Apple's Suppliers Projecting Weak Demand for iPhone 7 Due to 'Lack of Innovation'

[Michael Scrip]

I understand, but I prefer not taking out loans or adding to my debt. In the end, you are still shelling out 700 dollars its just that you're financing it.

You were technically financing the phone with the subsidy.

They let you walk out of the store without paying for the phone in full, right? You were still on the hook for it until it was paid off after 24 months. That was financing... albeit with a different name.

You might have only had to pay $199 at the time of purchase... but you were paying the other $450 over time as well. Again... that was a type of financing.

So I'm not seeing the difference today.

The point is... "subsidies gone = you must pay full price" is incorrect.

You don't have to pay full price now that subsidies are gone.

It's the same result... with a different name.

 

[maflynn]

I disagree, but to each his own.

I think the slowing sales shows others are less likely to buy new phones when they see they're buying a phone for 700 instead of 200.

 

[Michael Scrip]

they're buying a phone for 700 instead of 200.

YOU DON'T HAVE TO PAY $700 FOR A PHONE!!!

You didn't then and you don't now.

You will eventually pay $700 over 24 months... but you paid $700 even with the "subsidy"

NOTHING HAS CHANGED.

And it's not $700 vs $200.

The $200 was a lie.

You might have paid $200 up-front... but the rest was financed over the course of the 24-month contract. They called it a "subsidy" but YOU were paying for the phone the entire time.

Again... nothing has changed.

 

[maflynn]

YOU DON'T HAVE TO PAY $700 FOR A PHONE!!!

You will eventually pay $700 over 24 months

I kind of think you're contradicting yourself.
[doublepost=1463054857][/doublepost]Really its no big deal, I disagree with your opinion, I have my own opinion.

 

[I7guy]

You just described the iPhone 6s+. What reason is there for someone to get the iPhone 7?

Because it's new and has new features? Why do people need any reason to buy any new item when an old item is perfectly useable?

 

[Michael Scrip]

I kind of think you're contradicting yourself.

Really its no big deal, I disagree with your opinion, I have my own opinion.

What is my opinion?

I'm just trying to correct your incorrect statements:

1. You said subsidies are gone so people now have to pay $700 for iPhones.
2. You said iPhones used to cost $200 but now they cost $700.


So let's start over.

Your first claim: "subsidies are gone... so people will have to pay $700 for smartphones"

Yes... subsides are gone. But the second part is incorrect.

You don't have to pay $700 up-front for a smartphone. You can still pay for it over 24 months. It's a payment plan.

Instead of paying $700 all at once... you can take the phone home on day-one and pay for it over time.

WOW... that sounds very similar to the old "subsidy" way of buying a phone.

Remember how subsidies worked? You paid a down-payment of $200... but the rest of the phone was paid for over 24 months.

The end result is the same. Both methods are "pay over time" which alleviate the need to pay a huge price for a smartphone all at once.

You didn't have to pay $700 the old way... and you don't have to pay $700 the new way.

There's not much different between when someone walks into the store today versus when they walked into the store the last time they bought a phone two years ago.

The terminology might have changed... but the fundamentals are the same.


Your second claim: "they're buying a phone for $700 instead of $200"

The iPhone was NEVER $200. And if you believe that... you're a silly person.

As I explained before... you might have only paid $200 at the time of purchase... but YOU paid the rest of the cost over 24 months.

The $200 was a lie. That's all you had to pay that day. But, rest assured, you paid the full price over time.

Subsidies were, in fact, a type of payment plan. And we still have payment plans today.


So when someone walks into the store... they're aren't being slapped in the face with a $700 price tag as you claim.

The loss of subsidies doesn't mean "ZOMG no one will ever be able to afford an iPhone again"

The carriers might have changed the terminology... but anyone can still buy a smartphone with little to no money down... JUST LIKE THEY ALWAYS HAVE.

 

[jonnysods]

I'm in this group. I'm actually going to get a used 6S this year because I don't find the theoretical design compelling. I'm sure the internals will scream. If they drop an OLED into the 7 though that may change my tune.

 

[JackieInCo]

Bought every single iPhone up to the 6. Now I am 'droid.

Only iPhones I skipped since 2007 have the 5 and the 6. I have the 6S, 6+ and 6S+. I seriously doubt that I will be buying the next iPhone this year. An iPhone is still an iPhone no matter what model you use. I still have my 5S and other then the size, there isn't really much difference between that and the 6S or 6S+ other then a few minor features, and they ARE minor. The only reason that I continued buying an iPhone was because of the music player and the ability to sync and backup with iTunes. I also loved buying my music on iTunes and being able to have the purchases automatically download to my iPad and other iPhones as well as my Macs. I also preferred using iCloud email over Gmail.

This year, I'm all about Android. I have a S7 Edge, Note 5 and I am still using my Note 4 and Note Edge. It's amazing what these phones can do today.

 

[maflynn]

The carriers might have changed the terminology... but anyone can still buy a smartphone with little to no money down... JUST LIKE THEY ALWAYS HAVE.

That's fine, we don't need to beat a dead horse, I disagree and there's no use to continuing the debate. I have my opinion and you have yours

 

[Chupa Chupa]

You were technically financing the phone with the subsidy.

They let you walk out of the store without paying for the phone in full, right? You were still on the hook for it until it was paid off after 24 months. That was financing... albeit with a different name.

You might have only had to pay $199 at the time of purchase... but you were paying the other $450 over time as well. Again... that was a type of financing.

So I'm not seeing the difference today.

The point is... "subsidies gone = you must pay full price" is incorrect.

You don't have to pay full price now that subsidies are gone.

It's the same result... with a different name.

Well, for me at least, it's NOT the same result. My total cost (phone + contract) is going to increase by about 50-60% of the phone's cost now if I choose to keep my unlimited data plan -- contract price remains +/-$85/mo inc tax.

Previously I was able to buy the phone for $399 but then at the end of the contract, unlock and sell the phone for $300 or so. Now I have to pay $900 and then sell it for $350 in two years year. Net cost w/ subsidy was $99 + contract. Net cost w/o is $450 + contract (or +27/mo.)

Yes, I have looked into data based plans and those come out to be even more expensive -- by about $30 more a month, but w/ less data. So it's fantasy if you think the new plans are same as the old in terms of cost, just divided out differently. The new plans are a stealth price increase. Period.

 

[milo]

You mean taking off the headphone jack doesn't count as innovation?

 

[NYMinute]

YOU DON'T HAVE TO PAY $700 FOR A PHONE!!!

You didn't then and you don't now.

You will eventually pay $700 over 24 months... but you paid $700 even with the "subsidy"

NOTHING HAS CHANGED.

And it's not $700 vs $200.

The $200 was a lie.

You might have paid $200 up-front... but the rest was financed over the course of the 24-month contract. They called it a "subsidy" but YOU were paying for the phone the entire time.

Again... nothing has changed.

I agree with almost everything you said except the last sentence.

"Nothing has changed".

Like I said in my previous comment. A little over two years ago ATT started giving you a credit after the contract was done. People that bought a 5S on a two year contract like me saw the price go down. That did not happen with the 4S. I was paying for a subsidized phone that was already paid off. Not upgrading was the worst option. I was "forced" to upgrade. The way things are now is much better. I can make the decision just on the value of the phone. My wife and I decided the 5S is good for us for now. A lot of people are probably in the same boat. I predicted this sale decline two years ago when the credit started. This is IN PART a market correction in response the the fairer service bill from the carriers.

On the other hand there are people like maflynn that have a wrong perception of the new system and to them it just "feels" like paying significantly more. Just like there are people that want the IRS to take more than needed from their paycheck so they can get a tax return effectively giving the government an interest free-loan because it "feel" they are paying less than having to pay a little with your tax return and have more money every paycheck. This is also PART of the reason sales are down.

I am sticking with iOS and OSX (macOS?) even if I am no longer on a two year upgrade cycle. I updated my iPad last Christmas and this year it will be time to upgrade the iMAC that is going to be 5 years old. Maybe next the year will be the iPhone's (plural, I can't add an "s" for plural or an Apple executive will yell at me) turn.

 

[uid15]

- This is preposterous. Ride; rode; have ridden. Past participles seriously are not that difficult, MacRumors.

They're difficult if you're an illiterate nincompoop posting non-news.

 

[NYMinute]

I want to apologize to maflynn for using him as an example in my last post. It was presumptuous of me to assume how he is viewing the situation. Like Chupa Chupa's case if you were grandfathered on older plans there were ways to "exploit" the system that are not available now and make the total cost of owning a phone technically more expensive now than it was before. Although Apple was still getting their full cut from the carrier, the carrier was charging you less for service.

 

[jamezr]

I kind of think you're contradicting yourself.
[doublepost=1463054857][/doublepost]Really its no big deal, I disagree with your opinion, I have my own opinion.

you nailed it! People don't seem to get the whole financing part. Even if you put no money down and only pay 20 or so dollars a month....you still end up paying for the dang phone. It's not free.....

 

[horvatic]

Finally someone acknowledges the lack of innovation! Hopefully Apple gets a wake up call.

Uh you don't know what you are talking about. Just like the so called unnamed source who doesn't know anything about the iPhone 7. In fact they don't even know if it will be called the iPhone 7. Who was the first to invent the phone with a touch screen? Apple. Who came out with the iPod. Apple. Who came out with the best notebook called the iPad. Apple. Who came up with the best selling smart watch. Apple. Who has the best services integrated with all devices. Apple. Who was the first to bring the all in one computer with a flat screen. Apple. Innovation has Apple written all over it. Copycats like Samdung, Google, are not innovators only copycats. They do a piss poor job of it too.

 

[definitive]

Not surprised, considering all the rumors of the 2017 model that we're seeing... Why spend all that money on a phone which is so similar to 6/+ and 6s/s+ when you can get a supposedly redesigned model in a year after 7?

 

[theelysium]

Wow, well looks like the haters have coined "Lack of innovation" which is total bull ****.

You want to look at a lack of innovation.... pick up a Nexus, then a Nokia, then a Samsung.....


*Curved glass in NOT innovative! And, it was ripped off from Apple's leaked patents from a few years ago.

 

[bingeciren]

I jumped to 4 from the 3GS because it offered enough reason to do so. Then I stayed with my 4 until the 6 offered enough reason to upgrade. I skipped 4S, 5 and 5S in between. I already skipped 6S and it looks like I will skip 7 and 7S as well. iPhone 8 with an OLED display would give me enough incentive to upgrade from the 6.

I may not be alone with this kind of approach to upgrades. I predicted that there would be huge demand for the 6 for all those people with the 4 and 5 series of phones and I was right. Now that a lot of people have upgraded to 6 series, most of them will wait until the 8 is released. Until then, we may see a slow down in iPhone sales and when the 8 is released we may see a huge jump in sales again.

For this reason alone, I predict that iPhone 7 will not be a huge seller. On top of that, it may alienate some people with the deletion of the 3.5mm headphone jack, and that could be an additional factor to slow the sales down.

I'm quite happy with my 128gb 6 and can wait and see what Apple will offer and how will the customers react.

 

[C7 POWER]

. I already skipped 6S and it looks like I will skip 7 and 7S as well. iPhone 8 with an OLED display would give me enough incentive to upgrade from the 6.

The 7 will come out this year 2016, in 2017 is the next full updated phone that will have the OLED, etc... so you would only be skipping the 7. Just saying lol

 

[kdarling]

The $200 was a lie. That's all you had to pay that day. But, rest assured, you paid the full price over time.

Yes, he knows that.

It does not change the fact that the actual full price reveal can affect the purchasing decision.

(Think of all the ways that automobile dealers try to hide the real price a buyer is paying!)

It's a human thing. Not knowing the actual price made most people feel better

---

From the carrier standpoint, it's far more than just a renaming, too.

With subsidies, and under GAAP rules related to hardware that goes with a long term service plan, they were unable to instantly write off the amount they had to pay upfront to the phone maker. Thus they gained tons of extra debt and related stock price drops every time a new iPhone came out. (Sometimes almost a billion dollars, in AT&T's case.)

A separate lending plan is much better than monthly subsidies from their viewpoint.

 

[Tiger8]

I disagree, but to each his own.

I think the slowing sales shows others are less likely to buy new phones when they see they're buying a phone for 700 instead of 200.

100% correct.

YOU DON'T HAVE TO PAY $700 FOR A PHONE!!!

You didn't then and you don't now.

You will eventually pay $700 over 24 months... but you paid $700 even with the "subsidy"

NOTHING HAS CHANGED.

And it's not $700 vs $200.

The $200 was a lie.

You might have paid $200 up-front... but the rest was financed over the course of the 24-month contract. They called it a "subsidy" but YOU were paying for the phone the entire time.

Again... nothing has changed.

Financially nothing changed (in fact, it's slightly cheaper), but don't forget:
a. Sticker shock
b. Corporate phones; most companies have a BYOD policy now, which means you 'buy' the phone, and they pay your monthly contract. With subsidy going away, you no longer get a bulky $100 monthly charge, your best case scenario is an itemized single bill. You are on the hook of paying your own financing, so people will be less likely to take an upgrade every 2 years.

That's why programs like NEXT for example flourished for corporate users; and that's why the lack of subsidy will hurt corporate users sales.

 

[jamezr]

Uh you don't know what you are talking about. Just like the so called unnamed source who doesn't know anything about the iPhone 7. In fact they don't even know if it will be called the iPhone 7. Who was the first to invent the phone with a touch screen? Apple. Who came out with the iPod. Apple. Who came out with the best notebook called the iPad. Apple. Who came up with the best selling smart watch. Apple. Who has the best services integrated with all devices. Apple. Who was the first to bring the all in one computer with a flat screen. Apple. Innovation has Apple written all over it. Copycats like Samdung, Google, are not innovators only copycats. They do a piss poor job of it too.

Wrong on so many fronts. Touchscreen phones existed before the iPhone. All in one computers existed before apple made them. Apple invented the ipod but it wasn't the first music player by a long shot....ipod is just want apple called it.

 

[melendezest]

I'm really losing patience with Apple. Massive product line-ups, confusing for the average purchaser. No fresh design, slow/sloppy implementation of software, services and hardware. It really does feel like a downward slope.

Of course, the company can afford to let things slide a bit, they're no going bust any time soon, but I'm considering a move away from Apple for the first time since 1987. I've drunk the cool-aid, my entire ecosystem is Apple, but I'm about done. AirDrop is a mess, hand-off works when it feels like it, software updates are hidden and unclear, search in App Store and iTunes Store is flakey at best. iLife and iWork suites are forgotten and left in the dust by free and inexpensive software from small developers.

Where is the excitement, where is the fun? It really is stagnant.

Just my opinion, others will disagree with me, but surely all will agree there's been nothing exciting for a couple of years. No more 'one more thing'. The iPad is dead, the Mac Pro stagnant, the Thunderbolt Display as good as a fossil. It's a real shame. Incremental updates, while sucking all the colour out of the world.

I agree; Apple has nothing I want currently. NOTHING.

That said, I think that Apple needs more products to cater to a wider audience, just not consumer/iOS ones.

For example:
a mid tower/screen-less iMac
a real Mac Pro, at least sold alongside the trash can, with upgradeable internals
an upgraded Air
A 17" rMBP (desktop replacement) with real internal storage (2TB or more available)

I'd also love for Apple to bring out a "classic" line or something like that.
I would kill for a table-lamp iMac with modern internals or a Mac mini in a G4 Cube-like design.

They keep putting all their eggs into iOS and consumer devices and it looks like it's starting to bite them.

 

[Glassed Silver]

It will definitely have 4K recording.

Source: my iPhone 6s

If there is one thing the MacBook taught us it's that camera resolution is not necessarily be subject to evolution or at least stagnation.

Glassed Silver:ios