“Less than a month after releasing the iPhone XR, Apple Inc. is moving to offer subsidies to mobile-network operators in Japan to shore up sales of its least expensive new smartphone, people familiar with the matter said,” Takashi Mochizuki reports for The Wall Street Journal. ”
The de facto discount of the handset, coupled with cuts in production plans, are a sign of limited enthusiasm among consumers for the model, which has fewer features than Apple’s other two new releases and costs than still-popular older models like the iPhone 8.”
“Major wireless carriers in Japan plan to cut iPhone XR prices as early as next week, people with direct knowledge of the plan said, without giving details of the extent of the cut,” Mochizuki reports. “The XR is available in Apple stores in Japan from about $750, but carriers’ pricing is more opaque as phones are bundled with data plans. It isn’t known whether the Cupertino, Calif., company plans to offer similar programs in other regions.”
“Apple has used marketing dollars before to discount certain iPhone models and drive sales, viewing it as a lever to manage inventory, according to people familiar with its sales and production tactics. During the iPhone 6s cycle, Apple cut production on one model then offered carrier and retailer discounts to help reduce excess inventory, one of these people said,” Mochizuki reports. “Analysts say weaker-than-expected demand for iPhone XR may mirror what happened with the iPhone 5c in 2013, where sales picked up the following year. Apple’s higher-priced XS and XS Max models, released a month earlier, appeal more to tech’s early adopters who typically fuel initial sales of new iPhones.”
Read more in the full article here.
MacDailyNews Take: So, the thinking of consumers, at least in the holiday launch season, seems to be that if you’re going to spend at least $750, you might as well spend some more to get better (iPhone XS) or the very best (iPhone XS Max).
Perhaps people finally realize that the color of your iPhone really doesn’t matter as it’s usually slapped into a case in the first minute. If you’re concerned with a certain color, then get that color iPhone case. Color as a sales point may be weakening.
Plus, with the staggered release this year of the lesser iPhone coming after the flagship, not before as with the iPhone 8/Plus and the iPhone X, the early adopter crowd has already gone for the XS/Max, leaving the XR consumer base thin, at least until after the holidays when other types of iPhone buyers might take up the XR slack.
If there actually is an issue with iPhone XR sales — and the jury is still way out on that one — that could be a good thing for Apple as it could mean that when spending over $750 on an iPhone, more people than ever say to themselves, “Well, I might as well get the very best one available,” and buy the iPhone Xs Max over iPhone XR. This would positively impact Apple’s iPhone ASP, of course. — MacDailyNews, November 9, 2018
Misreading Apple’s supply chain and iPhone XR demand – November 15, 2018