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Apple Priced Itself Out of Shrinking Chinese Smartphone Market

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Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#121

Post by mstade »

sjansen wrote: post #97
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.

Anecdata: I was going to upgrade my iPhone this year, until I saw the new prices and decided I could wait one more year. I should have been an easy sale. After a bad experience with Android, I have no desire to go back. Budget isn't an issue. But if Apple is going to price phones like laptops, I'm going to upgrade as slowly as I upgrade my laptop. (Which given how long it took them to get more than 16GB of RAM, I've…

Precisely the same here, minus android experience – been with Apple since the original iPhone. Money is really no object so I ordered the iPhone X the moment they became available, but the XS really doesn't seem to offer anything new at all. Even now, comparing the models I only see some minor camera changes and an A12 chip over A11. I don't even know what that means. All I know is this phone is crazy good, and it'll have to take some crazy innovation coming out of Apple to get me to upgrade. I fee the same about my MBP frankly. Crazy good hardware, I'll stick with them for sure, but I have no need for anything new because it's pretty much the same as the old.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#122

Post by taobility »

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-...

1. China is the second biggest market for Apple 2. The cellphone competition in China is hotter than other regions, and the local players manufactured cheaper and competitive phones, like Huawei, OPPO/Vivo, Xiaomi 3. The whole economy situation is not good, the consumer would be more cautious for expensive consuming.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#123

Post by taobility »

threeseed wrote: post #43
bearcobra wrote: post #38

There's been quite a bit of discussion on how WeChat is basically the OS of Chinese smartphone users, so as long as a phone runs that the switching costs are pretty low. I wonder if there's the possibility of something similar happening in the US/West. I've been tempted to try Android but Facetime & iMessage are pretty good at keeping me on iOS.

WeChat is definitely popular but it isn't everything. Chinese users also buy apps, take photos, watch movies, listen to music, create content. All of which on iOS is tied to the Apple services ecosystem and hence the switching costs are still significant.

I agree with buy apps, but not the rest. There are lots of local content providers, like Tencent Music, Tecent Video, iQiyi, Netease Music, Youku, which provides music/video streaming service with much better localized content.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#124

Post by taobility »

disishhsha wrote: post #39
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 use my phone a lot, and gladly spend a few $ a day for a marginal improvement in my quality of life. Another question - why do people spend $30k on a car when a $10k car is nearly as good? Seems like a much bigger waste of money than the phone.

The answer is similar with current computer market. Most of people in the world still choose the cheaper PC, even Mac is more beautiful, solid and fancy.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#125

Post by zapzupnz »

izacus wrote: post #106
zapzupnz wrote: post #96

Earlier quoted context omitted.

And in the case of iPhone, the software takes advantage of custom-made, powerful, performant, and yet efficient chips that would make snapping photos take forever on older or non-specialised chips. Software and hardware dance together on iOS.

Now you just need to persuade people that paying 500$+ more to get a tiny little less delay after capturing a photo is worth it to people. Since Apple seems to be failing at that.

In what way does it seem that Apple is failing at that? Are you saying iPhone sales have just completely slumped? That's not what the data is saying.

Apple and other phone makers set the benchmark years ago, people don't seem too interested in going back. Even when they're buying non-Apple phones, they're buying other companies' flagships: Samsung, LG, Huawei, Xiaomi. Those phones are no slouches either.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#126

Post by taobility »

nicoburns wrote: post #66
hendersoon wrote: post #33

Earlier quoted context omitted.

The key differentiator is that in China your smartphone can in many ways be abstracted down to the platform that runs WeChat. So Apple's key lock-ins like iMessage and FaceTime don't matter and it has to compete on price. Apple greatly increased prices in the US/EU also and many of these regions are facing a recession too, but according to Tim Cook's letter those consumers didn't abandon the iPhone. What's unique to…

Hmm... I'm not convinced by that. At least in the UK, I don't know many people who use FaceTime (WhatsApp and Facebook Messenger are the most popular video chat software). People do use iMessage, but that falls back to SMS if you don't have an iphone, and SMS messages are universally free here these days.

But in UK, there is not too many alternative phones, like Huawei, OPPO/vivo, Xiaomi. All those local players in China are based on Android, but still provide customized OS with unique features.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#127

Post by [deleted] »

throwaway5752 wrote: post #81

I read all the comments, and nobody has mentioned consumer nationalism? The US president's behavior and the concept of face? Apple is being dragged down the trade war's reputational halo effect. Keep an eye on major international consumer US brands (Disney, McDonalds, Starbucks, and others). Obviously there's an rapid economic deceleration, too, but things happen for more than one reason most of the time.

[deleted]

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#128

Post by Arn_Thor »

mstade wrote: post #121
sjansen wrote: post #97

Earlier quoted context omitted.

Anecdata: I was going to upgrade my iPhone this year, until I saw the new prices and decided I could wait one more year. I should have been an easy sale. After a bad experience with Android, I have no desire to go back. Budget isn't an issue. But if Apple is going to price phones like laptops, I'm going to upgrade as slowly as I upgrade my laptop. (Which given how long it took them to get more than 16GB of RAM, I've…

Precisely the same here, minus android experience – been with Apple since the original iPhone. Money is really no object so I ordered the iPhone X the moment they became available, but the XS really doesn't seem to offer anything new at all. Even now, comparing the models I only see some minor camera changes and an A12 chip over A11. I don't even know what that means. All I know is this phone is crazy good, and it'll…

That is indeed the trend. iPhones have in recent years been so good in every way that the need to upgrade year-on-year is reduced. With iOS 12 even a 6S feels snappy with a new battery. This trend of a slower replacement cycle has been going on a while, and that is precisely why Apple is raising prices. With slower sales that's the only way to keep revenue growing. And it's working too, iPhone sales met expectations everywhere in the last quarter except China. This isn't an "Apple is failing" story, it's a "Apple misjudged the China slowdown" story

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#129

Post by sonnyblarney »

inscionent wrote: post #47
sonnyblarney wrote: post #25

Earlier quoted context omitted.

Market for $300 T-shirts is very small. Niche, not really consumer.

Yeah NO ONE has ever made money selling luxury consumer goods, ever. /s

It's a good point but most luxury goods are beyond $300 T-shirts.

And when they are, it's because of the brand and everything else going on with the brand.

Re: Apple Priced Itself Out of Shrinking Chinese Smartphone Market

#130

Post by denimnerd42 »

mr_spothawk wrote: post #116
disishhsha wrote: post #39

Earlier quoted context omitted.

I use my phone a lot, and gladly spend a few $ a day for a marginal improvement in my quality of life. Another question - why do people spend $30k on a car when a $10k car is nearly as good? Seems like a much bigger waste of money than the phone.

I bought an old $5000 truck, which I know I can find parts for easily. It's got 200k miles on it so far, and I expect to put another 200k on it (assuming I will eventually need to spend ~3k on a refurbished engine). Hard to argue with $8k for 250k miles.

Unfortunately an old truck is one of the least safe vehicles you can drive. But as far as miles per dollar nothing beats a common $5000 vehicle, that's for sure.
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