Here an outright iPhone 3GS is $A1129, an outright N97 is $A1049 a 16GB is $A929.
A SonyEricsson Satio is $A899.
These are RRP you can shop around for lower prices.
They are exactly the same price (free) on exactly the same plans.
Hey, where's the N900?
So we're being screwed with the iPhone pricing here! (Or you are with the Nokia's, don't really know).
I was looking at a price comparison site (http://hintaseuranta.fi/tuote.aspx/26392). There the N97 is 465€, X6 450€ and N900 is 539€. And the iPhone prices as mentioned.
Usually over here, the subsidised phones end up being much more expensive than getting a separate subscription and a separate phone. This at least is what I remember most studies pointing out (no link and completely based on my memory, sorry).
Personally I don't like long contracts and plans which hide the true cost. I rather buy the phone and the contract separately, then I can also change the contract at will.
But your Finnish skills seem good or you are good at deducing figures since you could read Sonera's site that well.
On top of the prices that you pointed, you have to still get a subscription. So the price for the iPhone 3GS 16GB in this case would become 456 €, which is cheaper, but I still have to have a contract with Sonera and minimum contract prices for 24 months would become around 25€/month (no voice, SMS or data bundles to see the price of the phone + subscr). That would increase the iPhone price to 1016€ (unsubs. 840€) . Also Sonera's prices for services are not the cheapest except for the current deal on data (24 month deal, 9,90€/mo for 3.6Mbps) so that would increase the price furter. There may be flaws in my calculation, but I tried my best.
So buying the iPhone unsubsidised would make the most sense. The Nokia N97s I can get for around 470€s. Or the 5800 for 230€. So in this case, the question for a layman becomes in places where contracts aren't favoured: 230€ for a touchscreen Nokia that seems pretty similar, or 540-840€ for an iPhone. In poor countries that's a huge difference. Even the 465€ for N97 vs. 550-840€ for an iPhone is significant. But it's of course again very different for us technogeeks where a few hundred € isn't as big a deal as it is in India or Africa for instance.
Being able to make profits is what business is about.
I wonder why Nokia, despite it's gigantic market share is not able to create and sell products which are similarly profitable?
C.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
I don't suppose that has anything to do with the desirability of their products?
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
You've got a good discussion going with good points on both sides and I don't want to interrupt, but just wanted to point out that the cheapes unsubsidised price here in Finland (Europe) for an iPhone 3G 8GB is 560? (760 USD) and 3GS 32 GB is 830? (1120 USD). That makes the other smartphones look quite cheap in comparison and the 400 USD seems more like N. Am price.
Regs, Jarkko
I used American pricing because we need a single point for reference to use for comparison, and that was most convenient for me. But we could've used any country.
And thanks for the pricing data.
In this other thread about pricing and profits, we need to recognize retail prices (including any taxes) are set at what the market will bear if the mfr wants to really sell the product. The more desirable your product, the higher the price you can set, regardless of how little it cost to make. As even samab (with whom I'm almost in continual disagreement) said, it's supply and demand.
Now if your product isn't that desirable, so that you can't sell your product for more than it costs you to make (the hardware and software for the product), you can either stop selling the product (and cut your losses), sell profitable accessories or services alongside it, or keep taking losses until you run out of capital.
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
If this were the case, it would be a reasonable argument.
Nokia DO make its N-Series devices with the same sort of margins as the iPhone. The un-subsidised prices are certainly the same.
But the market is not buying them. Nokia sold only 4 million N-series devices last quarter. Half as many as in the previous year.
Nokia would like those fat margins too. But the market, she say, no.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
I am sorry, I was under the impression this was a discussion about the relative performance of the iPhone versus other devices. I took this to be a business discussion.
If we disregard business performance and simply compare compare products from a consumer point-of-view, we have to look somewhere else than profits or market-share.
We'd need to look at customer satisfaction data.
or
How frequently users actually use the internet functionality of the devices?
or
How often do customers actually buy applications?
I think if you took the time to look at comparative data, you might find the iPhone to be dramatically ahead of its peers in all these categories.
I would argue that these metric indicate that consumer approve of the iPhone. They consider the iPhone to be so desirable, they tolerate the price of the device.
I would argue, it is this desirability which is at the force driving the high profits. Not showmanship, or marketing or some massive rip-off con perpetrated on a stupid public.
And let's not fool ourselves, if Nokia could match those profits with the N900, they would be delighted!
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
Yes, that must be it. Nokia is in the business of altruism, because corporate slogans are to be taken literally.
I have no doubt they would reorganize as a non-profit and simply give away their wares, if only they could figure out how to do it. On account of the connectedness.
If this were the case, it would be a reasonable argument.
Nokia DO make its N-Series devices with the same sort of margins as the iPhone. The un-subsidised prices are certainly the same.
But the market is not buying them. Nokia sold only 4 million N-series devices last quarter. Half as many as in the previous year.
Nokia would like those fat margins too. But the market, she say, no.
.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
No one is contesting that. Nokia's business strategy is to carpet the earth with dirt cheap phones, and I guess they hope to make up in volume what they're missing in margins. However, that may not be a tenable strategy going forward, and talk of Nokia's generosity of spirit pretty much misses the point.
Yes, that must be it. Nokia is in the business of altruism, because corporate slogans are to be taken literally.
I have no doubt they would reorganize as a non-profit and simply give away their wares, if only they could figure out how to do it. On account of the connectedness.
Valid arguments for what? I was responding to a specific statement of yours, in which you ascribe altruistic motivations for Nokia's high volume/low margin sales profile.
No one is contesting that. Nokia's business strategy is to carpet the earth with dirt cheap phones, and I guess they hope to make up in volume what they're missing in margins. However, that may not be a tenable strategy going forward, and talk of Nokia's generosity of spirit pretty much misses the point.
I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
Go away Apple shareholder, nothing you say has any value as you are too biased.
So holding NOK and AAPL makes me biased about discussions about them. Great Logic! Perhaps you should read up on these companies a bit more so you can make informed comments about them. Eventually, you may learn enough about technology to invest in such companies.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
Is this forum for consumers only? I thought it was people who are interested in any aspect of Apple.
Every company wants to create products/services that some number of consumers value so highly that they are willing to pay much more money for it than it actually costs the company to make/provide it. That difference is known as margin, a portion of which becomes profit.
When the value of something is inflated (due to whatever reason) beyond the real benefit to the consumer, then the consumer is ripped off. But different consumers see different benefits. So what is rip off to one consumer is not to another.
Consumers balance several "value" factors. One consumer may primarily value being the first to own something, or value the "cool" factor. Others may value "beauty", while others may value productivity, and others, low price. Not everyone is looking for the cheapest price over all other factors. Not everyone wants to shop at the dollar store, or pawn shop.
As for Nokia and its lower profits, from what I can gather from their conference call transcripts and filings, their products aren't attractive in the lucrative US market because they won't give in to the US carriers in order to be subsidized; so distribution is very limited.
Outside of the US, SMS and now MMS is booming (even among the lower-income groups), and the Internet and Apps aren't as highly valued (yet). So Nokia's E-series and other medium-priced smartphones, which have good keyboards and high quality cameras, are highly valued. (RIM is benefiting from this too but to a lesser extent because they don't have as good a distribution network as Nokia outside of North America.) And Nokia just made them more attractive with its free Maps.
Without the Internet as a driver, large touch-screens and multi-touch are less highly valued (for now), so less people are willing to pay the higher prices for them. The manufacturers like Apple and Nokia N-series are willing to not sell these touch screen models rather than sell at a lower precedent-setting price because they believe over time, as the Internet and other services/Apps become more valuable, people will eventually pay more. (Thus Nokia also feels it has time to get its OS and touch and Apps to work great at the high-end.)
Comments
Here an outright iPhone 3GS is $A1129, an outright N97 is $A1049 a 16GB is $A929.
A SonyEricsson Satio is $A899.
These are RRP you can shop around for lower prices.
They are exactly the same price (free) on exactly the same plans.
Hey, where's the N900?
So we're being screwed with the iPhone pricing here! (Or you are with the Nokia's, don't really know).
I was looking at a price comparison site (http://hintaseuranta.fi/tuote.aspx/26392). There the N97 is 465€, X6 450€ and N900 is 539€. And the iPhone prices as mentioned.
Usually over here, the subsidised phones end up being much more expensive than getting a separate subscription and a separate phone. This at least is what I remember most studies pointing out (no link and completely based on my memory, sorry).
Personally I don't like long contracts and plans which hide the true cost. I rather buy the phone and the contract separately, then I can also change the contract at will.
But your Finnish skills seem good or you are good at deducing figures since you could read Sonera's site that well.
On top of the prices that you pointed, you have to still get a subscription. So the price for the iPhone 3GS 16GB in this case would become 456 €, which is cheaper, but I still have to have a contract with Sonera and minimum contract prices for 24 months would become around 25€/month (no voice, SMS or data bundles to see the price of the phone + subscr). That would increase the iPhone price to 1016€ (unsubs. 840€) . Also Sonera's prices for services are not the cheapest except for the current deal on data (24 month deal, 9,90€/mo for 3.6Mbps) so that would increase the price furter. There may be flaws in my calculation, but I tried my best.
So buying the iPhone unsubsidised would make the most sense. The Nokia N97s I can get for around 470€s. Or the 5800 for 230€. So in this case, the question for a layman becomes in places where contracts aren't favoured: 230€ for a touchscreen Nokia that seems pretty similar, or 540-840€ for an iPhone. In poor countries that's a huge difference. Even the 465€ for N97 vs. 550-840€ for an iPhone is significant. But it's of course again very different for us technogeeks where a few hundred € isn't as big a deal as it is in India or Africa for instance.
Regs, Jarkko
Which means that Nokia will sell even more smartphones for less per unit.
But it's of course again very different for us technogeeks where a few hundred ? isn't as big a deal as it is in India or Africa for instance.
Regs, Jarkko
14% and growing...
It depends. The most recent data shows a decline in market share in the fourth quarter, compared to the third, but an increase YOY.
"The iPhone accounted for 16.6% of global smartphone shipments in the fourth quarter, compared to 18.1% in the third quarter, ABI Research said."
http://www.informationweek.com/news/...leID=222600940
One quarter does not a trend make, and nobody knows the future.
So why is Nokia making less profits that Apple?
I don't suppose that has anything to do with the desirability of their products?
It may or may not have anything to do with desirability of product. There's about ten gazillion other reasons which may account for it.
It may or may not have anything to do with desirability of product. There's about ten gazillion other reasons which may account for it.
There are?
Name just one!
(I am sure Nokia would appreciate your analysis.)
Being able to make profits is what business is about.
I wonder why Nokia, despite it's gigantic market share is not able to create and sell products which are similarly profitable?
C.
There are?
Name just one!
(I am sure Nokia would appreciate your analysis.)
Being able to make profits is what business is about.
I wonder why Nokia, despite it's gigantic market share is not able to create and sell products which are similarly profitable?
C.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
So why is Nokia making less profits that Apple?
I don't suppose that has anything to do with the desirability of their products?
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
You've got a good discussion going with good points on both sides and I don't want to interrupt, but just wanted to point out that the cheapes unsubsidised price here in Finland (Europe) for an iPhone 3G 8GB is 560? (760 USD) and 3GS 32 GB is 830? (1120 USD). That makes the other smartphones look quite cheap in comparison and the 400 USD seems more like N. Am price.
Regs, Jarkko
I used American pricing because we need a single point for reference to use for comparison, and that was most convenient for me. But we could've used any country.
And thanks for the pricing data.
In this other thread about pricing and profits, we need to recognize retail prices (including any taxes) are set at what the market will bear if the mfr wants to really sell the product. The more desirable your product, the higher the price you can set, regardless of how little it cost to make. As even samab (with whom I'm almost in continual disagreement) said, it's supply and demand.
Now if your product isn't that desirable, so that you can't sell your product for more than it costs you to make (the hardware and software for the product), you can either stop selling the product (and cut your losses), sell profitable accessories or services alongside it, or keep taking losses until you run out of capital.
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
If this were the case, it would be a reasonable argument.
Nokia DO make its N-Series devices with the same sort of margins as the iPhone. The un-subsidised prices are certainly the same.
But the market is not buying them. Nokia sold only 4 million N-series devices last quarter. Half as many as in the previous year.
Nokia would like those fat margins too. But the market, she say, no.
C.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
I am sorry, I was under the impression this was a discussion about the relative performance of the iPhone versus other devices. I took this to be a business discussion.
If we disregard business performance and simply compare compare products from a consumer point-of-view, we have to look somewhere else than profits or market-share.
We'd need to look at customer satisfaction data.
or
How frequently users actually use the internet functionality of the devices?
or
How often do customers actually buy applications?
I think if you took the time to look at comparative data, you might find the iPhone to be dramatically ahead of its peers in all these categories.
I would argue that these metric indicate that consumer approve of the iPhone. They consider the iPhone to be so desirable, they tolerate the price of the device.
I would argue, it is this desirability which is at the force driving the high profits. Not showmanship, or marketing or some massive rip-off con perpetrated on a stupid public.
And let's not fool ourselves, if Nokia could match those profits with the N900, they would be delighted!
C.
Maybe it is due to Apple making a lot of different products with very large margins, or maybe it is due to Nokia selling their products with a lower margin to enable everyone to afford one, after all their vision starts with "Our vision is a world where everyone is connected"
Yes, that must be it. Nokia is in the business of altruism, because corporate slogans are to be taken literally.
I have no doubt they would reorganize as a non-profit and simply give away their wares, if only they could figure out how to do it. On account of the connectedness.
If this were the case, it would be a reasonable argument.
Nokia DO make its N-Series devices with the same sort of margins as the iPhone. The un-subsidised prices are certainly the same.
But the market is not buying them. Nokia sold only 4 million N-series devices last quarter. Half as many as in the previous year.
Nokia would like those fat margins too. But the market, she say, no.
.
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
You are aware that the majority of the world cannot afford, or choose not to afford these high end models from Apple, Nokia, SE etc? Could this be the reason why Nokia sells 364 million non-smartphones a year?
No one is contesting that. Nokia's business strategy is to carpet the earth with dirt cheap phones, and I guess they hope to make up in volume what they're missing in margins. However, that may not be a tenable strategy going forward, and talk of Nokia's generosity of spirit pretty much misses the point.
Yes, that must be it. Nokia is in the business of altruism, because corporate slogans are to be taken literally.
I have no doubt they would reorganize as a non-profit and simply give away their wares, if only they could figure out how to do it. On account of the connectedness.
Run out of valid arguments I take it?
Run out of valid arguments I take it?
...says the kid who has never made a valid argument.
...says the kid who has never made a valid argument.
Go away Apple shareholder, nothing you say has any value as you are too biased.
And if I am a kid, what does that make you? 3?
Run out of valid arguments I take it?
Valid arguments for what? I was responding to a specific statement of yours, in which you ascribe altruistic motivations for Nokia's high volume/low margin sales profile.
Is that something you actually want defend?
No one is contesting that. Nokia's business strategy is to carpet the earth with dirt cheap phones, and I guess they hope to make up in volume what they're missing in margins. However, that may not be a tenable strategy going forward, and talk of Nokia's generosity of spirit pretty much misses the point.
I sense you have a kind of elitist attitude, and you don't seem to understand that the majority of the world is not in the same financial position as you. You see the majority of the world cannot afford Apple products, they cannot afford the Nokia smartphones, or the smartphones from other companies. Now are you saying that Nokia should walk away from these people and not supply them something they can afford (and still make a profit for themselves), or would you just like to forget that these people exist?
Go away Apple shareholder, nothing you say has any value as you are too biased.
So holding NOK and AAPL makes me biased about discussions about them. Great Logic! Perhaps you should read up on these companies a bit more so you can make informed comments about them. Eventually, you may learn enough about technology to invest in such companies.
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
Is this forum for consumers only? I thought it was people who are interested in any aspect of Apple.
Every company wants to create products/services that some number of consumers value so highly that they are willing to pay much more money for it than it actually costs the company to make/provide it. That difference is known as margin, a portion of which becomes profit.
When the value of something is inflated (due to whatever reason) beyond the real benefit to the consumer, then the consumer is ripped off. But different consumers see different benefits. So what is rip off to one consumer is not to another.
Consumers balance several "value" factors. One consumer may primarily value being the first to own something, or value the "cool" factor. Others may value "beauty", while others may value productivity, and others, low price. Not everyone is looking for the cheapest price over all other factors. Not everyone wants to shop at the dollar store, or pawn shop.
As for Nokia and its lower profits, from what I can gather from their conference call transcripts and filings, their products aren't attractive in the lucrative US market because they won't give in to the US carriers in order to be subsidized; so distribution is very limited.
Outside of the US, SMS and now MMS is booming (even among the lower-income groups), and the Internet and Apps aren't as highly valued (yet). So Nokia's E-series and other medium-priced smartphones, which have good keyboards and high quality cameras, are highly valued. (RIM is benefiting from this too but to a lesser extent because they don't have as good a distribution network as Nokia outside of North America.) And Nokia just made them more attractive with its free Maps.
Without the Internet as a driver, large touch-screens and multi-touch are less highly valued (for now), so less people are willing to pay the higher prices for them. The manufacturers like Apple and Nokia N-series are willing to not sell these touch screen models rather than sell at a lower precedent-setting price because they believe over time, as the Internet and other services/Apps become more valuable, people will eventually pay more. (Thus Nokia also feels it has time to get its OS and touch and Apps to work great at the high-end.)