Following accelerating dollar run and less-than-expected iPhone sales during the holiday season, Apple, in its unprecedented action, plans to slash prices of some of its flagship iPhones outside the US.
This has happened the second time in iPhone’s 12-year history. Earlier, Apple had reduced iPhone prices shortly after it debuted in 2007.
Reduced iPhone Prices Result of Depressed iPhone Sales in Holiday Period
In an interview with Reuters, Apple’s CEO Tim Cook said that the decision is an attempt to curtail weak sales of iPhones, in overseas markets like China. Rise in the US dollar in the past year has shot up prices of Apple products. Notably, many Apple products prices were already higher than other devices in Chinese markets.
Cook revealed this plan of price cut on Tuesday after Apple reported the first-ever slump in iPhone sales during the holiday season, which is a crucial period for the company.
Cook, in his statement, didn’t disclose the name of countries where Apple is going to reduce iPhone prices. However, many resellers in China had started cutting prices quickly after Apple lowered its sales forecast for the quarter ended in December 2018.
Consumers in the United States were happy as Apple released its iPhone XS at the same price as that of iPhone X. But for customers in China and Turkey, they had to pay exorbitant prices for iPhone XS as local currency registered high fall and became weak against the rising US dollar.
On Tuesday, Cook suggested that the company would adjust foreign prices in some markets by resetting them at or close to what they were a year before in local currencies. This indicates that Apple will absorb the cost of the rising dollar.
Cook said, “We’ve decided to go back to (iPhone prices) more commensurate with what our local prices were a year ago, in hopes of helping the sales in those areas.”
Soaring iPhone prices are a significant issue for Apple as consumers have already begun to lengthen the upgrade period. This decision of price cut is taken due to weak iPhone sales in the holiday season. Now, Apple has eyes on its 2020 iPhone launch as the company might introduce new technology (foldable iPhone, probably).
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