Why was iPhone X so successful at $999 despite a mountain of false reporting?

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  • Reply 41 of 110
    asdasdasdasd Posts: 5,686member
    Analysts admit to missing on iPhone estimates.

    https://seekingalpha.com/news/3351457-analysts-admit-missing-iphone-shipment-estimates?app=1&uprof=45&dr=1#email_link

    There was a fair amount of group think going on. 
    watto_cobra
  • Reply 42 of 110
    SEJUSEJU Posts: 46member
    Soli said:
    SEJU said:
    Ok, but if the price would have been comparable to the previous generations, they would have sold more. The configuration I usually purchase would have cost me 1500 or so. I hope they will bring down the price to where it used to be over the next generations, but I doubt they will do so…
    1) + 2) + 3a) + 3b) 
    No nothing of such. I am very well aware of it. It is just that for me as an individum it is ok to pay 4500 on a notebook I work with, but 1600 for a mobile phone is not something that I find reasonable. That is all. Maybe it depends from the fact that I do not do my work with a phone.

    That someone else is paying that money is perfectly fine.

    The only thing I said is that the maximum price you could pay for an iPhone has consistently gone up from the 800,- euro of the first generations to 1600,- of last years model. By applying the logic that the more cutting edge technology you put in a device the higher the price, we will end up with phones that will cost 15000,-. That this is coherent with business logic is true, but does it make sense? Anyway these are different topics mixed up. 
  • Reply 43 of 110
    fallenjtfallenjt Posts: 4,053member
    By the way, if you wanna invest in AAPL, come here, not WS. Look at Forbes article this morning:

    sessamoidkiltedgreenwatto_cobra
  • Reply 44 of 110
    eightzeroeightzero Posts: 3,056member
    My own take on iPhoneX:

    I first saw one last week in the Apple Store. My immediate reaction was, "I've heard of this, and now I see it, I must have one." It is gorgeous.But my iPhone 7 is going strong, and I don't have $1000. That said, I think this magic $1000 price point is important as the article describes. My own suspicion is that $1000 simply doesn't buy much anymore. Here in Seattle, It is about 10 days rent in a crappy apartment. At some time in the future, my iPhone 7 will need upgrade/replacement and there will be sales. I'll buy one. 

    I was in the Apple Store to sell Apple my iPhone 5s for $55 on their earth day deal. My recollection was I paid $50 on a carrier contract. I made $5 on an iPhone. 
    watto_cobra
  • Reply 45 of 110
    rogifan_newrogifan_new Posts: 4,297member
    Soli said:
    MacPro said:
    SEJU said:
    Ok, but if the price would have been comparable to the previous generations, they would have sold more. The configuration I usually purchase would have cost me 1500 or so. I hope they will bring down the price to where it used to be over the next generations, but I doubt they will do so...
    Sold more maybe but at less profit. It's about profits not volume.
    BS. If nobody is buying your product it doesn’t matter how much profit it would make. It’s a balance of maximizing both. Also considering how important services and recurring subscription revenue is I think Apple very much cares about sales and growing the install base.
    Maximize both? 🤦‍♂️
    Yes. When Apple is deciding on a product’s price point I think more goes into it than just maximizing profits.
    GeorgeBMac
  • Reply 46 of 110
    sphericspheric Posts: 2,544member
    macxpress said:
    SEJU said:
    Ok, but if the price would have been comparable to the previous generations, they would have sold more. The configuration I usually purchase would have cost me 1500 or so. I hope they will bring down the price to where it used to be over the next generations, but I doubt they will do so...
    Oh look...an armchair Marketing Executive who knows how to market Apple products better than Apple! Love these people! /s
    No, just another guy (like me) who’d love one but can’t justify spending 1600€ (including AppleCare and VAT) on one. 

    There’s nothing wrong with hoping that they bring down the price. 
  • Reply 47 of 110
    SEJUSEJU Posts: 46member

    sdw2001 said:

    First, you don't know that...it's speculation.  Do you honestly think you know more than Apple's professional marketing and sales people?  It's not much of a difference compared to previous generations.  Second, $1,500?  Or are you in Europe?  I have the most expensive model and it's not $1,500.  
    First of all: what would life be without speculation? I pretend not to know more about marketing than they do, why would I? I have another profession. I am not in marketing.

    If I am not mistaken I payed 800,- for the 3G top of the line, 1100 for the 5, and now the price is at 1600 (I just checked: iPhone X 256GB 145x,- + 25x,- euro for AppleCare) Always in euro and including AppleCare. The point is that the X is not another model such as the 3, 4, 5, 6 or 7, but another line above the iPhone. It is going to be interesting to find out if they will keep it or simplify the line.

    That is all.
  • Reply 48 of 110
    SoliSoli Posts: 10,035member
    SEJU said:
    ...but 1600 for a mobile phone is not something that I find reasonable.
    Unreasonable for you, but since you're not required to buy it it's silly to say it's unreasonable for the market, especially after the market has already proven you wrong.

    By applying the logic that the more cutting edge technology you put in a device the higher the price, we will end up with phones that will cost 15000,-. That this is coherent with business logic is true, but does it make sense?
    If that's what the market can bear then absofuckinglutely.

    Are you also going to say that $50k+ cars shouldn't exist because you don't drive enough to warrant the cost? I sure hope not, but that's the exact same thing, except here you desire to be the high-end customer of the iPhone but you can't warrant the cost. You need to come to terms with that. I'm still rocking my iPhone 7 Plus, and I may not even upgrade this year, but you're not going to hear me claim that Apple shouldn't make a $999 iPhone because the value to me doesn't warrant the cost.
    muthuk_vanalingambrucemcStrangeDayssessamoidchiawatto_cobra
  • Reply 49 of 110
    asdasdasdasd Posts: 5,686member
    One of the things that a high price does is create a halo for a brand even when the price is reduced. 

    I don't know if Apple will produce a cheap(er) X type device this, or next, year. They may be too supply constrained in OLED screens to do it in the near future.. Eventually they will and that device will sell like gangbusters.

    EDIT:

    of course they could produce a LCD version. That would be a good idea for sure. 
    edited May 2018 sphericchia
  • Reply 50 of 110
    SEJUSEJU Posts: 46member

    proline said:
    a) It gives them a way to sell technology that isn't produced in volumes of 200 million per year
    b) It made a ton a money

    I put a) first because contrary to what all the douchebags said, this isn't just about making money. By restricting themselves to components that are produced in huge quantities at affordable prices, Apple was leaving it to Android to offer up the very most cutting edge features- the absolute best cameras and displays, for example. They're tired of it, and now their top phone will be the best in every respect. If you can't afford it, wait a year or two and get the mid-range model.
    Genau! The X is clearly a product where they shift the technology in multiple sectors, just like they did with the MBP 2016, and that gives them the opportunity to develop all the necessary technologies to make it happen. For Apple that is what really counts, to be able to create a technological advantage and the necessary economy of scale.
    sphericchiawatto_cobra
  • Reply 51 of 110
    waltwalt Posts: 4member
    I'm surprised it did actually sell as well as they say since I don't see many folks carrying them, but I'm not surprised Apple continues to sell products at an alarmingly high rate.  I've followed them for over 20 years and in the early days only a few people who believed in their marketing messages were buying their original iMacs.  Now everyone I know has at least one product - not one of them are the pro-Microsoft customers they used to be.

    For me I picked up an iPhone X out of necessity for a new phone, curiosity, and I got a sweet deal where the total cost tax-in was a little less than $900. Over the Christmas season there was an automatic $150 savings and I had some gift cards to use up.  I was almost swayed by a new iPhone 8, but the price was nearly identical without the $150 savings.  I was also willing to take a risk with it's new technology.  I was sure I wouldn't regret it any more than the dreaded iMac G5 I bought and returned within a week of it being released.  Up until about a month ago when I donated it, that machine was by far the loudest Mac I ever owned.

    watto_cobra
  • Reply 52 of 110
    SEJUSEJU Posts: 46member

    macxpress said:
    Oh look...an armchair Marketing Executive who knows how to market Apple products better than Apple! Love these people! /s
    Nope no Marketing guy here, just my personal experience. Although I have to admit that I was not in the market for a new phone, since my old one is still doing well, but when I saw the price tag for the configuration I would have chosen usually, I decided that I would not buy a phone for that price tag. Others might, have done and will do so, no problem with that, just a personal choice.
  • Reply 53 of 110
    rogifan_newrogifan_new Posts: 4,297member
    MacPro said:
    SEJU said:
    Ok, but if the price would have been comparable to the previous generations, they would have sold more. The configuration I usually purchase would have cost me 1500 or so. I hope they will bring down the price to where it used to be over the next generations, but I doubt they will do so...
    Sold more maybe but at less profit. It's about profits not volume.
    BS. If nobody is buying your product it doesn’t matter how much profit it would make. It’s a balance of maximizing both. Also considering how important services and recurring subscription revenue is I think Apple very much cares about sales and growing the install base.
    Actually, it is about profits, not about volume. They make more money (profit) selling less units (volume) because the value of the iPhone is high enough (demand) to do so.  Maximizing both is really about maximizing profit, since to do otherwise would mean not maximizing profit.  Thus, the Apple high margin model, which others attempt and fail to emulate.    

    Your argument fails because you frame the issue as insufficient sales (nobody is buying your product). Obviously, if there are insufficient sales, revenues will be weak. However, maximizing profit as a function of maximizing volume leads to the low-margin model, and the race to the bottom strategy that, barring an outside third party subsidy (such as Googles ad business subsidizing their speaker and phone business), is eventually unsustainable.  

    Of course, Apple cares about growing the install base.  But that doesn’t mean that it’s current strategy isn’t working.  
    I didn’t say the current strategy isn’t working. I’m just pushing back on the notion cited here that all Apple cares about (or all that matters) is hardware profits. I’m sure Apple finance/marketing/operations run lots of models to determine what is the optimal price point a product should be sold at. But services are becoming a bigger percentage of Apple revenue and as services continue to grow hardware profits will start to matter less.
  • Reply 54 of 110
    holysmokesholysmokes Posts: 23member
    ...and these same analysts will continue to be assigned to cover Apple.  It sounds like many of them report the research of other analysts rather than digging independently. Journalism has become a joke. In essence fake news.
    watto_cobra
  • Reply 55 of 110
    SEJUSEJU Posts: 46member
    adm1 said:
    I wish Apple et al would actually call these guys out to explain themselves. Maybe after 5 or 6 public humiliations they'd start trying a little harder before publishing absolute sh*te.
    That is part of the game and a lot o people probably made money with it.
  • Reply 56 of 110
    SEJUSEJU Posts: 46member

    Rayz2016 said:

    Then don’t buy it. Problem solved. 
    Done so, problem solved. Keep my AAPL nevertheless.
  • Reply 57 of 110
    78Bandit78Bandit Posts: 238member
    I'll just point this out since the headline can easily be misinterpreted.

    iPhone revenue was up 14%.  iPhone unit sales were up less than 3%.  That is an important distinction as it shows the growth is from increased pricing as opposed to increased market share.  Most people think of units when the word "sales" is used.
  • Reply 58 of 110
    asdasdasdasd Posts: 5,686member
    SEJU said:
    adm1 said:
    I wish Apple et al would actually call these guys out to explain themselves. Maybe after 5 or 6 public humiliations they'd start trying a little harder before publishing absolute sh*te.
    That is part of the game and a lot o people probably made money with it.
    Is it though? These analysts are paid to give advice to investors. Their companies charge some investors and institutions money to access the full reports.

    Unless there is a secret document or email list where they say the opposite privately of what they say publicly I can't see how this would work for them. 
    brucemcchiawatto_cobra
  • Reply 59 of 110
    SEJUSEJU Posts: 46member
    Soli said:

    Unreasonable for you, but since you're not required to buy it it's silly to say it's unreasonable for the market, especially after the market has already proven you wrong.
    Yep. Unreasonable only for me. I am not sure I would pay it. And no, for and only for me my Audi is one thing, the Macs around me are one thing and a phone another. To me it is ok to buy a 14.000,- euro Mac, but I am not sure I would buy a 1600,- phone. But again that is personal. It does not even depend from the overall economic situation in so many places, just a personal choice.

    On the other hand I am absolutely happy that it goes so well. As long as my shares are happy, I am happy!
  • Reply 60 of 110
    SEJUSEJU Posts: 46member
    asdasd said:

    Is it though? These analysts are paid to give advice to investors. Their companies charge some investors and institutions money to access the full reports.

    Unless there is a secret document or email list where they say the opposite privately of what they say publicly I can't see how this would work for them. 
    You are absolutely right. On the other hand I do not understand all the discussion about analysts. I never ever based an investment decision on the opinion or data of a so called analyst. Sometimes their speculation is fun, but that is it.

    The only thing I trust are fundamentals, technology development, and so on. I do my research and invest in areas I have some expertise in. When I wrote that some people might have made money with it I was referring to the fact that for the last 15 years all this dance has become almost a ritual and the old “buy on rumour, sell on news” more true that ever.

    (Stop ... now I recall. The first investment I made, after high school, 70 percent were based on my research and 30 percent were investments chosen according to ratings and therefore analysts. I earned with mine and lost with theirs. Never done that again. With hindsight it is almost funny.)
    edited May 2018 asdasdchia
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