iPhone X Apple is losing its mainstream, non-fan core with the X

[Shanghaichica]

You need to better understand Consumer Electronics history. When great new gamechanging products emerge they go through a very predictable cycle. AM radios, 78 RPM record players, calculators, digital clock radios, home telephones, VCR's, personal computers, film cameras, video games, cassette players, record players, CD players, camcorders, they all followed the same script. Smartphones are no exception.

The first phase is adoption, getting an audience for the product, getting it sold. The next phase is expansion, watching as competitors enter the space, innovating and copying others ideas. After that comes mass consumption, where prices drop and new discount channels are opened. The product explodes, every consumer has to have one and every retailer wants to satisfy them.

Years later, we enter the saturation phase where sales growth starts to halt and consumers stop buying as aggressively because they already own the product and it's good enough. And it's at this phase where the surviving manufacturers batten down the hatches, curtail innovation, and stop the bloody pricing war and raise their prices so that they can maintain their profitability when sales units drop off sharply. This is the phase iPhone has entered, taking pricepoints up, reducing R&D spending, making sure each phone makes maximum profit in a phase where fewer units are going to be sold. Take that $349 iPhone 6 and make it into a $1250 iPhone X. Weather the storm for a few years, wait for the next big tech breakthru, that must-have feature that will jump-start smartphone sales again, and then go back to that expansion phase and enter another price war.

Most recently, this happened in the HDTV realm. 2005 plasma HDTV's starting gaining momentum. 2007 LCD's brought the prices down. 2008 thru 2010 dramatic expansion as every household in the world bought an HD panel. 2011 the failed attempt with 3D to jump-start the industry. 2015 the infusion of 4K panels which are leading growth in the category for the first time in nearly half a decade.

Shareholders understand what phase Apple is in, these blips with stock corrections and dramatic statements from a few analysts are inconsequential. And guess what? Apple is in a better place than, say, Samsung. Apple has deliberately delayed certain innovations like facial recognition, wireless charging, and OLED screens, this stuff is brand new to iPhone users. It's old news to Android. So on the product lifecycle Android is the one in trouble, not iPhone. Apple has a few years before everyone in an 8 or an X gets bored.

However Samsung might have more up their sleeves. We don’t know that yet.

Anyhow Apple are just fine. Their drip feeding strategy has worked for years and will continue to do so.

 

[MarkB786]

My original post continues to be confirmed. Gotta love the red pill.

https://www.cnbc.com/2017/12/27/art-cashin-apple-iphone-x-news-casts-a-shadow-over-everything.html

 

[BladeRunner95]

So you honestly think if the X cost $700, it wouldn't sell any better?

If they suddenly lowered the price then yes it would sell in increasing amounts because people would see it as getting a more expensive item for a lower price.

But looking at it on a relative basis, if the prices had maintained at a lower level over the whole iphone lifespan then I don't think sales would really be much higher.

Phones are almost always purchased on a monthly price plan anyway, so even a fairly big jump in the handset cost equates to only a small monthly increase.

 

[macher]

If they suddenly lowered the price then yes it would sell in increasing amounts because people would see it as getting a more expensive item for a lower price.

But looking at it on a relative basis, if the prices had maintained at a lower level over the whole iphone lifespan then I don't think sales would really be much higher.

Phones are almost always purchased on a monthly price plan anyway, so even a fairly big jump in the handset cost equates to only a small monthly increase.

Yep it only cost like $7 more a month on a monthly price plan.

 

[DNichter]

If they suddenly lowered the price then yes it would sell in increasing amounts because people would see it as getting a more expensive item for a lower price.

But looking at it on a relative basis, if the prices had maintained at a lower level over the whole iphone lifespan then I don't think sales would really be much higher.

Phones are almost always purchased on a monthly price plan anyway, so even a fairly big jump in the handset cost equates to only a small monthly increase.

Respectfully, I think you're nuts. If the X came out in September priced at $700, it would be a huge hit. It still is, but they aren't selling as many units as they had hoped.

 

[macher]

Respectfully, I think you're nuts. If the X came out in September priced at $700, it would be a huge hit. It still is, but they aren't selling as many units as they had hoped.

But not necessarily be about # of units sold but the bottom line. I know Wall St doesn’t really look at it that way though per se.

 

[DNichter]

But not necessarily be about # of units sold but the bottom line. I know Wall St doesn’t really look at it that way though per se.

Yea, personally I don't think Apple ultimately cares which iPhone you buy (I am sure they do, but in the grand scheme of things), just that you are buying an iPhone. That's why they offered so many choices this year as they knew a lot of people would be turned off by the supposed "$1,000" price tag. Get someone locked in and they are likely an iPhone customer for the foreseeable future. But yea, sell less at a higher profit and it's still all good to them.

 

[Blondie&Dagwood]

it would be a huge hit. It still is, but they aren't selling as many units as they had hoped.

I'm not following. You are saying that the phone is still a huge hit, but aren't selling as many units as hoped. That means it is not a huge hit no?

 

[DNichter]

I'm not following. You are saying that the phone is still a huge hit, but aren't selling as many units as hoped. That means it is not a huge hit no?

Depends how you look at it. To a company like Apple, I am sure they care more about revenue generated. The X generates more revenue per unit. So even if they sell less overall, they still have a very successful product on their hands. Also, you have to look at the potential for a "$1,000" phone. They knew this would likely not go over all that well with some buyers so they released the iPhone 8 and kept the 6s at an affordable cost in the lineup as well. Ultimately, I think they went into their season this year knowing that they would make good money off the X's that they sold, while still keep customers happy at all different price points. Apple is selling for the long term.

 

[boltjames]

I'm not following. You are saying that the phone is still a huge hit, but aren't selling as many units as hoped. That means it is not a huge hit no?

Units are an indicator of popularity. Profit dollars are an indicator of financial success.

If U2 were only able to fill 50% of the arenas they used to sell out but they doubled the price of their tickets, you would say that they were less popular and they'd get slammed in the press but you would also say they were just as profitable which is really what the band cares about as it's a business.

iPhone X is roughly twice as expensive as the iPhone 6 was at its launch and even if the analysts estimates of 30-40 million iPhone X's sold come in on the low side of unit sales it will still break records for revenue and profitability. Since Apple is clearly leaving behind the "mainstream" and targeting the high-end consumer, this would be considered quite a "huge hit" from a business perspective.

Not to mention that the iPhone 6 was not diluted by the simultaneous release of the iPhone 8 with also the iPhone 7 and the iPhone SE available. iPhone 6 was also released in the era of $0 or $99 pricing with a two-year contract, something else that's a thing of the past. iPhone X is a tremendous success by any measure if they come in with unit sales in the 25-35 million unit range, and add in the Apple sales on the other three iPhone's, it's going to be another record breaker.

 

[The-Real-Deal82]

iPhones have never been offered free on subsidies outside of the United States. We’ve always paid in full for iPhones on contract in Europe. They may have offered subsidies in parts of Asia too. As this is an international forum it’s different depending on the country/continent.

Subsidies have never been offered in Europe and Scandinavia.

 

[Blondie&Dagwood]

iPhones have never been offered free on subsidies outside of the United States. We’ve always paid in full for iPhones on contract in Europe. They may have offered subsidies in parts of Asia too. As this is an international forum it’s different depending on the country/continent.

Subsidies have never been offered in Europe and Scandinavia.

You have been trying to convey this point multiple times, but I think you will have better luck pissing into the wind than trying to convince us Yanks that we should care about anything else outside of our boarders.

 

[boltjames]

You have been trying to convey this point multiple times, but I think you will have better luck pissing into the wind than trying to convince us Yanks that we should care about anything else outside of our boarders.

As we learn that people outside of the USA have never had subsidized phones we also learn that it would make the financial transition to the 8 or X easier for them, not harder.

So not quite sure why they are complaining more than Americans are.

 

[The-Real-Deal82]

You have been trying to convey this point multiple times, but I think you will have better luck pissing into the wind than trying to convince us Yanks that we should care about anything else outside of our boarders.

Indeed. You can’t teach pork though you can only cure it as the saying goes lol.

I suppose I could repeat it as many times as the generalisation we’ve all had free iPhones keeps being passed off as fact.

 

[The-Real-Deal82]

As we learn that people outside of the USA have never had subsidized phones we also learn that it would make the financial transition to the 8 or X easier for them, not harder.

So not quite sure why they are complaining more than Americans are.

Because you guys only pay £747 for an iPhone X whereas we pay £1000. The jump on the 8 over previous iterations is over £200. The whole range has rapidly shot up and monthly tariffs tend not up let you pay more for the device to bring the monthly costs down.

Your status symbol is actually quite cheap by our standards and if we had the same pricing, the poor scumbags you like to mock here would have no problem getting a X.

 

[boltjames]

Indeed. You can’t teach pork though you can only cure it as the saying goes lol.

I suppose I could repeat it as many times as the generalisation we’ve all had free iPhones keeps being passed off as fact.

Paying for your iPhones instead of getting them heavily subsidized hurts your argument, doesn't help it.

If indeed you were paying full price for your iPhones for the past 10 years then there should be nothing shocking or unacceptable about doing so for the iPhone 8 or the iPhone X. The delta between what you have been paying and what you would now need to pay is far less than the sticker shock many Americans are facing.

 

[The-Real-Deal82]

Paying for your iPhones instead of getting them heavily subsidized hurts your argument, doesn't help it.

If indeed you were paying full price for your iPhones for the past 10 years then there should be nothing shocking or unacceptable about doing so for the iPhone 8 or the iPhone X. The delta between what you have been paying and what you would now need to pay is far less than the sticker shock many Americans are facing.

Nobody minds paying for the phones, the issue comes from the rapid increase in price across the board In the past 18 months.

 

[boltjames]

Nobody minds paying for the phones, the issue comes from the rapid increase in price across the board In the past 18 months.

In the end you're voicing a lot of displeasure over $268. It's only $268. Keep it for 3 years and it's $89 a year or $7 a month or $0.25 a day.

In the United States of America we call $.25 a quarter. Here's a picture of one.

 

[Martyimac]

In the end you're voicing a lot of displeasure over $268. It's only $268. Keep it for 3 years and it's $89 a year or $7 a month or $0.25 a day.

In the United States of America we call $.25 a quarter. Here's a picture of one.

Your statement about the quarter was uncalled for.
Secondly, show me a new iPhone I can buy for $268 and I would be all over it. In other words the $268 isn't the issue, it's the $1000.

 

[boltjames]

Your statement about the quarter was uncalled for.
Secondly, show me a new iPhone I can buy for $268 and I would be all over it. In other words the $268 isn't the issue, it's the $1000.

Not uncalled for. The poster who I was responding to said clearly that what was stopping him was the difference between the UK X and the US X which is £200 which I pointed out was $268 or $0.25 cents a day right here:

Because you guys only pay £747 for an iPhone X whereas we pay £1000. The jump on the 8 over previous iterations is over £200. The whole range has rapidly shot up and monthly tariffs tend not up let you pay more for the device to bring the monthly costs down.

 

[The-Real-Deal82]

I think it was the condescending, rude and provocative tone rather than the use of mathematics that was uncalled for.

 

[boltjames]

I think it was the condescending, rude and provocative tone rather than the use of mathematics that was uncalled for.

You will find that if you stop being condescending, rude, and provocative, perhaps you'll find others that follow suit.

This is an Apple iPhone forum, you do realize this yes? So your week-long rants pro-Android and anti-Apple are bound to get an equal and opposite reaction not just from me, but from other posters.

 

[The-Real-Deal82]

This is an Apple iPhone forum, you do realize this yes? So your week-long rants pro-Android and anti-Apple are bound to get an equal and opposite reaction not just from me, but from other posters.

I am an iPhone user not an Android user. I’ve only pointed out to you that you are wrong in your assertions when you’ve claimed Android users are ‘poor people’, ‘ill educated’, ‘working class’ who drive Kia’s but strive to own BMWs. That doesn’t make me pro Android, because I have something you don’t and that is knowledge of Android. You have admitted you have not got the first clue about it or what any of the phones are capable of. So to put it politely you are out of your depth passing judgement on a subject you’ve admitted you have no knowledge of. These are all your claims and they’ve come back to bite.

I’m also not the one who has the best part of a dozen people here reacting to my posts and accusing me of baiting. Do you know who that is? Yes, you’re right, you’ve guessed it, that’s you. Now I think I’ve been civil enough and perhaps stupid for engaging in something you evidently get a thrill out of, but for balance I think it was fair to say. All the best.

 

[Blondie&Dagwood]

I suppose I could repeat it as many times as the generalisation we’ve all had free iPhones keeps being passed off as fact.

Yup, just remember that you are repeating it to a group of people who still think the iPhones are subsidized because they purchased them through the IUP program
[doublepost=1514489905][/doublepost]

Not uncalled for. The poster who I was responding to said clearly that what was stopping him was the difference between the UK X and the US X which is £200 which I pointed out was $268 or $0.25 cents a day right here:

$268 price difference is actually very misleading. The UK iPhone is quoted inclusive of sales tax or VAT as they call it over there. The US price excludes tax. Yes, a few states such as Oregan and Deleware are tax free, but in New York, I paid around $150 (give or take) extra in state & local taxes. So we are essentially going ape sh@t over an extra $100 bucks or so. I think us New Yorkers deserve it seeing we are going to get raped by the new tax bill

 

[boltjames]

The
$268 price difference is actually very misleading. The UK iPhone is quoted inclusive of sales tax or VAT as they call it over there. The US price excludes tax. Yes, a few states such as Oregan and Deleware are tax free, but in New York, I paid around $150 (give or take) extra in state & local taxes. So we are essentially going ape sh@t over an extra $100 bucks or so. I think us New Yorkers deserve it seeing we are going to get raped by the new tax bill

No doubt the new tax bill hurts, capping real estate deductions is painful.

That said, and as much as I can appreciate $100, it’s really not that much money to be going is crazy over. It’s pennies a day which is what I was saying before. Complaining about Apple at pricepoints this low for products we use so often and for so many years makes the whole argument inconsequential from a financial standpoint.