Apple is looking to lower prices of the iPhone XR in Japan by offering carrier subsidies as it looks to spur sales of the device in the region. The Cupertino company is taking this step as the iPhone 8 continues to outsell the iPhone XR in Japan despite the latter coming with a modern design, better camera, chipset, and battery life.
The iPhone XR is already available at a lower price in Japan thanks to various carrier subsidies and bundles. But Apple is now looking to lower it further to boost sales. Apple rarely ever lowers or discounts its products within a few months of them going on sale but it looks like the slow iPhone XR sale and steady demand for the iPhone 8 is forcing the company to make this move.
Apple had previously reduced prices of the iPhone 6s and lowered its production to better manage its inventory.
Given that iPhone dominates the Japanese smartphone market, it is both strange and worrying to see the company lower the price of the iPhone XR in the region through carrier discounts. If anything, this does add credence to reports of new iPhones not doing as well as expected.
Interestingly, the WSJ report also says that Apple is restarting production of the iPhone X. The company is doing this so as to meet the minimum order requirement of OLED panels from Samsung. With iPhone XS and iPhone XS Max not doing as well as expected, Apple has decided to restart production of the iPhone X as it continues to be popular among consumers in certain markets. This is despite the iPhone X being primarily sold through carriers and resellers.
Selling an older model does help boost Apple’s profit margin due to lower component and production cost. And the company is known to produce older models for markets where they are still doing well.
Over the last one month, there have been multiple reports of Apple cutting down production of the iPhone XS and iPhone XR due to weak demand. This report further adds credence to them and essentially confirms that sales of 2018 iPhones have not been up to even Apple’s expectations.
With smartphone sales slowing down, it is perhaps time for Apple to reconsider its pricing strategy.[Via WSJ]