these days, but it's still a large portion.

No one is credibly predicting iPhone sales dwindling, just that growth is flat or in the single digits.

Wall Street views a lack of growth as a slowdown. Even if Apple's iPhone sales remain flat, they can grow revenue through Services, Wearables, and new products in the pipeline.

If you look at Amazon's PE of 90, no one is asking Amazon how many items did your customers have in their carts. They want to know Amazon's revenue.

Tim Cook all but accepted that possibility, quoted in August this year:

"I think the smartphone market is very healthy. I think it's actually the best market in the world to be in for someone that is in the business that we're in. It's an enormous sized market and whether it grows, from our point of view, whether it grows 1% or 2% or 5% or 6% or 10% or shrinks 1% or 2%, it's a great market because it's just huge. And so that's kind of the way that I view that."

So if iPhone sales are flat (at best?) where is the revenue growth coming from?

The iPhone accounted for 70% of Apples revenue in Q1 2018 btw.

 

[I7guy]

....

if iPhone sales start to dwindle so do the long term prospects of their services.

iphone sales can be flat, yet families that aren't buying iphones, can subscribe to apple music, the new streaming service, purchase apps on the store, buy airpods, get apple watches. Apple has been expanding their ecosystem as they predicted this.

 

[tromboneaholic]

Good thread... All the things Apple that make you eye-roll:

An Apple watch on a 75 year old. Lame.

Yes, health monitoring is the last thing elderly people need.

[doublepost=1542984218][/doublepost]

Tim Cook all but accepted that possibility, quoted in August this year:

"I think the smartphone market is very healthy. I think it's actually the best market in the world to be in for someone that is in the business that we're in. It's an enormous sized market and whether it grows, from our point of view, whether it grows 1% or 2% or 5% or 6% or 10% or shrinks 1% or 2%, it's a great market because it's just huge. And so that's kind of the way that I view that."

So if iPhone sales are flat (at best?) where is the revenue growth coming from?

The iPhone accounted for 70% of Apples revenue in Q1 2018 btw.

This is the problem with focusing on quarterly results. They paint an inaccurate long term picture.

For the entire fiscal 2018, iPhone was 59% of Apple's revenue.

Apple has continued to decrease its dependency on the iPhone, and none of their competitors disclose unit sales, so it's not a relevant metric.

Apple should be valued based on its revenue, just like its competitors.