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Gartner: iPhone Sales Suffered Worst Quarterly Decline for Three Years Over 2018 Holiday Period
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What about the new Samsung folding Android that costs a whopping $1998 USD? You think the iPhone XS Max is expensive and that thing comes along and destroys all covers - the king of expensive phones. You could buy a computer for that money.
Evidently Apple is trying to disguise this a bit with their in store displays. Now when you touch check pricing, it gives a monthly payment figure based on a trade in of an iPhone 7. It says see associate for other buying options. They don’t list the price of $999 in the in store pricing app.
Same people that won’t buy an iPhone due to expense won’t buy the s10 either.
Wow. Unbelievable. Even apple is ashamed of their prices.
I just saw it last weekend when a local Apple store reopened after a lengthy remodeling. Definitely disguising showing the actual retail price, something they haven’t done in the past.
Come on, nobody going to spring and call out Samsung for the essentially $2000 Samsung Galaxy Fold? I mean they sprung WAY past $999 and decided to go for $2k!
But isn’t the US price without sales tax which varies depending on the state? The European prices are typically with taxes included, so that explains the discrepancy at least partially. However, there’s still some 1:1 dollar to euro or pound conversion going on regardless of the exchange rate (or some extra FU Europe penalty just in case the dollar is strong), so the products are often insanely expensive here. However, when you factor in the taxes, the difference is a little narrower but still definitely exists.
Doesn't surprise me at all with their higher prices and stagnated technology. I used to be an Apple new product fan at any cost. Not so much anymore; especially with their Mac's.
To the extent we have numbers from Apple (which we did until this past quarter), Gartner's numbers match up almost exactly with them. I suspect Gartner has just been using the numbers that Apple provides (and making them a bit more precise).
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At $499 Apple would likely be effectively losing money on iPhone XR sales.
In the last quarter the aggregate iPhone gross margin was, at best, around 40%. And that's including the XS and XS Max models, as well as higher storage models (which surely have higher margins) So base iPhone XRs sold at $499 would, at best, have very low gross margins. And Apple's operating expenses for the last quarter were about 12% of total sales. So a slim gross margin (e.g., below 10%) would, effectively, mean losing money.
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Apple's war chest (if, by that, you mean its net cash pile) is considerably less than $150 billion.
That said, how much do you think Apple should lower its iPhone prices? How many more iPhones do you think it would sell if prices were, say, 20% lower across the board?
Phones are becoming commodities. Innovators will be rewarded, and those that sit on their thumbs will lose marketshare. As much as it pains me to say, I see Apple sitting with their hands on their d**k* lately.
How would you think Gartner backed into 4q/2018 units?
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We will see how the above $999 Galaxy line sells and where it sells.
How much can they lower the price for a new iPhone...The iPhone Xs I bought is around $1,200 (CDN). I believe I saw an article about the new iPhone Xs costing around $350 to $400 (US) to make. If Apple wants more people to buy the latest phone sooner it could less than $1,000.
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The war chest belongs to Apple. Shareholders own Apple stock.
'Ios lasts for years' or you wont see significant improvements between OS's for years..
For me personally,the integration is what is holding me back from using Android.
If Apple messes up with the software , iOS/ Mac OS ,then I think I will start looking elsewhere.
Apple have already lost a customer , maybe million more with their non ECG enabled Apple Watch .
And just to be clear, for those Apple supporters who say it is the individual country fault for the ECG rollout, I can conform for MY country “FDA” , APPLE did not raise a request for the ECG to be enabled... .....
If Apple messes up with the software , iOS/ Mac OS ,then I think I will start looking elsewhere.
Apple have already lost a customer , maybe million more with their non ECG enabled Apple Watch .
And just to be clear, for those Apple supporters who say it is the individual country fault for the ECG rollout, I can conform for MY country “FDA” , APPLE did not raise a request for the ECG to be enabled... .....
What about Apple's total debt which is 114 Billion?
Why doesn't that count?
There are other factors, but I think the contributing factor is iPhone users not upgrading. Hence why every interview Tim Cook did after the poor decline in sales, involved him going on about how easy it is to upgrade to a new iPhone.
Gartner could have used independent estimating techniques similar to what they do for other companies which hadn't been providing unit numbers. I'm not sure what those techniques are.
But I suspect they started with what we do know from Apple's reporting and guesstimated some things. We know that iPhone ASP was down YoY, and we know that it was $790 (using new accounting methods) in the year-ago quarter. So, if we used $760 as the iPhone ASP, and based on $51.982 billion in iPhone revenue, we'd get 68.4 million units.
But that's sell-in, and Gartner is estimating sell-though. So we'd still need to guesstimate channel build. In the year-ago quarter it as 4.2 million which was historically high. That year-go quarter had a new model (i.e. the X) released in the middle of the quarter putting all of its initial channel build in the quarter, something similar happened this year with the XR. So a similar channel build - say, 4.0 million - would make sell-through 64.4 million and Gartner says 64.5 million.
I'd note that Apple's reporting quarters don't line up with actual calendar quarters, but the effect of that in this case likely wouldn't be large. The reported quarter for Apple is a day shorter than the actual calendar quarter.
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The Canadian Apple website shows a price for the base iPhone XS of 1,379 CAD. That would be about 1,040 USD. So that model could feasibly be priced at 1,000 USD instead, that would only be around a 4% decrease. If you mean 1,000 CAD, that would - even if we assume the Canadian base iPhone XS's gross margin is well above average for iPhones (say, 50%) - slash its gross profit per unit by more than half and mean that Apple would need to sell more than twice as many units in order to generate the same gross profit.
The cost-to-make numbers we often see floated for iPhones don't make sense. They typically can't, based on what Apple reports, be right. The aggregate iPhone gross margin this past quarter was, at most, about 40%.
Three indicators of a healthy product:
1. Volume
2. Market share
3. Revenue
Apple has 1 of 3 this year