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Businesses Iphone The Almighty Buck Apple

Apple's New Strategy: Sell Pricier iPhones First (wsj.com) 115

Posted by msmash from the show-me-the-money dept.
The staggered release gives the company a month to sell higher-end models without cheaper competition from itself. WSJ: This year, according to people familiar with Apple's production plans, the company prioritized production of its two pricier OLED models, the iPhone XS and XS Max, whose prices start at about $1,000. Both will hit stores Friday, followed five weeks later by the least expensive new model, the XR, which has an LCD screen and a starting price of $749. The staggered release gives Apple a month to sell the higher-end models without cheaper competition from itself. It also simplifies logistics and retail demands and could strengthen Apple's ability to forecast sales and production of all three models through the Christmas holidays, analysts and supply chain experts said. "It's sort of a Dutch auction," said Josh Lowitz, co-founder of research firm Consumer Intelligence Research Partners, referring to the practice of starting with a high asking price, then lowering it until a buyer accepts. "The people who are most committed will pay to get early access. Then you get to the people who are making a choice and may settle for the $750 phone. This could become the new normal."
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Apple's New Strategy: Sell Pricier iPhones First More

Apple's New Strategy: Sell Pricier iPhones First

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  • It's more about skimming the cream (Score:4, Informative)

    by JoeyRox ( 2711699 ) on Friday September 21, 2018 @10:45AM (#57354280)
    This is a standard marketing strategy and not unique to Apple. You charge more for people who are willing to pay more (early adopters), then phase in a lower ASP as the demand curve shifts toward more typical mid and late stream adopters.

  • It seems like a great idea (Score:5, Insightful)

    by SuperKendall ( 25149 ) on Friday September 21, 2018 @10:45AM (#57354282)

    I don't really see a downside here, to me it seems like an excellent approach - by selling the top end models first, you are treating them as something more special.

    Those who want to wait for the slightly lower priced Xr won't mind a delay much, and they can judge if it's worth spending more to have a nicer model earlier.

    Personally I am really curious to see both the Xr and Xs Max side by side, to compare screens... I don't plan to get a phone update this year but I think seeing those two would be a really good way to contrast a great OLED against a great LCD screen. Some have said OLED screens do not appear to be quite as sharp and I think I can see what they are talking about, but the two latest larger models should present the best side by side comparison to really tell.

    • Re: (Score:2)

      by hawk ( 1151 )

      Well, they got *me* . . .

      I absolutely need a new phone immediately. As in, ran the last one over with one of my Cadillacs and have been desperately holding out.

      And we've already used up all the older spares.

      So I leave in half an hour to pick up my new nanny.

      And things had been *so* peaceful . . .

      hawk

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      I see it more as "Apple is prioritizing building the phones people want to buy" which happen to be the newest phones, and which happen to be the most expensive.

      The Xr is basically a repackabed iPhone X, minus OLED screen (replaced with LCD). If you wanted an iPhone X-style phone, you either want an Xs coming out, or you would've just bought the iPhone X already. Thus really, selling iPhone Xr units on day 1 wouldn't generate a ton of new sales and it takes away from manufacture of the phone people really wa

  • What? (Score:3, Funny)

    by cascadingstylesheet ( 140919 ) on Friday September 21, 2018 @10:51AM (#57354306) Journal
    Market forces, affect Apple? Blasphemy!!

  • $1000 phones are surreal. (Score:3, Insightful)

    by Anonymous Coward on Friday September 21, 2018 @10:53AM (#57354320)

    Any person that pays $1000 for a phone, Apple or not, is bat shit crazy, or bat shit rich.

    That phones does not make miracles people!!! Wake up...

    A $200 phone does 97% of what an $1000 phone can do.

    • Re: (Score:3, Insightful)

      by thegarbz ( 1787294 )

      Any person that pays $1000 for a phone, Apple or not, is bat shit crazy, or bat shit rich.

      Fortunately most of us haven't bought phones for many years. Pocket computers which can make calls on the other hand...

      A $200 phone does 97% of what an $1000 phone can do.

      In terms of dollar per frustration with a slow piece of shit I would say it does more like 297%

      • Except you can buy a very fast pocket computer that makes calls for only $379, the current price of an iPhone 7 refurb directly from Apple, which includes 1-year warranty.

        • Define very fast. I bet you mine is faster. Can it multitask as well as mine? Does it playback 6K videos smoothly? Will it chug trying to find text in a 450 page PDF document?

          If you answered no to any of the above then you don't have a "very fast" pocket computer. You have a basic one suitable for plebs who treat it like a phone with a Facebook app.

      • Re: (Score:2)

        by torkus ( 1133985 )

        "most of us" includes a ton of people who just have a phone because they need one...not because they use any of the features.

        If "most of us" is meant to include the tech-friendly generations then upgrades are about every two years.

        • "most of us" includes a ton of people who just have a phone because they need one...not because they use any of the features.

          Then my friend you bought the wrong device. May I suggest next time you send $1000 my way and I'll send you a $300 device back.

    • It really comes down to how long that $200 phone will last you. If it never gets software updates, you probably need to replace it after a few years if you care about security at all. If you can keep a $1000 phone for five years instead of buying a $200 phone every year during that span, there's no difference in cost aside fluctuations in currency value over that time period.

      I think the top end iPhone is probably worth closer to $600, but if Apple can get people to pay $1000 who am I to stop them. No one

    • Wake up...A $200 phone does 97% of what an $1000 phone can do.

      And my $60 J3 Luna does 100% of everything I need it to do, and will be in service for me for years to come. Just sayin' :)

    • Any person that pays $1000 for a phone, Apple or not, is bat shit crazy, or bat shit rich.

      This meme (yes, millennials, I'm using the word correctly) goes around every time Apple releases a new phone. $1,000 is roughly about a year's worth of cable TV, or a pack-every-other-day cigarette habit, or a $4.25 Starbucks latte every weekday. In the grand scheme of things people spend money on, a new smartphone that you'll use for at least a year, is not really that expensive.

    • A $200 phone does 97% of what an $1000 phone can do.

      Like a $20'000 car does 97% of what a $100'000 car does, yet some people still buy luxury cars.

      I spend more time in front of my phone than sitting in my car, so spending an additional 800$ each 3 years on my new phone doesn't feel so surreal.

    • Re: (Score:2)

      by torkus ( 1133985 )

      I was OK with the $500 phones, tolerated the $600 phones...kind of suffered through the $700 phones because they we're mini tablets (Galaxy Note)...

      But this new $1k+ standard for a phone is utterly, completely ridiculous. It's a mini computer, I get it...but nothing it does is so much more fantastic than a much more basic phone (except the camera).

      iOS 11 -> 12 is MUCH more of an improvement than iPhone X -> XS ... and even that is pretty minor. It's not about being a Luddite here, it's the simple tr

  • Smartphones are devices for consumers. I'm a maker not a taker. I've got no use for a spying, expensive, closed-source, sealed battery, crippled computing device with no keyboard. I'd rather carry a flip phone or "dad" phone or whatever. Hell, I'd rather have people have to call my home phone at the house and get the fucking answering machine and I don't eve know they called until hours later when I *might* feel like calling them back (maybe). Da fuck do I want to give every spammer and griefer instant acce
    • Get a low-end Moto smartphone. Unlocked bootloader, so you can install a custom ROM/OS. They also often have (in case of G4 Play, G5, and E4(?)) removable batteries and SD cards, not sealed junk.
      • Interesting. I'll have to check them out, especially if there are alternative operating systems. Right now I alternate between a Blackberry and an old Sony Walkman phone running Symbian (and no IP stack) Thanks!

    • The why not buy an iPhone? (Score:5, Insightful)

      by SuperKendall ( 25149 ) on Friday September 21, 2018 @11:39AM (#57354612)

      I'm a maker not a taker.

      If you were really a maker you would seek great tools.

      I've got no use for a spying

      Apple does not spy. They do not need to as they sell hardware, not you.

      , expensive

      Even $1k for a powerful computing device you keep at your side for three+ years is not expensive.

      closed-source

      Sigh. [apple.com]

      sealed battery

      All batteries are sealed, or else there would be quite a mess.

      Or did you mean you could remove the battery? Funny, you claim to be a "Maker" and yet you are afraid to open a phone case to change a battery manually (which you'd only have to do every 2-3 years)??

      Or did you mean you want a second battery, again if you were actually a maker you'd appreciate the flexibility of carrying around an external battery that could recharge any number of different USB devices instead of some lame proprietary internal battery that you have to throw away with your phone.

      crippled computing device with no keyboard.

      In what way crippled? And rather than "no keyboard" is has an infinite number of keyboards.

      If you really have to have a physical keyboard for a phone then why not get one [amazon.com]? That's the nice thing about buying popular hardware, is that you can expand it almost in whatever way you like.

      • Re: (Score:2, Insightful)

        by Seven Spirals ( 4924941 )
        Wow, Apple fanboy much? Suckin' the big apple, eh? You are a fucking idiot if you think iOS is 100% open source. Why should anyone fight the vendor to service something they paid for? They make it intentionally difficult [zdnet.com], speaking from the experience of actually replacing sealed-in batteries. It's cute (and ignorant) that you think Apple is an innocent lamb that doesn't spy. Of course, the rest of the ignorant Apple apologist blather in your post should have presaged that. Guess you've been living in a cave

      • Re: (Score:3)

        by Megol ( 3135005 )

        So where exactly is the iOS source? Or do you think for instance MS open sourcing something (they have) makes them open source?

        • Re:The why not buy an iPhone? (Score:4, Funny)

          by SuperKendall ( 25149 ) on Friday September 21, 2018 @01:14PM (#57355402)

          Appleopen sources Xnu, the kernel. They open source Webkit, they open source Swift, they open source LLVM...

          It's not just one or two things, it's almost everything except for Springboard (the iOS app launcher).

          No it's not all open source. But it's also not even mostly closed source, so it's wrong to claim that it's a closed-source system when so much of it is open.

          • Where is the source code for their camera, fingerprint, wifi or cellular network drivers? It must be part of that XNU kernel source, right? Have you actually tried to compile that kernel and run it on an iPhone? It must work, right?

      • Re: (Score:2)

        by ljw1004 ( 764174 )

        Or did you mean you could remove the battery? Funny, you claim to be a "Maker" and yet you are afraid to open a phone case to change a battery manually (which you'd only have to do every 2-3 years)?

        I like taking spare batteries for my gadgets on adventures (backpacking, sailing, long-distance cycling or swimming). They're more compact than external battery top-up devices, and they mean you can get full charge instantly rather than keeping the two things tethered for hours. This last point can be important depending on your holster/mount for your gadget.

        • I like taking spare batteries for my gadgets on adventures (backpacking, sailing, long-distance cycling or swimming). They're more compact than external battery top-up devices

          I don't see how you can say that when external batteries come in any form factor you like, from incredibly small to large but extremely powerful.

          I like external chargers more because they give me way more options for act I might need to do than carrying around extra phone batteries ever did. They can also support fast-charge so while

      • closed-source

        Sigh. [apple.com]

        Just because Apple releases some open source software doesn't make iOS open source. It is not only closed source like Windows, but unlike Windows, Apple does everything it can to ban sideloading of software, or at least mass market distribution through that channel.

    • `They have phones for the home now? And what on earth is an "answering machine"?
      • Hehe, it's a steam powered device from before your time. Yes, home phones are an anachronism. Mine costs $16 a month, though. It's worth paying it just to hear people flip out over the fact that I still have one. They also tend to lose their minds that they have to leave a message or just fuck off. People are so used to instantly being able to yank someone chain. They have a conniption fit when they can't do that and I enjoy every second of their discomfort like an alien protoplasm that feeds on hate. I do

    • Smartphones are devices for consumers.

      Oh, the old "I'm saving money using a dumbphone" argument. I assume you must never buy anything retail or dine out, right? My phone has likely paid for itself several times over in terms of looking up deals (slickdeals/retailmenot), comparison shopping/price matching while in a store, finding the cheapest gasoline (yeah, there's an app for that), and promotional freebies (I've gotten Amazon gift cards from Coke, free food from Chick-Fil-A, etc.)

  • Smaller phones? (Score:5, Interesting)

    by 93 Escort Wagon ( 326346 ) on Friday September 21, 2018 @11:23AM (#57354476)

    Every company seems to be in love with big phones. Can anyone recommend an Android phone with a 4” (or thereabouts) screen? My wife currently has an iPhone SE, and she’s adamant that she doesn’t want a phone larger than that.

    I’m going to keep using my 6S for as long as I practically can... but then I’ll probably move on from Apple too. Smartphones are basically commodities at this point... paying the ludicrous premium for any of these companies’ flagship phones is not something I’m willing to do.

    • The iPhone SE has dimensions of 123.8 x 58.6 x 7.6 mm

      You can use the Phone Finder at GSM Arena [gsmarena.com] to find a phone that matches your criteria. There really aren't many current phones that are the same size or smaller than the iPhone SE. Don't look at screensize though. Look at actual phone dimensions, because bezels have become a lot smaller in recent years. Something like the Sony Xperia XZ1 Compact [gsmarena.com] is probably going to be about as small as you can get.

    • Apple of late reduces the price of previous generations phones instead of engineeering an entry level device, like the SE. So hang on to your 6s for a few more years, the when the iPhone 12 is out, upgrade to the iPhone X.

      Personally I want a simplified “dinner out” iPhone ... 640x960 real pixels but 3 inch diagonal screen. No camera, or rear camera only. Edge to edge OLED no home button, so using the modern gesture interface only, speakers and microphone through the bezel. WiFi and Bluetooth.

    • Re: (Score:2)

      by hawk ( 1151 )

      > an iPhone SE, and sheâ(TM)s adamant that she doesnâ(TM)t want a phone larger than that.

      Indeed, the reason that the iphone stayed so small so long, and then first grew only taller, was to that a woman's thumb could reach the entire screen . . . (leaving folks with hands like mine unable to tap the near side; every strategy has holes . . .)

      hawk

    • Can anyone recommend an Android phone with a 4” (or thereabouts) screen?

      Android phone manufacturers abandoned smaller phones with decent hardware specs ages ago. Apple just recently did it. I'm personally not a fan of gargantuan screens, either. My recommendation would be get an iPhone 8 and drive it until the wheels fall off. Hopefully by then, "small" might come back into style.

    • Re: (Score:2)

      by antdude ( 79039 )

      No kidding. I don't want big smartphones, Apple. I love 4S' size to fit in my small hands and pockets.

  • Market research? (Score:3)

    by zarmanto ( 884704 ) on Friday September 21, 2018 @11:48AM (#57354678) Journal

    I think it might be noteworthy that they did exactly the opposite last year, with the iPhone 8/8+ available on 9/22 and the iPhone X available on 11/3. The most obvious explanation in that particular case was production delays... but what if it was less about practical issues and more about exploring the market? I mean, I know that I for one pre-ordered an iPhone X straightaway, and ignored the iPhone 8 entirely... but I dunno; maybe that mode of thinking only matches the crazy ones. (Or maybe not.) Perhaps most people want either whatever is available immediately (instant gratification) or whatever is cheapest. Last year, you could get both of those things at once... this year, you have to choose... but you can get their best options straightaway.

    And both last year's roll-out and this year's roll-out are perfectly valid marketing methodologies.

  • The secret is... (Score:1)

    by Anonymous Coward
    ... don't play this stupid game in the first place. I feel sorry for dumb bastards who bought an iPhone all those years back and are now locked into constant upgrade cycles. The REALLY stupid ones even appear on /. and elsewhere to justify why patently anti-consumer practices such as proprietary connectors, sealed in batteries, removal of features of headphone jacks etc are somehow a really good idea.

  • And your point is...? (Score:1)

    by Anonymous Coward
    What part of "for profit private corporation" do you not understand? They want to maximize revenue, and there's nothing wrong with that as long as they're not breaking laws to do so.

  • If they wanted to be somehow evil, they'd not say ANYTHING about the XR until it was released.

  • The problem with this argument ... (Score:3)

    by Tjp($)pjT ( 266360 ) on Friday September 21, 2018 @12:14PM (#57354924)
    The problem with this argument is the predecessors are still for sale. The model 7 and 7 plus, as well as the 8 and 8 plus. And at reduced prices over their introduction, and for the 7s a further reduction.

  • Etruscans and Romans also sold their expensive apples first, thousands of years ago.

  • Apple Fanboy current and since 1981 here.
    Even check my stupid username.
    Fuck Apple.
    FUCK APPLE.
    Apple died as Steve Jobs was dying.
    One proof among hundreds:
    2011.
    Mac OS X 10.7 Lion.
    No "save as" function.
    SMFH.

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