Apple Not Selling As Many iPhones As Expected So They’ll Lower Production By 10%

Back in September Apple released their new phones like they always do and they then followed up these releases with the new iPad. All these devices were met by stellar reviews on YouTube and in the mainstream media but consumers weren’t the biggest of fans and the sales paint a different picture.

Originally Apple intended to sell 48 million units of their phones between January and March and then this was cut to 43 million. Now they’ve lowered their expectations further by 10% which leaves the figure around 39 million. That’s a bucket load of sales anyway but as reported by GSMArena it’s about a 20% reduction from Apple’s 52.2 million devices sold in the first quarter of 2018.

There can only be so many “high-end” customers to sale to

The startling drop in sales has been accompanied by an increase in the pricing of iPhones. “Apple’s a lifestyle brand,” they said. You are supposedly buying into an experience like none other. The only problem with these high-end lifestyle brands is they can only be sold to so many people so prospects for growth get smaller every time you get a new user into the ecosystem.

A few years ago getting a user into the ecosystem was just the start as there was a higher likelihood of selling them something like an iPad or an Apple Watch to go along with their iPhone. There was also the likelihood that this customer would get the latest and greatest Apple iPhone upon release. The only problem now is that phones have kind of plateaued when it comes to features. It seems they’ve reached their peak and thus motivation to buy a new phone every year or even every other year seems to have died down. Same applies with the watches and iPads. You simply can’t buy those every year or every other year unless you are very privileged.

What now?

In the face of such dire consequences, it seems Apple is left with one choice. Either sale lower end, less expensive devices or watch the sales continue to tank. The only problem is no one wants to buy a less expensive iPhone because “IT’S LESS EXPENSIVE”. That’s the problem that lifestyle brands face. People buy them as status symbols and once there’s no status involved; selling that thing is trickier… We saw it with the iPhone 5C, which was a very good device (probably a better value proposition than XR) but no one really bought that. We’ve seen it with the XR. Though reviewers swore by it and thought it would sell, it seems that’s not the case.

But what about the SE

The Only time a cheaper iPhone made a dent on the market was when the iPhone SE came on the market. What does that mean? Maybe smaller/cheaper versions of the iPhone are actually a viable idea. Just as long as they don’t look like toys, which both the 5C and XR are glaringly guilty at. But even that might be a desperate lunge at things.

“Who’s foot are we shooting? Ours or the consumers?”

I believe this is the question Apple asked themselves when faced with their performance throttling scandal was unmasked last year. A user discovered that with new updates came worse performance and the fact that Apple wasn’t disclosing this turned into a heated debate. Was the company making performance as horrible as possible in order to make you buy a new iPhone? The fact that this wasn’t disclosed suggested so.

Apple refuted the claims and said the performance cuts were implemented to save on battery life. It was a valid excuse but the secrecy surrounding it leaves the whole debate in a murky area. I’m not a big fan of Apple so I believe they did it to force people to buy new phones. What do you think?

Anyway, now that Apple addressed this situation by offering $20 battery replacements, some believe this has led to a decline in sales as people no longer have to contend with crappy performance after every update.

What’s next?

Whether or not that is what’s affecting sales, what’s clear is that sales are being affected and Apple have to do something… What do you think is the answer?