Pricing – One of the four P’s of marketing is one of the first things MBAs learn. Has Apple got it wrong with the pricing of the iPhone X? lacklustre demand for Apple’s latest launch, the iPhone X, at the end of the holiday shopping season has led to lowering of shipment projections and dropping of prices in the international market.
Has Apple miscalculated by pegging the price for the top line premium phone at $999, seemingly higher than what the market is willing to bear?
With the high price point and lack of interesting innovations keeping away customers, the phone shipments are expected to drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, following reduced orders at some Apple suppliers.
Apple India listed price for the 64GB model is Rs 92,430 and Rs 105,720 for the 256GB model.
In India, the 64GB model was selling at Rs 85,022 on Amazon.in. TaaCLIQ.com was offering the 64GB version for Rs 85,022 while the phone price has dropped to Rs 88,899 on Flipkart.
You will find the cheapest iPhone X at PayTM Mall though where the iPhone X after discount (cash back in PayTM cash) is priced at Rs 84,799.
The discounts do not stop at iPhone X. Apple iPhone 8 is now available for Rs 54,999 on Amazon India. The discount is to the tune of Rs 9000 for the phone that was launched at Rs 64,000.
It also happens to be the second major offer on Apple’s iPhone from Amazon India in the last two weeks. The iPhone SE was offered at a massive discount of Rs 8,000 last week. The 32GB variant of iPhone SE was selling for Rs 17,999 as opposed to its list price of Rs 26,000. The 4-inch iPhone is now listed at Rs 18,899.
However, these price cuts are not official. Apple India is still listing iPhone 8 at Rs 66,120 for the 64GB variant and iPhone SE at Rs 26,000 for the 32GB variant. The company had recently increased the price of iPhone 8, iPhone 8 Plus and iPhone X citing an import duty hike by the India government.
Meanwhile, Bloomberg quotes Sinolink Securities Co. analyst Zhang Bin as saying that the handset shipments in the period may be around 35 million, or 10 million less than he previously estimated. The market is worried that the high price of the phone may weaken the demand in the first quarter after the first wave of orders has been met has been fulfilled.
With the high price point and lack of interesting innovations keeping away customers, the phone shipments are expected to drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, following reduced orders at some Apple suppliers.
The lowered sales projections are hurting companies down the line. In Taiwan, the Economic Daily News quoting unnamed supply chain officials to say that Apple has trimmed its first-quarter sales forecast to 30 million units from 50 million.
The Hon Hai Precision Industry Co.’s main iPhone X manufacturing hub in Zhengzhou, China, has stopped recruiting workers. The company also known as Foxconn is the sole iPhone X assembler, and also makes the handsets in Shenzhen and Chengdu.
Shares of Asian suppliers, such as Lens Technology Co., Shenzhen Desay Battery Technology Co. and Largan Precision Co. also fell on Monday on the report. Lens recovered some of the losses on Tuesday, while Largan continued to slide. Shenzhen Desay was little changed.
Apple has been facing flak following the revelation that it was throttling performance of old iPhone to prevent unexpected shutdowns. The adverse public reaction forced it to announce a discounted battery replacement program that allows iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus and iPhone SE users to get their smartphone batteries replaced at $29. In India, Apple authorized resellers will offer battery replacement at Rs 2,000 plus taxes.