AT&T (Cingular) mulling iPhone price tweaks, survey reveals - Page 3

Are you sure it is the same device, or are you comparing two dissimilar devices with dissimilar function that happen to have the same capacity

Originally Posted by melgross

No one knows when it will be produced, as they haven't committed to a date, nor does anyone know how much it will cost, though there is always speculation.

But, your assumed pricing is wrong. Today, if Apple wanted to have their phones with double the FLASH, the prices would be at least $200 more for the current 4 GB model, because it would then become the 8 GB model, and at least $300 more for the 8 GB model, which would become the 16 GB model.

The Nano uses slow FLASH, which, as I said, is much cheaper.

I never said this wouldn't change in the future. I said that it will. But, not on a 6 month time schedule.

Originally Posted by TenoBell

Unlike any other phone the iPhone is designed to directly connect and easily download movies, television shows, music videos, music tracks, audio books, video games, podcasts. 8GB is clearly not enough if one indulged in all of this content.

Originally Posted by TenoBell

It seems much of the rationale that makes 8Gb ok is that people won't use much of this content or store it for very long. What would be the point of Apple setting up this business model only for people to not take full advantage of it.

Originally Posted by TenoBell

In that dvnation page Mel linked to had 4GB flash for $399, which Apple uses in the $199 nano.

Originally Posted by vinea

SanDisk's speculation is $600 for OEMs. When the manufacturer makes that kind of speculation it sets expectations.

This would imply that going from a 4GB Nano to a 8GB Nano should also be $200 (no, its $50). And AT&T is playing with pricing. Yes the flash in the Nano is slow but I'm wondering why the iPhone needs fast flash. VM for OSX? Maybe.

While Apple needs to recoup R&D there's headroom in the iPhone pricing from a build perspective unless they are going with the 2GB NAND parts already. IMHO it's more dependent on launch volume. If they are too constrained they will leave the product alone and bump it when volumes improve. But its certainly not a $200 jump from 4GB to 8GB...more like $75. The jump from 8GB to 16GB is more like $150.

This is because Toshiba is going to go head to head against Samsung on the 2GB chips using the 56nm process and already have their 1GB parts (70nm) in mass production.

Both Samsung and Toshiba have their eye on Apple and the iPhone. Apple constitutes 40% of Samsung's Flash business...they have serious leverage. Samsung was accused of selling flash at half their market value in 2005 to Apple...that was before Apple split their buys across 4 companies.

Yeah, 6 months is enough time for the landscape to change if you pick the right 6 months. Folks are "speculating" that by March that flash will cost no more than double the cost of a 1.8" HDD on a per-GB basis when the 2GB part is expected. Samsung first, followed by Toshiba who "speculates" that they'll be shipping 300K 2GB chips/month starting April. Intel/Micron is going to have to step up too in 2007.

Vinea

Originally Posted by melgross

So that will be around $1,200 retail, assuming the price holds by the time sometime mid-year, when it might be produced That is what we would pay for it, if it were in a device. Good price for what it is, but far more than Apple, or any other manufacturer, would pay for these purposes.

You are likely correct. The iPhone is supposed to have at least 3 cpu's. That plus the video, and everything else, would require faster memory to keep up. If Apple is using Core anything in the phone, which I think they are, that would require fast memory as well.

Apple's price is less than half of what we will pay for the part. THat's SOP in manufacturing. Even assuming that your numbers are correct, that comes close to the pricing we see. Add a mere $25 to your number, going to 8, and we get the $200 difference easy.

Nah, prices aren't even close yet for that. Almost ten times the price for SS. The higher speed SS drives cost much more than that.

We can dispute this all week without coming to a conclusion, because we read the numbers, and movement in the industry. differently.

I've pretty much burned out my interest in it for now. Let's see what happens by June, when it comes out. We'll have a much better idea by then, and we can continue this to everyone's satisfaction.

Originally Posted by vinea

I doubt it. The probability that you'll admit you were mistaken in this thread even if proven wrong in June approaches zero. Even if we have 32GB $600 flash SSDs you'll claim you were correct anyway.

Vinea

Originally Posted by melgross

Vinea, you're a hopeless case. You just like to argue, and be snide. That's why most people don't like to respond to you.

Originally Posted by vinea

Yeah right. We'll see in 6 months. I have yet to see you graciously admit that you've ever been wrong on this board.

Vinea

Originally Posted by vinea

Yeah right. We'll see in 6 months. I have yet to see you graciously admit that you've ever been wrong on this board.

Vinea

But, even if 4 GB of FLASH that Apple uses costs the consumer, say, $150 in the finished product from Apple, 8 GB will be $300, 16 GB will be close to $600, and 32 will hit close to $1,000.

Originally Posted by TenoBell

Apple uses 8GB of flash in the Nano for $250. Along this pricing structure 16GB can certainly fit in a $600 device.

Originally Posted by TenoBell

Apple uses 8GB of flash in the Nano for $250. Along this pricing structure 16GB can certainly fit in a $600 device.

Teno, we've already been through the discussion that this is likely (probably, possibly?) not the same FLASH.

Why would Apple feel it to be necessary to price the 4 GB model at $500, when it could have been $400, and why raise the price of the 8 GB model by another $200, rather than by $100, or $75?

Otherwise, we're just shooting in the dark.

Originally Posted by TenoBell

Yes that's true, I understand what you are saying. But you refuse to acknowledge that looking at all of the potential uses of the iPhone 8GB is not a lot of storage.

Just as you refuse to acknowledge that Apple likely doesn't have a choice for the time being.

Originally Posted by TenoBell

Yes that's true, I understand what you are saying. But you refuse to acknowledge that looking at all of the potential uses of the iPhone 8GB is not a lot of storage.

Their have been theories that the iPhone is priced well over what it costs Apple to make. This headroom could provide space for Apple to lower the price or improve the specs. But ultimately only Apple knows.

Yes anything could change at any time, or nothing may change at all, its impossible to say with Apple. But in the real world using a software, audio, video player 8 GB is not enough.

Originally Posted by TenoBell

Alright I'll acknowledge Apple maybe using more expensive flash in the iPhone than the nano. But that certainly is not the only choice and I'm not convinced that is the best choice. Apple is choosing to use this expensive type of flash and not include a mini flash slot.

Mini SDHC flash memory has a minimum data rate of 2MBps which is more than enough for iTunes video. SDHC flash prices have recently been cut in half to around $50 for 4GB and $100 for 8GB.

Consumers are free to choose a competing smartphone for $99 with a contract. They have the option of purchasing a 4GB memory card for $50 which will equal the amount of storage in the $500 iPhone. Or purchase an 8GB card for $100 that will equal the storage in the $600 iPhone.

Originally Posted by melgross

Teno, we've already been through the discussion that this is likely (probably, possibly?) not the same FLASH.

What I'm finding to be difficult to understand, is why anyone would think that Apple would compromise the sales of these units by artificially raising the prices beyond where they would have to go.

Basically, if the cost of this FLASH is the same as the FLASH in the Nano's, then why wouldn't Apple price it so? Why would Apple feel it to be necessary to price the 4 GB model at $500, when it could have been $400, and why raise the price of the 8 GB model by another $200, rather than by $100, or $75?

Surely, Apple knows very well that those lower prices would result in much greater sales more quickly. That would result in other manufacturers scrambling to lower their prices, resulting in the competition being pressed on profits, as MS was surprised by the pricing of the 5.5 G's, and had to lower its prices.

Otherwise, for all the armchair economists out there, it's just a guessing game. Once we see the actual physical breakdown of the product, we will know exactly which memory chips and controller is involved.

Then, as I said before, we can begin this again. Otherwise, we're just shooting in the dark.

Originally Posted by vinea

Heh...Toshiba expect flash prices to drop another 60% in 2007. SanDisk said that NAND pricing slid 50% in the past 2 months alone due to weak Q1 demand and they are slashing prices to keep share.

“Industry wide NAND component pricing has deteriorated by approximately 50% in the past two months due to excess supply of NAND components coupled with first quarter seasonally weak demand. This is impacting pricing for our retail and OEM products at a steeper rate than we had been anticipating and in order to maintain market share we now expect to lower Q1 prices for many of our products to 30%-40% below fourth quarter levels. said Eli Harari, Chairman and CEO of SanDisk. Although we believe there will be strong pickup in demand for our products in the second half of the year, we do not have visibility as to when the current aggressive pricing cycle will run its full course, and gross margins are likely to remain under significant pressure for several quarters.”

...

“We believe that lower price points in the NAND industry will accelerate demand, particularly in the handset market, and will stimulate the emergence of new markets, fueling continued growth,” said Eli Harari, Chairman and CEO of SanDisk. “We are determined to continue to lead the industry in innovation, technology and product cost reductions, and to continue investing in the leading edge capacity that we believe is essential to meet demand from our global customers in 2008-2010.

http://www.sandisk.com/Corporate/Pre...e.aspx?ID=3723

Gee...accellerate demand in the handset market. I wonder who they're talking about there?

"The company plans a massive expansion of Nand flash chips manufacturing over the next three years, despite the 70 per cent collapse in prices over the course of 2006. Toshiba itself is forecasting a further 60 per cent slide in flash memory prices in the current calendar year.

While it is highly damaging to short-term margins, the collapse in prices may bring forward to this March a critical pricing point where the per-gigabyte cost of flash memory is only twice that of 1.8-inch laptop-sized hard-disc drive memory.

Yoshiharu Izumi, senior electronics analyst at JPMorgan who expects flash usage to expand rapidly in a wide range of consumer electronics devices, said: “Falling prices of Nand flash memory will transform the laptop PC market, with flash memory increasingly replacing hard-disc memory.”

http://www.ft.com/cms/s/18832c00-b54...0779e2340.html

Well...given the 50% drop in the last two monts forcasting a 60% drop in 2007 seems like a no-brainer.

No armchair analysis required when the manufacturers themselves are warning of massive price drops in the pipeline. Don't buy any flash media unless you need to for a month as SanDisk drops their pricing 30-40%.

There's your link Melgross. Time to prove me irrational...unless you think that a manufacturer warning investors, competitors and buyers alike that pricing is about to plummet isn't "proof" that a massive price cut is on the way in the next "6 months"?

Vinea

It's safe to say that the two upcoming first-revision iPhone models are early adopter products. They are too high-priced and low specced for broad appeal, and are really more of a glimpse or peek into what the iPhone will one day be.

Debating whether 8 GBs is enough or not is really a waste of
time, because this won't even be an issue in the long run.

You should be comparing this to equal priced competition, not cheap versions.

Most phones won't accept more than a 2 GB memory card right now. That's not exactly a great option. I would rather have 8 GB inside all of the time, rather than a Gb, plus another 2 Gb, or even 4 Gb on cards.

You know, we will only find out if you are right, by the sales numbers. If they suck, it could be one of the reasons. If they sell well, then memory isn't holding people back.

As more and more media-rich applications come into consumers hands, the capacity needed far surpasses what flash can do, said Bill Watkins, chief executive of Seagate, the largest hard-drive maker."

You seem to have missed that one. That helps to balance the info given by the FLASH manufacturers, who are also trying to convince companies to buy their products.

Originally Posted by TenoBell

Jobs goal of 1% of the mobile phone market is about 15% of the smart phone market, which would trump Windows Mobile, Palm, and RIM. That's market share they won't allow Apple to easily gain or maintain.

Originally Posted by melgross

I haven't disagreed with the trend at all. I've been saying that prices will drop. But, even you must have seen the numbers in the article. The prices will drop soon to twice the price of a 1.8" hd. That's still pretty high.

And, no, you didn't provide the link to the $600 pricing of that drive that we need.

You've got to remember that he was talking about worldwide markets. Windows Mobile, Palm and RIM barely measure statistically outside the USA. The market is owned by Symbian with nearly 75% of the market worldwide. Windows Mobile accounts for about 5% worldwide of the smartphone market.

Originally Posted by TenoBell

The mobile phone market is already well established, highly competitive, and nearly saturated. The only reason the iPhone has a chance at dominating against its competitors is because Apple is better at easy to use design and the fact that their is still some room for significant growth in the smaller smart phones segment. But those advantages will shrink as time goes on.

Motorola, Nokia, Sony-Ericson, RIM and all the rest are not going to wait for Apple to develop the real iPhone in two or three years. They are going to aggressively attack it right now.

That may be true but Apple is not 100% perfect they have made mistakes by over estimating how much consumers would pay for a particular configuration. This isn't like the iPod where Apple is getting in at the beginning. The iPhone cannot come out as an unfinished product with the hope of getting better two or three years from now. Jobs goal of 1% of the mobile phone market is about 15% of the smart phone market, which would trump Windows Mobile, Palm, and RIM. That's market share they won't allow Apple to easily gain or maintain.

Maybe I'm not fully understanding, what does the faster more expensive flash bring to the iPhone that the cheaper flash does not?

The whole purpose of the SDHC format is to increase storage and data rates.

I looked around at spec sheets of various smart phones and none seem to mention a limit on the size of memory cards. But even if the 2GB limit is true right now, there is no reason it will remain that way. iPhone certainly gives them incentive for in the near future to use the larger storage cards.

Even with the 8GB I think the iPhone will sell very well and Apple will likely meet its 1% goal. The right specs vs price could mean the difference between capturing 1% of the market and perhaps 3%. The rest of the mobile phone market will fight hard to narrow any perception of difference between their product and the iPhone. That will make the difference in sales.

Of course the executive from Seagate is going to be dismissive of Flash. But I think he's right in that hard drives have too much of a lead on storage vs price for flash to be used as the main storage in computers any time soon. Even in a sub-notebook you can use a 1.8" drive which uses less power than a 2.5" but far more storage at a less cost than Flash.

Originally Posted by vinea

You stated that the iPhone can't increase to 16GB because it is using the 8 Gb flash chip from the Nano and would need to double the number of chips because there are no larger parts. This is incorrect in as much as the Samsung chip we've talked about is the 16 Gb NAND chip (2GB) using a 50nm process that Samsung has been sampling with full production this spring as has Toshiba/SanDisk 16Gb chip (a little later with a 56nm process). And every process shrink has resulted in faster flash anyway.

Then you argue that the iPhone couldn't be using the Nano flash when its shown that the cost delta between 4GB and 8GB Nano is far less than the cost delta between the 4GB iPhone and 8GB iPhone (ie $50 vs the $200 you insist on).

The you stated that SSD cost 10 times the price of 1.8" HDDs and justify that the iPhone cannot reduce pricing because flash prices (as seen on DVNation) are so high. You refuse to accept that SanDisk has said that switching from HDD to SSD should increase the retail cost if a laptop by $600 and if the price really will be twice the price of 1.8" HDD then given that a 40GB 1.8" 4200RPM Toshiba HDD is $125 RETAIL then we can expect 32 GB 1.8" SDD to be on the order of $300.

That's not high at all...certainly nothing like the prices on DVNation where 16GB is $975.

You also stated that price drops wouldn't happen on a 6 month time schedule (i.e. within 6 months). Given that component prices dropped 70% in 2006 and SanDIsk reported 50% drops in the last 2 months and has announced 30-40% drops for much of their product lines in the next quarter this is incorrect.

Now're your simply engaging in retroactive spin ("I didn't disagree"...yes you did on the timing aspect which is the key point) and evading the issue for which I get called irrational when I point out this is common practice for you.

Is it so hard to admit that flash prices are falling faster than you thought?



The link for a $600 or less retail part will come when they start shipping samples in March. But if you agree with the 2 x cost for a HDD then a 32GB SDD will be around $300. Which reflects the 50% price drop from when the $600 figure was suggested...

And who knows, they might slip past June or even July (6 months from now) and I'll be proven wrong. The difference is I'm perfectly willing to come back and say so without any evasion or spin.

As proof of that I'm willing to admit that I had a mental f*rt when I went down that fast vs slow flash thing with you when I confused the differences between NOR and NAND flash with fast vs slow NAND. Yes, NOR is faster for reads but I was thinking the new 16 Mb part was "fast" NAND in comparison with the "slow" 8 Mb NAND part currently used in the Nano. Which is true...it IS faster but because its newer and on a smaller process.

Speed differences between NAND flash devices are due to the controllers and MLC vs SLC NANDs (no excuse there...both the Nano NAND and the new NANDs are MLC NANDs...a tad slower than the SLC NANDs...which have lower density and aren't that much faster anyway).

It seems likely that the iPhone will use both "fast" and "slow" flash in the iPhone (not a risky bet given the iPod does as well...8MB NOR for firmware along with 256MB worth of SDRAM). Intel has admitted it is providing the flash in the iPhone and they have been traditionally a NOR shop. You can run code out of NOR which is handy for startup speed. While Intel is ramping it's NAND production Samsung and Toshiba are still ahead in the NAND arena...but who knows. Very few folks can beat Intel at the process game and they may be playing a new NAND product close to the vest.

Vinea

Originally Posted by TenoBell

I was talking about world wide market share also. Jobs plan is to go from 0% market share to 15% world wide market share (more than Windows, Palm, and RIM). Which is pretty ambitious.

Yes Symbian owns the far majority. But Symbian is pretty vulnerable its biggest supporters are looking elsewhere. Motorola is investing more into Windows and Linux. Nokia I believe is looking more at Linux.

Originally Posted by TenoBell

I was talking about world wide market share also. Jobs plan is to go from 0% market share to 15% world wide market share (more than Windows, Palm, and RIM). Which is pretty ambitious.

Originally Posted by TenoBell

Yes Symbian owns the far majority. But Symbian is pretty vulnerable its biggest supporters are looking elsewhere. Motorola is investing more into Windows and Linux. Nokia I believe is looking more at Linux.

Originally Posted by melgross

I wasn't saying that it would use the Nano chip. Just the opposite. I was saying that the current chips are the size of the Nano chips, and whatever Apple would be using in this first incarnation, that's the size they would be.

What you are forgetting is that this has to have been designed, and built already. At least a first test run. After all, Apple has taken them around to be tried. Whatever Apple submits to the FCC for testing must be the device in its final form. If Apple changes the memory in mid stream, even assuming that the price does come down enough at the last minute, they would have to send the phone back for re-testing, and as Jobs has said, it takes months. He's right about that, because my designs for my company had to go through that same procedure, and it took two months.

I'm going by realistic production scedules, which you are not. You assume that every new development is immediatly available. It isn't. Even if the pricing was low enough, tnough memory for Apple's needs won't become available until the end of the year.

I won't argue that by then, the prices might squeek down just enough for Apple to be willing to take a look, but not by June.

You make assumptions that have no basis in the real world.

so, Sandisk will begin sampling in March. Production will start ???

And we're still waiting for that link.

This IS the real iPhone. will iut be improved?

Apple didn't get in the mp3 player market in the beginning, though it was much closer to it.

It doesn't really matter how long cell phones have been around. It's what is around today that matters.

The iPhone isn't perfect. But the amount of memory isn't the biggest factor why someone will, or will not buy one.

I'm more concerned about third party programs, and the fact that I won't be able to use programs that require a stylus.

The screen, small that it is, requires fast RAM for the sD effects. Remember that video cards use far faster RAM.

Seagate, just as the FLASH manufacturers, have their spin. But, even you agree that he is right.

15% marketshare of what? All phones? No. Of smartphones, which is just a fairly small percentage to begin with, though it is growing.

IMHO Palm and RIM are overdue to disappear in Europe at least as platforms if not as phone 'manufacturers' or service companies.

Originally Posted by TenoBell

I'm saying it needs to be a killer product from the beginning, improve it from there.

Originally Posted by vinea

There is no certainty that this is the case and the 16Gb parts are set for mass production in March. Folks have assumed that the reason the iPhone is shipping in June is due to the software. It could also be Apple waiting on Samsung.

And even with the launch iPhone volume could be constrained. There's no reason that Apple couldn't be using the new 16Gb part in place of the older 8Gb part. Nor is it impossible there are multiple versions of the iPhone engineering models, some with the older 8Gb part and some with the new 16Gb part in case Samsung has a production hitch.

If Samsung can deliver they can ship the higher density flash with higher capacities.



This has zero to do with your assertion that a) no larger chips are available and b) no price drops can occur in 6 months time.

That the iPhone hardware design is more or less complete is true. Your assertions as to the state of the flash market and slow pricing movement are not. These are seperate issues.

In any case, from a "realism" perspective it is likely that a) Apple has priced in headroom with the announcement because it knows the phone market will have changed by June and b) while it can assume that NAND prices will continue to drop there was no way to tell if it would remain as steep as in 2006. The fact that Toshiba decided after the iPhone announcement to proceed with massive captial investment in NAND production is not something they could reasonably anticipate given the 70% freefall of 2006.



300K chips/month by April from Toshiba. Samsung has not released predictions.



Samsung began sampling in January. Mass production is expected in March. While 300K units/month is a smallish number that's just for Toshiba starting April. Samsung will mass hit production earlier then Toshiba/SanDisk.

Is it a certainty that Apple will be using the 16Gb part for the iPhone? No. Of course not. But it is also not impossible as you state. While Samsung isn't in mass production there are plenty of the chips around for folks to build with.

Whether Apple cornered the Samsung 16Gb supply is TBD but its not outrageous to think they have which is why Toshiba decided to push production of their 16 Gb parts because they know there will be demand that Samsung can't fullfill.

Every assumption made has a corporate link attached. SanDisk announced 30-40% price drops. SanDisk stated using SSD vs HDD would be a $600 difference to the consumer. Toshiba has stated production begins in March with 300K units/month by April.

What assumptions are not grounded in reality? That Apple COULD be using the new 16Gb parts? They certainly could and the delay until June could be because they are waiting for Samsung to provide the volume they need. Samsung has been showing that part around since fall of last year and pricing have falled 50% since that timeframe according to SanDisk.



I've got till June. And I note that you glossed over that fast vs slow NAND mistake too. So we have three mistakes you're evading: 1 - there are no chips larger than the 8Gb chips available, 2 - rapid price drops in 6 months are impossible and 3- fast vs slow NAND as opposed to NOR vs NAND.

Vinea

Originally Posted by melgross

I can post a secondary source for that Sandisk drive price, though it's not the main thrust of the article, as another product, even more daunting, is.

http://www.dailytech.com/article.aspx?newsid=6220

Originally Posted by melgross

This can be a very simple response, and then I'm leaving it.

1. No, there are no 16Gb chips available in any mass manufactured quantity, and there won't be for months.

If Apple is going to sell the numbers it expects to in the beginning, 300 thousand a month isn't nearly enough. And that level won't be reached for a while.

2. Price drops will be coming, granted. But not for the chips Apple will be using, by the amount you mention for June. And, June is not 6 months away. It's a little more than three and a half months. These chips won't be a full production levels until the end of April, assuming everything goes well.

The phone is NOW at the FCC for testing. The point I made with that, is that those are the chips Apple must use, not new chips.

This is all relevant, though you want to dismiss it.

3. We'll see which chips are going into the device, so far, we don't know. But, we do know that they won't be slow chips. Yes. NAND is cheaper than NOR, but fast NAND is much more expensive than slow NAND. nothing new there.

I'm closing this from my end, so you can say anything you want, and have the last work, if it makes you happy.