Have you seen the new numbers this past quarter for the Apple iPhone X? To be blunt, they weren’t expected to be that great. The phone, while impressive, was said to be too expensive. It just wasn’t the best release to date by the company, yet the earnings report for Apple this past quarter was a surprise. The good surprise wasn’t all about the iPhone X, but the numbers weren’t so bad.
The music streaming service that Apple provides was one of the highlights, helping to shore up profits for the heavy tech titan. Apple did quite well, all things considered, and they beat earning estimates. That being said, one quarter wasn’t really going to dent the company. Yet all eyes are still on Apple. After the impressive numbers, the company’s stance about their iPhone prices stayed rock solid.
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You see, they think the phone is priced fairly. Granted, not everyone pays $1k for a new iPhone, as cellphone companies do provide deals. Yet that’s the cost of the latest iPhone at the standard level. What’s the company going to do next? Many companies are making their phones cheaper, and make no mistake about it, people are now using tablets more often. They don’t talk on the phone as much, and a tablet does what a phone does only with a bigger screen.
It will require a cultural shift for people to prefer a tablet over a phone, as texting is still king, even over social media in terms of communication. Yet there are apps for everything now. Granted, Apple has its iPad, but just like with the phone business, many other companies are involved. Apple has long been known to charge premium prices for their products, and maybe consumers are standing up in objection, at least a little.
Otherwise, what is the big reason for the numbers slowing down for phone sales? It’s not the first time that Apple has charged too much for a phone. Is another company out there stealing the limelight? Are people opting for cheaper Android phones in general? You bet they are, and that is why the focus is on the phones. Yet of course Apple has it hands in all kinds of technology. The only problem is that Apple is so big and its stock price so high, that shareholders expect all the company’s ducks to be in a row, including phone sales.
If phone sales were to slump next quarter yet again, you can expect that the share price for Apple will drop below $150 and stay there for awhile. That doesn’t mean the company will do poorly in the future. Apple is primed for growth and has hundreds of billions in reserves to continue to pay dividends. Yet what the real takeaway here is that slumping numbers will cause the tech giant to switch focus to other industries and perhaps resolve that it’s time to cheapen up the iPhone, at least just a little. I don’t think they will worry about that too much if the consumers speak.