So an Unreleased Apple Product is Too Expensive!

August 25th, 2017

Let me just go through all this again, because it seems that some of the chronic Apple critics have nothing better to do than repeat the same old nonsense no matter how many times you correct them.

One method to denigrate Apple is to make a survey that not only puts them in a bad light, but is factually baseless because focuses on things that don’t exist. But surveys appear — or are meant to appear — to have some level of credibility.

So consider the dueling surveys about possible interest in the rumored iPhone 8 and brand loyalty. So there’s a report from Barclays analyst Mark Moskowitz claiming that less than one in five people who own iPhones would be willing to pay the rumored higher price for the alleged tenth anniversary model.

He is quoted as saying:

While the device itself seems more evolutionary than revolutionary, we believe this launch represents the return of staunch competition into the premium segment ($700+ ASP) of the smartphone market following Samsung’s Note 7 debacle last year. For Apple, we are concerned that the company needs to meet momentous investor expectations following the expected launch of three new iPhone devices in September. This could be made more challenging when considering that only 18% of potential iPhone buyers are willing to spend $1,000+ for a new device (Wireless Subscriber Survey; 08/09/17), which is below the 30-35% figure investors seem to be expecting.

To put this in perspective, obviously there is no iPhone 8; no such product has been announced by Apple. Obviously you cannot specify a price for something that doesn’t exist. You can make educated guesses, considering that the most expensive model from the current lineup, the iPhone 7 Plus, is $969 with 256GB storage. With tax, that IS a dreaded $1,000 iPhone, and people are already buying them in pretty decent quantities.

But even if the number is as low as suggested, it’s still represents hundreds of millions of potential customers. Obviously, most iPhone owners do not buy the most expensive models anyway, so how does this represent anything more than what you might realistically expect?

The implication, however, is that Apple might be doing something wrong in charging fair market value for a premium product. That, of course, assumes the rumors of the iPhone 8 and its potential prices are mostly correct.

Now in the world of dueling surveys, there is yet another, from Fluent, which counters fears from Barclays that a fair number of iPhone users might move to Samsung because of  Apple’s high prices — or something or other. This survey claims only 5% of iPhone owners are going to abandon ship. Considering the brand’s traditionally high loyalty levels, that appears to make sense.

In any case, a proper survey should accurately reflect customer loyalties and other factors. It shouldn’t be skewed to prove a particular point of view. But some surveys are designed to deliver a specific result.

Now to put things in perspective, I was checking out the pricing of the forthcoming Samsung Galaxy Note 8. This is the successor to last year’s Galaxy Note 7, which had a penchant for overheating and bursting into flame. After a pair of recalls failed, the product was discontinued, and Samsung has taken the year to supposedly set things right. Or perhaps to give the public time to forget the entire miserable affair.

Regardless, iPhones will debut and sell for Apple’s regular retail price. In the months that follow, wireless carriers will offer special deals to persuade you to sign up for their service. So you might get a rebate on your existing gear, for example, to cover what you owe your present carrier to tempt you to switch. Maybe there will be a two-for-one discount. Here a carrier may be willing to sacrifice profits to gain new customers, which is a normal way of doing business.

But when a new product is discounted before it even ships, you wonder about the manufacturer’s confidence that it’ll be successful. Don’t forget all those heavy discounts on the Samsung Galaxy S8 almost as soon as it went on sale. I’m already seeing discounts if you preorder the Galaxy Note 8. Best Buy is touting discounts of up to $150 on a device that will evidently be priced similar to the 256GB iPhone 7 Plus.

Overall, it seems remarkable how much bandwidth is being consumed in speculating about the bad things that may hurt a forthcoming Apple gadget. You do not, for example, see similar levels of fear mongering about something new from Samsung. So it is assumed Samsung is destined to be successful, even if its gear contains serious flaws. With Apple, the critics write fake news about potential defects and their impact.

Don’t forget the run-up to the iPhone 7, where its lack of a headphone jack was treated as a serious failure. That it closely resembled its predecessor was also a negative, and consider all that talk about an iPhone 8 that was in full force last year. Indeed, it has not let up.

You ought to be surprised that anyone bought the 2016 iPhones considering that a much better model was supposed to arrive this year. But now you could say the same thing about next year’s iPhones, so why buy one at all? After all, it’ll be even further improved in 2019.

Just save your money and live in a bubble. Yeah, that’s the ticket! Or buy a Samsung? But what about next year’s Galaxy, and the one the year after that?

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4 Responses to “So an Unreleased Apple Product is Too Expensive!”

  1. dfs says:

    Since Gene is repeating a good deal of what he has said before, so will I. I. m. h. o. what is really at stake here is the idea, by now firmly implanted in customers’ minds, that the proper interval for upgrading a smart phone is one year. This idea has proven to be a huge money-maker for Apple, Samsung, and probably everybody else as well. Seems to me that if the price of a smart phone gets bumped up too much too soon this idea is going to get called into question. In my case, I have indeed been replacing my phones more or less yearly. If I’m supposed to sink this much money into a replacement, at least if Apple does not produce an absolutely killer improvement (and I fail to see one in the iPhone 8}, most likely I’ll hang onto what I now have for a couple of more years. And I think it’s a safe bet plenty of other iPhone owners will come to the same conclusion. So if Apple fails to hold the line on its price points it may wind up inflicting serious damage on itself. At the least, by not buying a new phone this time around I am “voting with my feet”, this is the only way I have of telling Apple that enough is enough.

  2. Edwin Hubble says:

    Liked the column; your assessment of the doom-and-gloom punditry is spot on, as always.

    But, please, stop describing ill-founded, misguided, click-bait columns and analyses as “fake news”!

    That redefines what fake news is and undermines the very real threat that it poses!

    It’s important to restrict its use to the rightwing campaigns of propaganda and misinformation that originated with and are exemplified by Fox Fake News, Breitbart, and Rush & Sean & Co.

    By labeling any old unfounded story or opinion as “fake news”, we fall prey to exactly what Trump and the Far Right want — the ability to discredit mainstream news media and scientific, technical reporting as “false” or “fake” and to distract attention from what they themselves are doing– that is, the deliberate spreading of lies and the systematic sewing of falsehoods to shape public opinion. That’s the real Fake News and it threatens democracy and reasoned discourse,

    By applying the phrase to real news and credible reporting, they’ve turned the phrase and world upside down. If we also use the phrase so loosely, we end up succumbing to their tactics and to a world of relativism, where truth and facts lack meaning. It undercuts reasoning and the acceptance of fact-based analysis!

    In such a world, Technightowl would simply be labeled as “Fake News” by anyone who disagrees with your conclusions! They wouldn’t have to address your reasons, evidence, or argument. We need to resist!

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