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Tim Cook admits that higher iPhone prices are a ‘factor’ in declining upgrade rates | 9to5Mac

After announcing that iPhone revenue was down 15 percent year-over-year in Q1 2019, Tim Cook was asked during Apple’s earnings call about iPhone pricing. Analyst Steve Milunovich asked Cook whether Apple might have pushed the “envelope a little bit too far” and might have to bring prices back down in the future.

First, Cook explained Apple’s pricing strategy with the iPhone XS, iPhone XS Max, and iPhone XR. He said that the idea was to price the iPhone XS at the same price as the iPhone X, with the iPhone XS Max priced just above that and the iPhone XR priced in between the iPhone 8 and iPhone 8 Plus.

In the U.S., Cook said this actually led to “pretty small difference” compared to 2017:

We priced the iPhone XS in the U.S. the same as we’d priced the iPhone X a year ago. The iPhone XS Max, which was new, was a hundred dollars more than the XS, and then we priced the XR right in the middle of where the entry iPhone 8 and entry iPhone 8 Plus had been priced. So it’s actually a pretty small difference in the United States compared to last year.

Internationally, however, Cook explained that foreign exchange issues amplified the difference in certain markets. This is what led Apple to change its internationally pricing strategy, as it announced earlier today:

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Tim Cook admits that higher iPhone prices are a ‘factor’ in declining upgrade rates – 9to5Mac.