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Apple’s iPhone XR Problem

Apple’s iPhone XR Problem

Hey guys it’s Greg with Apple Explained.
And in this video we’re going to cover some of the trouble Apple’s had with their iPhone
XR. Because the company expected it to be one of the best selling iPhone models of all
time, but it’s become clear that isn’t the case at all. And Apple has been moving
very aggressively to remedy the lack of demand. Now this topic was the first place winner
of last week’s voting poll, and if you want to vote for the next video topic, don’t
forget to subscribe. That way the polls will show up right in your mobile activity feed
and you can let me know which video you’d like to see next. Now before the iPhone XR and XS was introduced
back in September, Apple was enjoying the tremendous success of their iPhone X, which
helped catapult the company to a one trillion dollar valuation in August 2018. But there
had been many criticisms of the iPhone X, one of the biggest being its high price. Because
at one thousand dollars, it was the most expensive iPhone ever sold, and many analysts believed
that would hinder sales of the model. But Apple proved them wrong, selling more iPhones
in 2017 than the year before. So when it came to the iPhone XS and XR, Apple
assumed they had a winning combination on their hands. Especially since they were offering
a budget iPhone that featured an even larger edge to edge display than the X. And it came
in colors! So why on earth would the affordable, attractive, feature-filled iPhone XR not sell
like hotcakes? Well, there has to be at least one reason, because to Apple’s surprise,
the XR didn’t perform as well as they’d expected. And this has contributed to a host
of problems for the company. Like falling stock prices, criticism from analysts, and
frustration from suppliers. So let’s take this story one step at a time, and figure
out why the iPhone XR became one of the only models to fall short of Apple’s expectations. It all started on October 19th, 2018. The
day Apple began taking preorders for the iPhone XR. You see, preorder day for any new iPhone
is always highly anticipated, with millions of people across the globe eager to be the
first to submit their order on Apples website. Because typically what happens is, within
hours, the iPhone’s shipping time begins to slip as all the preorders come pouring
in. But that didn’t happen with the iPhone XR. In fact, it took four days of preorders
before there were any shipping delays. And one reason for this is that initial demand
for the XR wasn’t nearly as high as Apple hoped. But there could’ve been another reason,
maybe Apple intentionally ordered more iPhones than usual in order to prevent shipping delays
of as many preorders as possible. And while this may be true, the events that would unfold
later on suggest otherwise. Because just a few days after the XR went
on sale, Tim Cook moved marketing staff from other projects to work on boosting sales of
the new iPhones. And an internal source called this shift a “fire drill,” which certainly
suggests the iPhone XR was selling below Apple’s expectations. And work of the newly assigned
marketing team became visible right away. With Apple partnering with The Ellen Show
for the first time, giving away a free iPhone XR to every audience member. But when it came
to their Black Friday promotion, Apple wasn’t so generous. Only offering gift cards of up
to $50 if you bought an older generation Apple device. But the company obviously felt much
more giving when it came to the iPhone XR. Since they offered a discount of up to $300
upon trading in your existing iPhone. And that’s something I want to talk about in
more detail. Because although Apple has had an iPhone trade in program for years, they
never promoted it as aggressively as with the XR. It’s the first thing listed on Apple’s
homepage and it’s even displayed on a sign inside of Apple Stores across the country.
And this is very uncharacteristic of Apple, who usually never runs any sales or promotions
on any of their products, and this is especially true when it comes to the iPhone. Because
demand for the latest model is usually so high that Apple is able to simply name their
price and never lower it until an updated model takes its place. But that isn’t the
case this year. The fact that Apple is promoting the iPhone XR at its potential trade-in price
of $450 really goes to show how desperate they are to generate interest in the new model.
And to top it all off, Apple actually indirectly lowered the price of the iPhone XR in Japan
through carrier subsidies. So Docomo customers will effectively be saving $100 with a 24
month contract. And that’s a move we’ve never seen before from Apple. Now I can’t help but think that if the XR
had sold as well as Apple expected, we probably wouldn’t be seeing it on the Ellen Show
or promoted at a trade-in price on temporary signs at Apple Stores. But it seems that all the marketing and promoting
didn’t have too much of an effect on iPhone sales. Because two months after its release,
Apple cancelled a production boost they had scheduled for the iPhone XR. You see, the
company had originally planned on increasing the number of assembly lines for the XR before
the holiday season. But they actually did the exact opposite. Decreasing their production
lines from 60 to 45. A 25% manufacturing drop right before the holidays, which is definitely
saying something. Now I should mention that there were reports
claiming the cancellation of the iPhone XR production boost was due to quality issues
with its Printed Circuit Board rather than low demand, but this doesn’t explain why
Apple decreased assembly lines rather than keeping production steady. Now the news surrounding the iPhone XR’s
lackluster sales really took a toll on Apple’s share price. But this wasn’t the only thing
that scared investors. Because on November 1st, Apple announced they’d stop reporting
units sales of all their products. Something many experts believed was influenced by disappointing
sales of the iPhone XR. And as a result, Apple’s share price experienced a sharp fall at the
beginning of November. And while it’s true that the American economy as a whole began
declining around this time, the negative press surrounding Apple only accelerated their trend
downward. But the financial burden of slowing iPhone
sales extended to companies beyond Apple. Because if you think about it, all of the
suppliers who provide the iPhone with different components also suffered the consequences
of lower than expected sales. In fact, many display and chip manufacturers complained
about their largest client cutting back on orders, and after a second phase of order
reductions near the end of November, supplier Largan Precision saw revenues decline, Printed
Circuit Board supplier Career Technology reportedly laid off 110 workers to deal with order cuts
by Apple, Lumentum Holdings, the main supplier of iPhones Face ID system, anticipated a $70m
revenue loss; while screen maker Japan Display also lost revenue and reported lower than
expected demand for the new iPhone. But probably the most telling sign of all
that Apple jumped the gun with the new iPhone XR is when you consider its inventory health.
Now Tim Cook is known for being one of the best inventory managers in the industry. In
fact, he was hired onto Apple back in 1998 because of his experience in “just-in-time”
manufacturing, and because of his expertise, Apple has been very good at minimizing the
amount of money they have tied up in unsold inventory. Because as you can imagine, it’s
not very profitable to have millions of unsold iPhones sitting on apple store shelves across
the country. And typically the iPhone has almost always had a healthy sell through rate,
with a backlog of about 1 to 2 days of inventory. But supply of the iPhone XR is reportedly
already bloated to over three days of inventory. So it makes sense that Apple is cutting manufacturing
for the model since demand is clearly lower than initially estimated. Now I should mention that this isn’t the
first time Apple has overestimated the sales potential of a new iPhone model. Because back
in 2013 Apple made similar production cuts to their iPhone 5c, and Tim Cook later admitted
that they had overstocked the model since the sales ratio between the 5s and 5c was
much wider than expected. So when you consider the low number of preorders,
production cuts, aggressive promotions, and supplier layoffs, you begin to understand
why the iPhone XR has been such a problem for Apple. There simply isn’t as much demand
as the company expected and now they’re left to wonder why. And I think there are a variety of factors
at play. First, the iPhone X already sold extremely well just one year ago. And remember,
it was a $1,000 device. So I don’t think many of those customers are looking to drop
another grand on a new iPhone with virtually zero improvements. And that’s something
else to consider, I know many people who bought a used iPhone X rather than a new iPhone XR.
Because you’re getting a higher quality display, camera system, and design at a lower
price. So you could argue that the iPhone X was the true budget iPhone of 2018. And
while Apple cut production of the iPhone XR, they actually had to increase production of
the iPhone 8. Which was likely a more appealing option for customers on a budget buying new,
since the 8 starts at just $600, 20% less than the XR. Now that’s not to say the iPhone XR isn’t
a good device. I think it’s the best budget phone Apple has ever made. The problem is
that it’s hard to call it a budget phone when it’s priced $100 more than the flagship
iPhone 7 released just two years ago. And I think Apple understands this, their problem
is that the smartphone market is over saturated and they need to raise prices in order to
combat slowing iPhone sales. After all, the iPhone accounts for almost 60% of Apples total
revenue, with services coming in second at around 16%. So it’s clear that Apple is
trying to keep the average selling price of iPhones up as much as possible, I’m just
afraid the days of truly affordable budget iPhones died back in September with the discontinued
iPhone SE. So that is Apples iPhone XR problem, and if
you want to vote for the next video topic, don’t forget to subscribe. Thanks for watching
and I’ll see you next time.

98 thoughts on “Apple’s iPhone XR Problem”

  1. I feel like going back to iphone 8 plus because new iphones XR nad XSs area bunch of junk in a flower cover

  2. they need to make a cheap iphone has less ram and memory and a less powerful cpu and gpu and a price around 200/300$

  3. Nothing is wrong with the iPhone XR I’ve had it like a few months now it’s the best iPhone in the gameeeee nOt tO bRaG bUt I gOt Da CoRaL oNe AyYyYyYeEeE

    Edit:Just got the Xs max sorry not in the Xr gang anymore.

  4. Don't waste much of your time, I guarantee you 100% problem solved for your gadgets software. On instagram, add up @cyber_sailor

  5. The video keeps talking about the bad sales of the XR. But never mention the cause of the bad sales. Lack of feature? price? Presentation?

  6. “They need to raise iPhone prices to combat slowing sales” Higher price doesn’t always mean more profit…

  7. it's not just about the price, it's about the size also se sold well because of it's size. iPhone xs is more compact in size.

  8. Does anyone realise that the iPhone 5c and the iPhone XR both were supposed to be budget phones, both came in more colours than most iPhones and both sold less.

  9. Well, the problem seems to be taking Tinman from shipping department and trying to make him into a Techman. The man should just resign.
    Someone find us another Steve. A man that had courage to look for the new and different every year.

  10. Shut up dude, this is literally the best iphone. It performs exactly the same as the XS but the XS has more water resistance and a couple different things with camera. And its still $250 less.

  11. I just bought a product red Xr about 2 weeks ago and the flashlight and camera just randomly stopped working???

  12. Upgraded from a 6S to an Xr………. Took the first one back to Verizon after problems only within two hours, The text at Verizon couldn’t figure out what the problem was with the volume, it would ring loud once and then go virtually silent after that. I watched four people from Verizon could not figure out what the hell was wrong with it…. so since I just bought it they traded it off for a new one The same day I got the first one,The very next day with the second one it’s doing the same damn thing!!!!!…….. now I’m going back to Verizon again and tell them just give me another damn iPhone just make sure it’s not a piece of crap Xr!!!……………And here’s the funny part I had my 6S for almost 3 1/2 years never had one problem.

  13. Complain
    To Whom It May Concern:
    On January 22 2019 I came to the Apple Store locating at Des Peres MO 63131 on West County Mall. I wanted to change my iPhone 7+ on newer iPhone XR. The sale woman who take care of me check my phone and said that my phone cost $200 and she make exchange toward my new iPhone XR left over balance. She explained that my phone they going to send to ATT and then she brought a lot of paper and said I have to sign them because in these papers the sum of payments for each month is divided for 3 years. Then she take me to another table where another salesman was helping other customers besides me. In my case he helped me transfer all my information from iClouds to my new phone. That saleswoman when she took me to another salesman asked me take out my old phone from the case because its very tight and she was afraid to brake it so I took my old phone from the case , screen protection and gave my old phone to her. In that time I had my purse and my new phone in the box because they don’t have any bags to put my merchandise.
    On March 8th 2019 I received from my ATT provider text message saying that they still did not receive my old iPhone 7+ thats why I went to Apple store to find out what’s happened. I spoke with Apple store salesperson explaining about that day on January 23 I came to exchange (trade) my old phone for new one and about that sales lady who told me she’s going to send it to ATT and I mentioned him that I spoke with ATT and they never receive it, so I ask him I need tracking number from them to give it to ATT. Him and the manager ( Tim Koerner) went on the back to check the video and see what happened with my phone. After a while the manager ( Tim Koerner) came to me with a red and angry face he jump on me with hi voice and blame me that I took the phone and on video showed that I putting that phone in my purse. I was shocked for that blame because I put in my purse just case from my old phone which that saleswoman asked me to take out before she took it. I asked the manager ( Tim Koerner) if he looked in her hands when she was leaving from me but he was so rude saying he did not see anything. He was mentioned her name, her name was Cherell. I asked him to spell her name but he refused to do that I told him I’m not going to leave like that and I’m going to go to police which his answer was “do whatever you wanna do”. So I went to police and told them what happened, they opened case (19-2109) and policemen name was William Mathews DSN 210 phone # is (314) 835-6202 ext 256
    I never thought it would come to me in a place like this to be deceived as a child. After that I had a very heavy residue. Me and my family have great story with Apple products since the release of the first iPhone.

    Sincerely, Olga Samoylovich

  14. I just bought my first iPhone ever in March, and I went for the 7. I can’t justify paying what Apple wants for the XR when the 7 is still an awesome phone in 2019. I’m sure the XR is a great phone, but it is too expensive for a lot of people. The real budget iPhones are the previous models.

  15. Is it just me, or does it seem like history is repeating itself with the XR? When the iPhone 5C (C=Cheap) was released, it came in many colors and was marketed as an affordable version of the 5S. Just like how the XR is a colorful, supposedly affordable version of the XS.

  16. You said at the end of the video that the iPhone SE was the true budget iPhone. Who wants to pay 100 dollars for a 4 inch phone. So when Apple wants to charge me 300 dollars for an iPhone 5S, I would call that a dumb phone. AKA dPhone d for dumb.

  17. The iPhone XR today is like the iPhone 5C back in 2013! It's just not a good idea.
    They should've made a sequel to the iPhone SE!

  18. Why Apple products look so average now? Jon Ive demonstrated product prototypes in Steve’s office. Jon Ive demonstrates finished products to Cook in showroom.

  19. People try so hard to claim a problem with something for clout.This video is just telling people not to get the iPhone XR Bc it is too expensive.But what is people like expensive things?

  20. 720p. I’m not paying $750 for a phone with a worse resolution screen than my Galaxy S6 from 4 years ago.

  21. In the Netherlands Apple asks for the XR 64GB 920 euro that’s 1031 dollar, really expensive! I better go with my 6s. This is the turned around world. Euro is more worth like dollar so it should be cheaper! Still today 829 euro for the XR red… come on! Even the X is more expensive like the XR. I don’t get it at all. Apple it selves is the biggest problem….

  22. The price of the XR was much higher than anyone expected – they would have had a hit if it was 600 – 700 dollars, but its the same price as Apple’s flagships from 2017. If the XS is only 150 more, and you get a better camera, screen and performance and tech that will stay relevant for longer (important for a device you use everyday for 3 years), why would you get the XR?

    You wouldn’t.

  23. Well I guess that shows how much AE knows. The XR has proven to be the best-selling phone in North America since this video was released. It's sold more than the XS Max and XS combined. It's really advisable to wait six months minimum before you try assess how good a product's sales are.

  24. So i guess the bests selling iPhone has a problem i tho k it actually exceeded their expectations over time

  25. Ummm… I think the reason might be, that you can get an Android flagship, like…
    – OnePlus 7 Pro
    – Huawei Mate 20 Pro
    – Huawei P30 Pro
    – Xiaomi Mi9
    – Countless other top-class devices
    …for less. Just a wild guess!

  26. Any normal company would just lower prices on something that it cannot sell. Not Apple 😀

  27. I phone is not a budget neither a premium device anymore . there are many more better options out there than to giveup yourself as a hostage to apple's greed

  28. Their problem was BCS They added too much features From xs to xr, it would be better if they put A11 and maybe a lower camera inside

  29. Oh no apple couldn’t make another billion dollars! Yeah no sympathy at all for a TRILLION DOLLAR company.

  30. Well, the XR has been the best selling iPhone for the last 8 months. There wasn't any problem now, was there?

  31. Comparing my 5c and Xr on their release, the 5c was a year behind the 5s even though they were both releases on the same year. The Xr is released with Xs with the same internal hardware but toned down by a little. It might last longer than the 5c by software updates

  32. I have the iphone xr in (white) its so nice I had to get used to not having a home button but I love it!

  33. I am gonna tell you the problem. Xr is 750$ and is considered as a budget phone with budget components (except A12) but it cost as much as some Android flagships.

  34. I have to be honest i had the iPhone XS max and it even advertise for it's "water resistant". It went glitchy after it was just dropped in the kitchen sink. I have to be honest my cousin also had the problem with her Samsung galaxy s9.

    let's just say all phones is crappy

    And buy a brick phone.

  35. 828 pixels is not bad. It has the same amazing camera and battery life. And it sometimes goes on 500$! It comes in a lot of cool colors . I don't see the problem of this phone if you want a new futuristic iPhone other than the LCD 828 display. It can go on 500$ and that is an amazing deal. Better than the iPhone X

  36. Things I wish the future budget iPhones will have

    -dual lens

    -can play 1080p

    -about $600-650

    -edge to edge screen

    -latest chip

    -silver and space gray instead of black and white (because fancy)

  37. Granted while it didn’t sell as well as they wanted, the Xr sold better than any of the other 2018 models

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