Jefferson Graham, writing for USA Today:
Apple has for years been a premium brand that rarely, if ever discounted products. Period.
Every year, the company could raise prices on products, and consumers would not only happily pay, but stand in long lines for the privilege of doing so.
So when Apple started putting misleading, but seemingly consumer-friendly posters in front of Apple Stores at the end of 2018 offering a new model for $300 off (with trade-in of your current phone), you know something different happened for the company this year.
Consumers fought back.
There’s a lot of support for this argument in the article, but it’s basically all nonsense and hearsay. Apple’s sales missing analyst’s expectations means nothing, because analysts are both not that great at their jobs and because in certain circumstances are very interested in peddling wrong information to affect stock prices anyhow.
What certainly does seem to be true is that Apple is focusing on revenue rather than sales. This isn’t really news, because Apple’s entire business for years has been to capture the most profitable segment of a market (e.g. personal computers and phones) rather than the majority of a market. A lot of attention was made of their announcement that they aren’t going to be giving sales numbers in their financial disclosures going forward, but there are good reasons for them to do so absent a ‘consumers are fighting back’ story. Rather, it’s a continuing focus on what ultimately matters to companies and shareholders—revenues and profits.
Unlike past years, however, Apple didn’t offer consumers much that was new for the 2018 models. The flagship XS and XS Max phones had more power, but that didn’t resonate with consumers who thought their old iPhone 6S and 7 devices ran just fine. The XR has the premium edge-to-edge display of the X series iPhones, minus the second camera lens of those models and shinier OLED screen, but it’s $400 more expensive than the older, entry-level current model.
Analysts say the XR phone experienced the biggest resistance from consumers.
This just doesn’t make much sense, and speaks to the weird schism in talking about the iPhones I see online. The XR is no longer the flagship phone from Apple, but it is a flagship, retailing for less than the iPhone 8 Plus it replaced from last year. Yet so much of the discussion is about how it’s simultaneously not worth the price as it’s too expensive, and the iPhone XS is not worth the price because the XR is $250 cheaper. (And here Graham uses the discounted price of the old SE to make it appear that Apple has suddenly cranked the prices of the new models up rather than discounting the old model, as they have done literally since there were multiple iPhone models.)
Near the end of the story, Graham has this to say:
And I wonder if there’s any new feature consumers really would care about more than an all-day battery, unbreakable screen and camera as good as Google’s Pixel 3 for shooting in low light.
If phones had all-day batteries with unbreakable screens, we’d have those phones. But there’s no such thing as an unbreakable phone, or a phone with a battery that will last all day under the most punishing conditions (my old phone’s battery lasts ‘all day’ under most circumstances, anyhow.) There’s only stuff that chooses different compromises. It’s fair to be disappointed that Apple doesn’t make a phone that makes the compromises you want (where is the iPhone X-style screen in a small, easily handled phone like the poor iPhone SE? Remember small phones? I do.) but it doesn’t make sense to demand they make an amazing product with no downsides. And sell it for $100, too, please.
We’ve gone through these stories before. The $1000 iPhone X was a failure, except it wasn’t. There’s simply not enough data to make a real claim at this stage. And Apple certainly won’t be encouraging any more speculation. Apple’s focus on upgrade prices and ‘discounts’ to its new models just seem like a way of helping to encourage people on the fence to upgrade, as the market for people buying new phones year over year (which was always a crazy waste of money) has dried up. It certainly takes the sting out of a $750 price if you can get it for $600 or less by trading in that four-years-old iPhone 6 (and Apple’s GiveBack program is more hassle-free than trying to sell your phone online, and they give you more for it than a site like Gazelle does.)
There’s reasons to be concerned about Apple’s price increases (especially if you’re outside the US, where the increases were particularly large.) And I myself remain concerned that Apple’s attempt to boost average selling prices and revenue by cranking up the prices will hurt more than help. In a pure logic exercise, there does have to be some mathematical limit to how far Apple can boost its prices before it craters its overall revenue (and Apple is certainly trying to find just where that limit is.) But claiming that 2018 was the year that limit was reached is too early a call to make.