Sales of new Apple iPhones in the final weeks of 2018 fell off a cliff. They dropped far below expectations.
According to Apple the slowdown is due to a sales drop in one of their largest markets, China. They say it is the issue of trade relations is partially to blame in which local Apple competitors, like Huawei, are being considered for a ban from countries outside of China. Many Chinese people have chosen to buy a locally made phone instead of one from an American company.
There is an additional concern that is a sobering truth related to the overall tech industry – that is that we have hit something called “Peak Smartphone”. This is a tipping point when everyone who can afford one already owns one and no breakthroughs are compelling them to upgrade. In other words my 3 or 4 year old phone does what I need it to do and still works so why buy a new one?
Apple has a history of dropping the prices of phones as they start to age. As an example when the iPhone 8 came out the prices of iPhone 7 dropped. The difference here is that there may be a price cut not due to a new model but due to lack of sales of the existing one. While I do think we will see some drop in price it would most likely be in the Chinese market first.
At a suggested retail price of over $1000 USD for some models it is possible this has exceeded the price point for some consumers. A price drop, even just below the psychological barrier of a grand, may help to push sales back up.
What other methods are likely to be used to address the drop of sales of Apple iPhone?
If the drop continues to be massive we could start to see some more promotions. Things like rebates and sales are common. Apple, being an innovative company, may also begin to release some new features that only run on the newest equipment. This would give consumers more of a reason to upgrade existing models.
Apple has been a company that has always lead with technology. In some cases maybe a little too fast (things like removing the headphone jack and the Newton), but Apple has usually presented products that are very popular. I don’t think Apple’s innovation is coming to an end. The SmartPhone is a household item now so it will take something very new and unique to upstage that. If anyone is capable, Apple will be. We are not seeing an end anytime soon to the popularity of the iPhone. There are many consumers who are very loyal to the Apple brand and the company does make good quality products.
What will we see from Apple next? Only time will tell.
William (Bill) Sikkens has been a technology expert for KXL on the Morning Show with Steve and Rebecca since 2014. With an expertise in I.T., cyber security and software design he has had more than 20 years’ experience with advanced technology. Sikkens conceptualizes and designs custom applications for many professional industries from health care to banking and has the ability to explain the details in a way all can understand. Article edited by Gretchen Winkler.
Links and brand/store information provided are for information only and are not endorsed by Alpha Media, KXL or William Sikkens.
Got a technology question or comment for Bill? Follow him on Twitter @sikkensw