The media is full of reports that Apple iPhone price increases have led to plummeting sales and the corresponding horrific Apple share crash on 3 January.

GadgetGuy covered the Apple stock crash – Apple stock crumbles on iPhone sales decline saying

“Apple may still be a premium brand but… Huawei, OPPO, Vivo, Xiaomi and others are matching or exceeding iPhone features for as little as 50% of an iPhone. China voted with its wallet as it is not reliant on Apple lock-in services like iCloud, iMessage and iTunes.”

We were not planning another article, but the past week has seen a raft of media reports claiming

  • XR sales have tanked leading to factory orders severely cut
  • Potential drastic XR price cuts soon – should you wait?
  • Generous but covert trade-in offers to enterprise users.
  • Apple’s A$39 battery replacement program for iPhone SE, 6, 7, 8 and X series resulted in 11 million iPhones getting a new lease on life.
  • Finally, Apple’s apparently earlier release of three new models – X-whatever…

Apple iPhone XR – is it selling?

Tim Cook, Apple’s CEO, said, “Since we began shipping the iPhone XR, it has been the most popular iPhone every single day from when we started shipping until now.”

He does not qualify that statement. Is it the most popular ‘ever’ or most popular compared to the XS and XS Max? Analysts say it is the latter and reflects badly on the sky-high prices of the XS line.

MacRumors states that Apple has cut XR and XS/Max production by 10% for the next three months – that is cuts of over 40 million units. Component suppliers are seething, and assembler Foxconn has had to lay-off staff. Apple has the power to do this – it is part of its supplier contract but ‘might does not always equal right’.

Apple

The emerging theme about the XR is “Apple put the A12 chip into a cheaper body/screen, added some trendy plastic colours and charges the same price for a phone with fewer features.”

Interestingly GadgetGuy’s Apple expert did not review the XR but loves the XS Max.

Drastic price cuts – real or stealthy?

Sage marketing advice is never to cut price because you devalue the item.

Business Report International says major Chinese retailers have dropped the 64GB XR by 800 yuan (US$118) to 5699 yuan. By comparison, they are selling 64GB iPhone 8 for 3,899 – a 1,220 yuan discount. BRI says retailers have not received any support from Apple and its phones remain at full rate on Apple’s website. The retailers decided to clear stocks [even at a loss].

But AppleInsider states a ‘tier 1’ Apple partner has lowered the XR’s price from 5,980 yuan ($881) to 5,380 yuan ($793) and throwing in a 150-yuan ($22) coupon as a sweetener.

Stealthy and generous trade-in offers

Sage marketing advice is never to cannibalise new sales by offering higher trade-in offers. It may look good on paper, but one day you have to pay the piper (to bear the unfavourable consequences of one’s actions).

According to Reddit.com, Apple is targeting select iPhone users with an offer to ‘trade-up’. Users report, “Apple has never promoted a smartphone this aggressively before.”

BGR reports that Apple has effectively slashed prices in Japan where most buy it from Telcos, e.g. larger carrier subsidies. It also reports ‘limited time’ trade-up offers in Europe.

In the US, Tom’s Guide says trade-ins are up to $500 on an XR or XS. But MacRumors says that there is a covert ‘extra credit’ offer that can add up to US$300 to sweeten the deal.

Apple’s Australian website now offers the 128GB version for the 64GB price.

It is also offering to give you a new iPhone every year. The full cost of your iPhone and selected AppleCare+ coverage is spread out over 24 months with 0% interest. And you can upgrade once you’ve made the equivalent of 12 payments.