iPhone Sales Growing Following Price Cuts in China

[I7guy]

I’m not poor, and I’m not a Millenial either. I’m just tired of Apple’s shift of late to try to create a higher priced tier by dumbing down pre-existing good devices.

eg. The 8 Plus has a super high pixel density screen and 2X lens. The XR effectively replaces it in the pricing tiers but is missing both those features, because they made those features exclusive to the much, much higher priced OLED models.

Furthermore, the iPad 2017 removed features that were present in the iPad Air 2 because they made those features exclusive to the iPad Pro line.

The fact that many of the so-called high end features already were present in lower priced Apple products and then subsequently removed indicates Apple is not pricing just due to tech cost but for marketing reasons, because they thought they could get away with it. Fortunately, at least in some markets, consumers hit their breaking point and stopped buying.

The XR has other features: stereo recording, extended dynamic HDR video, smart HDR on photos,, bigger screen, portrait mode with depth control, faster wireless charging, better contrast ratio, video stabilization, HD video at 30 or 60 fps, plus others.

So in essence you give up more pixels in a smaller screen for less pixels in a larger screen for the above tech increments. YMMV on the value of each.
[doublepost=1549216104][/doublepost]

What Apple and the people who think the iphone prices should be as high as they are don’t understand is this: if you are going to sell a phone for $1100 it should be WORTH that $1100 and these phones are not.

XS max for example: You get 64gb if storage when the usual standard for the price range is 128gb, an odd resolution that isn’t actually quite 2k when other phones for the price range are full 2k, no fast charger included which is the standard as well for almost all phones. It’s pretty heavy as well which isnt normal in an age where electronics are getting lighter and smaller. A good amount of consumers are not this ignorant and besides not wanting to pay so much that’s why sales were down, the price was not the worth the value of these phones.

Apple posted $83.5B last quarter, the 2nd best quarter ever and there is some amount of a failure as a quarter.

Samsung phone sales were in the tank. Phone manufacturers selling quantity are those not sold in the US in the $500-600 range, but they have a totally different business model than Apple.

It's really nice if the boxes for tech specs are all checked, but Apple doesn't operate that way and they never have.

So as far as consumers are not ignorant and not wanting to pay more, Apple posted a heck of a quarter. The other phone manufacturers may check more boxes off the spec sheet, but except for google who gets a license fee for android, these phone manufacturers see very little post sale money going back to them. Unlike Apple, where there is an entire ecosystem available to the consumers; ie airpods, homepods, Apple Watch, Apple TV, icloud, apple music, app store etc.

I just got a pair of airpods and they are incredible. Not everybody may like them, but I find using one airpod in my ear on a phone call is quick, easy and better than holding the phone. The quality is awesome.

 

[Michael Scrip]

Yes, this again.

Phones full prices were around 500 to 600, not 1500 just because Tim said so.

But I replied to a comment saying "I miss when phones were $200"

Do you have anything to say about that?

 

[dampfnudel]

Is it better for the company to make $100 selling 100 phones for $100 or make $100 selling one phone for $1,000?

Apple isn’t dependent on market share as it doesn’t compete in the mid to low price market.

$1,000 is a big mental barrier for a lot of people, even a lot of people who can afford it. At the very least, it gives those affluent customers a moment of pause and a time to reflect on their need for an incrementally updated phone at that price. Offering the Xr isn’t the answer either. It’s at best a stopgap measure and clearly a sign that Apple knows they’ve charged too much.
[doublepost=1549221762][/doublepost]Spread the common sense around to other markets, Apple.

 

[I7guy]

$1,000 is a big mental barrier for a lot of people, even a lot of people who can afford it. At the very least, it gives those affluent customers a moment of pause and a time to reflect on their need for an incrementally updated phone at that price. Offering the Xr isn’t the answer either. It’s at best a stopgap measure and clearly a sign that Apple knows they’ve charged too much.
[doublepost=1549221762][/doublepost]Spread the common sense around to other markets, Apple.

The iPhone X proved that the $1,000 mental barrier could be overcome. Apple is in with other manufacturers that now sell phones over $1,000. I can’t speak for most people but it is expensive and so is $900, $800, $700 etc.

The xr isn’t a stopgap measure as apple seemingly wants to compete in the mid to upper tier phone markets. The xr and/or variations of it aren’t going away.

If one wants the latest and most tech in phones it’s jn the upper tier models and has been like that for a while. For those that are price sensitive there are alternatives.

 

[Glockworkorange]

China needed it. Other markets, did not.

For all the doubters, Apple is going to execute over time. They have too good of a track record to miss targets, which they did in China due to various factors. They will fix it.

They’ve made targets because they stack the deck. They used to force carriers to buy a certain amount of phones every year. They know how well they’re selling the phones because they are ALREADY SOLD to the carriers when they forecast their numbers. At least it used to be that way—not sure now.

 

[Baymowe335]

They’ve made targets because they stack the deck. They used to force carriers to buy a certain amount of phones every year. They know how well they’re selling the phones because they are ALREADY SOLD to the carriers when they forecast their numbers. At least it used to be that way—not sure now.

This is inaccurate. Only initial quantities were ever purchased by carriers, and still are. It's called channel inventory and only represents a small amount of stock. Orders aren't recognized until sold to customers. Any orders sold to carriers originally are an overall small percentage of total sales and again, only make up channel inventory.

If carriers don't repurchase phones over a quarter, sales will have always suffered. Carriers don't keep 10s of millions of inventory in stock. They re-order in batches as needed.

 

[cashboxz02]

It's common sense that people will go where their money stretches the furthest, especially in China. In USA, you can argue that it's about the holistic experience...but not China. The people there aren't going to use built-in iOS apps, they're going to use WeChat and are buying an iPhone strictly for the Apple logo as a socioeconomic status symbol. If you're targeting the top 0.1% who can afford it, then only the top 0.1% will buy it. There's no "need" to buy into iOS as the culture there has already been centered around WeChat.

 

[Soccertess]

Do you live in China? Otherwise your point is meaningless. Apple said the drop in sales was in China (with good as expected or even record sales in western countries) and is dropping sales in China only. Your non rocket science insight is price are too high period, and it’s not supported by available data nor this China only discount.[/QUOTE

Do you live in China? Otherwise your point is meaningless. Apple said the drop in sales was in China (with good as expected or even record sales in western countries) and is dropping sales in China only. Your non rocket science insight is price are too high period, and it’s not supported by available data nor this China only discount.

What crack are you smoking? Tim Cook even agreed that the price point was most likely attributed to declining sales. Did you not see his interview the last quarter!!

 

[Pamela5]

It's not worth it to you. And iPhone Xs Max sales in fact have been very good, better than the smaller Xs.

The 450ppi resolution on these OLED iPhones are more than enough to make them indistinguishable for your eyes. Anymore, the added benefit would only be written on paper that no one would be able to notice the differences. Apple chooses therefore to put more effort into the display's color saturation, contrast, and the overall look and feel of the images that the display outputs.

Apple has positioned themselves as a high-end brand - and it has worked. This has been the case from the very beginning.

High end brand, high end quality but yet every year they are always behind somehow. I know it’s said often, but Steve Jobs would never have allowed his company to have so many reviewers comment on what the iPhone is “lacking again this year”.

For him it was quality, AND innovation. For example, Look at Siri after all these years, still no where near as good as google voice commands. It took Apple years to get with the times and have a 2k screen, but it’s actually not even 2k just almost. Apple isn’t the same company they used to be and they can’t expect sales not to drop because of the cult following with the Apple brand, people will snap out of it eventually once they keep getting disappointed.

 

[ronno]

Don’t be ridiculous.

The XS is the same price as the 2017 X, and the X sold very well. The XS Max is only $100 more, which is a very nominal surcharge for the larger display. At $749, the 6.1” XR is priced exactly between the 2017 iPhone 8/8 Plus pricing of $699/$799.

In addition, the 128GB XR at $799 is a sweet spot for many. With the 8, if 64GB was too small, the only option was the $849 256GB.

I’m talking doubled from earlier times. The X (which I own) was already stupidly expensive.
Anyway I’m not going to argue about it, cheers.

 

[Woochoo]

for the purpose of subsidizing the needs of self-entitled millennials?

Buy the phone you can afford. It's not a constitutional right to own any phone you want.

No, because those prices are ludocrious and the other companies just follow the same path because they see it works (till now). The top gamma prices are going nuts and it is hooking mid range, and by domino effect low range, into much higher prices. Even the damn chinese phones (OnePlus, Xiaomi, etc) are substantially increasing it's flagships and middle range prices in just 2-3 years.

So thanks to Apple and Samsung's greed, and to the sheep-herd minded people, now we have phones that cost more than computers. And the funny part is you cannot even complain about that greed/price or some witty apple fan will come being sarcastic abou constitutional rights.

 

[PickUrPoison]

I’m talking doubled from earlier times. The X (which I own) was already stupidly expensive.
Anyway I’m not going to argue about it, cheers.

Well I’m not sure what earlier time you’re talking about... even iPhone 5s in 2013 was $649/749/849 for 16/32/64GB. *shrug*

Anyway, there’s no doubt X and XS, at $999, are rather expensive; however XR pricing at $749 is similarly priced to iPhone 8/8 Plus at $699/799. Personally, I’m still using a 6S, and if I had to replace it today I might very well just buy a $449 iPhone 7... I like the physical size of the 4.7” form factor.

 

[I7guy]

No, because those prices are ludocrious and the other companies just follow the same path because they see it works (till now). The top gamma prices are going nuts and it is hooking mid range, and by domino effect low range, into much higher prices. Even the damn chinese phones (OnePlus, Xiaomi, etc) are substantially increasing it's flagships and middle range prices in just 2-3 years.

So the price increases are because of Apple and Samsung?

So thanks to Apple and Samsung's greed, and to the sheep-herd minded people, now we have phones that cost more than computers. And the funny part is you cannot even complain about that greed/price or some witty apple fan will come being sarcastic abou constitutional rights.

You win the internets for a day with this comment.

 

[thealkimist]

High end brand, high end quality but yet every year they are always behind somehow. I know it’s said often, but Steve Jobs would never have allowed his company to have so many reviewers comment on what the iPhone is “lacking again this year”.

For him it was quality, AND innovation. For example, Look at Siri after all these years, still no where near as good as google voice commands. It took Apple years to get with the times and have a 2k screen, but it’s actually not even 2k just almost. Apple isn’t the same company they used to be and they can’t expect sales not to drop because of the cult following with the Apple brand, people will snap out of it eventually once they keep getting disappointed.

Siri sucks because Apple chooses to respect your privacy - something that Amazon and Google don't give a sh*t about. In order for a voice AI to improve, machine learning algorithms need data; listening to all of your conversations. For Apple, it is a tradeoff that I am okay with, and everyone else should be okay with it as well.

Apple is only behind on some things - but in others they make up for. Apple's ecosystem is unparalleled - Google and Microsoft don't even come close. Apple's integration with software and hardware across the board is unparalleled. And their sense of style and design is still unmatched. Improving a screen from 350ppi to 450ppi is barely discernible to the human eye.

People always bemoaned about what Steve's creations "lacked" from day one. (How about an internal fan?) And I don't think Apple would be that much different if in fact he did stick around. Apple knows it has to expand its services from on to stay competitive, and I think Steve would have probably jumped on that ball much sooner. Apple would have been probably already two years into competing with Netflix, Disney and HBO - knowing Steve's love for films. But at this point, I think we have come to a point where it's hard to predict what the real next game-changer will be.

 

[jeremiah256]

I use Siri quite a bit but the integration you mentioned needs work. Many of the issues I run across are due to Apple devices not being completely integrated with Siri and has little to do with Apple not compromising your privacy or security.

I can tell my Google Home Minis to play movies or music on my Sony smart tv. I can do the same with the Assistant app on my Apple iPhone. But I can’t easily use Siri on my iPhone to play my iTunes movies on my Apple TV. As far as I can tell, even the HomePod can’t process, “Play ‘Arrival’ on the living room tv”.

Siri sucks because Apple chooses to respect your privacy - something that Amazon and Google don't give a sh*t about. In order for a voice AI to improve, machine learning algorithms need data; listening to all of your conversations. For Apple, it is a tradeoff that I am okay with, and everyone else should be okay with it as well.

Apple is only behind on some things - but in others they make up for. Apple's ecosystem is unparalleled - Google and Microsoft don't even come close. Apple's integration with software and hardware across the board is unparalleled. And their sense of style and design is still unmatched. Improving a screen from 350ppi to 450ppi is barely discernible to the human eye.

People always bemoaned about what Steve's creations "lacked" from day one. (How about an internal fan?) And I don't think Apple would be that much different if in fact he did stick around. Apple knows it has to expand its services from on to stay competitive, and I think Steve would have probably jumped on that ball much sooner. Apple would have been probably already two years into competing with Netflix, Disney and HBO - knowing Steve's love for films. But at this point, I think we have come to a point where it's hard to predict what the real next game-changer will be.

 

[Ebok]

Well I’m not sure what earlier time you’re talking about... even iPhone 5s in 2013 was $649/749/849 for 16/32/64GB. *shrug*

Anyway, there’s no doubt X and XS, at $999, are rather expensive; however XR pricing at $749 is similarly priced to iPhone 8/8 Plus at $699/799. Personally, I’m still using a 6S, and if I had to replace it today I might very well just buy a $449 iPhone 7... I like the physical size of the 4.7” form factor.

The point is back then for $649 you had the top of the line iPhone (with the lowest storage). Now you need to pay $999 for the top of the line iphone with the lowest storage

 

[thealkimist]

I use Siri quite a bit but the integration you mentioned needs work. Many of the issues I run across are due to Apple devices not being completely integrated with Siri and has little to do with Apple not compromising your privacy or security.

I can tell my Google Home Minis to play movies or music on my Sony smart tv. I can do the same with the Assistant app on my Apple iPhone. But I can’t easily use Siri on my iPhone to play my iTunes movies on my Apple TV. As far as I can tell, even the HomePod can’t process, “Play ‘Arrival’ on the living room tv”.

The integration I mentioned wasn't about Siri - it was about everything else.

And yes, Siri needs a lot more data before it can learn how to talk to you the way Alexa and Google does, let alone the fact that contextual awareness means it needs a global view of everything you're doing. There's a reason why China's voice assistants in their smartphones are all integrated into one single app - they're watching your every move.

 

[nexusrule]

What crack are you smoking? Tim Cook even agreed that the price point was most likely attributed to declining sales. Did you not see his interview the last quarter!!

Yes he said the declining sale could be partially attributed to the price point, but also that most of the decline happened in China, so 2 + 2 still equals 4.

 

[I7guy]

The point is back then for $649 you had the top of the line iPhone (with the lowest storage). Now you need to pay $999 for the top of the line iphone with the lowest storage

And new non-commoditized tech is never cheaper than old tech, which means the Xs isn’t really not out of line.

If you want cheap and commoditized Samsung has a $100 phone for you.

 

[PickUrPoison]

The point is back then for $649 you had the top of the line iPhone (with the lowest storage). Now you need to pay $999 for the top of the line iphone with the lowest storage

Since 2017, Apple has been selling an iMac Pro (with lowest storage) for $4,999.

In 2016, the top of the line iMac with lowest storage was $2,499.

Did the price actually double? Or did Apple introduce a new, higher-tier, top of the line model?

 

[jeremiah256]

The integration I mentioned wasn't about Siri - it was about everything else.

And yes, Siri needs a lot more data before it can learn how to talk to you the way Alexa and Google does, let alone the fact that contextual awareness means it needs a global view of everything you're doing. There's a reason why China's voice assistants in their smartphones are all integrated into one single app - they're watching your every move.

Again, I use Siri a lot, so I don't have the issues with it recognizing my voice or not understanding the context of my query as others might. And while you are right about the data collection others have used to make their devices 'smarter', Apple needs to counter this perception. One way is by making sure Siri is as useful with Apple devices as Google is as useful with Android based devices.

With two cheap devices that can be had for $60 total, a Google Home Mini and a Chromecast, you have much more control and 'smartness' than you have with a HomePod and Apple TV 4, which total close to being 10x more expensive. That has little to do with data and more to do with working even more on integration.

 

[thealkimist]

Again, I use Siri a lot, so I don't have the issues with it recognizing my voice or not understanding the context of my query as others might. And while you are right about the data collection others have used to make their devices 'smarter', Apple needs to counter this perception. One way is by making sure Siri is as useful with Apple devices as Google is as useful with Android based devices.

With two cheap devices that can be had for $60 total, a Google Home Mini and a Chromecast, you have much more control and 'smartness' than you have with a HomePod and Apple TV 4, which total close to being 10x more expensive. That has little to do with data and more to do with working even more on integration.

Again, I use Siri a lot, so I don't have the issues with it recognizing my voice or not understanding the context of my query as others might. And while you are right about the data collection others have used to make their devices 'smarter', Apple needs to counter this perception. One way is by making sure Siri is as useful with Apple devices as Google is as useful with Android based devices.

With two cheap devices that can be had for $60 total, a Google Home Mini and a Chromecast, you have much more control and 'smartness' than you have with a HomePod and Apple TV 4, which total close to being 10x more expensive. That has little to do with data and more to do with working even more on integration.

I don’t care about how cheap Google’s products are. It proves nothing except that they offer cheap services because your private life is a commodity. I can deal with a work-in-progress Siri over that.

 

[AppleHaterLover]

I paid full price for my XR at the Apple Store and since then I couldn't help but feel like an idiot for drinking Apple's Kool-Aid and paying through the nose for something that Apple can just as easily sell for $200 less.

But I like it.

 

[PickUrPoison]

I paid full price for my XR at the Apple Store and since then I couldn't help but feel like an idiot for drinking Apple's Kool-Aid and paying through the nose for something that Apple can just as easily sell for $200 less.

But I like it.

I know people think Apple margins are really high, but Apple can’t just lop off $200 from the selling price of the XR without a pretty devastating hit to their profits.

Based on their average profit net profit before taxes, Apple would make about $226 on the XR, if we assume they’d sell equal numbers of the 64, 128 and 256GB models.

If Apple sold 50 million XR, they would earn $11.3 billion net profit. But if they reduced the selling price by $200, that would nuke almost 90% of their profits. Instead of averaging $226 net profit per sale, they’d net $26. They’d earn $10B less profit, so $1.3B instead of $11.3B.

 

[neomorpheus]

But I replied to a comment saying "I miss when phones were $200"

Do you have anything to say about that?

Yes, if apple didnt charge 1500 for a phone, you could have it subsidized for 200.