The more you sell, the cheaper it gets, and the iPhone doesn't smell good?

"Core Tips" From the crazy rush to buy the iPhone 4 when it was released, to the iPhone 15 sales not meeting expectations, and the domestic price cut, Apple's mobile phone is slowly being pulled off the "altar".

Author: Xu Penglin

Edited by Xing Yun

Apple, which surpassed Samsung for the first time and topped the global smartphone shipment ranking in 2023, began to cut prices in the Chinese market.

On January 15, the news of Apple's price cut rushed to the hot search on Weibo. On the same day, Apple's official website in China announced that from January 18th to 21st, the "New Year limited-time offer" will be opened, and the purchase of mobile phones, computers, tablets, watches and other types of products can enjoy discounts, of which up to 800 yuan can be saved, but each customer is limited to two pieces per product category.

The iPhone 15, which has been released for less than half a year, is also in the ranks of price reductions, with a maximum discount of 500 yuan. In the past, Apple would adopt a price reduction strategy for old models after the release of new phones. As early as 2023, during the "Double 11" period, the newly released iPhone 15 has been significantly reduced in price on multiple e-commerce platforms, and some models have even dropped by more than 1,000 yuan.

It is widely believed that the frequent quality problems of the iPhone 15 series and the more expensive pricing than in previous years do not meet user expectations, which in turn leads to a price plunge and the official has to reduce the price for promotion.

"Leopard Change" visited Apple stores in many business districts in Beijing, and there will be some great value gifts on the basis of official discounts. A clerk at Wangjing CapitaLand Store told "Leopard Change" that he would give away accessories for mobile phone cases and mobile phone films, and he could add 299 charging heads + lens films + power banks.

When asked about the sales of the iPhone 15, many store staff said that the number of visitors to the store recently was similar to usual, and the purchase was not amplified because of the discount. Some of the urgent consumer demand has been released during the "Double 11", and the wait-and-see mood is stronger. "In contrast, the majority of people will buy the iPhone 15 in 2023, but the overall feeling is that the sales are not as good as the 14. A clerk said.

Behind the price reduction is the lack of optimism in sales.

According to data from market research firm Counterpoint Research, sales of the iPhone 15 series in the first 17 days of its debut in China fell by 4.5% compared with the iPhone 14 series released in 2022, and Apple's mobile phone sales fell by 9% year-on-year in the third quarter of 2023.

iPhone手机卖不动了?苹果慌不慌?

1. iPhone is not fragrant?

In 2011, a 17-year-old high school student sold one of his kidneys for 22,000 yuan in order to buy an iPhone 4 mobile phone, which was popular at the time, and bought an iPhone 4 as he wished. After this incident was reported, the Chinese people felt the heat and magic of the iPhone for the first time.

In 2010, Apple launched the iPhone 4 mobile phone, subverting people's perception of mobile phones in the past, with two glass panels on the front and back, plus a metal middle frame, lightweight, strong and technological, and breakthroughs in software and hardware have led the development of global smartphones.

On September 25 of the same year, the iPhone 4 began to be sold in the Chinese mainland market. Before the official sale, thousands of people lined up at the entrance of Apple's flagship store in Beijing's Xidan Joy City, some of whom even came from Guangdong, Heilongjiang and other places.

At that time, the official price of the iPhone 4 (16GB) was 4999 yuan, and nearly 100,000 units were sold in 4 days of release, and the first batch of machines were quickly sold out. But because of the serious shortage of stock, scalpers began to increase the price of speculation. Many people can earn 4 or 5,000 yuan from the official queue to buy it and sell it to scalpers.

It wasn't until half a year after the iPhone 4 was released that the price dropped from fifteen thousand to six or seven thousand at the hype high. Back then, in order to buy cheaper mobile phones, many people chose to buy the Hong Kong version of "parallel imports". In the movie "Over Spring", many scalpers bring iPhones from Hong Kong through tourists or students.

This popularity continued until the release of the iPhone 4S in 2012. On the same day, there were a large number of queues at the entrance of Apple's flagship stores in Sanlitun and Xidan Joy City in Beijing, and the police deployed in advance to maintain order. Because of the long queuing time and other reasons, there was a scalper brawl in the queue crowd of the Sanlitun store, which directly led to the closure of the Sanlitun Apple store and the cancellation of the first sale.

In those years, owning the latest iPhone became a status symbol, so there was always a long queue outside the Apple store when the new model was released. Now, the sale of Apple's new mobile phone can no longer see such a spectacular scene. "Now many of them can be bought directly offline, so there is no need to queue up. An Apple store clerk said, "In recent years, there have been fewer people who have changed their iPhone every year." ”

From the iPhone 4 to the current iPhone 15, more than a decade has passed, and Apple's popularity has slowly cooled down. A major turning point is that the supply is becoming more and more abundant, and scalpers can no longer make money.

Traditionally, there is often a short-term shortage of supply after the release of new iPhones, and unless consumers grab the first batch of stock, they will have to wait about 2-3 weeks to get the second batch of supplies. At this time, scalpers will sell at a higher price to some consumers who are eager to try it. Even a few years ago, there were scalpers who made more than 300,000 yuan in two months by reselling the iPhone 13.

"Since the iPhone 14, those who hoard mobile phones at high prices have basically lost money, and there are more official website prices, third-party sales sources, and some discounts, unless you are particularly anxious to use a new machine, such as 14 Pro, you may have to increase the price by 1000 to get it. The above-mentioned Apple store clerk told "Leopard Change".

From the perspective of the overall environment, because of the slowdown in economic growth, people's consumption concepts have also begun to change, and the replacement cycle has been lengthening. TechInsights previously predicted that the global smartphone replacement cycle will continue to extend to the longest in history of 51 months in 2023.

At the same time, many high-end mobile phones, including Apple, are in a state of excess performance, on the one hand, the mobile phones of two years ago are still very easy to use, on the other hand, it is difficult for new products to have a big breakthrough point, and the attraction is limited. Under the superposition of various factors, Apple's mobile phone cannot escape the curse of not being fragrant.

2. Huawei and Xiaomi are flanked back and forth

Analysts at Jefferies, an investment bank, attributed the decline in Apple's sales in China to fierce competition from local rivals — particularly Huawei and Xiaomi, in a report.

According to market research firm BCI, a total of 270 million smartphones will be sold in China in 2023. In terms of the number of new phone activations, Apple, vivo, OPPO, Honor, Xiaomi and Huawei will become the top six domestic market shares in 2023, accounting for ninety percent of the market.

Among them, Apple occupies the first place with a proportion of 17.1%, but vivo, which accounts for 16.7%, and OPPO, which accounts for 16%, are not far behind Apple. In particular, the Huawei Mate 60, which was suddenly released in the second half of 2023, has rapidly increased the proportion of Huawei mobile phones, which has brought a greater impact on the market structure.

In August 2023, Huawei released the Mate 60 series, which quickly occupies the high-end mobile phone market with Huawei's self-developed Kirin 9000S chip, satellite communication technology, and optimized HarmonyOS system. However, due to production capacity, the Mate 60 series is still in a state where it is difficult to find a machine.

In the Lecheng Center of Chaoyang District, Beijing, the sales of Huawei's store told "Leopard Change" that the Huawei Mate 60 is currently not in stock and can only be pre-ordered. On e-commerce platforms, users even need to snap up the Mate 60 series on time to grab the Mate 60 series at Huawei's flagship store.

According to the data, the sales volume of the Mate 60 series exceeded 2.4 million units in just eight weeks after its launch, setting a new sales record for Huawei's flagship mobile phones. At the same time as the Huawei Mate 60, there is also a new M7 car.

A salesperson at Huawei's Changying Tianjie store in Chaoyang District, Beijing, told "Leopard Change" that many people came to see their mobile phones and then look at their cars by the way. "There are also people who come to consider buying a Huawei mobile phone after a test drive. Because Huawei's ecosystem is connected. You can control the car with your mobile phone. ”

In fact, the new M7 and Huawei Mate 60 were on fire at the same time, and the two brought traffic to each other. "It's true that a few customers on my side have placed orders to buy cars and changed to Huawei mobile phones. The above-mentioned sales also sighed, "The traffic of selling cars has also shifted to the mobile phone, if it is not in stock, I am afraid that this sales will be much better." ”

Similar to Huawei, Xiaomi launched the Xiaomi 14 series and Redmi K70 series in October 2023. In particular, the Xiaomi 14 series, the first surging OS system, set the price at 3999 yuan, and the ultra-high cost performance also made this mobile phone on sale for less than 1 month, with sales of one million units.

In addition, the news of Xiaomi's car manufacturing is also fermenting in the fourth quarter, which undoubtedly helps Xiaomi do the best publicity. And Xiaomi claims to open up the ecological chain, which may increase sales of its mobile phones to a certain extent.

In contrast, the iPhone 15 series released by Apple is not only not innovative enough, but the new Type-C interface has been complained by users about the slow charging, and the performance of taking pictures is not as good as that of domestic high-end mobile phones. A series of comparisons made Apple slowly lose its advantages.

3. The era of Apple lying down to make money has passed

The iPhone 15 sales did not meet expectations, and Apple's anxiety is obvious.

At the beginning of 2024, Microsoft surpassed Apple to become the world's largest company by market capitalization. This is also the first time that Apple has been overtaken by Microsoft since it topped the global market capitalization in 2021. As of the close of trading on January 18, Apple was worth $2.92 trillion and Microsoft was worth $2.93 trillion.

The earnings data also shows Apple's predicament. On November 3, 2023, Apple released its financial results for the fourth quarter and full year of fiscal 2023 (note: October 2022 to September 2023 is fiscal year 2023). According to the financial report, the company's sales revenue in fiscal year 2023 will be US$383.285 billion, a year-on-year decrease of 2.8%, and net profit will be US$96.995 billion, a year-on-year decrease of 2.81%.

In the fourth quarter of fiscal year 2023, in terms of products, the iPhone revenue in the hardware business was $43.805 billion, a year-on-year increase of 3%, but other Mac, iPad and other businesses declined year-on-year. At the same time, the revenue of the service business was 22.314 billion US dollars, a year-on-year increase of 16%. Regionally, revenue from Greater China decreased by 2.5% year-over-year.

The service business accounted for 24.9% of Apple's overall revenue from less than 18% in the first quarter of fiscal 2023, while the iPhone business decreased from 56% to 48.9%.

Nowadays, hardware is not easy to sell, and it seems that selling services is more profitable than selling mobile phones.

It is understood that Apple's service business includes the App Store, iCloud, Apple Music, AppleTV+, Apple Pay, Apple News, Apple Arcade, etc.

"The price of Apple music has gone up, and the monthly cost of iCloud is not cheap, and then I don't want to use Apple anymore. User Liu Le said, "For ordinary users, although Apple's service fee is not expensive, it is not a small amount in a few years." ”

At the beginning of December 2023, Apple Apple Music adjusted the subscription price in China, with a price increase of 1 yuan for students and individuals, and a price increase of 2 yuan for family subscriptions.

It is worth noting that not long ago, the price of Apple Music's subscription service in the outer region was also adjusted once, from the original $9.99 per month to $10.99 per month.

It's not just the price increase of Apple Music, since last year, many Apple services have been increasing in price.

"In fact, if you buy an Apple mobile phone, you will inevitably spend money on these service fees later. Take a few more photos to remind you that the memory is about to be full, and renew the iClod. Even if it is a high-capacity mobile phone, it is easy to run out of memory. In Liu Le's view, after buying an Apple mobile phone, the follow-up service fees will be endless.

Although Apple's revenue growth anxiety can be alleviated through the price increase of the service business, Apple's service business is now also facing stricter regulatory challenges, and the controversy over the "Apple tax" is increasing, and the United States, the European Union, Japan and other countries have strengthened the censorship of the App Store.

According to the EU's upcoming Digital Markets Act (DMA), Apple needs to open the App Store by March 7 this year, allowing users to install third-party app stores and sideload apps. Recently, foreign media reported that in order to cope with the impact of DMA, Apple plans to make changes to its App Store in the EU in the next few weeks, separating it from other regions to meet legal requirements.

After 10 years of popularity, Apple, which was once sought after by everyone, cannot escape the fate of leaving the altar.

(At the request of the interviewee, all names have been changed)