So is Apple taking a loss on these battery replacements or did they price them artificially high so people would opt to replace the phone instead batterry?
It depends on how you account for it regarding "taking a loss." Labor isn't free, and a battery replacement isn't a 20-minute job.
I guess I’m wondering was the previous price based just on the cost/labor of replacing the battery or was it inflated with the hopes that people would chose to get a new phone instead? And one reason I ask this is because Tim Cook chose to mention battery replacements as one of the reasons for lower iPhone sales.
It would be better if Apple kept their mouth shut on this topic, instead of trotting out numbers that can be interpreted negatively in a big way. It is almost as if Apple is sending out an invite to tech media to troll them now.
"So why would Apple want to do this? What is the logic of this durability focus as a business model? It may be good for the environment but is it good for the bottom line?
Of course, there would be not much business without an environment and we should all strive for sustainability. But this is an existential observation, and it’s defensive. The important call to make is that Apple is making a bet that sustainability is a growth business.
Fundamentally, Apple is betting on having customers not selling them products."
Troll all they want, but Apple already leads in longest lifecycle for their iPhone line.
11 million battery replacements for the program, for an iPhone series the began with the release of the iPhone 6 / 6 Plus in 2014, and includes other, newer models to a lesser extent, in a timeframe that Apple sold 800 million iPhones.
I'd be bragging about that actually, but certainly not using it as an excuse for lesser sales last quarter, which is the impression that most people came away from Tim's statement. It certainly belies the extent of the "throttling" story by magnitudes.
If the purpose of the battery program was "Apple making a bet that sustainability is a growth business" why would they have discontinued it so quickly? As Horace said, he's offering a defensive explanation of it.
The rational explanation says they had created a BAD PR situation with the intentional throttling stories flowing out of the iOS update and needed to do something positive to counter them. Thus the battery program for which they got GOOD PR.
IMHO if only 9 million more iPhone owners took advantage of it than would typically have, and many of them did so in an earlier quarter anyway, and not all 9 million would have been upgrading to begin with, it doesn't seem to me like the program could have had much impact on current sales. What, maybe a couple million or so at most in lost sales attributable to this quarter?
I'm a bit surprised after reading about the numbers Mr. Cook even raised that as a major factor, specifically mentioning it as one there at the All-Hands meeting and in public statements too. It does leave the impression of being something negative rather than a positive, just the opposite of Horace's slant on it as "Apple betting on customers rather than selling them products."
I think it was a bad idea for him to mention it. 1) it gives them impression the previous price to replace a battery was artificially high because Apple wanted customers to buy a new phone instead of replacing the battery. 2) it seems unlikely the battery replacement program would have impacted holiday quarter sales in a material way.
The reality is Apple’s build quality is high - I have a mid 2011 iMac, iPhone 5s and 6 still in use daily, and a perfectly fine 6 year old ipad. The days of upgrading every 2 years is gone (this was mainly artificial due to the teleco’s 24 month payment plans). The technology lasts longer, and there hasn’t been a truly compelling reason to upgrade unless you crack your screen or your battery doesn’t hold a charge - both of which have also been improved.
The reality today is nowhere near the reality of 2011!
Apple probably learned that being overly nice doesn't sell extra products World has changed and do what is required and not out of high ground. Don't pay your bills.
gatorguy said: The rational explanation says they had created a BAD PR situation with the intentional throttling stories flowing out of the iOS update and needed to do something positive to counter them. Thus the battery program for which they got GOOD PR.
Apple didn't create any "bad PR". The tech media did by misrepresenting both how iOS handled voltage supply issues AND how lithium ion battery technology works for voltage supply. The throttling in iOS was introduced only to prevent auto shutdown in situations where the voltage demand was higher than the battery could supply. Those kinds of voltage demand problems are not limited to old batteries that need replacing. They also occur when the battery charge is too low (like 20% or below) or if you're using your phone in cold temperatures. Apple was forced to clean up the mess created by someone else.
The battery is just an indicator of the bigger issue. It is very similar to when PC's were first introduced in the mid 80's. Everybody needed to buy a new computer every year as dramatic improvements were being made. The around the mid 90's improvements started being incremental, and computers reached a point where people really didn't need them to be that much faster for the activities most users did.
The same is happening to mobile phones. We call them mobile phones but really they are hand held PC's. Most phone users wouldn't really see a big need to upgrade a 2 year old phone- it still does everything they want it to. The current batch of phones are even better and may meet buyer's needs for the next 5 or 6 years. The battery is just a limiting component that runs out within that time frame
There really isn't a compelling reason- for most people- to upgrade their phones every year or even every 2 or 3 years anymore.
I for one continue to use an iPhone 6 with the new $29 battery, I would have bought the XR otherwise, since performance prior to replacement was poor and would not have spent $79 for a battery replacement.
I can’t comprehend people who say this - you would spend $29 to keep your phone another year but rather spend $750 instead of $79 for the same option? Unless you keep your phones for 15 years normally (which having a 6 makes unlikely) you expect your phone to cost most then $50/year. Let’s say the $50 only buys you 4 extra months of life - you would still be doing better than a new phone.
gatorguy said: The rational explanation says they had created a BAD PR situation with the intentional throttling stories flowing out of the iOS update and needed to do something positive to counter them. Thus the battery program for which they got GOOD PR.
Apple didn't create any "bad PR". The tech media did by misrepresenting both how iOS handled voltage supply issues AND how lithium ion battery technology works for voltage supply. The throttling in iOS was introduced only to prevent auto shutdown in situations where the voltage demand was higher than the battery could supply. Those kinds of voltage demand problems are not limited to old batteries that need replacing. They also occur when the battery charge is too low (like 20% or below) or if you're using your phone in cold temperatures. Apple was forced to clean up the mess created by someone else.
Ye. I worded it poorly, altho the outcome was the same. Thanks.
No doubt Apple felt pressured by the media / customer environment at the time to bring in the battery replacement program (at lower price). And it has gone back up, but not to what it was previously ($50 in US, $65 in Canada now - but was $99 pre replacement program). The result is a good one IMO. Devices can last longer (more people are in general just aware that they can easily replace battery, and the current cost is more in-line with general electronics repairs). This is positive to overall customer satisfaction, which is Apple's most important metric. Someone might delay an upgrade by a year or 2 (maybe longer), but then are far more likely to stay with iPhone (..."hey, I just got 5 years out of this device...good value & I am familiar with it"). Someone who has an iPhone is far more likely to buy a Mac, iPad, AW, AirPods, etc.
9M more battery replacements in 2018 certainly had a material impact on FY19 Q1 sales. While the program ran over the year, the case can easily be made that a replacement in calendar Q1'18 was the reason for no upgrade in Q4. Apple might be able to model what the result really was, but it isn't hard to see a few million (maybe 2-3M at a minimum) of upgrades were lost in that last quarter for this reason. But crucially, these are "delayed" upgrades, not lost.
Here is my view on the causes of reduction in last quarter's iPhone sales (in order): - China (affected many companies, especially those selling higher end goods) - Battery replacement - Models (specifically, the XR being a "large" phone only) - Prices (specifically, prices outside the US, impacted both higher price points of phones & exchange rate)
Key here is that, outside of China, all of the other elements are in Apple's control. And nothing here is indicating that the iPhone business is in a permanent decline.
The battery is just an indicator of the bigger issue. It is very similar to when PC's were first introduced in the mid 80's. Everybody needed to buy a new computer every year as dramatic improvements were being made. The around the mid 90's improvements started being incremental, and computers reached a point where people really didn't need them to be that much faster for the activities most users did.
The same is happening to mobile phones. We call them mobile phones but really they are hand held PC's. Most phone users wouldn't really see a big need to upgrade a 2 year old phone- it still does everything they want it to. The current batch of phones are even better and may meet buyer's needs for the next 5 or 6 years. The battery is just a limiting component that runs out within that time frame
There really isn't a compelling reason- for most people- to upgrade their phones every year or even every 2 or 3 years anymore.
Indeed, and Apple's Mac business has been in this scenario for over a decade. Would you say the Mac business is failing?
Also, I don't see phones reaching the same upgrade cycle (duration) as PC's, due to their mobile (breakage) nature, and that being a mobile device always on, there are still features that can be added bringing new functionality that drives upgrades. iPhone upgrade cycle is certainly greatly lengthening, but I would not say that it is past 4 years on average.
gatorguy said: The rational explanation says they had created a BAD PR situation with the intentional throttling stories flowing out of the iOS update and needed to do something positive to counter them. Thus the battery program for which they got GOOD PR.
Apple didn't create any "bad PR". The tech media did by misrepresenting both how iOS handled voltage supply issues AND how lithium ion battery technology works for voltage supply. The throttling in iOS was introduced only to prevent auto shutdown in situations where the voltage demand was higher than the battery could supply. Those kinds of voltage demand problems are not limited to old batteries that need replacing. They also occur when the battery charge is too low (like 20% or below) or if you're using your phone in cold temperatures. Apple was forced to clean up the mess created by someone else.
I call shenanigans. Apple had a hand in the mess they created and eventually owned up to it. Their communication of this issue and initial handling of the situation (prior to coming clean and offering the battery replacement program) was poor and created an environment ripe for conspiracies. I'm still bitter about my experience with this even though it's over a year behind me now.
The reality is Apple’s build quality is high - I have a mid 2011 iMac, iPhone 5s and 6 still in use daily, and a perfectly fine 6 year old ipad. The days of upgrading every 2 years is gone (this was mainly artificial due to the teleco’s 24 month payment plans). The technology lasts longer, and there hasn’t been a truly compelling reason to upgrade unless you crack your screen or your battery doesn’t hold a charge - both of which have also been improved.
The reality today is nowhere near the reality of 2011!
Wait until you buy 2018 versions....
I actually have an 8 plus for work, so I'm not completely in the dark ages. I've been holding out to replace my (now EOL iMac) with one that has a new form factor and newer Intel chips - hopefully 2019 won't disappoint! I also have my eye on the iPad Pros.
No doubt Apple felt pressured by the media / customer environment at the time to bring in the battery replacement program (at lower price). And it has gone back up, but not to what it was previously ($50 in US, $65 in Canada now - but was $99 pre replacement program). The result is a good one IMO. Devices can last longer (more people are in general just aware that they can easily replace battery, and the current cost is more in-line with general electronics repairs). This is positive to overall customer satisfaction, which is Apple's most important metric. Someone might delay an upgrade by a year or 2 (maybe longer), but then are far more likely to stay with iPhone (..."hey, I just got 5 years out of this device...good value & I am familiar with it"). Someone who has an iPhone is far more likely to buy a Mac, iPad, AW, AirPods, etc.
9M more battery replacements in 2018 certainly had a material impact on FY19 Q1 sales. While the program ran over the year, the case can easily be made that a replacement in calendar Q1'18 was the reason for no upgrade in Q4. Apple might be able to model what the result really was, but it isn't hard to see a few million (maybe 2-3M at a minimum) of upgrades were lost in that last quarter for this reason. But crucially, these are "delayed" upgrades, not lost.
Here is my view on the causes of reduction in last quarter's iPhone sales (in order): - China (affected many companies, especially those selling higher end goods) - Battery replacement - Models (specifically, the XR being a "large" phone only) - Prices (specifically, prices outside the US, impacted both higher price points of phones & exchange rate)
Key here is that, outside of China, all of the other elements are in Apple's control. And nothing here is indicating that the iPhone business is in a permanent decline.
Agreed. There is perhaps one more factor that’s acting as a drag on iPhone sales, and that is a reluctance to make the switch to FaceID. I suspect there’s more potential upgraders who will hold out another year with their TouchID phone that they’re comfortable than there are those who are intrigued by FaceID. So for a few years that’s going to be a hurdle for part of Apple’s user base, until most eventually land on the other side of the divide and have FaceID iPhones. Probably a similar drag existed with the removal of the earphone jack, and the floppy disc drive so many years ago. Last year there were options to upgrade to a new model that still had TouchID (the 8 and 8+) but this year there are no such options. I wonder how much that may have accounted for in the miss. Maybe a third factor; China slowdown, battery replacements, reluctance to switch to FaceID, currency headwinds...
Actually, I talked to a number of people who took advantage of the program simply to increase the resale value of their iPhone 6s or later ... they still planned on upgrading to the XS or XR because camera, speed, portrait mode, and other things that the iPhone 6s, great phone though it is, cannot do.
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I guess I’m wondering was the previous price based just on the cost/labor of replacing the battery or was it inflated with the hopes that people would chose to get a new phone instead? And one reason I ask this is because Tim Cook chose to mention battery replacements as one of the reasons for lower iPhone sales.
Wait until you buy 2018 versions....
The same is happening to mobile phones. We call them mobile phones but really they are hand held PC's. Most phone users wouldn't really see a big need to upgrade a 2 year old phone- it still does everything they want it to. The current batch of phones are even better and may meet buyer's needs for the next 5 or 6 years. The battery is just a limiting component that runs out within that time frame
There really isn't a compelling reason- for most people- to upgrade their phones every year or even every 2 or 3 years anymore.
9M more battery replacements in 2018 certainly had a material impact on FY19 Q1 sales. While the program ran over the year, the case can easily be made that a replacement in calendar Q1'18 was the reason for no upgrade in Q4. Apple might be able to model what the result really was, but it isn't hard to see a few million (maybe 2-3M at a minimum) of upgrades were lost in that last quarter for this reason. But crucially, these are "delayed" upgrades, not lost.
Here is my view on the causes of reduction in last quarter's iPhone sales (in order):
- China (affected many companies, especially those selling higher end goods)
- Battery replacement
- Models (specifically, the XR being a "large" phone only)
- Prices (specifically, prices outside the US, impacted both higher price points of phones & exchange rate)
Key here is that, outside of China, all of the other elements are in Apple's control. And nothing here is indicating that the iPhone business is in a permanent decline.
Also, I don't see phones reaching the same upgrade cycle (duration) as PC's, due to their mobile (breakage) nature, and that being a mobile device always on, there are still features that can be added bringing new functionality that drives upgrades. iPhone upgrade cycle is certainly greatly lengthening, but I would not say that it is past 4 years on average.