Apple ended up having a bit of a rough end to its 2018. Unfortunately for the company, the start of 2019 hasn’t been all rainbows and butterflies, either.
Yesterday saw some pretty explosive news. The company made a public statement warning investors, analysts, and rubberneckers that the first fiscal quarter was going to be much, much weaker than previously expected due to simply not selling enough iPhones. Apple had a variety of reasons why people weren’t upgrading, including a rough upgrade market in greater China, weak sales in developing markets, and even its $29 battery replacement program.
So Apple is doomed! Doomed!
Well, unless you look at all the other things that Apple is still doing very well. For instance, Apple said that iPhone activations in the United States and Canada set a record this holiday season. And now, just today, Apple confirmed that the App Store had a record-breaking holiday (again), and saw the single highest sales in a single day ($322 million on New Yer’s day!) to date. Basically, things aren’t all gloom and doom just yet, but that doesn’t mean we can’t start poking around at the tea leaves and have some fun dreaming about what might change in the future.
Apple’s CEO, Tim Cook, says change is on the horizon, too, so it looks like the company executives are doing something similar. Granted, the stakes are much more serious for them than us, so that’s nice. But is Apple actually doomed? Probably not! Should Apple make some changes? Probably!
The low-hanging fruit here is to just drop the price of the iPhone, right? The iPhone XS and XS Max are expensive devices, and while Apple may have introduced and tried to normalize the $1,000 smartphone to the mass market, it might not have gone over too well. Yes, other companies followed suit, but that doesn’t matter. This is Apple we’re talking about. Other smartphone manufacturers jumped all over the terrible notch design just because Apple did it, so copying Apple is just the thing to do.
But, the iPhone XR may show Apple that going that route may be the right thing to do. At least a little. Apple doesn’t just need to sell one smartphone, and the fact that there are options is a good thing. However, Apple’s aggressive trade-in deals leading into the holiday season, all meant to significantly drop the prices for the new iPhone XS models and the iPhone XR does seem pretty blatant.
People are going to buy iPhones, because people have their reasons for buying into Apple’s ecosystem. But when the new devices get so expensive that the question of whether or not a company is pricing its customer base right out of the ballpark is popping up, those customers are going to hold onto their existing devices a bit longer. I know someone who has just flat-out refused to upgrade in 2017 or 2018 because the iPhone X and XS were too expensive.
But, the silver lining in that story is that Apple hasn’t lost that customer completely. He’s going to upgrade this year. He just had to wait a bit longer to do it.
Maybe Apple will start working with wireless carriers to offer up more deals for the new iPhone models from this point on. The networks typically have plenty of deals in place for new iPhone buyers already, though. But considering most smartphone buyers pick up their devices from their wireless carrier of choice, this would be a pretty easy way to handle it.
Lowering iPhone prices probably would be a quick fix. But would it be one that actually sticks? I don’t know about you, but these devices are so good at this point that holding onto one for two, maybe three years doesn’t feel so crazy. More than that, though, the smartphone market has plateaued from the major players. Samsung has to shake things up so much that it’s going to launch its first (ridiculously high priced) foldable smartphone in 2019. Apple isn’t going to do that. Apple isn’t even going to launch a 5G smartphone until 2020. (This isn’t a bad thing, mind you. Just another example of the company taking its time.)
I don’t know that Apple has an easy fix. Especially not when it comes to the stock market, which hasn’t been fond of Apple as of late. Of course, if Apple just goes back to selling millions and millions of iPhones, which has been the benchmark for Apple’s business for so long, the stock market will rebound.
But, what do you think Apple should do to boost iPhone sales? Let me know in the comments below.
