Apparently, Apple’s new iPhone X is not selling as well as Apple had hoped, based on a new report from KGI Securities analyst Ming-Chi Kuo. Kuo reports that Apple is planning to cancel its latest model due to disappointing sales. Now this analyst, usually one of the most informed due to his contacts with Apple’s manufacturers, may be exaggerating the severity of the situation, but there’s probably something here. Other rumors have reported disappointing sales of the pricey model.
But, perhaps it should not be all that surprising. This was Apple’s gamble to sell a new phone at hundreds of dollars more than any previous phone or competitive product, crossing the $1000 mark for the base model. While the phone had some new features, at least for Apple, such as wireless charging and a longer, brighter OLED display, it had an uncanny resemblance to the Samsung S8 phone that preceded it by 6 months and cost $200 less. But true to Apple’s over-the-top messaging, this was a brand new phone, the most advanced in history, and worth every cent.
When Apple introduced the iPhone X, the company unleashed a huge publicity campaign to tout its features, full of superlatives, hype and exaggeration. They explained that one of its compelling features was face recognition that replaced the fingerprint authentication. It was done to make the front of the display more screen and eliminate the need for the home button.
And it does works well, although it requires a controversial notch to be taken out of the top of the display to make room for the sensors that characterize your face. But in the whole scheme of things it’s just another way to turn on the phone. Not really that big of a deal. Credit Apple’s masterful PR to get all of us to obsess how a device is turned on!
Apple’s behavior is not so different from the hotels and airlines that try to convince us less is more. They make a huge splash about something new, roll out their public relations machine to distort the benefits, but after all the excitement fades, we find we really are getting less for what we are paying. And, eventually the basic laws of economics hits these companies. When you offer less, the public will eventually catch on and reward you with less business.
In Apple’s case, they tried to increase the cost of the smartphone in an era where improvements were incremental and where older models worked much the same. They tried to convince us, and maybe themselves, that the new improvements were really significant and could command a premium. But the laws of economics eventually prevail, and customers were able to see through the hype.
What’s the lesson here? Advertising is rarely accurate and unbiased. It’s created by company executives that feel their job is to spin everything to their companies’ benefit, and perhaps they do it so often that they believe their own hype.
If Apple were to kill the iPhone X they’d likely spin it into a positive rather than lower the price and offend those faithful customers that spent $1000 or more. Apple is one company that rarely admits its mistake.
Instead, Apple might say something like this: “The iPhone X was always meant to be a limited edition phone to commemorate the tenth anniversary of the original iPhone. Now that the year is coming to an end, the phone will never be sold again. How lucky for those that get one of these special models before it came to an end!”
