2 months agoFrom "Apple is unlikely to lose customers as a result of production delays, analyst says" which aired Monday on CNBC Pro:
My take: Don't get to hear from Yang often enough. He gives good soundbites, clear and precise.
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I’m reminded of yet another recent typical Android user who said “why should I pay for an iPhone when I can buy a cheap $200 Xiaomi phone and just buy another one in 2 years? I don’t have to care about OS updates, build quality, or longevity – I get a new phone every two years.”
Yup, the price of quality vs price / cheapness is a buying decision carried out every day by millions of people. Apple buyers continue to show they value quality and are willing to pay for it.
My point is that build quality is not a convincing initial purchase or switcher argument for many/most people. But it is a compelling argument for remaining.
Completely de novo buyers of smartphone may choose iPhones based on what their family or peers have or desire – in the US and for teens and older or higher socioeconomic groups, a higher percentage choose iPhones and quality (in multiple senses of the term) may have a part in their decision.
Perhaps we can agree that quality construction, parts and materials at least add or uphold Apple’s premium reputation and allure. We have seen multiple past and current examples of Apple fans declining lower cost or perceived “lower” end models like the 5C, SE 2022, and now 14 Plus. I would posit that Quality plays a role in self upsell by Apple users. An example is my wife recently purchasing a stainless steel Graphite Watch on the basis of finish over the standard aluminum matte finish.
What gets them in the Store in the first place? Dissatisfaction with Android after purchase service, crap software and apps builds, privacy issues, limited resale revalue, no cache, limited upgrade ability. Take your pick, there are several.
Own their iPhones for several years reducing cost per year;
Or buy good, inexpensive used iPhones with several remaining years of useful life;
Or buy new iPhones every year or two with top of the line specs, for not much cost, net of resale value.
Build quality is important because people are naturally very averse to loss. Even if you can afford it no one enjoys the loss of something breaking before you think it should.
Those workers who did not flee or leave found more open and personal space around them, less congestion and competition in dorms for room, (maybe not better food though), and probably some reassignment to lines that were to be fully staffed rather than partially staffed. I am assuming they would be given the same pay incentives that lost workers were offered to come back (not always a correct assumption).
If Apple is down 3-4 million units so far, and if nothing done, an additional 3-4 million units by end of year, that’s a fair assessment. However, if Foxconn is able to improve worker numbers, retention, and production efficiency and output, then maybe Apple can still get the majority of orders filled for this quarter and somewhat lessen carryover to Q2.