How iPhone X sold less units yet changed the dynamics of the industry

Months before Apple had launched what is now known as the iPhone X, there was a lot of noise about how $1000 was way too much for a smartphone. Analyst, critics and skeptics had wondered aloud whether Apple’s pricing strategy would pay off or not. Surveys were conducted and the most logical answer was: you might be Apple but $1000 was not something people were willing to pay. Were Tim Cook and co. bang on about the pricing? Or are Tim Cook and co. having the last laugh? The answer lies somewhere in between.
The Cupertino-based tech giant revealed its quarterly results and guess what the iPhone X hasn’t met expectations yet Apple is laughing its way to the bank. Apple reported that it had sold 77.3 million iPhone units in the last quarter – a number which is 1% less than last year. The company’s revenues, on the other hand, rose by 13% to $88.3 billion dollars. Even in terms of profits, Apple reported a 12% jump – from $17.9 billion to $20.1 billion.
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As expected, the company didn’t reveal the contribution of which iPhone was the most. However, CEO Cook said that, “”iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November.”
The strategy to make a $1000 iPhone seems to have paid off as the iPhone business contributed $61.58 billion to the total revenue. This is a sharp 13% increase when compared to last year. What this means is that even though the number of units sold might have been less, the company’s profits and revenue has grown.
The numbers, however, tell you just one part of the story. It is quite clear that Apple could charge an exorbitant — $1000 is quite exorbitant even for “the best iPhone” ever – price and there is a chunk of customer base which is willing to shell out that kind of cash. Apple’s pricing strategy did pay off and perhaps also changed the smartphone game.
Devices – especially the ones from Apple – will in likelihood surpass the $1000-mark in 2018. Competitors like Samsung, which is all set to reveal its flagship devices later this month, will also charge a premium and expect the consumers to pay. Samsung is the only other brand for which people might pay close to what Apple is charging. In a sense all those people who said that iPhone X will change the smartphone industry have been proven right. It might not revolutionize the industry in terms of design and innovation, Apple has changed the price dynamics for sure.

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