Apple AAPL -0.21%’s new iPhones are in trouble according to reports today and the company’s response is uncharacteristically telling. Apple has announced it will give customers new cash incentives to buy them…
The pressure comes from both inside and outside America.
Inside America, the growing pressure of a trade war with China has seen President Trump threaten to place tariffs on Chinese manufacturers, including those who make iPhones. Speaking about phones and laptops, Trump said: “I can make it 10%, and people could stand that very easily.” On cheap models, maybe, but fast-rising iPhone prices are already on the brink of alienating buyers. A 512GB iPhone XS Max, for example, costs $1450 before sales tax (details).
And the news outside America only compounds this.
Digitimes reports today that Apple has “enforced a second wave of order reduction in the wake of weaker-than-expected sales for its new iPhones”. Apple’s Chinese manufacturers were already reporting profit warnings due to order cutbacks of 25% by their “largest customer”.
Apple’s response: it will give customers up to $100 more when they trade-in their existing iPhones under its ‘GiveBack’ program and upgrade to one of the new models.