The most common dig I continue to read about Apple’s strategy is that the phones are too expensive. But there’s little evidence from their earnings that this is

The most common dig I continue to read about Apple’s strategy is that the phones are too expensive. But there’s little evidence from their earnings that this is the case. Today’s report reduced guidance by $6 billion and was fully attributed to lagging demand in China. All signs point to the new phones selling very well in the US and anecdotally I’ve noticed lots of my friends and family upgrading to the XS with no regard for the cost. These are not extremely wealthy or otherwise financially irresponsible people. Say what you will about lack of innovation (which I don’t agree with), but the constant skepticism about cost ignores what consumers actually do in the real world. China is probably not going to be a reliable market for Apple because as Ben Thompson points out, smartphones are much more of a commodity there because consumers don’t value Apple software as highly as consumers elsewhere. If that’s indeed the case there’s not much Apple can do about it because they sell the entire package at a high price point. If people don’t value the hardware and software it’s probably not a market that is going to be good for Apple. Apple wants no part of a race to the bottom commodity market where cost is the sole differentiator. It’s a tough pill to swallow but what we’re talking about is consumer preferences in different markets around the world. Apple should be worried about customers flocking to cross platform messaging apps in the US, though. Right now US consumers won’t part with Apple largely due to iMessage. What happens if people slowly transition to WhatsApp or FB messenger? I could see this as a real threat if FB continues to innovate in messaging.