Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple.
Hold on, you said that "Price is what market will pay and people open their wallets for Apple". Are we not talking about "people NOT opening their wallets for Apple", at least not as much as Apple expected them to??? In this situation, what is wrong in talking about "pricing strategy" by Apple, which is the ONLY thing which has changed significantly in the last couple of years?
Did you miss the part where Apple announced that China is where greater than 100% of the revenue miss happened? Almost as if the Chinese gov’t is influencing its people to avoid Apple... almost maybe?
Cook said it expects Record revenues from USA, Canada and several other countries. In developed countries Apple keeps killing it.
Once you get used to having an integrated stylus available, apple phones become a second choice, even with all the positives. If apple were to release an iphone with an integrated stylus, it would become a top choice. maybe the galaxy note market isn't worth it?
Not once in my years of using an iPhone have I ever wished for, or felt the need for a stylus.
How will this strategy be good for investors in the long run? Please elaborate.
I have an idea in mind how to jumpstart the upgrade cycle for iPhones. Have someone from Apple contact me. It's legit.
Dear Timothy Cook
I am the legally appointed representative of the estate of Mr Romelly Chakchak esq. As I am sure you are aware, Mr Chakchak was recently killed in an accident involving his wife, his mistress and a large bladed implement most often used for butchering oxen carcasses.
Before his untimely demise, Mr Chakchak had amassed a small fortune of approximately $3,000,000,000,000 (three trillion dollars) through the sale of agricultural machinery in and around his village.
Mr Chakchak was a big Apple fan, having owned every single Apple product ever made since 1871. His will stipulated that in the event of Apple making anything less than sixty billion in a single quarter and thus declaring immediate bankruptcy, then his entire estate would be made available to you personally, so that you could save your most revered company. With this money, you could buy all the iPhones yourself, thus jumpstarting a new upgrade cycle for your phones.
Please send details of your passport and bank account so I can effect the immediate transfer of funds. To ensure documentation is all in order, we will be required to meet, in person, on a particularly dark street, close to an ATM. Come alone.
Yours
The legally appointed representative of the estate of Mr Romelly ChakChak esq.
Apple should operate as if their profit on unit sales is $0, so that they focus their efforts on cloud services instead. Microsoft changed course and they are kicking ass. Amazon is kicking ass. Google is kicking ass.
You mean jump on the fad of “product as a service” ... which really means behaving like ISPs: engaging in the business of selling contracts, not providing services. It’s a model that showcases how these corporations don’t care about the quality of the services on the consumer end (ie their product). Their stock holders and board of directors just want to see increased subscriber numbers and quarterly increases in profit; nothing else matters. Perpetual growth is an egregiously obviously unsustainable model that the only explanation for the pursuit of it is that the people at the top really don’t care about ultimate collapse of businesses, so long as they make their money and move on to the next one to suck blood from before the party is over.
You’re suggesting Apple jump on and ride the bubble before it bursts? No thanks.
Why Americans place shareholders rights above all other considerations is beyond me. We've shitted up the planet, we're killing our population with shit food, air & water pollution, shit medicine and all for the one goal of profit. Ugh!
If food manufacturers could grind up old car tires, put some red food coloring on it and call it tomato sauce they would. The largest beverage company is Coke, what do they sell, sugared shit. The largest restaurant company is McDonald's, what do they sell? Shit food that gives you diabetes and heart disease and on and on...
Charging higher and higher prices for all new versions of products. Just look at how much the 6plus cost vs the XS max. Every year it’s at least a $100 more for the newer phone. Then going up the storage ladder is ridiculously expensive. Including the shiftiest headphones with the iPhone. including Useless chargers with the iPhone. Charging ridiculous prices for new cables and chargers. The new pencil costs $30 more than the last one. The iPad keyboard is a pos and it’s almost $200! I got my daughter a 2018 iPad Pro 12.9” and got the top Logitech keyboard and stand which is cheaper and a 100 times better. I love my apple products but sick of being rippped off. Did I mention Siri sucks as does maps. All the profits go to the shareholders and executives. Executive compensation is out of control. Oh and how did that stock buyback work out? Not too well. Buybacks are a bad idea. That money should have gone to more dividends and probably way mire r&d and possibly more m&a. my 2 cents.
Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple.
Hey look, another person who believes the myths of the American “free market”.
For all those that still think price isn’t an issue...Apple is sending X owners emails about upgrading to an XR so they can lower their monthly payments.
Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple.
Hold on, you said that "Price is what market will pay and people open their wallets for Apple". Are we not talking about "people NOT opening their wallets for Apple", at least not as much as Apple expected them to??? In this situation, what is wrong in talking about "pricing strategy" by Apple, which is the ONLY thing which has changed significantly in the last couple of years?
I’m amazed at how many Apple centric analysts I’m seeing a Twitter saying that price isn’t the issue. It might not be the only issue and the answer might not be as easy as just cheaper iPhones but all the signs are there that some people are balking at these prices. Apple is still running the trade in promotion on the front page of their website. And now they’re sending people emails telling people they can upgrade to a phone with a cheaper monthly price. OK hello?!? That’s all about price.
Once you get used to having an integrated stylus available, apple phones become a second choice, even with all the positives. If apple were to release an iphone with an integrated stylus, it would become a top choice. maybe the galaxy note market isn't worth it?
Good god, ever since Apple’s adjusted Q1 guidance was made public, you trolls have swarmed every site in existence to pile on the BS and FUD as thick as you can.
Get an f’ing life and get lost! You’re not welcome.
Well, they have been waiting years for this, so I think everyone should show a little generosity and allow them their day out of the basement, as it were.
The guidance was very clear: the main problem was China, and as a result, Apple will adjusted their guidance from reporting in an sh*tload of money down to reporting in a smaller sh*load of money. The trade war hasn't helped, but it wasn't the only problem Apple has in that region. Contrary to what Cook says, I think the arrest of Huawei's executive, and the shunning of the same company because of their ties to the Chinese government is a problem for Apple, and will lead to further problems in the region.
One thing that has come out of this though: aside from the usual suspects here, we are actually getting folk to think about this whole "Apple is just jacking up the prices because they're greedy bastids" narrative. A fella here (and I've lost the post because this forum is not that good at searches) wrote a great post that pointed out that Apple's margins had remained at the 38% level for more than a decade (in fact, they've gone down slightly). Unfortunately, most folk don't understand that it actually costs money to build a product, and part of the pricing strategy takes that into account.
The second thing that most "the drop the price" contingent don't understand is that concept of price elasticity, and what we're seeing here is an example of it. The demand for an iPhone is relatively inelastic: a hike or drop in price won't actually produce a meaningful change in demand because the problem is that the iPhone that people have is good enough for what most folk do with it: take pictures, surf porn, and make the occasional phone call. You can drop the price, but to make a significant difference to demand you'd have to drop it so far that revenues would drop further than they would if you did nothing.
So why aren't folk upgrading? Well, yes, the iPhone has now reached a point where folk are happy with the devices they have, but Apple is now looking at this from a more self-critical point of view.
Gadgets get upgraded for three reasons: They wear out. They cannot run some new exciting software/service because they lack the necessary hardware gubbins (like an AR camera array). They cannot run some new exciting software/service because the chipset isn't advanced enough.
Apple kit lasts, so without making their kit crappy, there's not much they can do about number one.
Two and three though …
The big thing in the new phones is AR. Apple believes that this is the next big thing, but they haven't actually given a really compelling demonstration as to why. Where are Apple's own AR based apps (I think they have one)? It used to be that the hardware drove the sales of the services; now it is the other way around, and Apple's services component could be the weak spot, especially in China where (apparently) they care more about the services than the actual phones they run on.
From the iPhone 3G until the iPhone 6S Apple’s iPhone keynote quoted subsidized pricing - $199, $299 w/2 year contract. With the iPhone 7 Apple only showed the iPhone Upgrade Program monthly pricing. Then for some reason with iPhone 8/X Apple went away from that and showed the full price in the keynote.
Does anyone know why Apple made this change? Showing an iPhone X from $40/mo is less sticker shock than showing it from $999. How many people are actually paying full price upfront for their iPhone? My guess is more people aren’t than are so why not show the monthly price instead? And because In the past Apple showed the subsidized carrier pricing the narrative becomes I used to be able to get an iPhone for $200 now it’s $1000 (no joke someone on CNBC said this the other day).
For as much as people say Apple is missing Steve from a product innovation perspective I think they’re missing him more from a marketing and sales perspective. Steve was a master at the product introduction and the best way to sell a product. He was the best at telling you why a product existed. And when bad news needed to be delivered it didn’t take him a 1,400 word letter to do it. That’s what Apple is missing.
I switched just over four years ago with the dilemma mentioned in this piece. I was priced our of the iPhone market (new phone), but picking up a much older iPhone (refurbished or second hand) was a ridiculous proposition as I could get a new phone with very competitive hardware for (in those days) 200€.
New phone. Modern technology. Amazing build quality. Fast charging. Extra storage etc. It was Android but I liked the system much more than iOS.
Nowadays, you can pick up amazing new phones that leave four year old hardware in the dust for 250€ (or less!) and follow a far shorter upgrade path or hang on to it for longer if you wish.
You would have to be an iOS die hard to pick up a four year old iPhone as your main phone.
I think my situation is pretty indicative of many people who were in my situation and it is one of the reasons iPhone sales flattened.
New, far cheaper phones from competitors are more than good enough on every level.
The big difference between today and four years ago is that competitors are offering amazing phones at every price band right up into premium and far beyond.
Plenty of options at plenty of prices.
Apple has very limited options and an 's' cycle which is now taking the edge off of its ability to react to market trends.
We're so thrilled you're happy with your Android, and that you like their system better. Never mind that it's OS is full of security holes you could drive a Russian tank through. Never mind that you don't have the product ecosystem that Apple gives it's users. Go in peace to enjoy your Android device. Just don't expect us to be jealous....
I have never had one single security issue. What do you mean by 'ecosystem'. Is it synonymous of lock in?
If I need an app, I get it from the Play Store. If I need a service, it's available. Apps are updated continuously - and independently of the core OS.
One thing that has come out of this though: aside from the usual suspects here, we are actually getting folk to think about this whole "Apple is just jacking up the prices because they're greedy bastids" narrative. A fella here (and I've lost the post because this forum is not that good at searches) wrote a great post that pointed out that Apple's margins had remained at the 38% level for more than a decade (in fact, they've gone down slightly). Unfortunately, most folk don't understand that it actually costs money to build a product, and part of the pricing strategy takes that into account.
William wrote the article about margins — in November. I’ll link it here in a bit.
Investor: "We need better short term profits. iPhones last too long" Steve: "We don't sell junk"
Any questions?
When Apple was reporting record iPhone sales, record revenues and profits nobody here was complaining. In fact most of the time the argument was/is Apple is the best because it has all the profits. Now the company warns about missing guidance and its Wall Street’s fault for being too obsessed with profits? ¯\_(ツ)_/¯
Hey, look another armchair CEO with Bloomberg narrative syndrome.
Price is what the market will pay and people open their wallets for Apple.
Hold on, you said that "Price is what market will pay and people open their wallets for Apple". Are we not talking about "people NOT opening their wallets for Apple", at least not as much as Apple expected them to??? In this situation, what is wrong in talking about "pricing strategy" by Apple, which is the ONLY thing which has changed significantly in the last couple of years?
Did you miss the part where Apple announced that China is where greater than 100% of the revenue miss happened? Almost as if the Chinese gov’t is influencing its people to avoid Apple... almost maybe?
Cook said it expects Record revenues from USA, Canada and several other countries. In developed countries Apple keeps killing it.
Nope, I didn't miss it. But I read between the lines and came to a slightly different conclusion than what people in this forum have come to. 1. Revenue shortfall is $5 billion for the lower end of the guidance and in China region ALONE, the shortfall was more than $5 billion. I think this is the easier part, that all of us agree with and it was explicitly mentioned as well. 2. Here is the reading between lines part comes - Apart from iPhones, ALL other product lines made 19% growth worldwide. And they all pulled in more revenue than Apple's original guidance. Where did that additional revenue go away? Reduction in iPhone revenue in the rest of the world. Is it severe like in China? No. It is probably a smaller reduction. But all signs point to reduction in iPhone revenue all over the world, not just China. In rest of world, the other revenue streams took care of the shortfall, but that didn't happen in China. Hence the comments around battery replacement, carrier subsidies and so on.
Edit: My conclusion is that iPhone has performed very badly in China and slightly bad in rest of world. And price is the key change in the last 2 years. Good news is - it is very easy to fix for Apple. As and when Apple does it, Samsung and other Android OEMs will be in deep trouble with respect to running a profitable mobile business.
Once you get used to having an integrated stylus available, apple phones become a second choice, even with all the positives. If apple were to release an iphone with an integrated stylus, it would become a top choice. maybe the galaxy note market isn't worth it?
Good god, ever since Apple’s adjusted Q1 guidance was made public, you trolls have swarmed every site in existence to pile on the BS and FUD as thick as you can.
Get an f’ing life and get lost! You’re not welcome.
Well, they have been waiting years for this, so I think everyone should show a little generosity and allow them their day out of the basement, as it were.
The guidance was very clear: the main problem was China, and as a result, Apple will adjusted their guidance from reporting in an sh*tload of money down to reporting in a smaller sh*load of money. The trade war hasn't helped, but it wasn't the only problem Apple has in that region. Contrary to what Cook says, I think the arrest of Huawei's executive, and the shunning of the same company because of their ties to the Chinese government is a problem for Apple, and will lead to further problems in the region.
One thing that has come out of this though: aside from the usual suspects here, we are actually getting folk to think about this whole "Apple is just jacking up the prices because they're greedy bastids" narrative. A fella here (and I've lost the post because this forum is not that good at searches) wrote a great post that pointed out that Apple's margins had remained at the 38% level for more than a decade (in fact, they've gone down slightly). Unfortunately, most folk don't understand that it actually costs money to build a product, and part of the pricing strategy takes that into account.
The second thing that most "the drop the price" contingent don't understand is that concept of price elasticity, and what we're seeing here is an example of it. The demand for an iPhone is relatively inelastic: a hike or drop in price won't actually produce a meaningful change in demand because the problem is that the iPhone that people have is good enough for what most folk do with it: take pictures, surf porn, and make the occasional phone call. You can drop the price, but to make a significant difference to demand you'd have to drop it so far that revenues would drop further than they would if you did nothing.
So why aren't folk upgrading? Well, yes, the iPhone has now reached a point where folk are happy with the devices they have, but Apple is now looking at this from a more self-critical point of view.
Gadgets get upgraded for three reasons: They wear out. They cannot run some new exciting software/service because they lack the necessary hardware gubbins (like an AR camera array). They cannot run some new exciting software/service because the chipset isn't advanced enough.
Apple kit lasts, so without making their kit crappy, there's not much they can do about number one.
Two and three though …
The big thing in the new phones is AR. Apple believes that this is the next big thing, but they haven't actually given a really compelling demonstration as to why. Where are Apple's own AR based apps (I think they have one)? It used to be that the hardware drove the sales of the services; now it is the other way around, and Apple's services component could be the weak spot, especially in China where (apparently) they care more about the services than the actual phones they run on.
Many great points, but disagree with couple of them. The first one has been very well pointed out by Rogifan already, but I am just repeating what she said earlier. 1. It is being pointed out that Apple's margins have remained flat but component and other costs have increased, hence the price increases are justified - no, that is not how it works out in the real world. It is easy to explain that to Apple shareholders and they will accept it. But the common person does NOT care about Apple's profit margins or costs. They care for what they need to shell out and rightly so. 2. You have mentioned that reducing the prices would not help. But there is no evidence to this. And there is evidence to the opposite situation - if you keep increasing the prices, the revenue will go down dramatically, which is what happened with iphones in the last quarter. And I didn't believe that it is a pure China issue. Please read my above comment why I think this is an issue all over the world.
Investor: "We need better short term profits. iPhones last too long" Steve: "We don't sell junk"
Any questions?
When Apple was reporting record iPhone sales, record revenues and profits nobody here was complaining. In fact most of the time the argument was/is Apple is the best because it has all the profits. Now the company warns about missing guidance and its Wall Street’s fault for being too obsessed with profits? ¯\_(ツ)_/¯
We live in a world where $84billion in revenue in a quarter is bad. ¯\_(ツ)_/¯
The iPhone 8 continues to outsell the newer phones (XS and XR) in my local Apple store in Sydney during the Xmas/New Year period. I suspect this is the same situation elsewhere but now that Apple doesn’t report individual model performances we may never know.
But I do know this - many people much prefer Touch ID to Face ID, which causes them to choose the older models such as the iPhone 8.
Touch ID was also a major differentiator for iPhones but Apple’s latest models are almost identical to every other Samsung it Huawei phones.
Apple needs to bring back Touch ID ASAP, remove the silly notch and reintroduce rectangular screens (without curved corners).
Put touchID on the back with a full screen front and then I will buy it. the Notch is ugly, maybe in 3 years it will be smaller (Actually a smaller notch would help sell 2019 models)
Once you get used to having an integrated stylus available, apple phones become a second choice, even with all the positives. If apple were to release an iphone with an integrated stylus, it would become a top choice. maybe the galaxy note market isn't worth it?
Good god, ever since Apple’s adjusted Q1 guidance was made public, you trolls have swarmed every site in existence to pile on the BS and FUD as thick as you can.
Get an f’ing life and get lost! You’re not welcome.
A stylus is more than a writing instrument. Ask any note devotee. I’ve bought iPads and iPhones for others and recently bought a 9.7 to try while waiting for the 12.9 v3. I’d rather buy an iPhone for myself because apple was able to answer the questions at the privacy hearings, and seems to try to do the right thing.
Google has great tech, but makes you the product. Microsoft has promise, but apple comes complete with apps. But, still using the note 4, recently replaced the battery. Didn’t care for the Apple Pencil, not comfortable to use. Also, why only one type of stylus? Held off on the 12.9 because there is no backward compatibility and it is even more expensive. Still considering it though.
in the end I’m looking to choose apple, rough around the edges as it is. And as others have mentioned, it may be time to look outside the core apple community and reap the rewards of reputation. Although that is undermined by upgrade issues, and apples reliance on China.
Investor: "We need better short term profits. iPhones last too long" Steve: "We don't sell junk"
Any questions?
When Apple was reporting record iPhone sales, record revenues and profits nobody here was complaining. In fact most of the time the argument was/is Apple is the best because it has all the profits. Now the company warns about missing guidance and its Wall Street’s fault for being too obsessed with profits? ¯\_(ツ)_/¯
Victor Marks on the Podcast has a great quote from Steve Jobs which I will paraphrase as "The goal is to make the best Phone/ for which you needed to make a profit. Now the goal seems to be to make the most profit which Apple does by making the best phone in the market". I tend to agree and point to the iPhone 7 as a pivotal product as Apple was able to increate the Price of the iPhone 7Plus by $20 over the iPhone6SPlus's initial Price for the second camera.
Comments
Cook said it expects Record revenues from USA, Canada and several other countries. In developed countries Apple keeps killing it.
Dear Timothy Cook
I am the legally appointed representative of the estate of Mr Romelly Chakchak esq. As I am sure you are aware, Mr Chakchak was recently killed in an accident involving his wife, his mistress and a large bladed implement most often used for butchering oxen carcasses.
Before his untimely demise, Mr Chakchak had amassed a small fortune of approximately $3,000,000,000,000 (three trillion dollars) through the sale of agricultural machinery in and around his village.
Mr Chakchak was a big Apple fan, having owned every single Apple product ever made since 1871. His will stipulated that in the event of Apple making anything less than sixty billion in a single quarter and thus declaring immediate bankruptcy, then his entire estate would be made available to you personally, so that you could save your most revered company. With this money, you could buy all the iPhones yourself, thus jumpstarting a new upgrade cycle for your phones.
Please send details of your passport and bank account so I can effect the immediate transfer of funds. To ensure documentation is all in order, we will be required to meet, in person, on a particularly dark street, close to an ATM. Come alone.
Yours
The legally appointed representative of the estate of Mr Romelly ChakChak esq.
You’re suggesting Apple jump on and ride the bubble before it bursts? No thanks.
Well, they have been waiting years for this, so I think everyone should show a little generosity and allow them their day out of the basement, as it were.
The guidance was very clear: the main problem was China, and as a result, Apple will adjusted their guidance from reporting in an sh*tload of money down to reporting in a smaller sh*load of money. The trade war hasn't helped, but it wasn't the only problem Apple has in that region. Contrary to what Cook says, I think the arrest of Huawei's executive, and the shunning of the same company because of their ties to the Chinese government is a problem for Apple, and will lead to further problems in the region.
One thing that has come out of this though: aside from the usual suspects here, we are actually getting folk to think about this whole "Apple is just jacking up the prices because they're greedy bastids" narrative. A fella here (and I've lost the post because this forum is not that good at searches) wrote a great post that pointed out that Apple's margins had remained at the 38% level for more than a decade (in fact, they've gone down slightly). Unfortunately, most folk don't understand that it actually costs money to build a product, and part of the pricing strategy takes that into account.
The second thing that most "the drop the price" contingent don't understand is that concept of price elasticity, and what we're seeing here is an example of it. The demand for an iPhone is relatively inelastic: a hike or drop in price won't actually produce a meaningful change in demand because the problem is that the iPhone that people have is good enough for what most folk do with it: take pictures, surf porn, and make the occasional phone call. You can drop the price, but to make a significant difference to demand you'd have to drop it so far that revenues would drop further than they would if you did nothing.
So why aren't folk upgrading? Well, yes, the iPhone has now reached a point where folk are happy with the devices they have, but Apple is now looking at this from a more self-critical point of view.
Gadgets get upgraded for three reasons:
They wear out.
They cannot run some new exciting software/service because they lack the necessary hardware gubbins (like an AR camera array).
They cannot run some new exciting software/service because the chipset isn't advanced enough.
Apple kit lasts, so without making their kit crappy, there's not much they can do about number one.
Two and three though …
The big thing in the new phones is AR. Apple believes that this is the next big thing, but they haven't actually given a really compelling demonstration as to why. Where are Apple's own AR based apps (I think they have one)? It used to be that the hardware drove the sales of the services; now it is the other way around, and Apple's services component could be the weak spot, especially in China where (apparently) they care more about the services than the actual phones they run on.
Does anyone know why Apple made this change? Showing an iPhone X from $40/mo is less sticker shock than showing it from $999. How many people are actually paying full price upfront for their iPhone? My guess is more people aren’t than are so why not show the monthly price instead? And because In the past Apple showed the subsidized carrier pricing the narrative becomes I used to be able to get an iPhone for $200 now it’s $1000 (no joke someone on CNBC said this the other day).
For as much as people say Apple is missing Steve from a product innovation perspective I think they’re missing him more from a marketing and sales perspective. Steve was a master at the product introduction and the best way to sell a product. He was the best at telling you why a product existed. And when bad news needed to be delivered it didn’t take him a 1,400 word letter to do it. That’s what Apple is missing.
Steve: "We don't sell junk"
Any questions?
If I need an app, I get it from the Play Store. If I need a service, it's available. Apps are updated continuously - and independently of the core OS.
Have you used Android recently?
edit: https://appleinsider.com/articles/18/11/12/tim-cook-is-only-robbing-you-if-you-thought-steve-jobs-was-too
When Apple was reporting record iPhone sales, record revenues and profits nobody here was complaining. In fact most of the time the argument was/is Apple is the best because it has all the profits. Now the company warns about missing guidance and its Wall Street’s fault for being too obsessed with profits? ¯\_(ツ)_/¯
1. Revenue shortfall is $5 billion for the lower end of the guidance and in China region ALONE, the shortfall was more than $5 billion. I think this is the easier part, that all of us agree with and it was explicitly mentioned as well.
2. Here is the reading between lines part comes - Apart from iPhones, ALL other product lines made 19% growth worldwide. And they all pulled in more revenue than Apple's original guidance. Where did that additional revenue go away? Reduction in iPhone revenue in the rest of the world. Is it severe like in China? No. It is probably a smaller reduction. But all signs point to reduction in iPhone revenue all over the world, not just China. In rest of world, the other revenue streams took care of the shortfall, but that didn't happen in China. Hence the comments around battery replacement, carrier subsidies and so on.
Edit: My conclusion is that iPhone has performed very badly in China and slightly bad in rest of world. And price is the key change in the last 2 years. Good news is - it is very easy to fix for Apple. As and when Apple does it, Samsung and other Android OEMs will be in deep trouble with respect to running a profitable mobile business.
1. It is being pointed out that Apple's margins have remained flat but component and other costs have increased, hence the price increases are justified - no, that is not how it works out in the real world. It is easy to explain that to Apple shareholders and they will accept it. But the common person does NOT care about Apple's profit margins or costs. They care for what they need to shell out and rightly so.
2. You have mentioned that reducing the prices would not help. But there is no evidence to this. And there is evidence to the opposite situation - if you keep increasing the prices, the revenue will go down dramatically, which is what happened with iphones in the last quarter. And I didn't believe that it is a pure China issue. Please read my above comment why I think this is an issue all over the world.
Google has great tech, but makes you the product. Microsoft has promise, but apple comes complete with apps. But, still using the note 4, recently replaced the battery. Didn’t care for the Apple Pencil, not comfortable to use. Also, why only one type of stylus? Held off on the 12.9 because there is no backward compatibility and it is even more expensive. Still considering it though.
in the end I’m looking to choose apple, rough around the edges as it is. And as others have mentioned, it may be time to look outside the core apple community and reap the rewards of reputation. Although that is undermined by upgrade issues, and apples reliance on China.