Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
I disagree that HomePod is a miss. People are comparing the $350 HomePod to FREE-$20 buck Echos which is just dumb. It's not a direct competitor to smart speakers. It's a high end bluetooth speaker with a Siri "musicologist". It's selling and it's doing its job.
Where could Apple strike Gold?
1. Cars.
2. Glasses. I have an idea that (hopefully) Cook will read that would make Apple Glasses a miracle device. If Apple can think of better ideas than a poor forum commenter then they will strike gold.
3. Health. Apple is already a leader here.
Now as far as services:
1. Shopping. A pre-installed app that can act as a mall, an "eBay" and an "amazon" all in one would pull in billions.
2. Expanding the TV app. Adding an Apple Service, a possible sports service and movies in theaters would pull in more billions.
3. Expanding Didi. Apple could also pre-install Didi into iOS devices and go head on with Uber/Lyft in western countries.
I disagree on HomePod. Sure, if your expectations are low, it's doing ok, but it could have been so much more. Why can't it do surround? Why doesn't it have Ethernet? Why can't Siri play the lossless audio on my home Mini (from iTunes) instead of wasting my bandwidth and streaming lower quality audio from the cloud? It's a weak, gimped product compared to Sonos and other home audio solutions. If you compare it to bluetooth speakers, sure, it's great (but overpriced). I think Apple could do a whole lot more in the audio space. There are two kinds of audio customers: the ones who don't care about sound quality and the ones who care a lot. There's no middle ground. Apple targeted a non-existent middle. HomePod is too expensive for people who don't care about audio and it's underwhelming if you're someone who cares a lot. I'm sure it sounds better in a pair. I returned mine before they released that feature. Anyway, I see it as a miss. And it's definitely a miss from a sales standpoint for me. Like I said, I would have bought at least 6 for my home. Instead, I stuck with and am expanding my Sonos system.
Cars. Of the three things you list - cars, glasses and health - I see cars as the only one comparable to iPod and iPhone in terms of mass appeal. Everyone listens to music. Everyone talks on the phone. Everyone drives. Now, that said, can Apple pull it off? I have my doubts. It's so far out of their wheelhouse. Apple has been able to shine in the consumer electronics space. Will they bring enough to the car market to really set them apart and make people want to take the chance on an Apple car? I'm a huge Apple fan and longtime customer, but I seriously doubt I'd ever buy an Apple car. And I just can't even imagine building out the infrastructure to support the selling and servicing of vehicles. It all seems a bit crazy to me.
Glasses. Niche.
Health. Niche. One would think (hope!) otherwise, but it's pretty obvious from the (rising) obesity rate in the US that most people don't care about their health.
That isn't to say that glasses and health can't be very interesting and profitable niche markets, but I don't see them ever having the broad potential appeal of cars, portable audio, and phones.
Services. Shopping is an interesting one. I hadn't thought of that, but I agree that it could be huge if executed correctly. Video makes the most sense to me, whether it's a new service or they acquire (and rework!) Netflix. I also think there's a huge potential hardware market in TV as well. I know many people think Apple's TV set dreams are dead, but I don't believe that. If Apple got serious about the home - home automation, home audio, and TV - I think they could dominate in the way they dominated portable audio and cell phones. I'd much rather see them focus on the connected home market than cars.
I can't say that I agree on Didi. I personally think Apple is best to avoid any of these sharing economy services as it's still very much the wild west. At its core Apple is a hardware company and I don't see that changing. I think they should focus on services that directly work to sell hardware.
I Wonder if Angela Ahrendts influace has something to do with whats happening with Apples prices and image of super lux. Product... indtead of value proposition.
I said it months ago. The XR should have had a smaller screen size, pulling the price down to at least 699 with the same profits, maybe even a lower price.
Android phones with screens bigger than the Xr sell for much less than the Xr though. So there's no excusing high prices with feature X or Y.
Some do, some don't. Here's a handful of the flagship Android phones on the T-mobile site, all with comparable prices to iPhones:
OnePlus 6T
6.4-inch display
Qualcomm Snapdragon 845
Android 9 Pie (pretty close to stock Android) with quick security/OS updates
8GB RAM
128GB internal storage
3700 mAh battery
Dual rear cameras
In-display fingerprint reader
$580
Honestly I've never heard of this brand. Most Android people I know have Samsung or Google phones. Are these OnePlus phones any good (aside from a specs list)?
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
I disagree that HomePod is a miss. People are comparing the $350 HomePod to FREE-$20 buck Echos which is just dumb. It's not a direct competitor to smart speakers. It's a high end bluetooth speaker with a Siri "musicologist". It's selling and it's doing its job.
Where could Apple strike Gold?
1. Cars.
2. Glasses. I have an idea that (hopefully) Cook will read that would make Apple Glasses a miracle device. If Apple can think of better ideas than a poor forum commenter then they will strike gold.
3. Health. Apple is already a leader here.
Now as far as services:
1. Shopping. A pre-installed app that can act as a mall, an "eBay" and an "amazon" all in one would pull in billions.
2. Expanding the TV app. Adding an Apple Service, a possible sports service and movies in theaters would pull in more billions.
3. Expanding Didi. Apple could also pre-install Didi into iOS devices and go head on with Uber/Lyft in western countries.
How about safe secure home automation products we can trust? Thermostats, smoke detectors, cameras on the low end to integrated home control on the high end. All with the Apple security we value so high. What's out there now are much larger security risks than anything Apple puts out.
And right on cue, the salivating trolls come marching onto EVERY Apple site in existence by the truckload!
Forget trolls. What is your opinion on what is happening on iPhone?
The rest of the business seems to be doing ok. They have a lot of cash reserves to pull on. That won't save them from a roller coaster ride, short term, but iPhone is suffering. Do you agree with TCs line or do you think he is airbrushing bits? Are prices too high? Is competition playing a part? Are iPhones underperforming on features? Etc.
The smartphone market is mature. I can easily afford the top of the line iPhone model, but I see no reason to upgrade from my 7 Plus. I think a lot of people feel this way. Even if Apple dropped prices tomorrow, I still wouldn’t upgrade. My 7 Plus is great. I’d like FaceID, but that’s not enough of a reason to upgrade.
I dont think prices are the issue. There are iPhone models under $500. Top of the line is very pricey, but Apple has nice offerings at several price points. The market is saturated and mature and this was bound to happen.
If price wasn’t an issue why did Tim keep mentioning subsidies going away? Why did he mention not marketing the trade-in program enough? Both of those things scream price issues. Which was obvious when the front page of apple.com was displaying this:
I know many people with older phones and none of them WANT to upgrade. They don’t care about pricing. They are satisfied with their current devices. I was just helping a friend with her Mac today. It’s 8 years old and works fine. She sees no reason to upgrade. The same thing is happening with phones.
As I said, Apple has phone models at a variety of price points. Stop focusing on the top of the line. Phones are mature. The tech is mature. There aren’t a lot of new features. Faster, better screen, better camera...yawn. My phone is fast enough and the camera is fine. The days of annual upgrades are over.
Price is a factor, but it’s not the issue.
I don’t think higher prices is the only factor but it is A factor. It’s not like upgrade cycles just started lengthening this year. It’s possible too that the XR just introduced confusion to the lineup. People weren’t sure what to buy so they didn’t buy anything.
That could be, but I think it really comes down to how good these devices have become. We don’t upgrade our computers or any other piece of tech yearly. It’s crazy to buy a new phone every year, especially when there aren’t many new features. Truly new features, not just improved tech. At some point we reach “good enough” and I think that happened with the 7, maybe even the 6s. Upgrade cycles have been getting longer and longer ever since.
If Apple dropped the price of the XS by 20% tomorrow, I doubt it would impact overall sales very much. I think Apple could move more devices with promotions like a free year of Apple Music and/or increased iCloud storage amounts. After the first year, your customer is hooked and keeps paying. The “first world” (I hate that term) is saturated. Dropping prices alone won’t solve the problem. In the “developing” (I hate that term too) world, price is key. They need a cheap, break-even device that brings people into the ecosystem and gets them hooked on services. As much as I hate to think of Apple as a services company, that is the logical source of revenue growth. Recurring monthly charges.
You are right that regardless of price increases the upgrade cycle is lengthening. But I still think the price increases had an effect if for no other reason than the narrative around iPhone became about price. And maybe some people would have upgraded but balked when the flagship that used to start at $649 now started at $999. And then this year even the new cheaper model was $100 more than the flagship model was a couple years ago.
Personally I’d like to see Apple move to a good/better/best model for iPhones where good and better aren’t just the previous years phone at a cheaper price. Have 3 new phones that are good value for the money with no confusion over which one to get. The only thing that complicates this idea is size as some people want really big phones and some want an SE sized phone. I would just like to see the line up be clean. And only keep older models around for very price sensitive markets like India.
The narrative is definitely about price, unfortunately. It's like bashing BMW for selling the i8 at such a ridiculous price while ignoring all the other perfectly good cars that BMW sells. I agree with you on good/better/best, but I think that's kind of what we have now. It's just a matter of perception. Keeping an older models in production for another year or two and making it the "good" tier is a lot cheaper than designing three new phones each year, plus all of the production and tooling costs associated. You can get a new iPhone 7 Plus for under $500 today. I doubt they could deliver a newly designed "good" tier phone every year for that price.
I also agree that the product line is confusing, and that goes for everything, not just iPhones. Thank goodness we're not back to the Quadra and Performa days (yet), but things have gotten bad.
Apple does have good/better/best from a pricing standpoint but there’s nothing exciting about a 2 or 3 year old phone. If Apple is transitioning into a services company then they may need to be willing to sacrifice some hardware margin as they transition. I think Apple absolutely could design a really good phone for $500 (look what they did with the iPad announced in March). But are they willing to sacrifice some margin to do so? Time will tell.
I agree about the exciting part. I also think you're right about margins. But I don't think that Apple is transitioning into a services company. Services will become a greater part of the revenue mix, but without hardware, there are no services. At it's core, Apple will always be a hardware company. I don't ever see them more or less giving away hardware in the hopes of capturing services revenue.
And right on cue, the salivating trolls come marching onto EVERY Apple site in existence by the truckload!
Forget trolls. What is your opinion on what is happening on iPhone?
The rest of the business seems to be doing ok. They have a lot of cash reserves to pull on. That won't save them from a roller coaster ride, short term, but iPhone is suffering. Do you agree with TCs line or do you think he is airbrushing bits? Are prices too high? Is competition playing a part? Are iPhones underperforming on features? Etc.
The smartphone market is mature. I can easily afford the top of the line iPhone model, but I see no reason to upgrade from my 7 Plus. I think a lot of people feel this way. Even if Apple dropped prices tomorrow, I still wouldn’t upgrade. My 7 Plus is great. I’d like FaceID, but that’s not enough of a reason to upgrade.
I dont think prices are the issue. There are iPhone models under $500. Top of the line is very pricey, but Apple has nice offerings at several price points. The market is saturated and mature and this was bound to happen.
If price wasn’t an issue why did Tim keep mentioning subsidies going away? Why did he mention not marketing the trade-in program enough? Both of those things scream price issues. Which was obvious when the front page of apple.com was displaying this:
I know many people with older phones and none of them WANT to upgrade. They don’t care about pricing. They are satisfied with their current devices. I was just helping a friend with her Mac today. It’s 8 years old and works fine. She sees no reason to upgrade. The same thing is happening with phones.
As I said, Apple has phone models at a variety of price points. Stop focusing on the top of the line. Phones are mature. The tech is mature. There aren’t a lot of new features. Faster, better screen, better camera...yawn. My phone is fast enough and the camera is fine. The days of annual upgrades are over.
Price is a factor, but it’s not the issue.
I don’t think higher prices is the only factor but it is A factor. It’s not like upgrade cycles just started lengthening this year. It’s possible too that the XR just introduced confusion to the lineup. People weren’t sure what to buy so they didn’t buy anything.
DEAD ON with the XR confusion. A lot of people went into the Apple store prepared to drop $1000+ on a XS and left with a cheaper XR with a larger screen....
Or went into the store and left with nothing. If the XR was doing well why would Apple be marketing it $300 cheaper (with trade-in) on the front page of their website? Why would carriers like Sprint and T-Mobile be offering it for free with new activations?
Oh of course. People went in with $1000+ and left with nothing. DOOMED!
The cheapest new 2018 iPhone you can get in Canada right now is $1228 with AppleCare ($1375 after tax). $1375... for the bottom of the barrel 2018 phone. The cheapest possible phone you can get is a 7 for $1100.
The iPhone most people would like to have is the Xs 256 - which costs $2058 with AppleCare after tax.
Nice phones? Sure. $2058 nice? lol
Throw in a case and your average data plan cost and you are looking at a 2 year $4500 investment.
$4500 for the new iPhone with the newest features.
Go ahead and try to defend that. Business's can't justify that - so forget about 20 somethings paying off student loans, paying that for dancing poo emoji's and Instagram scrolling. And before you attempt to point to other offerings - nobody wants to pay $1100 for a near obsolete 3 year old iPhone 7.
It's beyond absurd.
And again you quote the most expensive possible situation. You even threw in AppleCare, a case and a 3rd party data plan for 2 years! lol
Beyond absurd.
No, you skipped over the lowest cost iPhone of all, a 4 year old device that costs $1100. That's ridiculous IMO. That's part of the issue is Apple charging sorry high prices for years old tech. The old 13" MacBook Air was years old tech but the price stayed the same. At some point Apple's great products so being enough to justify the ever increasing price. The competitors have come ever closer so that doesn't help either.
Jobs said the iPhone have Apple a five year headstart when he announced the first version. We're well past five years and I don't think anyone can honestly say Apple is still anywhere near five years ahead. That means others catching up and Apple keeps going raising prices.
Incredibly, it is still for sale at the same price point it was at in 2015. Apple historically rarely dropped prices, but they'd offer more for your money each refresh, and regularly update all their products. Now they leave products to stagnate for years, but don't drop the prices. And to top it off, when they do update a device, they remove half the ports for the inane goal of being thinner still and increase the price. So whilst not cheap to begin with, they end up downright extortionate after a year or so.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
That makes zero sense. Whats's the difference between your TV plus an AppleTV versus an Apple-built TV with a built-in AppleTV? Nothing.
So are all the people who shit on anybody here who speculated iPhone sales might be soft going to apologize now? It was patently obvious once Apple started heavily pushing the trade-in program and displaying cheaper prices on apple.com homepage that there was an issue with sales.
yes, they are soft but it's ludicrious to think price is the only issue. Even Apple lowered prices by $100 to $150, it would have made any difference. Combination of iOS 12 + cheap battery upgrade program made older iPhones better and good enough for a ton of users. Currencies outside the USA got hit a lot causing prices to rise further. China's economy slowed in the 2H of 2018 which according to Tim Cook's letter where almost all of their negative decline came from. On top of all of that, the iPhone user base grew by 100 million users in the last 12 months which is the 6th straight year that's happened which means more people are buying and using iPhones. That last point alone is remarkable actually. And I think this sums it pretty well;
Part of the problem is the overreiliance on China sales for growth. They’ve never stopped being an IP-stealing, product dumping country. If the President can get them to deal and make some serious adjustments to their policies, things will get back on track pretty fast.
Having said that, the stock is about to take another serious gut punch.
Not China anymore than it's few million to replace batteries or carrier subsidies. Whenever a company blames sales in China for lowered guidance I know it's something else.
I Wonder if Angela Ahrendts influace has something to do with whats happening with Apples prices and image of super lux. Product... indtead of value proposition.
I said it months ago. The XR should have had a smaller screen size, pulling the price down to at least 699 with the same profits, maybe even a lower price.
Android phones with screens bigger than the Xr sell for much less than the Xr though. So there's no excusing high prices with feature X or Y.
Some do, some don't. Here's a handful of the flagship Android phones on the T-mobile site, all with comparable prices to iPhones:
OnePlus 6T
6.4-inch display
Qualcomm Snapdragon 845
Android 9 Pie (pretty close to stock Android) with quick security/OS updates
8GB RAM
128GB internal storage
3700 mAh battery
Dual rear cameras
In-display fingerprint reader
$580
Honestly I've never heard of this brand. Most Android people I know have Samsung or Google phones. Are these OnePlus phones any good (aside from a specs list)?
I know two people with one and both say they're great, they're a couple of years old and seem to be holding up fine, and were £350 not £800
Apple is doomed in China. Even if Trump reverse his hostile altitude toward China, Apple has lost all the goodwill of Chinese people. If you don't believe this will happen, take a look of Samsung sales in China. Its market share is at low single digits. Chinese used to be fond of Apple due to Apple helping manufacturing jobs in China. Trump wants Apple to being those SLAVE jobs back to US. He says by avoiding tariffs he imposed on China, Apple can make up the high costs of labor in US. This idiot ignores Apple's market share in China. Apparently he doesn't care if Apple sell iPhones in China. This has never been the American way of doing business. Why the red states white Americans believe in him?
Speaking of which, this is an interesting take with respect to China
Don't understand what he means. WeChat can be used in iPhones.
What he means is that because WeChat is so dominant in terms of use, that users in China care far more about using WeChat than iOS / Android. Because of that the smartphone is essentially a commodity and the iPhone becomes over-priced.
OK Thanks for replying. Another thing I noticed is Chinese smartphone manufacturers emphasize a lot on camera capability.
As per usual the takes are spicy hot and people cant look past price and a single quarter of results. Meanwhile, Apple increased iOS install base by 100,000,000 over last 12 months.
Apple doesnt miss on its guidance so China must have made a pretty big effort to force its people away from Apple. Sounds like the rest of the World was near bang on to their guidance.
Would love to know how many battery replacements they did?!?!
Apple is doomed in China. Even if Trump reverse his hostile altitude toward China, Apple has lost all the goodwill of Chinese people. If you don't believe this will happen, take a look of Samsung sales in China. Its market share is at low single digits. Chinese used to be fond of Apple due to Apple helping manufacturing jobs in China. Trump wants Apple to being those SLAVE jobs back to US. He says by avoiding tariffs he imposed on China, Apple can make up the high costs of labor in US. This idiot ignores Apple's market share in China. Apparently he doesn't care if Apple sell iPhones in China. This has never been the American way of doing business. Why the red states white Americans believe in him?
Visit the red states one day and you will understand.
I agree with you on Apple in China. I don't know the Chinese market very well and my observations are that of an outsider. That said, I get the impression that Apple is not well liked in China and never really has been. Now that homegrown Chinese brands are offering some high quality phones, I don't see Apple making much progress in the Chinese market. Add all of the stupid politics into the equation and it does seem like Apple is doomed in China.
And right on cue, the salivating trolls come marching onto EVERY Apple site in existence by the truckload!
Forget trolls. What is your opinion on what is happening on iPhone?
The rest of the business seems to be doing ok. They have a lot of cash reserves to pull on. That won't save them from a roller coaster ride, short term, but iPhone is suffering. Do you agree with TCs line or do you think he is airbrushing bits? Are prices too high? Is competition playing a part? Are iPhones underperforming on features? Etc.
The smartphone market is mature. I can easily afford the top of the line iPhone model, but I see no reason to upgrade from my 7 Plus. I think a lot of people feel this way. Even if Apple dropped prices tomorrow, I still wouldn’t upgrade. My 7 Plus is great. I’d like FaceID, but that’s not enough of a reason to upgrade.
I dont think prices are the issue. There are iPhone models under $500. Top of the line is very pricey, but Apple has nice offerings at several price points. The market is saturated and mature and this was bound to happen.
If price wasn’t an issue why did Tim keep mentioning subsidies going away? Why did he mention not marketing the trade-in program enough? Both of those things scream price issues. Which was obvious when the front page of apple.com was displaying this:
I know many people with older phones and none of them WANT to upgrade. They don’t care about pricing. They are satisfied with their current devices. I was just helping a friend with her Mac today. It’s 8 years old and works fine. She sees no reason to upgrade. The same thing is happening with phones.
As I said, Apple has phone models at a variety of price points. Stop focusing on the top of the line. Phones are mature. The tech is mature. There aren’t a lot of new features. Faster, better screen, better camera...yawn. My phone is fast enough and the camera is fine. The days of annual upgrades are over.
Price is a factor, but it’s not the issue.
I don’t think higher prices is the only factor but it is A factor. It’s not like upgrade cycles just started lengthening this year. It’s possible too that the XR just introduced confusion to the lineup. People weren’t sure what to buy so they didn’t buy anything.
DEAD ON with the XR confusion. A lot of people went into the Apple store prepared to drop $1000+ on a XS and left with a cheaper XR with a larger screen....
Or went into the store and left with nothing. If the XR was doing well why would Apple be marketing it $300 cheaper (with trade-in) on the front page of their website? Why would carriers like Sprint and T-Mobile be offering it for free with new activations?
Oh of course. People went in with $1000+ and left with nothing. DOOMED!
The stock will open down about 7%. That’s after being down almost 30% over the last quarter. But keep covering your eyes and ears if it makes you feel better.
Buying opportunity.
Unfortunately the market overall doesn’t seem to be in buying mode.
No, but I am! I sold a chunk of shares back at $222. Wish I'd sold more. I was planning to keep the cash for now as I explore a few other opportunities, but if the stock drops much further, I'll probably just buy back in.
So are all the people who shit on anybody here who speculated iPhone sales might be soft going to apologize now? It was patently obvious once Apple started heavily pushing the trade-in program and displaying cheaper prices on apple.com homepage that there was an issue with sales.
Not for a minute.
Should someone who's wrong 24 quarters in a row (all the analysts and the idiots who believe them) that now finds their prediction come true one single time suddenly be praised for their insight? Or did they just get lucky after repeating the same tripe over and over to the point where one day they were finally correct?
We all know it's the latter.
Of course, you could have simply accepted a differing opinion and countered with your own reasoned input instead of jumping on posters and labelling them as trolls, shills, idiots and what not. There is no 'getting lucky' here. Price ceilings exist. You have one. I have one. Most of us do. If prices increase in a saturated market and Apple hasn't pushed the envelope on a tech level, something is likely to give. With iPhone, it just gave.
We're focusing on iPhone mainly here and rightly so.
If you don't call being right one time only a lucky guess, then what do you call it?
And what do you call being wrong 24+ times? Bad luck? Oh wait, you said luck isn't involved. So being wrong for years and years is what, incompetence?
You’re such a troll! Go stand in the corner and think about your actions.
Ahhhh, did I upset you with facts?
Not at all. There’s always people like you that root for the team they love no matter what. Apple could kill thousands of people and you’d still defend them no matter what. Just tired of you trying to bully people hear that have a different opinion than you do. You are an ass and I’m calling you out on that.
Liar. I simply tell the truth. If Apple does something wrong I'll say so.
Trolls just hate it when you call them on their lies over and over. Which probably explains why you're so upset.
You seem to think this doesn't vindicate people who said prices were too high. It does. But you're defending that by saying Apple's prices are right, despite sales being down. You're a troll.
The revenue miss is 100% greater China. Read the letter and watch the interview.
I am holding off on a new iPhone and am sticking with my 6S Plus for a while longer due to Apple's higher prices. I'm sure I am not the only one...
Why not? Still works?? But if you cannot afford a new iPhone theres a lot of android alternative. Nobody is twisting your arm to buy a latest and the greatest
Nobody even mentions that Apple is still selling the iPhone 7, 8 and now again the X. If you don’t need the latest model, there are plenty of less-expensive models to choose from. People are focusing on the most-expensive Xs Max instead of the whole lineup. Yes the Xs Max is expensive - one reason I’m keeping my 8 Plus. But it’s not all there is.
It's ridiculous isn't it?
People complain about price and then quote the most expensive iPhone as an example.
The latest iPhone is $750.
When do people complain that Ford is too expensive and then continue to quote the $70,000 Shelby Mustang? Like they say, people have special rules for Apple.
It is a puzzle how a computer maker turned trinket seller (iPods) became a luxury brand for so many people. Smart phones are utilitarian and mass produced. But then Apple somewhat pulled it off again by copying Swatch's down market but fun design sense and charging hundreds for it.
I love how everyone blamed Trump for China problem. The biggest China issue is the unfettered rip off of Apple with virtually carbon copies of iPhones being sold for pennies on Apple's dollars. Apple can't compete with that. The Chinese aren't bought into Apple's ecosystem and with the authoritarian government they lost the many benefits of Apple's security. Trump trying to stop the blatant theft and patent violations is Apple's only hope in China and the developing world. These people don't care for the to them slight benefits of Apple's ecosystem when an iPhone costs more than many earn in a year. Apple succeeding in the third world was never viable.
rogifan_new said: Why would carriers like Sprint and T-Mobile be offering it for free with new activations?
fastasleep said: Because they're not giving it away for free? Maybe you misread but T-Mobile is giving away free 2-day shipping which isn't really the same thing, is it.
And this is why I have guys like Rogifan on “ignore”. Too bad because he had a FEW valuable things to share about Android. his obfuscation and exaggeration are too much to bare.
most of us here were aware of the risks due to China especially in this economical and political climate. And are not surprised that the stock was already taking a small hit. But the fundamentals in the increasing customer base/activations, service revenue, etc., etc., will keep this ship steady. Hope that there is improved stability with China soon.
also not surprising that the trolls take this opportunity to bash all that they can. Quite shameful, but it’s who they are.
It's millions of haters/losers/idiots all over the world having a collective orgasm at hearing this news. Seems they can only be happy when there's bad news about Apple.
Perhaps you do dont know that Iphones in China costs 30% more than in the US. I bought mine in Hong Kong because is cheaper. Most people in the Mainland cannot justify the pricing considering that local phone makers offer similar or superior phones cheaper. In China all we need is Wechat and Alipay app which run on every platforms. I can tell you that uthe arguments that China economy is slowing is bull since other phone makers are still expanding. Perhaps if Apple released phones worth upgrading then things would be different. Truth is that Apple cannot longer compete with Huawei and Oneplus in the high-end, since their phones are superior and cheaper.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
That makes zero sense. Whats's the difference between your TV plus an AppleTV versus an Apple-built TV with a built-in AppleTV? Nothing.
Well, the cost of the Apple TV for starters. I also believe that Apple could do very well in the TV business, but only as part of a much greater commitment to home electronics and automation. If Apple went all in on first party HomeKit products, along with home audio and TV, I think they could own the home. They could bring some HomePod tech to the TV and deliver the best out of box audio quality. Most TV audio sucks. FaceTime would be an obvious feature. And what if FaceID could detect who is watching the TV? That opens up all kinds of possibilities from apps to more or less foolproof parental controls.
Comments
I disagree on HomePod. Sure, if your expectations are low, it's doing ok, but it could have been so much more. Why can't it do surround? Why doesn't it have Ethernet? Why can't Siri play the lossless audio on my home Mini (from iTunes) instead of wasting my bandwidth and streaming lower quality audio from the cloud? It's a weak, gimped product compared to Sonos and other home audio solutions. If you compare it to bluetooth speakers, sure, it's great (but overpriced). I think Apple could do a whole lot more in the audio space. There are two kinds of audio customers: the ones who don't care about sound quality and the ones who care a lot. There's no middle ground. Apple targeted a non-existent middle. HomePod is too expensive for people who don't care about audio and it's underwhelming if you're someone who cares a lot. I'm sure it sounds better in a pair. I returned mine before they released that feature. Anyway, I see it as a miss. And it's definitely a miss from a sales standpoint for me. Like I said, I would have bought at least 6 for my home. Instead, I stuck with and am expanding my Sonos system.
Cars. Of the three things you list - cars, glasses and health - I see cars as the only one comparable to iPod and iPhone in terms of mass appeal. Everyone listens to music. Everyone talks on the phone. Everyone drives. Now, that said, can Apple pull it off? I have my doubts. It's so far out of their wheelhouse. Apple has been able to shine in the consumer electronics space. Will they bring enough to the car market to really set them apart and make people want to take the chance on an Apple car? I'm a huge Apple fan and longtime customer, but I seriously doubt I'd ever buy an Apple car. And I just can't even imagine building out the infrastructure to support the selling and servicing of vehicles. It all seems a bit crazy to me.
Glasses. Niche.
Health. Niche. One would think (hope!) otherwise, but it's pretty obvious from the (rising) obesity rate in the US that most people don't care about their health.
That isn't to say that glasses and health can't be very interesting and profitable niche markets, but I don't see them ever having the broad potential appeal of cars, portable audio, and phones.
Services. Shopping is an interesting one. I hadn't thought of that, but I agree that it could be huge if executed correctly. Video makes the most sense to me, whether it's a new service or they acquire (and rework!) Netflix. I also think there's a huge potential hardware market in TV as well. I know many people think Apple's TV set dreams are dead, but I don't believe that. If Apple got serious about the home - home automation, home audio, and TV - I think they could dominate in the way they dominated portable audio and cell phones. I'd much rather see them focus on the connected home market than cars.
I can't say that I agree on Didi. I personally think Apple is best to avoid any of these sharing economy services as it's still very much the wild west. At its core Apple is a hardware company and I don't see that changing. I think they should focus on services that directly work to sell hardware.
Honestly I've never heard of this brand. Most Android people I know have Samsung or Google phones. Are these OnePlus phones any good (aside from a specs list)?
I agree about the exciting part. I also think you're right about margins. But I don't think that Apple is transitioning into a services company. Services will become a greater part of the revenue mix, but without hardware, there are no services. At it's core, Apple will always be a hardware company. I don't ever see them more or less giving away hardware in the hopes of capturing services revenue.
and that will go nowhere. It's one bad (bad being relative) quarter, no big deal.
I know two people with one and both say they're great, they're a couple of years old and seem to be holding up fine, and were £350 not £800
Apple doesnt miss on its guidance so China must have made a pretty big effort to force its people away from Apple. Sounds like the rest of the World was near bang on to their guidance.
Would love to know how many battery replacements they did?!?!
Visit the red states one day and you will understand.
I agree with you on Apple in China. I don't know the Chinese market very well and my observations are that of an outsider. That said, I get the impression that Apple is not well liked in China and never really has been. Now that homegrown Chinese brands are offering some high quality phones, I don't see Apple making much progress in the Chinese market. Add all of the stupid politics into the equation and it does seem like Apple is doomed in China.
most of us here were aware of the risks due to China especially in this economical and political climate. And are not surprised that the stock was already taking a small hit. But the fundamentals in the increasing customer base/activations, service revenue, etc., etc., will keep this ship steady. Hope that there is improved stability with China soon.
also not surprising that the trolls take this opportunity to bash all that they can. Quite shameful, but it’s who they are.