iPhone XS Max Since iPhone loyalty is dropping. Do you think they will raise the price of this years phone?

[Abazigal]

Therein lies the real risk for Apple, it looks like their revenue chart is going in the right direction, with other parts of the business slowly making the iPhone less dominant. In reality though, service revenue is heavily tied into the iPhone user base, due to the far lower numbers of Mac/ iPad users; the watch is basically an iPhone accessory; and macOS doesn't play all that nicely with android if you're using one of them instead of an iPhone. Taking this into account, the iPhone still probably underpins 75%+ of Apple's revenue, thus milking it for profit at the expense of units sold, rather than nurturing it to keep it growing isn't a sustainable business model.

I think we are forgetting that the iPhone installed base continues to grow even as iPhone sales slow down, mainly due to the sales of 2nd-hand iPhones. A consumer owning a 2nd-hand iPhone can still go on to pair an Apple Watch, sync AirPods, purchase apps and services.

One reason for this is that iPhones tend to hold their resale values better, which can go some way to offsetting the higher price of a new iPhone.

Looking solely at the number of iPhones sold by Apple tells only one part of the entire story.

 

[rui no onna]

I think we are forgetting that the iPhone installed base continues to grow even as iPhone sales slow down, mainly due to the sales of 2nd-hand iPhones.

Looking solely at the number of iPhones sold by Apple tells only one part of the entire story.

In fairness, we don't if those people buying second hand iPhones are actually new to Apple or are also just upgrading from another iPhone.

One thought, replacing broken or damaged, out-of-warranty devices is one reason why some upgrade their devices. When the option is $500+ for a refurbished replacement or a mere $100 off from original MSRP for a brand new version of the exact same model one needs to replace because latest models have risen to stratospheric pricing levels, that kinda leaves a sour taste in one's mouth and makes one wonder if it's still worth sticking around.

 

[rui no onna]

My last 2 iPhones have been the previous years models and it’s suiting me to be honest because I’m getting the same experience but paying up to £400 less for the device.

Checked pricing for iPhone 8 and in the US, it's $599/64GB and $749/256GB. Unfortunately, deep discounts like that are only possible if buying used here. Not something I'm willing to do since batteries are consumables and iPhones already have small batteries to begin with.

 

[The-Real-Deal82]

Checked pricing for iPhone 8 and in the US, it's $599/64GB and $749/256GB. Unfortunately, deep discounts like that are only possible if buying used here. Not something I'm willing to do since batteries are consumables and iPhones already have small batteries to begin with.

As long as you’re not paying a significant amount of sales tax on top I’d say that’s still quite cheap. Carriers here have been offering good deals as they’ve reported a 25% drop in upgrades annually which is huge. I paid £640 for my 8+ on a £30p/m contract last year. I couldn’t get an XS at the time for under £60p/m and it had only 1GB of data. It’s just not competitive when the older models or the XR are nearly half the price. The upgrade program is very expensive here and not worth it as it’s around £55 without a sim plan which has to be added on top.

 

[I7guy]

In fairness, we don't if those people buying second hand iPhones are actually new to Apple or are also just upgrading from another iPhone.

One thought, replacing broken or damaged, out-of-warranty devices is one reason why some upgrade their devices. When the option is $500+ for a refurbished replacement or a mere $100 off from original MSRP for a brand new version of the exact same model one needs to replace because latest models have risen to stratospheric pricing levels, that kinda leaves a sour taste in one's mouth and makes one wonder if it's still worth sticking around.

Isn't this the same with any phone? If your out of warranty s8 breaks you have the same options?
- second hand s8
- new s10
- cheaper new android

Presumably you bought the s8 for a specific reason, else you would have gotten the cheaper android to begin with.

 

[44267547]

Smartphone market is saturated now and will not bear increased price, especially with incremental upgrades. Apple will have to again resort to incentives and buyback program to even maintain current pricing and sales numbers for 2019 iPhones. They may have better upgrade in 2020 but raising prices may shrink sales even further.

To further your post, Tim Cook mentioned back in January that Apple would have to revamp their trade-in/services with the iPhone. So one thing I expect this year during the fall keynote, is Apple discussing how they are going to entice the consumer to want to trade in an older device for one of their newer ones, and make it lucrative enough where the consumer finds value in whatever alterations they made with their pricing programs.

 

[radiologyman]

To further your post, Tim Cook mentioned back in January that Apple would have to revamp their trade-in/services with the iPhone. So one thing I expect this year during the fall keynote, is Apple discussing how they are going to entice the consumer to want to trade in an older device for one of their newer ones, and make it lucrative enough where the consumer finds value in whatever alterations they made with their pricing programs.

I agree, trade-ins will be offered and going into holiday season there will be more discounts offered through 3rd parties. Raising prices further is impossible giving decreasing value proposition of full price flagship smartphones when 3-4 year old phones are fully capable and available at a fraction of the cost.

 

[rui no onna]

Isn't this the same with any phone? If your out of warranty s8 breaks you have the same options?
- second hand s8
- new s10
- cheaper new android

Presumably you bought the s8 for a specific reason, else you would have gotten the cheaper android to begin with.

Not quite. I was going with the scenario what if Apple raises prices again. Kinda like a similar situation with iPad Pros last year (MicroCenter B&M only sales don't really count given most areas don't have one nearby).

The 2017 iPad Pros didn't even get a $100 price cut. The 12.9 got discontinued and the 10.5 just kept the same MSRP as release. If I had been forced to replace either one, I would've balked at paying the same full price for the older model ($1080/10.5"/512GB LTE, $1230/12.9"/512GB LTE) as I did previous year or paying even higher prices for the new models ($1300/11"/512GB LTE, $1700/11"/1TB LTE, $1500/12.9"/512GB, $1900/12.9"/1TB LTE).

If I had a 512GB XS Max ($1450) and this year, its replacement jumped to $1650/512GB and $2050/1TB. Something happens to my XS Max and certified refurb is still >$1K, I'd consider downgrading. I wouldn't be happy being "forced" to downgrade, though.

With the Samsung example above, one can buy a *brand new* S8 for $350 or S9 for $450 and the latest S10 could be had for $700.
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As long as you’re not paying a significant amount of sales tax on top I’d say that’s still quite cheap. Carriers here have been offering good deals as they’ve reported a 25% drop in upgrades annually which is huge. I paid £640 for my 8+ on a £30p/m contract last year. I couldn’t get an XS at the time for under £60p/m and it had only 1GB of data. It’s just not competitive when the older models or the XR are nearly half the price. The upgrade program is very expensive here and not worth it as it’s around £55 without a sim plan which has to be added on top.

Sales tax is 10.25% in my area so 8+ would be $772/64GB and $937/256GB. The 8 would be $662/64GB and $827/256GB.

One issue I have with the XR is it's too big so my choice is pretty much between iPhone 8 and iPhone XS. I need 128GB minimum though and $827 seems a lot to pay when one could get the 128GB XR for around $50 more. I really would prefer if the iPhone got the iPad Air 3 treatment.

 

[I7guy]

Not quite. I was going with the scenario what if Apple raises prices again. Kinda like a similar situation with iPad Pros last year (MicroCenter B&M only sales don't really count given most areas don't have one nearby).

The 2017 iPad Pros didn't even get a $100 price cut. The 12.9 got discontinued and the 10.5 just kept the same MSRP as release. If I had been forced to replace either one, I would've balked at paying the same full price for the older model ($1080/10.5"/512GB LTE, $1230/12.9"/512GB LTE) as I did previous year or paying even higher prices for the new models ($1300/11"/512GB LTE, $1700/11"/1TB LTE, $1500/12.9"/512GB, $1900/12.9"/1TB LTE).

If I had a 512GB XS Max ($1450) and this year, its replacement jumped to $1650/512GB and $2050/1TB. Something happens to my XS Max and certified refurb is still >$1K, I'd consider downgrading. I wouldn't be happy being "forced" to downgrade, though.

With the Samsung example above, one can buy a *brand new* S8 for $350 or S9 for $450 and the latest S10 could be had for $700...

My guess is prices will be mostly flat, but that remains to be seen.