Why is the new iPhone so expensive?

Good news Malaysia Apple fans! iPhone XS and XS Max will be in store soon and now available for booking. The selling price starts at RM4,999 (iPhone XS 64GB) and goes all the way up to RM7,049 (iPhone XS Max 512 GB).

RM7,000+ for a mobile phone!

In context – the median monthly salaries for Malaysian workers, based on 2017 survey by Malaysia Statistic Department, is RM2,160. Employees with tertiary education of 3.3 million persons earn a median salary of RM4,320 (source)*.

So if you work out the simple maths – Should an average Malaysian want a new iPhone, he or she will need to spend three, or four months worth of salary.

Ouch!

Expensive price tag is good for Apple’s business (duh!)

It’s obvious now that Apple wants their iPhones to be expensive.

They want the majority can’t afford their products.

Weeding out the “poor” is good for Apple.

Chinese joke on iPhone XS price. Translation: “Expensive is never its drawbacks, it’s yours. Booking starts September 14, sales starts September 21”.

If you can’t afford an iPhone – it’s YOUR problem; not Apple’s

Apple announced financial results for its fiscal 2018 third quarter ended June 30, 2018 just recently.

The Company posted quarterly revenue of $53.3 billion, an increase of 17 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.34, up 40 percent.

56.1% of Apple’s revenue came from iPhone sales – the company sold 41.3 million iPhones in Q3 FY 2018. Services –  a catch-all category that includes the App Store, Apple Care, Apple Pay, iTunes and cloud services contributed $9.5 million in revenue – a 31% surge from year-ago quarter.

Some key observations:

  1. Apple sold the more or less the same amount of iPhones and iPads in year-ago quarter (Q3 2017),
  2. Apple sold less Mac compared to year-ago quarter (Q3 2017),
  3. Revenue and profit, however, are up 17% and 40%.

In other words, Apple made 40% more money by selling LESS.

what just happened? What just happened?

The strategy of selling higher price iPhones is proved working.

Users who spent so much on a phone are more likely to spend more in Apple Store, Apple Care, iTunes, and Apple Cloud service – the higher margin sectors. Revenue from “Service” just surged 31% Y-o-Y in Q3 2018. This sector will grew even faster in coming quarters.

Selling less units means Apple now has less users to take care of, they can provide better service to their “honorable customers”.

Apple iPhone will soon be the phones for the privileged. Just like how private banking and business class flights are positioned for only high net worth customers.

If you think these services or products are expensive – it’s because they are not for you. Stop pretending, or forcing yourself to be what you are not.

Stop letting Apple to milk you. Get an Oppo or Xiao Mi.

Or why change phone when your old one still works fine?

 


 

* Additional data –

1- iPhone in U.S. market

In United States, iPhone XS 64GB, 256GB or 512GB are selling at $999, $1,149 or $1,349. You need to add $100 on top of that for the iPhone XS Max with a bigger display ($1,099, $1,249 or $1,449). The iPhone XR starts at $749 for 64GB, with 128GB and 256GB also available for $799 and $899.

According to the Bureau of Labor Statistics (BLS), the median wage for workers in the United States in the fourth quarter of 2017 was (pre-tax) $857 per week or $44,564 per year for a 40-hour workweek.

The iPhone price is not as expensive as you would “feel” in Malaysia. But it’s still a big portion on household spending, considering an average American spent just about $7,700 annually on food.

2- Spending on apps and in-app purchases

Apple users spent $63 on average on apps and in-app purchases in 2017; versus Android’s $58.

If you really have to send that canned email…

I know that you are busy.

We are ALL BUSY.

But I thought you should know there’s another human on the other end of line.

If you really have to send that canned email…

  • Can you please address my name?
  • Can you please edit your font style so it’s easier to read?
  • Can you please keep it short so I can know what you want in just one quick glance?

That’s the least respect you can give to my inbox space.

And the least you can do as an “outreach specialist” or “IT manager” or “professional blogger”.

20 Years of Google Search and Beyond

Can you believe it? Google is no longer a teenager. The big brother has turned 20 years old in 2018.

Here’s an interesting article, written by Google Search VP Ben Gomes, in conjunction to the company anniversary: Improving search for the next 20 years.

For the next 20 years, Google wants to shift (to quote)…

  1. From answers to journeys,
  2. From queries to providing a queryless way to get to information, and
  3. From text to a more visual way of finding information.

All these sounds great. But… do read between the lines.

Every time Google says “First and foremost, we focus on the user….”, I get the feeling that something against the users’ interests is happening.

Be reminded that Google has been showing more and bigger ads in their search result pages repeatedly over the years. Read here, here, and here.

While Google is certainly serious about improving its users experience in overall. I suppose the shift in next 20 years also meant Google will

  1. Track users closer and collect even more data to improve product stickiness,
  2. Inject more suggestions in SERP (we have already seen a 35% surge in “people also ask” in July 2018) to better understand searchers’ intent; and then pushing more ads and product recommendations in the name of “improving user’s Google experience”, and
  3. Provide better Google image and video search suggestions (probably allow users to preview the videos on site?) to increase users time spent on Google.

Does that red ball in the movie Minority Report comes into mind?

 

Good Reads on Facebook Data “Leak” and “Hacks”

First of all Facebook is not hacked.

Nor there’s a data leaked.

The whole huh-ha about Cambridge Analytica, FB users’ privacy crisis, and Mark Zuckerberg’s testimony to Congress on main stream media is entertaining. Watching Mark’s responses to some of the questions remind me (a lot) of the movie “The Social Network”.

Many of these questions and writings are focusing on the shallows or issues that don’t matter.

When you are ready to dive deeper, I suggest reading:

How long can we survive Google domination?

If you wish to know how hard it is to please the almighty Google today, this is a good read.

In the name of “better user experience”, Google has been constantly exploiting small online businesses and pushing content publishers away.

Image credit: Dr. Peter J. Meyers

Knowledge graph. Live results. Snippet answers. Local Google results. Featured videos. Flight schedules.

Every new features being introduced in Google Search draws more internal links back to Google’s assets.

Good content, built with sweat and blood, by smaller publishers are being scrapped by force.

Many of us are creating more (and better) content to temporary solve the issue. But in the long run, there’s no escape from this downward spiral to 0% margin.

It takes good talent and lots of money to create good content.

Yes Google doesn’t owe us a living.

But quoting Dr. Peter J. Meyers  –

…the time has come for Google to stop and think about the pact that built their nearly hundred-billion-dollar ad empire.

After all – what’s there to search after all independent publishers are driven out of business?

Shareaholic Traffic Report (2017)

Recent Shareaholic traffic report indicates that web traffic pattern is shifting from social to search in 2017. Pinterest, Google, and Instagram came out as the big winners as Facebook share of visits dropped ~8% in 2017. Social network, in a whole, is no longer the biggest traffic driver for the 250,000+ sites (this blog included) using Shareaholic app. Instead, search is.

Search finally had a comeback year and overtook Social as the top traffic driver within our network.

Search surpassed social media networks as the biggest traffic driver in 2017.
Facebook visits dropped a massive 12.7% between the second half of 2016 and the second half of 2017.

Bitcoin is the very definition of bubble… yes?

I am no Bitcoin expert. I read the papers on how it works (years ago) and some news from media outlets I trust (definitely not Bloomberg and CNN). And that’s about it. I do not mine. I do not trade. I have yet to done my first Bitcoin transaction.

The idea of having a non-centralized, unregulated currency fascinates me.

Large banks, developed countries, and wolves from Wall Streets (Goldman Sachs might set a new stage for Bitcoin exchange) might not love it because that means end of world control and currency exploitation over smaller developing countries.

Bitcoin is unlike anything else in the past because:

Where there’s risk there’s opportunities?

The dramatic fluctuation of the crypto currency has defies the original purpose of the invention.

Would you spend your coin today if its value might surge 20 or 30% next month?

How would you feel, if you bought a car with 2 Bitcoins earlier this year and found out that the same amount of coins could buy you five or six car (the very same model!) today ?

So is Bitcoin the very definition of a bubble?

I don’t know.

Enlighten me please.