“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
SEE ALSO:
Misreading Apple’s supply chain and iPhone XR demand – November 15, 2018
TC went on with its strategies, a year late.
Hopefully, this is a big sign and TC and friends will adjust.
It is time to listen to your 100 millions clients now.
Disregard any story from the Wall Street Journal. It is purely bought and paid for by pump and dump hedge fund operators.
On a separate note, my cable system has a channel called EVINE which is like QVC and has beading Black Friday sales of iPads and MacBooks. It is amazing. The guy who is on – Elliott – does amazing demos of the iPad, MacBook, FaceTime, SIRI, Pages/Numbers, product durability, etc., etc. etc. He is doing a better job selling Apple than any commercial they have done since I’m A PC. At first I thought this was bad, Apple stuff being sold ala Dell cheap computers on QVC. But after watching for 15 minutes I have to say Elliott is the best thing going for Apple sales this holiday season. Check out EVINE today and you should see Elliott some time. He could replace Tim doing Apple Events. Less talk about recycling and more about why someone should buy a MacBook.
Apple obviously wanted people to buy higher priced models before the Xr cannibalize that potential. Apple probably knew that higher priced Xs/Max might have a limited market potential due to price (In Canada, maxed out Xs is priced C$1999, which is translated to C$2260 with tax at the retail level. Insane..).
Apple probably thought that the Xr sales would mop up the rest of the market potential. I believe the problem of the Xr was the size. All these new 3 phones and bundled in a monster size class. If the Xr was sized smaller than the Xs with cheaper price, it may have gone better. But what do I know….
If the story is true then I see no reason why Apple shouldn’t try to make price adjustments to move more inventory. Apple shouldn’t sit back and do nothing. If the smartphone market is truly saturated and shoppers are looking for price reductions on iPhones, then a price reduction is a good thing. Apple needs to adapt. Of course, Apple is going to be damned by the critics no matter what it does or doesn’t do.
Phones overpriced! Plain and simple
Could be the XR was intended as a discount strategy for certain markets all along, widen the base without impacting high end.
Ok lets look at this pragmatically rather than a FUD perspective.
I looked on line for iPhone 7 plus 128 selling prices… they are between 300 to 450
I even followed 3 auctions closing… ranged from 360, 375, 395 !
Given the above observation Anyone wanting an iPhone XR could sell their 7 plus 128 iPhone on. for 300 to 450!
Lets go Conservative based on my observed closing prices and say 350$ average. That’s lower than my observed.
XR prices at Apple site:
Sim free unlocked.
XR 64 GIG 674
XR 128 GIG 719
Carrier version
XR 64 GIG 749
XR 128 GIG. 799
Now lets forget Apple Apples so called Panic Promo.. ( which it is not, Apple has had trade in program for years now)…. and look at some elementary level math…Subtraction.
eBay average iPhone 7 plus 128 price average 350 (conservative )
The Net out of pocket cost for iPhone XR for a consumer who plans to go from iPhone 7 plus128 to XR:
XR 64 GIG 674 – 350= 324 125. better than apple
XR 128 GIG 719 – 350= 369 80 ‘’’’’’’
Carrier version
XR 64 GIG 749 -350= 399 50’’’’’’’’
XR 128 GIG 799- 350= 449 0 – Same as Apple deal.
(Mind you, i went on a very conservative low end of 7plus selling price ..realistically the net cost will be lower and a consumer will have even better deal than above )
Where is Apples desperation in this picture??
They are not offering anything over and above what the going market value is.. no extra discounts.. etc.
They are just trying to get the trades if anything. And offering a worse deal than one can get otherwise. They have always offered trade-in prices at lower than market prices.
Anyone could have had and can have as good or a better deal at any point without involving Apple.
Its just that Apple put the promo on their first page…..And the bashers are running with it mindlessly….throwing FUD around.
There is no story here..
Just Fud and hit pieces…Bloombug and alike are pushing negative crap out there.. as they have for quite a while.