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Apple bows to the market, big price cuts, looking for a turnaround in China

January 11, 2019 02:30

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Apple is trying to save Chinese consumers by cutting prices.

On January 10, in response to reports from outsiders about Apple's adjustment of product channel prices, Apple's official customer service told 21st Century Business Herald that whether it is wholesale or retail, Apple officials have no news of price cuts.

The reporter learned from the dealers of Pacific Digital Plaza in Xuhui District, Shanghai that iPhone XR, iPhone 8, iPhone 8 Plus, iPhone X, iPhone XS and iPhone XS Max have prices ranging from 200-400 yuan. . In addition, the reporter learned from Jingdong that starting at 0:00 on January 11th, the price of the iPhone8/8P of Jingdong platform will be lowered to 3,999 yuan and 4,799 yuan, respectively, and 600 yuan and 800 yuan respectively before the change, and 5099 yuan and 5999 with Apple's official website. The yuan differs by 1,100 yuan and 1,200 yuan respectively.

It seems that in the future, the final sales of Apple's mobile phone in the market will further decline. Apple’s control over prices has long been worse than it used to be. Last year's new iPhone was released less than ten days. The iPhone Xs Max 256GB model in Shanghai, Wuhan and Hangzhou was reduced by nearly 1,000 yuan and fell below 10,000 yuan. The iPhoneXR has a much lower price cut, and the current price has already plunged more than 1,500 yuan.

This is a phenomenon that Apple has never seen in the market in the past, not to mention that in the most beautiful scenery, Apple's new mobile phones often have to be increased by thousands of dollars to purchase. Different times in the past, due to ChinaPerformanceThe weak performance led to Apple's overall revenue in the first quarter of 2019 (the fourth quarter of 2018) was less than expected.

However, it is still unclear whether Apple’s price reduction strategy will restore the market. When the overall mobile phone market slows down, Apple is looking for space from outside the mobile phone business.

Heat is no longer

In order to stimulate the desire of Chinese users to buy, Apple began a price adjustment in disguise from the end of last year.

In December 2018, Apple's official website of China's official website launched a limited time redemption campaign, users can use Apple's old products to replace the new iPhone XR and iPhone XS, after the discount, you only need to pay a minimum of 4399 yuan to buy iPhone XR, and The new iPhone XS can be redeemed for a minimum payment of 6,599 yuan. This means that consumers can get up to 2,100 yuan for their old products. Today, the price reduction of these models has exceeded 1,000 yuan.

Such a large price adjustment, both dealers and fruit powder are very surprised. A person in charge of the 3C category of an e-commerce platform told the 21st Century Business Herald that Apple's price cuts can, to a certain extent, drive the buying demand of low-end and mid-end users, and the effect cannot be immediately reflected. In general, simply relying on hardware and then wanting to get a super premium is harder than it used to be. In addition, domestic mobile phones are also closer to users in terms of marketing methods and gameplay, especially at the operational level, which is also the reason for the decline in Apple's popularity.

In fact,AnalystAnd the investment community is still pessimistic about the cycle of iPhone demand. Goldman Sachs analyst Rodhal said in his latest report that Apple seems to have made serious mistakes in the pricing strategy of the iPhone XR, resulting in sales not meeting expectations. "In addition to weak demand in emerging markets such as China, iPhone XR is more Low cost performance does not seem to be welcomed by users outside the United States."

In short, Apple is in a dilemma. In terms of pricing, Apple will lose profit margins and will affect the positioning of its brand. However, unrealistic pricing, in turn, will hurt market share.

Canalys analyst Jia Mo told reporters in the 21st Century Business Herald that in the past six months, it has become apparent that Apple has compromised its price. For example, XR has given a substantial subsidy to the price of Japanese carriers, and it has begun to cut prices in China. . In general, Apple is in a strategic adjustment period, focusing on the high-end market. “In the mid-end market, it is getting more and more competitive.”

Center of gravity adjustment

On August 3, 2018, Apple's share price stood at $207.39, making it the world's first listed company with a market capitalization of more than $1 trillion. However, the good times did not last long. In the fourth quarter, the company's share price fell more than 30%.

What really ignited the negative sentiment in the market was that Apple CEO Tim Cook ("Cook") earlier this month cut the company's first quarter of 2019 (2018 Nature) in a letter to Apple investors. The fourth quarter of the year is expected to reduce revenue from the previously forecasted $89 billion to $93 billion to $84 billion.interest rateFrom 38% to 38.5% to about 38%.

The sales of the three major hardwares led by the iPhone were not as expected. Starting from the next quarter, the company will no longer publish sales data for iPhone, iPad and Mac. Declining sales do not affect the income of company CEO Tim Cook. In a recent filing, Apple said that in the 2018 fiscal year ending September 29, Cook received $3 million in salary, $12 million in year-end bonuses, and $121 million from his 10-year stock award. The stock of the dollar.

In response to negative market comments, Cook responded in an interview with the media that Apple’s long-term health status “has never been as good as it is now”. He believes that the most important indicator for observing Apple is not iPhone sales. Apple's core strengths are innovation, customer satisfaction and loyalty, and ecosystems. For Apple, the poor sales in China, the strengthening of the US dollar and the replacement of cheap batteries have affected Apple's earnings in the first quarter of 2019. And the channel is not a problem, what is important is the brand status of Apple in the hearts of Chinese consumers.

Therefore, in the coming year, Apple will continue to work on software services to expand its revenue. In Cook's view, Apple's equipment and services ecosystem "may be underestimated by opponents." At present, Apple still has a strong user base. Apple's registered users reached 1.3 billion people a year ago, and in the past 12 months, it has increased by 100 million.

How to get higher returns from the stock users is the challenge and hope of Cook and Apple. The latest news is that according to Japanese media reports, Apple has asked its suppliers to cut production of the new iPhone by 10% in the next three months. This is the second time Apple has cut iPhone production. For the entire industry chain of the apple industry, this is undoubtedly a long winter.

(Article source: 21st Century Business Herald)

                (Editor: DF387)

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