According to the news report by Bloomberg, Apple Inc. is trying to boost its iPhone sales by using a marketing strategy that it has seldom used – offering customers promos and deals.
An insider who is familiar with this subject stated executives have transferred marketing staff from other projects within the company to work on improving sales of the latest line of iPhones that Apple launched this year.
The iPhone XS went on sale in September and a month later, the marketing team was pulled in to bolster the handset’s sales. This happened around the time that the next handset, the iPhone XR was launched.
According to the source, this move has been described as a fire drill and it can also be seen as an admission that the new handsets are possibly selling below the company’s expectations. The source, however, asked to remain anonymous as these marketing strategies could change at the last moment.
Apple has already launched a series of offers which allow customers to trade in their new phones for the new iPhones. This would temporarily reduce the cost of the new devices, a tactic that is rare in a company that has been continuously raising prices of its newest iPhones in a bid to increase revenues and profits.
When contacted for more information, the Apple spokesperson, Trudy Muller, declined to comment about the company’s newest marketing strategies.
This Sunday, Apple added a new banner its website, advertising that the new iPhone XR was selling for $449 and $300, which is lower than its actually listing price. A condition to this deal was the customers needed to trade in their old iPhone 7 Plus handsets, a premium device that had been launched two years ago.
Since the beginning of October the company has lost about 20% of its market capitalization due to a waning demand for their iPhones. In fact, this week, on Monday, an iPhone supplier called Cirrus Logic Inc., dropped its quarterly sales forecast by 16%, citing a weakening smartphone market.
Apple, at the same time, has ceased reporting iPhone unit sales. This has only heightened concerns that the company’s flagship product is no longer selling like it used to. Apple’s stocks slipped by over 4% in trading on Tuesday in New York to $176.69 per share.
HSBC’s analysts have downgraded the company’s rating, stating that for the time being, the unit growth for iPhones are at an end. According to the bank’s analysts, the success of the company had been built on a concentrated portfolio of extremely desirable as well as expensive products. However, now the company was faced with the reality of a highly saturated market.
This new marketing strategy may help the company’s sales increase during the holiday season, and also increase the number of Apple iPhones being used. However, by doing so, the company may lose out on a key advantage that the higher prices of the new range of phones would actually have made up for lowered unit sales.
Apple had already launched a trade-in marketing push last week, wherein the value of older models of the iPhone had been increased by $25 to $100 if they were being traded in.
According to another source within the company, retail staff at Apple Stores have been instructed to push the new marketing promos more aggressively to customers. Added to this, some of the wireless carriers in Japan also reduced the price of iPhone XRs by way of subsidies.
In 2017, when the iPhone X has been launched, there had been similar concerns about the handset not selling well. However, after a slow start, the anniversary edition of the iPhone ended up bringing in strong sales.