Apple’s profits in danger as consumers opt for older iPhones

Apple’s profits in danger as consumers opt for older iPhonesGood lord, there’s no shortage of negativity surrounding Apple at the moment. Plunging stock? Check. Profits ‘likely peaked’? Check. Terrible web services? Check.

Now word on the street suggests a worrying number of consumers are happy to opt for older iPhone models if it means saving a few bucks.

One of the key factors in Android’s meteoric rise to first place in smartphone market share was offering phones at various price points.

Traditionally, Apple has been firmly at the wallet-punching end of the price spectrum, but more recently – in an apparent bid to address the Android thing – it’s started keeping the older models around and dropping the price.

For example, right now the iPhone 5 starts at £529, while the iPhone 4S comes in from £449, and – cheaper still – there’s the iPhone 4 as low as £319.

Makes sense, eh? Or does it?

According to Consumer Intelligence Research Partners, the iPhone 5 accounted for 68% of iPhone sales in its first month, significantly less than the iPhone 4S –which managed 90%.

The problem here is that low-end models are typically less profitable, so while an iPhone sale is an iPhone sale and a victory for iOS, it means less money in Apple’s pocket, and that ain’t good for business.

via: AllThingsD

Read more about: Apple iPhone 4Apple iPhone 4SApple iPhone 5iOS

Add a comment
7 comments

Pondlife  Dec. 4, 2012 at 18:19

I can't see it. 4s and 4 will be costing even less to make now than when they were new, doubt there's much in the profit margin between them, the 4s and 5 especially.
Compare the i4 price drop with the Nokia 800...

JanSt / MOD  Dec. 4, 2012 at 18:27

I read the opposite last night. Apparently they are expected to sell 45 million iPhone 5 this quarter. Just shy of an earlier prognosis of 47.5 million... If that is what "in danger means" - well, yay.

Pondlife  Dec. 4, 2012 at 18:29

Plus the person buying the i4 wasn't likely to stump up the cash for the i5 and likely doesn't have another iphone so might spend more in app and maybe music/tv/movie/book sales than an habitual iphone upgrader..

socialjeebus  Dec. 5, 2012 at 02:29

Plus the person buying the i4 wasn't likely to stump up the cash for the i5 and likely doesn't have another iphone so might spend more in app and maybe music/tv/movie/book sales than an habitual iphone upgrader..

Yep, I'd hazard a guess that most of the iPhone 4S customers would have only been part way through their 2-year contract so no surprise that they wouldn't be upgrading. I'd also argue that the performance / design gap between the 3GS and iPhone 4 was far greater than the gap between the iPhone 4S and iPhone 5.

matt101101 / MOD  Dec. 5, 2012 at 12:41

I'd also argue that the performance / design gap between the 3GS and iPhone 4 was far greater than the gap between the iPhone 4S and iPhone 5.
Very much so, espcially with the introduction of the "Retina" display, it gave people a very obvious upgrade which took no understanding or detailed comparsion of loading times etc to understand.

The iP4 was also the first iPhone with an acceptable camera, the first 3 were all terrible.

Pondlife  Dec. 5, 2012 at 13:05

Having a larger screen doesn't need much understanding or detailed comparison either.
Prefer the styling on the 3gs tbh.

matt101101 / MOD  Dec. 5, 2012 at 13:19

Having a larger screen doesn't need much understanding or detailed comparison either.
Prefer the styling on the 3gs tbh.

It is bigger, but the design is the same as is the perceived resolution.

Email:

You don't need an account to comment. Just enter your email address. We'll keep it private.

Comment: