- You don’t know how well iPhones are selling in other markets compared to previous years until Apple releases their numbers for the quarter.
- Even with the new guidance, it’s only about 5-10% lower than the initial guidance. Far from a catastrophe.
Besides it is quite exactly to see that outside first tier countries, iPhones never sold well, no matter what.
The numbers are easy to come by.
What tech company has a better,more profitable business model than Apple? Even long term, the only two other tech companies I would bet on are Microsoft because of Azure and Office (definitely not Windows) and Amazon because of AWS and to a lesser extent the stickiness of Amazon Prime.
http://english.hani.co.kr/arti/english_edition/e_business/83...
And the abnormal price hikes of the new model of iPhones indicate that Apple was well aware of the possible economic downturn, and thus sought to compensate the anticipated fall in sales by squeezing higher profit margins.
But what is their excuse for not penetrating the next biggest market in the world, one of the world's fastest growing economy, right next to China - India?
To me, Apple's attitude in India, and many other countries, is akin to that of a spolied brat who won't do things unless he has his own way. Some examples -
a) Apple management lamenting that India doesn't have a debt-based culture. (That's a broad view - the comment was more on how the cellular services providers don't sell their phones bundled with "plans" in India, and Indians and to buy their cell phones outright which obviously makes the iPhones to expensive and unaffordable to many).
b) In the last 2 decades are so, India has witnessed a revolution in digital payments and seen various innovations in this area. This has made it very easy to do micro-transactions. And yet Apple in India REFUSES to integrate with the local financial infrastructure of the country, and only accepts credit cards / debit cards from Visa or MasterCard for Apple Pay or iTunes. (Note that this is deliberate because the indian options give more privacy to the user - for example, with a credit card, Apple can know our credit rating and better profile us, but with certain indian payment options they will be deprived of this valuable information).
c) Objecting to certain policies of the government (this is understandable though from a capitalist point of view to maximise profit).
d) Totally ignoring the way how Indians use their phones and their requirements. (For example, Indians have been demanding a dual SIM phone for many years, and it is kind of a de facto standard feature here. And yet, it took about a decade or so for Apple to respond to that).
To summarise, Apple's management seems to lack creativity and the COURAGE to step out of thier comfort zone and try out new business models and / or new processes in other countries.
> If you’re going to sell success, you need bigger numbers. With the iPhone XS Plus clocking in at $1500 in some configurations the scope for larger margins and higher selling prices is pretty much priced out the market. Hiding the iPhone numbers means that the focus can be placed on the increasing revenue from software and services, rather than hardware revenue.
[How Apple defied expectations, launched a $1,000 iPhone and made it more profitable than ever](https://www.forbes.com/sites/ewanspence/2018/11/12/apple-iph...).
https://www.theinformation.com/articles/apples-iphone-prices...
If you have better numbers, share them. Your article has none.
The margin numbers that can be found are also for Apple as a company. Given the growth in services which should be high margin, this means the iPhones margins have been shrinking even with the price increases.
In this case, it's not just Apple and Samsung. It's a great many other industries, especially luxury goods, that have seen large drops in Chinese consumer demand.
Samsung’s and Apple’s stocks are apples and oranges. iPhone is a principal value driver for Apple. Small swings in iPhone demand mean big swings in Apple value. Samsung, on the other hand, is a diversified conglomerate. Moreover, Apple is—corporate structure-wise, for an investor—simple. Single Delaware corporation priced in U.S. dollars and traded in New York. Samsung is a chaebol. Lots of interlocking entities and agreements, parts of which are listed in Korea.
Samsung warned on their China demand yesterday.
>Samsung follows Apple warning, says Q4 profit likely sank 29% on weak China demand
https://www.straitstimes.com/business/companies-markets/sams...
We've known that Chinese consumer demand has been plunging for months now.
>DONGGUAN, China — China’s consumers and businesses are losing confidence. Car sales have plunged. The housing market is stumbling. Some factories are letting workers off for the big Lunar New Year holiday two months early.
China’s economy has slowed sharply in recent months, presenting perhaps the biggest challenge to its top leader, Xi Jinping, in his six years of rule.
https://www.nytimes.com/2018/12/14/business/china-economy-xi...
The situation in China is bad enough that local press coverage of the economic situation has been censored since last September.
>BEIJING — China has long made it clear that reporting on politics, civil society and sensitive historical events is forbidden. Increasingly, it wants to keep negative news about the economy under control, too.
A government directive sent to journalists in China on Friday named six economic topics to be “managed,” according to a copy of the order that was reviewed by The New York Times.
The list of topics includes:
■ Worse-than-expected data that could show the economy is slowing. ■ The impact of the trade war with the United States. ■ Signs of declining consumer confidence
https://www.nytimes.com/2018/09/28/business/china-censor-eco...
Sometimes a drop in consumer demand in a particular market is more a reflection of the local economic situation than an indictment of a product line that is selling fine elsewhere.