We need to see sales drop big time in the U.S. before the **** really hits the fan.
P.S. crossing my fingers it will.
P.S. crossing my fingers it will.
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Apple Suppliers Cutting Sales Forecasts Amid 'Extraordinary' Decline in Chinese Demand
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The US is one of the few places prices actually verge upon being reasonable. I think sales will begin to drop in Europe first if anywhere.
Smartphones have reached saturation, and the latest model isn’t a big enough advancement for people to camp out and stand in lines. PCs followed the same curve in the 90s. They sold well until everyone had one, and when the new models stopped being a significant improvement, sales normalized. The cheap PC/netbook market only held up sales for so long—those products eventually failed to move the needle and are largely being abandoned. Apple cutting prices will only delay the normalization of sales for a while, and it won’t make them any money.
I’m sure they will drop soon. You can buy 2 galaxy S9 over here for the price of an ancient iPhone 8. And I’m not exaggerating.
The real issue is not pricing. It’s the fact that Apple is not seen as much of as status symbol anymore, which leads to less sales. One factor for the decline is increasing nationalism and broader acceptance of Chinese brand phones as not simply “the average person’s phone”. Buyers of these phones tend to spend extremely large amounts of money on luxury items.
When did Cook deny it? Jan. 2. Time's a changing, there is plenty of more recent support that the trade wars are effecting Apple and others. And he didn't deny there was any boycott going on, just not 'widespread', as in not government organized. But he DID say the trade was was an impact.
Cook added that “rising trade tensions with the United States” contributed to the downturn in China.
https://www.cnbc.com/2019/01/08/inf...--may-be-behind-apple-iphone-sales-slump.html
Not to mention...
https://appleinsider.com/articles/1...nese-firms-in-support-of-huawei-is-escalating
Lets not handpick comments to support the ever popular stand that Apple's products are priced too high and deny that the trade war is part of the equation. Like it or not, we are paying for Politics.
Apple is finding itself in the transition of smartphones from luxury devices to commodities. You can get a perfectly serviceable device for under $500. If you don't need top end performance there are decent alternatives under $300 that will last a couple of years for most consumers.
The 66% gross margin on iPhones is not sustainable in a competitive environment. Apple will either have to start competing on price more, or they will have to make the deliberate decision to cut back production and focus only on the luxury buyers. I just don't see a long-term market for over 200,000,000 annual unit sales of devices that start at $450 for a two-year old design, jump to $750 for the lowest price current device, and top out well over $1,000.
Will there be a market for a $1K+ iPhone XS Max with multiple cameras and every bell-and-whistle tech feature? Sure. But I also think Apple will need to have more devices like the SE that start at $350 and wind up with their mainstream device as the XR at closer to $500 if they expect to maintain market share and even entice new users in emerging countries like China and India.
The 66% gross margin on iPhones is not sustainable in a competitive environment. Apple will either have to start competing on price more, or they will have to make the deliberate decision to cut back production and focus only on the luxury buyers. I just don't see a long-term market for over 200,000,000 annual unit sales of devices that start at $450 for a two-year old design, jump to $750 for the lowest price current device, and top out well over $1,000.
Will there be a market for a $1K+ iPhone XS Max with multiple cameras and every bell-and-whistle tech feature? Sure. But I also think Apple will need to have more devices like the SE that start at $350 and wind up with their mainstream device as the XR at closer to $500 if they expect to maintain market share and even entice new users in emerging countries like China and India.
It's funny how they blame this and that... no, it's simple – iPhones are overpriced. I have perfectly working iPhone 6s 64gb (mid range capacity in 2015) and I would still upgrade to Xs 256gb (mid range capacity in 2018) if it is the same price as I paid for the 6s (plus inflation). It is not, so I will enjoy my lovely phone for another year. I don’t blame this or that, I blame Apple, because they seem to be not aware of the current market and live inside their own bubble.
Cook is finding out he can only live off of Steve Jobs success for a finite amount of time.
Rest of the world to follow suit I hope, starting with Europe cuz those prices are no me gusta nada
Sorry, but there is not a 66% gross margin on iPhones.
They have about a 38% combined gross margin, and iPhones are 60% of revenue.
If Apple wants to change and start to get lots more money coming in from services as opposed to just relying on hardware sales, then there is one obvious path to consider.
Start making VASTLY cheaper phones, and I don't mean 599 or 499, I mean 199 and 299 price points.
Ok, there will be limited profit on each phone, but then you have another customer hooked to pay long term for your services.
Get the phones in more hands = more long term profits.
Would Apple ever do this though?
Start making VASTLY cheaper phones, and I don't mean 599 or 499, I mean 199 and 299 price points.
Ok, there will be limited profit on each phone, but then you have another customer hooked to pay long term for your services.
Get the phones in more hands = more long term profits.
Would Apple ever do this though?
Sorry, typed it in wrong. Meant 60% margins. Got my numbers from here:
https://9to5mac.com/2017/11/06/how-much-iphone-x-costs-apple-to-make/
No, that is the same thing (gross margins and margins). Those calculations are not margins: they are a GUESS at a bill of goods.
I think it is more the economic uncertainty. Unfortunately Huawei is not publicly traded, so they don’t need to disclose sales data. But I doubt a boycott is real. We are six weeks away from more tariffs unless the US and China reach a trade deal. It goes way beyond the trade deficit now.
The high price is defiantly a factor for alot of people i believe, I think Apple missed the target thinking they could keep raising the prices forever. In every other consumer products area things get batter and cheaper over time. Apple seem to think they can just raise the price every time. I get 'think different', but that's just too different...
China operates with a mercantilist mindset from the 18th century. What the past few months have shown is that China seems to have more to lose right now than the US or EU from the current trade wars. They may well be willing to make deals that seemed impossible only a year ago. The US is far more concerned about 5G and forced technology transfers than the trade deficit. A couple of quarters of slow smartphone sales could be worth it if China makes real concessions there.
This author continues to produce pure magic. In the entire FY2017, Apple profited an average of 137M/day.
Here's a thought: Apple's has had a fixation on the iPhone. Justifiably so, due to the fact that it's accounted for most of it's growth and profits in the past decade.
For the iPhone to stagnate somewhat might eventually convince apple to redirect more of their attention to other things, rather than just milking the cow that is the iPhone.
I look at them like Microsoft in the mid 2000's, when they were just milking the windows cow. It wasn't until windows no longer was giving Microsoft the same growth and profits that they re-directed their efforts and did some other cool stuff.
Yep. Even with a veteran discount and $250 for trading in a 6s+, a 256GB Xs with AC + tax comes to $950. I can technically afford it, but it's too much. The Xr is a non starter for me. I don't want a huge phone anymore.