Apple under pressure to sell its most expensive iPhone to date as it falls in worldwide rankings
DESPITE glossy new gadgets, celebrity appearances, and worldwide hype, analysts explain why the tech giant is facing more pressure than ever before.
APPLE this week unveiled its vision for the future of smartphones: bigger, bolder, faster, and more expensive.
But amid glossy new gadgets, celebrity appearances, and worldwide hype, analysts warned the pressure is on Apple to return to the days of Australia-wide sellouts and round-the-block queues if it is to regain its former glory.
The Cupertino tech giant, which unveiled three new iPhones this week, recently slipped in worldwide rankings to now trail controversial Chinese phone manufacturer Huawei and market leader Samsung.
And while many Australian buyers and committed iPhone users are coming out of phone contracts this year, analysts warned some could consider holding on their existing phones or investing in a discount model to avoid a $2000 outlay.
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Apple chief executive Tim Cook introduced three new iPhones at the company’s Apple Park campus this week, from the entry-level iPhone XR to the upgraded iPhone XS, and its new flagship iPhone XS Max.
The top model featured a 6.5-inch OLED screen, twice as much memory as before, and a bigger camera sensor.
“The new iPhone XS is the most advanced smartphone in the world,” Mr Cook told an applauding audience in the company’s Steve Jobs Theater.
“The iPhone XS Max (has) the biggest screen ever in an iPhone, the biggest battery ever in an iPhone and, of course, the biggest experience ever in an iPhone.”
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But, at $2369 for the top model, the new iPhone also comes with the biggest price for any smartphone in Australia, breaking the previous record by $540.
The price hike also comes as Apple is under increasing pressure to regain its second place in worldwide smartphones sales after Huawei overtook the company at the end of June.
Gartner research director Anshul Gupta said the Chinese firm sold 1.4 million more smartphones than Apple during the period, putting the iPhone maker under the microscope.
“Growing competition from Chinese brands and consumers’ greater expectations for phone value is putting immense pressure on Apple,” he said.
“Demand for the iPhone X started to slow down much earlier than when other new models were introduced.”
But Creative Strategies analyst Carolina Milanesi said Apple’s decision to raise the price of smartphones was a bet that could still pay off for the company.
“How far can they go? Apple can go further than other brands (on price) and they know what consumers are willing to pay,” she said.
Ms Milanesi said many committed Apple buyers would pay more for the new models due to pent-up demand for a larger version of the iPhone X, and because, unlike computers, smartphones were only becoming more integral into daily life.
“Smartphones are still something consumers are prepared to pay for because they play such a big role in their lives — they are their camera, they are their TV, they are their e-book reader, they are their MP3 player, they use them so much for so long in a day that they’re not like the PC,” she said.
Telsyte research director Foad Fadaghi said research showed Australian iPhone users were among the most loyal customers, however, and many were due to come off a contract this year.
But he said some might baulk at the high price of the iPhone XS Max, instead opting for the cheaper iPhone XR, or holding on to their existing iPhone handsets for longer.
Most Australian iPhone buyers who did invest in Apple’s new smartphones would do so on a carrier plan, he said, and plans could be extended as a result.
“We might see three-year repayment plans, possibly even four-year replacement plans down the track if prices continue to head north,” he said.
“Rising prices do make it a bit harder for those who want to buy their phone outright.”
The new Apple smartphones will arrive in Australian stores on September 21.
Jennifer Dudley-Nicholson travelled to Cupertino as a guest of Apple.
