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Apple, China worries pummel Asian shares

By Andrew Galbraith

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More good news from the Trump trade wars.

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Here in the US . A lot of people are keeping their phones longer. Why pay $1000 for basically the same phone . Tim Cook is not a Steve job. When it comes to new innovation . Granted you can only put so much technology into a phone

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Apples problem is saturation and price. They price the phone like a Ferrari and expect it to have the popular appeal of a Toyota. Its not going to happen. They have priced themselves out of the worlds largest growth market in India, now dominated by Chinese models. Once India reaches the development status of China, things could work in Apples favour again. Even in the West its too expensive though. Apple might want people to go on contract but a lot of people don't like contracts, 12 or 24 mth or whatever. I don't. I buy phones outright and price is a factor.

Fortunately for Apple everyone is comparing apples and oranges as Apple is a complete tech company, not just a phone manufacturer. The big advantage they have over everyone else.

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There is a price point at which the number of owners who are willing to pay the price to upgrade will drop and in turn lead to lower sales for the company. I remember when a Windows upgrade was hundreds of dollars, and OSX was cheap (eventually free). As such, OSX users would always upgrade, while many (most?) Windows users wouldn't.

Apple has forgotten this. They priced their phones to the point where not enough people who own an iphone are willing to pay the price to upgrade to the newer models, as the they see the newer models being beyond that price point where the new features justify the cost of the upgrade.

I also think that Apple screwed up by releasing the 8 and the X the year after they released the 7. Previous to that, Apple was basically on an two-year cycle, with every other year seeing a main release. The in-between years would see an upgraded version of the phone. This meant that a lot of people were on two-year contracts aligned with the major release. But then Apple released the 8 and the X the year after they released the 7. This meant that a lot of people were only a year into their contracts, so they did not upgrade. This year, they released the upgraded X series. People on two year contracts who were previously on the main release, are suddenly on the secondary release. It stands to reason that a number of these people would choose to wait until the next major release to upgrade, particularly with the increased price.

People will still stay on Apple, for as Matt said above, Apple is an ecosystem, not just the iphone. But as long as iPhones stay at the price they are at, customers won't upgrade their phones as often .

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Found this article which gives a more thorough guide to Apples position which is a lot rosier than the media have portrayed.

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