An unusual sight at an Apple store: a discount

Rumours of the iPhone’s (and therefore Apple’s) demise have often been greatly, hopelessly exaggerated. But there is plenty in this piece from USA Today to chew over. It begins:

Apple has for years been a premium brand that rarely, if ever discounted products. Period.

Every year, the company could raise prices on products, and consumers would not only happily pay, but stand in long lines for the privilege of doing so.

This isn’t any other year, however. The newspaper reports that visitors to Apple stores this Christmas were greeted with a highly unusual sight: a discount offer. Get $300 off the iPhone XR if you trade in your current model, a poster read. Apple called it “limited time” “instant credit”, but it is what it is: a money off deal for a brand new Apple phone.

USA Today’s writer Jefferson Graham offers this explanation as to why:

Unlike past years, however, Apple didn’t offer consumers much that was new for the 2018 models. The flagship XS and XS Max phones had more power, but that didn’t resonate with consumers who thought their old iPhone 6S and 7 devices ran just fine. The XR has the premium edge-to-edge display of the X series iPhones, minus the second camera lens of those models and shinier OLED screen, but it’s $400 more expensive than the older, entry-level current model.  Analysts say the XR phone experienced the biggest resistance from consumers.

Graham does go on to point out that a “bad” quarter for Apple is still 200 million smartphones shifted, and that part of the slower upgrade cycle might be – not to cosy up to Cupertino too much – the result of recent iPhones being really rather good, and standing the test of time.

And, the entire smartphone market has hit an innovation wall. There are simply no killer features coming with each yearly iteration, and consumers seem content keeping hold of devices until they conk out on them completely, instead of being lured by the latest model.

Apple seems to have seen this coming, and in an effort to fend off any negative share price impact, it said last quarter it would no longer be breaking out iPhone sales in its quarterly results.