Common misconception – assume that if a company doesn't sell more devices every year, then
No no and one more time no.Although many consider the iPhone X to be a failure simply because it costs $1,000 – it's too expensive for a smartphone, such reasoning is infinitely far from the truth. In fact, Apple doesn't necessarily need to increase the number of iPhones it sells by lowering its prices just to achieve another sales record.
If you focus solely on the smallWith a drop in the number of devices sold, you may not see the bigger picture. In fact, Apple seeks to sell other devices and services – Apple Watch, AirPods, iCloud, HomePod, Apple Music, etc. – to attract users to an iPhone-only ecosystem. And Apple's strategy turns out to be more long-term than just selling as many smartphones as possible. The main goal – keep customers in the ecosystem.
Statistics could be different
There are a myriad of tactics that Apple couldused to have record sales last quarter. A trivial example – release of fewer models. One of the best things about the iPhone has always been that you know which model to get. One model comes out in two sizes, and the potential buyer decides whether to take it or not. However, last year Apple released three smartphones at once, making the choice more difficult than ever.
iPhone 8 and 8 Plus – amazing smartphones.They're powered by the same Apple A11 Bionic processor as the iPhone X, and the 8 Plus even shares its camera with the older model. At the same time, Apple missed the opportunity to “impose” users a new futuristic iPhone as the only available option.
Of course, Apple had its own reasons for doing so.exactly this way – and they are easy to detect. So, for example, the release of 8 and 8 Plus made it possible to occupy two price categories at once instead of one, reduce the potential shortage of OLED displays for the iPhone X and prevent a large drop in sales due to the two-month wait for the release of the iPhone X. However, if the iPhone X was the only option, then most of the 350 million iPhone users who were ready to upgrade would likely choose it over an older model or a device from another manufacturer.
Another obvious way to increase iPhone salesX– sell it cheaper. Yes, there are many reasons why spending $1,000 on a smartphone in 2018 – not such a crazy idea, but still for many it is above the psychological threshold for the cost of an iPhone.
It is impossible to say with certainty whether Apple willlower prices on the iPhone X this year (unlikely) or release a newer, cheaper version (almost certainly). However, one thing is certain for sure: in fact, it does not matter how many iPhones the company sells per quarter.
More offers – less demand
The smartphone market is now oversaturated with modelsfrom different manufacturers in different price categories. A good smartphone can be bought even for $150-200 (take a closer look at the Motorola G series if you have a very limited budget). If you're into Android, you can always get the OnePlus 5T for $500. He's really cool.
Such market saturation is always followed by a recession.sales. In the fourth quarter of 2017, smartphone sales worldwide fell by 6.3%. Everyone who needs a smartphone has almost certainly bought it for themselves. And considering that smartphones are getting better and better every year, users begin to keep the same iPhones for several years, rather than updating them annually. In the end, the battery can always be changed. And, in the light of recent events, this can be done quite inexpensively.
Ecosystem – it is important
From the point above it follows that chasing salesreally not the best strategy right now. A good hook for users, as we have already said, is a developed ecosystem – and no company here even comes close to Apple. And this is an important point, since Apple easily makes up for the lack of profit from sales of the iPhone itself by selling accessories and additional services. During the fiscal first quarter 2018 sales call, Tim Cook said that “For us, it's not about the numbers, it's about customer satisfaction. And this figure among iPhone X buyers is amazing.”
And this – a typical example of the halo effect.iPhone X users who are satisfied with their purchase will almost certainly buy something else to complement their smartphone, despite the higher price, simply because they expect the same satisfaction from other Apple products. Simply put, the user gets used to the idea that everything Apple does, it does well, which means that it is justified to pay a little more for this quality.
Thus, buying an iPhone shouldpurchasing AirPods and Apple Watch. And, of course, you subscribe to Apple Music and additional space in iCloud. I say this with such confidence because it worked for me too. My card is charged every month for an Apple Music subscription – but for me this service is so convenient that the idea of switching to something else does not arise and, I’m ashamed to admit, I don’t even want to waste time looking for alternative solutions. I also have an Apple Watch on my wish list and I know for sure that sooner or later it will move from there to my wrist. This is how you start paying for things that you never thought about in your life before.
Thus, by selling me one and onlyiPhone 7 and budget MacBook Air, Apple can be sure that I will be a buyer again – because this is how an ecosystem works when it is streamlined and user-friendly.
Category “Other”
Tim Cook noted that Apple Watch 3 sales were twice as high as the second generation a year ago. Although he did not give exact numbers, it still sounds impressive.
It’s hard to imagine that the Apple Watch was on saleIt would be just as well if users were not happy with their iPhone. After all, an iPhone is needed to use Apple's smartwatch. And if someone is not happy with an iPhone, then why buy yourself another watch and tightly tie yourself to the ecosystem?
The same goes for AirPods, Apple TV, headphonesBeats and everything else that falls into the “Other” on the Apple website. By the way, the growth in sales of goods in this category was 36% over the past year. In 2017, Apple earned $5.5 billion from accessories alone. And profits from services (iCloud and Apple Music) increased by 18% over the same period.
Total
Apple will continue to sell many iPhones. Perhaps not as much as before, but users will continue to update their smartphones. Some Android users may switch to iPhone. If necessary, there are a number of ways to further improve sales.
But the future is not for iPhones alone. It is behind the general Apple product family. By further developing a reliable and credible ecosystem, the company will continue to retain users.
Now Samsung is trying to do the same andconnect Galaxy smartphones, Gear VR helmet, Gear 360 camera, Gear smart watches and Gear IconX wireless headphones into a single ecosystem. Google pulls up with Pixel smartphones and Pixel Buds. However, these companies are still far from the level of user satisfaction so that they want to invest in other elements of the system.