A few months after their launch, the new iPhone XS and iPhone XS Max are flying off the shelves. This is nothing new for the Cupertino giant, who still remains at the top of world rankings of the best brands. We also shouldn't forget that this is the first company in the world valued at a trillion dollars. However, something's wrong at Apple...
Every now and then, even the best company in the world is allowed to make a wrong move, if we can call it that. Apple's idea seems to have been to reuse the same market strategy as in 2013 - that is to combine the two best iPhones ever with a cheaper variant sold in six different colors, the iPhone XR.
So far nothing too strange. It seems like a good idea, so much so that I was also able to find several very positive aspects of this device. It doesn't have a plastic body like the previous budget model and has a 6.1 inch screen that makes for good usability. However, when compared to the premium models, it is equipped with lower-end components that will make many turn up their nose when they see the price ($749).
We've been here before
As I said, everything reminds me very much of that September in 2013, when the company presented the iPhone 5S on stage and, with great surprise, the iPhone 5C. For a long time many people expected the arrival of a low-cost smartphone from Apple and it seemed that the time had finally come. Too bad that the iPhone 5C was launched at a price of $549, causing a lot of controversy.
Initially the phone was spurned by consumers for the disproportionate price, but then the complaints came from shareholders: yes, despite sales of the first plastic iPhone proving a real success, compared to the competition (its sales exceeded the Galaxy S4 and LG G2 put together), overall the iPhone 5C was a modest flop.
First of all, the enormous availability of this device generated a drop in list prices of Apple products for the first time. Out of all iPhone purchases made between 2013 and 2014 (about 51 million), only 13 million were of the iPhone 5C. Even then the market did not react as well as Apple probably expected, so why try again five years later?
Maybe we should slow down...
Okay, plastic has been replaced by glass but the iPhone XR could make history repeat itself or flop even worse than its predecessor. In fact, almost two months after the presentation of the new line-up unveiled on stage by Tim Cook, the iPhone XS and XS Max have immediately sold 45% more units than the previous generation (we are referring to the iPhone 8 and the iPhone 8 Plus), one of the most impressive results for Apple.
Yet, it seems you can't say the same thing about the iPhone XR. Apple hasn't really learned anything from its past mistakes. The "low-cost" iPhone (yes, I wrote that in quotes because $749 is not low-cost to me) is not a hit on the market: according to recently obtained data, the demand for iPhone XR is so low that Apple had to order its Chinese assemblers, Foxconn and Pegatron, to slow down production of the device immediately.
According to the previous plan, Foxconn was supposed to produce about one hundred thousand units per month, but apparently that will be reduced by almost 30% - a considerable figure. The same goes for Pegatron, who doesn't talk about numbers, but doesn't hide the fact that the situation is exactly the same either. Pegatron declared that "the production of iPhone XR doesn't reach the established capacity anymore". Last but not least, Apple even cancelled any possible intervention by another assembly industry called Wistron, which was prepared to support the production of iPhone XR in case of high demand.
In short, how is it possible that in 2018 Apple has not yet realized that in the fantasy land it has built, there is absolutely no room for a low-cost iPhone? Especially since if you have enough spare cash for the XR in the first place, it's only a little more to get one of the higher end models. The grip that Apple has on its followers is so strong that the results speak for themselves: the two top iPhones set records, while the colored budget model remains dead in the water.
Apple doesn't want to talk numbers anymore
In addition, we should consider Apple's recent statement: the company has decided to never reveal the sales data of its products again, a move that will most likely hinder the predictability of future earnings. The reluctance to reveal shipping volumes suggests that Apple is facing a major decline and would like the public to concentrate their attention elsewhere.
Bright colors and lower prices do not attract Apple fans, who prefer to buy previous models rather than iPhone XR. With Christmas just around the corner, the company's ability to revive its production is very limited. Apple, I've admired you for years, but you should know your audience by now!
What do you think about the iPhone XR? Has Apple made a big mistake?