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

[lordofthereef]

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.

I could be wrong but I seem to remember something like this with the first iPhone when it got its price drops.

To be clear, I'm not saying you're wrong. It just didn't take off with the inertia they hoped. Probably had a lot to do with the fact that it requires a new two year contract and a full retail price.

 

[Abazigal]

I like the apps and services on my iPhone. But ymmv.

What I find is that while many of the default apps tend to have superior third party alternatives, they all work well together. Better than a hodge-podge of third party apps.

For example, mail has this feature which lets Siri suggest calendar events based on my email content.

Simply put, the stock apps have gotten a lot better, and the system integration they enjoy go a long way towards reducing the friction in the user experience.

I think this article articulates this best.

http://sethclifford.me/2015/06/bravely-default/

 

[Abazigal]

When you're looking at things from the perspective of the consumer, and the person you're referring to is an admitted stockholder that touts ASPs, service growth, revenue numbers, eps, it's obvious that you're not going to see eye to eye.

You want a great product at a great price. He loves Apple for how much money they're going to make him.

As long as the stock keeps going up, Apple can do no wrong.

Funny how the number of iPhones sold was a talking point in keynotes in the past when they could brag about huge increases. But now that they aren't increasing every year, "we're not going to talk about that".

You have it backwards.

Apple making record profits quarter after quarter is proof that what they are doing isn’t all that wrong in the greater scheme of things. People continue to buy Apple products despite all the criticism, and the most likely reason I can think of is that Apple products continue to offer a great user experience despite all the associated drawbacks. Or sometimes, the great experience is precisely because of those purported limitations (such as the Xr’s lower screen resolution contributing to its longer battery life, or the simplicity of iOS making the iPad more accessible to its user base).

This doesn’t mean Apple hasn’t made any missteps, but I do think that people who keep latching on to a single issue and harping on it miss the bigger picture.

It’s like a kid gets 95 for a math test and is the top in class, but all the parent can do is berate him over the five marks he didn’t get, rather than celebrate that he even did well at all.

I feel we should be trying to explain Apple’s success here, not explain it away.

 

[ipponrg]

It’s like a kid gets 95 for a math test and is the top in class, but all the parent can do is berate him over the five marks he didn’t get, rather than celebrate that he even did well at all.

No, it's not really. Apple is more of the teacher's pet in the class. They get favoritism from the teacher when things go well, and then they get **** on when things go bad.

I feel we should be trying to explain Apple’s success here, not explain it away.

Apple's success is pretty straight forward. They made key moves dating back before 2011 when you were in the ecosystem that allowed them the opportunity to capitalize on their current position. They also have a very underrated marketing team. People here say Tim Cook is a mastermind behind the supply chain, but really... what about the marketing adverts dating back to the iPod?

The lesson I learned back then other than to tell people/shareholders what they want to hear is that your marketing team is invaluable to your product and for your narrative.

 

[xaverine]

iPhone has always been great

but the price increases are finally shutting me down

proud owner of
- iPhone 3g
- iPhone 5, 5s
- iPhone 6s plus
- iPhone 8, 8 plus

 

[newyorksole]

I could be wrong but I seem to remember something like this with the first iPhone when it got its price drops.

To be clear, I'm not saying you're wrong. It just didn't take off with the inertia they hoped. Probably had a lot to do with the fact that it requires a new two year contract and a full retail price.

Hmmm I don’t remember that, but you could be right. They definitely did drop the price later in the year and I received a $100 credit and used it for a case and other accessories.
[doublepost=1545028846][/doublepost]

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

What lesson?... Do you recall Apple ever doing a “4 day holiday shopping event” for Black Friday? Do you recall them advertising a product that can be bought “for as low as $$$, with a trade in”?

Do you recall weekly articles talking about an Apple product that isn’t selling well and needs its production lines to be cut?

I’m a huuuuge Apple fan, but you have to be delusional to think that they’re not desperately pushing sales of these new iPhones. If the prices were lower, they wouldn’t be doing this.
[doublepost=1545029130][/doublepost]

Don't why people are calling this a promotion. If you don't have a phone to trade in you don't get the XR for $449 and that price is also dependent on what model and value of that model that you trade in. People have been offsetting the price of any iPhone by trading in an older iPhone when purchasing a new one. I have been doing that for years. Apple should have been doing this thing in a more pronounce way a long time ago, especially since they started taking in iPhons thru their upgrade program.

Who is calling it a promotion? It’s not “a” promotion, it’s just simply “promoting”. They’re promoting the XR by advertising it as starting at $449.

Hope that clears things up.

 

[ROGmaster]

I work for one of the two biggest carriers and the XR is by far our best selling phone. So this news comes at a surprise to me.

That doesn't say much.
And the XR is sold globally.

 

[dilbert99]

You made up a conclusion to fit your narrative.

In your opinion.

If you look at most things in this world, it all gets better over time without increasing in price.
If it didn't inflation would get higher and higher.

That is why you compare a 3GS with the XS Max over time. Its a fair comparison and the iPhone is getting more expensive. The average selling price is getting higher which shows this too since sales are flat or falling. Your statement about not comparing phones from different years and eggs from different years is pointless. Look at how inflation is calculated and you will see why. The basket contains

You just picked two phones, the X and XS and said look prices are the same...

I also took inflation in to account and currency fluctuations.

As for the model T, you are being facetious now. Or simply don't understand inflation. Take your pic.

 

[Gilligan's last elephant]

https://www.macrumors.com/2018/11/28/iphone-xr-best-selling-iphone/

Best selling it is, and most popular.

The quote attributed to Apple in the article was
"most popular iPhone each and every day"

 

[dilbert99]

ASP indicates people are buying more expensive models.

If Apple sells more expensive devices then people will be buying the "more expensive" models, doesn't mean they are buying more of the expensive models. Buyers are still skewed towards the lower priced devices. Which is what I would expect in most markets.

Perhaps another way to look at it is what percentage of phones are being used - https://deviceatlas.com/blog/most-popular-iphones. These are figures that can be disclosed.

The more expensive X isn't making much of a dent which is borne out by the ASP rising $100 yet the price of the X was $230-350 more expensive than the 7/7+. If people were buying the X in droves the ASP would have risen much higher than $766 (from $652 the year before)

 

[GodKingThoth]

Most people I know would rather get a new 6s or an 8. Nobody gives a damn about the new ****

 

[I7guy]

In your opinion.

If you look at most things in this world, it all gets better over time without increasing in price.
If it didn't inflation would get higher and higher.

That is why you compare a 3GS with the XS Max over time. Its a fair comparison and the iPhone is getting more expensive. The average selling price is getting higher which shows this too since sales are flat or falling. Your statement about not comparing phones from different years and eggs from different years is pointless. Look at how inflation is calculated and you will see why. The basket contains

You just picked two phones, the X and XS and said look prices are the same...

I also took inflation in to account and currency fluctuations.

As for the model T, you are being facetious now. Or simply don't understand inflation. Take your pic.

The model t example applied your exact (erroneous) logic. Comparing same type of product from two different years and making a conclusion that fits your narrative.

Your statement is a straw-man about "most things getting better over time without increasing price". Certainly doesn't apply to cars, houses, NYC rent.

Anyway I'll close with what you opened with. In your opinion.
[doublepost=1545050369][/doublepost]

If Apple sells more expensive devices then people will be buying the "more expensive" models, doesn't mean they are buying more of the expensive models. Buyers are still skewed towards the lower priced devices. Which is what I would expect in most markets.

Perhaps another way to look at it is what percentage of phones are being used - https://deviceatlas.com/blog/most-popular-iphones. These are figures that can be disclosed.

The more expensive X isn't making much of a dent which is borne out by the ASP rising $100 yet the price of the X was $230-350 more expensive than the 7/7+. If people were buying the X in droves the ASP would have risen much higher than $766 (from $652 the year before)

Again, this is in your opinion.

Using statistics derived from http headers to back into sales of iphones is something I quite never saw done before. (Well maybe that's how the purveyors of all concerns who make their money on everything apple, do it, and it does turn out to be wrong. See iphone x)

 

[BrooksA]

I think Apple have some very smart people at the moment predicting how long people will keep their phone from now on, given that they still think a 7 is OK to sell today. High price is in response to that prediction. I also think they have an even smarter set of people keeping an eye on switching to Android and losing them from the ecosystem temporarily or permanently, again due to high prices.

Before anyone says other makers have the same prices, they do not. Pixel 3 is £639, XS is £999, which is 56% more. Don't tell me that's the same. (Google also give a £75 gift voucher, enough for a wireless charger or two cases).

Personally I think the high prices won't hurt Apple that badly but we'll know at the end of January when the revenue for Q1 2019 (fiscal) is announced. Note that the prediction by Kuo in this article relates to the Q1 calendar so you need to wait for May to see if he's right.

All in all it's a shame that they are lazer focused on what they can extract from your wallet rather than on providing the best products they can ship.

 

[I7guy]

I think Apple have some very smart people at the moment predicting how long people will keep their phone from now on, given that they still think a 7 is OK to sell today. High price is in response to that prediction. I also think they have an even smarter set of people keeping an eye on switching to Android and losing them from the ecosystem temporarily or permanently, again due to high prices.

Before anyone says other makers have the same prices, they do not. Pixel 3 is £639, XS is £999, which is 56% more. Don't tell me that's the same. (Google also give a £75 gift voucher, enough for a wireless charger or two cases).

Personally I think the high prices won't hurt Apple that badly but we'll know at the end of January when the revenue for Q1 2019 (fiscal) is announced. Note that the prediction by Kuo in this article relates to the Q1 calendar so you need to wait for May to see if he's right.

All in all it's a shame that they are lazer focused on what they can extract from your wallet rather than on providing the best products they can ship.

Apples prices are high, though not the highest and apple does have company up there. With each new iteration of a product, apple has charged more for it's products.

Whether you believe apple is overcharging (or pick your euphemism) is subjective.

I do agree there are some (smart) people at apple modeling consumer behaviors, new customers and churn (both ways). This is the reason they are pretty much spot on with their guidance.

 

[dilbert99]

The model t example applied your exact (erroneous) logic. Comparing same type of product from two different years and making a conclusion that fits your narrative.

Your statement is a straw-man about "most things getting better over time without increasing price". Certainly doesn't apply to cars, houses, NYC rent.

You are conflating inflation with price rises.

I am talking about Apple raising prices not at CPI but above it.

I think it is pointless conversing with you
[doublepost=1545055310][/doublepost]

Using statistics derived from http headers to back into sales of iphones is something I quite never saw done before. (Well maybe that's how the purveyors of all concerns who make their money on everything apple, do it, and it does turn out to be wrong. See iphone x)

I was replying to someone who was implying that the X was outselling all the other iPhones.
This doesn't correlate with phone usage stats. And for the other reasons I put, nothing to do with my opinion. One only has to look at the ASP to see.

As the price of the iPhones went up the ASP did not rise by the same amount, which means that lower priced sales were higher.
[doublepost=1545055441][/doublepost]

Apples prices are high, though not the highest and apple does have company up there. With each new iteration of a product, apple has charged more for it's products.

I thought you said that Apple didn't raise prices?

 

[Baymowe335]

If Apple sells more expensive devices then people will be buying the "more expensive" models, doesn't mean they are buying more of the expensive models. Buyers are still skewed towards the lower priced devices. Which is what I would expect in most markets.

Perhaps another way to look at it is what percentage of phones are being used - https://deviceatlas.com/blog/most-popular-iphones. These are figures that can be disclosed.

The more expensive X isn't making much of a dent which is borne out by the ASP rising $100 yet the price of the X was $230-350 more expensive than the 7/7+. If people were buying the X in droves the ASP would have risen much higher than $766 (from $652 the year before)

Again, the X was the most popular iPhone in the lineup since release for at least 2 quarters, because Apple told us.

The $760+ price was in a year there was only 1 model that cost $999+. The iPhone 8 was released along side and ALSO was considered a flagship/high end model.

We won’t get official data, but ASP will rise in 2019 bc we now have 2 models $999 and up.

Your data is totally meaningless because it’s a guess, extroplated from small sample sizes. Stop trying to outsmart yourself. The X was the best selling iPhone in the lineup. Apple said it, the end. You don’t get to a $760 ASP by selling a lot of phones under $760, which would be anything other than the iPhone 8 and X. FY2018 ended Sept 30, so a few XS sales too.

 

[I7guy]

You are conflating inflation with price rises.

I am talking about Apple raising prices not at CPI but above it.

I think it is pointless conversing with you

You are conflating the cpi associated with essential consumer goods with non-essential goods. And are conflating price increases resulting from the introduction of new technology with costs associated with inflation.

If you elect not to debate the points, then don't.

I was replying to someone who was implying that the X was outselling all the other iPhones.
This doesn't correlate with phone usage stats. And for the other reasons I put, nothing to do with my opinion. One only has to look at the ASP to see.

That higher asp says the higher prices phones are selling.

As the price of the iPhones went up the ASP did not rise by the same amount, which means that lower priced sales were higher.

What's your point? That lower priced items sell more than higher priced items?

I thought you said that Apple didn't raise prices?

I never said they didn't value charge for their technology. This is not like a dozen eggs, where last year a dozen eggs were $3 and this year a dozen eggs cost $4. That's raising prices. When BMW releases a new M5 that goes to 60 in a second less, do you expect them to lower the price?

 

[dilbert99]

You are conflating the cpi associated with essential consumer goods with non-essential goods. And are conflating price increases resulting from the introduction of new technology with costs associated with inflation.

The basket of items in CPI changes over time, in some countries mobile phones were/is in that basket. As is other technology

Think of TVs, they have gotten better over time, the tech has gotten better. But the TV's cost the same.

If you elect not to debate the points, then don't.


That higher asp says the higher prices phones are selling.

Yes, but someone said the higher priced phones were selling in larger numbers than the lower priced phones.

What's your point? That lower priced items sell more than higher priced items?

Yes, the higher priced phones are not Apples best sellers.

I never said they didn't value charge for their technology. This is not like a dozen eggs, where last year a dozen eggs were $3 and this year a dozen eggs cost $4. That's raising prices. When BMW releases a new M5 that goes to 60 in a second less, do you expect them to lower the price?

Eggs go up over time, usually by CPI, sometimes they don't go up each year then every now and then they make a jump. Yes it is raising prices whether it be CPI or above CPI but that wasn't my initial point. I was pointing out that Apple was raising prices and you were saying that this was because of inflation. I pointed out that Apple was raising prices above inflation.

When BMW releases a new car that is better than before, I expect them to keep that model in the same price bracket. The price will stay the same in real terms (as in only goes up by inflation).
[doublepost=1545059824][/doublepost]

You don’t get to a $760 ASP by selling a lot of phones under $760

I know you know how averages work?

You get an ASP of $760 by selling a bunch of phones at less than $760 and a bunch of phones above $760.
The volume above and below depends on how far from the average the phones are selling at.

To simplify it, if there is a $1000 phone, then that is $240 above the average and if you have a $660 phone then that is $100 below the average. Hence they must have sold more phones at $660 than they did at $1000.

If they sold more of the $1000 phones then the ASP would have been closer to $1000

 

[I7guy]

The basket of items in CPI changes over time, in some countries mobile phones were/is in that basket. As is other technology

Think of TVs, they have gotten better over time, the tech has gotten better. But the TV's cost the same.

iphones were never in the basket here. And oled tvs cost more than lcd counterparts.

Yes, but someone said the higher priced phones were selling in larger numbers than the lower priced phones.

That still hasn't been disproven as a matter of fact.

Yes, the higher priced phones are not Apples best sellers.

As an opinion, this may be true. As a statement of fact, can't be proven.

Eggs go up over time, usually by CPI, sometimes they don't go up each year then every now and then they make a jump. Yes it is raising prices whether it be CPI or above CPI but that wasn't my initial point. I was pointing out that Apple was raising prices and you were saying that this was because of inflation. I pointed out that Apple was raising prices above inflation.

It is a fallacy to compare an iphone 7+ to an iphone Xs max and say apple raised prices. That's exactly the same as saying Ford raised prices since the Model T days. I never said increased prices were the result of inflation, it was a result of the value in the market place.

When BMW releases a new car that is better than before, I expect them to keep that model in the same price bracket. The price will stay the same in real terms (as in only goes up by inflation).

Ah. So this is the crux of the issue.

I expect BMW to increase the price of the new model consistent with what the market will pay. Because it is a non-essential, non-regulated(in the sense that BMW as a company is not regulated per-se like a nuclear power plant) consumer product.

 

[Baymowe335]

The basket of items in CPI changes over time, in some countries mobile phones were/is in that basket. As is other technology

Think of TVs, they have gotten better over time, the tech has gotten better. But the TV's cost the same.

Yes, but someone said the higher priced phones were selling in larger numbers than the lower priced phones.

Yes, the higher priced phones are not Apples best sellers.


Eggs go up over time, usually by CPI, sometimes they don't go up each year then every now and then they make a jump. Yes it is raising prices whether it be CPI or above CPI but that wasn't my initial point. I was pointing out that Apple was raising prices and you were saying that this was because of inflation. I pointed out that Apple was raising prices above inflation.

When BMW releases a new car that is better than before, I expect them to keep that model in the same price bracket. The price will stay the same in real terms (as in only goes up by inflation).
[doublepost=1545059824][/doublepost]

I know you know how averages work?

You get an ASP of $760 by selling a bunch of phones at less than $760 and a bunch of phones above $760.
The volume above and below depends on how far from the average the phones are selling at.

To simplify it, if there is a $1000 phone, then that is $240 above the average and if you have a $660 phone then that is $100 below the average. Hence they must have sold more phones at $660 than they did at $1000.

If they sold more of the $1000 phones then the ASP would have been closer to $1000

Dude...the iPhone X was the most popular phone in the lineup, the end.

Do all the weighted averages you want, but make sure the X is the best selling model. I really don't care how you get there. The $760 just proves ASPs were up $110/y/y, driven by the most popular iPhone X.

My entire point in all of this was people don't buy the previous year's phones more than the current models. We keep hearing "people are buying cheaper iPhones." They aren't.
[doublepost=1545060756][/doublepost]

Yes, the higher priced phones are not Apples best sellers.

This is why you are just wrong. You refuse to believe the X was the most popular model despite them telling you so? THE most expensive phone WAS the best selling model.

Do some weighted averages and make the X the best selling phone. You can't get to $760 ASP without selling a lot of flagship models which include the iPhone 8 for that year. iPhone 8 started at $699, which is still below the average.

For FY 2018, they sold the SE, 6S, 6S Plus, 7, 7 Plus, 8, 8 Plus, and X. Only the 8 Plus and the X were above $760 in a baseline configuration. Try to think about what that means.

 

[The-Real-Deal82]

My entire point in all of this was people don't buy the previous year's phones more than the current models. We keep hearing "people are buying cheaper iPhones." They aren't.
.

They seem to being buying older iPhones in Europe. The iPhone 7 has been the best seller here and in Western Europe for the past 2 years now.

 

[Baymowe335]

They seem to being buying older iPhones in Europe. The iPhone 7 has been the best seller here and in Western Europe for the past 2 years now.

No credible data to support that and evidently not a trend because the ASP was $761. If that were true in other developed markets, the $761 would be far lower.

Please don't post some nonsense carrier extrapolated data.

 

[The-Real-Deal82]

No credible data to support that and evidently not a trend because the ASP was $761. If that were true in other developed markets, the $761 would be far lower.

Please don't post some nonsense carrier extrapolated data.

It’s been reported here on a few occasions. Carphone Warehouse Britain’s biggest retailer confirms it is their biggest seller with the likes of O2 and EE reporting similar data to back that up. The iPhone 6 and 7 are the most widely used iPhones across Europe at this point in time.

What I post is my business and sadly for you I don’t take requests.

 

[Baymowe335]

It’s been reported here on a few occasions. Carphone Warehouse Britain’s biggest retailer confirms it is their biggest seller with the likes of O2 and EE reporting similar data to back that up. The iPhone 6 and 7 are the most widely used iPhones across Europe at this point in time.

What I post is my business and sadly for you I don’t take requests.

Most of the stuff reported here is speculative, "rumor" type content (hence the name). They are not verifiable or even correct most of the time.

The iPhone 6/7 have been on sale for years...that's not the point.

 

[Woofypawz]

PRICING - and screen quality - are likely issues with this phone. Apple missed the mark with this one.