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Apple CEO Tim Cook on cheap smartphones: 'We're not in the junk business' - Page 5

post #161 of 208
Quote:
Originally Posted by island hermit View Post

At $350 to $400 per phone... and Apple couldn't do it at those prices when others are selling phones for $99.

Get off it man. You're not making sense.

What you are saying is that the 5C will eat away at the flagship 5S. LOL!

What vendor is making money on $99 smart phones?
post #162 of 208
Quote:
Originally Posted by jungmark View Post


What vendor is making money on $99 smart phones?

 

Are you even comprehending what I am saying? I don't think so.

 

[ Just to help you out a little... there is a big difference between $99 and $350 to $400 ]

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post #163 of 208
Nor should Apple make junk.

I don't think anyone is seriously suggesting they do a 180 degree and do that.

However.

Is the iPod Touch 'junk?'

It's made of premium materials. Yet, Apple makes a decent margin on it presumingly. Take a £250 iPod Touch...and add a phone chipset. Does that really equate to the £215 price difference between the Alu iPod Touch and the 'plastic' iPhone c?

There was all the talk about how Apple couldn't do a cheaper phone.

it's nonsense.

The 4s is £350. Is that junk? People said Apple wouldn't do a cheaper phone. But they did. It's the iPhone 5c. And they have an even cheaper one. It's the 4s.

So. They can do 'cheapER' phones.

I'd hardly call £350 'cheap' for a phone off contract either. That would be a mid range market price. Not cheap. (Far from it.) Not over expensive compared to the 5s ofc.

The variables are age of the tech.

My bet is Apple did a sleight of hand with the 5c and has handsome margins on it. More so than if they'd had the '5' as 'last year's' phone. Didn't they bump the price of the flagship from £525 to £545? So the 5c is only '£60' cheaper than the old '5' flagship? It's not a £100 cheaper. That's for sure.

My bet is we'll see the 4s disappear next year and the 5c will drop into it's price bracket...with the 5S into the now 5c bracket. ...and the new + iPhone 5 incher will go flagship.

Then the 5c will make more sense. Because the price, to me, is 'reaching' as is.

Lemon Bon Bon.

You know, for a company that specializes in the video-graphics market, you'd think that they would offer top-of-the-line GPUs...

 

WITH THE NEW MAC PRO THEY FINALLY DID!  (But you bend over for it.)

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You know, for a company that specializes in the video-graphics market, you'd think that they would offer top-of-the-line GPUs...

 

WITH THE NEW MAC PRO THEY FINALLY DID!  (But you bend over for it.)

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post #164 of 208
Quote:
Originally Posted by Lemon Bon Bon. View Post

Nor should Apple make junk.

I don't think anyone is seriously suggesting they do a 180 degree and do that.

However.

Is the iPod Touch 'junk?'

It's made of premium materials. Yet, Apple makes a decent margin on it presumingly. Take a £250 iPod Touch...and add a phone chipset. Does that really equate to the £215 price difference between the Alu iPod Touch and the 'plastic' iPhone c?

There was all the talk about how Apple couldn't do a cheaper phone.

it's nonsense.

The 4s is £350. Is that junk? People said Apple wouldn't do a cheaper phone. But they did. It's the iPhone 5c. And they have an even cheaper one. It's the 4s.

So. They can do 'cheapER' phones.

I'd hardly call £350 'cheap' for a phone off contract either. That would be a mid range market price. Not cheap. (Far from it.) Not over expensive compared to the 5s ofc.

The variables are age of the tech.

My bet is Apple did a sleight of hand with the 5c and has handsome margins on it. More so than if they'd had the '5' as 'last year's' phone. Didn't they bump the price of the flagship from £525 to £545? So the 5c is only '£60' cheaper than the old '5' flagship? It's not a £100 cheaper. That's for sure.

My bet is we'll see the 4s disappear next year and the 5c will drop into it's price bracket...with the 5S into the now 5c bracket. ...and the new + iPhone 5 incher will go flagship.

Then the 5c will make more sense. Because the price, to me, is 'reaching' as is.

Lemon Bon Bon.

 

You need to understand that the iPod Touch and 4S is not Apple's cash cow now.  They will sacrifice margins on these low volume items.  But they cannot sacrifice margins on their cash cows: 5C and 5S.

 

And how is the 5C reaching?  Compare it to the other popular premium phone the Galaxy S4:

 

5C is faster

5C has better build quality

5C has a better OS/ecosystem

better resale value

better customer support

better prestige

 

So why would Apple sell the 5C 30% less than its rival?

Name me a single phone that is superior to the 5C that sells for $400?

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post #165 of 208
Quote:
Originally Posted by island hermit View Post

Are you even comprehending what I am saying? I don't think so.

[ Just to help you out a little... there is a big difference between $99 and $350 to $400 ]

And how many companies are making $$$ with a $400 phone. The C will probably be the bigger seller of the 2. If the c was cheaper, margins would be lower and profit would be lower. You can't escape that reality.
post #166 of 208
Quote:
Originally Posted by majortom1981 View Post
 

I wouldn't call the lumia 520 junk. Its $99 off contract. that's cheap enough for anybody to have one as a second phone. Heck load here maps onto it and you have a gps also (here maps allows you to download the whole USA maps on it for free).

 

If nokia can make a quality cheap phone I do not understand why apple cant either.

 

'Quality cheap phone' equals zero profit, or worse. That's why.

post #167 of 208
Quote:
Originally Posted by chadmatic View Post
 

 

What?!  Where did you come up with all of that?  He simply said they don't make junk.  And he's right!

 

So on this site, "reply" means "post" and to reply you need to click "quote."  Sorry for adding to the confusion.

 
If you click the link that is the submitters name, you can see all the posts and maybe put the thread back together.  I've already spent more time trying to make a point than I should have.  I have client work I need to do.
 
Negative marketing isn't going to work for Apple any better than those tasteless YouTube posts last week worked for Microsoft.  Name a top-tier brand with a CEO that has made the kinds of public comments a sports figure with an attitude might make.  Tim Cook & team, and I'm guessing he wishes he hadn't quite come off that way, and didn't intend for media to turn it into the headline it did.  Read the headline from the perspective of a professional with a post-graduate degree who found herself or himself with an Android phone and is thinking about taking the time and trouble to stop by an outlet and swap it for a iPhone (the cost being of no consequence to such a person).  Now how does this comment come across?
post #168 of 208

The 4S is either free or .99c how much cheaper do people want?

post #169 of 208
Quote:
Originally Posted by jungmark View Post


And how many companies are making $$$ with a $400 phone. The C will probably be the bigger seller of the 2. If the c was cheaper, margins would be lower and profit would be lower. You can't escape that reality.

 

I would imagine that quite a few companies are making money with $400 phones. Samsung for sure.

 
How the f*ck do you even know that the 5C isn't the $400 phone in Apple's future.
 
You can make a helluva phone with a very good margin selling it for $400.
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post #170 of 208
Quote:
Originally Posted by VicAustin View Post

So on this site, "reply" means "post" and to reply you need to click "quote."  Sorry for adding to the confusion.
 
If you click the link that is the submitters name, you can see all the posts and maybe put the thread back together.  I've already spent more time trying to make a point than I should have.  I have client work I need to do.
 
Negative marketing isn't going to work for Apple any better than those tasteless YouTube posts last week worked for Microsoft.  Name a top-tier brand with a CEO that has made the kinds of public comments a sports figure with an attitude might make.  Tim Cook & team, and I'm guessing he wishes he hadn't quite come off that way, and didn't intend for media to turn it into the headline it did.  Read the headline from the perspective of a professional with a post-graduate degree who found herself or himself with an Android phone and is thinking about taking the time and trouble to stop by an outlet and swap it for a iPhone (the cost being of no consequence to such a person).  Now how does this comment come across?

What are you talking about? He specified a market segment. He didn't single out any vendor. Apple doesn't do junk. Nothing wrong with that. As for the Android user, she would probably say the same thing after she plays with the iPhone.
post #171 of 208
Quote:
Originally Posted by island hermit View Post

I would imagine that quite a few companies are making money with $400 phones. Samsung for sure.
 
How the f*ck do you even know that the 5C isn't the $400 phone in Apple's future.
 
You can make a helluva phone with a very good margin selling it for $400.

Just Sammy and Apple are making money. Btw, Sammy makes its money with the higher cost GS4 and Note.
post #172 of 208
Quote:
Originally Posted by island hermit View Post
 

 

I would imagine that quite a few companies are making money with $400 phones. Samsung for sure.

 
How the f*ck do you even know that the 5C isn't the $400 phone in Apple's future.
 
You can make a helluva phone with a very good margin selling it for $400.

 

You are wrong.  Samsung makes close to ZERO on their $400 phones.  They make all their money on $500-$700 phones.

 

Lenovo/LG/Nokia/ect sell 200,000,000 smartphones combined and make ZERO profit or lose money.  The bulk of the phones they sell are mid/low end.  The only two companies that make any profits in smartphones sell a TON of high end phones. 

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post #173 of 208
Quote:
Originally Posted by GoonerYoda View Post

Why would Apple cheapen their image? That's like asking BMW to make a Civic-like car with a BMW logo.

 

Apple will never do dirt cheap, we're talking middle ground, where there are profits - not least for a company like Apple who can recycle previous technology, minimising development costs.

 

No-one need debate whether Apple should make a cheaper iPhone. They have done. The 5c. Those who've got their hands on it say it's decent quality compared with some other plastic phones. And, yes, it runs the best mobile OS yet. It's a terrific plastic smartphone. But none-the-less a plastic phone, packed with last year's technology.

 

Tim Cook, on the 5c "Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost."

 

Although Tim would like people to be focus on the first part of the sentence, the truth is in the latter. Apple already had the great phone and the great experience that was the iPhone 5. The world knows it. Nothing new. It's the 'we figured a way to do it at a lower cost' is the telling bit. (Of course - a plastic shell!).

 

But having done this, what do they do with the lower cost phone? They sell it at the same price as they've always sold what is last year's technology. 

 

So Apple has given us a 'cheaper' phone lacking the only real advantage of a cheaper phone - it's no cheaper.

post #174 of 208
Quote:
Originally Posted by sog35 View Post
 

 

You are wrong.  Samsung makes close to ZERO on their $400 phones.  They make all their money on $500-$700 phones.

 

Lenovo/LG/Nokia/ect sell 200,000,000 smartphones combined and make ZERO profit or lose money.  The bulk of the phones they sell are mid/low end.  The only two companies that make any profits in smartphones sell a TON of high end phones. 

 

Oh bs. You have no way of proving that a $400 is sold at a loss just as I have no way of proving that it doesn't.

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post #175 of 208
Quote:
Originally Posted by island hermit View Post
 

 

Oh bs. You have no way of proving that a $400 is sold at a loss just as I have no way of proving that it doesn't.

 

I just named 4 companies that sell mostly $400 phones and they all make ZERO or LOSE money.

 

Nokia has sold hundreds of millions of phones since 2011 and has not had a single profitable quarter

http://seekingalpha.com/article/1602002-how-many-lumia-phones-must-be-sold-for-nokia-to-break-even

 

Same with LG

Same with Levono

Same with ZTE

Same with Huawei

 

All these companies sell in the mid-range below $500.

Use your brain.

 

So you want Apple to do something that has never been done before? Risk there premium brand name, margins, and canibalization for the 5S just so you can sell a few more phones to cheapskates?  Nokia/LG/Leveno/ZTE/Huawei has already done that.  And they have all FAILED.

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post #176 of 208
Quote:
Originally Posted by kevt View Post
 

 

Apple will never do dirt cheap, we're talking middle ground, where there are profits - not least for a company like Apple who can recycle previous technology, minimising development costs.

 

No-one need debate whether Apple should make a cheaper iPhone. They have done. The 5c. Those who've got their hands on it say it's decent quality compared with some other plastic phones. And, yes, it runs the best mobile OS yet. It's a terrific plastic smartphone. But none-the-less a plastic phone, packed with last year's technology.

 

Tim Cook, on the 5c "Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost."

 

Although Tim would like people to be focus on the first part of the sentence, the truth is in the latter. Apple already had the great phone and the great experience that was the iPhone 5. The world knows it. Nothing new. It's the 'we figured a way to do it at a lower cost' is the telling bit. (Of course - a plastic shell!).

 

But having done this, what do they do with the lower cost phone? They sell it at the same price as they've always sold what is last year's technology. 

 

So Apple has given us a 'cheaper' phone lacking the only real advantage of a cheaper phone - it's no cheaper.

 

Tell me about a single phone priced at $400 that is better than the 5C.

 

If you can't then shut up.  Why should Apple be the first company to sell a phone of that high quality for $400.

 

Again name me a SINGLE PHONE.  Even the $700 Galaxy S4 is slower than the 5C.

You are living in dreamland.  Expecting a Ferrari for $50,000

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post #177 of 208
Quote:
Originally Posted by sog35 View Post
 

 

I just named 4 companies that sell mostly $400 phones and they all make ZERO or LOSE money.

 

Nokia has sold hundreds of millions of phones since 2011 and has not had a single profitable quarter

http://seekingalpha.com/article/1602002-how-many-lumia-phones-must-be-sold-for-nokia-to-break-even

 

Same with LG

Same with Levono

Same with ZTE

Same with Huawei

 

All these companies sell in the mid-range below $500.

Use your brain.

 

So you want Apple to do something that has never been done before? Risk there premium brand name, margins, and canibalization for the 5S just so you can sell a few more phones to cheapskates?  Nokia/LG/Leveno/ZTE/Huawei has already done that.  And they have all FAILED.

 

All these companies make plastic phones. They all lose money. Therefore Apple should never make a plastic phone.

 

Well, using your brain.

 

Apple has risked its premium brand name by selling a plastic phone, that (whilst good by plastic phone standards) is a clear step down in quality from the iPhone 4, 4S, and 5. They're taking the risk already, but for the sake of increased profit margins, not for competitiveness in price sensitive markets.

post #178 of 208
Quote:
Originally Posted by kevt View Post
 

 

All these companies make plastic phones. They all lose money. Therefore Apple should never make a plastic phone.

 

Well, using your brain.

 

Apple has risked it's premium brand name by selling a plastic phone, that (whilst good by plastic phone standards) is a clear step down in quality from the iPhone 4, 4S, and 5. They're taking the risk already, but for the sake of increased profit margins, not for competitiveness in price sensitive markets.

 

you are a fool.  Guess what material the iPhone3G was made of????

 

Also have you held the 5C in your hands?  If not shut the hell up.  Every single review I've read said the 5C feels like a premium phone.

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post #179 of 208
Quote:
Originally Posted by sog35 View Post
 

 

I just named 4 companies that sell mostly $400 phones and they all make ZERO or LOSE money.

 

Nokia has sold hundreds of millions of phones since 2011 and has not had a single profitable quarter

http://seekingalpha.com/article/1602002-how-many-lumia-phones-must-be-sold-for-nokia-to-break-even

 

Same with LG

Same with Levono

Same with ZTE

Same with Huawei

 

All these companies sell in the mid-range below $500.

Use your brain.

 

So you want Apple to do something that has never been done before? Risk there premium brand name, margins, and canibalization for the 5S just so you can sell a few more phones to cheapskates?  Nokia/LG/Leveno/ZTE/Huawei has already done that.  And they have all FAILED.

 

Use your brain. For all you know they use the $400 phone to subsidize the cheap phones. You still haven't proven to me that $400 phones can't be made with a decent margin.

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post #180 of 208
Quote:
Originally Posted by island hermit View Post
 

 

Use your brain. For all you know they use the $400 phone to subsidize the cheap phones. You still haven't proven to me that $400 phones can't be made with a decent margin.

 

Use your brain.  Apple does not sell products at a decent margin.  Espeically the cash cow (phone segment) that accounts for 70% of their profits.

 

If they could don't you think Apple would have done it?  Or do you truly believe  you know the market better than Mr Cook?  Do you truly believe you know better than the Apple exec's who manage the most valuable company in the world?  REally?

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post #181 of 208

Let's look at simple math.

 

5C

$550

Gross Margin 50%

Cost $275

Profit per phone $275

 

5C - cheaper

$400

Gross Margin 31%

Cost $275

Profit per phone $125

 

Estimated 5C sales is about 60,000,000 phones at $550

 

Do you really beleive that Apple can sell 132,000,000 phones at $400?

Do you really believe that Apple can sell 220% more phones at the lower price?

Do you really think that Apple can manufacter over 200,000,000 phones in one year (with the 5S)?

 

Use your brain people

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post #182 of 208
Quote:
Originally Posted by sog35 View Post
 

 

Use your brain.  Apple does not sell products at a decent margin.  Espeically the cash cow (phone segment) that accounts for 70% of their profits.

 

If they could don't you think Apple would have done it?  Or do you truly believe  you know the market better than Mr Cook?  Do you truly believe you know better than the Apple exec's who manage the most valuable company in the world?  REally?

 

Obviously you are not using your brain.

 

Your one big mistake is thinking that I ever said that Apple "should" do it. I have always maintained that Apple "could" do it... and I know it is possible and still have a very good margin. Unless you are thinking it takes over $300 to make any phone... which is absolute bs. Any thinking person can see thats not true.

 
If you read my original post I stated that we don't know how well this line-up will sell and if Apple can keep the inventory flowing. If there is an unacceptable slow down then, as I stated before, Apple still has plenty of latitude by developing a $350 - $400 lower cost phone to compete in that market and still make a very good margin. For all we know, Apple already has that phone in the 5C.
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post #183 of 208
Quote:
Originally Posted by sog35 View Post
 

Let's look at simple math.

 

5C

$550

Gross Margin 50%

Cost $275

Profit per phone $275

 

5C - cheaper

$400

Gross Margin 31%

Cost $275

Profit per phone $125

 

Estimated 5C sales is about 60,000,000 phones at $550

 

Do you really beleive that Apple can sell 132,000,000 phones at $400?

Do you really believe that Apple can sell 220% more phones at the lower price?

Do you really think that Apple can manufacter over 200,000,000 phones in one year (with the 5S)?

 

Use your brain people

 

Now I know you are full of bs. Where did you get those figures.

 

Weren't you person who said that there is zero profit in a $400 phone. Now you've shown us that even a new premium phone will give a company a gross margin of 31% on exaggerated bs BOM.

 

Now picture a 16 gig iPhone 4S in a new case and sold for $400 instead of $450 and you probably have bumped your gm up to 38-40%. Hmmm... not bad....but, of course, according to you, no company could live with those margins.


Edited by island hermit - 9/19/13 at 5:45pm
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post #184 of 208
Quote:
Originally Posted by island hermit View Post
 

 

Now I know you are full of bs. Where did you get those figures.

 

Weren't you person who said that there is zero profit in a $400 phone. Now you've shown us that even a new premium phone will give a company a gross margin of 31% on exaggerated bs BOM.

 

Apple sold about 120M phones last year.

I'd say the sale 60M 5C.  Isn't that reasonable?

http://techcrunch.com/2012/10/25/apple-hardware-sales-in-fy-2012-125-04m-iphones-58-23m-ipads-18-1m-macs-and-35-2m-ipods/

 

Estimated margin on iPhone 5 was 50%-60%.  I used 50% since the 5C is $100 cheaper.

http://www.forbes.com/sites/ericsavitz/2012/09/21/apple-jefferies-sees-55-gross-margin-on-iphone-5/

 

if those don't seem reasonable give me your GP% and i can run the numbers.

Regardless they would have to sell 150%-200% more phones at $400 than $550 just to break even.

 

FYI there is a HUGE difference between Gross Margin and Net Income/Profits.  Yes they may get 31% for gross margin but then you need to take out overhead, admin, sales costs, ect.  That will get the Profit margin to only 10%.  Apple's Profit margin is about 25%-30% bottom line.

 

I'm a CPA in corp finance so i go through this type of bs everyday.

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post #185 of 208
Quote:
Originally Posted by sog35 View Post
 

 

Apple sold about 120M phones last year.

I'd say the sale 60M 5C.  Isn't that reasonable?

http://techcrunch.com/2012/10/25/apple-hardware-sales-in-fy-2012-125-04m-iphones-58-23m-ipads-18-1m-macs-and-35-2m-ipods/

 

Estimated margin on iPhone 5 was 50%-60%.  I used 50% since the 5C is $100 cheaper.

http://www.forbes.com/sites/ericsavitz/2012/09/21/apple-jefferies-sees-55-gross-margin-on-iphone-5/

 

if those don't seem reasonable give me your GP% and i can run the numbers.

Regardless they would have to sell 150%-200% more phones at $400 than $550 just to break even.

 

FYI there is a HUGE difference between Gross Margin and Net Income/Profits.  Yes they may get 31% for gross margin but then you need to take out overhead, admin, sales costs, ect.  That will get the Profit margin to only 10%.  Apple's Profit margin is about 25%-30% bottom line.

 

I'm a CPA in corp finance so i go through this type of bs everyday.

 

Who the hell is talking about replacing the premium tier phones to sell a low cost phone.
 
The BOM of the 5 was around $225... the complete cost with all added items was around $280... but that is not even close to the type of phone I am talking about so your figures are just a red herring.
 
I'm a cpa at a fortune 500 company.
 
I'm done with you. Ignore list.
 
You need to follow your own advice and use your brain. 
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post #186 of 208
Quote:
Originally Posted by kevt View Post
 

 

The point is Apple has gone for cheaper in terms of casing - but that's not reflected in the price.
 
How many times have posters on this board dismissed Android or Windows phones as being 'cheap plastic crap'? A U-turn as far as plastic goes.
 
Now the iPhone 5c brings the worst of both worlds. Plastic casing ...  but ... same premium prices. Exactly the same prices they've always charged for last year's technology. 
 
Nobody is expecting any Apple product to be dirt cheap, but instead of using plastic savings to get a bit more competitive on price, Apple is using it to bolster their already healthy profit margins.

 

From someone who bought a 5C this morning:

 
Quote:

I just got my 5C. Definitely feels very very solid, even better than the Lumia 620 I had once. It's heavier than the 5 but that's a good thing in my opinion, just adds to the feel. Definitely no flex at all anywhere on the case, the steel reinforcement's doing its job. I got the pink model and it's actually a lot closer to fluro pink than it seems in pictures, but I don't mind.
Performance should logically be identical to my 5 but the animations actually look smoother, but that might level out once I use it more.

It definitely feels much nicer in the hand than my 5 did, as pretty as the solid aluminium is, it's not very friendly to hold, this is much nicer.

 

Premium plastic.

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post #187 of 208
Quote:
Originally Posted by ImAndrewSmith View Post
 

"New is easy. Right is hard." - Craig Federighi

 

Bravo, sir.

 

I feel like people are missing the point of the iPhone 5C. Everyone is looking at it like it's this whole new phone that Apple came out with and it's missing all of these features, etc. No... just no...

 

What Apple has done is great, really. Instead of doing what they've been doing for years, which is knocking the year-old iPhone model's prices down $100, they've turned it into a new, yet same (if that makes sense), phone. They've redone the looks/components on the outside, yet kept the components on the inside the same(?) (is there anything different on the inside compared to the 5? I'm not positive. I know it's nothing worse, that's for sure.)

 

So at the end of the day, they have a phone at the $199/$299/$399 price point, a phone at the $99/$199/$299 price point and a phone at the free price point. How is that anything worse than any other year? No one ever complained that the 4S was too much last year, or the 4 was the year before, etc... why is the 5C this catastrophe? They're keeping the same premise, but making it new at the same time. I applaud them for turning a piece of their business into something sort of new.

 

I'm confused as to why people are confused...

 

Very nicely said.

"We're Apple. We don't wear suits. We don't even own suits."
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"We're Apple. We don't wear suits. We don't even own suits."
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post #188 of 208
Quote:
Originally Posted by Tallest Skil View Post

Ah, THAT explains where that other image came from.


Hilarious irony in trolling.

This would be awesome as my iphone lock screen wallpaper!
post #189 of 208
Quote:
Originally Posted by sog35 View Post
 

Upper Middle class in China is growing massively.

 

"These trends will accelerate over the next 10 years as the role of “upper middle class” consumers expands. Today, the mass middle class – with annual household incomes of between $9,000 and $16,000 – are dominant, accounting for 54 percent of all urban households; upper middle-class households, with incomes of $16,000 to $34,000, represent only 14 percent. By 2022, however, the upper middle class will become the new mainstream, accounting for 54 percent of all urban households and generating just under half of total Chinese private consumption. "

 

http://thediplomat.com/pacific-money/2013/05/30/half-a-billion-chinas-middle-class-consumers/

 

Soon over 50% of the Chinese population can afford an iPhone.  Next year it will be close to 20% or over 250,000,000 people.

 

I've said the same thing here and on other fora. It should also be mentioned that the middle class in Asia will number approximately 1.7 billion by 2022. That's the demographic that Apple is aiming for, they don't need to go cheap, or cheaper for that matter, at all.

"We're Apple. We don't wear suits. We don't even own suits."
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"We're Apple. We don't wear suits. We don't even own suits."
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post #190 of 208
Quote:
Originally Posted by island hermit View Post

Who the hell is talking about replacing the premium tier phones to sell a low cost phone.
 
The BOM of the 5 was around $225... the complete cost with all added items was around $280... but that is not even close to the type of phone I am talking about so your figures are just a red herring.
 
I'm a cpa at a fortune 500 company.
 
I'm done with you. Ignore list.
 
You need to follow your own advice and use your brain. 

In the "Battle of the CPA's"... I'm going to have to side with Sog35 here, because he previously made some very solid posts above the one you're replying to.

Specifically: you or anyone else has failed to answer his question (paraphrased):

"Who makes... and what is the model of phone... that is $400-500 and BETTER than the iPhone 5C, or even equal to it?"

Let's keep it simple and not even consider the ecosystem, on-site support, or choice of materials; all of which IMHO add at least $100 of "soft value*" to Apple's products.

* Ah yes.. soft value... something that can not be accurately measured in the "cold hard numbers" of a CPA's spreadsheet.

But that's why I tip my hat to Sog35: he actually has the smarts to see beyond the numbers. I wish the number crunchers that I frequently run across could/would do the same and be as bright.

Re: BOM - read the Anand Tech review. The BOM for the previous iPhone 5 and new 5C are almost the same, regardless of the casing.

Besides the fact that not all plastics are created equal, both the aluminum and the plastic casings are created, cut and finished using robots. The only difference is the raw material cost and the number of process steps needed to get to a final casing. In the plastic case of the iPhone 5C, I don't see that too many steps in the process have been eliminated... and neither did Anand Shimpi.... who certainly knows more about these things than anybody commenting here.

One CPA figured that in to their analysis (among other very valid points) vs. one who didn't. Maybe we should all be "done with" the one who missed the forrest for the trees behind their Almighty Spreadsheet...?>>>> 1smoking.gif
Knowing what you are talking about would help you understand why you are so wrong. By "Realistic" - AI Forum Member
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Knowing what you are talking about would help you understand why you are so wrong. By "Realistic" - AI Forum Member
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post #191 of 208
It's really brave of him to say, as CEO of a publicly owned company, look we go in to markets to steal the cream, not get the biggest share. And I totally get that approach, it's no fun for the employees making junk. If you find your company making low margin products it's time to change to a more up-market industry.

And there's nothing inherent about being publicly owned that says you *have* to go for highest market share, you just have to get enough return on capital to keep enough people interested, and if you can do that with the cream then more power to you.
post #192 of 208
Remarkable how these three guys actually seems to have split Steves personality between them.
Including their looks.
That could have both advantages and disadvantages.
post #193 of 208
Quote:
Originally Posted by island hermit View Post
 

 

Who the hell is talking about replacing the premium tier phones to sell a low cost phone.
 
The BOM of the 5 was around $225... the complete cost with all added items was around $280... but that is not even close to the type of phone I am talking about so your figures are just a red herring.
 
I'm a cpa at a fortune 500 company.
 
I'm done with you. Ignore list.
 
You need to follow your own advice and use your brain. 

 

ok.  Was just trying to clear some things since you didn't seem to know the difference between Gross Margin and Profit Margin%.  Since you said I was contradicting myself when I quoted a 30% Gross Margin yet I also said they would make no profit.  As a CPA you should know that a company can easily have a 30% Gross margin and still lose money on the bottom line. 

 

Even if you change the BOM for the 5C and 5S the numbers will still be about the same.  In order to get the same BOTTOM LINE profit Apple would have to sell 75%-150% more  $400 phones just to break even.  Seeing that Apple already can't keep up with demand it would be foolish IMO to lower the price and cause even more shortages.  They are literally selling ever phone they can produce and are massively back ordered on the first day of release, yes even with the 5C.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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post #194 of 208
Quote:
Originally Posted by island hermit View Post
 

 

Well, that comment on its own...: it would mean that Apple has the ability to build a lower cost phone with high quality that would gain even more customers without a massive hit to its margins.

 
... but that comment coupled with the qualifying comment in the last paragraph:
 
"Depending on how the fiscal 1st and 2nd quarters add up, Apple may or may not change its strategy."

 

... would mean that if Apple's current strategy (inserting the 5C into the mid tier) doesn't pan out then there is still an opportunity to build a lower priced model without "racing to the bottom", as you put it.

 

You seem to have missed the majority of what I said in my post.  (ie. I didn't just include Ford as an example)

 

Again ... let me repeat:

 
"When Apple made a partnership with a fashion house, they did so with Burberry.  That should give you some idea where their thinking is.  They didn't partner with GAP or Target (not that there's anything wrong with either -- heck, major designers design clothes for both).  But Burberry is upper-tier.  I mean, the next time you want a calfskin trench coat for your wife/girlfriend, you can get a Burberry one for $13,000.  Or a python-skin skirt for $6000.
 
There's a REASON Apple sidled up with Burberry: Image.  And of course, the same goes for Burberry.  It's a mutually beneficial arrangement. Burberry represents a classic, upper-class British style that will always remain in style.  Apple represents the top of the food chain when it comes not only to electronics, but to an image in the technology world.  That glowing Apple symbol on the back of a MacBook Pro MEANS something -- at least to people who understand the fashion of it all."
post #195 of 208
Quote:
Originally Posted by AaronJ View Post
 

 

Again ... let me repeat:

 
"When Apple made a partnership with a fashion house, they did so with Burberry.  That should give you some idea where their thinking is.  They didn't partner with GAP or Target (not that there's anything wrong with either -- heck, major designers design clothes for both).  But Burberry is upper-tier.  I mean, the next time you want a calfskin trench coat for your wife/girlfriend, you can get a Burberry one for $13,000.  Or a python-skin skirt for $6000.
 
There's a REASON Apple sidled up with Burberry: Image.  And of course, the same goes for Burberry.  It's a mutually beneficial arrangement. Burberry represents a classic, upper-class British style that will always remain in style.  Apple represents the top of the food chain when it comes not only to electronics, but to an image in the technology world.  That glowing Apple symbol on the back of a MacBook Pro MEANS something -- at least to people who understand the fashion of it all."

 

excellent point. Burberry is NOT going to be associated with a cheap or even mid-level brand.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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post #196 of 208

Yes, you do pay a premium. It's remarkable however that version 7 can even be installed in an iOS device as old as the iPhone 4. You can't say that about the other platforms. Remarkable that almost overnight, 500 million iOS devices worldwide can be upgraded to the latest code, a code that takes the platform to a 64-bit OS, for no money other than what you paid for your device. Such epic technical exercises have never been done before, not because the tech was not there, but because it takes a lot of bucks, logistics planning and discipline to pull it off. It looks so simple, but something like this took a very long time to happen, and it began with Steve's vision, the first product of which is the iPhone. And they're not done. The point is, for the price, Apple gives back in the kind of vision and more importantly, implementation that really benefits its users. They sweat the details. This is not to say that they don't fail, because they obviously do at times. But just speaking for myself, despite the warts, I appreciate what they do and how they do it.

post #197 of 208
Quote:
Originally Posted by sog35 View Post
 

 

excellent point. Burberry is NOT going to be associated with a cheap or even mid-level brand.

 

Yeah, Burberry partnering with Dell isn't something I see in the future. :)

post #198 of 208
Quote:
Originally Posted by arvi View Post
 

Yes, you do pay a premium. It's remarkable however that version 7 can even be installed in an iOS device as old as the iPhone 4. You can't say that about the other platforms. Remarkable that almost overnight, 500 million iOS devices worldwide can be upgraded to the latest code, a code that takes the platform to a 64-bit OS, for no money other than what you paid for your device. Such epic technical exercises have never been done before, not because the tech was not there, but because it takes a lot of bucks, logistics planning and discipline to pull it off. It looks so simple, but something like this took a very long time to happen, and it began with Steve's vision, the first product of which is the iPhone. And they're not done. The point is, for the price, Apple gives back in the kind of vision and more importantly, implementation that really benefits its users. They sweat the details. This is not to say that they don't fail, because they obviously do at times. But just speaking for myself, despite the warts, I appreciate what they do and how they do it.

 

Exactly.  While my 2 year old Android phone has not gotten a SINGLE OS update, people with a 3 year old iPhone run the same software as a brand new 5S.  Amazing.

 

Over 66% of Android phones are running an OS from 2011 or older.  Pathetic.  Less than 10% are running either the current OS or the previous generation.  And this stuff does matter.  Some of my favorite apps either don't work or crash constantly because I'm running a 3 year old OS.  Can't wait to get my 5S in a couple of weeks.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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post #199 of 208
Quote:
Originally Posted by sog35 View Post
 

 

Exactly.  While my 2 year old Android phone has not gotten a SINGLE OS update, people with a 3 year old iPhone run the same software as a brand new 5S.  Amazing.

 

Over 66% of Android phones are running an OS from 2011 or older.  Pathetic.  Less than 10% are running either the current OS or the previous generation.  And this stuff does matter.  Some of my favorite apps either don't work or crash constantly because I'm running a 3 year old OS.  Can't wait to get my 5S in a couple of weeks.

 

Aren't like 40%+ of iOS devices already running iOS7?

post #200 of 208
Quote:
Originally Posted by sog35 View Post

Over 66% of Android phones are running an OS from 2011 or older.  Pathetic.

Maybe because Android users are accustomed to the hardware of Samsung and the like they do not even comprehend software refinement.
Send from my iPhone. Excuse brevity and auto-corrupt.
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Send from my iPhone. Excuse brevity and auto-corrupt.
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