Even Apple itself practically admitted that troubles are brewing at Cupertino. It warned investors that it earnings might be lower than expected. A lot lower, in fact. Although the company won’t say it, analysts believe that it has a lot to do with the weaker than anticipated sales of the 2018 iPhones, especially the iPhone XR. And at least one such analyst believes that far from being the last, the smartphone’s price cut in Japan and China are just the start.
Although it isn’t unheard of for Apple to slash down smartphone prices, it is almost unprecedented that it would do so too soon and too fast. The substantial $100 discount in Japan happened barely a month after the iPhone XR launched. That was followed by a 20% cut on the iPhone XR in China, along with the 2017 iPhone 8 and iPhone 8 Plus.
Investment firm Wedbush says that there are more price cuts to come in China but it’s not because of lackluster sales like what most suggest. Instead, it’s all about maintaining its customer base in the market. With cheaper phones from Xiaomi and Huawei popping up everywhere, reducing the iPhone XR’s price is Apple’s strategy at stopping buyers from moving away from its phones.
Apple also has another strategy in light of declining iPhone sales. The company is reportedly turning itself into a services company rather than a hardware one, but there it might also need to take drastic measures. Apple has long been expected to launch a streaming subscription of its own but now it might be too late to start from scratch.
Instead, Wedbush suggests Apple will be acquiring an existing service, despite that being uncharacteristic of the company. The firm believes that Lionsgate, Sony Pictures, and A24 are probably high on the list while earlier suspects Netflix and Disney are very low.