Apple promises to cut iPhone prices
Apple plans to revise its pricing policies for some countries. As a result, the cost of the iPhone may decrease. This will affect regions where national currencies are prone to volatility and sharp movements. The company wants to tie the price of its gadgets not to the dollar rate, as before, but will determine their value based on local currency rates. Apple policies have little to do with altruistic ideas. First of all, the company thinks about its profit, and in countries with fluctuations in local currencies, the demand for "apple" devices naturally turned out to be not up to par. Thus, the company, having reduced the price of the iPhone to last year's level, wants to help its own sales in these regions. In the past year, several important markets have let Apple down as the national currency in these regions has shown a decline against the dollar. During the year, the local currencies of Turkey, Brazil, India, USA, South Africa, Malaysia fell in price.
A fresh report from Apple with analytics for the last quarter of 2018 showed that the corporation sank in key financial indicators during the year. Thus, the total revenue in the amount of $ 84.3 billion showed a decline of 5%, operating profit ($ 23.4 billion) decreased by more than 10%. Also, net income was less than a year earlier ($ 19.97 and $ 20.1 billion, respectively). Interestingly, the last reporting period coincides with the season of New Year's hysteria and Christmas shopping, but this did not play into the hands of the company. For the first time in 10 years, Apple's pre-holiday performance showed a decline. The company changed the reporting form and now does not show the number of units sold, but reflects only the total amount of sales. Therefore, it is now unclear how many iPhones Apple sold for the quarter, but in monetary terms ($ 51.98 billion), an annual decline of 15% is visible. In addition, Apple is cutting back on new iPhones in the coming months, cutting its production plan by another 10%. The company has reduced appetites and revised its expectations also regarding the planned revenue for the past year. Instead of the expected $ 89- $ 93 billion, Apple agreed to $ 84 billion and thereby brought its expectations closer to reality.
The decline in iPhone sales, the selling price of which does not indulge in modesty, is explained by many experts precisely by the inflated cost of devices in comparison with their prime cost. The company itself attributes the demand for iPhones to the market decline and declining sales in China. But not everything is so bad with the "apple" giant. The company showed positive growth in certain categories of equipment during the year. Thus, sales of iPads increased by 17%, Mac computers - by 9%, and home and wearable gadgets - by almost a third. Since the beginning of 2019, the cost of the iPhone and other "apple" devices in USA has increased. The new pricing is associated with an increase in the internal VAT tax from the previous 18% to the current 20%, as the manufacturer informs about in additional explanations on the price tags. On average, changes affected all positions within 1.7%. The Topic of Article: Apple promises to cut iPhone prices. |
