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Did Apple Retail Prices Get Too High in 2018? Consumers Say Yes. (usatoday.com)
Apple has for years been a premium brand that rarely, if ever discounted products. Every year, the company could raise prices on products, and consumers would not only happily pay, but stand in long lines for the privilege of doing so. From a report: So when Apple started putting misleading, but seemingly consumer-friendly posters in front of Apple Stores at the end of 2018 offering a new iPhone model for $300 off (with trade-in of your current phone), you know something different happened for the company this year. Consumers fought back. Many analysts have reported that in the wake of poorer-than-expected sales for this year's crop of iPhones, Apple cut back on production, including on the $1,100 iPhone XS Max, the $999 iPhone XS and the XR, the "budget" model that replaced the previous entry-level new phone, the $349 SE. The price for the XR (the one Apple is hawking discounts for): $749.
"This should be a wakeup call for Apple," says Daniel Ives, an analyst with Wedbush Securities. "They swung, and they really missed." The prices on the new phones are "far too high," says Terry Walton, a tourist from Auckland, New Zealand. He has an iPhone 7 and didn't even consider any of the X-series iPhones because it still works just fine. Upgrading "didn't enter my mind at all," he says. It wasn't just iPhones that got price hikes. Apple also upped the cost of the top-of-the-line iPad to $1,000 as well (or over $2,800 for a loaded model) and added $300 to the cost of the Mac Mini and new MacBook Air computers.
"This should be a wakeup call for Apple," says Daniel Ives, an analyst with Wedbush Securities. "They swung, and they really missed." The prices on the new phones are "far too high," says Terry Walton, a tourist from Auckland, New Zealand. He has an iPhone 7 and didn't even consider any of the X-series iPhones because it still works just fine. Upgrading "didn't enter my mind at all," he says. It wasn't just iPhones that got price hikes. Apple also upped the cost of the top-of-the-line iPad to $1,000 as well (or over $2,800 for a loaded model) and added $300 to the cost of the Mac Mini and new MacBook Air computers.
I'm an iOS developer and a longtime Apple fan, but I'm having trouble finding a reason to upgrade from my iPhone 6S (even though Apple's offering me $200 in trade-in value for it).
Honestly, the lack of a headphone jack is a big thing for me. I listen to music all day at the office with my iPhone and an expensive set of headphones. It's a simple use case. No reason why I should have to bother with dongles or batteries.
Their sales start dropping and they simply start increasing prices to keep increasing profits. Their beyond-reason loyal fanbase enabled that for a while, but this is getting ridiculous, goes against any logic so could not possibly be sustained for long.
They have to be careful - I mean their 30% cut on all content makes a big chunk of their revenue (second only to the aforementioned ridiculously marked-up iphones), not offering an affordable way to hook people into that revenue stream will have severe long-term consequences. Other companies would give away hardware at cost for the chance of hooking people into that 30% content revenue deal, but Apple is trying to sell $300 worth of hardware for over $1000 based only on their name and gimmick-level innovations, in the anti-capitalist notion of increasing income simply by increasing prices.
Violence is the last refuge of the incompetent. Polar Scope Align for iOS
In their grand hunt for more profits, Apple is killing the golden goose. The blunder of the latest iPhone rollouts, their continued irrelevance of their iPad/Book/Pro lines with similarly high prices and underperformance, combined with their entire abandonment of anything desktop related, Apple will, unless there is a huge shakeup, fade back into the backwaters of computing history.
While there will always be people gullible enough to shell out $1,000 for a phone which plays music, the inflection point of people waking up to the reality of how much money they're wasting on phones is coming due. With only incremental "improvements", justifying exorbitant costs for meager gains will and is starting to come into play.
At this point, there isn't a good justification to buy an Apple phone other than its supposed exclusivity and for its fanboys. There isn't even a reason to buy their overpriced laptops which require multiple adapters to get it to work.
Apple needs to get its act together, and soon. The goose is getting long in the tooth and its ability to continue laying golden eggs is becoming doubtful. There is a huge market for people who are tired of Microsoft's crap, yet Apple seems vowed and determined to ignore those tens of millions of potential customers, all because they can make a few bucks now on a phone.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
This basically is starting to remind me of the cycle Apple went through back in the late 80's to early 90's. Back then Apples were seen as very high quality and the easiest most user friendly computers to own. They costed a lot, but if you had the money it was the way to go.
PCs kept getting built better though, and Windows started becoming a viable work GUI in the 90's after the 3.0 release. Eventually even if you preferred Apple it made little sense when a PC that worked just as good was 1/3 to 1/2 the cost. Even now after the company's rebound their traditional computer market share is a mere fraction of standard PC's.
Now, the same thing is happening with phones. For a long time Apple was the clear winner if you wanted a phone that "just worked". You paid a little extra but it was great. Now though, Android devices have pretty much caught up completely in hardware and software, while still being priced less. If you want a dirt cheap phone sure there are the sub-$100 options out there, but even at the premium level you can go Android and save a few hundred dollars vs Apple.
Particularly without Jobs at the helm, I see Apple's market share as continuing to drop within the next couple years. In a decade I'd wager Apple's marketshare on the phone market will be at or below 15%.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
It's just a totally unnecessary change. It's clearly not about space at all.
I'm not paying more for a device fractionally faster, without a convenient thumb unlock or headphone jack.
And yes. I've owned 4 of the last top end iPads in a row. I'm done.
Beat your UI over the head with an ugly stick and you lose the premium feel of the UI. Remove the standard headphone jack and you lose customers who care about high fidelity. Add a gimpy notch that makes your screen look like something from "There, I fixed it." and you no longer have a premium device. Now jack the price up and watch what customers you haven't already pissed off walk away. Then again, Jony Ive was in charge of product development the last time Apple went downhill, so none of this should surprise anybody.
One of the most outrageous parts of Apple's pricing strategy can be found in the way that they differentiate between models in the same range that differ only based on storage capacity.
For example, consider the new (no Home button) iPad. In the UK, there are 4 models offered in the range:-
64Gb - £769
256Gb - £919
512Gb - £1,119
1Tb - £1,519
Yes, that's £1,519 or approximately £1950 for the *starting point* in price for a 1Tb iPad. Now, on the one hand, if you really want a terabyte tablet, expect to pay for that. On the other hand, look at the difference in price between the 512Gb and 1Tb versions - no less than £400.
However, if you go to say Amazon and check the price of a 512Gb Samsung 970 Pro M2 PCI Express SSD (close to if not the fastest-performing drive at that capacity), you'll pay £176.78 for a boxed, retail part.
In other words, Apple (a company that bought a memory/storage manufacturing business and which manufactures a significant portion of the RAM they use in-house) are charging comfortably more than twice as much for RAM packaged in one of their products (i.e. with the addition of one or two more chips on a standard circuit board) than a company offering a stand-alone, retail part.
The reason they're doing this is because they can. However, there's a slim chance that, as the markets saturate and as Chump's trade practices continue to bite, Apple will be left with a choice between cutting prices or slashing profits.
And/or we can just move to a different vendor or significantly reduce the replacement cycle of existing Apple kit.