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Apple's aggressive pricing may not be enough to save the iPhone - Wired.co.uk

Date published: 2019-09-15
Originally published: Here. Excerpt below.


Tim Cook at Apple's WWDC on September 10, 2019
On September 10 Apple CEO Tim Cook once again took the stage at Apples headquarters in Cupertino to showcase this years lineup of Apple devices. This time, though, glossy finishes and triple lens cameras were not the only specs that grabbed headlines.
Instead, it was Apples apparent new stance on price tags that stole the show. In a highly unusual move, the company priced its entry-level iPhone 11 at $699 thats $50 (£40) cheaper than it had priced its equivalent, the iPhone XR, at the same time last year. But more significantly, it then gave the XR a $150 (£120) discount, and priced the two-year-old iPhone 8 at $449 (£479 UK price).
It doesnt stop there: after announcing its $399 (£399 UK) Series 5 watch, Apple also disclosed that it would start selling its Series 3 watch at $199 (£199 UK) thats almost the same price as its AirPods. To have a price that starts with a 'one' is a huge statement of intent from Apple, says Ben Wood, mobile industry analyst at CCS Insight. It makes it significantly more accessible, and is going to cause a world of pain to competitors like Fitbit.
For a company that is famous for premium pricing, Apples sudden shift to more affordable devices (even if it is its older line-up) comes as a surprise. A look at its sales performance last year might explain the change of heart: in 2018, Apples best-selling device was the $649 iPhone XR, meaning that its entry-level device out-performed the more advanced XS and XS Max.
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In other words, phone buyers are unwilling to shell out the extra dosh to get their hands on Apples best smartphones. Last year in China, the tech giant even cut prices for some of its iPhones, iPads, Macs and AirPods by nearly six per cent partly in response to lower than anticipated iPhone sales in the country.
Neil Mawston, executive director at Strategy Analytics, says: Apple fans have pricing fatigue and they want to see cheaper costs for iPhone 11. The push ab ...


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