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Apple’s iPhone 11 Success

Apple’s iPhone 11 Success

Apple recently reported their earnings for
the first fiscal quarter of 2020, and the numbers surprised some analysts. Apple has had some of their most profitable
quarters ever in the last year thanks to the sales success of the iPhone 11, but it’s
also worth mentioning the struggles they’ve faced in the process. Because remember that the biggest Apple-related
news story in 2016 was the decline of their hardware sales, especially when it came to
the iPhone. After a decade of record-setting growth, demand
for the device finally fell. And not just for one quarter, but three quarters
in a row. That resulted in Apple’s revenue shrinking
by almost ten percent, causing the company to post an annual revenue decline for the
first time in fifteen years. So how did Apple go from shrinking iPhone
sales in 2016, to surging sales in 2019? Well that’s exactly what we’re going to
find out. This is Greg with Apple Explained, and I want
to thank Squarespace for sponsoring this video. If you want to help decide which topics I
cover, make sure you’re subscribed and voting polls like this one will show up in your mobile
activity feed. Now in order to understand how the iPhone
11 reignited Apple’s sales success in 2019, we first have to learn about what caused Apple’s
revenue slowdown to begin with. And as I mentioned in the intro, that trend
began in 2016 while the iPhone 6s served as Apple’s flagship smartphone. It was during this time that the company started
to notice slowing sales of not only the iPhone, but the Mac and iPad too. Mac sales dropped by seventeen percent and
iPad sales by six percent. And because of this slowing growth across
the board, Apple announced in 2018 that they’d no longer be sharing unit sales of their hardware
and instead only reveal revenue earned. That way, they could prevent news outlets
from running negative headlines like “Are slow iPhone sales just a blip, or is Apple
starting to struggle?” But it wasn’t only about slowing hardware
sales, it was also about where those sales were happening. Because around 2015 Apple identified two emerging
markets where they’d like to expand their presence, China and India. But there was a problem. Domestic phones in those countries are much
less expensive than international devices like the iPhone. And it has a lot to do with the extra tariffs
and taxes imposed on imported devices. And that’s exactly what prompted Tim Cook
to visit India for the first time back in 2016. He wanted to negotiate with their prime minister
Narendra Modi and reduce the tariffs Apple had to pay to get their iPhones to market
in India. But Modi didn’t budge on his position, and
that prevented Apple from seeing increased sales success in the country. A similar situation played out in China. Although iPhones were viewed as a desirable,
luxury device, most Chinese customers considered it an unnecessary expense. Mainly because the app called WeChat, which
everyone in China uses to do almost everything, is available on iOS and Android. So there isn’t much of a reason for users
in China to spend hundreds more on an iPhone rather than a more affordable Huawei phone. So as a response to slowing sales and failed
attempts at capitalizing on foreign markets, Apple began increasing hardware prices across
the board. By 2018, the Mac Mini, MacBook Air, iPad Pro,
and even accessories like the Magic Mouse, Magic Keyboard, and Apple Pencil all received
price hikes in a way that was unprecedented in Apple’s history. But there’s one product in particular I
want to focus on, and that’s the iPhone. Because the price increases it received was
quite significant. In 2016, the flagship iPhone 7 cost $650. One year later, the iPhone 8 was priced at
$700, a $50 premium. But the iPhone 8 wasn’t even Apple’s flagship
device, that title belonged to the iPhone X, released the same year. And that premium model carried a record price
tag of one-thousand dollars. That’s $350 more than the flagship iPhone
7 released just one year earlier. But Apple didn’t stop there, they pushed
the iPhone’s price even higher with the XS Max in 2018, which retailed for $1,100. But it wasn’t only the premium iPhone models
that ballooned in price. The so-called “budget” iPhone XR did as
well, coming in at $750, which was $50 more than the iPhone 8, and $100 more than the
2016 flagship iPhone 7. And this dramatic rise in the iPhone’s cost
took a toll on sales, with the iPhone XR suffering from less pre-orders compared to previous
models, weaker demand, and two separate cuts to iPhone production within two months. It was clear that customers were getting tired
of paying more for iPhones year after year, and so in 2019 Apple made a decision that
not many people were expecting. They actually reduced the iPhone’s price
for the first time in over a decade. The iPhone 11 received a $50 price drop compared
to the previous iPhone XR, coming in at $700. And that made all the difference when it came
to sales performance. Now when it comes to performance, I’d like
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you might think, especially if you use the link since
you’ll get 10% off your first purchase, you can find that link in the description. Alright now as I mentioned earlier Apple no
longer reports unit sales of their products, so we’re forced to rely on third party analysts
to make as accurate predictions as possible. But we’re fairly certain that in the first
month of sales, the iPhone 11 outsold the XR by about fifteen percent, with twelve million
units sold. This outperformed even the most generous predictions
by analysts, and led to Apple increasing production of the iPhone 11 by 1.6 million units. But the iPhone 11 wasn’t only experiencing
sales success in the US, it was also doing well in the emerging markets that Apple had
tried to capitalize on in 2016. For example, in China, the iPhone 11 drove
a sales increase of 18.7% compared to the previous year. And this number is especially impressive for
a few reasons. First, the overall smartphone market in China
experienced a 13.7% decrease during the same period, proving strong demand for the iPhone
despite a declining market. Second, Apple had been struggling to stay
afloat in China amid a trade war with the US and Chinese governments, with both countries
threatening increased tariffs on imported products. And although Apple escaped the economic effects
of this trade tension, they didn’t escape the social implications of being an American
company selling products in China. You see, in addition to trade disputes, the
US government banned domestic telecommunication companies from buying foreign equipment due
to national security concerns. That meant Chinese companies like Huawei couldn’t
sell their technology to US companies like AT&T or Verizon to develop their 5G infrastructure. And if that didn’t upset the Chinese government
enough, President Trump also signed an executive order banning Huawei from buying US technology
without government approval. So companies like Google were no longer allowed
to offer apps like Google Play on Huawei devices. And all these actions against China caused
an anti-American movement among some of their citizens, who set their sights on US companies
like Apple, igniting a boycott and a declaration of Huawei’s superiority. So when you consider this hostility toward
Apple among Chinese citizens, the trade tensions between the US and Chinese governments, and
the country’s declining smartphone market, Apple was expected to suffer a fifty percent
drop in Chinese iPhone sales in the second half of 2019. But the iPhone 11 was such a compelling device,
that it managed to defy unprecedented odds in such a significant way that Apple achieved
sales growth in China for the first time since 2015. And that achievement alone is incredible,
but things become even more impressive when considering the Indian market. As I mentioned earlier, Tim Cook visited India
back in 2016 as part of an effort to boost sales in the country, but 2017 and 2018 saw
no significant returns on the company’s investment. And that’s likely due to the extraordinarily
high price of the iPhone in a market that’s very price sensitive. But Apple wasn’t standing idly by during
that time. They actually began assembling the iPhone
XR in India with the help of Foxconn’s facility, which allowed Apple to finally avoid the tariffs
and penalties associated with imported products. This resulted in a 35% price drop for the
iPhone XR in 2019, and combine with the lower price of the iPhone 11, Apple was able to
turn around its sales performance in India by doubling its market share from one to two
percent. And although that may not sound significant,
the Indian market in one of the largest in the world. So a company growing their market share by
one percent in a year is quite impressive, especially if that growth can be sustained
into the future. Now we’ve covered how the iPhone 11 was
able to turn around Apple’s sluggish sales domestically and internationally and prove
to be a very successful product for Apple. But something you may be asking yourself,
is why? Why was the iPhone 11 able to deliver all
this success for Apple and not models that came before it like the iPhone XR or iPhone
8? Well, I think there were many variables at
play, but the foundation of the iPhone 11’s success can be attributed to the fact that
it hit the sweet spot of what consumers wanted from an iPhone. It had the same incredible camera features
as the premium iPhone 11 Pro, except for 2x optical zoom. It had even better battery life than the previous
XR, it featured a glass design that was more durable than ever before, and all of these
features came at a cost that was lower than any iPhone since the 8. A model that paled in comparison to the feature
set that the 11 offered. Now what did all of this sales success mean
for Apple? Well, the company ended up earning $91.8 billion
in revenue for its first fiscal quarter of 2020, which actually ran from September to
December 2019. That was an increase of 9% from the previous
year, which not only outperformed analyst expectations, but also set a new quarterly
record for Apple. So it’s clear that iPhone sales are back
on track with the 11, and even sparking faster growth than ever before in vital international
markets like China and India that Apple has been working to expand into for years. Now it remains to be seen if this growth can
be sustained, but it’s definitely good news for a company that’s been struggling to
combat slowing hardware sales. Alright guys thanks for watching and I’ll
see you next time.

100 thoughts on “Apple’s iPhone 11 Success”

  1. Business strategy of apple is big failure..They are selling things in triple the price

    Be more greedy

    Reduce price half ,I bait their sell quadruple

  2. The problem is that the sales might drop next year, because everyone has the 11 already and only very few people want to upgrade to the 12…

  3. Apple iPhone 11 Series Still much more deficiency especially iphone 11 Pro does not have Technology Reverse Charging and much more feature from android phone, and this is Very Suck

  4. I love the IPhone 11 and what it has to offer I'm trying to save my money for one I'm gonna get it in purple it's so beautiful. I know the IPhone 11 is just $740.00 which I don't think is bad

  5. I like my iPhone 8 Plus product red. iPhones are the best am telling you. Android exists because Apple wasn’t on every carrier when they come and everybody that wasn’t on at&t want a iphone so they got android instead. Lool thanks to Apple we got good smart phones and not crappy blackberries. Although I think android has caught to Apple but Apple is something special not just a smartphone but an icon

  6. They should make a Budget series like.
    iPhone Q1 or something. like samsungs A and J series.
    Problem is, it will make apple look like a compqny like samsung. if samsung only sells its flagship products and not the budget series, it will have the same status as apple.

  7. While yall guys talk about the
    i11 increases Apple's sales..
    All peoples in Malaysia are walking at the streets and appeared in drama with their i11pro/max..

  8. Apple could literally release a box filled with dog shit and market the fuck out of it and it will still sell like hot cakes. Kind of crazy when you think about it.

  9. I’ve had the 11 pro max for about a week I’ve noticed a yellow tint to the phone like True Tone or night shift is on. It gives me really bad head aches what should I do

  10. Or…. it’s simply because the last top selling was the 6 which is conveniently showing it’s age right around now, not to mention it is cut off from iOS 13. It’s just time for all those millions of iPhone 6 owners to upgrade. That’s the real answer.

  11. I'm an Android guy and I couldn't even recommend any other premium Android device over the iPhone 11.
    The iPhone 11 is a killer value and outperforms all android device more expensive than it. The only downside is the LCD display but most people wouldn't care the the LCD is actually one of the best anyway.

  12. If all it took was to drop the price for them to outsell the market which was in decline, imagine if Apple actually made devices that were competitive in the mid range, yeah sure it would cut in to their top end but it would probably rip apart Android sales since most people buy them because of how much value you get in the mid range.

  13. The iPhone prices rose but so did many high end smart phones from other manufactures like Samsung etc, the only difference is that Apple only sells high end phones, whereas Samsung sold around 17 different phones ( released new models ) last year, Apple released 3

  14. No more isheeps are appearing in the world

    Ik that some people just like the os and brand, bad their are so many people who likes the iphones just because its an "iphone"

  15. I realise that my iPhone 6s+ still is slow down on iOS 13, when I replaced the battery, it's worked faster and smooter.

  16. They were recently forced to pay out billions to the EU after being proven to have intentionally slowed down devices in order to sell new ones. Why not cover this?

  17. Apple purposely screw their customers with planned obsolescence and products inferior to android at higher prices. You're all gullible morons for using apple products.

  18. Apple sales are very just has to use the app that comes on all iPhones to see the stocks dropping by the Hour😂😂 but yet Apple tell Consumers and business owners to buy buy buy due to the virus outbreak…these Apple Devices remains the same when not telling the paying customers the ones working on the Devices are very ill and sick meaning inside parts may be causing you to be sick also …but what do I know ….

  19. The iPhone 11 is worth all the hype, upgraded from iPhone 7 Plus there’s a huge difference in performance.

    Also I see the iPhone 11 more often now here in France.

  20. Naming is a big thing iphone 11 feels like a regular iPhone not a budget one. The 10r seems budget with naming. Also, like you said having the wide angle camera and the same processor was a big deal.

  21. I bought Iphone 11 with 256 gb, base on the reviews prior buying this phone, the pro and max and the 11 are just similarly alike well if not of the oled and telephoto. But Indont care of the oled, and most of the reviews they dont usually use Telephoto, thats why I decided to buy Iphone 11 256gb to maximize it more.

  22. As long as Apple refuses to support their earlier i phones (they don’t) the the i phone currantly in my hand is my last apple product of any kind. As its working like shit after just 3 years I cant wait to get out of it.

  23. Meanwhile people who bought the iPhone 11 don’t realize that it’s basically the same phone as from over a bit more than 2 years ago. 😂😅

  24. Okay but no 🧢 if Apple released a rose gold or baby pink iPhone 11 in addition to the other 3 pastel colors, they would have made more money 💰!!!

  25. Another thing is that the way they just said it had really a lot of new features made it look not like the cheap version, and also the variety in colors and the little gap between features in the pro models just catch attention. I really want an iphone 11!

  26. I love my 11 Pro Max and its battery life. I have upgraded from a 6S Plus, because I didn't feel the need to upgrade to anything in between this range. Battery life just had me do it. My ex-6S Plus still performs extraordinarily well. Cameras are a little outdated, but except that, still works just fine for my needs. Don't regret upgrading though.

  27. I upgraded from iPhone 5S to a budget samsung phone, M30 (~150$) which has decent specs and AMOLED screen. The display was amazing and i wonder why iPhone11 couldn't get a OLED display since Display replacement cost is for mine 60$

  28. People won't buy something if it's CLEARLY KNOWN and MARKETED to be aimed as a budget product for poor/common people. I don't know how come Apple such a mature company made that mistake. Here is India, years back Tata Motors launched 'Tata Nano' a very compact small car. It was literally marketed as a budget car for common people. I was a potential buyer but just took off my list. It failed miserably. For quite some time I didn't realize why it failed, but that marketing was the biggest reason. And just for the same reason, i didn't think of getting XR.

  29. For example, Apple keep raising their products price, but reduced ports and small storage on the MacBook.. which make some people unhappy about it, and think to buy another laptops or older Mac..
    For iPhone, let see what will happen next..

  30. Even though it’s not really new right now, I’m getting an iPhone 11 tomorrow! I’m so excited!💖

  31. Literally almost all the students in my school uses iPhone 11 lol , I'm not even kidding , and I'm here using Huawei🙄

  32. Apple's Indian sales will reach atleast 6% in late 2020 provided iphone 9 is released at $399 and the 12 is made in India similar to XR and 11.

  33. I mean, XS is even cheaper rn and has way better screen, thinner bezels, and (imo) better design. No brainer for me honestly, but if you want that slighly better camera and battery, sure I guess.

  34. Apple:*increases prices*
    Decreases prices
    People: Wow I think it was a great success what apple did they made the first well priced iPhone

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