Apple's weak Chinese iPhone sales blamed directly on high prices

Posted:
in iPhone
Apple's setbacks in the Chinese smartphone market can be directly linked to its decision to push iPhone prices even higher, research firm IDC claimed on Monday.

Apple store in Beijing


"The imbalance between the increasingly severe domestic market environment and Apple's high product unit price has led to the declines of iPhone shipments in Chinese market," the firm argued in a Chinese-language report seen by the South China Morning Post. The same study noted that Apple's 19.9 percent decline during the December quarter was far greater than the overall Chinese smartphone industry's 9.7 percent.

The company did managed to rise to fourth place, but only because local vendor Xiaomi did worse, plummeting 34.9 percent in the period.

Since the beginning Apple has been notoriously unwavering about its iPhone design and pricing policies, rarely making any concessions to accommodate different countries or even different income levels within the U.S. The company's "budget" iPhones are simply older models, and still relatively expensive -- the iPhone 7 costs at least $449. The cheapest new iPhone is the XR at $749, and that price is $100 more than Apple charged for flagship models just a few years ago.

At $999-plus, the iPhone XS is out of range for most of the world, even in developed countries. In China, natively-developed phones by brands like Huawei can often cost a third to a half as much, while offering many of the same features, making them an attractive proposition to a cash-strapped population.

Apple's December quarter was bad enough that it decided it would indeed lower prices in China and other international markets, if only to reverse hikes made in response to exchange rates. While it has seen some success with this tactic, it remains to be seen if pricing issues will influence those of the 2019 iPhone models expected this fall.
«1345

Comments

  • Reply 1 of 83
    A 256, 5.8 iPhone Xs with Apple care is $2,076.94 with tax in Canada. Insane. Price is a huge issue here as well.

    I know I'm beating a dead horse but I would pony-up quickly if I could get a 30-50% improvement in battery life.
    jbishop1039
  • Reply 2 of 83
    Demands curves slope down. Who knew.

    tokyojimurandominternetpersonmagman1979fastasleepuraharaviclauyycjony0
  • Reply 3 of 83
    Honestly I probably would have bought more Apple stuff this year if it was more cost effective. I just can't justify the price with the way they price their stuff in Canada.
    jbdragonwaltgkitatitols
  • Reply 4 of 83
    We're all beating dead horses here, probably.

    But whoever I talk to, Apple fanatics or people who converted from Windows or Anroid over the last few years, agree that Apple's pricing has gone out of hand. Everyone agrees that quality costs money. Yet they unanimously say that the have to re-evaluate whether they can justify buying another Apple device or not.

    Sure, Apple can start lowering prices. But it seems that the damage to Apple's reputation has already been done. In a lot of people's minds they are a company that is selling highly overpriced devices. This makes me sad. It seems like such a foolish mistake to make. I don't understand it. 

    Time Cook keeps talking about how expensive it is to develop these devices. But with the amount of cash the company is garnering every quarter, this seems like a desperate attempt to justify. People are not stupid. Developing the first iPhone, a truly revolutionary device, not evolutionary, with a much smaller marked, must have been very expensive. Yet it cost half as much as today's offerings. In a lot of people's minds - including mine - something just doesn't add up.
    edited February 11 gatorguywaltgmuthuk_vanalingamtokyojimumicrobeolspropodhzcviclauyycsteveau
  • Reply 5 of 83
    maestro64maestro64 Posts: 4,454member
    A 256, 5.8 iPhone Xs with Apple care is $2,076.94 with tax in Canada. Insane. Price is a huge issue here as well.

    I know I'm beating a dead horse but I would pony-up quickly if I could get a 30-50% improvement in battery life.
    But you do not need an iPhone Xs apple offers lower cost phones, you buy what you want to afford, no one is make you spend more than you want or need to spend. 30% to 50% improve battery performance is a pipedream, It will require significant leaps in technology to achieve that.

    I never bought Apple top of the line anything, first could not justify it, but if I wanted something they made it bought what I felt has the best value, plus I am willing to wait to get something since I know the price will come down or there will be a deal around the corner. That does not mean Apple over priced their products. 
    edited February 11 SpamSandwichMisterKitedredfastasleepJFC_PAviclauyycjony0
  • Reply 6 of 83
    jbdragonjbdragon Posts: 1,996member
    I think Apple has hit the wall on prices they think they can charge. iPhone prices are sky high. iPad prices are sky high. Really it's all shot up to crazy high prices for what you're getting. Remember when you could get a cheap Mac by just getting a mac Mini. Now those like everyone else shot up in price. For what you get at the so called CHEAP end is a joke. I have this new iPhone XS, but in 4 years when I go to upgrade once again as I upgrade every 4 years, will it be another iPhone? I'm sure not paying $1500+ for a new iPhone in 4 years. I am not a fan of Android or all of Google's spying, but if Apple is going to drive me over their with their insane prices!?!?!?! This phone of mine was $1100. Personally I don't think that OLED screen is much better than the LCD screens I've had. Apple had really just gotten greedy, and if they continue, people will start fleeing from them. I really do wish there was a 3rd choice. How about a comeback of Windows Phones!!!
    kitatitolsviclauyyc
  • Reply 7 of 83
    Given the price increases, it forces most people to either adopt a longer upgrade cycle (spend $1200 every 4 yrs vs $650 every 2 yrs) or to stop buying Apple products...things are getting out of hand.
    steveau
  • Reply 8 of 83
    wonderwomanwonderwoman Posts: 9unconfirmed, member
    Duh!
    AppleExposed
  • Reply 9 of 83
    lkrupplkrupp Posts: 6,712member
    So Chinese phone makers, who literally stole every once of technology available from the West to make their products, are undercutting Apple and Samsung on price? Wow, who would have thought that? And Huawei, who products are banned the U.S. because of their association with the totalitarian regime in China, and whose executives have been arrested and charged in the West, are thriving in the Chinese domestic market. Yet it’s Apple prices that are at the bottom of this decline? Okay, I guess so?
    StrangeDaysmagman1979AppleExposedjony0
  • Reply 10 of 83
    lkrupplkrupp Posts: 6,712member
    hucom2000 said:
    We're all beating dead horses here, probably.

    But whoever I talk to, Apple fanatics or people who converted from Windows or Anroid over the last few years, agree that Apple's pricing has gone out of hand. Everyone agrees that quality costs money. Yet they unanimously say that the have to re-evaluate whether they can justify buying another Apple device or not.

    Sure, Apple can start lowering prices. But it seems that the damage to Apple's reputation has already been done. In a lot of people's minds they are a company that is selling highly overpriced devices. This makes me sad. It seems like such a foolish mistake to make. I don't understand it. 

    Time Cook keeps talking about how expensive it is to develop these devices. But with the amount of cash the company is garnering every quarter, this seems like a desperate attempt to justify. People are not stupid. Developing the first iPhone, a truly revolutionary device, not evolutionary, with a much smaller marked, must have been very expensive. Yet it cost half as much as today's offerings. In a lot of people's minds - including mine - something just doesn't add up.
    You make a lot of assumptions there, Hondo. Sounds like talking point mimicry to me but hey, whatever. Unanimous agreement, eh? Okay.
    StrangeDaysmagman1979AppleExposedjony0
  • Reply 11 of 83
    maestro64maestro64 Posts: 4,454member
    IDC always has narrative different than what is really happening, nothing new here. It has been stated by Apple and others the Trade wars had a direct affect on Apple's business in China and the fact their were rumors and statements that Chinese companies were ordering/paying people not to buy Apple but Buy Chinese competitors. 

    Based on this it was not the selling price but trade actions causing the problem.
    SpamSandwichAppleExposedjony0
  • Reply 12 of 83
    MacProMacPro Posts: 18,013member
    lkrupp said:
    So Chinese phone makers, who literally stole every once of technology available from the West to make their products, are undercutting Apple and Samsung on price? Wow, who would have thought that? And Huawei, who products are banned the U.S. because of their association with the totalitarian regime in China, and whose executives have been arrested and charged in the West, are thriving in the Chinese domestic market. Yet it’s Apple prices that are at the bottom of this decline? Okay, I guess so?
    Not sure how Samsung moved from the 'who literally stole every once of technology available' category into the same category as Apple in your otherwise accurate comment.
    muthuk_vanalingamkitatitrandominternetpersonAppleExposed
  • Reply 13 of 83
    maestro64 said:
    A 256, 5.8 iPhone Xs with Apple care is $2,076.94 with tax in Canada. Insane. Price is a huge issue here as well.

    I know I'm beating a dead horse but I would pony-up quickly if I could get a 30-50% improvement in battery life.
    But you do not need an iPhone Xs apple offers lower cost phones, you buy what you want to afford, no one is make you spend more than you want or need to spend. 30% to 50% improve battery performance is a pipedream, It will require significant leaps in technology to achieve that.
    I think you should update your knowledge on smartphone battery life comparisons. I did before I made that comment. 

    People don't always buy what they can afford. Many people have a frugal cut-off-point where they say "I could drop the cash, but, meh! I'll save it." People buy what they want based on the value. I'm a long APPL investor and I'm happy with good margins. However, I do think 2k for the "entry-ish" Xs is steep. Your average phone is so good now that people are just going to pass.

    Regardless, I'm bullish on Apple finding ways to increase value in the coming years.
    designrMisterKit
  • Reply 14 of 83
    First there was Fake News, then there were Fake Rumors.
    magman1979jony0
  • Reply 15 of 83
    maestro64 said:
    A 256, 5.8 iPhone Xs with Apple care is $2,076.94 with tax in Canada. Insane. Price is a huge issue here as well.

    I know I'm beating a dead horse but I would pony-up quickly if I could get a 30-50% improvement in battery life.
    But you do not need an iPhone Xs apple offers lower cost phones, you buy what you want to afford, no one is make you spend more than you want or need to spend. 30% to 50% improve battery performance is a pipedream, It will require significant leaps in technology to achieve that.
    People buy what they want based on the value.
    This is really the fundamental issue. It would not be at all surprising to find that more and more people are simply not seeing the incremental value for the prices and choosing to wait to upgrade. This is the inevitable result in a mature product category. Smartphones have become a mature product category. There's very little that really compelling most people to upgrade as fast as they once did. Basically the phones have become "good enough" for most customers. When the time does come to upgrade they may face other decisions about whether the value Apple claims to provide is worth the price they ask (to the customer). What's more many people (e.g., families, couples) may find themselves wanting to upgrade more than one phone at a time. So this makes the bite even harder to swallow.

    For myself I considered upgrading this year but figured I'd just wait. Nothing really compelling me to spend the money. I have perfectly serviceable phone and am content to wait and if I end up paying $1K for a new phone, my upgrade timeline will stretch again.

    There's nothing wrong with any of this. But I suspect it's something Apple wasn't expecting to happen as quickly as it did.

    Certainly there a multiple factors involved in Apple's recent iPhone sales challenges. But price-to-value ratio cannot be easily dismissed. Because what the dismissers seem to frequently ignore, forget or simply not get is just because they perceive the price to be worth it. Not everyone else necessarily does.

    avon b7macguikitatitallmypeople
  • Reply 16 of 83
    Frayed cable Frayed cable Posts: 2unconfirmed, member
    The current state of Apple is symbolized by the un ending rip off and hazzard that is the charging cord and lightening connector. Please if you can my dear user name me one other electronic product cable of the last 50 years that fails and fails within months. There is no other as this problem was solved decades ago. Only apple has this problem and it continues year after year. $40 per cable F u Apple
  • Reply 17 of 83
    I love Apple products but, enough is enough with this insane phone pricing!! By the time they lowered the XR, well, too late Apple, I had already purchased another competitor’s phone, and I’m sure I’m not the only one that did so... It is sad, way too much greed and these prices ARE way out of line!
    kitatitpropod
  • Reply 18 of 83
    lkrupplkrupp Posts: 6,712member
    waltg said:
    I love Apple products but, enough is enough with this insane phone pricing!! By the time they lowered the XR, well, too late Apple, I had already purchased another competitor’s phone, and I’m sure I’m not the only one that did so... It is sad, way too much greed and these prices ARE way out of line!
    But Apple’s sales and market share have actually increased in the U.S. and elsewhere so I’m not buying your too expensive narrative. I guess you forgot this article is about the Chinese market, huh?
    AppleExposedJFC_PAjony0
  • Reply 19 of 83
    Tim Cook is not the right CEO for Apple in 2019. A true definition of success would be to sell the hardware with a razor thin margin, and make buttloads of cash on services. Apple is doing a poor job at services right now - Amazon, Google, Microsoft are performing much better on that regard. And I'm not talking iCloud photo storage here. I'm talking professional SaaS services for both consumers and enterprise. 
    Also Tim Cook should invest cash they are not moving. Buy 20% of Tesla, buy 25% of Netflix. It's frustrating to be a shareholder of a company that keeps money on the banks and over-pays management.
    designr
  • Reply 20 of 83
    lkrupplkrupp Posts: 6,712member
    Tim Cook is not the right CEO for Apple in 2019. A true definition of success would be to sell the hardware with a razor thin margin, and make buttloads of cash on services. Apple is doing a poor job at services right now - Amazon, Google, Microsoft are performing much better on that regard. And I'm not talking iCloud photo storage here. I'm talking professional SaaS services for both consumers and enterprise. 
    Also Tim Cook should invest cash they are not moving. Buy 20% of Tesla, buy 25% of Netflix. It's frustrating to be a shareholder of a company that keeps money on the banks and over-pays management.
    So do you vote your shares? Have you voted against Cook as CEO? I vote my AAPL shares every year and I like Tim Cook as CEO. If you don’t vote then I cancel you out and then some.
    magman1979AppleExposedgeekmeeEsquireCatsjony0
Sign In or Register to comment.