Why are Apple’s iPhones so expensive - and will they get cheaper?
Chief executive Tim Cook hints at price cuts following poor smartphone sales
Apple is considering changing how it prices iPhones following lacklustre sales of the brand’s latest handsets, Tim Cook has announced.
Speaking to Reuters, the Apple boss said the tech giant’s devices have become more expensive in local currencies as a result of the strengthening of the dollar over the past 12 months. And that has hurt sales in emerging markets, he added.
In a bid to reverse the trend, the company now plans to to revert back to the prices used for local currencies before Apple started matching device values to the dollar, back in late 2017.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“What we have done in January in some locations and [for] some products is essentially absorb part or all of the foreign currency move as compared to last year,” Cook explained.
He did not specify whether that plan will include changing iPhone prices in the UK. “At the the moment, according to Apple’s official website, an iPhone Xs with a 5.8in display costs from $999 (£763) in the US compared with £999 in the UK,” reports the BBC.
Although Apple has never explained publicly why it hiked iPhone prices in the UK two years ago, the Daily Mail says it may have been a result of the weakening of the pound following the Brexit vote.
On the other hand, the company may have driven up prices simply because “it can get away with charging more”, the newspaper adds.
Either way, the strategy no longer seems to be working.
Revenue from the iPhone, Apple’s biggest money-maker, fell by 15% over the final financial quarter of 2018. That meant the firm’s overall revenue dropped by about 5% compared with the same period last year.
Apple has also blamed China’s slowing economy for the fall in revenue, with sales in the Greater China region, which includes Hong Kong and Taiwan, plummeting by 25% over the past quarter.
But pricing is not entirely to blame for China’s disinterest in the iPhone.
Chinese smartphone makers Huawei and Xiaomi have posed a serious challenge to Apple in the market in recent years.
Chinese device maker Oppo has also seemingly emerged from nowhere over the past 12 months and now holds a 20% market share in the country, says VentureBeat.
Huawei leads the way with 27%, while Apple only has a 9% share in China.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Are 'judge shopping' rules a blow to Republicans?
Today's Big Question How the abortion pill case got to the Supreme Court
By Joel Mathis, The Week US Published
-
Climate change is driving Indian women to choose sterilization
under the radar Faced with losing their jobs, they are making a life-altering decision
By Theara Coleman, The Week US Published
-
'A great culture will be lost if the EV brigade gets its way'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Justice Department bites Apple with iPhone suit
Speed Read The lawsuit alleges that the tech company monopolized the smartphone industry
By Rafi Schwartz, The Week US Published
-
Apple kills its secret electric car project
Speed Read Many of the people from Project Titan are being reassigned to work on generative AI
By Peter Weber, The Week US Published
-
The pros and cons of virtual reality
Pros and cons The digital world is expanding, for better and for worse
By Devika Rao, The Week US Published
-
The Apple Vision Pro's dystopian debut
Why everyone's talking about Is "spatial computing" the next big thing?
By Theara Coleman, The Week US Published
-
Why Apple's carbon-neutral claims may be misleading
Speed Read The company isn't disclosing all the information, a new report alleges
By Devika Rao Published
-
The advent of the AI iPhone: does new tech show promise or peril?
Talking Point Apple design guru Jony Ive and OpenAI founder Sam Altman believed to be in talks to create new device
By The Week Staff Published
-
China steals the spotlight at Apple's iPhone 15 launch
How will a directive from the Chinese government affect the tech giant?
By The Week Staff Published
-
Why is a tiny change to the iPhone's charger such a big deal?
Today's Big Question A change to comply with EU regulations could have global ramifications
By Justin Klawans Published