“As yesterday’s surprise announcement of a significant holiday revenue shortfall made clear, Apple is in trouble — not the sort of ‘capital T’ trouble facing soon-to-be-bankrupt companies, but the nuanced dysfunction of a company that has lost more than 30 percent of its value, over $300 billion, in the past two months,” Jeremy Horwitz writes for VentureBeat. “Today, Apple CEO Tim Cook will hold an all-hands meeting to discuss the situation with employees, following his publication of a lengthy letter to investors.”
“My concern is that Cook will downplay or ignore the critical issue that has become obvious to virtually everyone outside the company: Apple’s pricing,” Horwitz writes. “It’s unclear whether Apple believes the laws of supply and demand don’t apply to its products or whether it thinks it can keep skirting those limitations by offering financing plans and milking existing customers until they’re dry.”
“There’s a finite and relatively small number of people who will pay two or four times the objectively reasonable price for a product. Even with that group as a ‘loyal’ customer base, a company that keeps raising prices will reduce the frequency of their purchases, a problem that would be reflected in declining unit sales,” Horwitz writes. “Tim Cook has two choices at today’s hands-on meeting. He can keep finding alternative ways to placate Apple’s current customers and hope they don’t leave, or he can make the difficult choice to shave down Apple’s insane 38 percent profit margin to expand the company’s user base.”
Read more in the full article here.
MacDailyNews Take: Two questions:
1. Has any other company in history ever lost over $300 billion in value in two months?
2. Do you think Apple’s iPhone and/or other product/service pricing is too high? If so, please give us some examples. We’ll start: Apple’s $39 for their clear case for iPhone XR is wildly, not-even-funny overpriced by a factor of three, at least. As we wrote when it finally debuted (late to market, naturally):
[It’s] a transparent, literally, money grab. And shameful, actually.
Do not waste $39 on a piece of plastic.
We recommend the Spigen Ultra Hybrid Crystal Clear Case for Apple iPhone XR:
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