iPhone Sales To Blame For Apple Earnings Tumble - InformationWeek

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iPhone Sales To Blame For Apple Earnings Tumble
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impactnow
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impactnow,
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4/27/2016 | 5:11:26 PM
Coincidence or the end to contracts
I don't think this is a surprise since wireless providers stopped offering discounted phone and increased their prices they are strangling consumers with $600 phones and $100 a month contracts. Other phone manufacturers will surely see the same impact from the premium phone pricing.
TerryB
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TerryB,
User Rank: Ninja
4/28/2016 | 1:02:15 PM
Re: Coincidence or the end to contracts
Agreed. Let's see how many people really love their Apple phone now that they know it is $200 more than, say, a Samsung Galaxy.

If this market doesn't start behaving exactly like the PC and tablet market then there is not enough competition or collusion is going on. Apple better get used to this.
impactnow
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impactnow,
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4/28/2016 | 5:59:32 PM
Re: Coincidence or the end to contracts
The end of discounted phones and contracts is going to hit the phone manufacturers hard. I see lots of old iPhones in use when the upgrade time comes and the $600 price tag becomes a reality many will think twice.
vnewman2
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vnewman2,
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4/29/2016 | 11:58:32 AM
Re: Coincidence or the end to contracts
I feel like investors are overreacting to this news.  You can't really make a fair comparison between Q2 a year ago when Apple was offering 2 products with distinct features.  And the S-series releases typically don't perform as well historically either.  Now if the iPhone 7 bombs, then I think people have a reason to worry.  This is premature in my eyes.  
vnewman2
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vnewman2,
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4/29/2016 | 12:07:33 PM
Re: Coincidence or the end to contracts
@TerryB - I hear you, but Samsung doesn't have the cachet that Apple still has and many people won't be swayed by the cheaper price point.  With Apple products, there's this feeling that something great is about to come - something different, something revolutionary - people hate to miss out on things like that, especially with technology.  If you make the switch, you risk losing out.
TerryB
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TerryB,
User Rank: Ninja
4/29/2016 | 1:00:56 PM
Re: Coincidence or the end to contracts
@vnewman, you may have a point, brand loyalty is hard to peg sometimes. But I just saw on another article on this site where Apple phones only 15% of market anyway. They may keep that loyal 15% but have to bring prices inline to expand that.

At our biz unit, we just went BYOD versus me managing everything thru Corp AT&T contract. What I've observed is people who were getting Samsung Galaxy or iPhone when I was getting subsidized $199 or $299 price are now buying all kinds of different things when buying the phone is their responsibility. Our policy is to kick in $500 towards a phone every 2-3 years (if they need phone), the rest on them. $500 doesn't cover either Galaxy or iPhone now (I expect that to change rapidly), people are buying other types of Android phones under that price point.

Much like computer market, I expect the hardware to become commodity and the o/s to drive the allegiance. Will be interesting to see this play out.
impactnow
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impactnow,
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4/29/2016 | 2:03:05 PM
Re: Coincidence or the end to contracts
Many companies aren't being as generous with the stipend for a phone. There appears to be no ceiling on the price of phones but as more and more people have to buy them even their brand loyalty may be questioned. I was personally appalled at the price of phones the las time I went shopping. It's getting hard to get a phone at even the $500 mark without going to last year's model.
TerryB
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TerryB,
User Rank: Ninja
4/29/2016 | 2:39:39 PM
Re: Coincidence or the end to contracts
My recommendation was $300 (and I participate in program also, meaning would affect me too) but HR and our President decided on $500. Their logic was they want these people to have phone for work (with our Corp email pushed to it) so they wanted to cover more of cost. My logic was people are going have a phone anyway so encourage them to be as frugal as possible. Plus I expect prices to plummet very quickly, which of course is just my opinion after watching things like desktop/tablet market.

I hear you on prices, it was unbelievable to see true price of these phones. On my AT&T portal, once they started showing price/installments, the newest iPhone (16GB) was $830 and a 16GB Galaxy S6 was $585. Cheapest phone they had listed was a Kyocera in the $375 range. It was eye opener.


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