Apple has been forced into the brutal world of discounting and buyback promotions as sales of their new iPhones fail to take off.
In the USA Apple has reduced the price of their new iPhone XR on their own website to A$611, the same device is selling at Harvey Norman for $1,299. The catch is that you also have to trade in your old iPhone 7 Plus a two-year-old handset.
According to Bloomberg, Apple executives have moved marketing staff from other projects to tackle the issue of falling sales.
As sales fail to pick up Apple has been forced to embarked on a series of aggressive trade-in offers that have temporarily reduced the cost of some of its latest iPhones. This is a Company who believed that that their devices were worth a premium price despite not having anywhere near the advanced smartphone technology found in a Samsung Galaxy 9 or the new Huawei Mate 20 Pro.
Since iPhone sales have started to plunge in October, Apple has lost about a fifth of its market value now suppliers such as Cirrus Logic have been forced to cut its latest quarter sales forecast by 16 percent due to “recent weakness in the iPhone market.”
Apple has also stopped reporting iPhone unit sales, sparking concern its most-important product is no longer growing said Bloomberg.
HSBC Analysts claim, “What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products, is now facing the reality of market saturation,” they said.
Last week, the company started offering a limited-time promotion that boosts the trade-in value of older iPhones by an additional $25 to $100. Apple retail employees have also been told in recent weeks to mention the program more often to consumers in stores, according to another person familiar with the situation. Some Japanese wireless carriers also cut iPhone XR pricing last week by way of subsidies.
Apple marketing executive Greg Joswiak tried to quell concern about sales by telling CNET last week that the iPhone XR has been the company’s best seller since it went on sale at the end of October.
According to sources, the tech giant is working on several new products and services, including an augmented-reality headset, driverless car technology, and digital offerings like original video.
“The question yet again is ‘what’s the next phase of innovation?’” Michael Olson, an analyst at Piper Jaffray, said. Apple spent $35 billion on research and development from 2016 to 2018. The technology that emerges from this huge investment “needs to become a new engine of growth,” he added.
Finding another hit like the iPhone will be almost impossible. Since Apple launched the device in 2007, it’s become one of the most successful products on Earth. The gadget generated US$167 Billion.