Apple’s new iPhone owners demand cheaper iPhones

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[Forbes]: Apple’s latest iPhones have had a rough time since they were announced in September 2018. Q4 numbers led to an unprecedented profits warning from Tim Cook and his team. But there are signs that the second quarter of 2019 will show an improvement.

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While this is good news in regards to higher than projected sales, the breakdown of which units are popular with customers is going to make for uncomfortable reading. The new iPhone XS, XS Max, and XR handsets are expected to be shunned for the older and cheaper models – namely the iPhone 7 and iPhone 8 families. Apple Insider’s Roger Fingas reports on the last numbers from analysts at UBS:

UBS is boosting its June-quarter iPhone estimates from 32.5 million units to 34.5 million, though mostly on the basis that Apple is expected to sell more pre-2018 models. While UBS is predicting 3 million more iPhone XR sales, it’s expecting an equal decrease in iPhone XS and iPhone XS Max shipments.

That’s going to lower Apple’s average selling price per handset, and limit the use of ‘gee-whizz’ technologies such as FaceID which are not present on the older models. And while iOS does offer support to older devices, there’s nothing the software can do to replicate newer technology that can pull the platform forwards and match up to the latest offerings from Android-focused manufacturers.

iPhone 8 Product (Red) (image: Apple PR)

Where does this use case cause the most difficulty? China. Irrespective of the feature set or the power of iOS, the Chinese market is focused on the brand new, very high-end specifications, and if a piece of hardware runs WeChat. The latter is pretty much universal and iOS offers no advantage, while the former areas have seen Apple outclassed since the launch of the iPhone XS and XS Max.

The mid-cycle pick up is simply not there for the new design of iPhones which placed their focus on premium features and premium pricing. Apple may be holding steady in the saturated markets of the US and the EU, but its strategy is counter to the needs to the countries where there is still capacity for significant growth.