Apple is all about average selling price
Appleâs newest iPhones are here. Â One of them is a real beauty. Â And that may be a problem.
Every September, Cupertino rolls out its latest devices. Â And every year tech journalists write breathlessly about how this iPhone, the new one, with its innovations and industrial design, really is the future of smartphones. Â It isnât, not normally.
At least, that was until iPhone X. Â
image courtesy Getty Images
The new iPhone features a large, almost bezel-free screen, a polished stainless steel frame, a new silky smooth software interface, and innovative facial recognition gear. Â It feels like the future.Â
By comparison, the other smartphone Apple introduced, iPhone 8, feels very much like the past. Â Worse, it is the only new Apple phone most people will get a chance to buy anytime soon.
All of the fancy new hardware for X is being mass produced for the first time.  Since April, rumors persisted Samsung, the maker of Xâs beautiful AMOLED screen, was having production yield issues. Â
So X is going to be in limited supply.  Even pre-orders have been pushed back to October 27.  Shipping dates will not begin until November 3. Â
To be fair, scarcity/exclusivity is a proven marketing strategy. Â No company plays this game better than Apple. Â This go around, other factors are in play. Â In addition to the late shipping date and probably limited supplies, the company will need to convince customers to skip the phone they want and buy another that looks like the one in their pocket.
The risk is they wait, and Apple misses fourth-quarter unit sales targets.  Iâm not willing to bet that happens, at least not yet. Â
However, competition from Android is ramping up. Â Users get an arguably better experience with a high-end Galaxy or Pixel device. Â The hardware is better or comparable, and the software is far superior. Â Google Maps, Mail, Search, Photos, Assistant, and YouTube are all tightly integrated into the operating system. Â Paired with the Google Pixel, itâs a very polished experience. Â
To Appleâs credit, it has done a great job crafting outstanding devices and building a very loyal customer base.  Often they will not even consider switching out of the ecosystem. Â
Apple does have a plan. Â Lost in the euphoria over X, were price hikes for its incremental offerings. Â The iPhone 8 and 8 plus now start at $699 and $799 respectively. Â That is $50 and $30 higher than the models they replace. Â In theory, the company can sell fewer phones and make the same amount of money.
And expect the carriers will offset some of the worries with trade-ins and promotions to move iPhone 8 inventory. Â Already, Sprint (S) is offering a $350 trade-in.
Shares have drifted mostly lower since the iPhone X reveal. Â There is good support in the $157 area and resistance at the recent high near $164. Â As long as the stock remains in that range near term, shareholders should be fine.
Apple made a terrific gadget with iPhone X. Â Shareholders need to hope it wasnât too good.
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