Tim Cook on iPhone Prices: 'We Want to Serve Everyone'

[M.PaulCezanne]

Please point me to the new article where Tim Cook has ordered the physical destruction of iPhone X's that were introduced last year? Because there is no Duke graduate in his right mind is going to destroy product that his company can still sell and make a profit on?

If you are talking about Apple Give Back, then the vast majority of those iPhone X models will be refurbished and sold on eBay, Woot, Boost, Cricket, StraightTalk, et al. websites as refurbished models with a limited warranty at a reduced cost. Is there something wrong with that?

A business exists to make a profit, it is up to the consumer to decide if they want to give the company their money in return for goods and services that the company offers. In fact, he has a fiduciary responsibility to Apple shareholders to pursue, keep and maintain profitability. Without it, he would be fired and employees could lose there jobs as a result of lower profitability. Basic Economics 101. Acknowledged.

Seriously, irrelevant alma maters aside, this is an obvious attempt to avoid cannibalization. They likely won’t burn em, like Burberry. They may use the parts for the xs because they’re so similar. Either way, they won’t sell them and there will be a lot of waste (production costs and un-reusable parts). You don’t need an Econ degree for that...

...even though I have one, and one in International Business, and one in Law - all from top tier schools that were not, and never would have been, Duke.

 

[Ryth]

That's a niche group though. Majority of sales come from the 16-35yr old group of everyday consumers whose contracts are up for renewal. Which is why the Xr and the 8 will be the best sellers.

It's not as niche as you think. But the major sales will be the Xr but you'll be surprised by the XsMax sales...just watch.

The 8 will not sell that great...the reason is once someone sees just how much more room they get on the Xr screen..the 8 looks dated now.

 

[lobbyist]

I have not bought a launch day iPhone since the 4S and instead bought last gen devices since then, and this time I was all set to buy the 512GB XS Max but at $1449, I'm starting to have second thoughts...

Maybe getting a used iPhone X 256GB will be in my future.

I'm thinking about selling mine - Can I DM you?

 

[corebeliefs]

My first computer was an Apple II+. I've been following Apple for almost four decades. Tim Cook has done very little to change Apple's brand image. Steve Jobs is the one who wanted Apple to be to computers what MagLite was to flashlights (i.e., the premium brand).

Premium and luxury have become different things. I don't think Jobs wanted the cost of a thing and a value of a thing to be so far apart. Jobs wanted to sell you multiple products instead, and get your money that way. Jobs built an Apple ecosystem to do this (routers, monitors). Cook is dismantling this ecosystem and getting all the money in one luxury play.

 

[Rocko99991]

It's really only missing an OLED screen, the dual cameras (let's be honest, a lot can be achieved with a single lens. Look at what Google has been able to do with the pixel 2) and 3d touch (which is just a fancy long press). They easily could've just done an OLED phone with a single camera.

This. The zoom lens only works in certain circumstances and doesn't add much. 3d touch-hate it. No OLED means no burn in for me-which is great as I use Waze for may hours a day. XR is the clear choice.

 

[PowerGala]

I agree, yeah I'm not the user for the top spec. But I begin to question when a phone costs more than a laptop. I'm sure someone can make a case for phone components being more expensive than laptop components, but I'm not buying that since phones have been less expensive until now and Apple isn't in the business of subsidizing hardware costs.

I mean, you can get a laptop for $200. It won't be a Macintosh, but it will work fine for most people.

I'm not entirely sure who the top spec XS Max is for, but I'm sure someone will buy it and I don't really begrudge them for that.

The base XR ($749) will probably be the best selling model. Personally, I'll be spending $474 for the base XS before taxes/after the trade. I think that's reasonable for what I use it for but to each their own.

 

[democracyrules]

At an event in Cupertino yesterday, Apple announced three new iPhone models: the iPhone XS, iPhone XS Max, and iPhone XR. Prices for the iPhones start at $749 for the iPhone XR in 64GB, and increase to as much as $1,449 for the iPhone XS Max in 512GB, which represents Apple's most expensive iPhone to date.

Commenting on this price range in an interview with Nikkei today, Apple CEO Tim Cook said, "We want to serve everyone." Apple introduced the iPhone XR at a cheaper price point so that customers who wanted the advantages of the iPhone X line -- Face ID, an edge-to-edge screen -- could find them on a lower-cost iPhone.
Likewise, the iPhone XS Max represents Apple's biggest iPhone yet, and serves the customers who enjoyed the features of the 2017 iPhone X, but wished it came in a larger size.
Apple will also still sell the previous generation iPhone 7 and iPhone 8, at new lower prices. The iPhone 7 will now start at $449 in 32GB and increase to as much as $669 for the iPhone 7 Plus in 128GB. The iPhone 8 will start at $599 in 64GB and rise to $849 for the iPhone 8 Plus in 256GB.

Discussing the iPhone in general, Cook says that, "The role of the iPhone has become much larger in people's lives," and that will justify the price of the devices for many customers.

Those interested will be able to pre-order their iPhone XS or iPhone XS Max beginning tomorrow, September 14, and the smartphones will then launch on September 21 in over 30 countries and territories. The iPhone XR will go up for pre-order in about a month, on Friday, October 19, and then launch on October 26.

In addition to the iPhone, Apple yesterday also announced the Apple Watch Series 4 with a 30 percent larger display, thinner body, ECG reader, fall detection, and more. Similar to iPhone XS, Apple Watch Series 4 pre-orders will go up on September 14 and the smartwatch will launch on September 21.

Article Link: Tim Cook on iPhone Prices: 'We Want to Serve Everyone'

Tim Cook speech was true. Anyone who is objective, business minded and not bias will be able to see the truth of his speech. Apple has a diverse iPhone line up with prices targeting a specific customer affordability market. I am glad to see this diversity. Also, I am very satisfied to see Apple puts his foot down finally to make a “premium” product class with a “premium” price to match. Apple has a very wise decision to do so. Kudos to Apple.

 

[MrMister111]

I have X on iUP. Don't think I'll go for Xs, maybe Max if have a look about size.

I'm actually contemplating the Xr though. Like the colours, bigger screen, will the screen be a massive downgrade from my X?

Will the Xr have a massive downgrade from my X on camera? The cost I'm not too bothered, but feel they are going too expensive now, so not keen on going too big.

Maybe an Xr and AW4?

 

[xraydoc]

I've bought a new iPhone at launch every year since the 3GS. It started out as $200*, then $400*, then $600, then $650, then $750, then last year $1000. This year the phone I would get is $1150. They say a frog won't jump out of a pot if you heat it slowly, Tim Cook has priced me out of the pot.

*due to how contracts used to work in the US

While I completely agree, I'm afraid other manufacturers (Samsung mainly, but possibly also Google for this round of Pixels) are likely to follow along with Apple's ever-escalating prices.

At this point, I think I'm priced out of the pot, too. I'll keep my current phone until it dies or until the midrange "affordable" (i.e., what the flagships used to cost) models are better than what I currently have.

You win, Tim Cook and Ki Nam Kim. I think I'm out of the flagship game at this point.

 

[TheNorthWaves]

They discontinued the SE. The one iPhone that my wife and I still liked. WTF. There was no reason to discontinue it, at least keep selling it like with the old Mac Mini.

Try to push me into a higher priced base model iPhone and you're gonna push me to your competition instead, Apple.

 

[31 Flavas]

I pay for my phones outright. But I totally miss the days you paid 199.99 for a new iPhone with a two year contract.

You realize now, though. You never payed $199.99 for your phone, right? The $400 or $450 you “saved” was an instant loan which they never told you about. The 2 year contract / commitment and ETF was either to either 1) Repay the loan or 2) repay the loan through the ETF.

You’re right, btw. The repayment did not appear on your phone bill because that would have spoiled the illusion. T-mobile ended the charade when they killed contracts and dropped their monthly fee around $30.

Maybe you prefer the illusionary price the magic trick offered. But, make no mistake you never paid $200 for a phone. And if you ever did not recommit and upgrade your phone at 2 years you overpaid your loan.

 

[Alphazoid]

It's not as niche as you think. But the major sales will be the Xr but you'll be surprised by the XsMax sales...just watch.

The 8 will not sell that great...the reason is once someone sees just how much more room they get on the Xr screen..the 8 looks dated now.

Everyday consumer is more price sensitive than you think. Even more so if they're outside the US and not particularly 'passionate' about Apple but just like an iPhone that works. Its why Android is so successful. People want iPhone Xs/Max but only at the right price otherwise they'll get something cheaper or something else entirely.

 

[matjamca]

The sad thing is he must truly believe what he is saying. It’s clear his pupils are dollar signs like in the cartoons.

Pity Apple has gone the greedy gouging route rather than the more reasonable route. Apple could easily subsidise the iPhone £100 and still make loads of money through services.

Hopefully their greed will back fire, but somehow I doubt it!

 

[ckhris1613]

Typical Tim

 

[mi7chy]

I am very amused by all teeth gnashing about the prices, as if we are all somehow entitled to iPhones at affordable prices. It's almost like complaining about Porsche pricing because BMW sells similar performance models for less.

Luxury brands like Porsche, BMW, Rolex, etc. don't make their products in China. Branding is the only thing that separates Apple from other Chinese made phones but is that enough? Huawei surpassed Apple to become #2.

https://www.macrumors.com/2018/07/31/huawei-surpasses-apple-smartphone-shipments-q2-2018/

 

[Falhófnir]

While I completely agree, I'm afraid other manufacturers (Samsung mainly, but possibly also Google for this round of Pixels) are likely to follow along with Apple's ever-escalating prices.

At this point, I think I'm priced out of the pot, too. I'll keep my current phone until it dies or until the midrange "affordable" (i.e., what the flagships used to cost) models are better than what I currently have.

You win, Tim Cook and Ki Nam Kim. I think I'm out of the flagship game at this point.

I think a lot of people feel the same way - another option is to just upgrade less regularly, it doesn’t even have to be a whole year later, paying 1149 every 18 months is still cheaper over 3 years than paying 999 every 12... that’s my plan anyway (I’m not ocd about getting an iPhone on launch every time though, so may not work for some who are)

 

[cajun67]

Premium and luxury have become different things. I don't think Jobs wanted the cost of a thing and a value of a thing to be so far apart. Jobs wanted to sell you multiple products instead, and get your money that way. Jobs built an Apple ecosystem to do this (routers, monitors). Cook is dismantling this ecosystem and getting all the money in one luxury play.

Jobs was a capitalist. He understood that there is an optimal price point for any product to generate the largest gross profit. He was never interested in marketshare, but in maintaining that premium position.

What we're seeing with the iPhone matrix is market segmentation: iPhone "Classic" with Touch ID, and iPhone "Pro". Apple has frequently segmented their products like this.

 

[davenowherejones]

...by serving no one.

The top of the line iPhone will be quite a bit over $2000 Canadian with a plan that will cost over $1400 per year.

 

[koa]

"We want to serve everyone," Cook said

​

 

[arkitect]

My first computer was an Apple II+. I've been following Apple for almost four decades. Tim Cook has done very little to change Apple's brand image. Steve Jobs is the one who wanted Apple to be to computers what MagLite was to flashlights (i.e., the premium brand).

Help me out here… when has a MagLite ever been a luxury item?

Don't change the goalposts now… you brought up luxury. That's not the same as premium.
Not at all.

 

[naturalstar]

Apple knows who their market is. They always have. They haven’t changed their market and who they are targeting.

What is happening is an economic shift where the divide between the “haves” and “have-nots” is getting wider than the Grand Canyon. I live in the U.S., but I’m sure other countries, especially in Europe, are seeing that wages are not keeping up with the rising cost of well, everything. Homes, cars, utilities, food... and our favorite luxuries are all going up in price faster than the pay increases (if you even see one) that we receive.

At one point, the arguments were about leasing a car/keeping it longer, cutting cable and not drinking so much Starbucks on a daily basis. Now the squeeze is moving into our favorite tech... time to stop upgrading every year or purchase the older model if you really need to upgrade due to a dead phone. Everyone in the family can’t have the latest iPhone either.

I’m not defending Apple’s pricing, but Apple (and Samsung as well) are packing more tech into these devices above and beyond basic phone, camera, and web browsing capabilities. Each advancement is not going to lessen the cost. It was unrealistic to ever think their prices were going to lower for the latest models. This is why older models remain available.

Personally, I don’t see this trajectory changing either unless some external market/economic factors come into play. There’s still enough people who can afford the latest and greatest and enough people who are willing to go with the lower Xr model or last year’s model. The Xr will be the huge seller overall, but the Xs and Max will see a lot of buyers, more than some people here think. Remember the X.

 

[mi7chy]

Steve Jobs on risking long term for short term gains.

 

[curtvaughan]

Don't bother. They will complain over anything nowadays. $5 iPhone? Complain. Premium priced iPhone? Complain. Removing a silly adapter no one used? coMPLAIN.

I have yet to see a $5 phone by orders of magnitude, much less anyone complain about it. You bet folks will complain of the continued price inflation of Apple products, especially if they continue to remove "silly adapter(s) that no one uses(d)." Silly is, as function is, in the eye of the beholder. If "no one used" any of the vanquished ports and jacks there would be no complaints. If one is unsatisfied with the product(s), there are two steps remaining: 1)complain, and/or 2) don't buy the product. I personally have chosen both options with current Apple laptop and iPhone offerings; iMacs and iPads still appeal to me for function/price.

 

[Azathoth123]

The prices are about what they’ve always been for computing hardware over the years, and like all hardware, today’s hardware is a bargain. Here are some examples:

Late 1980s (I used 1990 to calculate today’s dollars) 4 GB desktop RAM, $700, about $1,300 in today’s dollars.
1994 - Motorola StarTAC introduced at $1,000, about $1,700 in today’s dollars and it was popular, I had one.
Late 1990s early 2000s $1,000 for a solid Pentium desktop, $2,000 for a nice one and $2,500 for a ‘stuffed’ case (no exotic water/nitrogen, etc). Current prices aren’t that much different.

So if you think $1,000 to $1,400 is sky high, I’ll trade you a more expensive (in today’s dollars) StarTAC for it. I think I still have it somewhere.

Cheers, Azy

 

[Lilydgg]

You realize now, though. You never payed $199.99 for your phone, right? The $400 or $450 you “saved” was an instant loan which they never told you about. The 2 year contract / commitment and ETF was either to either 1) Repay the loan or 2) repay the loan through the ETF.

You’re right, btw. The repayment did not appear on your phone bill because that would have spoiled the illusion. T-mobile ended the charade when they killed contracts and dropped their monthly fee around $30.

Maybe you prefer the illusionary price the magic trick offered. But, make no mistake you never paid $200 for a phone. And if you ever did not recommit and upgrade your phone at 2 years you overpaid your loan.

I'm still ok with that concept, since the phone still ran about $600.