Corporations have the right to charge whatever they wish for a technological product. Publicly traded companies want to make as much money as possible to drive up share prices. Investors demand a return on their capital. Consumers, however, possess the most power. If someone doesn’t want to buy an overpriced item, the merchandise goes unsold. Apple, along with other companies such as Samsung, is learning a hard less. Many consumers won’t pay more than $1,000 for a smartphone.
Apple’s executives surely fear low iPhone sales. The company experienced a shocking drop in its stock value for most of 2019. The decline followed and wiped out the incredible growth of 2018. The current stock price figures are impressive, but the chance for another drop looms. Technology stocks aren’t predictable, and consumers can be fickle. Apple learned customers wouldn’t accept a subpar product because it bears the usually reliable company’s name. The initial failure of the Apple watch exemplifies this assessment.
Apple will soon announce the release date on the upcoming iPhone 11 models. Sales must prove secure for the company’s revenue streams to drive up the stock price. Apple’s don’t want to see consumers abandon the more expensive options. However, a customer can’t pay for something outside what he/she can afford. And even those who could afford the purchase may be uneasy.
Why pay for something that doesn’t live up to its high price? Ultimately, many iPhone customers use their devices for essential purposes: calling, texting, accessing preferred apps, and such. Unless a new iPhone delivers something dramatically beneficial, no compelling reason exists to upgrade.
Previously, Apple found smartphone sales in China lacking. Also compounding Apple’s overseas woes is the company’s request for a tariff waiver received a denial. Soft iPhone sales in the United States aren’t what the company needs. However, if Apple prices itself out of the market, the company must deal with the consequences.