Enthusiastic about raising the price of the iPhone without investing in innovation, Forbes bluntly said that the Apple era has passed
According to a special article in the US financial magazine “Forbes”, the Apple era is over, and Apple may step into the footsteps of Nokia (NOKIA), the king of mobile phones. The reason is that Apple raises the price of the iPhone every year and is keen to maximize profits and fail to renew the innovations made by the late CEO Steve Jobs.
The report pointed out that the sales trend of Apple’s core revenue product iPhone completely missed the crisis hidden behind the gorgeous revenue figures. Because, when the iPhone came out in 2007, the annual sales volume reached only 3.71 million, and then it continued to grow to reach the peak of 235.35 million in 2015. However, sales volume decreased to 215 million in 2016 and 2017. As of the third quarter of 2018, the cumulative sales volume has only reached 140 million.
In this regard, it is widely believed that Apple’s secret to revenue growth is simply “improving product prices.” Especially in the past five years, the price of the new iPhone has skyrocketed more than three times. Compared to the 2013 iPhone, the price of the iPhone is between $199 and $399. The price of the iPhone XS max launched in September 2018 is as high as $1,449. Even the most affordable iPhone XR costs $749.
However, the market no longer accepts the iPhone’s high price strategy. According to market experts, the main consumer group of the iPhone is unmarried people between the ages of 20 and 40 in big cities. They are avoiding buying iPhones that are higher than their monthly salary. In addition, the price of the iPhone XS max is higher than that of a large city such as London, Tokyo, and Paris in one month. For this reason, as the price of the iPhone increases, young consumers waiting around the clock in the United States, the United Kingdom, China, and Japan are gradually disappearing, let alone Apple’s iPhone will successfully expand into emerging markets such as China and India.
In addition, the report also pointed out that just after the death of Steve Jobs, Apple will always be accused of “no innovation” when launching the new iPhone. The result is that Apple’s current CEO, Tim Cook, who was responsible for the management of the production and supply network, is considered a “management leader” and not an innovative leader like Steve Jobs. As a result, there have been market regulators that Tim Cook is fairly conservative about investing in innovative technologies.
According to the data of Alliance Bernstein in the United States in 2018, the investment in research and development of Apple is only 5.1% of sales, which is far less than 7% of the competitive brand Samsung Electronics and 15% of Huawei. Recently, Apple has not only been unable to dominate the market’s innovation, but has even begun to imitate Samsung, which was criticized by Steve Jobs as a “cottage apple.” For example, the Samsung Galaxy Note is a typical example of a mobile phone with a large screen ratio and an OLED screen.
Of course, Apple will not know the crisis it is facing, so it is very likely to actively launch the affordable iPhone to get back to the market. The US IT media “Macworld” has previously reported that Apple will launch the iPhone SE2 in 2019. Coincidentally, Apple was previously lowering the inventory of the previous generation of iPhone SE, which is equivalent to indirectly confirming this prediction. In 2016, Apple’s iPhone SE was priced from $399 to $499, and has not yet launched a new generation of affordable phones. Therefore, this price of cheap mobile phones will be the focus of Apple’s consideration of the attack. Moreover, in order not to affect its supply chain, Apple must stick to the final bottom line of 200 million iPhones in the future to prevent further decline in the future.