There are a lot of people here who think that Apple don't go after market share and don't do cheap, this despite the fact that they say they are interested in market share all the time, and want to beat Google.
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For instance, people think the Touch and iPhone have the same display because they both have 960x480 3.5" "Retina Displays" but we know that the iPhone uses an IPS panel and the Touch a TN panel. Then there is quality of the backlight, the speed of the NAND flash, the A4 CPU, RAM, speaker, mic, vibrator, battery, GPS, cellular HW, and on and on and on...
Probably the latest touch has better stats in all these departments than the 3GS, which will be the cheap phone when the iPhone 5 comes out. I think they will rename the 3GS but keep the same components, possibly a better chip. It then can sell of contract for $250 ish.
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Considering Apple has already locked up a large percentage of profits in the mobile space, going after marketshare in these countries is foolish. Companies exist to make money, not to have everyone using their products (the former does not always mean the latter).
Apple doesn't care about any of this. They are sitting on $100 billion in profit for a reason.
Apple don't seem too concerned about the $100B and never mention it except to analysts, and conference calls. When they get on stage to introduce products they talk about market share.
Not entirely true I would say. iPods comes in all sorts of fashions - from lower entrance to high end touch. Cheap is probably just a unlucky choice of word. Apple could use it's knowledge to produce a simple but high quality entrance device.
I know - it's been in the ruomor mill before, just pointing to a choice of words and ways that it could happen.
Apple may offer some products with a cheap price point, but I believe that what Apple said is that they would never sacrifice quality over price. So, if it's possible for Apple to make something good and sell it for a decent price point, then they might just do so. But they wouldn't sell junk, just for the sake of selling junk, which is the strategy of many other companies.
I remember Steve Jobs saying something about that on a keynote from a few years back.
Waiting for an analyst report calling Apple out for not producing a sub-$99 iPhone Lite. Why does Apple need to address every single market in which it has a "hole," regardless of the ridiculousness of said market?
I think we should start a petition demanding that Apple make an iPhone that they can give away in cereal boxes. After all, they have $100 B to spend and think of what it would do for their market share.....
I think what many fail to recognize is that used iPhones have a tremendous resale value and many people, at least in Latin America, which I am familiar with, buy these used iPhones and jailbreak them to run prepaid minutes which they purchase at every little mom and pop store. These users and sales go under the radar. Tons of eBay and Craigslist iPhones sold in the US get shipped to Latin America. Subsidized phones are quite rare in these countries.
On the other hand there is not much of a a market for used Androids to my knowledge.
Also, the other very common phone in Latin America is BB.
But do those $188 dollar Android phone contribute to the Android ecosystem much? Are their users big app-consumers, spendings loads in the various Android stores?
I'm betting not. Apple's customers not only pay more for the iPhone, but are big consumers in the iTunes Store and App Store world, and also gets Apple in the door for millions of potential iPad, Mac, and Apple TV users. Apple are doing very well from their consumers, and by trying to meet a low price point would only be lowering their margins and their ability to deliver quality experiences. These aren't markets Apple wants to be in, nor should they.
Let Android crush the iPhone in the low end. It isn't the low end that matters.
There are a lot of people here who think that Apple don't go after market share and don't do cheap, this despite the fact that they say they are interested in market share all the time, and want to beat Google.
Apple is not interested in market share AT THE EXPENSE of making a profit. If it was about market share regardless of other factors then we'd see a loss-leader iPad that was priced at $199 or below to drive out Amazon who is technically taking some of Apple's market share with the Kindle FIre.
We'd also see Apple give away their OSes to everyone if it was about market share regardless of profit. But that isn't what Apple does. They didn't even do that when HP and Dell were begging them for a way to get out from under MS's thumb back when Apple could have used the money.
Bottom line: Market share is only a factor IF you can make more money as you increase your unit share.
This explains why most of us know very few people with Android phones and lots of people with iPhones. We don't live in countries where people are poor and phones aren't subsidized.
I doubt Apple is particularly concerned. This explains a lot more about the nature of Android market share than a problem for Apple.
I believe ifixit has pegged the "true cost" of an iPhone at close to the contract price,
in which case the "true enormous profit" isn't included.
There is no way for anyone outside Apple to know the "true cost". There are just too many unknowns. If anyone has come close, at least in understanding the details, I think it's Horace Deido. The graph is too large for the forum so I'll just post the link...
There is no way for anyone outside Apple to know the "true cost". There are just too many unknowns. If anyone has come close, at least in understanding the details, I think it's Horace Deido. The graph is too large for the forum so I'll just post the link...
I can't vouch for his numbers, but it is nice to see him including estimates for all the non-materials costs. That alone suggests that it's probably a better estimate than the silly ones that include only bills of materials.
They are talking people who choose pre-pay for fix amount of service verses pay up front for a complete plan whether you use or not. We are talking about people who are living pay check to pay check and may not use their phone when the pre-pay runs out each month.
As I understand, in many countries it is not just people who are living paycheck to paycheck who pre-pay phones, lots of people do. For example, in Italy phone contracts are taxed differently, and end up being less economical, so even wealthy people prepay or have "rechargeable" accounts.
Apple is not interested in market share AT THE EXPENSE of making a profit.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
OK. Now, all you have to do is show us your resume and point out where you have experience that indicates that you know how to run Apple better than the existing Board and management team.
As I understand, in many countries it is not just people who are living paycheck to paycheck who pre-pay phones, lots of people do. For example, in Italy phone contracts are taxed differently, and end up being less economical, so even wealthy people prepay or have "rechargeable" accounts.
Its fairly common in the UK, but was more common in the pre-smartphone age.
This explains why most of us know very few people with Android phones and lots of people with iPhones. We don't live in countries where people are poor and phones aren't subsidized.
I doubt Apple is particularly concerned. This explains a lot more about the nature of Android market share than a problem for Apple.
Southern European countries are not poor, they are all in the top 10% in the world.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
1) Your comment was squarely on Apple caring about market share and it wasn't qualified as mine was to include market share only if they can increase profit. Increasing profit margin is not the same thing and I don't think anything expect Apple to maintain their margins as they move into lower tiers.
2) From what I've seen the iPhone 3GS commands a higher rate from carriers than $250. Regardless of what Apple is getting i don't see how their margin can be established. Surely they make less profit per handset because it's a less expensive handset but how do we know the margin of profit is lower?
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For instance, people think the Touch and iPhone have the same display because they both have 960x480 3.5" "Retina Displays" but we know that the iPhone uses an IPS panel and the Touch a TN panel. Then there is quality of the backlight, the speed of the NAND flash, the A4 CPU, RAM, speaker, mic, vibrator, battery, GPS, cellular HW, and on and on and on...
Probably the latest touch has better stats in all these departments than the 3GS, which will be the cheap phone when the iPhone 5 comes out. I think they will rename the 3GS but keep the same components, possibly a better chip. It then can sell of contract for $250 ish.
Considering Apple has already locked up a large percentage of profits in the mobile space, going after marketshare in these countries is foolish. Companies exist to make money, not to have everyone using their products (the former does not always mean the latter).
There is also a platform to consider.
...people who are barely making ends meet do not have the cash that Apple has.
Nobody has the cash Apple has! Warren Buffett doesn't have the cash Apple has!
Apple doesn't care about any of this. They are sitting on $100 billion in profit for a reason.
Apple don't seem too concerned about the $100B and never mention it except to analysts, and conference calls. When they get on stage to introduce products they talk about market share.
Not entirely true I would say. iPods comes in all sorts of fashions - from lower entrance to high end touch. Cheap is probably just a unlucky choice of word. Apple could use it's knowledge to produce a simple but high quality entrance device.
I know - it's been in the ruomor mill before, just pointing to a choice of words and ways that it could happen.
Apple may offer some products with a cheap price point, but I believe that what Apple said is that they would never sacrifice quality over price. So, if it's possible for Apple to make something good and sell it for a decent price point, then they might just do so. But they wouldn't sell junk, just for the sake of selling junk, which is the strategy of many other companies.
I remember Steve Jobs saying something about that on a keynote from a few years back.
in which case the "true enormous profit" isn't included.
Waiting for an analyst report calling Apple out for not producing a sub-$99 iPhone Lite. Why does Apple need to address every single market in which it has a "hole," regardless of the ridiculousness of said market?
I think we should start a petition demanding that Apple make an iPhone that they can give away in cereal boxes. After all, they have $100 B to spend and think of what it would do for their market share.....
On the other hand there is not much of a a market for used Androids to my knowledge.
Also, the other very common phone in Latin America is BB.
I'm betting not. Apple's customers not only pay more for the iPhone, but are big consumers in the iTunes Store and App Store world, and also gets Apple in the door for millions of potential iPad, Mac, and Apple TV users. Apple are doing very well from their consumers, and by trying to meet a low price point would only be lowering their margins and their ability to deliver quality experiences. These aren't markets Apple wants to be in, nor should they.
Let Android crush the iPhone in the low end. It isn't the low end that matters.
There are a lot of people here who think that Apple don't go after market share and don't do cheap, this despite the fact that they say they are interested in market share all the time, and want to beat Google.
Apple is not interested in market share AT THE EXPENSE of making a profit. If it was about market share regardless of other factors then we'd see a loss-leader iPad that was priced at $199 or below to drive out Amazon who is technically taking some of Apple's market share with the Kindle FIre.
We'd also see Apple give away their OSes to everyone if it was about market share regardless of profit. But that isn't what Apple does. They didn't even do that when HP and Dell were begging them for a way to get out from under MS's thumb back when Apple could have used the money.
Bottom line: Market share is only a factor IF you can make more money as you increase your unit share.
I doubt Apple is particularly concerned. This explains a lot more about the nature of Android market share than a problem for Apple.
Nobody has the cash Apple has! Warren Buffett doesn't have the cash Apple has!
Berkshire Hathaway most certainly does.
http://en.wikipedia.org/wiki/Berkshire_Hathaway
Then again Warren is very bullish on Apple.
I believe ifixit has pegged the "true cost" of an iPhone at close to the contract price,
in which case the "true enormous profit" isn't included.
There is no way for anyone outside Apple to know the "true cost". There are just too many unknowns. If anyone has come close, at least in understanding the details, I think it's Horace Deido. The graph is too large for the forum so I'll just post the link...
There is no way for anyone outside Apple to know the "true cost". There are just too many unknowns. If anyone has come close, at least in understanding the details, I think it's Horace Deido. The graph is too large for the forum so I'll just post the link...
I can't vouch for his numbers, but it is nice to see him including estimates for all the non-materials costs. That alone suggests that it's probably a better estimate than the silly ones that include only bills of materials.
Berkshire Hathaway most certainly does.
http://en.wikipedia.org/wiki/Berkshire_Hathaway
Then again Warren is very bullish on Apple.
Where does it say that Berkshire Hathaway has the cash that Apple does?
They are talking people who choose pre-pay for fix amount of service verses pay up front for a complete plan whether you use or not. We are talking about people who are living pay check to pay check and may not use their phone when the pre-pay runs out each month.
As I understand, in many countries it is not just people who are living paycheck to paycheck who pre-pay phones, lots of people do. For example, in Italy phone contracts are taxed differently, and end up being less economical, so even wealthy people prepay or have "rechargeable" accounts.
Excellent point, mstone.
Apple is not interested in market share AT THE EXPENSE of making a profit.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
OK. Now, all you have to do is show us your resume and point out where you have experience that indicates that you know how to run Apple better than the existing Board and management team.
As I understand, in many countries it is not just people who are living paycheck to paycheck who pre-pay phones, lots of people do. For example, in Italy phone contracts are taxed differently, and end up being less economical, so even wealthy people prepay or have "rechargeable" accounts.
Its fairly common in the UK, but was more common in the pre-smartphone age.
This explains why most of us know very few people with Android phones and lots of people with iPhones. We don't live in countries where people are poor and phones aren't subsidized.
I doubt Apple is particularly concerned. This explains a lot more about the nature of Android market share than a problem for Apple.
Southern European countries are not poor, they are all in the top 10% in the world.
Who said they were? I suggest $250 which would give them some kind of margin for the 3GS, or cheapest device.
I think Apple should create three models based on the existing form factors when the iPhone NEXT - I don't want to get into the 5 debate - comes out. 3GS is non-retina but different price points. The lowest price point has a very low margin, the top price point is reasonable. iPhone 4, the standard normal sized phone, good margins all round, and the iPhone NEXT with very high margins.
Over all margins are maintained ish.
I say ish, because margins of 40% are not going to be maintainable. Of course if the next big thing is a TV with margins of 55% then the rest of the product line can take a margin cut.
1) Your comment was squarely on Apple caring about market share and it wasn't qualified as mine was to include market share only if they can increase profit. Increasing profit margin is not the same thing and I don't think anything expect Apple to maintain their margins as they move into lower tiers.
2) From what I've seen the iPhone 3GS commands a higher rate from carriers than $250. Regardless of what Apple is getting i don't see how their margin can be established. Surely they make less profit per handset because it's a less expensive handset but how do we know the margin of profit is lower?
Southern European countries are not poor, they are all in the top 10% in the world.
You're thinking of Spain and Italy, don't forget all the countries to the South East of Europe.