iPhone latest brands such as iPhone x prices aren’t going down and you just have to deal with it. When Apple CEO Tim Cook dropped his guidance bomb for his company’s upcoming earnings, he took great pains to point his finger at China’s slowing economy.
“In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Cook wrote in his letter to investors.
That’s what many analysts and pundits focused on in the days after Apple’s disclosure, as the stock market tanked Thursday but recovered Friday in dramatic fashion. But here’s the thing, China is just a symptom for Apple. The real issue is not a slowing of the second largest economy in the world. People there and elsewhere aren’t snapping up iPhones for another reason, one Cook really didn’t want to admit to
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Here’s the bottom line: The root of Apple’s problem with iPhone sale is pricing, above all else. Cook can blame China, but if Apple’s products weren’t so damned expensive, consumers in a Chinese economy that’s slowing could handle them.
Beginning with the iPhone 7 plus price, Apple positioned its flagship smartphones as a luxury item. That was cemented with the arrival of the $1,000 iPhone X in 2017, and even more so with the XS and XS Max phones. The latter, which is a big-screen phone that’s otherwise identical to the XS, can cost nearly $1,500, depending on how it’s configured. Even the less-expensive iPhone XR, which starts at $749, is still too pricey for many buyers. This puts the iPhone squarely in the luxury category.
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As we know from Apple’s recent earnings reports, the luxury market can be a profitable one, but it’s also a small one. iPhones have been a mass consumer draw in the U.S., and globally it’s a more aspirational product. It stands to reason that, as the market becomes saturated, the upper end of it will as well.
Another reason why iPhone prices still high is that Apple has put into place mechanisms that make buying a newer iPhone easier, including its iPhone Upgrade Program, which breaks the cost into 24 interest-free monthly payments.
In a nutshell, Apple the luxury category which it has cemented itself in and the continuous upgrade of its program has influenced largely its continuous catapult in pricing.