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iPhone seen as still too expensive, losing steam in fall

post #1 of 116
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A new report warns that halving the iPhone's price this summer still wasn't enough to truly grow sales -- and that recent metrics may show an actual shrink in sales during the early fall.

Morgan Stanley analyst Katy Huberty points to a study of prospective iPhone buyers that shows about 46 percent of them believing the handset to be too expensive, even at its $199 entry point.

Few actually object to the phone itself; only 11 percent disliked either the design or the feature set, the researcher says. About 31 percent objected to the iPhone's continued exclusivity with AT&T, which prevents subscribers to Verizon or other carriers from switching without added costs.

Huberty also takes care to dismantle notions that the resistance necessarily has its roots in preconceptions of Apple, noting that only 15 percent of the same overall group thinks Macs are overpriced.

The percentage of those showing very strong interest in buying an iPhone has also dropped significantly over time. Where as many as 7 percent of would-be buyers were very interested in the phone in February 2007 -- four months before the original phone and many of its final details were released -- 5 percent now show that same level of interest today.

Regardless of Apple's own beliefs as to the truth of those objections, it may have to use price as leverage to spur sales, the analyst warns. According to Huberty, sales were half as strong during September and October versus the height of the iPhone's launch in July and September. The exact methodology used to collect this information isn't known, but the data is used to lower estimates for Apple's 2009 iPhone shipments from 19 million down to 14 million.

To spike sales, Huberty suggests that Apple should take a cue from recent rumors and halve the price to $100, which she believes could at least double iPhone sales numbers. Apple's prized profit margins likely wouldn't be an issue, she claims, as the company only needs to reduce the cost of manufacturing and selling an iPhone by 17 percent to achieve the intended effect.

While other reports have also been cautious on Apple's iPhone sales performance for the fall, recent analysis has also suggested that the numbers may be deceptive as the company passes through the holiday season. Kaufman Bros.' Shaw Wu has just noted that gift cards may be factors in any seemingly disappointing sales during the fall quarter, as Apple may record the immediate revenue from an iPhone 3G gift card but can't register the buyer as an iPhone customer until the recipient picks up and activates the handset.

As many as one million actual iPhone buyers may go "missing" as a result, Wu says.
post #2 of 116
With zero methodology given, it is hard to take this report all that seriously.
It might be right on the money, I don't know, but it just seems like fluff or worse at this point...
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post #3 of 116
Quote:
Originally Posted by Bageljoey View Post

With zero methodology given, it is hard to take this report all that seriously.
It might be right on the money, I don't know, but it just seems like fluff or worse at this point...

Huberty is the kind of analyst that if you had more information on her methods you might have even less faith in her abilities. She wears the kick-me sign among analysts who follow Apple.
post #4 of 116
Ms Huberty has a pretty awful record at forecasting Apple unit sales and profits. Why doesn't AppleInsider mention her record? Why is AppleInsider giving space to an analyst who has proven time and time again her incompetence?
post #5 of 116
Shouldn't Appleinsider at least reference Katie's lousy track record?

She's missed Apple's revenue estimates by almost $1 billion and EPS by 6 cents.

She was 700,000 units below iPhone's performance, 2 million units light on her iPod estimate and 200,000 units under Apple's Mac numbers.

http://www.cnbc.com/id/28159562/site/14081545

I can understand posting her comments, but this article actually makes her look like she knows what she's doing.
post #6 of 116
The problem is that the service from AT&T almost doubles my monthly bill.

Until there is an iPhone that doesn't require a data connection, I will stick with my iPod touch + normal phone.
post #7 of 116
Quote:
Originally Posted by Obelix View Post

Ms Huberty has a pretty awful record at forecasting Apple unit sales and profits. Why doesn't AppleInsider mention her record? Why is AppleInsider giving space to an analyst who has proven time and time again her incompetence?

Slow news day?... I agree, analysts should not be given a free pass on their opinions. Their opinion, plus crediting them on AI can equal damage to AAPL stock and reputation.

These analysts have a track record, and they should be called on it, but every bloody time I take AI to task for assuming a journalistic stance but still not quite getting it, I get a note from Kaspar taking umbrage at my comments.

Kaspar, why did you not bother to take an editorial role here and include this analyst's track record as a point of reference to their unfounded comments? I'm honestly interested in what the thinking is here...

Who is the person making the decisions to post stories on AI? That person should be taking a responsible editorial role. I don't think anyone expects "Wall Street Journal" level reporting, but clearly there needs to be an editor assigned... I'd vote for Mel Gross.

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post #8 of 116
Quote:
Originally Posted by avions View Post

the problem is that the service from at&t almost doubles my monthly bill.

Until there is an iphone that doesn't require a data connection, i will stick with my ipod touch + normal phone.

amen.
Fragmentation is not just something we have to acknowledge and accept. Fragmentation is something that we deal with every day, and we must accept it as a fact of the iPhone platform experience.

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Fragmentation is not just something we have to acknowledge and accept. Fragmentation is something that we deal with every day, and we must accept it as a fact of the iPhone platform experience.

Ste...
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post #9 of 116
She's an idiot
Who's paying her anyway?

And, by the way if you don't want a data plan, you're not a target customer anyway???
In case you haven't noticed that's what the iphone is about?
it's certainly not about talk only?
Try a couple of tin cans and a roll of string
post #10 of 116
Shut up Katy.

It's the best selling "phone" in America - end of story.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #11 of 116
What a shock sales might have slowed a bit during the worst recession since the Great Depression. Not to mention that the fall often has people looking at other puchases or saving for the post Thanks Giving buying orgy.

More over the price of an IPhone is very reasonable. Certainly it could be better but that is true of all hardware. What makes IPhone expensive is the AT&T contract which makes one feel like the have been forceably bent over and abused. The way I see it is that AT&T could do better by $15 a month and still make good money.

In any event I still have a lot of people taking interest in my IPhone. Many looking towards future purchases.


Dave
post #12 of 116
I feel that the iPhone is not overpriced at all. What people are wary about is the phone service, data, text message, add a line, night and weekend minutes extra! Oh, by the way, were gonna stick it to you for 2 years. Even if the damn phone is free people will still not be interested in paying for the services and for that length of time.
post #13 of 116
Quote:
Originally Posted by Heymike2 View Post

Shouldn't Appleinsider at least reference Katie's lousy track record?

She's missed Apple's revenue estimates by almost $1 billion and EPS by 6 cents.

She was 700,000 units below iPhone's performance, 2 million units light on her iPod estimate and 200,000 units under Apple's Mac numbers.

http://www.cnbc.com/id/28159562/site/14081545

I can understand posting her comments, but this article actually makes her look like she knows what she's doing.

Good link, by the way. This CNBC reporter has the goods on this analyst.

Proud AAPL stock owner.

 

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Proud AAPL stock owner.

 

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post #14 of 116
This Analyst is a dedicated to destroying Apple Stock. She carefully picks the time to issue her downgrades when she can inflict maximum pain to Apple Shareholders. She seems to work in concert with the funds and traders that are shorting Apple. When she says she did a survey, I suspect it was done by email on the Blackberry network.

She should be fired. Her price target was still beaten at the close on the day she issued the downgrade. She always gets it wrong unless her aim is to drive it down.
post #15 of 116
A little off target

Does anyone have a guess when the exclusivity with ATT could possibly end, for example with say a new phone?

Or, when one could get an Apple phone without a data plan?
post #16 of 116
Quote:
Originally Posted by SpamSandwich View Post

Slow news day?... I agree, analysts should not be given a free pass on their opinions. Their opinion, plus crediting them on AI can equal damage to AAPL stock and reputation.

These analysts have a track record, and they should be called on it, but every bloody time I take AI to task for assuming a journalistic stance but still not quite getting it, I get a note from Kaspar taking umbrage at my comments.

Kaspar, why did you not bother to take an editorial role here and include this analyst's track record as a point of reference to their unfounded comments? I'm honestly interested in what the thinking is here...

Who is the person making the decisions to post stories on AI? That person should be taking a responsible editorial role. I don't think anyone expects "Wall Street Journal" level reporting, but clearly there needs to be an editor assigned... I'd vote for Mel Gross.

I agree, but then again AI is not what one would call a news agency nor would I consider Kaspar a journalist.

It's a rumor site. A popular one at that. Guaranteed to be even more popular and lucrative with click through on stories just like this. Sensationalist headlines certain to provoke the Mac community.
Ethics don't mean a thing when dollar signs are in your eyes.
post #17 of 116
Quote:
Originally Posted by AppleInsider View Post

A new report warns that halving the iPhone's price this summer still wasn't enough to truly grow sales

The overall 2 year cost went up by around $160.

People who believe this kind of "half" crap are part of the reason we're in this economic mess.
post #18 of 116
I don't consider it even remotely overpriced.

Those old Wizard pocket organizers - the ones with tip calcualtors, remember? They were at least $200 unless you had a deal from a guy like Bob Sacamano. No wifi. No phone. No music, photos, or video.

Seriously - the purchase price should be of nominal importance to the consumer. The question is can you come up with the extra $30 a month for a data plan. And to me, $30 a month is about the most I'd want to pay. With a crappy device that made surfing hard I wouldn't want to pay it. With the iPhones ease of use it's far more easy to pay. $30 strikes me as a laptop data plan price. $20 for the iPhone would cut down on the protest.

My wife has a BB 88xx and I was shocked at the web browser. It looked like Pong. I haven't looked at many smart phones to see what the browsers look like. But this Blackberry is miles behind the iPhone.

The real thing to complain about with iPhone pricing is SMS plans. That business is criminal.

EDIT : The Wizard went for over $600 in 1993
post #19 of 116
Quote:
Originally Posted by ichemware View Post

I feel that the iPhone is not overpriced at all. What people are wary about is the phone service, data, text message, add a line, night and weekend minutes extra! Oh, by the way, were gonna stick it to you for 2 years. Even if the damn phone is free people will still not be interested in paying for the services and for that length of time.

Exactly, 199 or even 299, i bet most people could afford it. It is relatively cheap compare to other phones.
The problem is the contract itself.

Now this causes a problem.
How Apple could maintain the iPhone value? They dont want it to be priced too low while being competitive. With that price they can not lower it. And they cant change the contract Talk Time and Usage Allowance. Which means it is pretty much locked phone into this price range.

The only thing i could think of it to get rid of the 8GB Model and introduce 32GB iPhone.

There are only two kind of people in this world.

Those who dont understand Apple and those who misunderstood Apple.

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There are only two kind of people in this world.

Those who dont understand Apple and those who misunderstood Apple.

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post #20 of 116
My wife and I would both have an iPhone if AT&T weren't so damn expensive. I just can't justify it. We have tmobile and to switch we'd get less minutes and still pay more for the plan after adding txts. Then you still have to pay for the datapart. How txt is not included In the data plan is stupid. AT&T is basically robbing you in plain site. AT&T costs is the sole reason i don't have one! Then to be locks into that for two years! INSANE!
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post #21 of 116
If you want to feel better about buying an iPhone here's a way to look at it:

What do you think the phone is worth? I actually think the value of the entry level phone is reasonably $500 - so let's go with that.

Let's say AT&T is picking up the tab for $300 with the subsidy, and you're paying $200 for the phone.

Take that $300 they gave you and apply it to your data plan. Over the course of 24 months you'd be getting $12.50 per month. That leaves you with $17.50 per month to pay for data. Not so bad.

That only works for two years, then you're back to $30 per month. Or more if it goes up. But you'll probably want a new phone anyway.

Just something to think about.....
post #22 of 116
This would be the same Wall Street people that analyzed Apple's success and the Equities holocaust before either happened? That's right, they never saw it:

"But it doesn't have a floppy"

"But it doesn't have a physical keyboard"

"Housing prices will go up forever"



Word to the wise: do your own research. Apple finally gave us a phone without a tortured interface, and that's huge.

The app store wasn't bad either.

In our desire to impose form on the world we have lost the capacity to see the form that is there;
and in that lies not liberation but alienation, the cutting off from things as they really are. --...

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In our desire to impose form on the world we have lost the capacity to see the form that is there;
and in that lies not liberation but alienation, the cutting off from things as they really are. --...

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post #23 of 116
She hasn't a clue as to what will make the world of iphone a better place.. or what will drive sales.. or what the iphone is doing that nobody else is even starting to do.. like she wants to dumb it down to the crowd who will actually own it just because all there friends got one cheap or free too.. wrong crowd.. wrong analzit.. wrong everything.. Sure, the phone will or may be at $99 soon or sooner than later.. I mean anyone interested in this kind of stuff knows the power of a product cycle.. what makes it successful and profitable and growing.. what gets it to the point of saturation.. and SURE! the price is one element of the marketing mix.. but .. how can anyone be so shallow as to suggest $99 NOW is more that a wet dream wish list for a wanna B iphone buyer.. It is such a sure bet that it WILL happen at some point that the next thing we will hear is that it was HER idea..

The fact is the iphone is growing very nicely.. growing sales.. growing profits.. growing customer satisfaction.. growing market mix of accessory software the customer needs being met and or will ultimately have..

I love sitting back and just watching it happen at the ballistic growth rate Apple enjoys.. I mean .. it is awesome!!
post #24 of 116
If I wanted a summary of analyst drivel I'd turn to a source like Scottrade.

Does anyone remember when Apple Insider used to actually report real news?

You know... real news? Not analyst reports with misleading headlines?
The true measure of a man is how he treats someone that can do him absolutely no good.
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The true measure of a man is how he treats someone that can do him absolutely no good.
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post #25 of 116
Quote:
Originally Posted by afalkner View Post

My wife and I would both have an iPhone if AT&T weren't so damn expensive. I just can't justify it. We have tmobile and to switch we'd get less minutes and still pay more for the plan after adding txts. Then you still have to pay for the datapart. How txt is not included In the data plan is stupid. AT&T is basically robbing you in plain site. AT&T costs is the sole reason i don't have one! Then to be locks into that for two years! INSANE!

Exactly me, as well !
post #26 of 116
Quote:
Originally Posted by pmjoe View Post

The overall 2 year cost went up by around $160.

People who believe this kind of "half" crap are part of the reason we're in this economic mess.

The first intelligent post so far. The newer iPhone is actually a lot more expensive because the compulsory contract has gone up!
post #27 of 116
For myself there are two major barriers; one is being locked into one carrier (I object on a freedom of choice basis) and secondly, and even more importantly, is the long term cost based on the monthly carrier cost (I would have to deal with rogers). I would be willing to pay a little more for an iPhone (maybe 299) for an over all less expensive investment. If there was one other issue it would be the penalties for breaking a contract. I an in a transition between cities and possibly countries. I just don't want to pay the penalty. I think companies are just getting more and more greedy. Every company and it seems this includes Apple needs to remember the relationship with the consumer has more long term value than short term profits. Hey,... give the consumer what they want, treat them fairly and they will be loyal. P
post #28 of 116
Quote:
Originally Posted by avions View Post

the problem is that the service from at&t almost doubles my monthly bill.

Until there is an iphone that doesn't require a data connection, i will stick with my ipod touch + normal phone.

:d exactly! :d
post #29 of 116
Quote:
Originally Posted by ichemware View Post

I feel that the iPhone is not overpriced at all. What people are wary about is the phone service, data, text message, add a line, night and weekend minutes extra! Oh, by the way, were gonna stick it to you for 2 years. Even if the damn phone is free people will still not be interested in paying for the services and for that length of time.

exactly, again!
post #30 of 116
Quote:
Originally Posted by satchmo View Post

I agree, but then again AI is not what one would call a news agency nor would I consider Kaspar a journalist.

It's a rumor site. A popular one at that. Guaranteed to be even more popular and lucrative with click through on stories just like this. Sensationalist headlines certain to provoke the Mac community.
Ethics don't mean a thing when dollar signs are in your eyes.

So ethics tossed out the window, keep the click traffic and site ads plentiful?

What say you, Kaspar? I've had numerous occasions where I've taken you to task for allowing stories on here that were wrong or fabrications. What say you?

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post #31 of 116
The price is not the problem, the real problem is these freggin screw up plans that cost to damn much, i rather pay $499 upfront one time and not $75 a month for 24 months for a plan the use to cost $60 when the economy was really good a year ago. I don't want i cheaper phone i want a cheaper plan
post #32 of 116
Quote:
Originally Posted by Xian Zhu Xuande;


Does anyone remember when Apple Insider used to actually report real news?

You know... real news? Not analyst reports with misleading headlines?

Have you been to alexa.com lately and seen how AppleInsider has been dropping like a rock since January 08 in web traffic?

There is so much BS here that I don't come here every day like I used to, sometimes I go a whole week without stopping by. There was a time not too long ago that I visited 4 or 5 times a day.
post #33 of 116
When AT&T raised the cost of a contract with the iPhone 3G and began charging extra for text messages, I gave up the idea of switching from Verizon. (However one problem is that AT&T's increases in their data plan with the 3G provided room for Verizon to raise the cost of THEIR plans.)

I am a CEO and could afford an iPhone, but I didn't get where I am by throwing away money. The iPhone hardware is fairly priced for the value it offers. But the contract from AT&T is a rip off.
post #34 of 116
Apple's iPhone 3G beats CDMA smartphones such as the Instinct with features such as HSPA, WIFI and the App Store. Though the iPhone 3G fails at providing features such as video recording, Mobile TV, tethering, voice guided GPS navigation and landscape typing for SMS and Email. The features it's missing Apple could provide. One way is for Apple to actually put work into providing a feature rich update instead of just releasing minor bug fixes or features customers haven't asked for. A good example of this is Google's Street View which isn't available in most countries where the iPhone 3G is sold such as Canada. Another way to provide missing features is for Apple to work at being more flexible with developers when considering which third party apps are allowed in the App Store. I enjoy using apps such as iPhone Modem, Snapture and Cycorder but I shouldn't have to jailbreak my iPhone 3G to get access to features competitors already include for free.
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post #35 of 116
There's always the good-enough-crowd. The G1 with Andriod OS is good enough for many and cheap. My Blackberry, paid for by my company, is good enough.

One thing we're finding is that the iPhone with ActiveSync is more chatty on our internal network then the WinMo phones with ActiceSync. That has limited our roll-out of the iPhone to our 30k employees as a choice. I don't admin the Exchange servers so I don't know the exact specifics but hopefully Apple is aware of the bandwidth issues with their implementation of ActiveSync and they've lost sales at our company.
post #36 of 116
I have no problem with the price of the iPhone, I just don't want to switch carriers to get one. Simply put, if Apple ditched their "one carrier per country" policy, they would move a lot of them.
post #37 of 116
I'm very surprised and disappointed at AI that this story is presented as 'fact' in it's headline. Katy Huberty should not be given the time of day given her track record, let alone a voice on a site such as this.
post #38 of 116
I do not have an issue with the purchase price of an iPhone being $200. My issue is with the AT&T contract rates.

I rarely use a mobile phone and so I do not want a contracted extortionate rate for phone minutes that I will never use. I want pay as you go. Were I want the iphone is for the connectivity to the internet but again the rates here are still too much. Still I might be more interested if I could get a pay as you use plan.
post #39 of 116
Say it isn't so! Another erudite observation from Morgan Stanley.

I'd like my Billions back, Morgan Stanley.
post #40 of 116
AI is running out of ideas and seeing as it's not much of an actual site for serious technical discussions it's soon going to run out of talent here to keep any rumor remotely reasonable.
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