Source
r/apple•
codevil

The case for truly low-cost iPhones

I was going to write a long story about how I found myself needing a second phone exclusively for work today, but none of you will read that so I'm just writing the TLDR:

Apple should create a product line of truly low-cost iPhones which are within the $200 to $350 range. It's a market which Android has a monopoly of, and is therefore a room for disruption and growth especially now that Apple has saturated the high-end smartphone market.

Posted Dec 21, 2018, 7:20 AM UTC ¡ edited

029
Fruit_Bot•

You can submit product feedback to the relevant Apple team at https://www.apple.com/feedback/.

15
codevilOP•

They probably get thousands of submissions so I have higher chances of being heard with a highly upvoted and gilded Reddit post.

:D

-19
ThannBanis•

Um, yeah. Good luck with that 😏

11
codevilOP•

Wow you guys are so negative

-5
ThannBanis•

😁 feedback through the official channels has gotten the best results for me.

(Of course, IDK how many others submitted similar suggestions)😂

4
ThannBanis•

😁 feedback through the official channels has gotten the best results for me.

(Of course, IDK how many others submitted similar suggestions)😂

1
mr-no-homo•

Bwahahaha as if Apple reads a tiny corner of the internet that constantly bashed them. Sure boyo

5
tojikomori•

Actually, yeah: large public forums like Reddit and Twitter are goldmines for qualitative market research. They're mentioned constantly at consumer insight conferences.

It's not going to come up in some report that u/codevil thinks Apple should invest in low cost phones, but the suggestion fits a general sentiment that Apple's prices are too high.

4
codevilOP•

You actually think that I meant what I said about being heard by a giant corporation?

1
AlphabetZer0•

Case not make sense. Unless Apple have grow their services revenue and profits as big as Google or Microsoft.

The last thing Apple need to grow is iPhone. World’s population is about 7 Billions. There are around 3.8B active cell phone. Apple probably have 0.5-1B active users, considering 200M new phone and the rest older models. Expanding market share only erode the profitability. There are countless of phone companies bankrupt every year fighting for that end of market.

It make more sense for Apple to earn more money from their customer base, which mainly richer people or upper middle class. Those have money but they won’t need 2 iPhones each. If you sell cheap one, they might even switch to cheap one as richer normally pretty good at maximizing value. On the other hand, Apple Watch or Apple TV or HomePod are good products to serve the purpose. Apple need other devices. Or find more services for existing devices.

8
codevilOP•

The whole "make money off of richer people" argument from 2011 sounds really antiquated today especially when you look at how the new iPhones aren't selling well, even among those so called rich people who are Apple's customers.

I'm not even suggesting that they go at the market aggressively, because the market is far more likely to aggressively purchase Apple products that they can finally afford. The services business also doesn't make sense if you're propositioning that Apple should do something like Google App Engine or AWS, but I am totally for Apple improving upon their customer-facing cloud solutions.

-5
AlphabetZer0•

It is better than chasing low return market where company capital and retained profits get wasted.

Many good company get destroyed just because of that. GE is a good example, going after power market and swap high profit maintenance contracts with low return long term contracts just to make short term balance sheet look good.

Microsoft stay healthy even they lose out in phone market, mainly due to they didn’t go after low margin revenue market.

Apple have room for mistake also due to the same reason. If they go after low margin market, they could very well become Blackberry. 1 or 2 fiscal year of products scrap will kill all retained earnings.

4
codevilOP•

You can't be more wrong about Microsoft not trying to go after the smartphone market I'm describing, though. They tried, really hard. They simply failed. And it's utterly reductionist to say that they failed solely because they didn't chase the premium market--there were plenty of factors in play. The market focus is also not the sole reason why they remained afloat. GE, of course, is in a different business altogether and was under different circumstances.

Apple, however, has true differentiators. They have a mobile OS that simply isn't a skin on top of Android, it is far more secure and respects user privacy, and they already have a strong brand which new OEMs often have to start from scratch. What do you know, maybe a bigger market share will actually spark a renaissance in Apple's AI-related offerings such as Siri.

1
AlphabetZer0•

I mean low margin. After they figure out their pricing is not acceptable they quit. They didn’t go after Android. They try to go in high margin which charge for OS.

2
tell-a-phone•

Apple won't. They won't sacrifice the prestige of the brand

5
shapeshifting_robot•

Android doesn’t have a monopoly, per se.

Several retailers (including Walmart and Best Buy) sell iPhones for budget consumers, namely the SE and 6S. They sell well, too.

And let’s be objective here. A budget iPhone would contain the same components as these devices, so the only thing that’s really missing is a marketing component. Maybe re-brand and repackage these devices, but that feels kind of insulting to the consumer’s intelligence.

2
codevilOP•

Several retailers

In the US. Where I come from, and in many other markets outside the US, authorized resellers don't offer the older iPhones at discounted prices.

A budget iPhone would contain the same components as these devices

True, but Apple no longer manufactures the SE and the 6S. Older iPhones eventually become positioned as the cheaper alternative to the latest, but they become eventually hard to find. Now, when the X, XS, XR, and XS Max are no longer the latest, do you really think that they will ever go down to the prices of SE and the 6S today? That they are likely not to is precisely why I think there should be a separate product line for mid-range phones to begin width.

the only thing that’s really missing is a marketing component.

What do you mean here?

3
shapeshifting_robot•

To your first point, apple just opened a factory in India to produce older phones for markets looking for budget phones.

All phones come down in price because they’re simply older inventory that retailers are trying to not be stuck with. There’s a point in every product’s retail cycle where the MSRP goes out the window and the consumers dictate the price. No retailer wants an unsold iPhone SE filling up their stockrooms and warehouses, when they can sell it for $250 and make some money. There’s also the secondhand market, which is where budget consumers usually go first.

The X, XR, and XS will all reach this point eventually. The only real factor is if retailers are predicting the demand better and buying more conservatively to prevent having leftover inventory after 24 months.

What I mean by the marketing is that apple could repackage all of the remaining SEs and 6S phones they have in warehouses around the world and call it the iPhone B or whatever, and market it as a new budget model, and people would get real excited about how Apple is finally making phones for budget consumers. But that would be silly.

4
aokusman•

SE 6s R 200<

2
[deleted]•

[removed]

1
[deleted]•

[removed]

1
sidyvu536•

They already tried. It didn't work.

The iPhone SE was their lowest cost iPhone ever. Despite this, they had 3 years of weak units and declining profit margins. They abandoned this strategy and raised prices.

0
AngelicPringles1998•

You do have a convincing point there

-1
jmnugent•

Only about 50 to 60% of the world population has a smartphone,. so the idea that we're anywhere even remotely close to "saturating the market" is pretty silly. There's so much room to grow and innovate there.. it's not even funny.

-1
codevilOP•

Your interpretation of the statistic is just shortsighted. Considering how smartphones didn’t stop in production yet its sales have already slowed in the last two to three years, it’s also likely that the rest of the world that doesn’t have a smartphone is just inaccessible already, and are hence not the target market. It’s never the case that everyone belongs to the market for any given product.

2