Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

[nexusrule]

I would not know. Then of course you have no idea either.

Yes I have. All the products you mentioned in your previous post are years old. No one was launched recently.

The simple fact is that it's stupid to claim that Foxconn profits are any indication of iPhone sales because iPhone is just a fraction of Foxconn business.

It would be stupid if, as you probably don't know or want to ignore, we didn't already saw the link between iPhone sales and Foxconn profits in the previous years. The order of magnitude of iPhone sales and profits make all the devices you mentioned pale in comparison, it's as simple as that.

What really is stupid imho is how, despite a simple 5-minutes check on google for the last several years clearly shows this pattern 1. Apple launch an iPhone 2. Reports of lacklustre iPhone start to show 3. Reports are refuted by official numbers, people with an axe to grind with Apple consistently ignore the past and start screaming doom for Apple. I mean, if someone burns himself with fire one, twice, thrice and still keep putting is hand in the fireplace, that is the definition of stupid.

 

[Radon87000]

Internal targets have everything to do with this. Apple bases it’s guidance on what it believes it’s upcoming revenue is.

As far as the margin in the Xs max, do you know fir a fact apple has a higher margin than on the Xs?

As far as the narrative, apple wants to control it, not have the analysts control the narrative.

Increasing prices to compensate for lower unit sales won't work permanently. If a person pays $1500 for a XS Max this year, there is a lesser chance of him upgrading to the 2019 XS Max than if the price were $1200. So they maintain profits this year but what about next year?

 

[MoreRumors?]

Sorry Apple but I would not trade in an perfectly working iPhone, or in this case a 7 Plus or newer, just to get a new phone at a lower price. How about a real sale price or lower the price, latter is better IMO? I and a few other iPhone owners can't justify paying the high price, plus even higher price for getting more memory, for what we use the phone for and none of us have a X or newer models so we're hanging on to it as long as we can. BTW, we are not going to buy the older models just because it at a lower price, however, the price jumps up when you add more memory to it.

 

[The-Real-Deal82]

Internal targets have everything to do with this. Apple bases it’s guidance on what it believes it’s upcoming revenue is.

As far as the margin in the Xs max, do you know fir a fact apple has a higher margin than on the Xs?

As far as the narrative, apple wants to control it, not have the analysts control the narrative.

I certainly hope the analysts get enough coverage to really drive the narrative. Apple have around a 65% profit margin on each device which is of course their choice, but it’s the desire to maintain this margin that driven the price over £1000 for an iPhone. That’s ridiculous in my opinion and despite enjoying tech and Apple products, I could never justify that. It’s also most definitely going to contribute to consumers keeping iPhones longer and Apple will ultimately lose in the long term and I hope they do for our sakes.

 

[dilbert99]

Your laptop doesn’t have a custom designed oled screen, where the part number is new for 2018.

You really fall for Apples marketing ********.

Technology moves on each year

 

[groadyho]

just open a separate savings account or checking put all the money in and do autopay. same difference.

Until the feds legalize amd decriminize marijuana all us in the legal business in legal states have to use cash. We can't just drop money in the bank.
C.R.E.A.M
Cash Rules Everything Around Me
Wu-tang Clan. Ahaha

 

[Blaze4G]

There definitely is some confusion here. For the record, this is what I posted below previously. The price points are reflective of being the competition that have similarities. The Pixel XL and Note 9 have the Highest price points and are the most expensive phones in relation to Apple’s.

These are my previous quotes that you may/may not have read:

You keep comparing the price of the XL to the XS though. Why not compare it to the XS Max price?

Regarding the Note, it comes with a stylus, if Apple ever decided to add pencil functionality to the XS Max you know you would have to buy it separately. How much is a pencil now 149? Hence, why the S9 plus is really the XS Max direct competitor imo.

 

[jdclifford]

Next up:
iPhone XR for $99*

*after kidney trade-in

WITH carrier activation!

 

[ppnkg]

hopefully people are coming to their senses and refuse to reward apple's ridiculous pricing.

 

[I7guy]

You really fall for Apples marketing ********.

Technology moves on each year

If I'm falling for Apples marketinng ********, maybe you don't understand how pricing for the value of your product works?

Technology moves on every year, but the new tech always commands the highest price. Having said that, it's my opinion, apple has established the prices (give or take a few bucks) for the next few years.
[doublepost=1544885329][/doublepost]

I certainly hope the analysts get enough coverage to really drive the narrative. Apple have around a 65% profit margin on each device which is of course their choice, but it’s the desire to maintain this margin that driven the price over £1000 for an iPhone. That’s ridiculous in my opinion and despite enjoying tech and Apple products, I could never justify that. It’s also most definitely going to contribute to consumers keeping iPhones longer and Apple will ultimately lose in the long term and I hope they do for our sakes.

Removing unit sales from the equation is lessening the way the analysts can dissect apples business, which is what apples wants and in-line with the way other companies report earnings.

And yes, there is no doubt the note 9 and xs max are expensive. Except the note 9 is already discounted and with the discount Samsung is giving away TVs.

And I believe apple wants their customers to keep their phones longer and that is factored into the price.
[doublepost=1544885491][/doublepost]

Increasing prices to compensate for lower unit sales won't work permanently. If a person pays $1500 for a XS Max this year, there is a lesser chance of him upgrading to the 2019 XS Max than if the price were $1200. So they maintain profits this year but what about next year?

It doesn't seem like apple has been increasing prices. Last year I paid $3 for a dozen eggs, today I'm paying $4. That's increasing prices.

Last year I paid $3 for a dozen eggs. This year I'm paying $4.50 for two dozen eggs? Increased prices?

IMO, apple has factored the prices and longevity into the buy/sell cycle.
[doublepost=1544885831][/doublepost]

Ok that is revenue. That is not iPhone sales. Less phones sold at higher prices doesn't take away from the fact that they are selling fewer of them.

Again, there is a reason Apple is hiding the unit sales numbers.

I didn't say the Xs Max had higher margin the X/Xs have a higher margin than the 8/8 Plus et al

Last years "X" was a flop by all accounts until the revenue reports. We won't know what the overall picture is until the next earnings call.

I don't think apple cares from this point forward about the iphone unit sales volume as much as some of the MRF posters. They are building a bigger services infrastructure that will be the gap in the revenue numbers.

 

[The-Real-Deal82]

If I'm falling for Apples marketinng ********, maybe you don't understand how pricing for the value of your product works?

Technology moves on every year, but the new tech always commands the highest price. Having said that, it's my opinion, apple has established the prices (give or take a few bucks) for the next few years.
[doublepost=1544885329][/doublepost]
Removing unit sales from the equation is lessening the way the analysts can dissect apples business, which is what apples wants and in-line with the way other companies report earnings.

And yes, there is no doubt the note 9 and xs max are expensive. Except the note 9 is already discounted and with the discount Samsung is giving away TVs.

I wish Apple gave away TV’s like the carriers do with some phones here, although I think maybe they do on some iPhone contracts, certainly a free iPad.

I would love nothing more than to see Apples sale tank and for them to start offering iPhones at the old premium again. This new technology commands an obscene premium is bollocks as far as I am concerned when the mark up is so huge to begin with.

 

[Macintoshrumors]

Jeez. Apple Stores also have easels holding up a poster about “XR starting at $449”. Never seen some type of promo like that.

I really hope they learned their lesson this year. Sheesh.

What lesson? They have always had high prices since the 70s
[doublepost=1544886842][/doublepost]

If I'm falling for Apples marketinng ********, maybe you don't understand how pricing for the value of your product works?

Technology moves on every year, but the new tech always commands the highest price. Having said that, it's my opinion, apple has established the prices (give or take a few bucks) for the next few years.
[doublepost=1544885329][/doublepost]
Removing unit sales from the equation is lessening the way the analysts can dissect apples business, which is what apples wants and in-line with the way other companies report earnings.

And yes, there is no doubt the note 9 and xs max are expensive. Except the note 9 is already discounted and with the discount Samsung is giving away TVs.

And I believe apple wants their customers to keep their phones longer and that is factored into the price.
[doublepost=1544885491][/doublepost]
It doesn't seem like apple has been increasing prices. Last year I paid $3 for a dozen eggs, today I'm paying $4. That's increasing prices.

Last year I paid $3 for a dozen eggs. This year I'm paying $4.50 for two dozen eggs? Increased prices?

IMO, apple has factored the prices and longevity into the buy/sell cycle.
[doublepost=1544885831][/doublepost]
Last years "X" was a flop by all accounts until the revenue reports. We won't know what the overall picture is until the next earnings call.

I don't think apple cares from this point forward about the iphone unit sales volume as much as some of the MRF posters. They are building a bigger services infrastructure that will be the gap in the revenue numbers.

The X wasn’t a flop

 

[Radon87000]

If I'm falling for Apples marketinng ********, maybe you don't understand how pricing for the value of your product works?

Technology moves on every year, but the new tech always commands the highest price. Having said that, it's my opinion, apple has established the prices (give or take a few bucks) for the next few years.
[doublepost=1544885329][/doublepost]
Removing unit sales from the equation is lessening the way the analysts can dissect apples business, which is what apples wants and in-line with the way other companies report earnings.

And yes, there is no doubt the note 9 and xs max are expensive. Except the note 9 is already discounted and with the discount Samsung is giving away TVs.

And I believe apple wants their customers to keep their phones longer and that is factored into the price.
[doublepost=1544885491][/doublepost]
It doesn't seem like apple has been increasing prices. Last year I paid $3 for a dozen eggs, today I'm paying $4. That's increasing prices.

Last year I paid $3 for a dozen eggs. This year I'm paying $4.50 for two dozen eggs? Increased prices?

IMO, apple has factored the prices and longevity into the buy/sell cycle.
[doublepost=1544885831][/doublepost]
Last years "X" was a flop by all accounts until the revenue reports. We won't know what the overall picture is until the next earnings call.

I don't think apple cares from this point forward about the iphone unit sales volume as much as some of the MRF posters. They are building a bigger services infrastructure that will be the gap in the revenue numbers.

Its not as simple as that because 2 dozen eggs is better than 1. The iPhone XR being better than the 8 Plus is debatable.

 

[The-Real-Deal82]

The X wasn’t a flop

I think you missed his point. It was reported as such until the earnings guesses came in and Apple told us it sold well.

It’s certainly wasn’t a flop overall, but it sort of was in quite a few countries. Across Europe it was around 4th most popular iPhone and in the UK it was 8th. I think in the US where most of it’s sales occurred it was 3rd best selling iPhone overall. Apple were likely happy with the profit off it though even if it wasn’t at the top of every iPhone fans shopping list.

 

[I7guy]

Its not as simple as that because 2 dozen eggs is better than 1. The iPhone XR being better than the 8 Plus is debatable.

Correct. Because "better" is a value judgement.

But with the eggs, one is paying more (sic: rising prices) for a product that didn't exist last year. Similar to the Xs Max; which is not a recycled 8+.
[doublepost=1544887382][/doublepost]

I wish Apple gave away TV’s like the carriers do with some phones here, although I think maybe they do on some iPhone contracts, certainly a free iPad.

I would love nothing more than to see Apples sale tank and for them to start offering iPhones at the old premium again. This new technology commands an obscene premium is bollocks as far as I am concerned when the mark up is so huge to begin with.

I think someone else noted the gross margin has been consistent over the last few years.

 

[DakotaGuy]

The greed in price increases is starting to take a toll. They should lower the prices or people are going to switch to Android or look somewhere else.

Apple needs more innovation and less greed. Go back to Steve Jobs days maybe?

I agree, but as sales slow the only way they can maintain the extreme levels of corporate profit they have experienced over the past few years is to raise the price of the product. It's a formula in the past that's been tried with failure many times, but I believe Apple feels the iPhone brand is so strong it can withstand large price increases to maintain the same level of profit with less devices sold.

It seems a high MSRP worked out for the X last year and might still be working for the XS and XS Max this year, but I don't think the XR can maintain high sales when it's price is ranging between $750-900. I think you'll see increasing discounts on this model. Most customers that are going to spend that much likely decide to pay a little more to get a much better phone or if they want to actually spend less opt for a 7 or 8. The XR is in a bad spot and just not that great of a product for the price.

 

[I7guy]

What lesson? They have always had high prices since the 70s
[doublepost=1544886842][/doublepost]
The X wasn’t a flop

Yes, I noted that when I said:

Until the revenue reports

 

[falainber]

Do you have some citations about iPhone being a fraction of Foxconn business..because I believe you are so wrong on that. You have repeated that multiple times.

Sure I do. Here. Foxconn assembles phones for Huawei and Xiaomi. Huawei alone sells more smartphones than Apple. Then there is a fact that Foxconn manufactures way more products than just smartphones. Its customer list includes Amazon, Google, Acer, Cisco, Dell and HP.

 

[The-Real-Deal82]

Correct. Because "better" is a value judgement.

But with the eggs, one is paying more (sic: rising prices) for a product that didn't exist last year. Similar to the Xs Max; which is not a recycled 8+.
[doublepost=1544887382][/doublepost]
I think someone else noted the gross margin has been consistent over the last few years.

I’m sure it’s very much the same but I view this from a consumers perspective as I have zero financial interest in Apple as a company. I’m sure you make a decent amount of money off them being a shareholder as you clearly admire their every move, but as someone who buys their stuff only, it’s depressing to see them take the piss.

If they were honest and admitted the XS is not aimed at the core consumer and is more a luxury product, then I might understand it better. However it’s marketed as the ‘flagship’ iPhone for everybody and the price makes it very much the opposite. I would be happy if they continued with the XR and made sure it was more closely matched to the XS so those of us are able to enjoy the features we’ve been asking for for years. The fact I felt an 8+ was better than an XR this year sums up my feelings currently.

 

[Mainsail]

I think you’re slightly off there as we used to have iPhones for £619 so it’s not about consumers comparing to devices like the 5C at all. The iPhone 5, 5S, 6 and 6S were around the £600 mark at launch and now the cheapest new device in £749 and is a rather large offering. Do you not think that perhaps a higher price and only one size has put a lot of people off considering the XR?

I think this is the reason the iPhone 7 and 8 are selling better than most of the other models right now. The prices are right and the form is a size most people are used to.

I understand your point. But, in fairness, you really shouldn't be comparing a phone with a 4" or 4.7" display to an Xr with a 6.1" display. A better comparison would be the 5.5" plus size phones. The most recent of which would be the 8 plus, which was launched at $799 last year (along side the iPhone X) compared to $749 for the Xr this year. My point remains that the price of the Xr is not unreasonable compared to prior large phone offerings by Apple.....unless of course you are comparing the Xr to something that really isn't comparable. I just don't understand why people keep saying the Xr is too expensive....relative to what? Everyone, including Apple, knows that there are cheaper Android options, but that has always been the case.....certainly not unique to the Xr in Apple's line-up.

Now, you might wonder why Apple is not making new smaller phones. I assume this is because their market research shows that there isn't as much demand for smaller new phones. Or, they are still in development with Face ID. Perhaps, they will release a compact Face ID replacement for the SE next year.

 

[The-Real-Deal82]

I understand your point. But, in fairness, you really shouldn't be comparing a phone with a 4" or 4.7" display to an Xr with a 6.1" display. A better comparison would be the 5.5" plus size phones. The most recent of which would be the 8 plus, which was launched at $799 last year (along side the iPhone X) compared to $749 for the Xr this year. My point remains that the price of the Xr is not unreasonable compared to prior large phone offerings by Apple.....unless of course you are comparing the Xr to something that really isn't comparable. I just don't understand why people keep saying the Xr is too expensive....relative to what? Everyone, including Apple, knows that there are cheaper Android options, but that has always been the case.....certainly not unique to the Xr in Apple's line-up.

Now, you might wonder why Apple is not making new smaller phones. I assume this is because their market research shows that there isn't as much demand for smaller new phones. Or, they are still in development with Face ID. Perhaps, they will release a compact Face ID replacement for the SE next year.

I find it extremely hard to believe the demand for standard size iPhones has died completely. In fact I know for a fact my own experience with people tastes isn’t completely isolated. If the XR is compared to the Plus models, then what choice right now do people have coming from say an iPhone 7? The iPhone 8 as an upgrade?

I compared the XR to other previous devices because in terms of cost it is directly comparable as it’s the only new iPhone under £1000. The size is irrelevant in terms of offering but crucial when a significant chunk of the market don’t want a massive phone.

 

[Rob_2811]

I understand your point. But, in fairness, you really shouldn't be comparing a phone with a 4" or 4.7" display to an Xr with a 6.1" display. A better comparison would be the 5.5" plus size phones. The most recent of which would be the 8 plus, which was launched at $799 last year (along side the iPhone X) compared to $749 for the Xr this year. My point remains that the price of the Xr is not unreasonable compared to prior large phone offerings by Apple.....unless of course you are comparing the Xr to something that really isn't comparable. I just don't understand why people keep saying the Xr is too expensive....relative to what? Everyone, including Apple, knows that there are cheaper Android options, but that has always been the case.....certainly not unique to the Xr in Apple's line-up.

Now, you might wonder why Apple is not making new smaller phones. I assume this is because their market research shows that there isn't as much demand for smaller new phones. Or, they are still in development with Face ID. Perhaps, they will release a compact Face ID replacement for the SE next year.

Relative to their flagship phones.

In 2016 $769 bought you the base model of the best phone Apple offered, the iPhone 7 Plus. Today for only $20 dollars less you get the base model of the watered down version of the flagships with various compromises.

Peoples money doesn't go as far in the Apple store anymore so people are choosing not to visit, seems reasonable enough to me.

 

[Blaze4G]

If I'm falling for Apples marketinng ********, maybe you don't understand how pricing for the value of your product works?

Technology moves on every year, but the new tech always commands the highest price. Having said that, it's my opinion, apple has established the prices (give or take a few bucks) for the next few years.
[doublepost=1544885329][/doublepost]
Removing unit sales from the equation is lessening the way the analysts can dissect apples business, which is what apples wants and in-line with the way other companies report earnings.

And yes, there is no doubt the note 9 and xs max are expensive. Except the note 9 is already discounted and with the discount Samsung is giving away TVs.

And I believe apple wants their customers to keep their phones longer and that is factored into the price.
[doublepost=1544885491][/doublepost]
It doesn't seem like apple has been increasing prices. Last year I paid $3 for a dozen eggs, today I'm paying $4. That's increasing prices.

Last year I paid $3 for a dozen eggs. This year I'm paying $4.50 for two dozen eggs? Increased prices?

IMO, apple has factored the prices and longevity into the buy/sell cycle.
[doublepost=1544885831][/doublepost]
Last years "X" was a flop by all accounts until the revenue reports. We won't know what the overall picture is until the next earnings call.

I don't think apple cares from this point forward about the iphone unit sales volume as much as some of the MRF posters. They are building a bigger services infrastructure that will be the gap in the revenue numbers.

Apple first needs people to own their devices to use their services for the most part. So they do care about unit sales. More unit sales = more potential customers to subscribe to the services.

 

[Sunfly]

Not only that but there’s something going on with the XS screens, it can’t just be PWM because many OLED phones use PWM and I don’t feel anything using them, but the XS I immediately feel strained and get a headache later.

It has to do with dimming on OLED screens. To go dim the pixels alternate on and off really fast (gross oversimplification). Many people cannot use OLED phones for this very reason.

 

[Mainsail]

I find it extremely hard to believe the demand for standard size iPhones has died completely. In fact I know for a fact my own experience with people tastes isn’t completely isolated. If the XR is compared to the Plus models, then what choice right now do people have coming from say an iPhone 7? The iPhone 8 as an upgrade?

I compared the XR to other previous devices because in terms of cost it is directly comparable as it’s the only new iPhone under £1000. The size is irrelevant in terms of offering but crucial when a significant chunk of the market don’t want a massive phone.

Well, the size is relevant when making cost comparisons. Someone in the market for a full sized luxury sedan is going price compare against similar sedans, not against economy compact cars.

I am not saying that the demand for smaller iPhones has died completely. I said it makes no sense to compare the price of a 6.1" phone to a 4.7" phone if you are trying to determine if the larger phone is "too expensive", which seems to be what some folks are saying. I just don't understand how they came to that conclusion when compared to similarly sized Apple offerings from prior years (i.e. Launch prices: iPhone 8+ $799 vs Xr $749).

Now, you might say that you wish Apple still offered new smaller handsets at a lower price than the large phones that they recently released. I am simply suggesting that Apple made a decision not to do this because their research shows there is more demand for larger phones. Not that there is no demand for smaller phones....just not sufficient demand to support the design & development, tooling costs, and supply chain investments such that they could still hit their target margins.

This might change. But, Apple probably needs some time to develop a smaller design that has Face ID and other recent enhancements in a smaller handset. Of course, they also have to figure out how to produce this product at their target profit margins.