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

[tromboneaholic]

Believe it or not there are a lot of places in the world where people aren't bowled over by Apples £1200 phones.

There is a difference between not being able to afford the top of the line iPhone, and not being "bowled over" by one.

Apple's margins haven't really gone up as the price of its phones went up last year. The build and materials in my iPhone X definitely feel better than the generation I had before. The performance is fantastic. This phone is definitely more expensive to produce than my previous iPhone.

Apple is not interested in chasing the bottom of the market. They create new markets.

Analysts were insisting Apple needed to make cheap laptops for the market when netbooks were a thing. Instead, Apple introduced the iPad as a cheap laptop replacement. While a bunch of trolls on MacRumors (who will never buy an Apple product) would be interject that iPad Pro isn't cheap, the 2018 iPad retails for $329, and is often available for much less.

 

[Rob_2811]

There is a difference between not being able to afford the top of the line iPhone, and not being "bowled over" by one.

Apple's margins haven't really gone up as the price of its phones went up last year. The build and materials in my iPhone X definitely feel better than the generation I had before. The performance is fantastic. This phone is definitely more expensive to produce than my previous iPhone.

Apple is not interested in chasing the bottom of the market. They create new markets.

Analysts were insisting Apple needed to make cheap laptops for the market when netbooks were a thing. Instead, Apple introduced the iPad as a cheap laptop replacement. While a bunch of trolls on MacRumors (who will never buy an Apple product) would be interject that iPad Pro isn't cheap, the 2018 iPad retails for $329, and is often available for much less.

They create new markets in markets that can tolerate their ever increasing prices which is becoming smaller and smaller and this is why their global market share is shrinking.

 

[The Game 161]

They create new markets in markets that can tolerate their ever increasing prices which is becoming smaller and smaller and this is why their global market share is shrinking.
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Again you have absolutely nothing to back that up really.

Think you will find reported sales from analysts is more than enough to back that up.

Be like me saying about this topic about production being cut there is nothing to back that up when there clearly is.

If you wish to ignore this then that’s up to you. Fact is the flagship iPhones still sell properly close to double to what any other flagship out there sells wether the price is high or not.

 

[Rob_2811]

Think you will find reported sales from analysts is more than enough to back that up.

Be like me saying about this topic about production being cut there is nothing to back that up when there clearly is.

If you wish to ignore this then that’s up to you. Fact is the flagship iPhones still sale properly double to what any other flagship out there sells wether the price is high or not.

So you believe analysts when they say the Pixel didn't sell well, but if they say Apple are cutting production because the iPhone didn't you don't believe it?

Confirmation bias at its finest.

 

[The Game 161]

So you believe analysts when they say the Pixel didn't sell well, but if they say Apple are cutting production because the iPhone didn't you don't believe it?

Confirmation bias at its finest.

Jesus try reading before replying to posts.

I said IT WOULD BE LIKE ME SAYING about this topic about production being cut there is nothing to back that up when there clearly is.


Try reading first and you might not continue to miss the point each time.

 

[tromboneaholic]

They create new markets in markets that can tolerate their ever increasing prices which is becoming smaller and smaller and this is why their global market share is shrinking.

"Ever increasing prices" is an over simplification.

Apple offers a range of products at a range of prices. They always have. Sometimes they introduce a new product or model at a higher price point, and it comes down over time.

It's not that Apple is increasing it's margins; it's that everyone else is decreasing their margins and making less money in a race to the bottom.

 

[Rob_2811]

Jesus try reading before replying to posts.

I said IT WOULD BE LIKE ME SAYING

Try reading first and you might not continue to miss the point each time.

Ok but you seem to be selectively picking your argument to suit whichever paints the rosiest picture for Apple.

Most analysts seem to think that the iPhone has peaked and that its only going one way but you don't seem to accept that. You seem fixated on how many "flagship" phones they sell. it doesn't really matter.

They lost their spot as second biggest seller of phones to Huawei this year after seven years, they aren't seeing any real growth and some of the Android manufacturers are seeing huge growth.

Regardless of whether you were referring to flagship phones or not your post implied that Android manufacturers weren't doing well, when in truth Xiaomi and Huawei relatively speaking have had a better last couple of years than Apple. They have gained huge market share they are making inroads in markets that Apple can't most notable China and India.

Apple are doing well in the here and now but the signs are there. People are being turned off by their pricing.
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"Ever increasing prices" is an over simplification.

Apple offers a range of products at a range of prices. They always have. Sometimes they introduce a new product or model at a higher price point, and it comes down over time.

It's not that Apple is increasing it's margins; it's that everyone else is decreasing there margins and making less money in a race to the bottom.

Apple was taking higher margins on the iPhone X than previous phones by all accounts so no.

 

[tromboneaholic]

Apple was taking higher margins on the iPhone X than previous phones by all accounts so no.

Source: https://www.theinformation.com/articles/apples-iphone-prices-soar-but-not-profit-margins

 

[The Game 161]

Ok but you seem to be selectively picking your argument to suit whichever paints the rosiest picture for Apple.

Most analysts seem to think that the iPhone has peaked and that its only going one way but you don't seem to accept that. You seem fixated on how many "flagship" phones they sell. it doesn't really matter.

They lost their spot as second biggest seller of phones to Huawei this year after seven years, they aren't seeing any real growth and some of the Android manufacturers are seeing huge growth.

Regardless of whether you were referring to flagship phones or not your post implied that Android manufacturers weren't doing well, when in truth Xiaomi and Huawei relatively speaking have had a better last couple of years than Apple. They have gained huge market share they are making inroads in markets that Apple can't most notable China and India.

Apple are doing well in the here and now but the signs are there. People are being turned off by their pricing.
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Apple was taking higher margins on the iPhone X than previous phones by all accounts so no.

I don’t see how i’m Picking my argument. I believe whatever analysts say as that’s all we have to go by.

Where did I say iPhone hasn’t peaked? You are assuming.

Overall smart phones have peaked due to price point and generally people being able to keep their devices for far longer. That doesn’t mean apple aren’t going to sell 50-70 million units a year as they likely will. However selling say 48 in a period which be leveled off but that doesn’t mean they aren’t still selling like hot cakes. It’s just far harder to sell 100 million units like they used to.

Android is a big reason for this but so is the market of price and people don’t see the need to upgrade to what they already have.

Each year it gets harder and harder to improve technology so less reason you will have for people to upgrade.

 

[Rob_2811]

View attachment 806253

Same source tech insights reported that the iPhone X had a gross margin of 64% compared to the iPhone 8 at 59%. So at the higher end they are taking bigger margins.

https://www.reuters.com/article/us-...r-margin-than-iphone-8-analysis-idUSKBN1D62RZ
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I don’t see how i’m Picking my argument. I believe whatever analysts say as that’s all we have to go by.

Where did I say iPhone hasn’t peaked? You are assuming.

Overall smart phones have peaked due to price point and generally people being able to keep their devices for far longer. That doesn’t mean apple aren’t going to sell 50-70 million units a year as they likely will. However selling say 48 in a period which be leveled off but that doesn’t mean they aren’t still selling like hot cakes. It’s just far harder to sell 100 million units like they used to.

Android is a big reason for this but so is the market of price and people don’t see the need to upgrade to what they already have.

Each year it gets harder and harder to improve technology so less reason you will have for people to upgrade.

Particularly when you're charging more for it.

 

[tromboneaholic]

Same source tech insights reported that the iPhone X had a gross margin of 64% compared to the iPhone 8 at 59%. So at the higher end they are taking bigger margins.

https://www.reuters.com/article/us-...r-margin-than-iphone-8-analysis-idUSKBN1D62RZ

You keep shifting the goalposts.

The 64% margin is lower than their high of 74%.

A fluctuation from one year to the next doesn't show a trend.

This year's iPhone XS has about the same margin as iPhone 8.

 

[Rob_2811]

You keep shifting the goalposts.

The 64% margin is lower than their high of 74%.

A fluctuation from one year to the next doesn't show a trend.

This year's iPhone XS has about the same margin as iPhone 8.

Tech insights again via Forbes. Some SKUs of the iPhone XS Max 200% margin. But no margins aren't rising.

https://www.forbes.com/sites/jeanba...make-nearly-a-200-profit-margin/#512fca074966

 

[tromboneaholic]

Tech insights again via Forbes. Some SKUs of the iPhone XS Max 200% margin. But no margins aren't rising.

https://www.forbes.com/sites/jeanba...make-nearly-a-200-profit-margin/#512fca074966

No they are not.

You would need to compare it against similar top end SKUs from previous years to make a meaningful argument.

Just look at the chart literally comparing apples to apples. The entry-level iPhone XS has lower profit margins than the entry-level iPhone 7.

 

[Rob_2811]

No they are not.

You would need to compare it against similar top end SKUs from previous years to make a meaningful argument.

Just look at the chart literally comparing apples to apples. The entry-level iPhone XS has lower profit margins than the entry-level iPhone 7.

View attachment 806258

No they wouldn't, thats all well and good if people are just buying the base model but that conveniently overlooks how much Apple charge for the storage upgrades and that larger tiers are being offered at greater profit to Apple each year.

The margin taken on the phone is entirely dependant on the storage tier purchased. On the 256gb iPhone XS Max that margin is 200%.

Here from Bloomberg business week. iPhone XS 64 GB memory cost $23.68, phone cost $999. The 512 gb memory cost $132.48 phone cost $1,349.

https://www.bloomberg.com/news/articles/2018-09-24/apple-s-most-lucrative-iphone-feature-is-storage

On the "race to the bottom margins" on Android phones, Samsung and Huawei are both taking 50% + margins on their high end devices so its not as if they are taking tiny profit as you seem to be implying.

 

[tromboneaholic]

No they wouldn't, thats all well and good if people are just buying the base model but that conveniently overlooks how much Apple charge for the storage upgrades and that larger tiers are being offered at greater profit to Apple each year.

You would need to compare the profit margin on a top tier models over time to make a point.

Furthermore, the entry-level iPhone XS isn't a stripped down phone compared to the entry-level iPhone 7, but iPhone 7 had a higher profit margin.
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On the "race to the bottom margins" on Android phones, Samsung and Huawei are both taking 50% + margins on their high end devices so its not as if they are taking tiny profit as you seem to be implying.

So those high end devices are driving growth for android manufacturers in emerging markets like India? No. That's why Apple sells 20% of the smartphones but makes 80% of the profits.

There is no profit in the race to the bottom.

 

[Rob_2811]

You would need to compare the profit margin on a top tier models over time to make a point.

Furthermore, the entry-level iPhone XS isn't a stripped down phone compared to the entry-level iPhone 7, but iPhone 7 had a higher profit margin.

Again, you're tailoring an argument to paint Apple in the best light possible. Do you think that people consult a chart plotting iPhone margins for the last eight years when buying a phone? The cost of owning Apples flagship phones in 2018 based on the base configuration:

iPhone X base model = $999
Larger iPhone XS Max base model = $1099

Two years ago

iPhone 7 $649
larger iPhone7 plus - $769

So an $350 hike for their latest phone in the space of two years, there is very little value in that for most people and the market is speaking to that. Its happened all across the board aswell , Cook is appeasing Wall Street for the flat sales by cranking up prices.

Bringing us right back on topic the iPhone XR is a great example of it, Apple trotting out a hobbled version of their flagship at a price that would've bought you the best phone they sold a few years ago.

Apple is becoming a company by rich people for rich people, they've always been premium but they now becoming elitist. Its sad to see.

 

[tromboneaholic]

So an $350 hike for their latest phone in the space of two years, there is very little value in that for most people and the market is speaking to that.

That's simply not true.

In fact, to get back on topic of this thread, iPhone X surprised many analysts by how well it sold. After last year's reports by the WSJ and others of up to 40% production cuts, iPhone X was the top selling smartphone globally for two quarters.

From a consumer's perspective, I bought iPhone X knowing I would keep it for at least 3 years. After 1 year it's still faster than the majority of android devices. In 3 years I will still be getting iOS and security updates, and my phone will still be relatively fast.

Apple obviously saw the trend before the media started reporting that people were holding onto their phones longer. Don't you think that's why they started spending more to make phones that would last longer? It's part of why they are banking on Services, and they need the phones to be usable for a longer period of time to keep subscribers. People aren't going to pay a monthly subscription on a slow device.

 

[I7guy]

Again, you're tailoring an argument to paint Apple in the best light possible. Do you think that people consult a chart plotting iPhone margins for the last eight years when buying a phone? The cost of owning Apples flagship phones in 2018 based on the base configuration:

iPhone X base model = $999
Larger iPhone XS Max base model = $1099

Two years ago

iPhone 7 $649
larger iPhone7 plus - $769

So an $350 hike for their latest phone in the space of two years, there is very little value in that for most people and the market is speaking to that. Its happened all across the board aswell , Cook is appeasing Wall Street for the flat sales by cranking up prices.

Bringing us right back on topic the iPhone XR is a great example of it, Apple trotting out a hobbled version of their flagship at a price that would've bought you the best phone they sold a few years ago.

Apple is becoming a company by rich people for rich people, they've always been premium but they now becoming elitist. Its sad to see.

The iphone 5 64gb was $849. With the introduction of the iphone x apple changed it's strategy. The X became the super premium, the M5 of the lineup. You could still buy the other models. LIke the M5, if you want a higher tier, you pay. This trend was continued with the Xs and Xs max.

The Xr at $749 is less then the iphone 5 64gig, which was $849. In 2018 the range of phones are wider than 2012.

 

[Rob_2811]

The iphone 5 64gb was $849. With the introduction of the iphone x apple changed it's strategy. The X became the super premium, the M5 of the lineup. You could still buy the other models. LIke the M5, if you want a higher tier, you pay. This trend was continued with the Xs and Xs max.

The Xr at $749 is less then the iphone 5 64gig, which was $849. In 2018 the range of phones are wider than 2012.

The iPhone 5 had an 8mp camera, maxed out at 1080p at 30fps for video and 720p 30 for the front facing, there was nowhere near the requirement for storage then as there is now. Comparing phones being sold this year to ones sold in 2012 is never going to provide a fair comparison.

On the bolded part you have basically concurred with what I posted, Tim Cook and co have turned Apple into an elitist brand where their latest and greatest sell at super premium prices. The iPhone XR is their latest but it falls short on the other part and at the price Apple used to sell its flagship for. People aren't stupid.

I'll say it here so people can quote me. Most people don't love Apple enough to pay $1000 - $1500 for their flagship phone , I think they've misjudged this.

 

[tromboneaholic]

The iPhone 5 had an 8mp camera, maxed out at 1080p at 30fps for video and 720p 30 for the front facing, there was nowhere near the requirement for storage then as there is now.

Do you have a source supporting the idea that photos were the reason people chose larger capacity storage in 2012?

Personally, music storage was always my primary concern back then before streaming my music became common.

 

[MultiMan]

"Ever increasing prices" is an over simplification.

Apple offers a range of products at a range of prices. They always have. Sometimes they introduce a new product or model at a higher price point, and it comes down over time.

It's not that Apple is increasing it's margins; it's that everyone else is decreasing there margins and making less money in a race to the bottom.

What race to the bottom? https://www.forbes.com/sites/bensin...th-helps-explain-p20-pros-price/#74aa0d6364a6

 

[tromboneaholic]

I'll say it here so people can quote me. Most people don't love Apple enough to pay $1000 - $1500 for their flagship phone , I think they've misjudged this.

That's kind of a meaningless statement.

It's like me saying Most people don't love Samsung enough to buy their phone at any price.

 

[smoking monkey]

... especially in the far east where Apple isn't a dominating phone brand.

Actually Apple phones are massively popular in Japan. By far the dominant smartphone brand. From teenagers to middle age, most are using iphones. Old folks in Japan love their flip phones. Kind of like a badge of pride... dunno why. I think it's because they don't know how to push a touch screen without trying to drive their finger right through it!

Living in Japan is really expensive already.

It's not really. Tokyo can be expensive, but everywhere else is rather cheap. You can go out for dinner for 2 people for 10 bucks.

I will be disappointed if the discount to the XR is only carrier. I refuse to buy from a carrier anymore. They are so shady and the whole locked phone for 110 days is total BS.

Still deciding between XR and Max, but if Apple drop the price of the XR then it will make it hard not to get that.

 

[I7guy]

The iPhone 5 had an 8mp camera, maxed out at 1080p at 30fps for video and 720p 30 for the front facing, there was nowhere near the requirement for storage then as there is now. Comparing phones being sold this year to ones sold in 2012 is never going to provide a fair comparison.

On the bolded part you have basically concurred with what I posted, Tim Cook and co have turned Apple into an elitist brand where their latest and greatest sell at super premium prices. The iPhone XR is their latest but it falls short on the other part and at the price Apple used to sell its flagship for. People aren't stupid.

I'll say it here so people can quote me. Most people don't love Apple enough to pay $1000 - $1500 for their flagship phone , I think they've misjudged this.

Apple has always been an elitist brand. With the iphone 5 64gb in 2012 selling for $849, is proof of that. The Xr, with the obvious 6 year tech advantage is less than $849.

So you only get to have this one way. Apple was an elitist brand from the start as well as other manufacturers that sell expensive phones. You don't get to say Cook has turned apple into an elitist brand when Jobs was introducing phones 6 years ago more expensive than today's models.

I pay cash for my phones, but it seems people do opt for the various financing options available.

NB. By your definition of elitist any manufacturer that produces a wide range or products at various price points is elitist.

 

[tromboneaholic]

Tokyo can be expensive, but everywhere else is rather cheap. You can go out for dinner for 2 people for 10 bucks.

I lived in Japan for a short time, and I found Tokyo to be on par with most major US cities in most respects.

If you compare the price of a steak in the US to one in Japan, it can seem expensive. However, you have so many types of food over there that you don't have to worry about missing steak.

The same goes for everything. You just adjust to the local culture and prices. Unlike in Florida, I was able to get everywhere on the subways and trains in Japan, which were really clean and on time, so I didn't need a car or even have to worry about the price of gas.