iPhone upgrade program

The past few months haven’t been rosy at all for Apple Inc. (NASDAQ:AAPL). With declining sales and the future prospects not looking too good either, the time has come for Apple to revisit its marketing strategy. And from the recent reports, it seems like the company has, in fact, recognised that. The Cupertino giant has come up with quite a unique way to market it.

Apple’s market strategy previously has been all about building a great product and marketing it to the urban population having enough financial power to buy the product. However, this marketing strategy has started falling short of Apple’s expectations as the sales of newly launched iPhone XS series have been below than expectations. This has also forced the world’s most valuable company to stop revealing the unit sales figures of iPhone from the fiscal Q1 2019, ended December 31, 2018.

While announcing the first fiscal quarter results, Tim Cook, CEO – Apple Inc, didn’t shy away from admitting that the lower than expected iPhone upgrades was one of the key reasons behind the declining sales of iPhone.

So Apple tried doing something which all its contemporaries usually do: push for iPhone upgrades. But this is not the only change in the strategy. Along with that, they decided to focus on a more vulnerable target: the people with devices without warranty.

Essentially, they have advised their vendors to market iPhone upgrades to users with out-of-warranty devices. The stores were also specifically told to offer trade-in deals for the iPhone XR. Not just that, even their homepage is changed into an offering of iPhones at reduced prices which requires a trade-in deal.

Apple Home Page

It might not seem a big deal as companies do practice such strategies to boost their sales. But from a company like Apple, this is indeed surprising considering, probably, it’s the first time in history when the company needs to push iPhone sales. The company have always believed in themselves and their marketing strategies enough to make it work over all these years. They have always focused on making the best product that they can, so as to maintain the elite nature of the brand.

However, it seems like this strategy is losing out its charm and has started failing to match the company’s expectations. Had this been other company, it would make sense to sell an underperforming model of a product, like the iPhone XR, through trade-in deals. However, in the case of Apple, it appears to be signs of desperation.

iPhone Sales: The Colossal problem at hand

It is obvious to everyone around the world that the problem with the company lies in its declining sales of iPhones. The people at Apple have of course denied it, by showing growth in the non-iPhone departments of the company instead. While the latter part is true, it doesn’t totally mask or make up for the initial problem either.

Worldwide Smartphone Shipments, by Quarter

The trouble for Apple is far from over, apparently. After posted quite a disappointing fiscal Q1 2019 results, Apple is, once again, expecting weaker fiscal Q2 2019 compared to the same quarter a year ago. This means that the company is expecting quite a heavy decline in the sales of their iPhone, the driving force of their company. If Tim Cook and team neglect the problem even further, the company is not going to see an increase in revenue either. And considering the fact that the previous models of the iPhone are selling better than the new ones, these trade-in deals might just prove to be fruitful for them.

Desperation: A novel marketing strategy?

We believe that Apple is not going to continue this for too long. The company is going to look for ways to market iPhone only until their next release. After that, we can safely expect them to go back to handling things like they used to. But the huge ‘if‘ here is whether their next line of iPhones are going to succeed or not. If not, we may have to see more of the similar strategy employed by Apple in the future as well.

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