The Launch of a Cheaper iPhone Could Affect Apple’s Profit

The Launch of a Cheaper iPhone Could Affect Apple’s Profit

Every time a new device is launched, contesters don’t hesitate to express their thoughts on the matter. Last year, when the iPhone X was launched, Apple had to face some critics concerning the price. Some reviewers claimed that a starting cost of $999 might not be worth it, even if the handset has innovative features like an outstanding display and FaceID recognition.

This situation determined Apple to analyze their results and see how things are going for their new ”baby”. The year’s third quarter data clarified speculations. It looks like iPhone X wasn’t able to bring as many new buyers as anticipated, especially if shipments were involved.

However, the high price was enough to increase Apple’s revenue. Furthermore, because of it, the iPhone’s average selling price increased as well. This means that X was the most popular and successful smartphone from the quarter, as compared to other handsets released by Apple.

How did the iPhone X manage to succeed after all?

Tim Cook, the company’s CEO, said that customers could be willing to buy a more expensive phone because it would give them more storage space for keeping their photos, favorite videos, music and more. Besides, many buyers chose to purchase their new iPhone through instalment plans, so they will pay around $10/ month instead of $120 at once.

With all this considered, it’s safe to say that Apple’s revenue has considerably grown since the iPhone X was launched. This move was smart enough to make the company worth almost $1 trillion. If they will reach this value, the company would be the first which manages to set these high standards.

On the other hand, there are people who think that Apple’s business ”offer” should be praised for the growth. We are talking about the App Store, Apple Music, iCloud and others. These are must-haves for every iPhone user and if we add the “Other products” segment we might notice that these speculations are not far from being true.

Products like Apple watches, AirPods, Beats headphones and others were more successful than the Business category. However, nothing could beat the iPhone category so far. It brought the most important part of revenue – over $5 billion and this means that the majority of Apple’s earnings (approximately $7.9 billion) were produced by iPhones in 2018.

What will the future bring?

Now, several questions are waiting for answers. Analysts are wondering if trends will remain the same or if cheaper phones could cause Apple to lose a part of the ascending revenue. For the time being, things are good, because 98% of iPhone X users are happy with their choice.



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