Price cuts are a painkiller, but not the antidote to curb iPhone decline | bakar77 slot, rgm168 slot login

Daniel Ives, an analyst at U.S. investment bank Wedbush, said in a report on the 14th that iPhone prices will be significantly reduced in China in the next few months. He said in the report: "We expect that the price of iPhone XR will be significantly reduced in the next few months. Apple is facing a 'red alert' in the Chinese market. It is crucial for Apple to formulate the correct price strategy for iPhone XR and future iPhone models."

Aves said that to meet Wall Street's "ideal expectations" for Apple's performance, low prices are the prescription. Goldman Sachs analyst Rod Haar's previous analysis report had the same view. Apple seems to have made a serious mistake in the iPhone XR's pricing strategy, resulting in sales failing to meet expectations. Apple is currently constrained by the high price of the iPhone. Based on past experience in the mobile phone industry, when pricing power is lost, consumer technology companies either lose profit margins, lose market share, or both.

The mistake in pricing strategy is an important reason for Apple's poor sales of new phones this year. This has become a consensus in the industry. Unfortunately, Apple still refuses to admit it verbally. Cook also blamed the iPhone's decline more on the economic environment, such as the strength of the U.S. dollar, production capacity constraints and weak demand in emerging markets. However, he does not admit it in words, but he is still very honest in body.

As early as January 10, the wave of iPhone price cuts has arrived. According to media reports, Shenzhen Huaqiangbei channel dealers have received news of price cuts for iPhone product channels from the United States.

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iPhone XR, iPhone8 series, iPhone X, iPhone XS series and other products have begun to reduce prices. Among them, new iPhone models at the Yuanwang Digital City Wholesale Market in Huaqiangbei experienced varying degrees of decline across the board.

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In addition, the prices of iPhone8/8P on JD.com will be reduced to 3999 yuan and 479 yuan respectively.9 yuan, which is 1,100 yuan and 1,200 yuan respectively different from the 5,099 yuan and 5,999 yuan quoted on Apple’s official website. Secondly, Suning’s official Weibo said that it has significantly reduced the price of iPhone products. The iPhone XR 128GB version is only priced at 5,799 yuan, which is 1,200 yuan cheaper than the price of 6,999 yuan on Apple’s official website.

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Compared to the stability and uncompromising price of the iPhone over the past many years, Apple today seems to have begun to bow to the market. And judging from the current trend, the days of standing to make money are over. Apple earlier lowered its expectations and announced that its revenue in the first quarter of 2019 is expected to be US$84 billion, lower than the original estimate of US$89 billion to US$93 billion.

Based on the current weak sales, in order to save Apple's stock price from falling, the iPhone may continue to adjust its price in the next few months to trigger the money-holding group to turn to the iPhone again. After all, Apple may need to rely on sales to prove itself again in the next quarter.

With a wave of price cuts in a short period of time, what deep-seated crises have emerged?

Back to a question, What is the biggest advantage of iPhone over Android? Of course, an important reason lies in the smoothness and stability of iOS compared to Android, and the second is its product quality and brand value preservation.

Generally speaking, in the past, within six months after the release of new products, Apple’s official website, directly-operated stores, and authorized dealers with independent stores basically maintained the original price. Even if the price was reduced, it would generally be a small drop. It is almost impossible for Apple to see this kind of price reduction trend.

Because in the past few years, Android has become a common consensus, which determines that Apple iOS can maintain its brand premium for a long time. After a year, the price of new products will decline slightly, but overall it will still be stable, but the flagship new products of the Android camp will fall rapidly. People will think that Apple's value retention is better than Android, and it is worth the price.

But now, Apple has begun to write its anxiety on its face in the dilemma of continued decline in sales. The essence of the iPhone’s drastic price cuts now is that it can no longer maintain its brand premium. Everyone knows that Apple’s iPhone’s trump card is iOS, which is also the key to maintaining Apple’s iPhone. The key link of the iPhone brand premium. The reason behind the inability to maintain the iPhone brand premium is that the advantages of iOS have been weakened. Over the years, mobile phone performance and product innovation as well as the smoothness and stability of the Android system have been greatly improved.Nowadays, iOS is no longer as important as before in terms of factors that people consider when purchasing a machine. This actually means that Apple may be facing a real brand crisis.

In the mobile phone industry, declining sales is a dangerous signal. Once sales decline, the impression given to the outside world is often a signal of decline. So far, few mobile phone manufacturers have been able to rebound from declining sales and make a comeback. Of course, the exception of Xiaomi is that it was relatively easy to see and seize the dividends of India's low-end market, harvesting a wave of sales growth, and covering up the reality of the decline of the domestic market. However, Xiaomi has not made up for its shortcomings in product innovation and core technology. The layout of the hardware ecological chain is actually diverting attention from the east and west, trying to cover up the crisis of the core category with the product layout and sales of new hardware categories.

This is similar to how HTC began to vigorously deploy VR to find new category breakthroughs when it couldn't sell its mobile phones. However, the core competitiveness of the mobile phone product has not been improved. Therefore, once the dividends in the Indian market gradually fade and the product improvement and innovation of domestic Huawei OV become more obvious, Xiaomi's weakness and fatigue in the domestic market will gradually become apparent. Therefore, the recent sharp drop in stock prices is actually due to Xiaomi's performance in the domestic market not meeting the expectations of the capital market.

That's a bit far. What the author wants to say is that the weakness of hardware manufacturers is that they rely more on sales to support their brand premiums. For the mobile phone market, there is a trend. An increase in market share is a signal of good future growth, and the opposite is a signal of decline, or at least the stability of the sales ranking in the overall market.

Under the premise that the general environment is not optimistic, the market will tolerate a small decline, but it is difficult to tolerate a large decline. Because once there is a sharp decline of a certain manufacturer rather than the overall manufacturer, it essentially reflects the strong rise of competitors in the market, and the manufacturer's capabilities and advantages in brand premium, supply chain, product innovation capabilities, and core technology have been weakened, and the product has made mistakes in grasping consumer preferences. This is the revelation of a deep crisis. For Apple, product pricing missteps may be more of a symptom behind this crisis.

Why is price reduction not a real prescription?

In the long run, price cuts are not the antidote for Apple. On the one hand, because the iPhone has lost its in-demand attributes, the bigger crisis is that its product hardware performance and innovation are gradually failing to hit the pain points of young people. For example, the low-end iPhone XR lacks sincerity and is severely emasculated. The large black border and single camera make its product incompatible with the appearance and quality of the product that young people need. In the eyes of young people, this product is not worthy of its price. However, Apple is not aware of this demand of young people, but instead uses it as the main shipment machine to place orders.

In addition, the new iPhone still comes with a 5V1A charger as standard, and the battery capacity has always been below 3000mAh. The popularity of short videos has prompted young users to have higher and higher requirements for camera battery life. However, the iPhone’s camera optimization has not captured the preferences of young users. The flagships of the Android camp are generally better than the iPhone in terms of camera, battery life, and signal. They are getting better and better in appearance, but the price is several levels lower.

Over the past few years, iPhone updates have always been stuck., the battery life has been slow to keep up, and the lack of innovation in aspects such as behind-the-scenes photography has actually caused consumers to reach the critical point of user aesthetic fatigue with the iPhone. This year, the shell-changing and high-priced leek-cutting games have brought consumers to the point of emotional explosion. Apple's products have gradually deviated from the needs of the new generation of users in some aspects, which Apple did not realize.

On the other hand, 5G is coming. Apple's biggest advantage is that the iOS system is smooth, easy to use and fast. Although 5G here refers to faster speeds, it is more about transmission speed and download speed. But to some extent, in the5G era, faster and smoother may be a basic experience for mainstream 5G mobile phones. Will this weaken the core advantages of Apple iOS? I think it might be.

In the 2G and 3G eras, limitations in software, hardware and communication network conditions have had a certain impact on the mobile phone experience. Slowness, lag, and unsmoothness have become common intuitive pain points and feelings for Android phones. However, after the arrival of the 4G era, faster network conditions and progress in system optimization by mobile phone manufacturers have brought about certain improvements in the ease of use and smooth experience of Android phones. After the 5G era, supporting low latency and large capacity GB level, faster network and speed, higher definition and VR live content will inevitably lead to a smoother and faster experience. This essentially further weakens Apple’s iOS advantage.

What does this mean? This may mean that in the 5G era, Apple can no longer rely on the iOS operating system to rest on its laurels. It must come up with real highlights in terms of innovation, otherwise it may be really dangerous.

When Apple said it would no longer announce sales, it obviously noticed the decrease in iPhone sales, so it raised the price of individual products to ensure revenue and profits. This is actually a way of self-inflicted harm, because it shrinks the ecosystem around the iPhone and cedes the mainstream mobile phone market under 6,000 yuan to others. For example, iPhoneXR leaves space below 6K for mate20, and XS leaves space below 8K for mate20Pro. But now, when sales are plummeting, they have lowered their heads and drastically cut prices. In fact, they are following the old path of Sony and HTC.

In the past, within a few months after the launch of a new mobile phone, significant price drops often only occurred among manufacturers in the Android camp. When the brand premium and product quality of a mobile phone were not enough to support its selling price, its price would be adjusted to a level consistent with its value under the effect of market supply and demand. In the past, whether it was manufacturers such as HTC or Sony, their brand premiums were obviously not enough to support the value of their products. Although these manufacturers artificially positioned their flagship prices at a higher price, because its value did not match its price, users did not buy it. As a result, the products dropped again and again in just a few months, which in turn caused the brand premiums of these manufacturers to be shrunk.

But the result is that users are increasingly unwilling to buy it, because in essence,you have destroyed your own pricing system and will develop users' decision-making to wait for the price to drop before delaying their purchase or not buying again.

But this year, Apple began to significantly reduce prices to save the market within just three months after the launch of new products. This means that the value brought by the iPhone has not changed, but due to competition effects, the value has shrunk and is lower than its product pricing. At this time, its brand premiumThe price can no longer maintain its price. The iPhone can only maintain sales and value if it falls. The current impact of Apple's price cuts on the industry is that even if the impulse is effective in the short term, it may not be a good strategy to boost product sales in the long run.

The reason why Apple’s new iPhones were rushed in the early stages in the past is because consumers know well that iPhones have good value retention and their prices will remain stable in a short period of time. Two years ago, iPhones purchased in the US market for 12 months could still be sold at a 60% discount. In China, the price can even be higher.

This aspect reflects that at that time, Apple set the price of its iPhone at a reasonable level. However, as the experience gap between system software and software was narrowing, hardware performance was peaking, and the situation of new products in short supply no longer recurred, Moore's Law, which had not been very effective for Apple in the past, began to work on Apple, which to some extent affected the value preservation of Apple's new products.

On the other hand, the brand influence and premium capabilities that Apple has always relied on can ensure that the value retention of its new products tends to be stable. Now that Apple's price plunge has set a precedent, future users may be more inclined to wait for the iPhone price to drop before making a purchase decision. Therefore, Apple may also enter a vicious cycle of launching a new iPhone - insufficient product innovation - users not buying into the high price - inertial decline in sales - price plunge - and declining brand premium.

So, the market is really delicate. When product innovation is weak, the high pricing strategy becomes the first domino to push Apple down. Once it starts to go down, price reduction rescue measures often become ineffective.

What Apple needs to do is to adjust from the above two links (product innovation system) and third link (new product pricing strategy), break its vicious cycle system, review its product innovation mechanism, supply chain system and pricing system, rethink consumer needs and pain points, and balance the relationship between short-term profits and market share. Current price cuts are a painkiller, but they are not the ultimate cure for declining sales.