In its revenue call for 2019 Q1, Tim Cook admitted that the overstretched prices of iPhone are a factor behind the disappointing sales this year. Apple witnessed a 15 percent decline in year-over-year revenue in the first quarter of 2019.
Popular analyst Steve Milunovich questioned Cook whether the Apple has taken the “envelop a little bit too far” and pricing has to be lowered down. Cook answered by explaining the pricing strategy of iPhone Xs, Xs Max, and Xr. He said that the company planned to price iPhone Xs similar to X, Xs Max a bit higher than Xs and Xr in the same price segment as iPhone 8 and 8 Plus.
In Cook’s own words, “So it’s actually a pretty small difference in the United States compared to last year.”
Explaining the international market, Cook said foreign exchange issues led to inflated prices in some countries. Another factor that contributed to slower sales of iPhones, as per the CEO, is the unavailability of carrier subsidized devices.
“If you’re a customer that your last purchase was a 6S or a 6 or in some cases even a 7, you may have paid 199 dollars for it, and now the unbundled world it’s obviously much more than that,” said Cook.
Concluding the answer to the analyst’s questions, Cook finally admitted that pricing is definitely a factor for declining revenues. To improve the situation, Apple will focus more on trade-ins and payment in installments for the convenience of the customers.
“So yes, I do think the price is a factor. And so we are working through those, and we’ve got a number of actions to address that, including the trade-in and the installment payments, which I had mentioned as well.”
Now that Apple has finally realized that iPhones are overpriced, we expect the Cupertino giant to address the issue. Do you think Apple will lower down the prices of iPhone from next year? Tell us in the comments.