Apple CEO Tim Cook: 'I Do Think Price is a Factor' in Declining iPhone Upgrades

[MacRumors]

During today's earnings call for the first fiscal quarter of 2019, Apple CEO Tim Cook was asked whether he thought that the pricing of the iPhone XR, XS, and iPhone XS Max was too high.

In response, Cook said that while he didn't feel that was as much of a factor in the United States, it was an issue in emerging markets.

The iPhone XS is priced the same as the iPhone X at $999, while the iPhone XS Max, a new device, was $100 more. The XR, at $749, was priced to be right in the middle of the entry level iPhone 8 and iPhone 8 Plus models. Cook said that's a "pretty small difference in the United States compared to last year."

In emerging markets, however, iPhone pricing was an issue due to the strength of the dollar. Foreign exchange rates amplified the pricing increases leading to weaker sales. Cook says that in January, in some locations, the company has absorbed all or part of the currency movements compared to a year ago, getting closer to local price compared to a year ago.

Cook in an interview with Reuters earlier today said that Apple is lowering iPhone prices in some emerging markets.

In developed markets, like Japan, a lack of subsidies has also become a major factor. Even in the U.S., where subsidies have been phased out for several years, Cook said that a person who last purchased an iPhone 6 or 6s for $199 when subsidies were still in place may be reluctant to upgrade to a device that costs upwards of $749 without subsidies.

Apple is working to address the subsidy issue with trade-ins and installment payments.

Cook in a separate statement said all of Apple's devices are designed to last. "We do design our products to last as long as possible," he said. Some customers choose to hold on to those products for as long as possible, while some trade them in. Apple's product cycle has indeed extended and upgrades were less than anticipated last quarter, but Cook says he doesn't know where that will go in the future.

"I'm convinced that making a great product that is high quality is the best thing for the customer. That's the way we look at it."

Article Link: Apple CEO Tim Cook: 'I Do Think Price is a Factor' in Declining iPhone Upgrades

 

[Hiran]

To me it is not the biggest factor. I just don't like too freaking large phones. That's why I use an iPhone SE. I was hoping for a new iPhone SE with face ID and other new features. But they want an iPad in my pocket. No way dude.

 

[DrJohnnyN]

Well, duh. The deciding factor for many.

 

[Mac Fly (film)]

“Small difference” to a near-billionaire? It’s a deciding factor is all markets—just not amongst your friend’s rich kids, Tim.

Oh and btw, “compared to last year”... Hahahahaaaaa. Yeah, last year you were giving them away, weren’t you. Couldn’t happen to a more deserving company.

Greedy elitist bastards. Karma’s a bitch.

 

[calzon65]

"In response, Cook said that while he didn't feel that was as much of a factor in the United States …"

Hey Tim … no duh price is a factor … and it's also a factor in the United States.

 

[raindogg]

Hate to break it to you, Mr. Cook. But it's 80% of the reason I switched to Samsung. The other 20% is the headphone jack.

 

[Woodcrest64]

I hope he isn’t realizing this now…

 

[gugy]

Come on Tim. Wake up!

 

[dan9700]

Hate to break it to you, Mr. Cook. But it's 80% of the reason I switched to Samsung. The other 20% is the headphone jack.

Samsung isnt cheap

 

[mi7chy]

Sales down 15% so it makes sense to him to increase price another ~15% to make up for it, right?

 

[bladerunner2000]

Tim Cook is so out of touch, it's embarrassing. How is this guy still Apple's CEO?
[doublepost=1548803389][/doublepost]

Hate to break it to you, Mr. Cook. But it's 80% of the reason I switched to Samsung. The other 20% is the headphone jack.

100% with you on that.

 

[adamneer]

Yeah, except people were expecting the price of the "X" series phones to drop after the initial release, when it was billed as a "special edition". No one was expecting the $1000 starting price to become the new normal price of all iPhones moving forward.

 

[JCoe13]

In summary for those jumping to conclusions and did not read the article: He said price was a factor for out of US sales because of FX rates... In US he said price was not a factor since there was a wide spectrum of pricing.

 

[femike]

'Cook said that while he didn't feel that was as much of a factor in the United States, it was an issue in emerging markets.' - Tim Cook really needs to get out more and understand the real world. He is living in his own bubble. But, with that much money, he doesn't need to care or even notice.

 

[Bornee35]

Hate to break it to you, Mr. Cook. But it's 80% of the reason I switched to Samsung. The other 20% is the headphone jack.

yet here you are. Let me help you, you seem to be lost: https://samsungrumors.net.

 

[genovelle]

“Small difference” to a near-billionaire? It’s a deciding factor is all markets—just not amongst your friend’s rich kids, Tim.

Greedy elitist bastards.

The same or $50 is a small difference

 

[9081094]

It is proof how far he is standing away from real consumers. Every research about customer satisfaction he was talking about came from the USA. I wish he would do some research in other countries where Apple services are crippled and prices are skyrocketing. In the Netherlands I can almost buy 2 Samsung Galaxy S9 for the cost of the very outdated iPhone 8. Tim has no clue at all.

 

[Mazda 3s]

It was a factor for me. I plunked down $1000 for an iPhone X in 2017, but the iPhone XS wasn't a worthwhile upgrade, so I got a battery replacement instead for $29.

I did get an Apple Watch Series 4, so they still got me....

 

[genovelle]

Hate to break it to you, Mr. Cook. But it's 80% of the reason I switched to Samsung. The other 20% is the headphone jack.

You clearly didn’t buy their best phone because they are priced the same as Apple’s

 

[mgmacius]

At least I know why it’s so bloody cold here in Ireland. Cause the hell froze over!!

 

[MacMikePro]

Damn near every comment here is only in response to the headline, this seems to be the new trend on MacRumors "read headline only, post negative comment, move on to next headline"

Does no one read the articles anymore? This is embarrassing

 

[pat500000]

Too much time spending in your room, Tim?

 

[jpn]

these comments from Tim are refreshing.
not a lot of sugar on these words.

apple got it wrong this cycle.

i look forward to apple believing less in its own marketing hype.
the 2019 iPhone launches should go much better because of these mistakes in 2018.

 

[zed1291]

I want a new device that has an iPhone SE form factor thats also optimised for that size screen.
iOS 11/12 have terrible spacing, especially apparent on smaller devices. Even if an iPhone SE 2 came out tomorrow I wouldn't get it until iOS is optimised for it.

My iPhone SE running iOS 10.3.3 (bought day one) finally bit the dust (not repairable). I replaced it with an iPhone 5 because I (A) didn't want a bigger phone and (B) didn't want to run iOS 12.

For me, cost isn't a factor. I'm willing to pay a premium for a premium experience. But iPhone Xs/Xr is not a premium experience.

 

[ahoover]

Mr. Cook,

Respectfully, I have owned numerous iPhones as well as Macs, iPads, MacBook Pros and I am an AAPL owner as well. I can honestly tell you that $1000 USD for the new generation of iPhone XS/XS Max is prohibitive and a genuine deterrent to upgrading.