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Cook finally announced his mistake. Is it too late to cut the price for the iPhone?

February 11, 2019 05:06
source: Pinway Business Review

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Speaking of mobile phones, basically everyone's mind will be such a definition. This is Apple's mobile phone and other mobile phones. Chinese domestic mobile phones represented by Huawei and Xiaomi have risen in the past few years, but Apple's mobile phones are deeply ingrained in everyone's minds. Impressions are still difficult to change in a short time. However, the price of Apple's mobile phones has become more and more unreachable over the years. The high price of Apple's mobile phones makes it difficult for people who like Apple's mobile phones to bear such prices. Finally, Apple's head, Cook, admits that this time. Is it not too late to cut the price of the iPhone?

  First, Cook finally admits the wrong

As the head of Apple, Tim Cook is the actual leader of Apple after Steve Jobs passed away. Over the years, under the leadership of Cook, Apple has created a myth of trillions of dollars in market value. Cook is also known as well-deserved. The management elite, there is only one thing that believes that everyone is not guilty of Cook's illness, this is the increasingly high price of Apple's mobile phone since the iPhoneX.

When the iPhoneXS and other three mobile phones upgraded by the iPhoneX were released in 2018, no matter how many local people saw such a price, they would be a bit surprised. Who gave Cook the courage to set such a high price? However, in the following interviews, Cook has been insisting that this price is the price Apple should have until January 30. On January 30, Apple’s first-quarter earnings report was released. After announcing a 15% year-on-year decline in iPhone revenue in the first quarter of 2019, Tim Cook announced that it would cut the price of iPhones in some regions, so that mobile phone prices and recent exchange rate fluctuations Consistent. The high price led to a decline in iPhone sales from $61 billion in the fourth quarter of 2017 to $52 billion in the fourth quarter of 2018. Apple’s sales in China have also been hit hard. Its revenue in China fell by 26.7% to $13.17 billion.

At the earnings conference,AnalystSteve Milunovich asked if Apple is doing too much in terms of pricing and may have to cut prices in the future. In this regard, Cook admitted that in the first quarter of 2019, iPhone revenue and user upgrades were worse than originally expected, "price is one of them." In response, Cook said that in order to alleviate users' anxiety about high selling prices, they will implement iPhone price reduction policies in certain countries; Apple will no longer focus on the dollar price, but in each market.currencyDetermine the iPhone price and increase sales.

Cook finally admits wrong, but can the price cut at this time save Apple?

  Second, it is not too late to cut prices now?

First of all, we have to see if there is any effect in reducing prices. From the performance of the Chinese market, the effect of price cuts is still quite significant. On February 3, according to at least two online retailers, Apple’s strategy to reduce iPhone prices in China has received significant results. From January 11 (Apple began to cut prices) to January 30, Suning Appliance's Apple iPhone sales increased by 83%. The iPhone 8 and XR are the most popular models. Tmall made a sharp price cut on the iPhone on January 13. As of January 29, iPhone sales on Tmall soared 76%. It can be seen that the price cut has brought about a real increase in the sales of Apple's mobile phones. Although this period of time has important factors in the traditional Chinese New Year shopping golden period, the sales volume before and after this represents the huge increase brought by Apple's downgrade. Power, but how long can this power last? This requires us to analyze further.

Next, let's analyze again, Apple's mobile phone as the world's number one mobile phone, how much can the price cut?

First, how many people need to change their mobile phones? On February 9th, according to a report by Bernstein analysts, people have extended the renewal cycle of the iPhone. He said that the fiscal year of 2018 is about every three years, and the upgrade period of the iPhone in the 2019 fiscal year is about every four years. . Sacconaghi expects 16% of the 900 million iPhone users to purchase a new iPhone in FY 2019. Then we use this data for an analysis, 16% of the 900 million users is about 144 million, because the iPhoneXS's high price may delay the consumer's impulse to replace the phone, although the current Apple sales price has declined but still It is higher than the previous generation iPhone, and many of the strategies adopted by Apple are the indirect price reduction strategy of replacing the old ones, so that the sales forecast of Apple mobile phones will further decline, so even if 144 million users will replace the Apple mobile phone, Apple There is still no advantage before the price cuts drop to everyone's psychological price.

Second, how many people will switch to Android in the end? For a long time, Apple has dominated the world with its powerful iOS system. It is indeed in the face of iOS's almost unparalleled system design, ensuring that Apple's mobile phone can use a configuration far lower than Android phones to ensure a very smooth user experience, plus User habits have a strong inertia. When users get used to a mobile phone system, it will be difficult to adapt to another mobile phone system. Therefore, under normal circumstances, the Apple Party is less likely to switch to the Android camp. However, the situation has been reversed in recent times. On the one hand, the optimization of the Android system has been continuously improved, and it has been in the process of optimizing the system of the iOS, so many Apple functions are Already implemented on Android phones, coupled with the more user-friendly settings of Android itself, the Android system is now getting closer and even in some aspects has not lost to Apple phones. On the other hand, there are many mobile phones in the Android camp. Whether it is Huawei's mate series, P series, Xiaomi's meter 8, MIX series, etc., it is not lost to Apple's mobile phone in the user experience, and even more attractive in many vertical fields. people. Perhaps in the history of Apple's mobile phone, there is no time to choose a model that is closer to the Apple mobile phone than the current consumer, and an alternative echelon of Apple mobile phones has emerged.

The third is the same as the apple in the cold winter era. As Lei Jun said some time ago, the current global mobile phone market is experiencing a period of low tide, which may continue to the 5G real large-scale commercialization, and we are ready to fight a protracted war. How can Apple succeed? It is just a mobile phone. Under the objective law of the economic cycle, the revolutionary tide of the mobile phone industry brought about by 3G and 4G has ended. Although the world's major telecom operators are all sprinting 5G, but from At present, there is still a long way to go before 5G is officially commercialized. Before the full arrival of the 5G era, the world mobile phone industry will likely enter a comprehensive trough. Even this apple period cannot be reversed by the trend. It is highly probable that Apple has indeed cut prices, but the price cuts still have no way to completely reverse the trend of the industry in the tide of the entire industry.

Based on the above analysis, we can find that although the price cut is Apple's current choice, but the price cut can really save Apple, I am afraid it is not so simple, Apple's crisis may not be so easy to solve.

(Article source: Pinway Business Review)

                (Editor: DF395)

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