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.