Second-Generation iPhone X Estimated to Cost Apple Up to 10% Less to Manufacture

[EugW]

Okay? Not sure why I or anyone else would care if they haven't sold as many as expected. The X is the best phone they've made, they had a record quarter, and the stock is doing great. I am good.

I would care because the X is too expensive, and I expect its replacement to be cheaper for the reasons already mentioned.

And so would a lot of other people. I mean I thought that would be obvious, since that's what everyone here is talking about.

 

[lazard]

10% more profit for Apple come October.

 

[DNichter]

I would care because the X is too expensive, and I expect its replacement to be cheaper for the reasons already mentioned.

And so would a lot of other people. I mean I thought that would be obvious, since that's what everyone here is talking about.

We are talking about the X cost going down, which it will. This was obvious at launch due to the high manufacturing costs at the time. I don't think the price is coming down because they didn't sell as many as they had originally thought, which is rumor at best. As manufacturing costs come down, so will the cost. You're trying to bring an aspect into the conversation that has nothing to do with it.

 

[EugW]

We are talking about the X cost going down, which it will. This was obvious at launch due to the high manufacturing costs at the time. I don't think the price is coming down because they didn't sell as many as they had originally thought, which is rumor at best. As manufacturing costs come down, so will the cost.

It's coming down for both reasons. Obviously if they expected they could sell twice as many units for the same price, they would do so. But they won't sell so many at that price so they have more incentive to reduce the price.

 

[DNichter]

It's coming down for both reasons. Obviously if they expected they could sell twice as many units for the same price, they would do so. But they won't sell so many at that price so they have more incentive to reduce the price.

I'll lean towards some reputable sources for that instead of hello kitty.

 

[PlainviewX]

That means there will be a 10% price hike! Great way to increase revenue by 20%!

 

[Baymowe335]

I use iOS and MacOS too, and I also use Android devices. I want and prefer Android because I think it's better, more open, more versatile, and less closed off. I know that doesn't mean anything to you, but there you go.

The idea that paying more for iOS makes it better is out of date. It's not 2008 any more.

Dude...look at the numbers. The loyalty for iOS is at an all time high. These people do not switch to Android. This is 2018 information. The number of iOS and overall Apple devices is growing, not shrinking. They just sold 83M phones in 14 weeks for $62B. Customer satisfaction are at all time highs. These are facts from the earnings call, not my "feeling" or my opinion.

People DO pay a premium ($800 on average) for an iOS device. They also stay with that device at 90% levels. Remember, don't buy into the "Android loyalty" number because that's at an OS level, not a single device. Android is basically everything NOT Apple. It's almost entirely driven by low cost Android phones bought by people who don't care who makes it.

 

[AdonisSMU]

The price has to come down. The X is way to expensive and they priced many people out (myself including). So if the price becomes reasonable then I might consider it although I still struggle with the notch design so I'm waiting to see what happens there.

What is reasonable?

 

[Baymowe335]

The articles also state that their quarterly unit volumes have decreased vs. 2016 and 2015, and they've had to cancel OLED orders because demand has been low, with estimates saying that iPhone X sales have been tens of millions of units below expected.

I think most of us expected a price cut in 2018, but this may affect how much that price cut will be. A price cut of US$100 on the 5.8" OLED model is a reasonable estimate IMO.


I think $899 is good enough as a starting point for the entry level OLED model, in terms of effect on sales volumes, revenues, and profit.

These "articles" you talk about are constantly bashing Apple and are consistently proven wrong. They were once again wrong in the Q1 numbers just reported.

iPhone X was the best selling phone since released AND through January, according to Cook. ASP was $800...a $100 increase y/y.

They did 83M phones at the same 14 wk run rate of last year, a 7% increase. iPhone revenue was up to $62B and $67B adjusted for 14 weeks. This was an over 20% increase y/y.

Their Profit and Revenue were both up 13% y/y, WITHOUT adjusting for 14 weeks, closer to 20% if you do. Stock has recently been at all time highs.

I get my numbers from Apple, not "unnamed" sources and speculation from the Nikkei Asian Review, who has been wrong literally every time they post anything about Apple.

Apple DOES NOT share unit sales or unit sales targets publicly, so no one knows. Analysts guess, are wrong, and then they have to explain why their arbitrary guess was what Apple was trying to do and somehow fell short. This is all made up fake nothing. "Supercycle" is an analyst made up term. Apple never promised a supercycle or even said the word. Apple doesn't offer unit sales projections. They give guidance for GM, tax rates, and revenue, which they destroy.

People trying to understand Apple's supply chain are ALWAYS WRONG. It's proven over and over and over, yet you kids still read it like it's fact.

Real investors like myself actually listen to the company and the actuals to form opinions. We have to be diligent and rigorous because we have real money at stake. In my case, many thousands of shares.

2015 was an outlier year for unit sales because of pent up demand for large screen phones. The ASP today and revenue for iPhones is higher. Apple sold more phones in 2017 than 2016 and at far higher prices. Services is growing like gangbusters and will expand the multiple.

 

[9081094]

It's a business, you either buy the products from Apple or from competition. I look at the platform overall (I am iOS only for my computing needs) and I still feel Apple provide the best platform when it comes to performance, security, privacy, ecosystem, apps, and support. Until competition provides something better in those areas, I will stick with Apple. I don't particularly care for ports (wireless), headphone jacks (bluetooth), glued in memory (no memory issues, stopped doing my own repairs years ago), lack of upgradability (same thing, moved on, more important things to worry about), sneaky updates (they increased the longevity of those phones, but should have been transparent) or pricing (see MacBook Air introduction, same exact thing, Apple has never been cheap). I still see the same value in the Apple platform as I did from the beginning. That's my decision. If you don't like it, apparently there are a ton of good options out there. But yes, no one on here cares if you change platforms or buy a Pixel. Apparently, neither does Apple, they still have a ton of customers that are moving in the direction of using wireless solutions and don't care about manually updating their devices. I guess it's time for you to move on.

I think your assumption is from the past. There are far better solutions nowadays on every key element Apple used to be strong. Years of neglect and little to no improvements have driven many of Apple’s most loyal fans away. First Apple excelled on hardware and software but not anymore. Android has surpassed iOS in user friendliness, stability, services, openness and features. That gap is widening each year and doesn’t justify Apple’s prices. The so called famous Apple’s ecosystem is more like an expensive trap today when using your intelligence you should avoid. Emotions and brand loyalty speaks... but you should ask yourself the question: is Apple loyal to you or only your wallet. Apple has sunken deep these last 6 years.

 

[DNichter]

Dude...look at the numbers. The loyalty for iOS is at an all time high. These people do not switch to Android. This is 2018 information. The number of iOS and overall Apple devices is growing, not shrinking. They just sold 83M phones in 14 weeks for $62B. Customer satisfaction are at all time highs. These are facts from the earnings call, not my "feeling" or my opinion.

People DO pay a premium ($800 on average) for an iOS device. They also stay with that device at 90% levels. Remember, don't buy into the "Android loyalty" number because that's at an OS level, not a single device. Android is basically everything NOT Apple. It's almost entirely driven by low cost Android phones bought by people who don't care who makes it.

Very good points here. I have never considered Android as Apple provides me with the best performance, security, privacy, apps, ecosystem, and support. A feature here or there is not going to make me consider switching to Android. Some of the hardware seems nice, but it's all superficial if it's not hitting on the things above that really make a difference to me in a choice of platform. I don't see it changing anytime soon, for me or many others.

 

[Baymowe335]

I use iOS and MacOS too, and I also use Android devices. I want and prefer Android because I think it's better, more open, more versatile, and less closed off. I know that doesn't mean anything to you, but there you go.

The idea that paying more for iOS makes it better is out of date. It's not 2008 any more.

And you're right...this isn't 2008 anymore.

Apple is FAR FAR FAR stronger than in 2008. Like night and day. Apple has never been stronger than today, actually.

 

[EugW]

These "articles" you talk about are constantly bashing Apple and are consistently proven wrong. They were once again wrong in the Q1 numbers just reported.

I'm not talking about predicted numbers. These are Gartner tracked historic numbers. With regards to yearly sales of 2017, vs. 2016, vs 2015: Out of the the three years, 2015 was the highest in terms of iPhone unit sales, and 2017 was the lowest, albeit by just a shade under 2016.

2015: 225.8 million
2016: 216.1 million
2017: 214.9 million

I was not talking about revenues. I was specifically talking about unit sales. You're free to ignore Gartner if you wish, but they are pretty well respected.

 

[DNichter]

I think your assumption is from the past. There are far better solutions nowadays on every key element Apple used to be strong. Years of neglect and little to no improvements have driven many of Apple’s most loyal fans away. First Apple excelled on hardware and software but not anymore. Android has surpassed iOS in user friendliness, stability, services, openness and features. That gap is widening each year and doesn’t justify Apple’s prices. The so called famous Apple’s ecosystem is more like an expensive trap today when using your intelligence you should avoid. Emotions and brand loyalty speaks... but you should ask yourself the question: is Apple loyal to you or only your wallet. Apple has sunken deep these last 6 years.

What assumptions? You are responding to my post about why Apple is my platform of choice. If you find there are better solutions, that's great. Not sure why you are on here. Apple is still the best choice for me in regards to performance, security, privacy, ecosystem, apps, and support. You don't have to share my opinion, but you certainly won't change it. To your last question.. is Apple loyal to me or my wallet? To my wallet, of course. As I mentioned, they are a business, and the amount of people on this site that lose sight of that or seem to think Apple owes them something is incredible to me. If I want a product and it brings the same level of value mentioned above that I need from my devices, I buy it.

 

[9081094]

That's fine. Apple released multiple iPhone's in 2017 knowing full well the X wouldn't sell a ton based on the $999 price tag. This still resulted in their highest grossing quarter ever. Ultimately it doesn't matter to me as I still like my X and the stock price is doing just fine. I think the base X model this year will start at $899 and the Plus model this year will start at $999, for 64GB. Is a $100 difference still a no buy for you? The 7 plus was an awesome phone, nothing wrong with holding on to what works. Nothing wrong with any of your choices, or mine.

For $ 699 you’ll have a top of the line huawei or xaomi Phone with better specs and better OS then Apple has to offer. Since they’re all fabricated in China (as is the iPhone) buying an Apple these days is pure based on emotions and not intelligence. I loved Apple and I also loved it when it was more expensive than the rest. I loved it because you knew it was cutting edge and better than the rest so that justified the higher prices. Fast forward to 2018: Apple is lagging on all fronts, hardware, software and services.

 

[mackinmike]

10% less, but will remain the same price of 1k to customers. Apple just looking to increase profit margins. Nothing to see, move along.

 

[EugW]

For $ 699 you’ll have a top of the line huawei or xaomi Phone with better specs and better OS then Apple has to offer. Since they’re all fabricated in China (as is the iPhone) buying an Apple these days is pure based on emotions and not intelligence. I loved Apple and I also loved it when it was more expensive than the rest. I loved it because you knew it was cutting edge and better than the rest so that justified the higher prices. Fast forward to 2018: Apple is lagging on all fronts, hardware, software and services.

1. As mentioned some people prefer iOS. I'm one of them, but I also believe the delta between Android and iOS is much smaller than it used to be.

2. Fabrication in the same country or even the same factory does not guarantee the same quality control, and it also doesn't guarantee the same warranty experience. For example, to "fix" an iPhone under warranty here, one walks into an Apple Store and they check it out and then give you a replacement on the spot. For my Nexus 7 I had to ship mine to some place in the middle of nowhere.

3. Specs don't necessarily mean much when the integration isn't very good.

 

[DNichter]

For $ 699 you’ll have a top of the line huawei or xaomi Phone with better specs and better OS then Apple has to offer. Since they’re all fabricated in China (as is the iPhone) buying an Apple these days is pure based on emotions and not intelligence. I loved Apple and I also loved it when it was more expensive than the rest. I loved it because you knew it was cutting edge and better than the rest so that justified the higher prices. Fast forward to 2018: Apple is lagging on all fronts, hardware, software and services.

Haha, come on. Better specs? Who cares. They can throw as much junk into a phone as they want and it still won't provide what I need from a platform. I don't need cutting edge necessarily (although Apple still leads, you mention two companies who are essentially knock offs of Apple), I need stability. I need performance. I need security. I need privacy. I need the best apps. I need the best ecosystem available. I need the best customer support. I don't need some cheap knock off brand rattling off a spec list.

 

[Baymowe335]

I'm not talking about predicted numbers. These are Gartner tracked historic numbers. With regards to yearly sales of 2017, vs. 2016, vs 2015: Out of the the three years, 2015 was the highest in terms of iPhone unit sales, and 2017 was the lowest, albeit by just a shade under 2016.

2015: 225.8 million
2016: 216.1 million
2017: 214.9 million

I was not talking about revenues. I was specifically talking about unit sales. You're free to ignore Gartner if you wish, but they are pretty well respected.

Your numbers are wrong.

2015: 231M
2016: 211.8M
2017: 216.8M

Source: SEC.GOV

For 2017, you could even add an additional 6M for 222.8M because 2016 had an extra week, but I gave you actuals. 2017 iPhones were sold at much higher prices, so revenues were far higher as we have established. 2015 was a pent up demand year and those folks will be upgrading soon enough at a 90% loyalty rate.

I worked for Gartner. They use modeling to GUESS. My numbers are from Apple themselves and are the only numbers that matter, period.

 

[EugW]

Your numbers are wrong.

2015: 231M
2016: 211.8M
2017: 216.8M

Source: SEC.GOV

For 2017, you could even add an additional 6M for 222.8M because 2016 had an extra week, but I gave you actuals. 2017 iPhones were sold at much higher prices, so revenues were far higher as we have established. 2015 was a pent up demand year and those folks will be upgrading soon enough at a 90% loyalty rate.

I worked for Gartner. They use modeling to GUESS. My numbers are from Apple themselves and are the only numbers that matter, period.

Fair enough. But even those numbers indicate 2015 unit sales are still way higher.

 

[9081094]

1. As mentioned some people prefer iOS. I'm one of them, but I also believe the delta between Android and iOS is much smaller than it used to be.

2. Fabrication in the same country or even the same factory does not guarantee the same quality control, and it also doesn't guarantee the same warranty experience. For example, to "fix" an iPhone under warranty here, one walks into an Apple Store and they check it out and then give you a replacement on the spot. For my Nexus 7 I had to ship mine to some place in the middle of nowhere.

I live in the netherlands and we only have an applestore in Amsterdam. I guess you’re right when living in the USA or Canada. But over here the Chinese brands are rising. At first I was very hesitant because of the quality. But their built quality has improved very much and I can honestly say they’re on par with the iPhone now. Screens are most of the time even better. And service for when it’s broke is as bad as Apple’s over here.
[doublepost=1521658791][/doublepost]

Haha, come on. Better specs? Who cares. They can throw as much junk into a phone as they want and it still won't provide what I need from a platform. I don't need cutting edge necessarily (although Apple still leads, you mention two companies who are essentially knock offs of Apple), I need stability. I need performance. I need security. I need privacy. I need the best apps. I need the best ecosystem available. I need the best customer support. I don't need some cheap knock off brand rattling off a spec list.

You’re definitely the type of person Apple is targeting today, lol. Have fun with your outdated overpriced gear.

 

[ChrisChaval]

In the USA yes but when you go to the global market things get crazy, lets take Brazil as an example, here the iPhone X costs R$7000 that converts to approximately 2100 US dollars.

For most of the population that half a year of their salary. The iPhone is usually R$3300, which is 990 dollars.

50% annual earnings for a phone that gets easily lost, stolen or broken and will certainly be outdated after one year ... that is crazy indeed

 

[DNichter]

I live in the netherlands and we only have an applestore in Amsterdam. I guess you’re right when living in the USA or Canada. But over here the Chinese brands are rising. At first I was very hesitant because of the quality. But their built quality has improved very much and I can honestly say they’re on par with the iPhone now. Screens are most of the time even better. And service for when it’s broke is as bad as Apple’s over here.
[doublepost=1521658791][/doublepost]
You’re definitely the type of person Apple is targeting today, lol. Have fun with your outdated overpriced gear.

Correct. Not a specs nerd. Just need the best overall value. Once you get out of the specs/tinkering phase, some things are more important than widgets, roms, and launchers.

 

[EugW]

I live in the netherlands and we only have an applestore in Amsterdam. I guess you’re right when living in the USA or Canada. But over here the Chinese brands are rising. At first I was very hesitant because of the quality. But their built quality has improved very much and I can honestly say they’re on par with the iPhone now. Screens are most of the time even better. And service for when it’s broke is as bad as Apple’s over here.

Well, the return process is much easier too, even if doing it via shipments. I also find that it's easier to get warranty work approved with Apple at least in certain instances. It does vary from company to company though.

Overall I prefer Apple, and am willing to pay somewhat of a premium for Apple but not everyone would. OTOH, I'm not willing to pay CAD$1319 for an entry level iPhone X. The price increase is not justified even though I prefer Apple.

50% annual earnings for a phone that gets easily lost, stolen or broken and will certainly be outdated after one year ... that is crazy indeed

I was in China last fall. What shocked me was the fact that sales girls in shopping malls had iPhones, even though they might make US$600 a month.

However, the iPhone SE did seem more popular there than here in Canada.

 

[dfgddikf]

Haha, come on. Better specs? Who cares. They can throw as much junk into a phone as they want and it still won't provide what I need from a platform. I don't need cutting edge necessarily (although Apple still leads, you mention two companies who are essentially knock offs of Apple), I need stability. I need performance. I need security. I need privacy. I need the best apps. I need the best ecosystem available. I need the best customer support. I don't need some cheap knock off brand rattling off a spec list.

I had the same smartphone tech enthusiasm circa 2012. Long gone.