“Apple’s ‘pricing hubris’ on its midrange iPhone XR was the main factor in the company’s weak December-quarter sales, a Wall Street analyst says,” Patrick Seitz reports for Investor’s Business Daily. “Apple stock was down Monday.”
“Wedbush analyst Daniel Ives says Apple will need to cut pricing on the device to get back on track. In a report to clients, he said he expects ‘significant price cuts’ on the iPhone XR,” Seitz reports. “These will come in the coming months as the company course corrects, Ives says.”
“‘As we have discussed with investors, it has been Apple’s pricing hubris on iPhone XR that was the major factor in the company’s December-quarter earnings debacle,” he said,” Seitz reports. “Roughly 750 million iPhones in use worldwide. Of those, Ives says about 350 million are candidates for upgrades over the next 12 to 18 months. That includes 60 million to 70 million iPhones in the Greater China region, Ives said… Ives reiterated his outperform rating on Apple stock with a 12-month price target of 200.”
Read more in the full article here.
MacDailyNews Take: Whatever it takes to move product until the next big iPhone upgrade impetus arrives (5G) in 2020 (hopefully).
Apple should do everything they can and then some to make the 5G-capable iPhone as attractive as possible to those who’ve previously settled for Android-based iPhone wannabes.
Tim Cook’s price gouging is DONE.
His pricing model hit a steel wall at 100mph.
To give you an idea of exactly how greedy Tim Cook is: HIS GREED SUPERCEDES EVEN WALLSTREET STANDARDS!
Now that, ladies and gentlemen is greed in its purest form.
FACT 1- There is zero price gouging , stop your ignorant whining and disinformation…Apple gross margins have not change.. have always been between 38-40%, still are.
FACT 2- ORIGINAL iphone Price tag in 2007 : $599
Inflation adjusted price ( ie in todays dolloars ) $727
In comparison, Iphone XR. Today 699 . A product immensely better than the original iphone.
Excellent analysis. Good stuff, man.
Without cost info and analysis, your post based on the total speculation and conjecture is entirely invalid. Were you aware of it?
FACT 3 – if I may – iPhones are no more expensive than the top Androcrap.
Ummm…in regarding ‘Fact 2’.
The original iPhone’s original price wasn’t $599, because there was also a 4GB model for $499.
And then on 6 SEP 07, Steve announced that the 8GB model (which was at the aforementioned $599 price) was going to have its price cut by $200, and the 4GB model dropped.
(both prices are as per Wikipedia)
Therefore, the correct number to use isn’t $599, but either $499 or $399, depending on if you want to be pedantic to “absolutely first” price, or include Steve’s product line adjustment done 9 weeks after original launch.
Proceeding with both:
$399 –> inflation adjusted = $484
$499 –> inflation adjusted = $605
The XR today is therefore priced at least 16% greater than is explained by inflation.
…and that’s despite huge increases in manufacturing volumes (economies of scale)…
And I say “at least” because if we take Steve’s price correction, then the XR is overpriced vs inflation by a mere 44%.
FWIW, it would be worthwhile to go check back into the 2007 SEC filing reports to see what profit margins Apple reported for the iPhone, to see if it is comparable to today’s ~36%, for it is possible (even if IMO not all that likely) that Steve chose to shave profit margins initially to break into the market.
At much lower production cost….
Both scale and efficiencies, not even counting maturity.
Samsung isn’t exactly selling their Notes/Galaxy cheap… with no customer service (Genius Bar/Apple Store) to fall back on for personalize support.
Pixel 3… has like no support… except for the camera… talk about price gouging
Exactly right and this rarely mentioned fact (by the press) regarding aapl product support is one of a few differentiating factors for aapl products. Another one, of course, is that iOS and MacOS are not virtual instruments that constantly surveil your location, searches (you don’t need to use google), and anything else you do on your devices.
please apple be like everyone else make no money so you cannot innovate. Please do it now so you can collapse like xaomi and report 1/4 of your current profits on 10x the sales like amazon please please
The interesting counter statement is Apple’s repeated statement that the iPhone XR has been the leading seller since it started shipping.
Is the iPhone XR overpriced? Yes.
Will it require “significant price cuts” as Seitz suggests? Likely not.
Fact
ORIGINAL iphone Price tag in 2007 : $599
Inflation adjusted price ( ie in todays dolloars ) $727
In comparison, Iphone XR. Today 699 . A product immensely better than the original iphone.
Dont you ever tire of having Pipeline’s nut sack in your mouth?
Steve Jobs LOWERED the price of the first iPhone $200
Blithering idiot.
@Alan
And to top it all off, he’s comparing Apple’s then flagship with today’s entry level XR. If he compared it like for like with today’s XS Max, all booked out with 512GB, it’s an $1800 phone (3-times what the original iphone went for). Jimbo is a nutjob.
Fool. there was only one iPhone at tte beginning. Flagship does not even apply.
He is comparing the price of the closet match to the original, the XR which is hugely better than the original! Yet cheaper!
Nope, there was a 4GB and an 8GB model … check Wikipedia.
Originally,
4GB = $499
8GB = $599
But 9 weeks later, on 6 Sept 2007, Steve announced:
4GB = discontinued
8GB = $399
Granted, both prices did require a 2 year AT&T contract at the time, and there probably was some level of reimbursement to Apple from the Providers, but this was hidden from consumers, and since consumers were going to pay for cellular anyway, its a relatively minor footnote for the period.
“Fool. there was only one iPhone at tte beginning. Flagship does not even apply.”
Yes, the ORIGINAL “flagship iPhone.”!!!
Explain how the description is disqualified in your mind if you have one. Not only was it “flagship” it was revolutionary and changed the world. One of the greatest inventions of all time!
I bought the granddaddy original on DAY ONE for $599. Month or two later Jobs lowered the price and granted the early adopters a free $100 gift certificate to be used at Apple stores everywhere. In the glass cube bought a printer back when Apple stocked its stores with third-party products and products they recommended.
I much preferred more choice in the old days than the Apple fashion stores of today…
Alan G — Thanks so much for your great insight. Sure changed my mind on these issues.
Alan G again – and Zerorandy and the rest of you incessantly blithering whiners… I still have never received any kind of logical answer to my question from any of you… If this company and its prodocts are so terrible – and have been for so long – why don’t you kindly fuck off. Go somewhere else. Use and write about products you enjoy.
“If this company and its prodocts are so terrible – and have been for so long – why don’t you kindly fuck off. Go somewhere else.”
Immature Sean, how many times do I have to tell you constructive criticism is most likely the most important tool Apple needs right now.
And how many times do I have to tell you your posts are over 90% the same. Insulting broken record over and over and NOTHING ENLIGHTENING we can appreciate.
For a change, how about “you kindly fuck off!”…
@GoeB
💥👍👍👍👍👍💥
Kindly?
Incessantly whining on slight variations of your same complaints is not “constructive criticism”. If you tried such a daily pile of shit with business managers I work for, you’d be shut down real fast.
“Constructive” supposes an overall, basically positive environment and a building of mutual respect and trust in which there is occasional criticism. You bunch of whiny little bitches display ZERO positive attitude towards Apple or anyone else here, and your negativity is incessant.
Just bought one today! Sold off an iPhone 7 Plus for $375 and came in and bought a new iPhone XR. ($799)
Good stuff right there.
Yup, I will buy an iPhone 7 early this year.
Looking to buy new in 2020.
I don’t see a need for the “Xs” right now.
The iPhone SE V2 is one of those things needed to sell more units .
I can ‘ almost guarantee’ there will be an SE v2 next year.
With design cues from iphone x edge to edge and the new ipad pro 3d gen.
I’m so glad that Tim Cook runs Apple, not any of you. This is all conjecture and if you really feel you know better how to run Apple, you are delusional. These opinions are like 10 gallon hats in Texas. Every asshole has one.
although, i think the stock buy backs are a waste… i think Apple should just go private like Dell…
no more stockholders to answer to… just what matters most… their customers
Apple has over 4.5 BILLION shares outstanding. Calculate up the value of that and see how likely it is they will go private.
FFS, the Tim Cook apologists here are nauseating as all hell.
Dell is public again…..