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iPod touch price cuts 'may not be enough' given conditions - Page 2

post #41 of 129
9/10/08 at 11:31am
Quote:
Originally Posted by teckstud View Post

Not according to the iHeads on here who keep insisting that the cost of the iPhone is the cost and you shouldn't add in the AT&T plan. Otherwise the iPhone is not half the price as advertised.

The price of the initial purchase and the TCO are completely different entities. While I do wish the US would be required to list the TCO (including taxes) like in some countries, they don't, so Apple is in no way lying by saying that the iPhone costs half as much than the previous model because the funds that are deducted from your account at the time of purchase are half as much.
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post #42 of 129
9/10/08 at 11:32am
Sorry, this is off topic, but I just got an iPod touch. before the update Is there anything I can do to get the new one? even though the new one is cheaper than I paid, I don't care. Like can I break it on purpose somehow? I know this makes me sound like a criminal, but it's pretty upsetting.
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post #43 of 129
9/10/08 at 11:32am
Quote:
Originally Posted by teckstud View Post

So then it's not really half the price= false advertising.

If I bought an iPhone 3G, $199 gets charged to my credit card. If I bought an iPhone back in the day, $399 was charged to my credit card.

Any additional monthly service costs are paid to AT&T (in the US) and is considered a separate transaction. And any monies that are transferred from AT&T to Apple have nothing to do with my credit card.

So the iPhone itself is half the price to the consumer.
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post #44 of 129
9/10/08 at 11:35am
Quote:
Originally Posted by NeilM View Post

So stupid than anyone would be so poor at arithmetic and then make a post about it.

Quote:
Originally Posted by teckstud View Post

How much is the subsidy and why isn't it posted like any other phone when discounted by any other carrier?

Quote:
Originally Posted by roehlstation View Post

People! the iPhone is SUBSIDIZED, meaning AT&T is absorbing a chunk of the cost, the iPhone 3G would cost the same as the first generation iPhone if it were NOT subsidized, $499-$599.

the iPhone may be subsidized...let's say it wasn't. Would it be right to price them the same? One can make calls and operate on a cellular network, the other can't...why price them the same (not taking into consideration the subsidation)?
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post #45 of 129
9/10/08 at 11:36am
Quote:
Originally Posted by jamisen.sc View Post

Sorry, this is off topic, but I just got an iPod touch. before the update Is there anything I can do to get the new one? even though the new one is cheaper than I paid, I don't care. Like can I break it on purpose somehow? I know this makes me sound like a criminal, but it's pretty upsetting.

If you got it as part of the student Mac/iPod promo and got the rebate, then no. If you break it accidentally, I'm pretty sure they'll give you a refurbished iPod touch, not a new 2nd-gen iPod touch (at least for the next two months or so).

If you did not get it as part of the student promo (or did not submit the rebate) and this happened within the last 14 days, then you can return it and buy the new one, no questions asked.
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post #46 of 129
9/10/08 at 11:37am
As others have noted, just because Apple bundles a phone with iPhone (and a weighty service contract) and doesn't with iPod touch doesn't magically equate to there being one buyer for both devices. The economics are different, the primary "job" you are hiring the device for is different, etc.

For one thing, the ability to relentlessly use your iPod touch until the battery dies is less of an option when it's also your phone, and oh by the way, games, a primary application bucket for the platform, is a battery hog. You get to a certain level of juice with an iPhone, and you suddenly start conserving since you don't want to miss calls because your battery is dead.

What concerns me a bit is messaging/positioning. Apple has done a poor job of segmenting the two devices (iPhone/iPod touch) and even the underlying software and platform is iPhone 2.0/iPhone SDK, as opposed to something like Mobility OS for iPhone, Mobility OS for iPod, or something like that.

Personally, I think that customers will sort through this, whereas (some) analysts see this as one customer, one bucket of mush.

That said, I would like to see Apple get religion on the messaging/positioning/segmentation front, as I came away from yesterday's event pretty pumped, something I blogged about in:

65 Million Reasons to be bullish on Apple
http://thenetworkgarden.com/weblog/2...lion-reas.html

Check it out.

Mark
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post #47 of 129
9/10/08 at 11:39am
Quote:
Originally Posted by teckstud View Post

Not according to the iHeads on here who keep insisting that the cost of the iPhone is the cost and you shouldn't add in the AT&T plan. Otherwise the iPhone is not half the price as advertised.

What do you call it when the price of the phone itself $199 (subsidized) or $399 (unsubsidized) and the carrier charges remain the same either way?
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post #48 of 129
9/10/08 at 11:39am
Quote:
Originally Posted by solipsism View Post

The price of the initial purchase and the TCO are completely different entities. While I do wish the US would be required to list the TCO (including taxes) like in some countries, they don't, so Apple is in no way lying by saying that the iPhone costs half as much than the previous model because the funds that are deducted from your account at the time of purchase are half as much.

So then it's not a lie but simply misleading information- big difference.
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post #49 of 129
9/10/08 at 11:40am
Quote:
Originally Posted by TenoBell View Post

What do you call it when the price of the phone itself $199 (subsidized) or $399 (unsubsidized) and the carrier charges remain the same either way?

Not half the price of the first one.
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post #50 of 129
9/10/08 at 11:41am
Quote:
Originally Posted by teckstud View Post

How much is the subsidy and why isn't it posted like any other phone when discounted by any other carrier?

Within the statement "half the price" tells you how much the subsidy is.
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post #51 of 129
9/10/08 at 11:42am
Quote:
Originally Posted by teckstud View Post

Not half the price of the first one.

Half the price is talking about the phone not the service. You just stubbornly want to take it out of context.
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post #52 of 129
9/10/08 at 11:43am
Quote:
Originally Posted by mark2005 View Post

If I bought an iPhone 3G, $199 gets charged to my credit card. If I bought an iPhone back in the day, $399 was charged to my credit card.

Any additional monthly service costs are paid to AT&T (in the US) and is considered a separate transaction. And any monies that are transferred from AT&T to Apple have nothing to do with my credit card.

So the iPhone itself is half the price to the consumer.

OK-so the cost of the phone is not half the price even though the price charged is.
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post #53 of 129
9/10/08 at 11:44am
Quote:
Originally Posted by teckstud View Post

How much is the subsidy and why isn't it posted like any other phone when discounted by any other carrier?

It's not a rebate. Rebates are returned to a consumer, and these are posted, of course.

This is a subsidy from the carrier (AT&T) to the handset mfr (Apple), not to the consumer. Carriers NEVER post the amount of the subsidy; as far as I can tell, subsidy amounts are fairly well-kept secrets between the carrier and handset mfr. As for iPhone, analysts believe the subsidy is some number between $200 and $350 for the 8GB model - no one is willing to say for sure, but they believe it is the highest subsidy ever for a phone. To further confuse, analysts won't say if their estimated subsidy amount includes retail fees for servicing the transaction (e.g., if Apple signs you up to an AT&T contract at the Apple store, Apple gets paid by AT&T for that service.) or not.

If anyone can find real subsidy amount data (not analyst estimates), please share.
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post #54 of 129
9/10/08 at 11:45am
Quote:
Originally Posted by Cubert View Post

How can Apple sell an 8 GB iPhone for $199 and an 8 GB iPod touch for $229?

Easy, because the iPhone actually costs more, Apple gets a kickback from AT&T for you signing a 2 year agreement.
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post #55 of 129
9/10/08 at 11:48am
Quote:
Originally Posted by mark2005 View Post

It's not a rebate. Rebates are returned to a consumer, and these are posted, of course.

This is a subsidy from the carrier (AT&T) to the handset mfr (Apple), not to the consumer. Carriers NEVER post the amount of the subsidy; as far as I can tell, subsidy amounts are fairly well-kept secrets between the carrier and handset mfr. As for iPhone, analysts believe the subsidy is some number between $200 and $350 for the 8GB model - no one is willing to say for sure, but they believe it is the highest subsidy ever for a phone. To further confuse, analysts won't say if their estimated subsidy amount includes retail fees for servicing the transaction (e.g., if Apple signs you up to an AT&T contract at the Apple store, Apple gets paid by AT&T for that service.) or not.

If anyone can find real subsidy amount data (not analyst estimates), please share.

Excellent- thanks for sharing that.
Do you think the advertising as "half the price" is misleading? Don't you think the average consumer thinks the phone itself cost 1/2 less as opposed to what it really means?
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post #56 of 129
9/10/08 at 11:49am
Quote:
Originally Posted by jamisen.sc View Post

Sorry, this is off topic, but I just got an iPod touch. before the update Is there anything I can do to get the new one? even though the new one is cheaper than I paid, I don't care. Like can I break it on purpose somehow? I know this makes me sound like a criminal, but it's pretty upsetting.

You have 14 days to return it with a 10% restocking fee.
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post #57 of 129
9/10/08 at 11:50am
Quote:
Originally Posted by TenoBell View Post

Half the price is talking about the phone not the service. You just stubbornly want to take it out of context.

No- you just keep spinning the Apple mantra.
The cost of the phone is not half the price- get over it!
The price charged (which includes a subsidy) is.
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post #58 of 129
9/10/08 at 11:51am
What is getting me here is that the article refers to two analysts, one of which states that the touch wont sell, the other says it will. Nevertheless, the title of the article only refers to the idea that the touch wonts sell.

did I mention that the analyst arguing for poor sales is Shawn Wu -- an analyst who has so consistently miscalled apple that I'm becoming convinced that he actually knows whats going to happen and is then intentionally misleading stockholders to drive prices down (seriously, a dartboard would have better calls than this guy).

just my 2 cents.
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post #59 of 129
9/10/08 at 11:52am
Quote:
Originally Posted by jamisen.sc View Post

Sorry, this is off topic, but I just got an iPod touch. before the update Is there anything I can do to get the new one? even though the new one is cheaper than I paid, I don't care. Like can I break it on purpose somehow? I know this makes me sound like a criminal, but it's pretty upsetting.

If you read threads here- why would you do that? This has been discussed here for the last 6-9 months?
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post #60 of 129
9/10/08 at 11:54am
Quote:
Originally Posted by teckstud View Post

So then it's not a lie but simply misleading information- big difference.

Advertising is like a first date. It's designed to be misleading. You point out the good aspects, hide the bad ones and hope your comments about "being an entrepreneur" which is reselling stolen software on eBay and your comments about "owning your house" because your on your elderly grandmother's deed which you live with, don't reveal the whole truth.

PS: There is a reason why in a US court of law you swear to tell "the truth, the whole truth, and nothing but the truth", as opposed to just telling the truth.
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post #61 of 129
9/10/08 at 11:57am
Quote:
Originally Posted by solipsism View Post

Advertising is like a first date. It's designed to be misleading. You point out the good aspects, hide the bad ones and hope your comments about "being an entrepreneur" which is reselling stolen software on eBay and your comments about "owning your house" because your on your elderly grandmother's deed which you live with, don't reveal the whole truth.

PS: There is a reason why in a US court of law you swear to tell "the truth, the whole truth, and nothing but the truth", as opposed to just telling the truth.

Kinda of like your posts on anything "Apple"?
just kidding
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post #62 of 129
9/10/08 at 11:58am
Quote:
Originally Posted by vassillios View Post

that's a pretty stupid statement. most people stay with the carrier they sign up with. i've been with verizon for the past 6 years.

Hmm, no you're the stupid one here. Staying with your carrier has nothing to do with.

If you don't sign up for a plan that includes a subsidised phone, you can get exactly the same number of included minutes, texts, data etc. etc. for less money per month. Why? Because you're not paying to subsidise a phone! Anyone who thinks they're getting an iPhone for $199/$299 really is a total moron.
it's = it is / it has, its = belonging to it.
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it's = it is / it has, its = belonging to it.
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post #63 of 129
9/10/08 at 12:02pm
man, you guys are ruthless!

Also worth mentioning is the fact that you can can get an iPhone for $199 + first months service + $175 termination fee and you are at a cost less than the 24 month contract but still at a greater cost than the Touch which shows that the iPhone is still substantially more than the Touch.
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post #64 of 129
9/10/08 at 12:02pm
Quote:
Originally Posted by teckstud View Post

Kinda of like your posts on anything "Apple"?
just kidding

Exactly, i state the whole truth.
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post #65 of 129
9/10/08 at 12:02pm
Quote:
Originally Posted by frugality View Post

IT IS a lower price, when you figure in the higher cost of the phone plan that you have to pay for with the iPhone.

Apple doesn't make much profit, if any, on the iPhone. Where they make their money is on the kickback from AT&T. They're basically selling the iPhone for cost.


I was disappointed with the price, too. I've been wanting a 32Gb iPod Touch so that I can put my whole music collection on it and use it as a jukebox for home and car, but the original $500 was too much. I was hoping it'd come down to more like $350. But I think I'll probably be buying one at $400 anyway.

I disagree with Apple discounting any top of the line products for short term gains. The touch, just like the Air and other "Pro" computers are aspirational purchases. Competing solely on price is always a big mistake. Better to be reasonably priced and maintain an aura than slash prices and flood the market.

Proud AAPL stock owner.

 

GOA

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post #66 of 129
9/10/08 at 12:08pm
Quote:
Originally Posted by teckstud View Post

So then it's not really half the price= false advertising.

No...it is half the price to end user. $199 is still about half of $399, at least last time I checked.
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post #67 of 129
9/10/08 at 12:11pm
Quote:
Originally Posted by teckstud View Post

No- you just keep spinning the Apple mantra.
The cost of the phone is not half the price- get over it!
The price charged (which includes a subsidy) is.

Carriers have been advertising free phones for years. Everyone understands the phone is free not the service.

So far I've seen no one who thinks the total cost of phone and service are half the price. That has not been a widely held complaint. Only a few people on AI.
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post #68 of 129
9/10/08 at 12:13pm
Quote:
Originally Posted by vassillios View Post

the iPhone may be subsidized...let's say it wasn't. Would it be right to price them the same? One can make calls and operate on a cellular network, the other can't...why price them the same (not taking into consideration the subsidation)?

You simply cannot pretend they are NOT subsidized.
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post #69 of 129
9/10/08 at 12:13pm
Quote:
Originally Posted by mark2005 View Post

It's not a rebate. Rebates are returned to a consumer, and these are posted, of course.

This is a subsidy from the carrier (AT&T) to the handset mfr (Apple), not to the consumer. Carriers NEVER post the amount of the subsidy; as far as I can tell, subsidy amounts are fairly well-kept secrets between the carrier and handset mfr. As for iPhone, analysts believe the subsidy is some number between $200 and $350 for the 8GB model - no one is willing to say for sure, but they believe it is the highest subsidy ever for a phone. To further confuse, analysts won't say if their estimated subsidy amount includes retail fees for servicing the transaction (e.g., if Apple signs you up to an AT&T contract at the Apple store, Apple gets paid by AT&T for that service.) or not.

If anyone can find real subsidy amount data (not analyst estimates), please share.

While I agree with everything you've said. I don't believe ATT is paying over the unsubsidized sale cost.
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post #70 of 129
9/10/08 at 12:16pm
Quote:
Originally Posted by teckstud View Post

Excellent- thanks for sharing that.
Do you think the advertising as "half the price" is misleading? Don't you think the average consumer thinks the phone itself cost 1/2 less as opposed to what it really means?

The only I can see people being confused over such a simple concept is to either have problems with cognitive reasoning. Or have recently woken from a 15 year coma before mobile carrier price structures were established.
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post #71 of 129
9/10/08 at 12:18pm
Quote:
Originally Posted by wizard69 View Post

The Touch is a different story and in my opinion Apple blew it here. The problem here is the limited number of features added and the sad and disgusting tie in with Nike. I could almost accept that the arraingement of these models Touches if they where low end models and the high end was implemented to balance the line. We have yet to see indications of a high end model though.

They 'blew it' compared to what? There isn't any other product which does what the iPod Touch does, and so well, aside from the iPhone (or, arguably, other smart phones). If people want that functionality without a cellular contract, they can get the iPod Touch. It is progressing as surely as the iPhone is and, collectively, they are some of the most revolutionary consumer electronics we've seen in an extremely long time.

I think perspective is important here.
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post #72 of 129
9/10/08 at 12:18pm
Quote:
Originally Posted by roehlstation View Post

No...it is half the price to end user. $199 is still about half of $399, at least last time I checked.

When you see a picture of the iPhone with the statement "half the price"- don't you think most believe the cost is half the price? Again- half the price of what? And don't say "what you're being charged".
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post #73 of 129
9/10/08 at 12:20pm
Quote:
Originally Posted by TenoBell View Post

The only I can see people being confused over such a simple concept is to either have problems with cognitive reasoning. Or have recently woken from a 15 year coma before mobile carrier price structures were established.

So a picture of a product with the statement- half the price -does not infer that?
Sounds like you're awake in Backwardsville!
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post #74 of 129
9/10/08 at 12:20pm
Quote:
Originally Posted by teckstud View Post

Excellent- thanks for sharing that.
Do you think the advertising as "half the price" is misleading? Don't you think the average consumer thinks the phone itself cost 1/2 less as opposed to what it really means?

"Half the Price" simply talks about your up-front cost...that is all, I don't find that misleading one bit, (I've talked to 8 year olds that understand that) you have to assume you are going to pay for cell phone service, how useful would a cell phone be without service really? Subsidized phones is NOT a new thing. MANY, MANY phones are subsidized, a $99 blackberry certainly does not cost $99 without a plan.
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post #75 of 129
9/10/08 at 12:23pm
Quote:
Originally Posted by teckstud View Post

No- you just keep spinning the Apple mantra.
The cost of the phone is not half the price- get over it!
The price charged (which includes a subsidy) is.

Teckstud: I hate to tell you this, but I'm sick of your whining about this same subject. Get off of it or come up with a different or more creative way to explain it, or at least entertain us. I just want to save the board from regurgitating your same old thought process on why you are so angry about the "1/2 the price" thing.

For the record, I've enjoyed some of your other posts.
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post #76 of 129
9/10/08 at 12:23pm
Quote:
Originally Posted by solipsism View Post

Exactly, i state the whole truth.

First time I've seen the shades used- good call!
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post #77 of 129
9/10/08 at 12:26pm
Quote:
Originally Posted by teckstud View Post

So a picture of a product with the statement- half the price -does not infer that?
Sounds like you're awake in Backwardsville!

The same way a poster that says FREE infers the phone and service is free.
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post #78 of 129
9/10/08 at 12:26pm
Quote:
Originally Posted by teckstud View Post

When you see a picture of the iPhone with the statement "half the price"- don't you think most believe the cost is half the price? Again- half the price of what? And don't say "what you're being charged".

We've gone over this so many times. They aren't specifying one way or the other. They are purposely, and legally, being vague. Do you think it's possible that people are not being made aware of what the "with subscription to AT&T" involves prior to signing the contract? How is this any different when other phones are being advertised as 'free'?

Come here an lobby for change. I would support full financial requirements in advertising.
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post #79 of 129
9/10/08 at 12:31pm
Quote:
Originally Posted by teckstud View Post

Do you think the advertising as "half the price" is misleading? Don't you think the average consumer thinks the phone itself cost 1/2 less as opposed to what it really means?

"Everyone else does it." When others advertise phones at half-price, they are certainly not including the service contract. And they're under no obligation to tell you why it's selling to you at a discount from the previous price. In this case and in many other industries, subsidies are used to allow one party (such as a retailer) to sell something at lower cost without hurting that party, while another party absorbs the cost difference in exchange for something else - future dollars via service contract, marketing exposure, etc.

Having said that, I wish Apple would be a leader and rise above what everyone else does even if it costs them a bit (and I say this as an Apple stockholder! Ouch.)
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post #80 of 129
9/10/08 at 12:37pm
Quote:
Originally Posted by mark2005 View Post

Having said that, I wish Apple would be a leader and rise above what everyone else does even if it costs them a bit (and I say this as an Apple stockholder! Ouch.)

They tried it a comprise last year with the revenue sharing. It allowed Apple to not sell the iPhone at too huge an initial cost but keep it from using the typical subsidization model. It's reported the Verizon turned Apple down, as well as many foreign carriers. I wouldn't care about a more expense initial cost in my monthly network fees are lower to the point of my TCO being lower, but it seems too many people don't look at the TCO.

Here is some info as to why discounts are bad. It refers to coupons, but the concept is the same:
http://books.google.com/books?id=o_m...esult#PPA43,M1
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