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  • They Don’t Want Apple to Build a High-End Model

    September 26th, 2017

    Are you ready yet? The iPhone X will arrive in a few weeks, and Apple is doomed to suffer for its ill-advised decision to build an expensive smartphone. What self-respecting company would dare engage in such foolishness. It has to be doomed to disaster.

    According to one column from a usual suspect among tech pundits, the existence of an iPhone X must do harm to expected sales of the iPhone 8 series. You see, instead of buying the cheaper smartphone, people will buy the more expensive one, thus giving Apple higher profits. That’s supposed to be a bad thing?

    That the iPhone 8 came out earlier supposedly caused a dilemma based on the lack of information on sales for the first weekend. This is allegedly a significant issue, since Apple has traditionally done that, so is it possible there was no “passion” for the cheaper iPhones? They are, after all, just ho-hum products with “little more than some updated chips and hand-me down tech from the iPhone X.”

    What’s that supposed to mean?

    Well, evidently the fact that all the new iPhones have the same processors and other internal components. Well, except for the OLED display and the Face ID hardware that’s exclusive to the iPhone X. But you get most of the rest on the lesser models which, one would think, ought to make them good values. You can get great tech and not pay the highest price.

    So what about that weekend sales dilemma? Well, Apple didn’t do that last year either, and the critics were equally alarmed. Maybe customers were holding off for the year in expectation of a far superior iPhone 8 this year. As you recall, what became the iPhone X was previously known as the iPhone 8, at least when it wasn’t identified as the iPhone Edition.

    Despite that perceived lack of enthusiasm, Apple did sell more copies of the iPhone 7 than the iPhone 6s. Maybe not a lot more, but more nonetheless at a time when people expected iPhone sales to continue to fall.

    Unfortunately, certain pundits must be unaware of the fact, by having a wider selection of gear, by giving customers more choices, sales might actually increase. Most people will not spring for the iPhone X for reasons of cost and other considerations. Enough probably will do so to noticeably impact total sales. The rest will buy an iPhone 8 or a legacy model. Based on the usual customer surveys from Apple, they will be quite satisfied with whatever they buy.

    Will some have iPhone X envy if they can’t afford the price of admission? Well, I suppose that’s true with any product perceived as high-end, such as an OLED TV set, a luxury watch or a luxury automobile. But that isn’t going to paralyze their credit cards. They will buy what they want regardless what a tech pundit tells them.

    And certainly people aren’t inclined to base their purchase decisions based on what I write. Well, maybe some do, but I can only applaud their wisdom. Or something like that.

    Now when you read blogs expressing such skepticism about Apple’s moves, wouldn’t it be fair to consider how other companies are treated?

    So Samsung released the Galaxy S8 smartphones for sale in late April in the U.S. The pricier Galaxy Note 8 went on sale about four months later. I suppose you could, in a sense, roughly compare the product positioning of the Galaxy S8 and the Galaxy Note 8 as similar to the iPhone 8 and the iPhone X, even though the release dates for the latter are much closer.

    Are pundits complaining that Samsung made a foolish decision to separate the release dates of these two product lines? Does the existence of the Galaxy Note 8, which lists for $960 with 64GB storage, threaten the existence of cheaper gear? Does anyone even ask that question, or even care?

    And just for comparison, the 64GB iPhone X is $999, just $39 more than the top-of-the-line Samsung with which it is being compared. On a 24-month lease, the price difference isn’t significant. On T-Mobile, you’ll pay $30 per month for high-end gear with different down payments on its JUMP plan, if you have good credit. It’s $210 for the Galaxy Note 8, and I presume it would be roughly in the same range for the iPhone X. The differences in up front payments don’t seem to precisely track the retail prices except in an approximate sense.

    Unfortunately, some of the people who write those blogs seem to believe that Apple is run by a bunch of fools that have no concept of marketing and maximizing sales. So they need to be told how to run the company, and certainly someone who carries the title of industry or financial analyst has the authority to tell them what to do and how to do it.

    I will not pretend to guess how iPhone sales will fare based on the new models. The impact of the iPhone 8 to September’s quarterly totals will not be revealed until late October. If Apple correctly figured demand between the iPhone 8 and the iPhone 8 Plus, there will be plenty to go around without long waits. As it stands, Apple is quoting 1-3 business days delivery on all the new gear I checked. It is expected that the iPhone X may be seriously backordered, based on published reports of production delays.

    But that might not even be true. There might just be plenty of product to meet demand, which is the best situation as we get closer to the holidays. All that will mean is that Apple’s best guesses about supplies and demand are accurate and the production lines will be humming along. Nothing more, nothing less. You will be able to visit your favorite mobile handset dealer and get what you want without a long wait. Isn’t that supposed to be a good thing?



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