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Apple, Samsung struggle in face of Chinese competition

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Hopefully all this fierce competition will lead to a drop in Smartphone prices.

2 ( +4 / -2 )

I wouldn't bet on it. I'll take an iPhone over the Huawei and the other two any day of the week.

-3 ( +4 / -7 )

because you can afford it. Many people are taking the galaxy over the iphone because of the price. Apple could really cash out if it dropped its prices. Demand would skyrocket.

3 ( +5 / -2 )

Hopefully all this fierce competition will lead to a drop in Smartphone prices.

at the end of the day people just want cheap with no thought of quality - you get what you pay for.

-5 ( +1 / -6 )

Many people are taking the galaxy over the iphone because of the price. Apple could really cash out if it dropped its prices. Demand would skyrocket.

So could Rolls Royce, Mercedes Benz, and Ferrari. But that's not the business plan of these companies, nor is it the business plan of Apple. And it's not like Apple is in need of an adjustment to their business plan - they are one of the biggest companies in the world, whatever they are doing it, they are doing it right. A drastic change to their business plan would be very likely to hurt that standing.

at the end of the day people just want cheap with no thought of quality

Some people. Others are willing to pay for quality.

0 ( +4 / -4 )

So could Rolls Royce, Mercedes Benz, and Ferrari. But that's not the business plan of these companies, nor is it the business plan of Apple. And it's not like Apple is in need of an adjustment to their business plan - they are one of the biggest companies in the world, whatever they are doing it, they are doing it right. A drastic change to their business plan would be very likely to hurt that standing.

No one is saying that they need to change their business plan. But a slight price adjustment wouldn't hurt them either. and they already have modified their prices. They rolled out a new and cheap phone (SE) that looks like a new version of the iphone 5 . They released cheap models like the 5C because they realized they needed to tap into that market. Their sales have started to become sluggish because not enough people are buying new phones, and they are facing difficulties in India AND china due to lackluster demand mainly due to price.

Apple products are superior. No doubt about that. But it is difficult for people to upgrade their phones and tablets every 2-3 years when the costs are so high.

1 ( +3 / -2 )

No one is saying that they need to change their business plan. But a slight price adjustment wouldn't hurt them either.

That's a change in their business plan!

and they already have modified their prices. They rolled out a new and cheap phone (SE) that looks like a new version of the iphone 5 .

That's not dropping their prices though, that's releasing a lower priced model. It's different from dropping the prices of their newest phones.

it is difficult for people to upgrade their phones and tablets every 2-3 years when the costs are so high.

I don't disagree with this, but that's why they release lower-priced models.

-2 ( +2 / -4 )

heres an idea Apple how abut dropping prices to a more competitive level, afterall the Iphones are made in China. Chinese want value for money, theyre not suckered into the quality/ premium price scam that many smartphone makers seem to attach to their phones

6 ( +7 / -1 )

That's a change in their business plan!

Mate, a change in a business plan is more than a slight price adjustment. They'd still be the most expensive and elite smartphone company out there. Just slightly more affordable.

That's not dropping their prices though, that's releasing a lower priced model. It's different from dropping the prices of their newest phones.

They have though. The new iphones are becoming more affordable for more people.

I don't disagree that they don't need to bring down the price as they always sell out of the new phones though. But IF they did, their revenue would go up.

-3 ( +1 / -4 )

heres an idea Apple how abut dropping prices to a more competitive level

And:

Mate, a change in a business plan is more than a slight price adjustment. They'd still be the most expensive and elite smartphone company out there. Just slightly more affordable.

What is their motivation for doing so?

They have though. The new iphones are becoming more affordable for more people.

I think the prices of the iphone 7 are higher than any previous model, are they not?

I don't disagree that they don't need to bring down the price as they always sell out of the new phones though. But IF they did, their revenue would go up.

I would imagine that they have a lot of highly skilled people running many scenarios on fine-tuning income, as well as surveying users to find out what sort of prices they would pay, in order to maximize their profits.

I don't imagine anyone in the general public has enough information to be able to say what Apple could do to maximize their profits. These sort of calculations require in-depth information on everything from supply lines, manufacturing, advertising, salaries and a million other things.

Revenue and profit are not directly proportional. Increased revenue does not necessarily equate to increased profit.

1 ( +2 / -1 )

chinese brands dont have massive mark up like apple and samsung. before you tell me you get what you pay for your apple was made there too.

-1 ( +1 / -2 )

What is their motivation for doing so?

bigger market.

I think the prices of the iphone 7 are higher than any previous model, are they not?

Are they? What I heard is that they are about the same as the 6 and 6s models when they came out. What did you hear?

I would imagine that they have a lot of highly skilled people running many scenarios on fine-tuning income, as well as surveying users to find out what sort of prices they would pay, in order to maximize their profits.

sure. but maybe its not just about profit. Maybe its also about image or some other considerations.

I don't imagine anyone in the general public has enough information to be able to say what Apple could do to maximize their profits.

sure we do. we are the customer. if we don't like the product we wouldn't buy it, thereby not maximizing their profit.

These sort of calculations require in-depth information on everything from supply lines, manufacturing, advertising, salaries and a million other things.

I'll agree there.

Revenue and profit are not directly proportional. Increased revenue does not necessarily equate to increased profit

They are more often then not intertwined. Not always, but usually.

0 ( +1 / -1 )

bigger market.

Market size by itself is irrelevant to companies. Profits are what matters. Generally market size will have some relation to profits, but hey aren't directly proportional.

Are they? What I heard is that they are about the same as the 6 and 6s models when they came out. What did you hear?

Only that they are more expensive. From my friend in the UK though, I haven't looked into it.

sure. but maybe its not just about profit. Maybe its also about image or some other considerations.

Ahh, but that's where high prices come into effect. One factor to being seen as the best, is to also be the most expensive. Does a Ferrari really have anything near the production costs that it would need to be sold for the amount it costs? Very doubtful. But they have the image of being the best. And one of the appeals of that is the cost - the best should cost the most. And that's quite true with Apple products - they cost more than equivalent models by other makers. So dropping the price would cut into this image.

sure we do. we are the customer. if we don't like the product we wouldn't buy it, thereby not maximizing their profit.

Different things. I said that the average person does not have enough information to determine how Apple can best maximize profit. You are speaking of people choosing whether or not to buy a product based on its price.

The only thing a single buyer has is the decision on whether or not to buy the product. If enough people are of a similar mindset, the product will not sell well. If enough people don't agree with that single buyer (and therefore buy the product), the product will sell well.

No one person knows whether profits will be made at the set price. And no person who isn't in the know (and not even many who are) knows how Apple should fine-tune their business plan to maximize profits. Only the people in Apple who are tasked with maximizing profits know that. And even then, it's an imperfect science (know one knows this better than someone who has run a company and had to set prices). It's a matter of using all the information available to make a best judgement.

Any of the general public who thinks they have enough information to know how Apple should set their prices... well, doesn't.

They are more often then not intertwined.

Of course revenue and profit are intertwined - without revenue there cannot be profit. But an increase in revenue can result in a decrease in profit. As an extreme, imagine they sold iphones for $10/unit. They would sell a ridiculous amount of iphones. Almost no one would ever buy another phone, because iphones would be so cheap. They would probably see an increase in revenue. But they would see a drop in profit, as the loss per unit would cost them money, not generate profits.

1 ( +1 / -0 )

Market size by itself is irrelevant to companies. Profits are what matters. Generally market size will have some relation to profits, but hey aren't directly proportional.

Generally speaking though, you would agree that bigger market share generally correlates with high profit.

Only that they are more expensive. From my friend in the UK though, I haven't looked into it.

I did though very briefly. I remember hearing it was the same price as the 6. Maybe there was some misreporting. Like you, I'll have to go and recheck.

Ahh, but that's where high prices come into effect. One factor to being seen as the best, is to also be the most expensive.

Absolutely. Which is why when I mentioned a reduction in price I didn't consider it changing the market strategy, because what I was thinking is that they could reduce the price significantly, and STILL be the most expensive and swanky phone out there. If they reduced the price to that of a galaxy, that would be a major change in strategy.

Mind you, I was just checking the sales on the new phone and it appears to have sold out in all colors 7 plus and the pitch black with the smaller 7, so maybe Apple doesn't feel that they need to drop the prices. Would be nice for us though.

. Does a Ferrari really have anything near the production costs that it would need to be sold for the amount it costs

I don't think we can make the iphone analogy to the ferrari. Sure they are the most expensive and luxurious models of their respective markets, but Ferrari does not get its profits through mass production. They sell to a very small niche market. Apple is trying to mass sell; albeit with higher prices and with a superior product.

No one person knows whether profits will be made at the set price. And no person who isn't in the know (and not even many who are) knows how Apple should fine-tune their business plan to maximize profits. Only the people in Apple who are tasked with maximizing profits know that. And even then, it's an imperfect science (know one knows this better than someone who has run a company and had to set prices). It's a matter of using all the information available to make a best judgement.

No argument there.

0 ( +1 / -1 )

Generally speaking though, you would agree that bigger market share generally correlates with high profit.

In general, yes. In Apple's case with the iphone, I wouldn't.

Absolutely. Which is why when I mentioned a reduction in price I didn't consider it changing the market strategy, because what I was thinking is that they could reduce the price significantly, and STILL be the most expensive and swanky phone out there. If they reduced the price to that of a galaxy, that would be a major change in strategy.

But if that would result in a cut in profits, then there would be no reason for them to do that.

I don't think we can make the iphone analogy to the ferrari. Sure they are the most expensive and luxurious models of their respective markets, but Ferrari does not get its profits through mass production. They sell to a very small niche market. Apple is trying to mass sell; albeit with higher prices and with a superior product.

Of course it's not a direct correlation - Ferrari is nowhere near the size of Apple. But the point was to show that brand image can be a reason not to drop cost, even if that would result in higher profits in the short-run.

1 ( +1 / -0 )

In general, yes. In Apple's case with the iphone, I wouldn't.

But if that would result in a cut in profits, then there would be no reason for them to do that.

Ok. so this is where we disagree. I think that a reduction in price would lead to a greater market share which would in turn lead to higher profits, whereas you don't. Different approaches. I've seen board members clash over this very argument. Its impossible to solve this one unless we sit down and discuss it face to face.

Its Sunday. Have a beer for me, and I'll do the same.

0 ( +1 / -1 )

so this is where we disagree. I think that a reduction in price would lead to a greater market share which would in turn lead to higher profits, whereas you don't.

It's not that I don't, it's that I don't think I have enough knowledge to be able to know one way or the other. However, what I do know is that Apple does have enough information to know one way or the other, and I think they are much better positioned to be able to fairly accurately judge the sweet spot where they are going to maintain their brand image, and make the most profits.

I don't think anyone who isn't tasked with maximizing profits for Apple, has enough information whatsoever to be able to say that they know Apple's business better than Apple.

1 ( +1 / -0 )

I don't think anyone who isn't tasked with maximizing profits for Apple, has enough information whatsoever to be able to say that they know Apple's business better than Apple.

or maybe how they decide the best way to max their profits is to survey those arent tasked with maximizing the profits

0 ( +1 / -1 )

or maybe how they decide the best way to max their profits is to survey those arent tasked with maximizing the profits

Anything is possible. But we're not talking Joe's start-up in Tokyo, we're talking one of the richest companies on this entire planet.

1 ( +1 / -0 )

Wouldn't buy either for different reasons, nor a Chinese brand. Whats wrong with a Sony Xperia? Seems to me Apple were doing quite well without this obsession over the Chinese market. If you can't make a profit there whats the point? Better to focus on their core audience.

2 ( +2 / -0 )

chinese brands dont have massive mark up like apple and samsung. before you tell me you get what you pay for your apple was made there too.

Who cares. You still get what you pay for and I don't use apple products

-1 ( +1 / -2 )

Anything is possible. But we're not talking Joe's start-up in Tokyo, we're talking one of the richest companies on this entire planet.

Agree. But even the richest companies on the planet need our input.

0 ( +1 / -1 )

I like apple because the software is great and easy to use. Unlike android its very dyslexic friendly. Ill take a new iPhone over the fake chinese ripoff.

-1 ( +1 / -2 )

Apple is now following the technology lead instead of the other way around.

Phones are getting so good nowadays that consumers would benefit from the choices.

1 ( +1 / -0 )

Phones are getting so good nowadays that consumers would benefit from the choices.

Very very true. My hope is that as the phones get better and better, prices continue to drop. Having said that, Apple does distinguish itself as the cutting edge of not only smart phones but also computers and tablets so whether or not the improvements in technology will affect Apple's decision to drop prices or not remains to be seen. Every time Apple comes up with a new product you see lines and lines of people just waiting to buy ads. While other companies are stepping up their game, it is very telling that while Apple is still more expensive than almost anyone out there they still manage to garner so much popularity..

My wife and I are extremely lucky in that various friends gave us an iPad each and a Mac book.

0 ( +1 / -1 )

I am competing with these companies by taking good care of my phone. my iPhone5 still works great. I think consumers should also know that they can compete too......

0 ( +0 / -0 )

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