I’m on Apple’s annual upgrade plan, and even I skipped the X, for a number of reasons. But I reckon it’s only “overpriced” when it stops selling... Looking at this article, that’s far from happening.
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iPhone X Responsible for 35% of Total Worldwide Phone Profits in Q4 2017
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I’m on Apple’s annual upgrade plan, and even I skipped the X, for a number of reasons. But I reckon it’s only “overpriced” when it stops selling... Looking at this article, that’s far from happening.
That surprised me a bit too, since the 8 Plus likely also has a higher profit margin than the 8, in addition to be priced higher.
After thinking about it, it might be that the X is cannibalizing the 8 Plus to the point that the smaller 8 is outselling the Plus, despite early reports that the Plus was the better selling of the two.
Also, the higher capacity 256GB model is much more profitable than the 64; it could very well be that the 64/256GB split favors the 8. Those that would usually buy the 256GB 8 Plus, for $949 may have been driven to the X.
I don’t think you understand how margins work. The iPhone X has similar margins to other flagships (like the Galaxy S or Note Series).
For the last quarter ending 2017 (when the X was launched) Apples gross margin was 38.4% while Samsung was 45.8%.
Who’s overpriced?
I hope I'm not too late to hear comments like this:
"Proof that Apple charges too much"
or
"Something something Android market share something"
"Proof that Apple charges too much"
or
"Something something Android market share something"
Except by the nature of being an open bid, ebay more or less assures whatever price you arrive at is the fair market value. Apple doesn't let people bid on iPhones. On the contrary, Apple has a pseudo monopoly on iOS smartphones, and thus if someone is deep enough in the ecosystem, they will pay whatever Apple charges. And obviously this is all by design, and Apple knows this.
If they were overpriced, Apple wouldn’t be selling hundreds of millions of iPhones.
Things are worth what people are willing to pay for them. iPhones are apparently fairly priced.
Lots of companies would _love_ to have a failure like that.
Regardless of what the Apple profit margin is on the iPhone X the phone still has TO SELL or that profit will never be realized. That is what I am saying. I'm not discussing the sales or lack thereof in regards to other manufacturers. But you can bet that Samsung's profit on the Galaxy / Note and Google's on the Pixel is just as high as Apple's
This comment is SO STUPID. iPhone X is Apple's latest flagship. OBVIOUSLY it will still sell well.
Apple could sell an iPhone that literally performs worse and looks worse than the prior generation and still have it sell incredibly well.
That was an estimated cost of materials in November. Surely 6 months later and half way through the cycle, it’s gotta be considerably lower / a sunk cost even if the rumor they’ve halted production is true and are just sitting on units to sell at this point.
So that's why every week there is a new article on MacRumors saying that Apple is "cutting production" and "going to discontinue" the iPhone X?
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If that article is accurate, then the iPhone X was Apples best selling iPhone model (just like Cook stated). That article shows a difference in margin of just over 5% between the 8 and X. Yet in terms of profit the X is higher by over 100%.
There’s no way to spin these numbers - the X sold very well and was Apples best selling iPhone.
The thing is, iPhone 8 style models won't be around forever. Apple obviously expects iPhone X style phones to be the future. Unless Apple drops their flagship pricing, I'll be moving to a three year upgrade cycle instead of every two years, resulting in Apple netting less money overall. There's already barely enough compelling changes to upgrade every two-years as it is. I think many others will balk at the prospect of dropping $1000 on a phone every two years as well. Even upgrading at $900 every other year is pushing it for me if Apple insists on the base storage being less than 128 GB of storage.
You don't need to compare prices to other vendors to see that Apple priced the X at a crazy level. The 8 and 8+ made 19.1% and 15.2% of profits respectively. The X is roughly double their average. Unless Apple sold way more X's than 8's, and I don't think the data has shown that, they clearly priced these to have a much larger profit margin than previous iPhones. It's quite 'greedy', and I think absurd, but they're a company and can charge what they want. Obviously, I opted not to buy in at that crazy price level.
The answer is obvious - the X sold more devices by a considerable margin. I don’t see how the margins on the X can be substantially higher than the 8. It includes the much more expensive OLED screen and all the sensors for FaceID. At the price difference between the 8 and the X that pretty much wipes out your “extra” margin.
There's two ways to make tons of profit. Massive volume or massive markup and profit per unit. Data clearly points to the latter being the case.
https://www.techradar.com/news/new-figures-reveal-the-iphone-8-outsold-the-iphone-x-last-year
We don't have the numbers, but Apple could have sold the same numbers of iPhone X and iPhone 8(s) at the exact same profit with these numbers.
For while, the newest iPhones started at $650. By newest, I mean the cheapest version of the most recently-released hardware with usually the latest-and-greatest SoC.
In theory, these things should get cheaper over time. The latest iMac and Macbook start much much lower than they did 10 years ago.
But Apple is trying to do the opposite. They're trying to raise ASP. The only reason they can get away with it is because they have spent the last 10 years cultivating this iOS/iTunes/AppStore ecosystem to be as entrenching as possible, they have this pseudo iOS smartphone monopoly.
Most analysts expected the iPhone X to be a "super-cycle" or upgrades, similar to the iPhone 5 and iPhone 6. So far it looks like that did not pan out. Perhaps Apple knew that repeating that super-cycle was impossible, so that is why they decided to price it higher. Only Apple knows for sure, but that is my guess. If you know you won't get the volume anyway, might as well try to jack up the ASP.
I hope most of these iPhone X buyers are kicking themselves this coming October, when they're offered $300 trade-in value or they're selling for $500 on Swappa and ebay. First-gen first-rev Apple hardware tends to lose value the quickest, for good reason usually.
What? You cannot sell the same number of phones at the same profit on each unit and come up with two different profits as a percent of the market.
Exactly. We can't forget that Apple sells a range of smartphones.
The $1,000 pricetag of the iPhone X gets all the attention... but the current generation of iPhones actually starts at $700 with the iPhone 8.
Sure... that might still be too high for some people... but Apple has never been a "budget" phone maker.
I don’t doubt that the X is as good as any iPhone that came before it, but philosophically it failed to impress the more discerning audience. Apple’s success can be disceiving. To become the status quo is an achievement. To remain the status quo is easier. You simply coast until someone or something challenges the fact. Even then, customer complacency is the largest hurdle for a challenger.