In this article by CNBC, it explains how in China the latest iPhone models are having a very difficult time selling. For this reason, Apple is having to heavily discount them. The article goes on to explain how experts say that poor iPhone sales throughout China are due to a combination of things. This includes a poor pricing strategy and a lack of exciting new features with recent models.
This will have a fairly large impact on Apple’s ability to make money in the Chinese market. Even Apple itself acknowledged earlier this month that lower than expected sales in China would more than likely cause worse-than-anticipated first-quarter revenue for 2019.
Many people including myself are wondering if the trade war has anything to do with this. However, Daniel Ives, managing director of equity research at Wedbush Securities gave his opinion on this. He said that the trade war is background noise and more of an excuse with the real issues being iPhone XR demand and being mispriced in the Chinese market.
I think that Apple is doing in the correct thing in this situation by decreasing iPhone prices to try and drive up sales in the Chinese market. I believe that the extremely high prices of iPhone discourages many people from being able to purchase them. Also, that this lower price will now allow far more people in China to be able to afford them. One piece of advice that I can offer is that it is extremely important to understand just how much demand there is for your products and to base your pricing strategy on this.
Austin Blomme Business Communications 