Apple iPhone sales fears rock Wall Street | Hacker News Reader

Apple iPhone sales fears rock Wall Street

bbc.com

43 pointsosrec101 comments

There is a long history of these sorts of rumors making the rounds shortly after the yearly iPhone announcement, only to later turn out to be complete nonsense.

The most recent example was in January 2018:

>Apple has reportedly slashed production orders for its iPhone X… sending shares in the world’s biggest company down on Monday.

The US giant has told Asian suppliers to halve manufacturing targets for the first three months of the year, from 40m units to 20m, according to the Japanese newspaper Nikkei. The news sent Apple shares falling by as much as 2.3pc in early trading

https://www.telegraph.co.uk/technology/2018/01/29/apple-slow...

The reality turned out to be quite different.

>According to the latest estimates from IHS Markit, the iPhone X was the world’s most sold smartphone in the first 3 months of 2018, with 12.7 million units, while the iPhone 8 ranked second with 8.5 million units.

https://www.forbes.com/sites/jeanbaptiste/2018/06/13/the-iph...

That is 21 million units though. Unless there were other models in production that brought it up to 40 million seems like it could still be the best selling models and about 20 million units total, no?

Ope, clicked your link before posting thankfully. Looks like with the 7 and 6 and 8 plus it gets up to 40 million units on the nose pretty much.

Impressive.

The endless cycle of analysts manipulating AAPL with spurious reporting about supply chain shifts continues apace.

How is this spurious? The maker of the components used to make FaceID cut their outlook. Since Apple is their largest (if only) customer that's a good indication that sales are slowing. Apple also recently said it will no longer make public the exact unit sales numbers.

It may be real or not. But "Apple is doomed according to indirect supplier reports" appears every few months. Chicken little's cred is worn very thin.

Example from last January: https://markets.businessinsider.com/news/stocks/apple-stock-...

Well, Apple did miss iPhone sales this past quarter and the quarter before (and maybe the quarter in between)...so it's not exactly chicken little. They have beaten their EPS target, and we have been in a strong bull market so the stock has shrugged it off.

A maker. Are they the only supplier of these particular components?

The last paragraph in this article implies otherwise: https://www.ped30.com/2018/11/12/lumentum-wells-fargo-apple/

> UPDATE: A friend of the blog dug up this press release from last December, when Apple invested a few hundred million in one of Lementum’s chief competitors: Apple awards Finisar $390 million from its Advanced Manufacturing Fund

Now, this is an Apple friendly blog; I don't know whether the two companies are truly in the same business, or whether or not Apple sales are actually slowing down, but there is a perennial pattern of analysts interpreting order cuts at a single supplier as evidence of a slowdown, and being mistaken.

> but there is a perennial pattern of analysts interpreting order cuts at a single supplier as evidence of a slowdown, and being mistaken.

Exactly this. I didn't say it before because I didn't feel like trying to dig up sources on this, but I feel like we've had several instances already where "analysts" predict a slow quarter for Apple based on news coming out of a supplier of Apple cutting inventory orders, and then it turns out that Apple had a great quarter and presumably just used a different supplier instead.

A lot of people keep complaining about Apple raising their prices without considering that a) Apple knows people will pay it and b) they're making really solid machines that last longer. The MacBook Pro that I'm typing this on is closer to a decade old than is it new and is showing no signs of stopping. A friend of mine has had three name-brand PC laptops in that time.

I acknowledge the current prices are a hard pill to swallow, but the tool I use to generate my income isn't something I want to skimp on.

b) they're making really solid machines that last longer.

The concern is their products are no longer lasting longer, they deny there are problems for long periods of time, and make it very hard to fix independently. The higher prices are worth it for quality, but they are cutting corners in places they shouldn’t for quality products.

In all honesty iOS 12 rolling out to the iPhone 5s - a five year old device - showed their commitment to that. It will be supported at least until iOS 13 which is next year, giving the device six years of software updates.

And the iOS 12 update was actually quite good and breathed life into older phones.

I don't think there was ever much concern about MacBooks not lasting long - they definitely hold up. The concerns lay with iPads and iPhones, and they're most certainly holding up now.

This shift is actually the reason why I moved back to Apple after leaving the ecosystem back in 2011 or so.

The iPhone 6 is trouble plagued, and the MacBook had a keyboard the dies if it gets dusty. The iPhones after the 6 all had problems. Heck, the whole slow down the machine to preserve old batteries shows what a pain it is to replace the battery and an acknowledgement that batteries degrade. Never mind the repair cost for the various ports that went out on MacBooks.

> The iPhone 6 is trouble plagued, and the MacBook had a keyboard the dies if it gets dusty

Anecdotally, I bought my mom an iPhone 6 and she hasn't complained of any issues, and my 2016 15" MacBook Pro literally survived being trashed (in the form of dropping it, trying to crack it open, probably kicking it around, maybe even using it as a chopping board) by the Mossad.

> The iPhones after the 6 all had problems

I'm pretty happy with my iPhone X. I used an iPhone 8 Plus briefly before this and didn't have much trouble. Which issues do you mean?

> Heck, the whole slow down the machine to preserve old batteries shows what a pain it is to replace the battery and an acknowledgement that batteries degrade

That definitely was poor form on their part, but they've dropped the price of battery replacements (I think until the end of this year?) and now have a dedicated screen for battery health.

> my 2016 15" MacBook Pro literally survived being trashed (in the form of dropping it, trying to crack it open, probably kicking it around, maybe even using it as a chopping board) by the Mossad

Wait, what?

Being born in a "red flag" country and trying to travel to Israel on an El Al flight is an interesting affair.

> The iPhones after the 6 all had problems.

Why do I get the feeling you're romanticizing pre-iPhone 6 iPhones in a way that you would not be if this was 2014?

No, they had some problems (e.g. Antennaegate), but the iPhone 6 really had more than its share, and frankly, cost me the most money in repairs since I ended up paying for the repairs of 3 of 4 (family) before Apple acknowledged the problems and dropped the price of repairs. I noticed they didn't refund me any of my money.

I just put iOS 12 on a family member’s iPhone 6, a four year old model. It runs beautifully.

Apple replaced the battery on it for $29, even though the phone did not need it (capacity was above 90% after 2 years of use - it was purchased before phase-out).

More people should replace batteries - their phones would last longer at a cheaper annual cost. We already know modern iPhones have more than enough compute in them.

“Planned obsolescence” is not a thing with iPhones.

Apple replaced the battery on it for $29

I paid $159 twice, and then $79 because the third phone lost the ability to recognize touches (after the battery expanded). After a class action lawsuit was filed, they reduced the price to $29 for battery replacement. Apple didn't refund any portion of the money they got out of me.

[edit: because I switched the amounts - dumb me]

I'm sorry, this must have been really disappointing to experience.

Why did you pay $159 twice?

They stopped responding to touch input and Apple said I either paid it or could keep a broken phone. The third one they said was battery since it swelled to break the case and stopped input.

This is the problem with buying Apple. They lie about problems until someone decides to sue but don’t refund anyone who paid already.

> The iPhones after the 6 all had problems.

I think you’re recalling your memories the wrong way.

That is still my favourite iPhone.

The iPhone 6 (and plus) had Touch Disease, battery issues, and bending issues. It was just not a great phone and cost me 2 $150 repairs and 1 $79 repair at the Apple store accounting for 3 of the 4 phones I bought. I am rather clear on my memories and doing searches for others on this phone.

Apple has problems but "cutting corners" is not one of them.

The butterfly keyboard is bad, and the problem is apparently that it is too delicate. There's no evidence this bad keyboard was created as a cost-saving measure. The mechanism is complex, and clearly expensive. If anything it was a mistake born of fetishizing thinness.

Apple has problems but "cutting corners" is not one of them.

https://www.zdnet.com/article/apple-knew-about-the-iphone-6-...

Cutting a bit of cost by not using underfill is the definition of cutting corners.

And they’re fixing it for free even out of warranty. Good luck getting a pc laptop manufacturer to repair a 2016 model for four years for free.

They start those programs years into the product cycle (afaik the 2018 model isn't covered at the moment). They decide every time if it is a warranty case. They decide if other parts need replacement first and you have to pay for those. - Also you actually paid for that, because Apple doesn't loses money on Macs. It's priced in.

For other manufactures you just buy the replacement part for 40 bucks on amazon, it comes to your house and you replace it yourself within ten minutes. I prefer that cheap, zero downtime solution even if I have to pay for it myself.

It's nice that this warranty program exists, but it's a band aid, not a fix.

After a class action lawsuit happened, before they denied the issue.

Sad practice of Apple PR. Deny issues the longest time possible.

More sad is the customer attitude that fall for it and now praise Apple for replace the keyboard or the phone batteries but don't mention that it just needed some class action lawsuit.

I've just moved away from Mac book Pro for this very reason. The new keyboard is horrendous.

However it's highly doubtable if the current versions (with butterfly keyboards) will last for the same amount of time. They are also less future-proof than older revisions, due to non-exchangable RAM and storage.

I feel for the Macbook side my main concern wouldn't be the increasing prices, but the combination with the fact that those things haven't really gotten better for some years. The entry level models with 128GB SSD are not better than was sold 3 years ago. I bought a 2015 Macbook Pro with 256GB, and the newest variant would be within the same speed rate, has the same amount of storage, and is more expensive. I would also prefer the screen as well as the keyboard of the 2015. The only thing that might be nice on the 2015 would be an (additional) USB-C/TB3 port.

> "They are also less future-proof than older revisions, due to non-exchangable RAM and storage."

In my mind the most problematic thing that Apple does is make the batteries difficult to replace. Last I checked replacing a MacBook Pro battery through official channels also includes replacing the topcase, making it a nearly $400 repair.

Apple heavily discounts the top case replacement if the reason for replacing it is the battery, so the actual cost is between $130-200 [1]. I'm not sure what they do if your top case has other damage as well - if you break something in the top case, but also need a new battery, can you get a new case for the battery price?

[1] https://support.apple.com/mac/repair/service

Interestingly, if you can demonstrate that your keyboard has gone to shit and they thus have to do a top-panel replacement, they have to replace the battery, too.

At least that's what they did with my new Macbook Pro when a few of the keys came off with my fingers as I typed because I thought I could power through the crunches of debris that got under them.

Possibly the one (cheeky) advantage of a hard to replace battery: free battery replacement when something else fails. :)

Geekbench shows 2018 Macbook Pro is almost 200% better than 2015 MBP (20000 multicore vs 10000 multicore, and 4 cores vs 6 cores).

I think I compared the baseline models (lowest price 13" dual-core ones), and those had been very very close. The top models might be a different story, but the price gap there might be even bigger.

I'm typing this on a six-year old Lenovo that runs Ubuntu like a champ. Part of the reason why people run 10-year-old Apple hardware without upgrading is because it's so damn expensive.

How are sleep, wake, battery management, and sound? If they're essentially seamless, which Lenovo laptop are you using? (I'm considering a replacement for a 2012 MBP).

My main laptop is a 2011 X220i, which has been upgraded to 8GB RAM, SSD, 5GHz wifi, USB 3.0 (ExpressCard) and a new 9-cell battery.

I'm running KDE Neon on it right now, and everything worked perfectly from a default install. Before that I was using Linux Mint, and that also worked fine. Sleep+wake and just work, and the sound switches correctly if I plug in a displayport cable or a stereo jack. I get 6-7 hours of battery life, which is expected with an i3 that needs to work a little harder these days.

Both Neon and Mind are based on Ubuntu LTS.

I had a newer T440 briefly, and that had no issues either.

Sounds like a good place to start with the Lenovo possibilities -- thanks!

The old Macbooks were easily upgradable with ram and swapping hard disk for ssd. With the T2 introduction they are just making overpriced machines with 3 years warranty (extra for applecare)

> b) they're making really solid machines that last longer. The MacBook Pro that I'm typing this on is closer to a decade old

Erm... We can certainly conclude that a decade ago, they made long-lasting machines. The newer MBP are apparently defeated by a grain of sand.

Which is not true. One of my worst apple products was a white MB I bought 10 yrs ago that just disintegrated, the white plastic broke gradually of.

>The MacBook Pro that I'm typing this on is closer to a decade old.

I'm not typing on mine because it doesn't work.

> MacBook Pro that I'm typing this on is closer to a decade old than is it new and is showing no signs of stopping.

iPhone 5S on the other hand became unusable after 3 years. Battery lasts only 7 hours if you keep it still without a SIM card. The apps lag while opening. 16GB memory is way too less and I can't even upgrade it -- not even in an apple authorized center.

On the other hand, the iPhone 5S is 5 years old, is still supported by the latest iOS 12, and I was using it until just recently. Many apps did lag a few seconds, but the battery lasted until the end of the day with moderate use. Quite impressive compared to the equivalent priced Androids that seem to always be 1.5 - 3 years life.

I saw a video on youtube saying that the bump in prices is because sales are slowing down year over year.

I have a bunch of Apple devices but haven't updated them in a couple of years. Prices are just prohibited for me.

They're also probably reaching market saturation of who will likely buy their devices - there's a limit at some point. It's analogous to Facebook, which isn't growing it's user base much anymore because they have already have just about everyone on the social internet outside of China with an account. At some point, there just isn't more humans in your market sector.

Wall street cares about growth, and Apple knows they're growth in device numbers is going to slow - so the way you make more money is to make your devices more expensive. They did this, and that's why their revenue and profit is still rising even though the sales numbers are not.

They don't want to report the sales numbers of iPhones anymore because they know they won't go up, so they'll just show revenue and profit instead because they're confident there's still growth there. Other manufacturers such as Samsung and Google already don't release sales numbers, it was actually outside of the norm that Apple used to share these.

Been on an Apple binge recently. The prices are out of reach. I’ve watched Steve on stage reducing prices! Whilst increasing speed. Steve talked about speed, ram, students constantly.

Same here. The prices in my local market are absurdly high. They're literally more expensive than a 2017 Macbook Pro, and more expensive than every Macbook Air on the market.

My OnePlus 5T was less than 1/4th the price.

The latest iterations turned me off the brand. Apple is still my go to for laptops, but the phone prices are a ripoff

It was kind of inspiring to see Steve talk about the power PC CPU’s in a technical way. He would say “these things scream” and would compare constantly. He would talk about students and creatives. Professionals and home users in detail. Watching him bring down the prices was cool to see. The event in NY was a slap in the face. The new air might be great. But they increased the price by $100 without making it anything innovative.

What do you define to be "innovative"? They added a new screen, Touch ID, new trackpad, faster processor…for a $100 more. Compared to the computer it was replacing, this is a steal.

the new macbook air starts at €1349 (ca $1500) in Belgium and you really want the one for €1599 (ca $1800).

for the same money, you get other laptops that are really nice with a cost/return ratio that is a lot better.

sure, apple products are good products. but the premium is getting absurdly high

> you get other laptops that are really nice with a cost/return ratio that is a lot better.

The problem is that they'll all use Windows 10.

I switched to Apple because my Windows 10 experience was absolutely horrendous (literally 7m long start time).

(I can't use Linux because a core use is creating music and my software isn't available for it)

If Microsoft can improve Windows 10, which I don't see much chance of given how they keep screwing up their updates, there might be alternatives to Apple. But for now, OS X is the only competent software solution on the market

> I switched to Apple because my Windows 10 experience was absolutely horrendous (literally 7m long start time).

Windows may be bad, but it's not that bad. There's probably something else wrong with your computer.

I mean I got the best specs I could get - i7, 16GB RAM, a decent graphics card. The only thing I don't have is a SSD. But that alone couldn't contribute so much to my speed woes

Which DAW?

Primarily Ableton Live 10. Also use Pro Tools but mostly for vocals (need AutoTune)

Yeah that's a real shame. I keep a completely separate pc HDD running Windows for Ableton. Maybe I'll switch to bitwig one day cause I'd like to be able to produce whilst on the move

I've tried Bitwig on Linux - it's nice and works well enough. But a few of my VSTs break on it (couldn't get Serum to work for some reason and I absolutely need it)

I really thought the iPhone X price last year was so high because that’s what apple dows. They make the price outrageous but it comes down the following year. It comes down for a NEW model not the last year’s model. That doesn’t seem to happen these days.

And students. I remember that.

AAPL will survive, not because they are doing great but the fact that Android just can't pick up the slack. I was completely mind boggled when top Android phones decided to get rid of headphone jack in order to copy iPhone's mistake. When Apple introduced notch, most Android phones followed up to also have that ugly thing. Funny thing is that none had FaceID to justify it! As long as Android is determined to chase tail lights, Apple is safe and will keep leading the segment. Wall street will come around back in few days.

There were android phones without a headphone jack prior to Apple removing theirs, such as the Motorola Z.

I still have hopes for SE 2. Wish there was XR mini.

apple is becoming a services company, selling high margin services. This seems to be what the market is missing.

It is possible they missed that, it is also possible that that assumption is already built into APPL's $194.17 share price.

A lot of Apple stock holders are speculators who have bet big on Apple continuing to grow and expand their device and service business to even larger heights, stopping or slowing won't recoup the current bets.

AAPL's P/E of 16.36 does not reflect speculation on a growth company. Compare to Google at 40, MSFT at 44, f'ing Oracle at 52...

How is the market missing that? Their service revenue is almost always front and center during conference calls, and what analysts herald as Apple's future.

The reason is device sales are almost always "the proxy" to apple's future, which apple is diversifying away from. I think deep inside, people still count on device sales for the rest.

Also apple cutting orders from one vendor might also be an indicator of vendor diversification.

Without devices to compliment its services. Why would someone use Apple Music over Spotify on android? Or appleflix over disneyflix or Netflix. Services are growing because of an established user base. Take away the hardware and they need to compete with many other companies. It’s a mistake I feel.

Apple services are also not very good outside of Apple's platform:

Apple Music - Only major service which requires you to install iTunes to play with all kinds of funky issues. (ex: try to play an Apple music video fullscreen on a multi-screen system and all other screens goes to BLANK, I mean seriously??) Apple Maps - Not available on non Apple devices iCloud - You only pay for this when you are heavily invested on iOS ecosystem.

Apple services works best on Apple products today; the real question is whether the price increase just forces your average consumers to buy/keep used/older products or they would switch to alternatives.

So Apple prices themselves out of the market and now they are shocked the market reacted with lower sales.

You mean, analysts who typically claim sales are down based on hints and rumors are once again claiming sales are down based on hints and rumors.

No one is claiming sales are falling outright, but that they are slowing...and that is definitely the case. There is a reason why Apple has an incredibly low F P/E. Wall Street loves growth, cash cows usually get less love. That's why Microsoft was flat for ages despite having solid profits but no real growth arm. Then Azure happened and suddenly it's a growth stock. Apple will be just fine, obviously, I actually think the market's overreaction has more to do with overall jitters of the Trump trade war.

Isn't it possible by supporting their own devices for so long they've slowed sales for themselves? If Androids get three years of updates and Apple's get six, and there are fewer and fewer emerging markets you're obviously going to have slow down at some point.

If anything, it might point to increased satisfaction with Apple products which retain their value and work securely for longer.

iOS 12 made iPhone 5's faster than they were with iOS 11 didn't it?

That to me is worth a premium but it also means I probably won't upgrade my 7 for a while.

Apple will have to continue pushing their watches, Apple TVs, and air pods and maybe new products to perpetually have people buying more and more of their products if their products consistently last a long time.

Last time we got actual numbers from Apple (only a few weeks ago btw) the iPhone was selling just fine even at the record setting price points.

Apple just stopped releasing unit shipped data only revenue. Revenue grew but we don't know how many phones were sold.

Apple announced that they were going to stop releasing numbers this coming quarter. Apple announced numbers during the quarter that just passed.

I'm not sure the largest company by market cap has priced itself out of the market just yet.

Blackberry’s highest stock price was one year after the iPhone was introduced. Market Cap is not a leading indicator.

In fairness to RIM:

https://www.statista.com/statistics/266240/global-revenue-of...

Their revenue continued to grow in the early iPhone days. Blackberry was still the mobile for business users until iOS (and Android) caught up on application and service support that those users wanted/needed.

I don't think we've seen (yet) a situation where people will, en masse, depart the iOS platform. RIM failed to recognize (until too late) the desire for an iPhone-style device amongst business users, and ended up losing out to both Android and iOS devices. Android devices aren't offering anything (with regard to hardware and software capabilities) that is substantially different than what iOS devices offer. The primary differentiator today is the pricing, which it seems many Apple customers don't care about (enough to jump ship).

RIM failed to recognize (until too late) the desire for an iPhone-style device amongst business users, and ended up losing out to both Android and iOS devices.

After listening to the book Losing the Signal, I'm starting to think they rushed into the iPhone clone market too fast at the insistence of Verizon. I actually think they would have better off getting their ducks in a row and getting their software strategy correct before challenging Apple. It really seems like they were rushed badly.

Aren’t the new iPhones approximately the same price as the premium android phones?

Edit: Note to self, don’t ask questions here. I had thought the top of the line Samsungs were close. Good points below about cost per supported year.

Unlocked Pixel 3: $799-899 (64GB-128GB)

Unlocked Pixel 3XL: $899-999 (64GB-128GB)

Unlocked iPhone Xs: $999-1349 (64GB-512GB)

Unlocked iPhone Xs Max: $1099-1449 (64GB-512GB)

I don't know if Google's Pixel phones are really premium, but by the price I'm assuming so. It seems Apple is adding about $200 over Google's price for the similar size and storage points.

Yes, and when you sell them in 2 years time the iPhone will be worth $300 more than the Pixel.

Depth sensor? Other meaningful specs? Plthe difference between $800 and $1000 is abstract when you're financing or renting month to month

No doubt there are more spec differences between the two. I don't know Android hardware well enough to find a proper Android-to-Apples comparison, so I went with a current flagship from Google and the two specs that (I suspect) most users care about: size and storage.

As others have said the difference is a few hundred dollars.

The other thing is that the premimum phones offer less than they used to over medium priced phones and that is where Android phones are much cheaper.

Apple devices hold their value better, but still the price differences between very good mid-range phones and iPhones are pretty big.

In my market, the Google Pixel 2 XL is literally half the price of the iPhone X

iPhone XS: $999

iPhone XS Max: $1,099

Pixel 3: $799

Pixel 3 XL: $899

So the new iPhones are now more expensive than the new premium Android phones. Historically, yes it seems like iPhones cost as much as the best-of-the-breed Android phones.

A big part of the issue is that there is no iPhone XS with 128gb storage, and no iPhone XR with 4x4 MIMO. If those were the real prices then that would be one thing, but they're purposely making their base models all but unusable.

When they still sold 16 GB phones sure, but 64 GB is perfectly fine for most users, especially if you use music and photo services in the cloud. As for 4x4 MIMO, I saw benchmarks on a real-world network, and the differences were pretty much negligible (under 10%)

The base models are nowhere near "unusable", they're actually better than they have ever been for Apple.

Not really, there is a fairly significant drop when you compare top end Android phones to top end iPhones.

The Pixel 3 and S9 are about $300 cheaper. That's a big chunk.

How long will they be supported?

What is the cost per supported year?

This.

If history is any guide and seeing the iPhone 5s is going into its 5th year of being supported. Someone with an this years phone should be getting updates until 2023.

Don't know about Samsung, but Google has been quite good about supporting their phones over longer time periods and has been making specific changes to Android because they can't count on the carriers to do the upgrades.

The Nexus 6 is a 2014 phone and is upgradeable to Nougat/7.1.1--which was basically top end until just this year.

The original Pixel is a 2013 phone and actually has Android 9 support.

The original Pixel isn't a 2013 phone. It's a 2016 phone. That's a pretty big difference from 2013.

Try selling them both 3 years from now. You’ll get that chunk back.

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