speedfriend

"Bloomberg admitted in its trade-in sensationalism piece that "last year, there were similar concerns about sales of the iPhone X, and the handset ended up selling well," a gross simplification of the regular reports the site itself actually promoted as an ongoing narrative, which didn't just "raise concerns about sales," but confidently insisted that Apple's "$999 starting price was too much for some consumers," while in parallel crafting a false "pile of bad news" with story after story of supply chain rumors that implied Apple might be slashing production due to weak demand." Everyone that we spoke to in the supply chain confirmed that total X production was way less than the initial guidance that they had been given by Apple, and this was seen in guidance downgrades by many of the suppliers where Apple was their biggest customer. and the same continues now with the Xr and Xs. They have failed to ignite the refresh cycle that Apple had hoped for...

bkkcanuck said:

speedfriend said:

This doesn't make any sense given what Apple reported

With the iPad Pro price levels at $800, $950 and $1080, lets say at 1/3 of each type, the average price is $933. If Apple sold 2m iPad Pros, that would equal revenue of $1.9bn. Total iPad revenue in the quarter was $7.1bn. So none Pro revenue was $5.2bn and none Pro units were 14.1m units. That implies an average selling price of $369, compared to an average selling price of $435 over the past 8 quarters, a 15% decline.

So either Apple has been offering significant discounts off its non-Pro iPads (which I haven't really seen any evidence of) or the IDC report is very wrong and nowhere near 2m iPad Pros were sold.

Just a guess, the price levels of $800, etc.  would not be a direct translation into revenue from iPads would it not?  What is the wholesale price of those? (maybe 70%?? I don't know).  If an iPad is sold at $800, would not dealer not receive revenue from the sale, and Apple receive a net amount?  The Apple store would likely have to treat it the same but not compete on price, so revenue to the apple store would be a portion, and revenue from iPad would be the net amount (maybe 70%).

I thought about this but don't believe it would have a significant impact.
Firstly, from what I understand the margins on Apple products for retailers are tiny, I have read reports that they are 3%-5%, so wholesale price is not far from retail. Retailers then make margin pushing overpriced covers, keyboards etc.
Secondly, most iPad Pro sales would be made at Apple stores given the limited availability initially and they would record it at full retail price as retail is not reported as a separate item.

No, I still think something is wrong with the report, however I have seen reports now that there was a fair amount of discounting on iPads in some markets before Christmas.