Apple appears to be suffering from the fact that more consumers are buying less expensive versions of Apple’s iPhones and iPads. Apple’s chief financial officer, Peter Oppenheimer said that when given a choice between older and cheaper models and the “new” ones, Apple users were opting to save their pennies. It is more likely that they can’t see any difference in technology which is worth paying the extra cash for. It is also likely that the more sensible iPhone user will either buy or stick to the more discounted iPhone4s or even the iPhone4. For years Apple has built a sales model which is dependant on its customers paying a relative high price for nearly identical products, or paying over the odds for more expensive models. Perhaps this will now change.
Apple have performed rather well for a maker of expensive gadgets in the middle of a recession. Both revenue and net income posted increases of just over 20 percent. While it has managed to make a lot of money, Apple’s growth was the slowest this month in more than two years and failed to meet analyst expectations. Part of the problem appears to be that Apple enthusiasts, in the current economic climate, are starting to realise that the latest range of products are not much better than earlier ones, which are a lot cheaper now. The iPhone4S, for example, is identical to the iPhone4, it just has Siri, which many users of the device, worked out does not work half the time. It is not particularly useful in the UK either where Apple did not bother updating it.
Of course this will change with the consumer rush when Apple issues its iPhone5 later this year, but early indications are that it will be just a slimmed down iPhone4s with an expected high price tag. The difference between the latest iPad and its earlier versions is also negligible. In this case it is the improved graphics screen. Apple makes its mark by marketing itself as innovative. But for the last 18 months it has been selling more or less the same product. Its average selling prices for their gadgets have declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.