Apple Again Judged by Different Rules

January 30th, 2018

For over a year, there were complaints that Apple had some nerve to charge $1,000 for a new iPhone. Month after month, the same objections were raised, implying that Apple was gouging customers once more with overpriced gear. When the iPhone X arrived, at a starting price of $999, it merely confirmed the suspicions.

Forgotten in all this was the nasty fact that, not long before the unveiling of new iPhones last September, Samsung delivered the Galaxy Note 8, at a price just $50 less. Evidently the critics must believe that spending just $50 more must somehow cause a rip in the space-time continuum, or something equally nasty.

Short of complaints about Apple’s pricing decisions, and I grant they lean towards the higher end of the spectrum, there are constant reminders that any new Apple product is inevitably destined for failure.

So the iPhone X must be a loser because it’s just too expensive, and the alleged rushed decision to substitute Face ID for Touch ID due to technology limitations — as opposed to just being better — must somehow impact your privacy negatively. It doesn’t matter that Apple stores its biometric data in a secure enclave that’s not distributed outside of your device.

That both facial and iris recognition is so flawed on the Samsung Galaxy S8 and related models that you can defeat it with digital photographs is usually ignored. Google’s questionable relationship with user privacy is also often overlooked.

It must be all about Apple.

Now consider this: How long have you read dire news about the Samsung Galaxy supply chain? Even when sales aren’t considered very high, do you hear constant reminders that sales must have declined from previous years? No, Samsung is the company to beat, mostly due to selling loads of cheap gear and thus manufacturing larger quantities than Apple. But at much lower profit margins.

Now when it comes to rumors from Apple’s supply chain, the alleged bad news just never seems to end.

So we have yet another story — I hesitate to call it a report — claiming that Apple has been forced to seriously slash production of the iPhone X due to disappointing sales last year. This one comes from Japan’s Nikkei, which is a usual source of such claims.

Now lest I remind you, the Night Owl reported a while back that one sales metric, from CIRP, indicated that the iPhone X was second in sales through the December quarter, behind the iPhone 8 and ahead of the iPhone 8 Plus. That sure doesn’t sound disappointing to me.

Obviously the sales mix has to be different this time, because Apple was selling several lines of iPhones, the three new models for 2017, plus products going back to the iPhone 6s and the iPhone SE from 2015. So even if total iPhone sales were way ahead of the holiday quarter for 2016, individual models may otherwise have sold in fewer quantities.

I’m sure this is perfectly clear to you.

Besides, the Nikkei stories about slashed iPhone orders are repeated regularly. It happened last year too, and in previous years. I remember how Apple’s stock price suffered big time due to fake rumors about bad sales and huge supply cutbacks for the iPhone 5 in late 2013. Whether this was done to allow investors to manipulate the price and gain underserved profits by selling short is not something I am prepared to claim. I am not a market expert by any means.

I do understand that media outlets make mistakes, but it’s rare that fake news about Apple is ever corrected. If Apple’s market cap drops by billions of dollars due to erroneous reports about nonexistent or perfectly normal supply chain cutbacks, nobody pays the penalty. Eventually actual sales figures will be revealed, and the stock price, one assumes, will revert to its former level.

The problem is that the news media seldom has the time to do its research. Reports about Apple often lack a proper historical context, nor are corrections usually made when those reports are shown to be wrong. Such stories are usually treated strictly as current events with little or no perspective and only a rare followup.

This doesn’t mean that I am making assumptions about iPhone X sales, or the sales of any specific model, for the December 2017 quarter. I honestly have no idea what Apple will report on Thursday. It may well be that iPhone X sales didn’t meet expectations, although it may require looking through the fine print to see. But if average retail prices increase by a decent amount, you can probably assume that the sales mix favored more expensive models.

Some believe that the iPhone X was a grand experiment that may never be repeated. Reports that it will be discontinued when the new models come out this September convey the impression that it’s a dead end. It may just mean that there will be a 2018 version, but the original won’t be kept around and sold at a lower cost.

Of course, nothing is confirmed, and Apple is sure to adapt marketing plans over the year based on ongoing sales and what they expect to do going forward.

In the meantime, expect more bad news about Apple even if the real story paints a totally different picture.

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One Response to “Apple Again Judged by Different Rules”

  1. DaveD says:

    I could never understand why crappy writers write crappy, click-bait sales articles. Maybe a way to get a meager paycheck for worthless information. I certainly don’t read their articles. Have much better use of my time. For me, I look for sales information from Apple. It is fine to comment about sales after the quarterly earnings report.

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