Apple Says It Will Lower iPhone Prices in Certain Markets

Posted on January 30, 2019 by Paul Thurrott in Apple, iOS with 17 Comments

A $350 Billion "Contribution" to the U.S. economy? No

Apple CEO Tim Cook said last night that his firm would tackle declining iPhone sales by doing the unthinkable. But only in certain markets.

“We’ve decided to go back to [be] more commensurate with what our local prices were a year ago, in hopes of helping the sales in those areas,” Mr. Cook told Reuters after Apple’s earnings conference call.

Cook’s comments suggest that Apple will roll back the 20 percent price hike that it enacted this year on its latest iPhones, a strategy I previously labeled “Apple Jacks.” And they follow comments he made during that call in which he addressed Apple’s pricing strategy head-on.

During that call, Cook claimed that the overall price hike on iPhones in 2018 was “pretty small” in the United States, despite the fact that the iPhone XS Max bumped the flagship iPhone’s price up by at least $100, depending on model, and the new “entry-level” iPhone, the XR, is $100 to $250 more expensive than the iPhone 8 handsets it replaced.

The issue, he said, was in international markets thanks to foreign exchange rates and disappearing carrier subsidies. To counter this during the quarter, Apple “absorbed” the exchange rate changes to help keep the prices down internationally.

Going forward, however, Apple will apparently lower prices … somewhere. What’s unclear, of course, is which markets will see price cuts. We just know it won’t be established markets like the United States and Western Europe.

But don’t worry, Apple fans. Despite all the evidence to the contrary, Cook isn’t backing down on Apple’s central marketing assertion about its latest products.

“iPhone XR, iPhone XS, and iPhone XS Max are by far the best iPhones we’ve ever shipped,” he said last night “We couldn’t be more proud [sic] of our iPhone lineup and our industry-leading customer satisfaction.”

In this case, I assume “proud” means the way I’m proud when one of my kids doesn’t make the honor roll at school.

Join the discussion!


Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Comments (17)

17 responses to “Apple Says It Will Lower iPhone Prices in Certain Markets”

  1. maethorechannen

    The Performa range didn't help Apple all that much back in the 90s, if anything it diluted the brand. I'm guessing they learned something from that experience seeing as they're keeping these to the developing world, but I have a feeling they will eventually succumb to the pressure for growth and bring these to the developed markets at some point.

  2. Daekar

    I'm beginning to think that all the lawyers in hell are kept company by both CEOs and people who write press releases.

  3. provision l-3

    "What’s unclear, of course, is which markets will see price cuts."

    I'm going to go out on a limb here and guess Greater China is at the top of that list. As far as other "emerging markets" go, Turkey 's economy has tanked so that would be an obvious choice. India is still a place I believe Apple struggles to gain traction as well. Lastly, and this isn't an emerging market, I think they came up short in Japan.

  4. BMcDonald

    I can say from a buying experience that Apple has certainly not "absorbed” the exchange rate changes to help keep the prices down internationally.

    For an iPhone XR - via one of our big carriers here in Alberta - I just paid $1134.00 CDN for a black 128GB iPhone XR - which is a far cry from a US user paying $799.00 USD.

    If Apple absorbed the exchange rate - where's my $234.00 dollar rebate?

    Even at today's exchange rate - 799.00 USD = $1,078.01. Clearly something else is at play here.


  5. glenn8878

    I wish Apple will lower the prices of the iPhone XR since it offers worse screen resolution and one less camera that the iPhone 8 Plus. Or they should upgrade the specs of the XR at the next release. I might just buy the iPhone 8 in a few months. I can pocket the savings.

  6. prebengh

    I agree that Apple hiked prices on Ipads and Macbooks/MacMini, but I don’t agree that they hiked prices on the iPhone.

    iPhone Xs = iPhone X

    iPhone Xs Max, new larger model, + 100 USD

    iPhone Xr = 749 USD which is between the iPhone 8 and the iPhone 8 Plus prices last year, but the phone is actually larger than the iPhone 8 Plus, so you might even say they have reduced the price for the iPhone Xr

  7. Chris Payne

    I'm a little confused... maybe it's just because I only see the U.S., but Apple didn't raise prices on the iPhones last year? The Xs is the same price as the X. They did add a higher-end on the Xs this year, which comes with a price increase, but they didn't jack prices up on similar models.

    Put aside the Xr for a moment.. that should be priced lower, yes, but it's a brand new model that doesn't have a comparison from a previous year in order to compare a price increase.

    Is it that much different outside the US?

  8. straker135

    So no admission that Apple’s iPhone pricing strategy or marketing was incorrect, we are buying them wrong?!

    It always puzzles me when companies that see declines in sales volume respond by jacking up their prices. I don’t recall it ever doing anything other than accelerating decline.

    Also I think Apple marketing is loosing it’s mojo. All I have seen for the new X series is that ludicrous open everything with your face ad and another that sends the message ‘Oh look, pretty!’. Seems bankrupt of any real features to warrant the expense.

    I did pull the trigger on the XR Red I’m using now but it is a bit ‘Meh’, pretty and functional enough but the OS irritates me in small ways every day and I am not that impressed with the camera. Although it’s good enough it ain’t greater than NZ$1400 good. Sigh ?. Must have been sucked in by the marketing after all. Loved my Lumias.

  9. Tony Barrett

    So let's see here. Apple are now blaming international currency fluctuations rather than their own pricing model for the lower sales of the 2018 iPhones! Will Apple not actually take responsibility for their own actions and just ADMIT they're now pricing these things too high? We're meant to feel sorry for them that they'll now have to absorb these currency adjustments to get the pricing down a little in 'some' regions. What complete and utter BULL.

    Apple finally pushed pricing beyond all reason to try and keep revenues and profits up when they knew they were seeing a slowdown in sales, even from 2016. This was pure greed and their ego and self-importance wouldn't yield. I really, really hope Apple get knocked down a further peg or two. They deserve it.

  10. rfog

    I will become very very very angry if they lower prices in any place, does not matter where. That will demonstrate they were stealing us.

    As angry as to sell all my Apple stuff and forget them forever. My current Note 9 works even better than my iPhone XS Max ("flaifon (X)omer (S)impson (MAX) power", to make a joke).

    • wp7mango

      In reply to rfog:

      They weren't stealing from you. They simply persuaded you to part with more cash than it was worth. Basically, Apple set the price and you decided that it was a price worth paying. But as more and more people started thinking that it isn't a price worth paying, Apple decided to adjust the iPhone's price. It's all about perceived value, i.e. what enough people are prepared to pay for a product. The perceived value of a product depends on it's relative value compared with other products, which varies from country to country, as does affordability.

      But look, we've seen Apple play this ridiculous game before. Take the gold Apple watch which cost $14,000 or the Apple book for $200. Some people will still buy it, regardless.

      My question is, are the people who are prepared to pay Apple's high prices equally responsible for this situation?

      • rfog

        In reply to WP7Mango:

        The real thing is until now you paid some overprice based on quality. Hardware quality and software quality. At least that was my reason to still buy Apple things. But now hw quality is meh, and software quality is near the level of other companies.

        Then is not worth pay those high prices. At least not for me.

        And yes, you are right in what you say, but now we customers can start thinking in Apple stealing us. Is the other side of the coin. We intellectually could understand that, but that does not prevent we will feel stolen, and could be a great problem for Apple.

        At this moment, even unbrained Apple fanboys (at least Spanish ones), are complaining about Apple, when in other times the iPhone 4 problem with antennas were "you are handling it wrong".

        (And yes, please, give me as many negative points as you can click. Is there any prize to win by negative points? :-P)

  11. Yaggs

    Love that they feel the need to say: “iPhone XR, iPhone XS, and iPhone XS Max are by far the best iPhones we’ve ever shipped,” he said last night “We couldn’t be more proud [sic] of our iPhone lineup and our industry-leading customer satisfaction.”

    As if they were going to make crappier iPhones than they did last year and make them more expensive. Their problem is that the iPhone 7 was a pretty good product and it still works fine for most people... and their new phones prices are outrageous...

  12. wright_is

    Not seeing any changes in Germany, the XS still starts at $1311 for the 64GB, topping out at $1768 for the 256GB model and the XS Max starts at $1425 for 64GB and tops out at $1882.

    The XR is, comparatively, a bargain at $969 for 64GB and only $1163 for the top end model.

  13. dontbe evil

    but but paul said that "the iPhone XR is Unfairly Maligned"