Apple to Cut Back on New Hires Following Disappointing Holiday iPhone Sales

[Peperino]

Here's my hot take: Apple knows more than we do about pricing and market realities. The new iPhones are more expensive because Apple knows it will sell fewer and fewer iPhone upgrades (due to the maturity of the technology and high customer satisfaction with their current devices). To cope with falling sales numbers, Apple is raising prices on the fewer phones it sells. As sales volume goes down, the unit price goes up. In terms of actual price increases, I don't think most consumers are bothered by a few extra dollars a month on their carrier bill due to a slightly larger phone payment. The problem is that consumers don't see the point of upgrading at all.

TL;DR: iPhone sales aren't dropping because the price is rising. Prices are rising because Apple knows they've reached the point where upgrades (and therefore sales volume) is decreasing, and are raising unit prices to compensate.

Your Logic is completely illogical.

The problem is that consumers don't see the point of upgrading because they are tired of paying obscenely high prices for a phone with no innovation whatsoever. Since 2 years ago iPhones went up almost 100%. So ridiculous that a fully loaded iPhone Max cost the same or more than a Macbook Pro. Furthermore, you cannot even connect it to your own Macbook... what a joke.

iPhones sales are dropping because people are voting with their wallets, and while in the past they upgraded every 2 years since price was basically the same,now people see no reason to upgrade since the price are way more expensive. And if that happens now, what till there is a recession, will be much worse.

If sales volumes go down, increasing the prices will NOT making sell more. Apple should have lowered the prices to increase its market share since in addition that will bring more revenue through their services.
Selling less will cut market share and also drop the sales of services.

It also quite pathetic that Cook's solution is to concentrate on the trade-in program instead on innovation and reducing cost. In any case, the trading-in program is a complete scam. Cook's lack of innovation and cracks are starting to show in the entire product line.

 

[BeforeTheMeds]

Oh please, don't blame Apple for greed. They're just as greedy as anybody else, as greedy as capitalism requires them to be. Don't hate the player, hate the game.

Apple is greedy, period. Stop defending these people. Some people are greedy in any situation, welcome to life.
[doublepost=1547687802][/doublepost]

None of the things you listed is actually a significant selling point to the vast majority of users.

Proof? How many actually told you that?

You nor I know FOR SURE if that is correct or not.

 

[gugy]

Greedy will get you at some point.
I love Apple and I hope they can come back to Earth and lower the prices. I just want prices to be fair. Stifling customers is not the answer anymore.

 

[pika2000]

Reduce staff to maintain profit. Anybody who has studied business knows Albert Dunlap ("Chainsaw Al").

He was an executive, professional downsizer, and believed in profit at any price.

https://en.wikipedia.org/wiki/Albert_J._Dunlap

Who said Apple is reducing staff? Go read the article again. Apple is simply cutting back on hiring, it means they are hiring less new people than usual, not reducing people.

 

[az431]

Apple needs to focus on in-store services, revamping their pricing structure and understanding the current market when it comes to the iPhone price points and what the consumer wants to upgrade to with a respectable price tag for a smart phone. Hopefully in 2019, we do see some changes in that area.

Greedy will get you at some point.
I love Apple and I hope they can come back to Earth and lower the prices. I just want prices to be fair. Stifling customers is not the answer anymore.

In 2004, a brand new Motorola Razr cost $800 in inflation-adjusted dollars, and that was after carrier subsidies.

In 2012, an iPhone 5 off contract would set you back $649.

Today, you can buy an iPhone 7 for $449 and an XR for $749.

China and India aside, Apple is hitting all the "price points." The nonsense bandied about on this forum is pitched by self-entitled people who think a new iPhone every year should be accorded to them as a matter of right.

Since 2 years ago iPhones went up almost 100%. So ridiculous that a fully loaded iPhone Max cost the same or more than a Macbook Pro. Furthermore, you cannot even connect it to your own Macbook... what a joke.

Wrong. First there are no phones that have doubled in price. Zero. The most expensive phone is the XS Max, which starts at $999. Two years ago it was the 7S Plus at $769. That's a 29% increase, not 100%.

Second, Apple expanded the iPhone line with higher-end phones. You can't compare an XS Max to an iPhone 7S and claim the price has gone up because that is an apples and oranges comparison. The comparable phone is the XR, which is $20 less than a 7S Plus sold for two years ago.


[doublepost=1547688187][/doublepost]

Who said Apple is reducing staff? Go read the article again. Apple is simply cutting back on hiring, it means they are hiring less new people than usual, not reducing people.

Welcome to the MR forums, where people read half the title of an article then click the Reply button to post whatever came to mind at that instant in time.

 

[pika2000]

In 2004, a brand new Motorola Razr cost $800 in inflation-adjusted dollars, and that was after carrier subsidies.

In 2012, an iPhone 5 off contract would set you back $649.

Today, you can buy an iPhone 7 for $449 and an XR for $749.

China and India aside, Apple is hitting all the "price points." The nonsense bandied about on this forum is pitched by self-entitled people who think a new iPhone every year should be accorded to them as a matter of right.

These people are complaining that iPhones are expensive, yet they are willing to pay $1k for Samsung phones. So weird.

 

[normanfox]

So Tim Cook's memo phrased this slowdown in terms of quasi-temporary blips, like the exchange rate and some challenges in China that they expect to pass. Yet all their moves based on this revised guidance makes it seem like they are digging in for a more or less permanent structural change to their business.

Jobs literally saw every minute of every day as an opportunity for innovation, he didn't wait for slowdowns and stagnation to make a change. I guess this is what happens when you put sales and logistics guys in charge.

can't agree more... Apple has a huge market opportunity with iCar until they canceled the whole project. that is a new market that every car company is starting to invest hundred of millions.

the mobile market is mature and not much to innovate. It is like the last few pounds of fat is harder to lose.

 

[Rob_2811]

In 2004, a brand new Motorola Razr cost $800 in inflation-adjusted dollars, and that was after carrier subsidies.

In 2012, an iPhone 5 off contract would set you back $649.

Today, you can buy an iPhone 7 for $449 and an XR for $749.

So you can buy a two generations old iPhone cheaper today than you could buy the best iPhone on the market in 2012.

The flagship iPhone, the equivalent of what the iPhone 5 was then, starts at $999.

 

[trusso]

Years from now, perhaps decades, they'll air one of those news documentaries, "Apple: Where Did It All Go Wrong?". A bunch of blowhards, economists and lawyers will be featured in the talking-head segments, professing how Apple was a victim of forces beyond its control; China; Trump; blah-blah-blah...

If reporters of the future are interested in the real reasons Apple fell from grace, they could do worse than perusing threads like these. It will be painfully evident that the bourgeois sensibilities of Silicon Valley and Wall Street were laughably out-of-touch with the realities of the average American worker, and too high on their own supply to conceive of anything beyond their narrow worldview.

Oh gentle Faustus, leave this damned art,
This magic, that will charm thy soul to hell,
And quite bereave thee of salvation.
Though thou hast now offended like a man,
Do not persever in it like a devil.

–Christopher Marlowe (Doctor Faustus)​

 

[stevearm]

Make a new iPhone SE and I'll buy one. I haven't bought an iPhone since that was released. Zero interest in these giant tablet sized things

 

[jeremiah256]

... so make new products other than the damn phone?

They're trying, but honestly, until they get ML/Siri right on the HomePod, by which I specifically mean multi-user functionality, they are going to be restricted in what they can do in the Homekit/IoT market due to privacy concerns. Probably why they made sure to say that AI hiring is going full speed ahead.

 

[Mimiron]

iPhone prices have gone up so rapidly that many people simply won’t upgrade. The phones offer little to nothing new or exciting for the last couple of years. Budget phones have caught up on flagships at 1/3 of their price. Huawei P20 Lite, Xiaomi Pocophone F1, just to mention a few. Entry level iPhone XR costs 959€ lol. Yeah, no. I’d rather pay 100€ extra to get an iPhone X.

 

[magicschoolbus]

You should all do your bit, stop by your local store and buy a lightning cable or a dongle. Every cent counts!

i have been wanting a blue horizon watch band

 

[Soba]

As the old saying goes, the fish stinks from the head.

Tim Cook behaves like an aging C-player corporate welfare type who doesn't understand technology and who might not even be interested in it. He only seems intent on milking the company for all it's worth in the short term so he can reap millions of dollars in stock grants, all the while mortgaging the future of the company. Putrid rot has set in throughout every product line, hardware and software alike.

Saying that the man is an empty suit might be too harsh, but he is definitely in the wrong job.

 

[ronno]

I would like for my $1200 iPhone to be able to

A) Plug into my new Apple laptop without buying something extra, and

B) Be able to do a quick charge without buying something extra, or using a charger that came (free!) with some other device.

The Apple luxury pricing structure really should include these things.

 

[HiVolt]

And that may be, and I’m not sure what Apple will do in terms of offering more trade-ins, incentives, ect, but regardless, they have to realize that it’s not just China’s market, it’s the consumer does see the full value in a $1000 smart phone for stainless bands, OLED displays, Animoji, etc. What they see, is that their current phone does everything they need it to, so they ask themselves the question, “Do I really need to upgrade to $1000”? And the answer is likely not. The sooner Apple can make the appropriate adjustments, the better they can stay on course.

Yep. And Apple used to regularly completely refresh the design every two years, after the (S) cycle. That stopped after the 6S, the iPhone 7 & 8's still largely looked identical to the iPhone 6's. And if people gonna spend $1K+ on a new phone, they want it to look different.

When the X came out, lots of people plunked down, because it was a brand new design, but it was also $1K so a lot of those people aren't gonna spend even more money on an XS - unless they absolutely need the XS Max, which offers almost no benefit over the X, except the size - camera gimmicks aside.

And the "normal" iPhones starting with the 6s A9 generation chips have proven to be quite capable of lasting more than before, especially since iOS12 actually improved performance on older devices.

My friend's boss, a rich guy, a lifelong Apple user, was using an iPhone 6s, because thats all he needs and it did everything he wanted - he's not an old fart, he's in his 40's and tech savvy. He just wanted a bigger screen cuz the keyboard is larger so its easier to type, so he bought a used iPhone 6s Plus from someone because he does not like the newer face ID crap and he was happy with the 6s performance and look & feel. That says something.

 

[vicviper789]

I bet ios13 is going to slow down everyone’s device so we have to upgrade lol

 

[miflgr92]

Wrong. First there are no phones that have doubled in price. Zero. The most expensive phone is the XS Max, which starts at $999. Two years ago it was the 7S Plus at $769. That's a 29% increase, not 100%.

Second, Apple expanded the iPhone line with higher-end phones. You can't compare an XS Max to an iPhone 7S and claim the price has gone up because that is an apples and oranges comparison. The comparable phone is the XR, which is $20 less than a 7S Plus sold for two years ago.

According to macrumors and other sites, the XR was created to be a budget friendly version of the iPhone. It's an entirely new category. I personally don't think the existence of the XR should be used to justify the price increases we have seen. The 7 & 7 Plus were the flagship phones in 2016. The Xs & Xs Max were the flagship phones in 2018. Those are the models that should be compared.

Edit: But then just thinking about it after I posted, Apple did release the 8 series as updates to the 7 series the same year that the X was released so you are right when you say the expanded their line up with higher end phones. Still feels weird to me to compare the XR to a previous flagship model though. Apple's iPhone line up (and MacBook too) has been a bit confusing these past couple of years lol

 

[alextu]

I SO love how Tim Cook said that the iPhone XR is a Flop


Agreed! I could see Apple only supporting the iPhone for two years in order to boost sales.

i highly doubt they would support the iphone for two years. if they do it then they would be no different than android. people buy iphones knowing that they will still get update for many years. if they do it, you will see people switching to android.
[doublepost=1547692956][/doublepost]

... so make new products other than the damn phone?

problem is tim cook dont know what else to make. he has just been milking the iphone. and apple watch is not going to be the next iphone phenomenom

 

[unobtainium]

Your Logic is completely illogical.

Oh?

If sales volumes go down, increasing the prices will NOT making sell more.

Never said it would...increasing price will increase the revenue from the fewer units that sell each year. Falling sales is unavoidable at this point for Apple (and other smartphone makers).

My phone payment through my carrier has gone up by a few dollars this past year. It's hardly noticeable for the vast majority of people. That's not why people aren't upgrading.

The reason people aren't upgrading is that they don't need a new phone. Since 2014 all high-end smartphones have had all the features most people could ever want. I know many people who used to upgrade frequently and now hang onto their phones until they break. That's a huge shift from the early days of the smartphone.

 

[EvilEvil]

Apple needs to cut back the number of iPhone SKUs back to one and lower prices. Also, focus on making the Mac great again.

 

[AFDoc]

Make a good phone and this won't be a problem... you know; no notch, put in a headphone jack, use the standard USB-C port... things like that.

I don't have a problem with the notch..... Have no use for a HP jack..... Nothing wrong with lighting.... maybe you need a new phone?

 

[psingh01]

The watch band team will not be impacted. Mac Pro team probably will.

 

[Salvor Hardin]

It’s not just greed, if you look at the smart phone market, it’s completely saturated, which is a result of slower upgrades for those who used the battery exchange program and iOS 12 was a major contributor to the performance factor with older iPhones.

Like I brought up in a earlier comments sections this has we very worried for iOS 13 now, either they have a massive drop of older devices or make them painful to use I’m taking about iOS 8 on 4S levels of pain.

 

[brewcitywi]

I think this is a healthy problem to have, I think it could spur some innovation and focus on getting some technology to the iPhone in 2019 that might have taken til 2020 or 2021 to adopt.

Also, in every company, two big risks are "inventory levels" and "payroll." Even for a company with tons of hoarded profits, you have to always watch both. Apple is one of those companies that Steve Jobs knew should "think big" but "act small" as far as acting like a "small company" when purchasing and dealing with inventory levels.

So, we know that they've already adjusted production and shipments (inventory), and now they're at least being cautious with hiring (payroll).

No matter how much profit is built up, you have to play by the budgets you have for this year. So, I'm sure they're thinking about how to adjust to a slowing of revenue, at least for the first two quarters.

I do agree that Apple is making iPhones with materials and finishing that make it last well over the 1-2 year cycle that people usually upgrade. iPhones 5 years old still work fine for people who just want the phone to work, and have the basic e-mail/texts they normally rely on. I also agree that, once a phone goes well above $1,000, like $1,200-1,400 for the top top model, it becomes a bigger decision. I'm an early adopter, so, I try to forget about the price and hope that the monthly charges aren't too high!

For people who say that Apple hasn't created a product under Tim Cook, I kind of disagree. I get that products may have been planned out 2-3 years after Steve had to leave. But, AirPods are extremely well made and have captured the market, even with younger kids who gravitate towards non-Apple phones, still love AirPods. Also, Apple Watch has really changed and made more meaningful upgrades the past two generations.

HomePod probably needs a major version 2 upgrade like the Watch needed.

I love the new iPad Pro, but even those get very close to $2,000 or more if you want the really top models, and that's hard to budget for.

So, there are challenges and potential for growth on the horizon. Can an iPhone incorporate enough new technology and features to really give them enough of a gap from competitors that they're the clear choice? I think the competitors have caught up a little bit. Also, could they make a really low-cost phone for the China/India market that competes with home grown phones and cellular plans?

One thing about Tim Cook. Could anyone be as innovative and creative as Steve Jobs? Steve probably hated companies that had huge "tech" divisions, but never produced anything. He found a way to sort of mash the heads together of technical departments, and creative departments, to focus on single products that disrupt the marketplace. In fact, I think a lot of the more "rude" or crazier things Steve did were a refusal to allow Apple to become like those companies who never make anything, and he probably had to take some extreme positions on corporate issues to make that point over and over.

Tim knows product chain management, and, has a conscience about how a company should act. Just think how much worse things could be, if you didn't have someone competent like Tim Cook to take over. If the smart phone market has truly plateaued, and we're looking at a race to become a "commodity," then I think would be as much a challenge for Tim Cook as it would have been for Steve Jobs. Can Tim make some magic happen? We'll see I guess!