Apple is presently adding around 100 million new customers by selling their old iPhones to the low end consumers. Plus every year they would sell 80% of the new iPhones to repeat customers who are upgrading. Gradually they will be adding new consumers who will buy their old iPhones and still buy apps, music, video and other software services. I am happy that Apple is keeping the prices high.
China Mobile is yet to convert its network to LTE and Apple has time to get an agreement with them. Apple is selling iPhones to the china mobile network presently through retail network and most of the consumers in the developing countries buy their smartphones from retailers not the mobile operators. Apple has the licenses to sell iPhones in the china mobile network.
You must be new to Apple if you have realize what Apple iPhones it has sold in the last few years.
This strategy worked with the iPod mini and the iPad mini. I see no reason why the 5S and 5C won't be #1 and #2.
Since you are interested in my history with Apple, it began in 1991 with my first computer a Mac Classic, and I've never looked back. I've owned and some brilliant technology for its day.
I am not disputing that Apple has sold lots of iPhones, whatever makes you think that?
But Apple is also losing market share worldwide. Though thankfully not in the USA, and is gaining here in the UK.
What do you mean by 'this strategy'? Apple has not tried this with an iPad mini - it's in its first model. If they had introduced a plastic version of the iPad mini, using technology a generation behind - A4 chip etc, and expected it to sell it at 85% of the cost of the current iPad mini - then they'd have pursued the 'same strategy',
I see no reason why the 5S and 5C won't sell very well - I'm particularly impressed with the 5S. They could conceivably take #1 and #2 spots. But that's not the figure I'm interested in - it's platform marketshare. The importance of this will not be lost to anyone who has been using Apple products for anything approaching a similar length of time to me, or longer.
My issue is with the pricing. (I'm not keen on the pastel shades, but that's a minor thing and tastes differ). How will keeping the same pricing structure (the Current model; Last Year's model; 2 years ago model) increase market share? Especially considering the greater growth is in less affluent markets.
In fact Apple are offering a poorer model for the same money at the middle price point. We now have: Current model; a cheaper-to-make plastic version of Last Year's model; and the 2-year old model.
What's consoling me is I don't think Apple is that far off a successful range, and could adjust.
Phase out the 4S with its antiquated connector. Drop the 5C by a $100 and the range looks attractive, sensible and appealing. Apple could surely afford this, with savings in manufacturing on the 5C. Even $50 less would pay off big time imho.
The initial runaway success of the iPhone has led Apple, and maybe Wallstreet, to expect huge margins that I don't think can be maintained long term in the middle ground. Apple could charge what they wanted when they were the only gig in town. But competition (most of it derivative and second rate) is here now. And Apple still has no real presence in the middle of the range.
This pricing seems very shortsighted. They seem to want to maintain their extremely high profit margins at the cost of losing market share and customers....
...The question is whether they waited too late and now so many people are locked into the Android ecosystem if these people can be pulled in or not. Switching ecosystems is not an easy process...
This is the essential question: Is Apple waiting too long to have a phone at moderate pricing $499US MAX. I'd like Apple to price the 5c in China at least as "low" as $549. Perhaps that's going too far to favor one country like that - but make some concession in China since they are manufactured there (yes?) and Apple is paying Chinese wages.
Getting locked into the Android ecosystem or the Apple ecosystem is a powerful deterrent to switching. The longer I have my iPhone/iCloud/Apps, the less likely I am to move to anything else (well I would switch to anything Google anyway but you get my point).
But Apple is also losing market share worldwide. Though thankfully not in the USA, and is gaining here in the UK.
Perhaps you should share your deep concern for Apple's Doom with Tim Cook. The people on these forums have no power to address your concerns. It's a tempest in a teapot here.
The article is a good read -- as are the comments.
I miss having these kind of discussions on AI forums -- where, for the most, part the participants are polite, thoughtful and offer well-reasons (if differing) points of view.
Agreed and unfortunately, the paid influx of Android fanatics have turned this place into a dump zone.
This article from MacLife sums up my feelings. Apple's biggest problem is delivery. And I would throw in marketing and brand. I'm sorry to say it but Cook and Schiller just don't cut it on stage. Federighi is great though. He should be given the most time on stage. And I think Phil could use a different role as I don't think he's cutting it in the one he's got. The ad they showed at the event yesterday was really bad. It didn't make me want to go out and buy a 5C.
It's amazing how these analyst suggest that Apple has not put any thought behind the pricing and materials of these phones. i seem to remember hearing this a year ago when it was feared an ipad mini above $299 would be a disaster. i think it was 2 months in before you could find a mini in stock.
It's been stated many times that Apple is too big for a $100 or $200 product to have a material impact to their bottom line. Now analysts want apple to sell a $200 phone and make $50 per unit. Analyst are just blowing smoke. The stock tanked last year because of negative earnings growth and lower margins.
They could very easily have a subsidized deal in place with China mobile which could explain why the retail price is so much. It's hard to believe after Tim Cook acknowledge the slow down in China sales last quarter that they would in return launch a phone that is $350.00 more than what the average person over there can afford and expect it to sale. Is apple clueless or is there more to the story that has not surfaced? Wasn't it munster who said there was a 99% chance a china mobile deal would be announced? We are now to believe them on potential sales lost by the pricing.
I wonder if Cook has underestimated 5S demand and overestimated 5C demand. Thinking that the 5C will take up the slack, keeping pressure off the 5S inventory.
Agreed and unfortunately, the paid influx of Android fanatics have turned this place into a dump zone.
I think that spins both ways. If you aren't in total agreement with everything that Apple is doing then you get called a liar, an idiot, a paid android/samsung schill etc. That's not too pleasant either.
I think that spins both ways. If you aren't in total agreement with everything that Apple is doing then you get called a liar, an idiot, a paid android/samsung schill etc. That's not too pleasant either.
Then you either don't read or selectively choose portions of conversations to generalize an absolute black and white position.
I wonder if Cook has underestimated 5S demand and overestimated 5C demand. Thinking that the 5C will take up the slack, keeping pressure off the 5S inventory.
Could apple be previewing their future plans with the current line up considering they will be offering 3 different form factors this year? If a 5 inch phone comes next year..........
Apple's Vision is beyond the scope of the 90 day limit of the standard investor. The problem stock price is all about perception, and Apple's message is beyond what analysts can grok, therefore they have no perception, therefore no price.
Hit the nail on the head. Apple grows by coming up with unexpected products that open up new markets. Of course the analysts can't accurately foresee what these products are. They'd be running Apple if they did. But just because they can't foresee them, they assume Apple doesn't have anything that will be another blockbuster and so their forecasts are based on totally mundane and self-contradictory factors like "Apple has to come up with a cheaper phone and higher margins!". Morons.
With people frothing at the mouth over Apple's failure to go for a price that would greatly expand their market share in exchange for a 'slight' hit on margins, it is probably a good time to remind everyone that whenever Apple expands its unit sales, it has to expand its customer service capacity as well. Yes that includes Apple Stores, especially Geniuses at the Genius Bars, which don't come cheap. Apple is not like Samsung or Moto where they can just cut prices, crank up their production and to hell with customer support (or hire a few more offshore flow-chart readers).
A significant component of being the premium brand is offering premium support. Lowering margins and increasing unit sales hits customer support two ways (less financial resources, more customers), and you know how it is, once you get "Company X has awful support" ingrained in the conventional "wisdom", it's extremely hard to change perceptions.
and the iPhone 6 with a 4.5 inch screen becomes $649 upward.
Really a beautiful move.
My thoughts exactly. If they can just get through 2014 things will only grow from there.
The issue is everyone thought the iPhone 5C was being targeted to replace the 4S. Apple, as always, found a way to apply the handbrake and eke a little more margin for another year.
This issue is also compounded by the forecasted strengthening of the US dollar which has resulted in some outrageous pricing in international markets. Australian media are panning the iPhone 5C as "last year's technology with a 10% discount" and spruiking "equally capable" (excuse me while I puke) Android handsets which retail for less than half the price.
The conversation is being dominated half by those who cannot bear to be contained by Apple's ecosystem (and resent developers for not prioritising their platform of choice) and half by those with no taste shrilling that Apple is not chasing them down for their spare change. The voice of consumers in the middle that appreciate Apple's unique value are being drowned out. Maybe Apple need to create an ad campaign involving dialogues starting with "I love my iPhone..." / "i love my iPad..." to inject a little more pride back into the conversation.
The street always give the wrong reason of why a stock goes up or down. AAPL began dropping yesterday after 11AM PT when the show was over. The price of 3C was announced much earlier. It seems the investors was waiting for the one last thing that is a 5 inch iPhone. Apple has missed a huge market which is every bigger than iPhone. The combined sales of larger smartphones are bigger than iPhone. With a bigger iPhone Apple can resume growth.
Indeed I feel so frustrated with Apple that it took them one year just to come out with all these little things? Why is it so hard for them to come up with a 5" or 5.5" big iPhone? they need to drop the "one hand operation" bs as who says you can't control a 5.5" phone with one hand? I really miss Steve! Tim Cook is NOT a product or marketing guy, as Steve said.
Comments
low end consumers. Plus every year they would sell 80% of the new iPhones to repeat customers who are upgrading. Gradually they will be adding new consumers who will buy their old iPhones and still buy apps, music, video and other software services. I am happy that Apple is keeping the prices high.
China Mobile is yet to convert its network to LTE and Apple has time to get an agreement with them. Apple is selling iPhones to the china mobile network presently through retail network and most of the consumers in the developing countries buy their smartphones from retailers not the mobile operators. Apple has the licenses to sell iPhones in the china mobile network.
You must be new to Apple if you have realize what Apple iPhones it has sold in the last few years.
This strategy worked with the iPod mini and the iPad mini. I see no reason why the 5S and 5C won't be #1 and #2.
Since you are interested in my history with Apple, it began in 1991 with my first computer a Mac Classic, and I've never looked back. I've owned and some brilliant technology for its day.
I am not disputing that Apple has sold lots of iPhones, whatever makes you think that?
But Apple is also losing market share worldwide. Though thankfully not in the USA, and is gaining here in the UK.
What do you mean by 'this strategy'? Apple has not tried this with an iPad mini - it's in its first model. If they had introduced a plastic version of the iPad mini, using technology a generation behind - A4 chip etc, and expected it to sell it at 85% of the cost of the current iPad mini - then they'd have pursued the 'same strategy',
I see no reason why the 5S and 5C won't sell very well - I'm particularly impressed with the 5S. They could conceivably take #1 and #2 spots. But that's not the figure I'm interested in - it's platform marketshare. The importance of this will not be lost to anyone who has been using Apple products for anything approaching a similar length of time to me, or longer.
My issue is with the pricing. (I'm not keen on the pastel shades, but that's a minor thing and tastes differ). How will keeping the same pricing structure (the Current model; Last Year's model; 2 years ago model) increase market share? Especially considering the greater growth is in less affluent markets.
In fact Apple are offering a poorer model for the same money at the middle price point. We now have: Current model; a cheaper-to-make plastic version of Last Year's model; and the 2-year old model.
What's consoling me is I don't think Apple is that far off a successful range, and could adjust.
Phase out the 4S with its antiquated connector. Drop the 5C by a $100 and the range looks attractive, sensible and appealing. Apple could surely afford this, with savings in manufacturing on the 5C. Even $50 less would pay off big time imho.
The initial runaway success of the iPhone has led Apple, and maybe Wallstreet, to expect huge margins that I don't think can be maintained long term in the middle ground. Apple could charge what they wanted when they were the only gig in town. But competition (most of it derivative and second rate) is here now. And Apple still has no real presence in the middle of the range.
This pricing seems very shortsighted. They seem to want to maintain their extremely high profit margins at the cost of losing market share and customers....
...The question is whether they waited too late and now so many people are locked into the Android ecosystem if these people can be pulled in or not. Switching ecosystems is not an easy process...
This is the essential question: Is Apple waiting too long to have a phone at moderate pricing $499US MAX. I'd like Apple to price the 5c in China at least as "low" as $549. Perhaps that's going too far to favor one country like that - but make some concession in China since they are manufactured there (yes?) and Apple is paying Chinese wages.
Getting locked into the Android ecosystem or the Apple ecosystem is a powerful deterrent to switching. The longer I have my iPhone/iCloud/Apps, the less likely I am to move to anything else (well I would switch to anything Google anyway but you get my point).
Perhaps you should share your deep concern for Apple's Doom with Tim Cook. The people on these forums have no power to address your concerns. It's a tempest in a teapot here.
Re: Pricing of the 5C;
Here's an interesting post I read on another forum -- that may be the explanation for what Apple attempting to accomplish with the iPhone 5C:
and another about the 5S:
Both from:
http://www.macworld.com/article/2048561/apples-neat-trick-why-the-iphone-5c-will-outsell-the-5s.html
The article is a good read -- as are the comments.
I miss having these kind of discussions on AI forums -- where, for the most, part the participants are polite, thoughtful and offer well-reasons (if differing) points of view.
Agreed and unfortunately, the paid influx of Android fanatics have turned this place into a dump zone.
http://www.maclife.com/article/analysis/new_iphones_look_great_presentation_could_use_some_work
It's been stated many times that Apple is too big for a $100 or $200 product to have a material impact to their bottom line. Now analysts want apple to sell a $200 phone and make $50 per unit. Analyst are just blowing smoke. The stock tanked last year because of negative earnings growth and lower margins.
They could very easily have a subsidized deal in place with China mobile which could explain why the retail price is so much. It's hard to believe after Tim Cook acknowledge the slow down in China sales last quarter that they would in return launch a phone that is $350.00 more than what the average person over there can afford and expect it to sale. Is apple clueless or is there more to the story that has not surfaced? Wasn't it munster who said there was a 99% chance a china mobile deal would be announced? We are now to believe them on potential sales lost by the pricing.
I wonder if Cook has underestimated 5S demand and overestimated 5C demand. Thinking that the 5C will take up the slack, keeping pressure off the 5S inventory.
Or maybe just underestimated 5S demand.
The next 3-6 months should be interesting.
Definitely a watershed moment for Tim Cook.
Agreed and unfortunately, the paid influx of Android fanatics have turned this place into a dump zone.
I think that spins both ways. If you aren't in total agreement with everything that Apple is doing then you get called a liar, an idiot, a paid android/samsung schill etc. That's not too pleasant either.
I think that spins both ways. If you aren't in total agreement with everything that Apple is doing then you get called a liar, an idiot, a paid android/samsung schill etc. That's not too pleasant either.
Then you either don't read or selectively choose portions of conversations to generalize an absolute black and white position.
The point of the 5C is to sell more 5S.
Aren't you touched by their deep concern over Apple's lack of competitiveness? It's...so moving. They really care about Apple's marketshare!
Then you either don't read or selectively choose portions of conversations to generalize an absolute black and white position.
Neither... but you have your opinion.
Looks like two to me, unless you're counting 5S/C as two.
Apple's Vision is beyond the scope of the 90 day limit of the standard investor. The problem stock price is all about perception, and Apple's message is beyond what analysts can grok, therefore they have no perception, therefore no price.
Hit the nail on the head. Apple grows by coming up with unexpected products that open up new markets. Of course the analysts can't accurately foresee what these products are. They'd be running Apple if they did. But just because they can't foresee them, they assume Apple doesn't have anything that will be another blockbuster and so their forecasts are based on totally mundane and self-contradictory factors like "Apple has to come up with a cheaper phone and higher margins!". Morons.
The point of the 5C is to sell more 5S.
That's a novel opinion.
With people frothing at the mouth over Apple's failure to go for a price that would greatly expand their market share in exchange for a 'slight' hit on margins, it is probably a good time to remind everyone that whenever Apple expands its unit sales, it has to expand its customer service capacity as well. Yes that includes Apple Stores, especially Geniuses at the Genius Bars, which don't come cheap. Apple is not like Samsung or Moto where they can just cut prices, crank up their production and to hell with customer support (or hire a few more offshore flow-chart readers).
A significant component of being the premium brand is offering premium support. Lowering margins and increasing unit sales hits customer support two ways (less financial resources, more customers), and you know how it is, once you get "Company X has awful support" ingrained in the conventional "wisdom", it's extremely hard to change perceptions.
They set themselves up perfectly for next year.
Next year the iPhone 5C becomes $449.
The iPhone 5S becomes $549 and $649
and the iPhone 6 with a 4.5 inch screen becomes $649 upward.
Really a beautiful move.
My thoughts exactly. If they can just get through 2014 things will only grow from there.
The issue is everyone thought the iPhone 5C was being targeted to replace the 4S. Apple, as always, found a way to apply the handbrake and eke a little more margin for another year.
This issue is also compounded by the forecasted strengthening of the US dollar which has resulted in some outrageous pricing in international markets. Australian media are panning the iPhone 5C as "last year's technology with a 10% discount" and spruiking "equally capable" (excuse me while I puke) Android handsets which retail for less than half the price.
The conversation is being dominated half by those who cannot bear to be contained by Apple's ecosystem (and resent developers for not prioritising their platform of choice) and half by those with no taste shrilling that Apple is not chasing them down for their spare change. The voice of consumers in the middle that appreciate Apple's unique value are being drowned out. Maybe Apple need to create an ad campaign involving dialogues starting with "I love my iPhone..." / "i love my iPad..." to inject a little more pride back into the conversation.