Apple Tells Suppliers to Cut iPhone XR and XS Production by 10% for Next Three Months

[Peperino]

Raising prices is precisely the right thing to do when growth in a market stagnates. When you know that you are going to sell more or less the same number of units of a products regardless of its price, the natural thing to do would be to further raise prices (and banking on the increased margins to offset any profits lost from a less than proportionate drop in sales), offer more accessories, and release more services.

In short, rather than try to further grow their iphone user base (which is apparently still growing via the second hand iphone market), Apple is focusing inwards and monetising its existing user base more heavily.

And I like how you dismiss the success of the Apple Watch so flippantly. Personally, I am not so perturbed by the apparent lack of attention paid to the Mac, because I have come to terms long ago that the Mac simply does not represent the future at Apple.

Apple will likely still keep the Mac around, if only for app development, but I expect the Mac’s refresh cycle to lengthen in accordance with its profitability (heck, the ipad is already slipping to a 1.5-year refresh cycle).

The future at Apple is clearly wearables. The Apple Watch and AirPods are simply the tip of the iceberg. It’s funny how so many people wonder out loud what the next big thing at Apple is, while completely ignoring the reality that is right in front of their very eyes.

And that is why Apple is Lowering the prices in Japan and China... it seems that high prices are NOT working...
https://9to5mac.com/2019/01/11/wsj-...h-end-xr-successor-dual-camera/#disqus_thread

 

[Abazigal]

And that is why Apple is Lowering the prices in Japan and China... it seems that high prices are NOT working...
https://9to5mac.com/2019/01/11/wsj-...h-end-xr-successor-dual-camera/#disqus_thread

This is the article I am linked to.

Doesn’t seem to have any correlation?

 

[Bacillus]

And I believe more people in this forum will agree with me than with you.

I guess so
(Carpal Tunnel Syndrome explaining it over and over again...)
[doublepost=1547459125][/doublepost]

Raising prices is precisely the right thing to do when growth in a market stagnates. When you know that you are going to sell more or less the same number of units of a products regardless of its price, the natural thing to do would be to further raise prices (and banking on the increased margins to offset any profits lost from a less than proportionate drop in sales)

Something must have gone wrong in your economy studies. Institutionally wrong.
I need a word with your teachers.

 

[I7guy]

...And I believe more people in this forum will agree with me than with you.

Irrelevant who agrees with who on an Internet forum. I don’t do this for “likes”, I participate to out an opinion out there and maybe even have a discussion. No one has to agree with me.

The universe is bigger than both of us and will do what it wants anyway.
[doublepost=1547468578][/doublepost]

...Something must have gone wrong in your economy studies. Institutionally wrong.
I need a word with your teachers.

I never saw a car company lower prices when sales were slow.

 

[Bacillus]

Raising prices is precisely the right thing to do when growth in a market stagnates. When you know that you are going to sell more or less the same number of units of a products regardless of its price, the natural thing to do would be to further raise prices (and banking on the increased margins to offset any profits lost from a less than proportionate drop in sales), offer more accessories, and release more services.

In short, rather than try to further grow their iphone user base (which is apparently still growing via the second hand iphone market), Apple is focusing inwards and monetising its existing user base more heavily.

And I like how you dismiss the success of the Apple Watch so flippantly. Personally, I am not so perturbed by the apparent lack of attention paid to the Mac, because I have come to terms long ago that the Mac simply does not represent the future at Apple.

Apple will likely still keep the Mac around, if only for app development, but I expect the Mac’s refresh cycle to lengthen in accordance with its profitability (heck, the ipad is already slipping to a 1.5-year refresh cycle).

The future at Apple is clearly wearables. The Apple Watch and AirPods are simply the tip of the iceberg. It’s funny how so many people wonder out loud what the next big thing at Apple is, while completely ignoring the reality that is right in front of their very eyes.

I never saw a car company lower prices when sales were slow.

Wauw, now we get it. The new economic order:

The Cookette Economic Law of Price Inelasticity
"Raise prices to overcome the market's natural hesitation for affordable products !"

BMW too affordable ? Get a Lamborghini instead !
Now with exclusive New-year deal: 15% price hike

 

[I7guy]

Wauw, now we get it: The new economic order

The Cookette Economic Law of Price Inelasticity
"Raise prices to overcome the market's natural hesitation for affordable products !"

BMW too affordable ? Get a Lamborghini instead !
Now with exclusive New-year deal: 15% price hike

Now we are all on the same page of the corporate money losers. Sell a product no one wants and raise the prices. And watch the sales increase as the product becomes the most sought after.

 

[ipponrg]

I never saw a car company lower prices when sales were slow.

But dealerships will give better prices if they are trying to hit their sales goals

 

[Bacillus]

Now we are all on the same page of the corporate money losers. Sell a product no one wants and raise the prices. And watch the sales increase as the product becomes the most sought after.

Take your part in rewriting 150+ years of economic literature. It's your thing, really.

 

[I7guy]

I hope you'll take your part in rewriting 150+ years of economic literature. It's your thing, really.

I’m all for disruptive economics.

 

[Abazigal]

Irrelevant who agrees with who on an Internet forum. I don’t do this for “likes”, I participate to out an opinion out there and maybe even have a discussion. No one has to agree with me.

The universe is bigger than both of us and will do what it wants anyway.
[doublepost=1547468578][/doublepost]
I never saw a car company lower prices when sales were slow.

This. I will still stand by my original assertions, even if the whole forum turns against me.

It’s not like this place hasn’t had a track record of being prone to hysteria and reading Apple wrong. It wasn’t so long ago that people thought the iPhone X wouldn’t sell well, and Apple went on to announce another quarter of excellent earnings.

How quickly the haters forget.

I guess so
(Carpal Tunnel Syndrome explaining it over and over again...)
[doublepost=1547459125][/doublepost]

Something must have gone wrong in your economy studies. Institutionally wrong.
I need a word with your teachers.

There is such a concept called price inelasticity. Apple is essentially betting that the higher margins will more than make up for any loss in sales. And considering that they still expect to rake in 84 billion this quarter, it sounds like their strategy is still paying off, albeit not as well as they had hoped. But it’s still an impressive amount nevertheless.

That you don’t like higher prices (I personally don’t either, but that’s besides the point) should not prevent us from objectively evaluating the merits of what Apple has done here. The truth is that their costs have risen as well, so I am not seeing the logic of selling their products at razor thin margins and earning next to no profits.

Not to mention that the Apple installed user base continues to grow via the influx of second-hand apple devices entering the grey market from upgraders selling their older iPhones. So even as Apple raised the prices of their products, it still grew its iphone user base by more than 100 million people. These are people who can still contribute financially via apps, services and accessories.

Can anyone here be so sure that their recommendation of selling (potentially) more units at lower prices would have resulted in higher overall profits for Apple here?

 

[Bacillus]

I’m all for disruptive economics.

Then subsidize Apple with some extra funds, to reinforce Tim's inner beliefs.
He's very alone...
[doublepost=1547473529][/doublepost]

This. I will still stand by my original assertions, even if the whole forum turns against me.
It’s not like this place hasn’t had a track record of being prone to hysteria and reading Apple wrong. It wasn’t so long ago that people thought the iPhone X wouldn’t sell well, and Apple went on to announce another quarter of excellent earnings.
How quickly the haters forget.
There is such a concept called price inelasticity. Apple is essentially betting that the higher margins will more than make up for any loss in sales. And considering that they still expect to rake in 84 billion this quarter, it sounds like their strategy is still paying off, albeit not as well as they had hoped. But it’s still an impressive amount nevertheless.
That you don’t like higher prices (I personally don’t either, but that’s besides the point) should not prevent us from objectively evaluating the merits of what Apple has done here. The truth is that their costs have risen as well, so I am not seeing the logic of selling their products at razor thin margins and earning next to no profits.

You're pretty good in getting things slightly mixed up.
Price elasticity (essentially the mainstream of economics) says: more affordable products will improve sales - and so, making things more expensive will harm it.
Within the higher end market segments there may be some bandwith of acceptibility - which offers (limited) manouvering space.
But Apple already tested that out, and chose to negate initial market reactions.
They shouldn't have broadened that raise to the upper middle tier, because those are the customers that easier to lose and are the most critical/vocal & larger volume.
Let alone their second raise across the board (including XR, Air, Mac Mini, MacBook) that was a suicide mission because those are the buyers that the bigtime volume losses plus those are future premium customers.
Increasing prices typically evokes a negative market reaction - unless there is broad appreciation for innovation, improved price/performance, value addition, say brand recognition.
Apple possibly gambled on brand recognition - but this time that didn't work anymore - conversely, it even resulted in a negative overall brand connotation ("cash burners" etc.)
So to say: increasing prices can only be a one-time (so: short term) correction: repeated increases will only harm revenue in also the mid-tier (which is why Xr production was cut)

Now all this only is about 1st world market segmentation.
In China and India, price strategies are completely different and Apple (with its 1st world offerings and pricing) is way-off from the income/market segmentation, making their whole brand essentially out of reach for a critical mass to succeed.
So they did sell in the upper segment, but essentially lost the rest to the competition with better price/performance.

Every mechanism that you and i7guy refer to, can only work once to increase revenue at cost of volume and should only be targeted to the most upper (Xs and Xs Max, iPad Pro, MBP) segments because of lower volume / price sensitivity.
It remains to be seen how well that works there (Tim hiding sales numbers says a lot), but overall it doesn't seem to help yet.
Therefore, the financial world considers Tim to have outpaced himself.

Not to mention that the Apple installed user base continues to grow via the influx of second-hand apple devices entering the grey market from upgraders selling their older iPhones. So even as Apple raised

The 2nd hand market doesn’t drive sales - it only impedes.
It does facilitate installed base which isn’t the problem here.
Conversely, Apple takes older devices out of the market to revive stalled upgrade rates

 

[Rob_2811]

Raising prices is precisely the right thing to do when growth in a market stagnates. When you know that you are going to sell more or less the same number of units of a products regardless of its price, the natural thing to do would be to further raise prices (and banking on the increased margins to offset any profits lost from a less than proportionate drop in sales), offer more accessories, and release more services.

In short, rather than try to further grow their iphone user base (which is apparently still growing via the second hand iphone market), Apple is focusing inwards and monetising its existing user base more heavily.

And I like how you dismiss the success of the Apple Watch so flippantly. Personally, I am not so perturbed by the apparent lack of attention paid to the Mac, because I have come to terms long ago that the Mac simply does not represent the future at Apple.

Apple will likely still keep the Mac around, if only for app development, but I expect the Mac’s refresh cycle to lengthen in accordance with its profitability (heck, the ipad is already slipping to a 1.5-year refresh cycle).

The future at Apple is clearly wearables. The Apple Watch and AirPods are simply the tip of the iceberg. It’s funny how so many people wonder out loud what the next big thing at Apple is, while completely ignoring the reality that is right in front of their very eyes.

Couple of things here..

Raising prices is precisely the right thing to do when growth in a market stagnates.

Isn't really true, it depends what you are trying to achieve. If its purely a short term play to please Wall Street, fine. Longer term not so much. As we've seen it worked in the short term for Apple, now we are starting to see the effects of pushing the prices up in a market that is starting to 'stagnate'.

Also here for your weekly reminder that there is no evidence whatsoever that AirPods/The Apple Watch are going to be as big a business as the iPhone. I don't know what you base your argument about wearables on really, seems like confirmation bias.

Take the Watch, what does it do in sales a year, about 15 million, maybe a bit more? Compare that to 200 + million for the phone. The phones sells at double the price in most cases too.

A lot of the research seems to suggest that the older models of the watch sell better than the newer ones, which isn't an altogether positive sign either.

 

[I7guy]

Then subsidize Apple with some extra funds, to reinforce Tim's inner beliefs.
He's very alone...

Me and my 90 million friends , (could be 90 million plus one) shall keep our dealings with Tim Cook secret.

 

[Abazigal]

Couple of things here..



Isn't really true, it depends what you are trying to achieve. If its purely a short term play to please Wall Street, fine. Longer term not so much. As we've seen it worked in the short term for Apple, now we are starting to see the effects of pushing the prices up in a market that is starting to 'stagnate'.

Also here for your weekly reminder that there is no evidence whatsoever that AirPods/The Apple Watch are going to be as big a business as the iPhone. I don't know what you base your argument about wearables on really, seems like confirmation bias.

Take the Watch, what does it do in sales a year, about 15 million, maybe a bit more? Compare that to 200 + million for the phone. The phones sells at double the price in most cases too.

A lot of the research seems to suggest that the older models of the watch sell better than the newer ones, which isn't an altogether positive sign either.

The iphone didn’t start out selling 200 million units a year either.

It’s not that hard to see Apple release an ecosystem of connected wearables which use the Apple Watch as the brains of the whole operation. There’s also the Apple Glasses rumoured for a 2020 release, health-tracking airpods, and who knows what else Apple has cooking.

Lastly, name me one other business that is as big as the iphone. The iphone may well be this once-in-a-lifetime phenomenon that can’t be replicated by anyone (not even Apple) and maybe that’s just the way it is. The Apple Watch can still go on to be immensely popular and profitable, not come anywhere close to matching the financial success of the iphone, and still be a success in its own right.

I continue to believe that the future of Apple lies with wearables. There is just so much potential to be had with it. More so than Macs, at any rate.

Time will just have to tell, I guess.

 

[Rob_2811]

The iphone didn’t start out selling 200 million units a year either..

By its fourth iteration it was selling circa 75 million units a year.

It’s not that hard to see Apple release an ecosystem of connected wearables which use the Apple Watch as the brains of the whole operation. There’s also the Apple Glasses rumoured for a 2020 release, health-tracking airpods, and who knows what else Apple has cooking.

Thats great but you've asserted that "the next big thing is clearly wearables" and then offered up speculation about unreleased products in markets that are completely untested as evidence of that.

You shouldn't make the mistake of buying fully into the things that Apple regularly trumpets as the next big thing. Apple talk about wearables because they have seen some growth there and can point to it to appease Wall Street at at time when phone sales are not what they were.

One of the fastest growing segments in tech is connected smart speakers. Apple never talk about that because theirs flopped and their voice assistant is miles behind Amazons/Googles.

 

[Bacillus]

I continue to believe that the future of Apple lies with wearables. There is just so much potential to be had with it. More so than Macs, at any rate.
Time will just have to tell, I guess.

A lot of the research seems to suggest that the older models of the watch sell better than the newer ones, which isn't an altogether positive sign either.

By its fourth iteration it was selling circa 75 million units a year.
Thats great but you've asserted that "the next big thing is clearly wearables" and then offered up speculation about unreleased products in markets that are completely untested as evidence of that.

Long-term marketing speak. What wearable will sell for a $800+ price tag, at iPhone volumes ?
Nice products that by far don't reach the desired volume to replace iPhone and assorted cash (that Apple has come to depend on)
They will need a landscape-changer in 5 years, to stay alive...

 

[Peperino]

Irrelevant who agrees with who on an Internet forum. I don’t do this for “likes”, I participate to out an opinion out there and maybe even have a discussion. No one has to agree with me.

The universe is bigger than both of us and will do what it wants anyway.
[doublepost=1547468578][/doublepost]
I never saw a car company lower prices when sales were slow.

I never saw a car company soldering the tires to the car, so every time you need to change them, you need to change the entire car. That is what Apple is doing with the entire Macbook line up some iMacs and Mac Mini, with RAM and SSD being soldered to the logic board.
One more point that the Apple design team is so bad that only wants to milk more money out of its customers.

 

[I7guy]

I never saw a car company soldering the tires to the car, so every time you need to change them, you need to change the entire car. That is what Apple is doing with the entire Macbook line up some iMacs and Mac Mini, with RAM and SSD being soldered to the logic board.
One more point that the Apple design team is so bad that only wants to milk more money out of its customers.

This addresses the point in question?

Edit: forgot question mark.

 

[Abazigal]

Long-term marketing speak. What wearable will sell for a $800+ price tag, at iPhone volumes ?
Nice products that by far don't reach the desired volume to replace iPhone and assorted cash (that Apple has come to depend on)
They will need a landscape-changer in 5 years, to stay alive...

The Apple Watch is currently seeing 50% growth year after year. It’s not unreasonable to expect it to hit at least 100 million units a year, especially once Apple makes the Watch independent of the iPhone.

Feels like the watch is taking a page out of the iPod playbook here. Use the watch to tie users to the iPhone until it’s no longer sustainable, then flip a switch.

 

[Bacillus]

The Apple Watch is currently seeing 50% growth year after year. It’s not unreasonable to expect it to hit at least 100 million units a year, especially once Apple makes the Watch independent of the iPhone.
Feels like the watch is taking a page out of the iPod playbook here. Use the watch to tie users to the iPhone until it’s no longer sustainable, then flip a switch.

In its current iteration, the watch very much depends on iPhone storage & interaction.
That may change, but will eat more battery with battery capacity remaining a physical problem in a small enclosure.
Also, interaction with the iPhone is far more intense and requires a large screen - that the Watch can't ever match.
So I am not denying that disruptive innovation may change the landscape.
But it will require foldable screens, top battery tech and everything the current Apple laments or lags on.

So if this is a plea to move Cook, I am with you.
Sadly, that's the only switch that is flippable overnight...

 

[Abazigal]

In its current iteration, the watch very much depends on iPhone storage & interaction.
That may change, but will eat more battery with battery capacity remaining a physical problem in a small enclosure.
Also, interaction with the iPhone is far more intense and requires a large screen - that the Watch can't ever match.
So I am not denying that disruptive innovation may change the landscape.
But it will require foldable screens, top battery tech and everything the current Apple laments or lags on.

So if this is a plea to move Cook, I am with you.
Sadly, that's the only switch that is flippable overnight...

Large screen and interaction is kinda answered by AR glasses.

And the flip side of better battery tech is more power efficient parts and software, which Apple has the lead in.

There’s more than one way to skin a cat.

 

[Bacillus]

Large screen and interaction is kinda answered by AR glasses.
And the flip side of better battery tech is more power efficient parts and software, which Apple has the lead in.
There’s more than one way to skin a cat.

The only glasses I have seen from Apple are Angela's immense spectacles.
They are battery sparse, but they seem more intriguing than commercially viable
OT: AppleWatch has the worst battery life of its category. Cheerio !
[doublepost=1547547825][/doublepost]

This addresses the point in question?
Edit: forgot question mark.

You might consider to make that an automated addition to all of your posts.

 

[iMEric984]

There is not blinder that the one that does not want to see.
Apple is NOT doing fine. Otherwise, its stock would not be plummeting, sales would not be declining and Apple would not be lowering prices in markets like Japan and China.

Especially if you think the whole market is experiencing this, Cook's increasing prices is not a good marketing strategy.

And I reiterate Apple is NOT innovating. You failed to mention any Apple product in the last 10 years (except the iWatch) that has been truly innovating and market disrupting.

iMac external design has not been updated in 10 years.
Mac Pro has been a failure
And I can keep going but I already mentioned why Apple is NOT innovating in previous posts.
And Apple standards have been lowered. Look at how badly Macbooks Pro and Air have been designed.
Macbook Pro 2016 was a disaster.

Innovations

A series chips. A9-A12
Especially iPad Pro A series X chips
Apple Watch
iPad
Smart HDR and camera sensors
Best video in the game
Face ID
AirPods
Best EcoSystem bar none.


I could go on and on, and I’m sure you’ll quote me some android OEM that tried to do one of these things half assed.

Apples iPhone is what makes the money. Most people can use their personal devices as computers. (iPhone iPad) and this is why they account for so much of their sales.

 

[Peperino]

Innovations

A series chips. A9-A12
Especially iPad Pro A series X chips
Apple Watch
iPad
Smart HDR and camera sensors
Best video in the game
Face ID
AirPods
Best EcoSystem bar none..

Several things you mentioned are only internal components (chips, camera sensors, etc). I said except the Apple iWatch, there has been no design that has been revolutionary. AirPods, there are several bluetooth pods in the market. iPads, there are many tablets in the market that are comparable to the iPad. Furthermore the Apple pencil 1 had such a bad design that you had to plug it the port in order to charge it.

And.... still waiting fot those revolutionary hardware/products designs that you failed to mention...because there are none...

 

[iMEric984]

Several things you mentioned are only internal components (chips, camera sensors, etc). I said except the Apple iWatch, there has been no design that has been revolutionary. AirPods, there are several bluetooth pods in the market. iPads, there are many tablets in the market that are comparable to the iPad. Furthermore the Apple pencil 1 had such a bad design that you had to plug it the port in order to charge it.

And.... still waiting fot those revolutionary hardware/products designs that you failed to mention...because there are none...

The FEW things I quoted as innovations as small as they may seem are quite the innovations compared to other camps.

To me it sounds like nothing Apple does makes you happy. So I ask myself, what is your point of being here?? To **** in everyone’s Apple Cheerios?? To bash Apple at any rumor??? I don’t understand you.

Who are you trying to convince that Apple isn’t innovating? A forum full of Apple fans??

Your Apple bashing makes you completely transparent.