In an industry fascinated by cheap commodity components, Apple is able to bring considerable profit margins to "magic", high-priced products that are designed to satisfy users, not just to solve basic problems in a cost-effective manner , Which confuses analysts and experts. Most of the 40 years. It seems that Apple will continue to launch high-end new products in 2014, instead of following the entire industry into the lowest price trough.
Cheap iPhone
Throughout 2013, various analysts insisted that Apple needed to bring the cheap iPhone to the market. Jefferies analyst Peter Misek predicts that the price of a cheap iPhone will be between $200 and $250. Piper Jaffray analyst Gene Munster predicts that one month before Apple’s launch of the new iPhone in 2013, the new phone will be priced at $300 without signing a contract.
However, after updating its product lineup last fall, Apple’s cheapest iPhone remained at around US$400, while the mid-range 5c was priced at US$550, and the high-end 5s was priced at US$650, reaching a maximum of US$850. I have been worried that analysts worried that the cheap new iPhone would erode Apple’s profits, but the analysts turned their heads, misrepresented Apple’s failure to get what they wanted, and lowered their stock price expectations to a lower level, because they were worried that Apple could not do so. The climate is flooded with phones that maintain cheap sales in a competitive environment.
We can only speculate whether the cheap new iPhone will grab more sales from the Samsung Galaxy S4, HTC One, LG G2, Google Moto X and Nokia Lumia series already sold during the holidays. All these models even surpass Apple's mid-range iPhone 5c, which in turn far surpasses the iPhone 5s.
Cheaper iPhones are likely to erode the sales of Apple’s other iPhones; Samsung harmed the Apple brand by reducing the initial experience of new users, and greatly affected Apple’s revenue and profits. The same approach has led to a sharp drop in average selling prices and meager profit margins.
Fight for the future
We cannot conduct the 2013 experiment again to understand exactly what would happen if Apple provided a low-end iPhone. However, we do know that Apple has more revenue in the mobile industry than anyone else, which gives Apple more capital to invest in more advanced OS, chips, application and service development and manufacturing capabilities. In the winter quarter alone, Apple earned a staggering 87% of the industry’s global mobile phone profits.Apple has tripled its headquarters office space and plans to build 30 new retail stores this year: these major projects show long-term expectations. All these large investments require very large capital.
If Apple spends $1,015 billion to produce unprofitable, cheap mobile phones to win IDC's praise as a commodity producer in 2013, it will not be able to spend that money to acquire more talent, technology, and production capacity. Google last year.
In terms of sales, Apple surpassed Commodore in the 1980s, HP and Dell in the 1990s, Nokia in the 2000s, and Samsung in the 2010s. What's more noteworthy is that Apple's current sales have surpassed those old competitors in the past. Apple will remain the same in the future. This is clearly where Apple hopes to win today. It does not expect it to win the title of "most smartphones sold" in 2013, because the most money it makes will eventually make it surpass Samsung in the same way.
Samsung is also investing in the future, but in terms of market share, Samsung has given up half of its profits in the past to "win." For an example of how to bankrupt yourself, take a look at what happened to Apple in the early 1990s, when Apple decided to follow the advice of analysts and use Performa Macs designed and sold like commercial PCs for cheap, unprofitable volume. Sales. Everyone else is doing it.
Affordable luxury in a sea of cheap goods
As Apple accelerates its pace of expansion, it (at least so far) has not focused on making cheaper devices. Instead, it released a series of high-end luxury goods. From the ultra-thin iMac to the new Retina Display MacBook Pro, the thin and light MacBook Air, the high-end Mac Pro, the new ultra-thin iPad Air and the 64-bit iPhone 5s, Apple sells more luxury and high-end devices than similar products. In the middle of the market. iPhone, and on average, according to IDC data, the overall price of a smartphone is currently $335. Apple's average selling price of iPhone in 2013 remained at US$650, while the average selling price of Android system dropped to US$276
Widely available luxury
Throughout its existence, Apple has released a series of products that showcase technological advancements that sometimes embarrass the industry as a whole, while creating new categories of high-priced products and raising what the public considers to be the minimum. moving forward. After the iPod, DiscMan or USB 1.0 MP3 players are not good enough. After the iPhone, Java button phones are no longer interesting. After the iPad, chunky tablets became popular.
Apple introduced the iPod with a price of 400 dollars in 2001; the iPhone with 600 dollars in 2007, the iPad with 500 dollars in 2010 and the MacBook Air with 1000 dollars in 2010 attracted competitors to produce imitation "MP3 players." "Smartphones", "tablets" and "Ultrabooks", but Apple did not perform well in any of these products. In the high-end product field, it redefines products and designs products designed to satisfy customers. Set a new price point.
It can be said that the best thing about Apple's competitors is that they are trying to produce more low-end, cheap products, because they sell them to customers who own and use these products with greatly reduced customer satisfaction. many. In the conclusions drawn by IDC, Gartner and Strategy Analytics, this failure is mysteriously portrayed as a victory.