Tim Cook: $999 is “value price” for iPhone X because of EIPs and “discounts”
Tim Cook appeared on ABC’s “Good Morning America” yesterday, telling host Robin Roberts about the wonders of using AR to place future furniture in your room or check out the interior of a car away from the showroom.
He then dug into the privacy concerns of facial recognition and what Apple can store with the iPhone X’s Face ID:
ROBERTS: What is the potential of- because we’re talking about facial data, millions of people and the potential that it can be misused or hacked — should be people concerned about that, Tim?
COOK: Not with us because we’re about your privacy. We want to protect your data because we know it’s yours, not ours. And so, once you place your face in the phone, it’s in the phone — Apple doesn’t have it — we’ve encrypted it on your device, you make the decisions about who has it, not us. We’re very protective of our customers’ data because we believe that privacy is very important in this world. There are hackers everywhere that are trying to steal your information. We want it to be yours, it is not ours.
Later on, he said that he “wouldn’t recommend” keeping a second face on the device, such as a spouse’s or a child’s.
Cook responded to gripes about the Home Button going away in favor of a bigger screen by saying that he believes that people will prefer the screen over the button.
Wrapping up with viewer questions through Twitter, Roberts went on to take the executive on with pricing concerns for the iPhone X, which starts at $999.
I understand inflation, etc but don’t you find the price tag for the iPhone X out of reach for the average American?
— anna maria (@sorianoam) September 18, 2017
COOK: Well, it’s a value price, actually, for the technology you’re getting. As it turns out, most people are paying for phones over long periods of time. Very few people will pay for the price tag of the phone initially. Also, most people actually trade in their current phone and so, that reduces the price further and some carriers throw in even subsidies and discounts.
And so, when we look at it, the iPhone in particular has become so essential in our daily lives, people want it to do more and more and more and so we built more and more technology to be able to do that.
ROBERTS: I love how you told me yesterday you don’t want to sell the most, you want to sell the best.
COOK: Yeah. Apple has never been about selling the most of anything. It is not our objective — our objectives are not big revenues — our objective is to make the best product that enriches people’s lives. We want to help people.
ROBERTS: I know you do, Tim.
The advent of the 24-month equipment installment plan — or, in AT&T’s case, the 30-month installment plan — gives people some relief, but it’s another financed payment to add on top of groceries, a car lease and more. There are still people who are on the fence about an iPhone being a mission-critical element of daily life when something just as capable can be had for less or disposed of entirely.
Besides that, carriers are only able to provide any subsidy at all through trade-ins — which, in turn, make them money through refurbishment — with many customers getting paltry credit quotes for their fair condition old iPhone. None of the carriers are discounting the phone outright. Customers have to give something up and/or carry a new voice line in order to take advantage of a half-off or “buy one, get one free” offer. And let’s not even get into the mechanics of prepaid carriers.
As for the “value price” argument and his objectives against revenue and volume sales, Cook does realize that his company posts gross margin between 35 and 40 percent, doesn’t he?
The nearly 9-minute interview piece in front of a live studio audience was a fairly interesting watch, but didn’t really provide worthwhile takeaways to people at home. The real takeaways come from post-purchase interactions and that’s where reviews of the Apple Watch Series 3 Cellular come in to prevent that.