Due to the lower-than-expected revenue of China’s iPhone, Apple’s overall revenue in the first quarter of 2019 (the fourth quarter of 2018) was less than expected. After the news was released, Apple’s stock price (January 3, US time) plummeted 9.96%. In order to stimulate the desire of Chinese users to purchase and increase the popularity of the newly released models, Apple began to adjust the channel prices
On the evening of January 9, the reporter of “Daily Economic News” learned about the adjusted price of Apple products from the sellers of Shenzhen Huaqiang North. According to Liu Yu (pseudonym) who has been in business for many years, on the evening of January 8, Huaqiang North’s channel providers received price adjustment information from the US, iPhone XR, iPhone 8, iPhone 8 Plus, iPhone X, iPhone XS and iPhone XS Max. Products began to cut prices, the channel price of the highest single product fell by 450 yuan. Among them, the new iPhone of Yuanwang Digital City wholesale market has experienced a full-scale decline in various degrees
Liu Yu also told reporters: “After the price reduction, Apple products can stimulate the demand of low-end and mid-end consumers, thus promoting Apple’s sales growth. But these practitioners are more miserable, and there is a loss of iPhone XR. At most, the average one is about 400 yuan.”
September 10, 2018, an Apple store on the street Photo source: Every reporter Zhang Jianshe.
The highest single product channel price dropped by 450 yuan.
Shenzhen Huaqiang North is known as the “barometer” and “wind vane” of the Chinese electronics industry, and is also known as “China Electronics First Street”. On the evening of January 9, the reporter got the quotation provided by Huaqiang North Electronics Market:
iPhone XR 64GB wholesale price fell 450 yuan, the current price of 5250 yuan;
iPhone X 64GB wholesale price fell 100 yuan, the current price of 5630 yuan;
iPhone 8 64GB wholesale price fell 420 yuan, of which 3 models currently price 3880 yuan;
IPhone 8 Plus 64GB wholesale price fell 450 yuan, two of which currently price 4800 yuan
It’s worth noting that the iPhone XR is one of Apple’s new models launched last year, but now it is like a veteran model with a price cut of 450 yuan. Previously, due to the mismatch between the “cheap” configuration and the high price of the iPhone XR, the product was not accepted by the public after the product went on the market, and the industry chain also reported that the iPhone XR was one-third of the order
According to Caijing, at the end of October 2018, Apple notified Foxconn and Heshuo after two weeks on the iPhone XR, cutting the total of 78 million mobile phones originally planned to be cut by one-third. Moreover, Changshuo Technology, one of the recent Apple foundries, has dismantled the iPhone XR production line three months ahead of schedule
And the other two Apple’s new machines released last year also showed varying degrees of price declines:
Apple’s official website price of 8699 yuan iPhone XS 64GB (golden version), the channel price has fallen below 8,000 yuan, reported 7610 yuan;
Dual-card, big-screen blessing iPhone XS Max also does not have a strong resilience, 64GB channel prices have fallen below 9,000 yuan, the gold version reported 8520 yuan, in addition, 256GB version has fallen below 10,000 yuan, the golden version of 9385 Yuan; the highest price of 512G gold version, the current channel price is 11,100 yuan
The following is a detailed quote after the price reduction.
Liu Yu provides a quotation (new model).
Liu Yu provides a quotation (old model).
Can you stimulate low-end consumers?
For reasons of price adjustment, Liu Yu said that due to poor sales, the price of Apple’s price cuts can stimulate low-end consumer demand and promote sales growth. Moreover, this year’s Apple market is generally poor, for them, the era of profiteering has passed. The current channel price has also caused them to lose money. Among them, the iPhone XR has the most losses, and the average one loses about 400 yuan
It is worth noting that this is not the first time Apple has adjusted its price. At the end of December 2018, Apple began to roll out the redemption activities in its official website in China, so that the iPhone XR only needs to make up the difference of 4,399 yuan, and the iPhone XS only needs to make up the difference of 6,599 yuan. At present, the iPhone XR official price starts at 6499 yuan, and the iPhone XS starts at 8699 yuan, which means that consumers can get up to 2100 yuan with the old mobile phone in their hands. Calculated by offsetting discounts, this is the biggest offer that Apple has launched since it entered the Chinese market
In fact, many analysts are currently pessimistic about the iPhone demand cycle, and the introduction of trade-in offers is more conducive to strengthening this view. Goldman Sachs analyst Rodhal said in his latest report that Apple seems to have made serious mistakes in the pricing strategy of the iPhone XR, resulting in sales not meeting expectations. “In addition to weak demand in emerging markets such as China, iPhone XR is more Low cost performance does not seem to be popular with users outside the United States.”
Rodhal also pointed out that the current market conditions indicate that Apple is subject to the high price of the iPhone. According to experience in the mobile phone industry, when pricing power is lost, consumer technology companies either lose profit margins or lose market share, or both
On the morning of January 10, the retail price of Apple’s official iPhone XR 64GB is still 6499 yuan, which is much higher than the channel price.
iPhone’s weak demand in China has plunged its share price.
On August 3, 2018, Apple’s share price at Nasdaq was $207.39, making it the world’s first listed company with a market capitalization of more than $1 trillion. However, the good times did not last long. After Apple hit an intraday high of $233.47 per share on October 3 last year, the stock price trend turned sharply. The entire fourth quarter, the cumulative decline has exceeded 30%. Many investors also expressed concern about Apple’s development prospects
Investors believe that the stock price decline is a sign of weak demand for new iPhones, and news about the new iPhone cuts in the market is endless
In the third natural season (fourth quarter) reported by Apple, the three major hardware sales led by the iPhone were not as expected. At the same time, Apple said in the earnings conference call that from the next quarter, the company will no longer publish the sales data of iPhone, iPad and Mac separately, and Apple’s move is also interpreted by the outside world as “to cover up the falling hardware. Sales.”
Worse, at the beginning of this month, Apple CEO Cook lowered the company’s performance forecast for the first quarter of 2019 (the fourth quarter of 2018) in a letter to Apple investors. From the previous forecast of $89 billion to $93 billion, the revised range was revised down to $84 billion, and the gross profit margin was revised down from 38% to 38.5% to about 38%
For reasons lower than expected, Cook explained that mainly the emerging market economy is weak, and emerging markets are mainly reflected in the Chinese market. “China’s iPhone revenue is less than expected, resulting in the company’s overall revenue is less than expected, and led to the camp. The year-on-year decline