When Apple released its latest quarterly data on Tuesday night, it turned out that in January, the company started to cut prices on some markets in the iPhone. It is the second time in the history of Iphone that prices are being reduced.
The sale of new iPhone models has not met expectations, especially in new markets such as China. Iphone earnings fell by 15 percent quarter-on-quarter, and as the Iphone historically accounts for about 60 percent of Apple's revenue, it is a significant drop.
The main reason, according to Apple, is that some markets have a high dollar exchange rate against the local currency. This is especially true of critical emerging markets where Apple can still grow, and the fact that US goods have increased by more than 10 percent in one year's price.
"We have decided to lower prices to the local currency as in the previous year, hoping to increase sales," said Apple CEO Tim Kuch to Reuters.
These countries can be referred to as Turkey, where the local currency is written off at 33 percent. In November, Apple reported that there was pressure on prices in Brazil, India and Russia.
Almost in Norway
The Norwegian krone has also been facing the dollar last year. The dollar exchange rate against NOK has risen slightly more than nine percent since Iphone X was launched and was set for Norway. The growth since Iphone XS started last fall is just over four percent.
This is unlikely to be enough for Norway to benefit from price reductions. Norway is not a growth market, on the contrary, iPhone is convenient here, perhaps 60 to 70 percent.
– I would be surprised if they lower prices here. They do not have to do this because they have a strong market position and do not lose competitiveness even when prices rise, says Ragnhild Silkoset, Marketing Professor at BI Norwegian Business School and Tromso University.
Norway is one of the most lucrative consumers in the world, and the new iPhone models have been at the top of the sales list since the sale, despite high prices.
Apple is wise to use the currency as an explanation. The external reason for the price decrease justifies the change in prices. For example, if they had said that the price was too high, it would give them bad light and put pressure on other countries too, says Silkoset.
She thinks the third motivation is to give the right signal to competitors.
"By explaining price changes to the currency, Apple sends a signal to its competitors that price changes do not mean they are ready for a price war," says Silkosets.
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