[craigc]

I totally agree with you. This also does not make any sense to me:

> US dollar strength-related price increases

A weaker dollar (due to inflation, etc.) is the reason that consumer prices increase. A stronger dollar in theory should make the prices decrease.

EDIT: I understand that a stronger dollar means the prices in other currencies will increase, but I was referring to specifically the price in US markets. Pretty sure the iPhone prices in the United States increased as well.

[maw]

A stronger dollar in theory should make the prices decrease.

But for whom? If you're outside the US, and I'll remind you that most of the world, including China, is, then goods effectively priced in US dollars will be more expensive.

[baybal2]

Electronic parts are priced in USD, because USA is the biggest buyer of electronic toys...

This is what I think 99% of business people don't get when they are confused by counterintuitive price dynamics of the industry.

[craigc]

I totally understand that. I should have clarified that I meant in US markets. Cause the iPhone prices also increased in the United States IIRC.

[smileysteve]

> US dollar strength-related price increases

strength-related price increases can be ambiguously read, whether the U.S. dollar strength increased or decreased, it led to price increases.

[eisa01]

Apple raises prices outside the US when the dollar strengthens. Prices in Norway have gone up considerably in the last five years due to this

[craigc]

Mmm I should have clarified my comment. I understand that, but in this case the prices also increased in the US.

[function_seven]

The US price increases aren't being attributed to the strong dollar. The letter is referring to the reasons Chinese sales are weaker than predicted. The stronger dollar is one of those reasons.

But I'm still a bit confused on it. How is Foxconn being paid? In dollars or in yuan? If the dollar is strong, shouldn't the BOM and manufacturing costs decline in lockstep with the Chinese buyers' purchasing power (relative to USD)?

[vel0city]

I imagine the BOM and manufacturing costs aren't as big as paying all of those employees at 1 Apple Park Way, their IP holding companies overseas, or all their construction costs on billion dollar campuses they're building, who are being paid in dollars.

[tanilama]

They increase the price in US, they also increase the price in local currency ON top of that, to hedge the currency fluctuations. In the end, the oversea consumers pay much more even in terms of us dollars.

So US probably has the cheapest iPhone in the world.

[a_c_s]

A strong dollar increases prices in non-US markets, which is most of Apple's revenue now.