Apple restarting iPhone X production may not be a good idea

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Image source: Visual China

As early as after the release of Apple's XS series, the old iPhone X was discontinued. Apple's purpose at the time was also very clear. The iPhone XS series has limited innovation and a higher price. If there is an iPhone X in the middle for comparison, its cost-effectiveness advantage is too strong. Its existence will affect the sales of the iPhone XS series and even the iPhone XR.

Therefore, after Apple cunningly discontinued this product, it might think that compared with the iPhone 8 series, the cost-effectiveness and full-screen advantages of the iPhone XR and the high-end quality advantages of the iPhone XS series will be greatly highlighted.

Who knows that man proposes, God disposes? Apple has made good calculations, but users are not stupid either. In addition, the comparison with the new flagships in the Android camp with greater potential for blockbuster sales has caused Apple's new iPhone this year to face unprecedented embarrassment and challenges.

As a result, we can see that the sales of iPhone XS and iPhone XR series have lost their momentum compared to previous years. The expected growth has not come. According to the Wall Street Journal, iPhone XR will cut one-third of its orders, and iPhone XS series will also cut some orders. Foxconn's industrial lines have been reduced by 25%. After cutting orders, reducing production and reducing production lines, Apple panicked.

According to the Wall Street Journal, due to the market performance of iPhoneXs and iPhoneXsMax being lower than expected over the past few years, Apple has been forced to restart the production of iPhoneX. It also explained that the reason for doing so was that Apple had previously signed too many OLED screen orders with Samsung, and among the previous old models, only iPhoneX used an OLED screen, and the rest were LCD screen phones.

In the past year, iPhone profits have increased by nearly 30%, and Asian users have contributed greatly to this, which to some extent shows the popularity of iPhone X. If a mobile phone is popular and user demand is strong, but a hot-selling product is forced to be discontinued in order to make way for a new phone with limited upgrades but higher prices, we rarely see this practice in the Android camp.

If a mobile phone product is popular in the Android camp, the manufacturer will inevitably increase production lines and increase inventory to cope with the surge in demand based on the expected growing user demand in the future. The manufacturer may also show data on various platforms and emphasize to users that this is not hunger marketing, but that there is indeed insufficient inventory and an underestimation of user demand. The manufacturer must also comfort users that new goods will arrive soon and they don't need to worry.

But Apple doesn't do that. After all, it has lived a life of luxury for too long and has long forgotten the cruelty of the outside world.

Apple may have encountered too few setbacks in recent years and lacked awareness of the risks of the new iPhone XS series. After all, it has done so in previous years, upgrading in the big year and repairing in the small year, and users buy into it every year. Why is this practice not working this year?

This is obviously beyond Apple's expectations, so now it has restarted the production of iPhone X to digest OLED screens. After all, Apple has ordered too many OLED screens this year, and must complete the purchase volume according to the contract, otherwise it will have to pay Samsung a penalty.

In order to save declining sales, is Apple on the right track?

To some extent, we know from various channels that users value OLED screen and dual cameras more than the performance of iPhone XR. The author also pointed out earlier that although the A12, FaceID, large screen, etc. on iPhoneXR have not shrunk, the reason why the iPhoneXR, which is not cheap, is labeled as a cheap version is actually because it loses in the appearance that represents the quality of a mobile phone product - including industrial design and the quality configuration of core components such as screen, aluminum alloy middle frame, and camera. The exquisiteness of the appearance of industrial design is the first factor that constitutes people's buying impulse. From the perspective of human nature, the importance of quality and impression points given to people is actually far greater than the performance of the inside.

If the price is the same, users will choose iPhone X. But it is obvious that even if iPhone X is re-produced, the hardware cost for Apple will not change much compared with last year.

Judging from the price of iPhone X when it was released last year, the price of iPhone X is much higher than that of iPhone XR. Therefore, even if iPhone X is re-produced, its price will definitely be higher than that of iPhone XR due to its higher cost. However, the current price of iPhone X on some third-party platforms is around 6,400 yuan, which is lower than the starting price of iPhone XR. If the starting price of the re-produced iPhone X is too low, the sales of iPhone XR will be even more miserable.

Therefore, based on the cost of materials and OLED screens, it is highly likely that the price of the re-produced iPhone X will be higher than that of the iPhone XR.

It can also be seen from the official repair costs of iPhone XR announced by Apple earlier that the repair cost of XR is cheaper than that of iPhone X, because even from the perspective of product positioning, iPhone X is more high-end than iPhone XR.

Among the advantages that Apple boasts, the only thing that iPhone XR can surpass iPhone X is that its screen refresh rate is 120Hz, which makes the experience smoother. However, this perception of smoothness is not obvious to the user, and under the premise that iPhone X is already smooth enough, this slight advantage is not attractive enough.

If the starting price of the re-produced iPhone X is close to last year's price, iPhone X will compete with iPhone XS and iPhone XS Max. If the price difference between iPhone X and iPhone XS series is too small, iPhone X will become useless again. If the difference is too large, for Apple, the profit of its new flagship iPhone XS series will be seriously affected.

Essentially, the re-production of iPhone X will make the horse race and competition among Apple's new products more intense than ever before. And to a large extent, iPhone X will greatly affect the sales of iPhone XS, iPhone XS Max and iPhone XR.

For Apple, it has always been good at modifying the pricing and product "mix ratio" of previous and current products and keeping the average selling price at a constant level, so that the company can maintain its profit margin no matter which market stage it is in.

But the core problem at present is that the iPhoneXR itself, which has a low cost-effectiveness, lacks in style and differentiation, will make users feel hesitant about purchasing a new phone. The emergence of iPhone X will cause users to prefer previous-generation products. Once Apple fails to control the price, the sales of new products in the same period will often be overshadowed by the old models.

iPhone XS and iPhone XS Max have been affected in sales due to their higher prices and small upgrades. Overall, the emergence of iPhone X will disrupt Apple's previous positioning and balance between various products. However, facing the current sales slump, Apple has no choice but to do so.

In fact, to some extent, reproducing the iPhone X will make more users who are waiting to buy the iPhone X turn to the camp and embrace of the iPhone X. This will actually push Apple into a more embarrassing position, that is, Apple itself has indirectly admitted that its new product has errors from price to positioning, which makes users more accepting of Apple's past rather than its future.

To some extent, the iPhone XR, originally a high-volume product, may become the biggest victim after the iPhone X is re-produced, and the cost-effectiveness advantage that Apple believes the iPhone XR possesses will disappear.

In fact, in a sense, Apple should learn from Huawei and Xiaomi to restart a sub-category and sub-brand for its low-end products. For example, Huawei has Honor and Xiaomi has Redmi. Their sub-brands are distinguished from their high-end brands. The sub-brands can target a younger market and cater to this market with a younger marketing approach, and also successfully meet the needs of the cost-effective user group.

But from today's perspective, Apple, which used to be good at brand packaging and marketing, seems to lack achievements in brand building. It can be said that the reason why Apple's previous cheap versions of the iPhone have failed is that Apple did not reposition it as a new brand, allowing the outside world to classify it as a cheap camp rather than a younger iPhone camp.

To sum up, Apple is currently trying hard to save its declining sales, but it should also reflect on its lack of insight and innovation in marketing and brand building.

In general, the iPhone X can have a certain effect in rescuing the market, but if the iPhone X sells well in the next sales season, it may not be a good thing. It is equivalent to telling people that the iPhone X is more cost-effective than the new iPhone XS series, and the upgrade of the new product is indeed very limited as the outside world says.

But in fact, this strategy will make people ignore the stunning design and performance upgrades of iPhone XS and iPhone XS Max. It can be said that iPhone XS and iPhone XS Max are superior to iPhone X in terms of industrial design, color quality and the smoothness of software and hardware.

For example, the new iPhone XS has a more harmonious and high-quality look in color matching, and the OLED screen resolution has also been improved to a certain extent, with a 60% increase in tolerance. In actual viewing, the screen of the iPhone XS series has a significant improvement over the iPhone X screen, which is noticeably more gorgeous, surpassing the iPhone X in both look and feel and visual impact.

In addition, the unlocking speed and accuracy of the new Face ID have been improved, the dual-speaker stereo sound brings a wider sound effect, and the intelligent HDR combined with the computing power of the A12 Bionic chip makes the photo quality and effect much better than the iPhone X. The A12 Bionic processor on the iPhone XS series is the world's first mass-produced 7nm process mobile chip with stronger GPU and neural network computing capabilities. It has brought significant improvements to mobile phone performance, heat control, battery life, photography, etc.

In general, although the iPhone XS and iPhone XS Max series do not have obvious functional innovations compared to their predecessors, they have improved the shortcomings and weaknesses of the iPhone X and are a more mature and textured product.

If Apple fans buy new iPhones for longer life and better experience, then iPhone XS and iPhone XS Max are more suitable for their needs. Perhaps after a long enough period of time, people may realize that iPhone XS Max may be the flagship worth buying.

But what is regrettable is that based on the pursuit of higher profits, Apple set a higher selling price, which greatly increased people's experience threshold for iPhone XS and iPhone XS Max, and caused more users who lack in-depth understanding of them to have prejudices, thus greatly affecting the greater sales and popularity of Apple's new phone.

In general, Apple's decision to raise the price of the new iPhone again was a mistake with far-reaching consequences, as it did not realize that the iPhone X had reached the upper limit of what users could afford. Although it is not a complete loss, the current stock price plunge may have been beyond Apple's expectations.

Apple was forced to restart the production of iPhone X due to the situation, but in fact, restarting the production of iPhone X is a retrograde practice. It is a waste of resources to use the OLED screen originally used for iPhone XS and iPhone XS Max on an old model, isolating the better chip performance and configuration of the new product from users.

The wise approach would be to directly cut the price of the new flagship iPhone X and iPhone XS Max, reduce its experience and purchase cost, and spread its quality experience to more groups to generate word of mouth. From a strategic point of view, this is to guide users to recognize Apple's present and future rather than its past.

To some extent, Apple may be trying to save an existing mistake by making a new one. In this sense, restarting the production of the iPhone X may not be a good idea.