There’s still another quarter to go, but Apple’s 2019 fiscal year is not going to go down as The Year of Booming iPhone Sales. After reporting its third-quarter numbers this past week, Apple has seen revenue from its smartphone business drop 15% for its fiscal year to date, as the iPhone goes from the engine that drove Apple to just another product.
A lot of factors have contributed to the slower sales figures. People are holding on to their smartphones longer. Last fall’s iPhone updates introduced only modest changes, and with the iPhone 11 not expected to reinvent the wheel either, anyone who can put off a smartphone upgrade is going to be inclined to wait for the more marquee features rumored for the 2020 model.
But there’s another explanation for why the latest iPhones haven’t caught on in quite the same way as their predecessors: Maybe they just cost too damn much.
MacDailyNews Take: Newsflash: Apple sells premium products at premium prices to premium customers.
For as long as Apple has been Apple there have been calls for the company to make “affordable products.” By this, most mean lower price tags. They’re not talking value or Total Cost of Ownership (TCO). When you bring those ideas into the discussion, Apple’s prices are very low indeed. Apple iPhones get software updates and the company supports older iPhone models for far longer than do fake iPhon peddlers (Android). No, this is all about sticker prices.
One major problem: Offering low priced products is, as Apple’s leadership likes to say, “not part of Apple’s DNA.” This is a nice way of saying: We can’t dominate entire markets (outside of the fluke iPod/iTunes Store) because it would irrecoverably damage the Apple brand or as Steve Jobs once said, “We can’t do it; we just can’t ship junk.” More recently, this has been parroted by Tim Cook: “There’s always a large junk part of the market. We’re not in the junk business.”
The other issue is that those who settle for Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android settlers to developers, advertisers, third-party accessory makers (speakers, cases, chargers, cables, etc.), vehicle makers, musicians, TV show producers, movie producers, book authors, carriers, retailers, podcasters… The list goes on and on.
The quality of the customer matters. A lot.
Facile “analyses” that look only at market (unit) share, equating one Android settler to one iOS user, make a fatal error by incorrectly equating users of each platform one-to-one.
When it comes to mobile operating systems, all users are simply not equal. – SteveJack, MacDailyNews, November 15, 2014
As X-class iPhones continue to be released, older models (X, XS, XS Max) will remain on the market and drop in price, satisfying the mid-range iPhone buyer.
Again, Apple sells premium products at premium prices to premium customers. Android can have the rest. They’re more trouble than they’re worth as they generally only want things for “free,” “discounted,” or “cheap” and they buy demonstrably fewer apps, accessories, and subscriptions.