Apple CEO Tim Cook Admits High iPhone Pricing Is One Reason for Declining Yearly Upgrades
Apple reported its first fiscal quarter earnings of 2019, summarizing net sales of $73 billion. With declining iPhone sales, many industry analysts have continuously pointed out that Apple needs to reduce the price of its iPhones in order to maintain a steady momentum. As it turns out, Tim Cook also admits that the high price of the iPhone was one of the reasons why there were fewer smartphone upgrades. However, going into more detail, Cook relays that the high price of the iPhone also depended on your geographical location.
Tim Cook Believes High Price of iPhone Isn’t a Huge Factor in the U.S. As It Is in Emerging Markets
After Tim Cook was asked if the iPhone XR, iPhone XS, and iPhone XS Max pricing was too high, he responded that in emerging markets, it is a factor for declining sales because of the strength of the dollar. As for the U.S., the executive responded by saying that the 2018 iPhone lineup’s price featured a very small difference in the region compared to the iPhone 8 and iPhone 8 Plus launched back in September 2017.
In other countries, however, it is a different story. Foreign exchange rates have substantially increased the price of the iPhone, leading to fewer sales. To make the technology more accessible for customers, Tim Cook states that the company will be lowering the price of its mobile devices, but in some regions, and this does not include the U.S. Another reason why Cook believes the pricing factor had little impact in the U.S. was due to flexibility of payments, and even though subsidies have phased out, there are other practices that make purchasing the newest iPhone a better experience.
This will include monthly installments and trade-in offers from different carriers, which Apple has also implemented on its website. Earlier, we reported that Apple replaced as much as 11 million batteries in 2018 alone, compared to 1-2 million cells the company normally replaces. The $29 battery replacement program was introduced after Apple apologized for throttling the performance of users’ iPhones.
Replacing the battery restored the performance of older models, which only meant that customers saw no point in upgrading when their current device was running optimally. Cook also states that Apple’s products are built to last and that some customers choose to hold onto their devices as long as possible. Whether this continuous behavior from consumers will further result in declining iPhone sales, we’ll find out in the future.
Do you think reducing the price of iPhone will encourage higher sales? Tell us your thoughts down in the comments.
Image Credits: Lucy Nicholson, Reuters