We’ve seen it before, and the big tech companies just got a taste of their own medicine.
By stacking discounts on in-store Apple devices with fees attached, Apple is infuriating people once again. In previous years, brand loyalty has been the one thing that has stood in the way of being lured away from Apple by products from other players. But in recent years, our retail habits have started to shift. Of all the reasons to buy something online, mainly because there’s more of it, it’s not the nicest one to have. But we have come to expect to pay, on average, a staggering 99% more in commission, over retail price, for a physical purchase than for one made online. This isn’t new, it’s just now the Apple Broke Brand Loyalty does it the hardest: Apple sells its computers, phones and tablets online at discounts that aren’t nearly as large as the discounts it sells them at in the stores. And this year, Apple’s new “smokescreen” of monthly or annual payments on cards tied to the computers, which also cost more than equivalent devices sold in the stores, continues to anger customers. (Remember when the cost of Apple devices was enough to keep us loyal? They also have the luxury of stocking all sorts of accessories that you have to pay for separately. Apple, on the other hand, will only sell you the purchase of a phone or a computer with AppleCare, the company’s insurance cover for new devices, a compulsory extra the iPhone 4 – since 2011. AppleCare comes with the initial sale and runs for the life of the device and covers accidental damage and virtually all support-related issues.)
According to a recent survey by openAI, a company with ties to Elon Musk, half of customers would stop buying Apple products if this was a more standard model of offering new phones at half the retail price and then offering an additional payment over time. At the end of it, Apple’s margins are bigger than Amazon’s, and that makes sense – but this model is also cheaper than other major rivals. Amazon still doesn’t charge you for the option to buy your new device without AppleCare (where previous generations come with it) or any other online warranty. Instead you just buy your new iPhone a year early and then pay $700 per year to be covered for accidents (it’s almost half the actual retail price), as well as a personal support line, tech-support centre, screen scratches and accidental damage, plus the manuals, packs and accessories. So while Apple’s online sales may be cheaper, you have to buy an item more than double the retail price when you order it, something that infuriates plenty of people (including Dave Goudie, the chief technology officer of a UK-based data company, whose now-deleted tweetstorm against the iPhone 11’s announcement has accumulated nearly 100,000 shares).
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For a number of years, Apple has resisted responding to the series of internal crises that hit its sales during the critical Christmas period. For example, most customers can use a discount Apple offers to buy online over 24-hours but not in store.
But in recent years, the company has started releasing news of its products on different dates, meaning that you have to buy a new device a few months later if you want to get your money’s worth, especially as many reviews of the iPhone X have been dismal. But since these news breaks online, Apple is also receiving feedback. It’s also well aware that it will get more criticism for its last-minute update than it did in the recent past for being late. This keeps them up at night. Last Christmas Apple seemed to be haunted by the audience it disappointed after failing to give the public more specific news of the new iPhone in December 2017. According to a survey by Consumer Intelligence Research Partners in May, the number of consumers who cancelled or failed to make their usual purchase after hearing the news of the 2017 launch had jumped 50% from 2016 to 2017. And when the iPhone X launched in November, it didn’t start shipping until November 22 – even though this was three weeks earlier than in 2016.
Now that every company knows how to pander to their fans by bundling discounts and expensive add-ons with complicated, brand new offers, let’s hope their customers see the light.