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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.
At the prices they charge, I would expect a superior product and build quality.
You can take your $2800 loaded iPad and bend it easily with your hands, among other flaws. I wouldn't even expect that from a $100 tablet.
Glad people are starting to wake up to Apple's price gouging and downward slide in quality.
The problems are becoming aggravating enough that I'm reviewing my options for the next upgrade.
My music library doesn't completely load. I have playlists that show all the songs but when you click to play, it grays out as unavailable. If I plug the phone or tablet in and sync, it'll sync up a couple of thousand different songs but other songs will then gray out. This is with about 50G of "free space" per iTunes.
The spacebar issue. For some reason, in more recent versions of IOS, I keep missing the spacebar and have posts with concatenated words. I don't know why it's doing it all of a sudden but it's damned annoying.
The music thing pisses me off the most though. Go through the trouble to create a playlist, go to listen to music during my commute and half the songs are missing.
[John]
Shit better not happen!
There is a big selection of Android phones from the Low End cheap sub $100 phones to the high end phones that are a fraction of a dollar less then what Apple sells, which are arguably just as nice or for some people much better.
However people are still paying more of the Apple phones. So why would lower its prices until it really has too.
Apple rarely gets suckered to the race to the bottom game, even it costs them market share. ...
Here is how the race to the bottom game works.
Company A offers a product at a high price.
Company B offers a similar product at a lower Price (often with some minor quality issues that is barely noticed).
Company A offers a product at a lower cost then B, however to meet the cost they have to cut its quality down.
Company B then goes makes an even crappier product to compete against A.
What we end up with is 2 products that no one really wants to buy because they are so poor.
We have seen this with Gateway 2000. Back in the mid 1990's gateway actually sold quality custom built PC's they were more expensive, but people gladly paid for them because they used good components. Then by the late 1990's they were competing against the lower end system to dominate the market, and end up with system that were Crap. In which Dell took over.
Apples approach is to maximize profit, not market share, if they can do both great, but they will error on the side of profit. So when company B makes a lower cost competitor Apple then tries to make a much better unit and charge more for it.
Now did they hit the limit? This article says yes, but we will see. Consumers always say the prices are too high.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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
I've been a long time Apple fan. Switched everything over to Macs in the early 2000's.
Currently, I have an 11 year old Mac Pro I'm using and a 2007 iMac. Was hoping to upgrade the iMac before Christmas. But new ones didn't show.
The Mac Pro drives me crazy. Every time I start Word, it yells at me to upgrade my OS. I can't upgrade my OS. I have to get a new machine. The current Mac Pro is garbage. The new Mac Pro probably will be as well. And supremely over priced.
I don't mind spending a ton of money on a computer. As long as I know it will last. I don't like upgrading my hardware very often.
I'm not excited about getting off the platform. But I think it's about time to make it happen.
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
When you call a product excess, many customers are going to get a message that you did not intend to send.
After the Apple problems highlighted by Louis Rossmann I'm not surprised that customers are careful these days.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
While I have no doubt that lowering prices would significantly increase demand, I wonder how much raising prices even more would decrease demand. Many many people are completely committed to iPhones, and will be willing to pay much more than the current prices to not have to switch to Android. I wonder if Apple would actually make the biggest profit by fleecing these people instead of going after people who are more price sensitive and are willing to switch or already have switched to Android.
Increasing prices even further would kill the 1-2 year upgrade cycle they try to push everyone into. Why pay $1500+ for a new phone when your 2 year old phone still works fine and is maybe even subjectively superior to the new model due to "upgrades" that affect usability? People are already starting to hold on to their iPhones longer. It's part of the reason why Apple worked with all the carriers to start those plans that are effectively 1-2 year leases where you upgrade your phone each year to the new model.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
Apple rarely gets suckered to the race to the bottom game, even it costs them market share.
They had a pretty large share of the market. Simply not raising their prices and being a familiar OS would have let them hold that market for a long time. A small number of high margin devices is their old business model. They had moved to moderate margin and a huge number of units is what they've been doing ever since the runaway success of the iPhone. Their real problem is that their older phones are still good enough and they should have always expected sales to slow to the replacement level once they owned the market.
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.
Apples approach is to maximize profit, not market share, if they can do both great, but they will error on the side of profit.
They'll certainly error on the side of profit margin, but that's not what brought Apple to be one of the world's most profitable companies. The iPod/iPhone/iPad was by no means cheap, but it could sell to a normal middle class market like BMW to use a car analogy. Now I feel like Apple is retreating back into Ferrari market, sure there has been and will be a market for luxury sports cars but it's not huge. That Apple is taking away the low-end options like the SE and the small Mini is a clear sign they were cannibalizing the market as people look for cheaper ways to stay in/get in the Apple ecosystem. So they raise the bar and say you must be this rich to buy Apple, it can work as long as people are tied up in iTunes purchases and iCloud and whatnot... but if they make the switch it's bye-bye Apple.
They can survive some skew in that the people with the most money to buy phones are also those who spend the most money buying apps, but 9 out of 10 times the mainstream end up crushing niche applications. Think like the workstation market, mainframe market or what Blackberry was like. What I don't like is that it's Google taking over, our lead data miner. Even with Microsoft trying to be a mini-Google they're nothing to the Big Daddy of tracking. But I think Apple will find that as they're retreating back into the high end, they'll find it terribly hard to stop when they want to stop.
Live today, because you never know what tomorrow brings
Here's my 2 cents, FWIW.
I have a 5S that I bought when it was the top-of-the-line flagship iPhone. It's served me really well.
Every time a new model has been released, I have evaluated whether it was worth the cost of upgrading given the amount of improvement I would see. With the 6 and 7 series, the only real difference in terms of how I would use it would be the addition of Apple Pay. The technical performance isn't enough better to be worth the price tag (at least to me) and Apple Pay isn't available in the stores that I would use it most if it were an option. So, those are out.
I have no real interest in the X because I don't want FaceID. Let me stick with using my thumb with TouchID. I might have considered the 8, but the loss of the headphones port (something I use often) represents a loss in functionality in a very real way. In other words, for me the 8 is actually a downgrade from the 5s for my use case.
Aside from that, I prefer the form factor of the 5s. I know that the SE would be an upgrade, but it's a case of not being a big enough upgrade to justify the price tag (plus they don't even make those anymore).
As it stands right now, the 5s still runs the latest iOS. I don't know how much longer that will continue, but as long as it does I see no reason to upgrade, and some compelling reasons to stay where I am. I'm not sure what I'll do when the 5s gets obsoleted. I'm hoping for an updated SE that still has a headphone port, but I'm not holding my breath. It's going to be a tough decision.
Intelligent responses welcome, flames will be met with marshmallows.
I don’t know if brand really factors into it if the prices are too high. No matter how much someone wants something, you can’t sell it to them if they can’t afford it. I wouldn’t think to claim that Lamborghini’s brand is suffering just because I haven’t purchased any of their cars.
The difference between $1k+ Apple phones and Lamborghini's is that most people can afford Apple phones. Too expensive doesn't mean they cannot afford it, it means they would rather spend the money on something else. Buying a $1500 phone every other year is about $60 per month. That is far less than a standard cable bill. Compare that to a $3500 monthly Lamborghini car payment and it's clear why they are fundamentally different. I'd guess about two thirds of the US population can afford a $1k+ iPhone, considering about 70% of them can afford cable TV. Whether or not that is a good idea is another matter.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
So much negativity in these comments.
* Apple made an incremental upgrade to their phones which offered little new over the prior generation which was well purchased (the X and 8/8Plus)
* at a time when the overall phone purchasing market shrunk due to saturation
* at a time when consumer debt is the highest and consumer spending is on a decline due to uncertainty (partly created by media)
They saw the same decline everyone else did this year, but had a fantastic last-year. They also sold a ton of Apple Watches, iPads, iPad Pros. and iMacs.
when you see the word 'Linux', drink!
So much Apple-love on Slashdot. I wonder what you all do for a living?
Personally, I have never, and probably will never, buy an Apple product. Because of the pricing, yes, but also because I've never found a single redeeming feature in any Apple product.
I manage *thousands* of the damn things, phones, Macs and iPads. But I honestly wouldn't ever buy one or use one myself. My "work" iPad sits doing CCTV all day (and falls over with alarming regularity - there is obviously no application controls and one program sucking up RAM can easily cause it to fall over and "restart" the entire iPad once every 24 hours at least. It also can't manage four simultaneous H264 HD-level streams as it runs out of RAM on the fourth and kills the app).
I finally convinced my employers to stop using them for anything when I proved that they're not compliant with UK consumer, company or data protection laws. By literally failing to get them to acknowledge a letter of complaint to their head office (Ireland), and then them refusing to do ANYTHING - even reply to questions requesting statutory complaint / data retention information. I strongly suspect that they are not GDPR compliant, as they weren't ever DPA compliant. They make noises to suggest such, but they have never given a statement to that effect, and refuse when asked.
(And that's because iCloud is nothing more than AWS, Azure etc. cloud instances in random regions... The Register published an article on it earlier this year).
I haven't found a single redeeming feature in any product, service, or business process that they use. Those people who have rejected my concerns have - to a person - gone back on their assertions that Apple are "so wonderful" within a matter of months, after whatever-I-predicted happened.
Honestly... what do you use Apple for that you couldn't use anyone else for, and do so cheaper?
If you want the best camera, you want a Sony phone.
They keep the best CCDs for their own use, ship the high defect counts to their competitors. Same as they've been doing for 20+ years.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'