Apple Priced Itself Out of Shrinking Chinese Smartphone Market • Hacker News Board

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#11

Post by snazz » Thu, Jan 03, 2019, 10:59 PM UTC

andrewmcwatters wrote: post #3

This is an interesting development, but not exclusive to the Chinese market. They've priced themselves out of many working Americans who refuse to put payments on a phone. Many companies, not just Apple, are raising their ASPs, or cutting categories to pursue more affluent customers while tacking on corporate debt to buyback shares in efforts to prop up share prices. I believe what we're seeing isn't an Apple-ism, th…

What this might be telling us is that there is, in fact, a cap for the amount of money someone will spend on a phone. I thought $650 was a lot, but then it started looking reasonable as soon as we got to $1000 phones. I have been continually surprised for the last few years that people are not only willing to spend more money but Apple’s unit sales have increased as well.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#12

Post by tlholaday » Thu, Jan 03, 2019, 11:00 PM UTC

baroffoos wrote: post #7

I really don't understand why anyone is paying $1000+ for a phone when you can get really amazing phones for $300.

I don't understand why anyone is paying $1000+ for a camera which doesn't make telephone calls.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#13

Post by hendersoon » Thu, Jan 03, 2019, 11:01 PM UTC

Neither pricing nor the economy fully explains why Apple's suddenly doing so poorly in China and not in the US or EU. They're triggers certainly, but not the root cause. There's one keystone here-- WeChat.

In the US and EU, Apple has people locked into their ecosystem. That doesn't apply to China. WeChat is their alpha and their omega. They use it not only for chatting, as you might expect from its name-- WeChat is in many ways their _entire operating system_.

You pay your utility bills with WeChat, it's your social network, map app, phone app for VOIP, video calls, you access local services, your banking, payments like Venmo, your healthcare, read the news, buy stuff from online stores, EVERYTHING is in WeChat.

And WeChat is cross-platform.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#14

Post by inscionent » Thu, Jan 03, 2019, 11:01 PM UTC

baroffoos wrote: post #7

I really don't understand why anyone is paying $1000+ for a phone when you can get really amazing phones for $300.

I really don't understand why anyone is paying $300+ for a t-shirt when you can get really amazing t-shirts for $10.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#15

Post by andrewmcwatters » Thu, Jan 03, 2019, 11:02 PM UTC

snazz wrote: post #11

andrewmcwatters wrote: post #3

This is an interesting development, but not exclusive to the Chinese market. They've priced themselves out of many working Americans who refuse to put payments on a phone. Many companies, not just Apple, are raising their ASPs, or cutting categories to pursue more affluent customers while tacking on corporate debt to buyback shares in efforts to prop up share prices. I believe what we're seeing isn't an Apple-ism, th…

What this might be telling us is that there is, in fact, a cap for the amount of money someone will spend on a phone. I thought $650 was a lot, but then it started looking reasonable as soon as we got to $1000 phones. I have been continually surprised for the last few years that people are not only willing to spend more money but Apple’s unit sales have increased as well.

You're focused on the micro. Yes, Apple is doing this, but why are other American publicly-traded companies also raising their ASPs uniformly? What companies are not doing this who also utilize foreign manufacturing deals? And of those companies, are they purchasing shares back?

These things will answer whether or not Apple in the future will go back to selling phones within the ~$600 dollar range.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#16

Post by andrewmcwatters » Thu, Jan 03, 2019, 11:04 PM UTC

nostromo wrote: post #8

That's part of it, but the bigger issue is China is rapidly slowing down. Otherwise Apple would be seeing shrinking sales in other regions, which according to Cook has not been the case. WSJ today posted this alarming chart of Chinese consumption-tax revenue: https://i.imgur.com/2LzUKrz.png https://www.wsj.com/articles/chinas-economic-downturn-takes-...

Thanks for sharing this. I'd rather see meaningful explanations for ongoing trends rather than read people complain about phone prices. Sometimes the latter can explain the former.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#17

Post by nicoburns » Thu, Jan 03, 2019, 11:04 PM UTC

hendersoon wrote: post #13

Neither pricing nor the economy fully explains why Apple's suddenly doing so poorly in China and not in the US or EU. They're triggers certainly, but not the root cause. There's one keystone here-- WeChat. In the US and EU, Apple has people locked into their ecosystem. That doesn't apply to China. WeChat is their alpha and their omega. They use it not only for chatting, as you might expect from its name-- WeChat is i…

Are many people really locked into the apple ecosystem. Most apps that people here in the UK use are cross-platform too...

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#18

Post by megaman8 » Thu, Jan 03, 2019, 11:04 PM UTC

inscionent wrote: post #14

baroffoos wrote: post #7

I really don't understand why anyone is paying $1000+ for a phone when you can get really amazing phones for $300.

I really don't understand why anyone is paying $300+ for a t-shirt when you can get really amazing t-shirts for $10.

despite all the advertising, it may surprise you to learn that it's actually quite rare for people to buy expensive clothes. i looked it up one time. i think it said less than 1% of the jeans sold in the US cost more than 50$

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#19

Post by dpflan » Thu, Jan 03, 2019, 11:05 PM UTC

hendersoon wrote: post #13

Neither pricing nor the economy fully explains why Apple's suddenly doing so poorly in China and not in the US or EU. They're triggers certainly, but not the root cause. There's one keystone here-- WeChat. In the US and EU, Apple has people locked into their ecosystem. That doesn't apply to China. WeChat is their alpha and their omega. They use it not only for chatting, as you might expect from its name-- WeChat is i…

Do you know of any good analysis, reports, discussions about the rise, impact, and influence of WeChat?

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#20

Post by gwright » Thu, Jan 03, 2019, 11:05 PM UTC

Why is the comparison always done to the newest, high end Apple phones? The iPhone 7 is still sold for $550 unlocked and $23/month on installment in the US. I assume it is also more reasonably priced in China as compared to the high end XS phones.

You don't have to purchase the most expensive iPhone to get a high quality phone from Apple. Attributing the decreased demand in China to the price of the most exclusive phone seems misguided to me.