Re:Apple iPhone Supplier Foxconn Planning Deep Cost Cuts
by dwaite on Thursday November 22, 2018 @12:11AM
(#18507993)
Apple has always (quite successfully) focused on total profit, not total revenue or volume.
As the upgrade cycle slows, they are cramming more technology into the phone to justify upgrades, increasing the base price and thus increasing the profit per replacement phone.
They'll continue to sell models with a reduced cost (such as the iPhone 7, still for sale), but they will likely continue to not have "cheap" phones.
For people who are on longer upgrade cycles, I tell them that phones are historically supported by Apple in OS updates for 5 years after initial release. So while that iPhone 7 may be nearly half the cost of the XR on sale, it also likely has half the remaining supported life. This usually gets them thinking about the pricing as an ongoing cost (of the device, replacements, and likely repairs over time) which IMHO is a healthier way of reasoning about such expenses than just shininess or upfront cost.
As the upgrade cycle slows, they are cramming more technology into the phone to justify upgrades, increasing the base price and thus increasing the profit per replacement phone.
They'll continue to sell models with a reduced cost (such as the iPhone 7, still for sale), but they will likely continue to not have "cheap" phones.
For people who are on longer upgrade cycles, I tell them that phones are historically supported by Apple in OS updates for 5 years after initial release. So while that iPhone 7 may be nearly half the cost of the XR on sale, it also likely has half the remaining supported life. This usually gets them thinking about the pricing as an ongoing cost (of the device, replacements, and likely repairs over time) which IMHO is a healthier way of reasoning about such expenses than just shininess or upfront cost.