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I think market analysts continue to miss the mark on this story. What I keep hearing over and over are variations of "people are turned off by the $1,000 price
by dkrich 9y ago
I think market analysts continue to miss the mark on this story.
What I keep hearing over and over are variations of "people are turned off by the $1,000 price tag." I think this is a complete misread. People don't pay $1k for an iPhone because it's the practical thing to do. If practicality is the #1 priority for phone shoppers, they will simply buy a 7 or 8. I don't think this comprises the top of the market, though, and the top of the market is Apple's wheelhouse.
Practicality has nothing to do with why people buy the X. People buy the X because it's a status symbol and they want to be seen with it. With consumer spending up pretty much across the board, I will be very surprised if Apple misses on earnings next month or reduces guidance. I think comparisons to the release of the 6 are misguided as well, since this phone was in shorter supply to begin with, carried a 50% higher price point, and was released alongside two other models.
- aiofgniaotnio 9y ago>People buy the X because it's a status symbol and they want to be seen with it. I find this aspect of the tech industry so gross that I'm considering changing careers. Building a new tool that makes people's lives better is great, but much of the time it just becomes a status symbol. No one should feel bad for owning a machine that's a few years old but does everything they need. I'm not convinced that consumer gadgets fill a real need any more rather than just being new and shiny for the sake of being new and shiny. Unless we as a society can get over showing off by buying things we don't need, I think we're in trouble.
- dkrich 9y agoI don't disagree with you about what people should do, but the reality is that consumers have been this way for a long time, the only thing that changed is that phones shifted from commodities people bought for performance to fashion accessories. People pay more for cars, bags, clothing, etc. to elevate their feeling of status, now we can add phones to that list. Perhaps this has been Apple's greatest contribution to the hardware industry.
- QAPereo 9y agoConsumers have this in them, but it’s conditioned by a couple of centuries of marketing.
- bunderbunder 9y agoThe part that irritates me is, I am actively punished for being someone who doesn't behave this way. It used to just be the hidden surcharges that phone companies tacked onto my bill to cover the cost of the "free" phone, calculated from the assumption that I'd get a new phone each year. Those surcharges are now gone. But they have been replaced with constant nagging to update the OS to a version that will harm the performance or battery life (or both) of a >2yo phone. They have been replaced with apps that will eventually refuse to stop working if I don't upgrade to a version that doesn't run on the older version of the OS that I used to use. They have been replaced with mobile sites that flat-out don't work on my older device's smaller screen.
- valuearb 9y agoThose updates are always optional, and also keep your 2+ year old phone secure.
- chadgeidel 9y agoAs long as there have been cellular phones, they have been "fashion accessories". We all joke about the business guy with the giant phone, but that was the "iPhone X" of the 80's.
- kalleboo 9y ago> I find this aspect of the tech industry so gross that I'm considering changing careers. What career are you considering? There are even high-end supermarkets. This is a human condition.
- ShabbosGoy 9y ago>No one should feel bad for owning a machine that's a few years old but does everything they need. That doesn’t bother me as much as planned obsolescence. Here’s why I had to upgrade to the iPhone X from my iPhone 6.[1] [1] https://techcrunch.com/2017/12/20/apple-addresses-why-people-are-saying-their-iphones-with-older-batteries-are-running-slower/ https://techcrunch.com/2017/12/20/apple-addresses-why-people...
- chadgeidel 9y agoYou had to upgrade to a X when a 8 or a 7 was available - or even a new battery for $80?
- valuearb 9y agoWhen were you planning to upgrade your three year old phone? I upgraded for same reason as you (6 plus), but when I found out I could have paid $85 for a new battery to restore much of my performance my reaction was, meh. I would have still upgraded anyways. Even if there wasn't CPU throttling to keep old phones usable, software marches on adding features and benefits. iPhone 3: 256 Mb ram iPhone 4s: 512 Mb ram, 490 multicore Geekbench iPhone 5: 1 Gb ram, 1,203 multicore Geekbench iPhone 6s: 2 Gb ram, 3,888 multicore Geekbench iPhone 7 Plus: 3 Gb ram, 5,763 multicore Geekbench iPhone X: 3 Gb ram, 10,108 multicore Geekbench I have always been amazed at Apple's ability to shoehorn iOS versions and new features into such limited memory capacities (compared to Android for example). But there is always a limit to what can be done. My daughter's iPhone 5 shipped with iOS 6, and is currently running iOS 9. Is it slower? Yes. Does it have more features than when released, heck yea.
- newscracker 9y ago> No one should feel bad for owning a machine that's a few years old but does everything they need. I'm not convinced that consumer gadgets fill a real need any more rather than just being new and shiny for the sake of being new and shiny. I disagree that consumer gadgets, especially phones, don't fill a real need anymore. We have at least a good four or five years, minimum, for a lot more to be done in that form factor. It may not necessarily be new sensors, but significant improvement in what's available now. Things like AR and VR have quite a while to mature and bring about more practical use cases than we see now, and smartphones and devices associated with them will be the ones leading the charge there.
- PopsiclePete 9y ago>Unless we as a society can get over showing off by buying things we don't need, I think we're in trouble. Good luck with that. Maybe if you eliminated human sexuality first, somehow? We've been "showing off" since we were cavemen. The iphoneX is just a really, really nice spear that you can throw further.
- rayiner 9y agoI'm okay with this aspect of the iPhone X. People buying $1,000 iPhone X's subsidize the technology that goes into a $350 iPhone SE.
- valuearb 9y agoThey also pave the way for the third generation of the iPhone X to cost $350.
- matwood 9y ago> If practicality is the #1 priority for phone shoppers, they will simply buy a 7 or 8. Yep, Apple is slowly filling in price points below the top end. They will not ever be budget, but they have iPhones starting at $349. I'm confused about all the hubbub around the 1k price tag. Top end phones with the next storage option were already ~1k. Additionally, most people buy their phone using the free loan from the carrier so the price goes from ~$40/month to ~$50/month if they wanted the X. I think Apple beats earnings and successfully raises the ASP across the iPhone line using the X.
- deleted 9y ago[deleted]
- at-fates-hands 9y ago> People buy the X because it's a status symbol and they want to be seen with it. I think Apple may have overplayed their bet on this point. Unless their top end clients are going to buy the 8, then dump those on the market and start buying the 10. If it is a status symbol, then those people are going to want the latest iphone, regardless of cost, right? In that case, many of the people who are already flaunting their 8's will have to make the decision of either holding onto the 8, or moving to the 10. I'm sure those pure status symbol seekers will indeed move to the 10, but doing so could create a large increase in stock on the 8 and driving down its price. Do you think the way they positioned it was done on purpose with the $1000 price tag so they're not losing their shirt when their market starts to cannibalize itself?
- dkrich 9y agoI'm certainly not knowledgable enough to try and get inside the head of Apple's strategic decision makers, but if I had to guess I would say that they already had a proven form factor and supply chain in place to produce the 8 and 8 Plus so they chose to launch with three models instead of just one or two because: 1) There was execution risk with the X. Had they run into supply chain issues or the facial recognition didn't work properly, they would still have had a new phone to launch. 2) $1k is an elevated price point and so the 8/8 Plus present a hedge against risk that consumers won't pay more than $800 for the X. 3) Perhaps most importantly, from what I read Apple couldn't have produced enough X's to come close to meeting the initial demand, which is in large part why the raised the price in the first place. Keep in mind that if they had not released the 8's early with plenty of supply, lots of those buyers would have wanted the X. If you have a supply shortage, raising the price is the obvious move. But then that leaves huge swaths of people who want to give you their money and stay in your ecosystem who are unable to because they have to wait months to get the phone. So if those theories are true, then we should expect the 6/7/8 form factor to be sunset after this release cycle and then the X and the reported larger X Plus (or whatever it will be called) will be the new form factor once the supply chain and demand concerns have worked themselves out. I think the multi release was just a bridge to get them to the new price point and form factor.
- valuearb 9y agoI get a new iPhone every 2-3 years. This year I spent $10 a month extra to get the best possible screen and camera on a device I use hours every day. Not because it’s a status symbol. And very happy with my purchase.
- aphextron 9y ago>This year I spent $10 a month extra to get the best possible screen and camera on a device I use hours every day. Not because it’s a status symbol. And very happy with my purchase. And this is how they get people. You didn't spend an extra $10/month, you spent an extra $400 compared to getting the 8. I don't blame you, I think it's worth it, but that's a terrible way to think about prices.
- econnors 9y agoI think it's a different way to think about prices, but I think the terribleness of it is subjective (assuming one understands the pricing model).
- baddox 9y agoWhy is that a terrible way to think about prices? Most people earn money at a predictable rate per month, so it’s perfectly reasonable to talk about these phone payment plans in the same terms. Obviously this isn’t true for things like credit card or mortgage payments, where interest is likely a significant factor, but AFAIK these cell phone payment plans are interest free.
- lostlogin 9y agoIt’s terrible because any difference between carrier prices is a large multiple of what the sticker/brochure says. Most plans here (New Zealand) are over 2 years, so any difference in price is 24x greater at the end of the contract. And no one here is paid per month, that’s seen as completely antiquated and they are paid per week or per fortnight.
- 9y ago
- TimTheTinker 9y ago> If practicality is the #1 priority for phone shoppers, they will simply buy a 7 or 8. Clever or particularly frugal shoppers may note that the SE has the same chip as the 6S (the A9) and can be had for $250 unlocked and in mint condition.
- gruez 9y agoOn Black Friday they were going for $150 brand new.
- 1123581321 9y agoCan you link to this? I don’t think this deal happened because Apple doesn’t discount this heavily. Some of their partners might but only in exchange for phone service or something. The SE is $350/$450 USD new, not $250 like the above poster said.
- TimTheTinker 9y agoI didn’t mean from Apple or an authorized reseller. Check Swappa - that’s where I got the above price.
- 1123581321 9y agoAh, ok! Yes, I’ve bought five iPhones on Swappa and Gazelle. I don’t think a used or third party refurb is an apples-to-apples comparison with a new X, though I prefer the SE. I’m hoping the SE 2 in the spring will have iPhone 8 internals.
- TimTheTinker 9y agoI agree. I mention secondary SE prices to show that frugal & discerning Apple customers will go much further down than the iPhone 7.
- valuearb 9y ago
- appletway 9y ago(Good) analysts start with numbers, then draw conclusions based on those numbers. Numbers in this case would be reduced orders at Apple suppliers, reduced demand for labor at an iPhone assembly factory, and reduced iPhone Q1 unit forecasts from Apple itself. I'm assuming they also collect their own numbers by surveying end users and consumers to round out both the supply and demand side picture. Then they draw the conclusions in the article. Now these could be bad analysts, in which case they would start with some presupposed beliefs, then mold the numbers/forecasts to fit their story...
- dkrich 9y agoI don't think Apple actually reduced guidance, I think the article in question predicted that they would reduce guidance. What we know for sure is that the phone was sold out as soon as it opened for pre-orders and that Apple on their last earnings call reported huge demand for the X. I'm not at all saying that the following is what happened, but it's important to not take any one news report as fact, especially one based on "sources" or "rumors". Stock manipulation and poorly-researched reporting are very real things and again, not saying that's what's going on here, but I would want to see Apple come out and report low demand before forming any lasting conclusion. If that happens, I'll definitely have a different opinion. In the face of lots of evidence to the contrary, lines like this make me skeptical of the validity: Apple is said to have trimmed its first-quarter sales forecast to 30 million units from 50 million, Taiwanese newspaper Economic Daily News reported, citing unidentified supply chain officials.
- qaq 9y agoIn poor countries iPhone X could be considered a status symbol but in US?
- deleted 9y ago[deleted]
- namelost 9y agoI agree. The problem with the X is that every new feature comes with a downside. It has a edge-to-edge screen but the notch is really ugly in landscape mode. It has Face ID but no Touch ID. It has wireless charging at the cost of a fragile glass back. It is a phone beset by compromises, the only thing it does reliably is broadcast that you are rich enough to buy a $1000 phone.
- JAFTEM 9y ago>It is a phone beset by compromises, the only thing it does reliably is broadcast that you are rich enough to buy a $1000 phone. I think most of us with engineering backgrounds have a very hard time accepting that social capital is a valid reason to buy a device. It may just not be valid for me personally.
- valuearb 9y agoAll electronic devices are exercises in compromise. But the X is very reliable at everything except broadcasting that I own an X. You see, like most every other X, mine is in a case. So far no one has ever noticed it's an X. And that case means I don't care about the glass back.
- justaduder 9y ago>"they want to be seen with it" How does this contradict the article? Demand is limited because fewer people will or can spend $1000 on a status symbol. Seems like basic economics.
- dkrich 9y agoBecause the premise of the article is that people are balking at the price when I would argue the price and exclusivity are the main selling points.
- bdcravens 9y agoMy 17 year old niece recently upgraded, and she could choose any phone. She chose the 8 Plus, as she perceived the iPhone X as being smaller. She said she'd happily get a "X Plus"
- tkxxx7 9y agomy fiance says the same. Her main issue is the landscape difference; she plays a lot of games.
- joelhooks 9y agoI got the X because I like the screen to size ratio and my purchased media is resting on Apple’s markets. A few hundred bucks either way is inconsequential. Style-wise, they aren’t visibly much different than the last several generations of iPhones or Androids.