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Apple predicted to offer $200 unsubsidized iPhone in 2013 - Page 2

post #41 of 75
Quote:
Originally Posted by TheOtherGeoff View Post

I do not think you will see any iPhone product 'forks' with a subset of the current OS.  The iPod series save for the Touch is not iOS.  iOS is about driving capabilities to mobile apps.  A 'nano' phone would cause both OS and Apps to 'fork' their code, and mix their message.

 

Apple will not create a  iOS 'consumer' 'pro' and 'enterprise' version of the phone in a forward motion (ala Microsoft).  It's about increasing capability for same $$, not cutting existing capabilities to hit a new price point.

 

But that's the thing...I wouldn't characterize it as any kind of iOS fork. iPod nano is not iOS in any way. It has the veneer of iOS-ness, that's it. They did this to bring iOS mojo to iPod nano without actually cramming iOS into that device. I'm suggesting the same possibility for an possible iPhone nano.

 

Quote:
Originally Posted by TheOtherGeoff View Post

If anything, this is where Tim Cook just goes to the supply chain and tells them to cut their prices by 50% and increase shipments by 100% ['revenue neutral' to the supplier], because he knows how to do that.   

 

If only it were that simple and easy. Sadly* these other companies also think about profits, not just revenue. Were it as easy as you suggest, it would have been done.

 

*Sadly for your theory, but happily because unprofitable companies have a nasty habit of going away fairly quickly.

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post #42 of 75
Quote:
Originally Posted by al_bundy View Post

no way, apple only does premium products

You mean like this?

 

http://store.apple.com/us/browse/home/shop_ipod/family/ipod_shuffle

post #43 of 75
Quote:
Originally Posted by jragosta View Post


I agree completely.
Look at the iPhone 3GS. Even without changing a thing, they could probably offer this for $200. All of the tooling and design work is paid for many times over. Manufacturing should be a piece of cake because they've made millions. Bugs are all worked out so quality costs should be low. And so on. Yet a 3GS would easily compete with a $200 phone that the competitors are selling.

 

Yup. This strategy is also used in game consoles. Sony has been selling the PS3 for years, but it gets cheaper for them all the time because the component costs keep coming down. Also, like the console makers, Apple could continue to upgrade the fab processes used to make the chips in the 3GS, lowering costs while holding performance constant. A smaller, more efficient SOC might also allow Apple to cut the size and cost of the battery while maintaining battery life. 

 

In short, there are a lot of ways for Apple to keep the performance of the 3GS constant while lowering costs a lot. And it's still a perfectly good phone for a lot of users. And they get to add more customers to the ecosystem, who might buy higher margin products in the future. Makes perfect sense to keep selling it. 

post #44 of 75

This is actually brilliant - they extend the product life while bringing more users into the family.  Those users will upgrade in the future as well.  Don't assume the margin is much less either.  As production volume increases and parts get consolidated to fewer chips, costs will continue to go down.  The increase in market share is a bonus.  The change in average margin irrelevant.  Its a boost to gross profit.  A year ago i was anti - Apple.  Got an iPad as a gift, so we bought the phone.  Now we'll upgrade to the "5" and pass the 4s to the missus.   Am I switching back   to a Windows phone or Android now? Not likely unless there's a real technological breakthrough.   Only caveat - with the 5 the product is mature.  Further personal upgrades will be less frequent in all likelihood.

post #45 of 75
Quote:
Originally Posted by TheOtherGeoff View Post

Apple will make a profit... if they cut prices.. they cut costs by a proportional amount.

The unsubsidized full retail price of a 3GS is $375. I doubt they'll be able to shave off $175 in production costs.
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post #46 of 75

Hey blastdoor.  Sorry, didn't see ur post - could saved the time. good thinking...

post #47 of 75
Originally Posted by Willy05 View Post
Only caveat - with the 5 the product is mature.  Further personal upgrades will be less frequent in all likelihood.

 

They've only just begun.

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post #48 of 75

It is possible to reach $130 in parts cost, but I doubt they will sell it for $200.  They most probably would start at $299 or at the lowest $249 giving them a much higher margin.

 

They would probably do this with a phone that looked much like a 3gs (glass on only one side, plastic back) but with the A5 (32nm) and a 5mp camera.  They might add a front facing camera if budget allows but it probably would not be able to.

post #49 of 75
Quote:
Originally Posted by jmgregory1 View Post

Yep.  Anyone who thinks Apple needs to make trashy, throw--away phones to compete with the trashy throw-away Android phones has completely misunderstood who Apple is and what value they bring to the equation.

Who says that Apple would sell a trashy, throw-away phone?

We're talking about keeping an older phone around slightly longer in order to go after the low priced market. The iPhone 3GS, for example, was a state of the art, high quality phone at one time. If they sold it today at a lower price, it would still be a high quality phone, albeit somewhat obsolete.

For people who don't need all the latest features, it might be a very good solution. Or even the iPhone 4.
Quote:
Originally Posted by dasanman69 View Post

The unsubsidized full retail price of a 3GS is $375. I doubt they'll be able to shave off $175 in production costs.

Take an economics course. Apple doesn't need to shave costs by anywhere near $175.

Current retail price is $375. On analyst indicates that average gross margins on Apple phones is 60%.
http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/
That means that the manufacturing cost is 40% of $375 or $150. They could sell it at $200 and still make 25% gross margin. But let's say that they're willing to accept a margin of 50% in order to go after high volume markets overseas and domestically. They only need to reduce the manufacturing cost by $50 in order to get a 50% margin on a $200 sale. Given that all of their tooling, design costs, and overheads have been totally absorbed and that the components in the 3GS and 4 are a couple of generations old, it's not hard to imagine a 33% reduction in manufacturing costs.

Even if the numbers vary from the above, the amount of cost savings needed is not all that great.
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post #50 of 75
Quote:
Originally Posted by MJ1970 View Post

 

But that's the thing...I wouldn't characterize it as any kind of iOS fork. iPod nano is not iOS in any way. It has the veneer of iOS-ness, that's it. They did this to bring iOS mojo to iPod nano without actually cramming iOS into that device. I'm suggesting the same possibility for an possible iPhone nano.

 

 

If only it were that simple and easy. Sadly* these other companies also think about profits, not just revenue. Were it as easy as you suggest, it would have been done.

 

*Sadly for your theory, but happily because unprofitable companies have a nasty habit of going away fairly quickly.

first off, you wouldn't, but developers around the world would.  An iPhone is a 'computer that makes calls'  If it can't do what the 2012 iPhone 4s[++] can do, it's not a 'true' iOS device (marrying great HW with great SW for amazingly useful functionality for a 'reasonable' price)

 

It was a step up from the previous 'nano'  == improvement

 

I can't see apple creating a brand (iphone) then creating a device (iPhone nano) that doesn't do what all iPhones do, or requires them to bifurcate their message  (you got 2 choices... ).  No... simple message...

 

 

Secondly, You're assuming these companies are just breaking even on a 'X year old' technology.  Apple spends top dollar to get their capacity year 1 (and block all others from that capacity).  Year 2, they renegotiate, year 3, the same, because there is no startup costs, there is scaling efficiencies, and most of all, there is competition (supply from other companies who now make the same thing because the original supplier was overbooked by Apple Year 1).

 

Apple won't demand a company go out of business to satisfy them, but Tim is magical in cutting his supply chain cost.    I agree there is a limit of how low they can go, but in 2 years, component costs should drop by  more than 150% (moore's law).    

 

It's not 'sad', it's 'business'.

post #51 of 75
Quote:
Originally Posted by TheOtherGeoff View Post

first off, you wouldn't, but developers around the world would.  An iPhone is a 'computer that makes calls'  If it can't do what the 2012 iPhone 4s[++] can do, it's not a 'true' iOS device (marrying great HW with great SW for amazingly useful functionality for a 'reasonable' price)

 

But I'm not claiming it would be an iOS device at all. You seem to be missing this point.

 

 

Quote:
Originally Posted by TheOtherGeoff View Post

I can't see apple creating a brand (iphone) then creating a device (iPhone nano) that doesn't do what all iPhones do, or requires them to bifurcate their message  (you got 2 choices... ).  No... simple message...

 

Maybe they won't. Maybe they will. Even if you can't imagine it, I can.

 

 

Quote:
Originally Posted by TheOtherGeoff View Post

Secondly, You're assuming these companies are just breaking even on a 'X year old' technology.

 

No I'm not.

 

 

Quote:
Originally Posted by TheOtherGeoff View Post

Apple won't demand a company go out of business to satisfy them, but Tim is magical in cutting his supply chain cost.

 

What you call magical isn't.

 

 

Quote:
Originally Posted by TheOtherGeoff View Post

I agree there is a limit of how low they can go, but in 2 years, component costs should drop by  more than 150% (moore's law).

 

Except that not every component in the product is riding a Moore's Law cost curve. :sigh:

 

 

Quote:
Originally Posted by TheOtherGeoff View Post

It's not 'sad', it's 'business'.

 

I was being facetious. :rolleyes:


Edited by MJ1970 - 8/24/12 at 2:02pm

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post #52 of 75
Quote:
Originally Posted by dasanman69 View Post


The unsubsidized full retail price of a 3GS is $375. I doubt they'll be able to shave off $175 in production costs.

what jragosta said.

 

key word... full retail.   

 

and one more thing... meeting market demand.

 

If you figure that the contract was the gating factor "I can't spend $3000 over 2 years on a phone, but I am willing to spend $200 up front, and $50 a month, the months you need a cell phone."

 

Assume that is say 250Million people saying that around the world. 100Million are going to buy a month-to-month smartphone next year.

 

you're currently selling 5 million phones a year at $375, with a net profit 40% . (profit: 750M a year)

 

you drop cost to $200 (and production costs drops to 120), and sacrifice some markup to get 30% net margin (60/phone)

 

you get currently get ~20% of the general  smart phone market... so assume 25%of this market (and only this market) because now your competing on equal terms with those cheap android phones.

 

So... now you are selling 25MILLION phones at 60 profit = 1.5Billion in profit 

 

You doubled your annual profit on the Same SKU.

 

More importantly, You've   C*ckBlocked Android at this entry level, and these users are likely very entry level  (first apple product, save for an iPod)

 

You've increased the number of Apple iCloud users

You've increased the number of App Store buyers

You've increase the value of your 'network'   (for app developers, for analysts, for other users)

 

This is why you need to keep your pricing umbrella low.


Edited by TheOtherGeoff - 8/24/12 at 2:13pm
post #53 of 75
Quote:
Originally Posted by jragosta View Post

I would buy one - even if it's a 3GS. My daughter has been asking to get an iPhone to replace her POS Android phone. I'd pay $200, but not $400 or more.

They are not that bad. I have an xperia mini next to a fleet of Apple products and when roaming abroad it's always the xperia who gets the foreign sim, for the very simple reason that tethering has never been an issue and google maps is just fine whereever you go.

post #54 of 75
Quote:
Originally Posted by MJ1970 View Post

 

But I'm not claiming it would be an iOS device at all. You seem to be missing this point.

 

and I'm claiming it is.  

 

Anything with the iPhone branding will

  make calls

  runs iOS.

  runs iOS apps built for an iPhone.

 

 

Apple's brand discipline (say 'no' more often than not) demands this.

post #55 of 75
Quote:
Originally Posted by TheOtherGeoff View Post

and I'm claiming it is.  

 

Anything with the iPhone branding will

  make calls

  runs iOS.

  runs iOS apps built for an iPhone.

 

 

Apple's brand discipline (say 'no' more often than not) demands this.

 

So we disagree on what options Apple might consider and how flexible that brand definition is. OK.

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post #56 of 75
Quote:
Originally Posted by jragosta View Post

Who says that Apple would sell a trashy, throw-away phone?
We're talking about keeping an older phone around slightly longer in order to go after the low priced market. The iPhone 3GS, for example, was a state of the art, high quality phone at one time. If they sold it today at a lower price, it would still be a high quality phone, albeit somewhat obsolete.
For people who don't need all the latest features, it might be a very good solution. Or even the iPhone 4.
Take an economics course. Apple doesn't need to shave costs by anywhere near $175.
Current retail price is $375. On analyst indicates that average gross margins on Apple phones is 60%.
http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/
That means that the manufacturing cost is 40% of $375 or $150. They could sell it at $200 and still make 25% gross margin. But let's say that they're willing to accept a margin of 50% in order to go after high volume markets overseas and domestically. They only need to reduce the manufacturing cost by $50 in order to get a 50% margin on a $200 sale. Given that all of their tooling, design costs, and overheads have been totally absorbed and that the components in the 3GS and 4 are a couple of generations old, it's not hard to imagine a 33% reduction in manufacturing costs.
Even if the numbers vary from the above, the amount of cost savings needed is not all that great.

That 60% profit margin was on the higher capacity iPhone 4s not the 3GS, they're current profit margin on the 3GS is probably at 25% now. So at the current retail price of $375, the cost is $200 with a 47% profit margin.
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post #57 of 75
Quote:
Originally Posted by dasanman69 View Post

That 60% profit margin was on the higher capacity iPhone 4s not the 3GS, they're current profit margin on the 3GS is probably at 25% now. So at the current retail price of $375, the cost is $200 with a 47% profit margin.

Really? Then please explain how it is that the chart in the article I provided estimated a 57.8% gross margin in 2009 - which was before the iPhone 4 was even introduced? And where in the world did you come up with your imagined 25% figure? I don't believe Apple has EVER sold a major product line at 25% gross margin - certainly not in the past decade or so.

You really should stop just making things up.
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post #58 of 75
Quote:
Originally Posted by jragosta View Post

Really? Then please explain how it is that the chart in the article I provided estimated a 57.8% gross margin in 2009 - which was before the iPhone 4 was even introduced? And where in the world did you come up with your imagined 25% figure? I don't believe Apple has EVER sold a major product line at 25% gross margin - certainly not in the past decade or so.
You really should stop just making things up.

And I qoute from your previous post "They could sell it at $200 and still make 25% gross margin", so who's making it up? Show me where it says 2009 anywhere on that chart.
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post #59 of 75
Quote:
Originally Posted by AppleGreen View Post

There is a big market for a "messaging" Apple phone.  No data plan required.  The carriers here in the U.S. are colluding (I'm looking at you, AT&T and Verizon !!) to raise prices via these ridiculous "shared data" plans.  Have you seen their current offerings of messaging phones?  A bunch of crappy phones.  The selection used to be better.  The carriers want everyone, including kids on family plans, to move to smartphones, so they can increase what each family pays per month.  And, they have increased their upgrade fees substantially to discourage people from upgrading frequently.  They are also making a lot of noise about how much they would like to get rid of subsidies.

In two to three years, we just may see the end of subsidies.  I am sure Apple has considered that this might happen.  In fact, they might take steps to accelerate this turn of events.  One thing they can do is offer a messaging phone with Wi-Fi but no 3G/4G.  With iMessage, no texting plan required.  Children are the heavy texters.  If all their friends have an Apple phone, why would anybody need a texting plan?  This phone would also be perfect for emerging markets.  In the U.S., smaller carriers may have a shot at eroding the duopoly of AT&T and Verizon.

It baffles me why people think that every place has WiFi. Sure, not all iPad's need 3G/4G if the devices are only ever used at home (or at work), that doesn't help a whole lot in the while on foot, car, train, ferry, cruise ship or airplane.

It really depends on what people use it for. An iPad mini or iPod Touch with only 3G/4G is likely targeting the music/book segment. But as a messaging/blogging/news capture tool, without the 3G/4G radio, this is a failure.

What needs to happen, which we won't see for 20 years, is the patents on the 3G/4G radios to all expire (the 3G networks will be shut down long before this happens) before devices will be affordable. Almost 1/4 of a cost of a iPhone, and iPad goes into the radio equipment. At some point every device will come with all "current" generation radios, that you just add a sim card to. But at the current rate we're going we go through another "G" every 5 years, so the existing patents aren't going to expire until we're on 8G.

I'm actually surprised there isn't a standard 802.11 series "anonymous use AP isolation" mode that would allow any access point to be used by any 802.11 device in this mode, without having to negotiate a billing plan or ToS screen first.
post #60 of 75

Shut up and take my money!

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post #61 of 75
Quote:
Originally Posted by dasanman69 View Post

And I qoute from your previous post "They could sell it at $200 and still make 25% gross margin", so who's making it up? Show me where it says 2009 anywhere on that chart.

I never said they should sell it at 25%. I said that based on historic numbers, they COULD if they wished. Furthermore, I said that the margin would be 25% if they lowered the price to $200. There's absolutely nothing in anything I said or any published information that says that the CURRENT 3GS margin is 25% - which is what you claimed in post #56.

Besides, it's irrelevant. You're the one who claimed that the link I provided was talking about the 4S. Since it has a reference to 2009, it obviously wasn't.

As for the chart, click on the link I provided above. Look for the table marked exhibit 1.
http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/

I really don't think you should be attempting to discuss finances when you can't even follow a simple hyperlink and obviously would rather pull numbers out of your rear than use realistic numbers.
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post #62 of 75
Quote:
Originally Posted by Misa View Post

It baffles me why people think that every place has WiFi. Sure, not all iPad's need 3G/4G if the devices are only ever used at home (or at work), that doesn't help a whole lot in the while on foot, car, train, ferry, cruise ship or airplane.
It really depends on what people use it for. An iPad mini or iPod Touch with only 3G/4G is likely targeting the music/book segment. But as a messaging/blogging/news capture tool, without the 3G/4G radio, this is a failure. .

When you become emperor of the world, you get to make the rules. Until then, you don't get to dictate what everyone else uses.

For me, the extra money for 3G on my iPad would be wasted (not to mention the extra data plan). I always have my iPhone 4S with me and if I'm ever away from WiFi and need to do something on my iPad that requires an Internet connection, I'll just tether it (my data plan allows tethering).

Not everyone has the same needs as you.
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post #63 of 75
Quote:
Originally Posted by jragosta View Post

I never said they should sell it at 25%. I said that based on historic numbers, they COULD if they wished. Furthermore, I said that the margin would be 25% if they lowered the price to $200. There's absolutely nothing in anything I said or any published information that says that the CURRENT 3GS margin is 25% - which is what you claimed in post #56.
Besides, it's irrelevant. You're the one who claimed that the link I provided was talking about the 4S. Since it has a reference to 2009, it obviously wasn't.
As for the chart, click on the link I provided above. Look for the table marked exhibit 1.
http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/
I really don't think you should be attempting to discuss finances when you can't even follow a simple hyperlink and obviously would rather pull numbers out of your rear than use realistic numbers.

Where did i claim you said that? i was just using your example of 25%, I knew it was just a number you picked out of the blue and i used it as well. You are correct, at the time of the article they would've been referring to the 3GS, I read on another site that it was the iPhone 4 so i thought there was a correlation, but I highly doubt that the current 3GS is sold at a 60% profit margin, anyway this is all for naught because I doubt Apple will do what the article suggests.
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post #64 of 75
Quote:
Originally Posted by Tallest Skil View Post

 

They've only just begun.

 

What features and functions do you believe Apple can add at this point?  Despite the numerous improvements in the pipeline for potential iPhone components next year I just don't see a significant number of innovative, revolutionary features to be added at this time.  That isn't to say that I don't see valuable potential features, I just don't see any marquee features to be added in the future to iOS at least not for the average user.  I would like to see Automator for iOS, Download Manager, more functionality for Siri, etc. though.
 
post #65 of 75
Quote:
Originally Posted by BeltsBear View Post

It is possible to reach $130 in parts cost, but I doubt they will sell it for $200.  They most probably would start at $299 or at the lowest $249 giving them a much higher margin.

 

They would probably do this with a phone that looked much like a 3gs (glass on only one side, plastic back) but with the A5 (32nm) and a 5mp camera.  They might add a front facing camera if budget allows but it probably would not be able to.

Yes, I think the 3GS will become a "model" - with a new chip, maybe the A5, and higher RAM.

 

 
Quote:
Originally Posted by jragosta View Post


I never said they should sell it at 25%. I said that based on historic numbers, they COULD if they wished. Furthermore, I said that the margin would be 25% if they lowered the price to $200. There's absolutely nothing in anything I said or any published information that says that the CURRENT 3GS margin is 25% - which is what you claimed in post #56.
Besides, it's irrelevant. You're the one who claimed that the link I provided was talking about the 4S. Since it has a reference to 2009, it obviously wasn't.
As for the chart, click on the link I provided above. Look for the table marked exhibit 1.
http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/
I really don't think you should be attempting to discuss finances when you can't even follow a simple hyperlink and obviously would rather pull numbers out of your rear than use realistic numbers.

 

Yes, and Apple are predicting a fairly large fall in margins this quarter which has to be affected by new models, and since the new models are only one month of the quarter the prices must drop substantially. How much of that is the new iPad?

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post #66 of 75
Quote:
Originally Posted by dasanman69 View Post

Where did i claim you said that? i was just using your example of 25%, I knew it was just a number you picked out of the blue and i used it as well. You are correct, at the time of the article they would've been referring to the 3GS, I read on another site that it was the iPhone 4 so i thought there was a correlation, but I highly doubt that the current 3GS is sold at a 60% profit margin, anyway this is all for naught because I doubt Apple will do what the article suggests.

Please try to keep up.

You stated that the 3GS currently costs $375 and Apple would have to take $175 out of the manufacturing cost to get it down to $200.

I explained that you are wrong. The average margin for Apple's iPhone's is close to 60% according to the link I provided. If that applies to the 3GS, then the manufacturing cost would be $150. At a cost of $150, they would have 25% in margin if they sold it at $200. It wasn't a number I picked out of the blue - I explained exactly how I got it and you were never able to refute it.

Then, I showed you exactly how much Apple would have to reduce the manufacturing cost ($50) in order to get their margins up to 50% if they want to sell for $200.

You really should quit. You obviously don't know what you're talking about and are simply making things up as you go along.
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post #67 of 75
Quote:
Originally Posted by AppleGreen View Post

There is a big market for a "messaging" Apple phone.  No data plan required.  The carriers here in the U.S. are colluding (I'm looking at you, AT&T and Verizon !!) to raise prices via these ridiculous "shared data" plans.  Have you seen their current offerings of messaging phones?  A bunch of crappy phones.  The selection used to be better.  The carriers want everyone, including kids on family plans, to move to smartphones, so they can increase what each family pays per month.  And, they have increased their upgrade fees substantially to discourage people from upgrading frequently.  They are also making a lot of noise about how much they would like to get rid of subsidies.

iPod Touch, perhaps?

post #68 of 75
Quote:
Originally Posted by urbanleopard View Post

iPod Touch, perhaps?

I think that's the opposite of what he's asking for. He wants to be able to buy an Apple phone with no data plan. That is, a device that you can use to make phone calls, but that doesn't need to access data from the Internet.

I don't believe that there's any chance that Apple will make a "phone only" product. If all you want to do is make calls, there's no reason for Apple's ease of use advantage. I think the real issue is one with the carriers. Many people could probably get by without a data plan if it weren't required. They could use their phone as a phone when they're away from WiFi and do all their data downloading only when they're in a WiFi zone. For those people, simple phone service without a data plan would be fine - but most (if not all) carriers require you to sign up for a data plan if you have an iPhone.

For example, on Straight Talk, you get unlimited everything for $45. For $30, you get 1000 phone minutes and 1000 text messages as well as 30 MB of data. I don't know if Straight Talk will let you use the cheaper plan for iPhones, but most carriers will not.

In short, it's a carrier issue, not an Apple issue.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #69 of 75
"The unsubsidized full retail price of a 3GS is $375. I doubt they'll be able to shave off $175 in production costs." You will no doubt find the same Chinese contractors contracted to make more modern phones for $50 a pop.(Chipset $5, battery $1, screen $10, case $1. etc etc). Even the very latest quad core chipsets cost less than $25.
post #70 of 75
Quote:
Originally Posted by jragosta View Post

Really? Then please explain how it is that the chart in the article I provided estimated a 57.8% gross margin in 2009 - which was before the iPhone 4 was even introduced? ...

 

Those iPhones were selling for more than $375 back then.

post #71 of 75
Quote:
Originally Posted by bitmonkey View Post

Those iPhones were selling for more than $375 back then.

And components cost a lot more back then, too.

Regardless:

1. Apple's AVERAGE iPhone margin has been around 60% for years, so one can assume that they wouldn't continue to sell the 3GS unless the margin is pretty decent.

2. It doesn't matter what the margin is - Dasanman claimed that Apple would have to shave $175 off the production costs to get a $375 phone down to $200. That's only true if they were selling the phone at cost. If they were making any margin at all, his statement is wrong.

I wasn't arguing for any particular numbers - I was simply pointing out that he didn't have any idea how margins or business economics worked. I presented numbers which I believe are reasonable, but the correctness of my argument does not rely on the details of the numbers. He was still wrong even if Apple's 3GS margins were only 20% (but they're not - Apple wouldn't continue to sell an old, outdated phone unless the margins were pretty good).
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #72 of 75
Quote:
Originally Posted by dasanman69 View Post

Quote:
Originally Posted by TheOtherGeoff View Post

Apple will make a profit... if they cut prices.. they cut costs by a proportional amount.

The unsubsidized full retail price of a 3GS is $375. I doubt they'll be able to shave off $175 in production costs.

@dasanman69 -- What's your point? Why does Apple need to shave $175 from the production costs of the 3GS? As jragosta pointed out, you replied to a comment about "proportional" profit margins from TheOtherGeoff with a statement about absolute production cost. Are you saying that Apple needs to net a fixed dollar amount per phone (as opposed to a fixed margin)? I'm guessing you were writing too quickly, so maybe you could clarify your point about profits?

post #73 of 75
Good news. Its been cancelled.
post #74 of 75
Originally Posted by aBeliefSystem View Post
Good news. Its been cancelled.

 

The rumored product of which we had no proof is now being cancelled with no proof.

 

I'm unsure how to feel about this, but there's no proof that I am.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #75 of 75

If and when Apple releases the 3GS. It will surely have a lot of buyers.

What i think is, it has advantages for Apple itself.

 

I'd like to state a few reasons here.

1. It gives a lot of flexibilty, which is a good choice.

2. In my part of the world, not many people have a liking and appreciation for an Apple device. So this product can easily make a good impression to them since it costs cheap.

3. Again, in my part of the world, no cell phone comes tied to any operators / carriers. So an unsubsidized phone is the only way we get to use iPhones.

4. Even with unchanged specs, the 3GS will still kicka**. Here, 90% of the ''cell phone using population'' doesn't use 3G. And by any standards, the 3GS will still be an high-end device here.

 

PS. : Most of my views are biased in favor of India and its people's lifestyle. Incase Apple really does it and launches it here too.. it is going to sell well. Period.


Edited by kshitij22 - 8/27/12 at 2:03pm

iPhone 4. That's the only Apple Device i own.

I wish all these devices were subsidized here too.

Reply

iPhone 4. That's the only Apple Device i own.

I wish all these devices were subsidized here too.

Reply
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