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Report: iPhone Sales Fail Triggered “Fire Drill” at Apple
Posted on 12/4/18 at 6:07 pm
Posted on 12/4/18 at 6:07 pm
quote:
A new report details the emergency response within Apple when it became clear that its new iPhones were not selling as well as expected.
“Company executives moved some marketing staff from other projects to work on bolstering sales of the latest handsets in October, about a month after the iPhone XS went on sale and in the days around the launch of the iPhone XR, according to a person familiar with the situation,” a new Bloomberg report explains.
That source referred to the reaction within Apple as a “fire drill,” and said that it led quickly to strategy changes. Among the changes, Apple is now offering its customers double the normal amount on trade-in devices for those who buy a new iPhone. This effectively lowers the price of a new iPhone … without Apple having to go through the embarrassment of actually lowering the price.
Bloomberg notes that Apple on Sunday actually went so far as to denote a starting price of “$449*” for the iPhone XR on its website. The iPhone XR actually starts at $749.
But as the footnote at the bottom of the site explains, ” $449 reflects [the] price of iPhone XR after trade-in of iPhone 7 Plus … Trade-in values vary based on the condition, year, and configuration of your trade-in device, and may also vary between online and in-store trade-in.”
This change, which Apple’s site says is for a limited time, suggests that Apple’s strategy of raising prices to make up for diminished sales—what I called Apple Jacked—is not working. And the timing of the “fire drill” at Apple is interesting: In the one month between the launches of the iPhone XS/XS Max and iPhone XR, Apple suddenly discovered that things were going south. And that the iPhone XR was not going to solve the problem.
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Posted on 12/4/18 at 6:40 pm to Street Hawk
Who would have thought that the death of Steve Jobs would kill an entire companies creativity and development.
Posted on 12/4/18 at 6:42 pm to kywildcatfanone
quote:
Who would have thought that the death of Steve Jobs would kill an entire companies creativity and development.
I'm willing to bet, Steve Jobs
Posted on 12/4/18 at 8:00 pm to Street Hawk
I started a thread on here several months ago about Apple and my concern about declining smartphone sales. The market is mature and there's very little compelling reasons to upgrade every two years other than performance and declining battery life.
I think about 70% of their revenue comes from the iPhone.
It's still my largest holding and I've given back some gains but I'll likely consider locking in some profits on the next bounce. I don't plan to sell it all.
I think about 70% of their revenue comes from the iPhone.
It's still my largest holding and I've given back some gains but I'll likely consider locking in some profits on the next bounce. I don't plan to sell it all.
Posted on 12/4/18 at 8:57 pm to kywildcatfanone
quote:
Who would have thought that the death of Steve Jobs would kill an entire companies creativity and development.
Apple was in the toilet before he came back to save them.
Posted on 12/4/18 at 10:01 pm to fallguy_1978
quote:This is one of the reasons why their focusing on major growth in their services, so they can still make money from the consumers with their devices, even when they're not buying any devices.
I think about 70% of their revenue comes from the iPhone.
Posted on 12/4/18 at 10:44 pm to fallguy_1978
I’m not an Einstein by any stretch of the imagination, but their model doesn’t seem effective for a large part of cell phone users. Releasing a new model of phone every year that costs hundreds of dollars seems silly. Especially when the “new” features don’t really affect me.
Posted on 12/4/18 at 11:17 pm to Monday
quote:
I’m not an Einstein by any stretch of the imagination, but their model doesn’t seem effective for a large part of cell phone users. Releasing a new model of phone every year that costs hundreds of dollars seems silly.
I mean, that's kind of how they became the company they are today.
Granted, that model is a little long in the tooth, but they're not going to abandon it altogether after one sales slump.
Posted on 12/5/18 at 12:26 am to slackster
quote:
I mean, that's kind of how they became the company they are today.
Granted, that model is a little long in the tooth, but they're not going to abandon it altogether after one sales slump.
I think they just need to go without the odd year releases.
Were there really big enough differences between any of the 6,7,8,X's vs the S versions of those phones?
The technology and innovation just isn't advancing as quickly as it was when going from the 3 to 4 to 5's.
Posted on 12/5/18 at 4:53 am to SLafourche07
I'm still cruising with the 6 and it has worked great since the day I bought it. No plans to update anytime soon.
Posted on 12/5/18 at 7:03 am to Azazello
quote:
I'm still cruising with the 6 and it has worked great since the day I bought it. No plans to update anytime soon.
This. I have a 6s and certainly have no reason to spend $800 for a new phone. If the new phones were $200 maybe. But I’m not getting a 7.
I always think it’s laughable all these people saying Apple is no longer a great company because of the lack of new innovations. What is Samsung, sprint, T-Mobile, dell, Verizon, blackberry, gateway, Hp, etc. that are all in their competitive market doing better and doing with more innovation?
Posted on 12/5/18 at 7:46 am to Monday
quote:
I’m not an Einstein by any stretch of the imagination, but their model doesn’t seem effective for a large part of cell phone users. Releasing a new model of phone every year that costs hundreds of dollars seems silly. Especially when the “new” features don’t really affect me.
You’re not their target audience. The target audience are teenagers, young to middle aged women, and tech geeks. It’s a pretty small audience, but one that generally has enough money to scrap together for a new phone every year
Posted on 12/5/18 at 7:50 am to Monday
quote:
I’m not an Einstein by any stretch of the imagination, but their model doesn’t seem effective for a large part of cell phone users. Releasing a new model of phone every year that costs hundreds of dollars seems silly. Especially when the “new” features don’t really affect me.
I don't think it's unique to Apple. I think smartphone companies are struggling to find new features to add and the phones are almost commoditized at this point.
That being said, they are sitting on a ton of cash and the stock yields a little over 1.5%.
Posted on 12/5/18 at 7:54 am to Upperdecker
quote:
You’re not their target audience. The target audience are teenagers, young to middle aged women, and tech geeks. It’s a pretty small audience, but one that generally has enough money to scrap together for a new phone every year
I work in IT so I guess I'm a tech geek. I'm an Android user and my phone is over 2 years old now.
I've looked at the newer models and they don't really have anything that mine doesn't. It seems that they just add a bigger battery, a better camera and jack the price up to see if they can make up some ground there.
I've seen this as a trend more and more. People are keeping their old phones longer.
Posted on 12/5/18 at 8:00 am to fallguy_1978
I've gotten into upgrading every year, just went from an S8+ to a S9+. Not really much different, but Sams was giving $300 gift cards to Sams for each upgrade, and that was enough to pay off my contract, so as long as they keep doing that, I will probably just upgrade for the fun of it.
Posted on 12/5/18 at 8:07 am to baldona
I have a 5S I'm still using. It works fine but memory is starting to be an issue. Probably will replace in next year, but may only go to an 8 or so.
I'm surprised noone has mentioned the changing carrier market that no longer really subsidizes phones. A $200 iphone and a 2 year contract, to many, seems like a better deal than a $40 a month phone payment plus a cheaper plan price.
Further, phones used to barely last two years before they broke. They are built better and lasting longer, so no real "need" to upgrade that often, unless you just want to have the latest and greatest.
Jobs' gift was the innovation of new products. he could see the need for products, and know the public needed them, before the public knew they needed them.
The propritary nature of apple means they always need to be innovating and coming up with new products. That is what they are missing right now. Samsung, etc, have a lower price point and go after a lower market.
I'm surprised noone has mentioned the changing carrier market that no longer really subsidizes phones. A $200 iphone and a 2 year contract, to many, seems like a better deal than a $40 a month phone payment plus a cheaper plan price.
Further, phones used to barely last two years before they broke. They are built better and lasting longer, so no real "need" to upgrade that often, unless you just want to have the latest and greatest.
Jobs' gift was the innovation of new products. he could see the need for products, and know the public needed them, before the public knew they needed them.
The propritary nature of apple means they always need to be innovating and coming up with new products. That is what they are missing right now. Samsung, etc, have a lower price point and go after a lower market.
Posted on 12/5/18 at 10:40 am to fallguy_1978
I'm not a tech guy, but I assume a new phone will be necessary to access 5g lte when it rolls out. That might help phone sales for a few years as Apple tries to develop another flagship piece of hardware.
Posted on 12/5/18 at 11:27 am to PearlJam
Agreed I think the rollout to 5g will help them crush their 2020 sales. Their services department is showing tremendous growth as well.
Posted on 12/5/18 at 1:29 pm to Street Hawk
Cell carriers getting away from the model of subsidizing the phone's pricing in exchange for 2 year contracts is probably one of (if not the biggest) factor in iPhone sales slowing down.
$299 or $399 iPhone (with 2 year contract) sounds a lot more appealing than $899 for a phone.
I used to pay about $90/month for 1 line and buying the phone at a subsidized price in exchange for a 2 year contract. Now I'm at about $95/month but that includes about $35/month of AT&T "financing" the phone for me interest free. So it works out cheaper since I didn't have to come out of pocket $300-400 when I got the phone.
Carriers built the cost of subsidizing the phone into their monthly plan rates. But now that the FULL price of the phone is staring consumers in the face, people aren't upgrading every 2 years anymore. Apple not really having many groundbreaking must-have features either isn't helping.
$299 or $399 iPhone (with 2 year contract) sounds a lot more appealing than $899 for a phone.
I used to pay about $90/month for 1 line and buying the phone at a subsidized price in exchange for a 2 year contract. Now I'm at about $95/month but that includes about $35/month of AT&T "financing" the phone for me interest free. So it works out cheaper since I didn't have to come out of pocket $300-400 when I got the phone.
Carriers built the cost of subsidizing the phone into their monthly plan rates. But now that the FULL price of the phone is staring consumers in the face, people aren't upgrading every 2 years anymore. Apple not really having many groundbreaking must-have features either isn't helping.
Posted on 12/5/18 at 1:54 pm to Tiger Prawn
quote:
$299 or $399 iPhone (with 2 year contract) sounds a lot more appealing than $899 for a phone.
Yep. People see the 1k price tag on some of these phones and decide to keep what they've got for awhile longer.
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