Why the Chinese aren't buying the Apple iPhone XR

by Alan Friedman / Jan 06, 2019, 12:03 PM

Why the Chinese aren't buying the Apple iPhone XR

Analysts on Wall Street were tripping over themselves last fall to sing the praises of the Apple iPhone XR. The phone was supposed to be Apple's response to consumers who complained about the pricing of the iPhone X in 2017; that phone became the poster boy for smartphone sticker shock as the $1,000 barrier was finally broken by Apple's premium model. Most of these so-called experts said that the iPhone XR, once it launched in October, would become the top-selling iPhone among the trio of 2018 models. And while they were right about that, none of them expected overall sales to be as low as they have been.

Priced at $749 and up in the states, Apple had to cut some corners on the iPhone XR to keep the cost down. For example, the device is equipped with a 6.1-inch LCD display instead of the costlier OLED panels that grace the iPhone XS and iPhone XS Max. It also relies on a single camera in back instead of the dual sensors on the other two 2018 models, and does not offer 3D Touch. But it does have the front-facing TrueDepth Camera, Face ID and the A12 Bionic SoC that powers the other 2018 iPhones. And it also has the best battery life of any iPhone ever.

The Wall Street Journal today notes that the world's largest smartphone market, China, has failed to embrace the iPhone XR to the degree Apple expected. As a result, last week Apple CEO Tim Cook announced that the company was lowering its revenue guidance for the first fiscal quarter that ended in December. That touched off a selling stampede in Apple's shares; the company, once the most valuable public firm in the world with a trillion dollar valuation, is now worth $703 billion and is looking up at Microsoft, Amazon and Google parent Alphabet in terms of market capitalization.

Part of the problem for weak iPhone XR sales in China is the price of the phone. At 6,499 yuan, the iPhone XR is priced a the equivalent of $946 USD in the country. And most of the features available on the device are available on lower priced Android models manufactured by Chinese companies. There also is a huge anti-American backlash growing in China thanks to the U.S.-China trade war, and the arrest of Huawei CFO Meng Wanzhou on a U.S. warrant. Some Chinese companies are fining employees who buy an iPhone, while subsidizing the purchase of handsets made by Huawei and other domestic firms.

The Apple iPhone XR is not meeting Apple's sales expectations

To try and kickstart demand for the iPhone XR, Apple is offering a discount for those who trade-in an older iPhone model. This deal was expanded to 17 foreign markets, including China, last month. But in order to maintain its profit margin, Apple previously had to raise the price of the iPhone XR in China due to the rise of the U.S. Dollar against the Chinese Yuan. This took the price of Apple's handset above those made by Chinese firms like Huawei. In the letter he disseminated on Wednesday cutting Apple's revenue estimates, Tim Cook wrote, "we knew the strong U.S. dollar would create foreign exchange headwinds."

With Apple protecting its margins, the iPhone XR is priced higher than premium phones made by Huawei, like the P20 and Mate 20 series. Chinese manufacturers like Oppo and Vivo also offer flagship models that can be bought for less than the price of the iPhone XR in China.

One analyst says that the reason for the "failure" of the iPhone XR is Apple's miscalculation of demand. Talking to Apple's supply chain, UBS analyst Tim Arcuri figured back in October that Apple planned on 45% of its iPhone production to be made up of the iPhone XR. Arcuri boils down Apple's problem with the iPhone XR to one simple sentence. He says, "They just built too many XRs and people just aren’t buying them, particularly in China."

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67 Comments

1. SIGPRO

Posts: 2815; Member since: Oct 03, 2012

Why buy a 1000 plus euro phone while you can get a phone way cheaper that has more to offer? People are not stupid......only iFans are!

posted on Jan 06, 2019, 12:24 PM 31

5. Cat97

Posts: 1865; Member since: Mar 02, 2017

You can find it for under 800 euros on Amazon Germany. But of course, you can also find a Galaxy S9 for 500 euros on the same place :)

posted on Jan 06, 2019, 12:48 PM 4

45. Loveneesh

Posts: 432; Member since: Jul 14, 2015

Why the Chinese aren't buying the Apple iPhone Xr? Because it don't even worth half of its price.

posted on Jan 07, 2019, 2:45 AM 0

2. STRANG3R

Posts: 234; Member since: Sep 24, 2015

The failure of Apple is its greedyness. At least now few isheeps using brain before they buy.

posted on Jan 06, 2019, 12:31 PM 21

3. Iodine

Posts: 1478; Member since: Jun 19, 2014

Why they don’t buy ? Cause they are dumb.

posted on Jan 06, 2019, 12:46 PM 1

4. slashas

Posts: 127; Member since: Jul 17, 2017

All Chinese phones made in China as well are cheaper. So you get even better phone for the half of the price...

posted on Jan 06, 2019, 12:47 PM 10

6. tntwit

Posts: 82; Member since: Sep 11, 2012

Maybe because the iPhone 7 launched at $100 less in the US, so I would assume it launched for less in China as well. The XS would be the 2018 equivalent to the 7 and it launched at $999 and the value phone (XR) is $100 more than what was premium 2 years earlier (iPhone 7). Who would have thought the consumer would react this way? Stunning. Not sure how they think the content (iTunes, etc) will keep their revenue up when at this rate there will be fewer and fewer iPhones in use. Eventually the iPhone 7 and 8 will be gone from the line up and the consumer will be left with overpriced phones that don't provide much more than the older phones did. They're going to have to readjust their pricing structure or I expect this to continue. They make a good product, but they lost me after 2 iPhones when the X came out last year and radically increased the price with no real justification in features.

posted on Jan 06, 2019, 12:53 PM 3

7. surethom

Posts: 1669; Member since: Mar 04, 2009

Because with android there is so much more cheaper & better spec deviced.nfrom Chinese brands. Once you are in iOS there is little choose. Apple need an iPhone for $500

posted on Jan 06, 2019, 1:02 PM 3

8. Poptart2828

Posts: 364; Member since: Jan 23, 2018

The Chinese just make better phones at half the price

posted on Jan 06, 2019, 1:12 PM 5

17. theviolinist

Posts: 209; Member since: Feb 03, 2018

define better? cause they can't compare with an iphone in any way

posted on Jan 06, 2019, 3:48 PM 2

29. iushnt

Posts: 3086; Member since: Feb 06, 2013

So if a person click photos, use Baidu, some Chinese version of Facebook, Wechat and some regular calls and texts, the same could be done on Chinese phone too. But the pricing makes it more value for buck. More value = better

posted on Jan 06, 2019, 7:10 PM 1

30. MarmiteTheDog

Posts: 191; Member since: Jul 31, 2017

A screen not from 2013?

posted on Jan 06, 2019, 7:14 PM 0

32. Poptart2828

Posts: 364; Member since: Jan 23, 2018

Some take better pics. Battery last longer and charges three times as fast. All of them use Android giving them the user total freedom. All of them are priced less. Most of them offer tech that iPhone will never implement because of their play it safe practices. Most of them use Qualcomm modems so reception is always better and faster than iphones. Some of them still offer a headphone Jack and offer cheap USB C charge port. Not proprietary charge port where apple dictates the price. Chinese and Koreans make the best phones in the world right now and there is no debate.

posted on Jan 06, 2019, 8:52 PM 2

33. sissy246

Posts: 7087; Member since: Mar 04, 2015

LMAO the iphone does nothing you can't do on a android phone but, a android phone will do things you can't on a iphone. Iphones and flagship android phones are both good phone, its just what one is best for you.

posted on Jan 06, 2019, 10:04 PM 1

34. Leo_MC

Posts: 7254; Member since: Dec 02, 2011

Not the things that I would do on a phone.

posted on Jan 06, 2019, 11:39 PM 1

19. lyndon420

Posts: 6746; Member since: Jul 11, 2012

At that price, you'll probably get a 3.5" screen, physical home button....and a headphone jack.

posted on Jan 06, 2019, 4:24 PM 0

9. Rager722 unregistered

Simple.. no one wants to pay 750 or rather 950 dollars for a 750p screen phone in 2018/19

posted on Jan 06, 2019, 1:19 PM 16

12. STRANG3R

Posts: 234; Member since: Sep 24, 2015

With single camera. No jack. Poor low resolution lcd.no sd card. Less memory. Huge notch and above 1000$ in my country.

posted on Jan 06, 2019, 2:10 PM 8

18. w159148

Posts: 19; Member since: Jan 02, 2018

youtube. com/watch?v=dcFXEXJicgc Resolution is just numbers, friend. The quality and grade and the calibration matter the most.

posted on Jan 06, 2019, 3:56 PM 2

21. wickedwilly

Posts: 669; Member since: Sep 19, 2018

Wrong, it brings sharper images, thus it is one of the many factors that make up a great screen along with quality, grade and the calibration. Apple fans do not include it as they like to excuse Apples penny-pinching.

posted on Jan 06, 2019, 6:07 PM 4

42. midan

Posts: 2751; Member since: Oct 09, 2017

Images? when you have that sharp images? for sure you can't spot the difference from images. You should have atleast said text and in that comparison XR actually does very good job because of the LCD. OLED screen text can look blurry even with 1080p screen. So just like writer above you said, resolution is just a number, especially if you compare two different screen tech.

posted on Jan 07, 2019, 1:07 AM 0

57. Vancetastic

Posts: 1131; Member since: May 17, 2017

It’s not even the point. People know what HD is, and this phone doesn’t support it, at what is still a fairly high price. My four year old 6 Plus was HD. This XR has a bigger screen, and is not. Of course, you won’t answer this, because truth.

posted on Jan 07, 2019, 7:42 AM 0

63. w159148

Posts: 19; Member since: Jan 02, 2018

The human eye can't discern a difference between 720p and 1080p. Even to tell a TV is 4K or whatsoever, a person has to be sitting close to the TV to make out each individual pixel.

posted on Jan 08, 2019, 6:37 PM 0

64. wickedwilly

Posts: 669; Member since: Sep 19, 2018

I disagree with that, Apple says you can not make out the difference between anything above their "Retina" phones, but that is just marketing. For sure it is more difficult to tell, but the human eye can tell the difference. Fir sure you can see the difference between a 4k TV and lower resolutions. I watch some programs in 720, 1,080 and 4K and the difference is marked between the first and last and still noticeable with the 1,080. So much so I can hardly stand to watch at lower resolution any more.

posted on Jan 08, 2019, 7:01 PM 0

66. w159148

Posts: 19; Member since: Jan 02, 2018

I have to disagree with you, sir. There are many publications/studies detailing why we can't do so.

posted on Jan 09, 2019, 9:07 PM 0

67. wickedwilly

Posts: 669; Member since: Sep 19, 2018

That is your perogative. However here are also many that publications/studies that agree with me. I side with them because I can see a difference and my eyes are not that special. The difference is especially obvious when watching the same TV at differing resolutions.

posted on Jan 10, 2019, 1:22 AM 0

65. Vancetastic

Posts: 1131; Member since: May 17, 2017

Then why was my 6 Plus 1080p? Were they just being silly?

posted on Jan 08, 2019, 7:13 PM 0

22. bambamboogy02

Posts: 838; Member since: Jun 23, 2012

No it's not. Even iphone X owners comained of the new s**tty screens on the XR. XR uses lcd vs OLED on the X, and the MORE EXPENSIVE XS series. Why would anyone pay over $1,000(US) when better phones with better screens can be had for far less $$$.

posted on Jan 06, 2019, 6:13 PM 1

25. wickedwilly

Posts: 669; Member since: Sep 19, 2018

iFans have been saying that resolution makes no difference for many years. As long ago as when Android phones started to come with higher resolution screens than Apples Retina, way before the XR was thought of. I agree with you, many have shunned the XR because of other factors, not have I said or inferred that. However, it does not change the fact that Apple fans have ignored resolution as a factor in screen quality for years.

posted on Jan 06, 2019, 6:29 PM 0

39. midan

Posts: 2751; Member since: Oct 09, 2017

"iFans have been saying that resolution makes no difference for many years. As long ago as when Android phones started to come with higher resolution screens than Apples Retina" Do you know why android phones started to get those very high resolution screens in paper? because OLED screen has to be lot higher resolution than LCD to make it look as sharp because of the tech behind OLED

posted on Jan 07, 2019, 12:38 AM 0

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