iPhone XR: Why Apple Plans Big Price Cuts in Japan
Apple is taking action in Japan amid sluggish sales for the iPhone XR, the company’s newest smartphone. A Thursday report claims Apple will give Japanese carriers a subsidy as they prepare to slash prices next week, in a bid to maintain the iPhone’s 46.7 percent share of the country’s smartphone market.
It’s a sign of somewhat muted enthusiasm for the phone, which wowed reviewers with features like Face ID and a big screen at $749, a price that’s $250 less than this year’s iPhone XS and $350 less than the XS Max. The Wall Street Journal report states that one carrier official said that “a price cut within a month of the release is rare not just for Apple but for smartphone makers in general.” It comes as Nikkei reports earlier this month that the company has halted plans to expand production lines and will produce around 100,000 fewer units per day.
The XR’s slower sales echo that of the iPhone 5C. The phone launched in 2013 alongside the iPhone 5S, and acted essentially as a repackaged iPhone 5 but with larger battery and plastic backing. Unlike most years where Apple continues to sell the previous year’s phone at a lower price point, the 5C was a way of refreshing the product to make it more appealing. CEO Tim Cook admitted in one earnings call that Apple underestimated demand for the 5S versus the 5C, and Apple did not produce a successor to the 5C.
The XR’s high-tech internals, with the same A12 Bionic processor and main camera sensor as the XS and XS Max, copy a similar pattern to the iPhone SE. The phone launched in March 2016 as an entry-level device that packed the same internals as the iPhone 6S, at the time the company’s flagship model. Reviewers praised the phone for offering high performance in a phone with a 4-inch screen. While the XR packs the same internals as the XS, its 6.1-inch screen means it strays from this formula.
With Apple analyst Ming-Chi Kuo claiming Apple will stick to a three-device lineup for next year, it seems the company may not give up on the XR strategy just yet.
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