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iPhone sales continues to decline (down another 13% vs this quarter last year), but services are making up for it

by skrowl 7y ago

rubicon33 7y ago
And they will continue to decline as long as a $200 Android phone can do literally ~95% of what a $1400 iPhone can do. Seriously, there's just no good reason for a general consumer to purchase an iPhone today. Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers. For the record: I've used iPhones since 2010. I've never had an Android until this year. It came time to upgrade, and I did my research. Simply put, there's nothing on the flagship iPhone that most vastly cheaper Android phones can do. I'm not a fanboy, I vote with my dollar.
- stock_toaster 7y ago
  > there's just no good reason for a general consumer to purchase an iPhone today * iOS (I prefer it over android) * customers already tied into the apple ecosystem * more of a focus on privacy (admittedly, this one is probably debatable)
  - toper-centage 7y ago
    So it's a mix of Stockholm syndrome and lazyness to change and tweak the system a bit in a more privacy friendly way.
    - snazz 7y ago
      Unlocking the bootloader, flashing TWRP, and installing LineageOS without Google Play Services is roughly equivalent in privacy to an iPhone. I wouldn’t blame my grandma for choosing to buy an iPhone instead!
      - lern_too_spel 7y ago
        A phone with Google Play Services collects less data than an iPhone. To wit: Apple knows every app you ever downloaded, and there is nothing you can do about it. Every time you click on an address link, it sends the address to Apple, and there is nothing you can do about it. Any time an app looks up your GPS location, that location is sent to Apple, and there is nothing you can do about it. If you want to write apps for your own device, you need to give card details to Apple, and there is nothing you can do about it. A phone with Google Play services doesn't suffer from any of these problems.
        jdofaz 7y ago
        How do you stop Google Play services from sending your location to google without disabling Location Services?
        lern_too_spel 7y ago
        If you disable Location Services, which is an option presented on initial setup of the device, apps can still request the GPS permission directly (the default behavior in most location libraries), not sending your location to Google. This is not possible on iOS. Every location lookup will send your location to Apple.
        jdofaz 7y ago
        How do you know iOS sends all location lookups to Apple?
        lern_too_spel 7y ago
        Because Apple says so. "By enabling Location Services for your devices, you agree and consent to the transmission, collection, maintenance, processing, and use of your location data and location search queries by Apple and its partners and licensees to provide and improve location-based and road traffic-based products and services." It will also send your location to Apple when no app is requesting your location: "If Location Services is on, your iPhone will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers in an anonymous and encrypted form to Apple, to be used for augmenting this crowd-sourced database of Wi-Fi hotspot and cell tower locations." Unlike on Android, you cannot get your location without sending this data to Apple: "To use features such as these, you must enable Location Services on your iPhone" https://support.apple.com/en-us/HT207056 https://support.apple.com/en-us/HT207056
    - asdf21 7y ago
      Some people just also don't want to support Google, for various reasons.
  - snazz 7y ago
    The focus on privacy is not at all debatable compared to Android. There’s no way to argue that any Android device sold with Google Play Services (i.e. all of them in the US) is more private than an iPhone. iOS security and privacy is flawed in more than one way, but is infinitely better than Android.
    - pas 7y ago
      Exactly what has been leaked from Google? Google makes money by targeting users, not by selling their data. I don't like ads in general, but privacy is not lost because of Google. Cambridge Analytica run on FB for a reason.
  - r00fus 7y ago
    > * more of a focus on privacy (admittedly, this one is probably debatable) Not even sure why this is considered debatable. Even if it's just "perception" (which I doubt) it's a real reason to buy.
    - stock_toaster 7y ago
      I couched it a bit, because I've had people argue with me about it in meatspace. It seems odd to me, especially when their stated alternative was predominantly google. People being people I guess.
  - rubicon33 7y ago
    * iOS (I prefer it over android) - Very subjective. Further, from a feature set perspective, you're not missing out on much (anything?) with Android. It used to be that you could only get certain Apps on iOS. That's simply not the case anymore. So it comes down to a raw, subjective preference... Like what color do you prefer - green or blue? * customers already tied into the apple ecosystem - I was in the Apple ecosystem for ~9 years. Switched over to Android this year. Took me all of a couple days to make the switch. Turns out I'm more embedded in Google's ecosystem than I thought. Apple was just a conduit for Google services, in many ways. * more of a focus on privacy (admittedly, this one is probably debatable) - A compelling reason for the technically aware. My post however was about the "general consumer" ... 99% of people are going to be just fine on Android v.s. iOS when it comes to privacy. For god sakes, they're likely already using Facebook/IG.
- wcfields 7y ago
  Disagree that iPhone users are going from a previously $700 phone to a “free when you switch carriers” Android. More so that someone with a 6S or better has little reason to upgrade; the improvements have been incremental.
  - merpnderp 7y ago
    Same story here. Although 6 years ago I remember catching flak for buying an iPad over an Amazon tablet. Course my iPad is still going strong, but has been relegated to backup after a new iPad purchase. Those 6 year old Amazon tablets are in a dump somewhere.
- ballenf 7y ago
  And my Toyota can literally do 99% of what your BMW can do. BMW is obviously screwed.
  - rubicon33 7y ago
    Did you miss this? > Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers. It's not just the software. I'm guessing you haven't used any of the new + cheap Android phones? They might surprise you.
    - yibg 7y ago
      In many cases quality for a Toyota is superior to a BMW. Try maintaining a BMW that’s over 5 years old compared to a Toyota.
    - mruts 7y ago
      Veblen goods (which you good argue an iPhone is) are very sticky and very profitable. To say that veblen goods shouldn't exist is kind of missing the point.
      - rubicon33 7y ago
        Please show me where I said they shouldn't exist? There's definitely a market for them, so I think they should exist. It's just - if I'm being honest - you're either a fool, or very rich, to be buying some of these "veblen goods" (given the more than adequate alternatives)
        criddell 7y ago
        Very rich? If you replace it every year and spend $1000 each time, that's only around $3 / day. There are an awful lot of people that can afford that. When you consider how a phone is the primary computing device for a lot of people, it's an even easier decision.
        7y ago
- ReverseCold 7y ago
  > there's just no good reason for a general consumer to purchase an iPhone today For me, being able to iMessage / AirDrop / Facetime people is worth the money just from a people standpoint. Apple has a lot of vendor lock-in, and they still have the most polished product by far.
- deleted 7y ago
  [deleted]
- criddell 7y ago
  Apple still has a better product for people concerned about privacy and security. Not perfect, but better. They also have retail stores all over the place where you can get help when you need it. Again, the experience might not be great, but at least you have that option. In the Android world, I don't think I would recommend anything but a Pixel device just because they get all the security updates and get them faster than Samsung and all the rest. For the record, my phone is a Pixel 2. The bigger differentiator though is the app stores. If there's an iOS app or Android app that you need, then the decision is made for you.
- scarface74 7y ago
  I bought my son a $200 Moto G. It was suppose to be one of the best midrange phones. It sucked in so many ways. He was glad to “upgrade” to my old iPhone 6s that was three years older. Even now, four years later, the 6s runs rings around newer midrange Android phones.
- ubercow13 7y ago
  Budget Android phones like that might last 1/5th as long as an iPhone though, in terms of security updates.
safog 7y ago
It's pretty amazing the amount of money they make on services. It's almost 45% of the iPhone revenue, while I was under the impression that it was more like 3-4% of overall revenue.
lnsru 7y ago
Still using multiple iPhone 6 devices in the family. The newest one is iPhone 8 and it will last hopefully another 5 years. Even iPhone 3G is used almost weekly with another number for ads. The phones are durable and get updates many years after purchase date. New original battery replacement costs 49€, not cheap, but it gives at least another 2 years of life for the phone.
- iscrewyou 7y ago
  And I don’t think that’s bad for Apple because you are still in the ecosystem, buying their services, all the while not buying a non-Apple device.
tinus_hn 7y ago
iPhones have become extremely expensive so I buy a new one less often. I presume they set the price at the level that makes them the most money though.
n1000 7y ago
Apart from Apple Music and iCloud storage space what services does Apple offer / sell?
- iNate2000 7y ago
  App Store
- gurkendoktor 7y ago
  Besides the App Store: Apple Care, movies, books, audiobooks, Apple News+, Apple Pay.
- mythz 7y ago
  Right now Apple's Services Business consists of: - Apple Music - iCloud - App Store / iTunes / Apple Books - Apple Pay - Apple Care - Licensing (i.e. default Google search) - Apple News+ Coming later in the year: - Apple Arcade - Apple TV+ - Apple Card I'm expecting Apple Arcade to be a huge source of revenue which I'm eagerly awaiting for myself (and my kids) to get off the cesspool of scammy Dark UX IAP land mines that currently proliferates the App Store.
- jjtheblunt 7y ago
  Movies, iTunes, AppleTV sorts of stuff might count
- ksec 7y ago
  Apple attribute $10 ( or $20 I can't remember ) per Unit ( iPhone, iPad and Mac ) into Services for macOS, iOS, iPadOS, and Apple Map. There is roughly $10 per user paid to Apple ( iPhone, iPad, Mac ) for using Google as default search engine. Last estimate were $9B. Before you ask the Active User and $9B don't align, Keep in mind this is users excluding China, where Google is not available. And App Store purchase, that is the 30% cut Apple received. These three item likely combined to be 80%+ of Apple Services Revenue. The rest are iCloud, Apple TV, Apple Music, Apple Card etc..
ksec 7y ago
It is worth point out this is 13% down in Revenue. Given Apple have a higher price range of iPhones this year, ( the iPhone XS Max ) and higher entry level price compare to last year with iPhone 6s. The unit shipment must have been down ~20%. Apple did make price adjustment in China, including cutting wholesale price and promotion. I am wondering if those eats into Profits. Having said that, in the Conference Call: -Active iPhone installed base grew to a new all-time high in every operating segment ( Including China ) -Install base growing, people are holding onto devices longer, but staying inside the ecosystem And interesting bit on 5G. Tim Cook says Apple doesn't comment on future products, but says it is "extremely early innings" for 5G, especially on a global basis. May be we wont even see a 5G iPhone in 2020.

iPhone sales continues to decline (down another 13% vs this quarter last year), but services are making up for it

by skrowl 7y ago

iPhone sales continues to decline (down another 13% vs this quarter last year), but services are making up for it

And they will continue to decline as long as a $200 Android phone can do literally ~95% of what a $1400 iPhone can do. Seriously, there's just no good reason for a general consumer to purchase an iPhone today. Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers. For the record: I've used iPhones since 2010. I've never had an Android until this year. It came time to upgrade, and I did my research. Simply put, there's nothing on the flagship iPhone that most vastly cheaper Android phones can do. I'm not a fanboy, I vote with my dollar.

stock_toaster 7y ago
> there's just no good reason for a general consumer to purchase an iPhone today * iOS (I prefer it over android) * customers already tied into the apple ecosystem * more of a focus on privacy (admittedly, this one is probably debatable)
- toper-centage 7y ago
  So it's a mix of Stockholm syndrome and lazyness to change and tweak the system a bit in a more privacy friendly way.
  - snazz 7y ago
    Unlocking the bootloader, flashing TWRP, and installing LineageOS without Google Play Services is roughly equivalent in privacy to an iPhone. I wouldn’t blame my grandma for choosing to buy an iPhone instead!
    - lern_too_spel 7y ago
      A phone with Google Play Services collects less data than an iPhone. To wit: Apple knows every app you ever downloaded, and there is nothing you can do about it. Every time you click on an address link, it sends the address to Apple, and there is nothing you can do about it. Any time an app looks up your GPS location, that location is sent to Apple, and there is nothing you can do about it. If you want to write apps for your own device, you need to give card details to Apple, and there is nothing you can do about it. A phone with Google Play services doesn't suffer from any of these problems.
      - jdofaz 7y ago
        How do you stop Google Play services from sending your location to google without disabling Location Services?
        lern_too_spel 7y ago
        If you disable Location Services, which is an option presented on initial setup of the device, apps can still request the GPS permission directly (the default behavior in most location libraries), not sending your location to Google. This is not possible on iOS. Every location lookup will send your location to Apple.
        jdofaz 7y ago
        How do you know iOS sends all location lookups to Apple?
        lern_too_spel 7y ago
        Because Apple says so. "By enabling Location Services for your devices, you agree and consent to the transmission, collection, maintenance, processing, and use of your location data and location search queries by Apple and its partners and licensees to provide and improve location-based and road traffic-based products and services." It will also send your location to Apple when no app is requesting your location: "If Location Services is on, your iPhone will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers in an anonymous and encrypted form to Apple, to be used for augmenting this crowd-sourced database of Wi-Fi hotspot and cell tower locations." Unlike on Android, you cannot get your location without sending this data to Apple: "To use features such as these, you must enable Location Services on your iPhone" https://support.apple.com/en-us/HT207056 https://support.apple.com/en-us/HT207056
  - asdf21 7y ago
    Some people just also don't want to support Google, for various reasons.
- snazz 7y ago
  The focus on privacy is not at all debatable compared to Android. There’s no way to argue that any Android device sold with Google Play Services (i.e. all of them in the US) is more private than an iPhone. iOS security and privacy is flawed in more than one way, but is infinitely better than Android.
  - pas 7y ago
    Exactly what has been leaked from Google? Google makes money by targeting users, not by selling their data. I don't like ads in general, but privacy is not lost because of Google. Cambridge Analytica run on FB for a reason.
- r00fus 7y ago
  > * more of a focus on privacy (admittedly, this one is probably debatable) Not even sure why this is considered debatable. Even if it's just "perception" (which I doubt) it's a real reason to buy.
  - stock_toaster 7y ago
    I couched it a bit, because I've had people argue with me about it in meatspace. It seems odd to me, especially when their stated alternative was predominantly google. People being people I guess.
- rubicon33 7y ago
  * iOS (I prefer it over android) - Very subjective. Further, from a feature set perspective, you're not missing out on much (anything?) with Android. It used to be that you could only get certain Apps on iOS. That's simply not the case anymore. So it comes down to a raw, subjective preference... Like what color do you prefer - green or blue? * customers already tied into the apple ecosystem - I was in the Apple ecosystem for ~9 years. Switched over to Android this year. Took me all of a couple days to make the switch. Turns out I'm more embedded in Google's ecosystem than I thought. Apple was just a conduit for Google services, in many ways. * more of a focus on privacy (admittedly, this one is probably debatable) - A compelling reason for the technically aware. My post however was about the "general consumer" ... 99% of people are going to be just fine on Android v.s. iOS when it comes to privacy. For god sakes, they're likely already using Facebook/IG.
wcfields 7y ago
Disagree that iPhone users are going from a previously $700 phone to a “free when you switch carriers” Android. More so that someone with a 6S or better has little reason to upgrade; the improvements have been incremental.
- merpnderp 7y ago
  Same story here. Although 6 years ago I remember catching flak for buying an iPad over an Amazon tablet. Course my iPad is still going strong, but has been relegated to backup after a new iPad purchase. Those 6 year old Amazon tablets are in a dump somewhere.
ballenf 7y ago
And my Toyota can literally do 99% of what your BMW can do. BMW is obviously screwed.
- rubicon33 7y ago
  Did you miss this? > Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers. It's not just the software. I'm guessing you haven't used any of the new + cheap Android phones? They might surprise you.
  - yibg 7y ago
    In many cases quality for a Toyota is superior to a BMW. Try maintaining a BMW that’s over 5 years old compared to a Toyota.
  - mruts 7y ago
    Veblen goods (which you good argue an iPhone is) are very sticky and very profitable. To say that veblen goods shouldn't exist is kind of missing the point.
    - rubicon33 7y ago
      Please show me where I said they shouldn't exist? There's definitely a market for them, so I think they should exist. It's just - if I'm being honest - you're either a fool, or very rich, to be buying some of these "veblen goods" (given the more than adequate alternatives)
      - criddell 7y ago
        Very rich? If you replace it every year and spend $1000 each time, that's only around $3 / day. There are an awful lot of people that can afford that. When you consider how a phone is the primary computing device for a lot of people, it's an even easier decision.
        7y ago
ReverseCold 7y ago
> there's just no good reason for a general consumer to purchase an iPhone today For me, being able to iMessage / AirDrop / Facetime people is worth the money just from a people standpoint. Apple has a lot of vendor lock-in, and they still have the most polished product by far.
deleted 7y ago
[deleted]
criddell 7y ago
Apple still has a better product for people concerned about privacy and security. Not perfect, but better. They also have retail stores all over the place where you can get help when you need it. Again, the experience might not be great, but at least you have that option. In the Android world, I don't think I would recommend anything but a Pixel device just because they get all the security updates and get them faster than Samsung and all the rest. For the record, my phone is a Pixel 2. The bigger differentiator though is the app stores. If there's an iOS app or Android app that you need, then the decision is made for you.
scarface74 7y ago
I bought my son a $200 Moto G. It was suppose to be one of the best midrange phones. It sucked in so many ways. He was glad to “upgrade” to my old iPhone 6s that was three years older. Even now, four years later, the 6s runs rings around newer midrange Android phones.
ubercow13 7y ago
Budget Android phones like that might last 1/5th as long as an iPhone though, in terms of security updates.

safog 7y ago

It's pretty amazing the amount of money they make on services. It's almost 45% of the iPhone revenue, while I was under the impression that it was more like 3-4% of overall revenue.

lnsru 7y ago

Still using multiple iPhone 6 devices in the family. The newest one is iPhone 8 and it will last hopefully another 5 years. Even iPhone 3G is used almost weekly with another number for ads. The phones are durable and get updates many years after purchase date. New original battery replacement costs 49€, not cheap, but it gives at least another 2 years of life for the phone.

iscrewyou 7y ago
And I don’t think that’s bad for Apple because you are still in the ecosystem, buying their services, all the while not buying a non-Apple device.

tinus_hn 7y ago

iPhones have become extremely expensive so I buy a new one less often. I presume they set the price at the level that makes them the most money though.

n1000 7y ago

Apart from Apple Music and iCloud storage space what services does Apple offer / sell?

iNate2000 7y ago
App Store
gurkendoktor 7y ago
Besides the App Store: Apple Care, movies, books, audiobooks, Apple News+, Apple Pay.
mythz 7y ago
Right now Apple's Services Business consists of: - Apple Music - iCloud - App Store / iTunes / Apple Books - Apple Pay - Apple Care - Licensing (i.e. default Google search) - Apple News+ Coming later in the year: - Apple Arcade - Apple TV+ - Apple Card I'm expecting Apple Arcade to be a huge source of revenue which I'm eagerly awaiting for myself (and my kids) to get off the cesspool of scammy Dark UX IAP land mines that currently proliferates the App Store.
jjtheblunt 7y ago
Movies, iTunes, AppleTV sorts of stuff might count
ksec 7y ago
Apple attribute $10 ( or $20 I can't remember ) per Unit ( iPhone, iPad and Mac ) into Services for macOS, iOS, iPadOS, and Apple Map. There is roughly $10 per user paid to Apple ( iPhone, iPad, Mac ) for using Google as default search engine. Last estimate were $9B. Before you ask the Active User and $9B don't align, Keep in mind this is users excluding China, where Google is not available. And App Store purchase, that is the 30% cut Apple received. These three item likely combined to be 80%+ of Apple Services Revenue. The rest are iCloud, Apple TV, Apple Music, Apple Card etc..

ksec 7y ago

It is worth point out this is 13% down in Revenue. Given Apple have a higher price range of iPhones this year, ( the iPhone XS Max ) and higher entry level price compare to last year with iPhone 6s. The unit shipment must have been down ~20%. Apple did make price adjustment in China, including cutting wholesale price and promotion. I am wondering if those eats into Profits. Having said that, in the Conference Call: -Active iPhone installed base grew to a new all-time high in every operating segment ( Including China ) -Install base growing, people are holding onto devices longer, but staying inside the ecosystem And interesting bit on 5G. Tim Cook says Apple doesn't comment on future products, but says it is "extremely early innings" for 5G, especially on a global basis. May be we wont even see a 5G iPhone in 2020.