But it isn't sold at less than cost. RIM still has the second highest profit margin in the industry.
iPhones don't change prices throughout the year, even the week before a new model comes out --- does it mean that it is "worth" more? No. Is it "worth" less just because an android phone price drops to $99 after 3 months? No.
The question is how much sales get hit by not subsidizing the ipad and/or not doing BOGO.
If Apple can sell everything they make at whatever they charge, what possible motivation do they have to discount? If every RIM handset could be sold without BOGO, why do it?
If RIM and/or the carriers have to prop up market share at the expense of profits, then that's a choice they're free to make. If Apple doesn't need to, there's no choice at all.
If Apple can sell everything they make at whatever they charge, what possible motivation do they have to discount? If every RIM handset could be sold without BOGO, why do it?
If RIM and/or the carriers have to prop up market share at the expense of profits, then that's a choice they're free to make. If Apple doesn't need to, there's no choice at all.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
Until the very end of September (the last period for which we have sales figures) the iPad was supply constrained -- to the point it was not offered in some countries and not sold through some channel partners.
Only a fool would suggest not discounting under these condition would negatively "hit" sales.
Apple did just get it's channel inventory aligned at the end of September, though there were a few momentary blips -- Apple Store shipments went from 24 hours to 3 days for several days.
Further, Apple is anticipating very large iPad sales during the holidays -- so they had approximately 2 months to add resellers, build inventory, and stock the channel for the anticipated sales.
You, obviously, have no concept of how manufacturing and the supply chain works. It isn't magic -- it's hard work: analysis, planning, reporting, and execution -- with the built-in agility to adjust to conditions. Apple, and especially Tim Cook are masters at this -- that's Tim's job!
Apple sometimes misses the mark, but it's usually on the conservative side.
Others miss the mark, flood the channel -- then discount or BOGO their product... making it even less desirable.
.
If it was only GSM-based carriers doing 2 for 1 deals Samab would be using that as proof that GSM/UMTS is an inferior technology over CDMA/EV-DO.
Furthermore, he?s completely wrong (as noted in previous threads) regarding the vendors potential say in BOGO sales.
On top of that, RiM?s profit per device has significantly dropped since the emergence of the iPhone. To their credit RiM is a very well managed company and have increased profit YoY, despite having to lower the average retail price in order to compete in today?s smartphone market.
I?m surprised they?ve managed to tread water for so long, but we all know that this isn?t a sustainable model and without proper innovation they will crash.
I have mixed feelings about the Playbook?s OS short and longterm feasibility, wonder if they can adopt their QNX+AIR OS for a multi-touch smartphones, and wonder how long phones with physical keyboards can continue to be the bulk of their smartphone business. All those questions should be answered within the next year.
Personally, I like the idea of RiM focusing now on a tablet after the Storm/Thunder failure. I had hoped MS would have done this with Windows Phones 7. My reasoning is that the smartphone market has changed a lot for this smartphone ?dinosaurs? but the tablet market Apple reinvented is still nascent, which means both MS and RiM could come in with something pretty good, take a hefty chunk of the market, use that to refine their OS and build support for a smartphone.
After all, part of the iPad?s appeal for the average user was the built in acceptance of iPhone OS being well designed for the iPhone and iPod Touch, but neither RiM nor MS had nothing even their most rabid fans could directly compare when moving from BB OS or WM6 to a tablet. In other words, I think MS missed the boat here (even though I do like WP7 for what it is) and think RiM is actually on the right path (even though it remains to be seen if they used their great managing ability to add the requisite technical prowess that was so severely lacking).
In this case Apple wants people to warm up to this kind of devices, because it's the feature. Yes, it marketshare, but it's a new market.
Actually, Samab?s statement is axiomatically wrong.
Quote:
Originally Posted by Per your quote, he wrote?
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
He?s saying that Apple is focusing on marketshare, not profits with the iPad, but that patently false in every aspect.
First of all, his statement tries to convince us that Apple?s primary concern is how many unit of their iPad are sold compared the entire tablet market. Since Apple hasn?t dropped its price to meet or beat all the other tablets hitting the market he is clearly incorrect.
Secondly, Apple has a lower the profit margin, in order to gain more unit sales, thereby increasing their profits. His statement first suggest that it?s not about increasing their unit sales for the sake of increasing profit, but increasing sales to increase their share of the whole market, hence marketshare. He then finishes his statement by saying that Apple is choosing to lose profits by using a lower than their usual profit margin for this new iOS-based device, when in fact they choose this price point to maximize their profits.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
On top of that, RiM’s profit per device has significantly dropped since the emergence of the iPhone. To their credit RiM is a very well managed company and have increased profit YoY, despite having to lower the average retail price in order to compete in today’s smartphone market.
I’m surprised they’ve managed to tread water for so long, but we all know that this isn’t a sustainable model and without proper innovation they will crash.
I believe the services business is RIMs cash cow. If they recognized that they could develop interfaces for iOS, Android, whatever comes along, gradually ceding the handset business -- and still remain a major force.
Quote:
I have mixed feelings about the Playbook’s OS short and longterm feasibility, wonder if they can adopt their QNX+AIR OS for a multi-touch smartphones, and wonder how long phones with physical keyboards can continue to be the bulk of their smartphone business. All those questions should be answered within the next year.
I like QNX -- AIR, not so much!
Except for the lack of Cell radio and 7" screen, the PlayBook has "Hecka-Hardware" specs (to paraphrase my granddaughter).
Quote:
Personally, I like the idea of RiM focusing now on a tablet after the Storm/Thunder failure. I had hoped MS would have done this with Windows Phones 7. My reasoning is that the smartphone market has changed a lot for this smartphone “dinosaurs” but the tablet market Apple reinvented is still nascent, which means both MS and RiM could come in with something pretty good, take a hefty chunk of the market, use that to refine their OS and build support for a smartphone.
Don't forget HP/Palm -- the great unknown in the tablet business! I agree in principle with what you say! Why beat a dead horse -- the tablet is the future (even when once revisited, like yourself). That's where the potential is.
What amazes me is that the MS, RIM management don't have the business acumen to take advantage of the situation. MS and RIM should be writing iPad apps (and later Android) apps -- making $, learning the ropes, keeping their brands in "front and center" view of all those consumers currently buying the iPad. How many would buy iPad Excel, Word, or BB Email if available,
Steve Jobs is the penultimate Apple Fan -- but he knows when to cede ground to gain strategic advantage -- iTunes on Windows,
BTW, I include AT&T among the short-sighted. Why in the world don't they have an app that streams from their AT&T U-Verse boxes to iDevices. SlingBox and Verizon will clean AT&T's clock -- real soon now!
Quote:
After all, part of the iPad’s appeal for the average user was the built in acceptance of iPhone OS being well designed for the iPhone and iPod Touch, but neither RiM nor MS had nothing even their most rabid fans could directly compare when moving from BB OS or WM6 to a tablet. In other words, I think MS missed the boat here (even though I do like WP7 for what it is) and think RiM is actually on the right path (even though it remains to be seen if they used their great managing ability to add the requisite technical prowess that was so severely lacking).
What both RIM and MS fail to realize is the iOS interface blazed the trail for WebOS and Android -- RIM seems to be starting over with QNX/AIR, MS has about 80-90% of a Tablet OS in WP7. Both would be miles ahead if they had apps running on the iPad that they could "migrate and excel" to their own platforms -- when ready in mid 2011.
I am afraid, and a little sorry, that the MS and RIM "all or Nothing" approach will leave them nothing.
C'mon, guys -- This is the "Oklahoma Territory", "49'ers" and "Alaska Gold Rush" rolled into one... Get in the game, for God's sake!
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
If history is anything to go by Apple will hold prices on iPads but add valuable features over time at no additional costs. Of course we don't know what possible new iOS products might be coming.
Admittedly, the PlayBook is a different device from a different company -- but they have similarities: 7" Form factor; Flash support; Cameras: App Ecosystem, etc.
Admittedly, the PlayBook is a different device from a different company -- but they have similarities: 7" Form factor; Cameras: App Ecosystem, etc.
That thing looks like a prop electronic at a furniture store, but that?s aesthetics. I?m sure it works a hell or a lot better than the $99 Android-based tablet found at Walgreens which is so bad that I want one for sake of owning the worst gadget of the century.
That thing looks like a prop electronic at a furniture store, but that?s aesthetics. I?m sure it works a hell or a lot better than the $99 Android-based tablet found at Walgreens which is so bad that I want one for sake of owning the worst gadget of the century.
The truth of the matter is that the M-150 is so painful to use that you'll rarely find yourself looking forward to using it (not to mention that it feels cheap, flimsy, and barely lasts longer than a drunken fratboy in bed). Why would you do that to yourself?
If history is anything to go by Apple will hold prices on iPads but add valuable features over time at no additional costs. Of course we don't know what possible new iOS products might be coming.
Yes...which means that Apple choose iPad price points based on their analysis of expected maxima for a consumer tablet device: $499. Then upsold from there. The ASP for iPads is $645. The ASP for iPhones is $610. Gross margins are down a little but still...36.9% is good (no worse than RIM) and net income was up.
In comparison RIM's ASP is $304 down from it's peak $371 in 2009 and they announced they'd stop reporting ASPs and subscription numbers. Gee...I wonder why. Reporting on downward trend lines is always unpleasant...and those BOGO offers probably are reflected in the ASP unless you think the carrier is sucking up all the damage (unlikely). Subsidizing does not since that cost delta IS covered by the carrier. Either way, RIM saw nearly a $70 drop in ASP in a year.
I don't know why anyone bothers to argue with samab. He clearly has no more knowledge about sales than he does about anything else and makes stuff up. Fortunately it's pretty easy to refute.
Yes...which means that Apple choose iPad price points based on their analysis of expected maxima for a consumer tablet device: $499. Then upsold from there. The ASP for iPads is $645. The ASP for iPhones is $610. Gross margins are down a little but still...36.9% is good (no worse than RIM) and net income was up.
In comparison RIM's ASP is $304 down from it's peak $371 in 2009 and they announced they'd stop reporting ASPs and subscription numbers. Gee...I wonder why. Reporting on downward trend lines is always unpleasant...and those BOGO offers probably are reflected in the ASP unless you think the carrier is sucking up all the damage (unlikely). Subsidizing does not since that cost delta IS covered by the carrier. Either way, RIM saw nearly a $70 drop in ASP in a year.
I don't know why anyone bothers to argue with samab. He clearly has no more knowledge about sales than he does about anything else and makes stuff up. Fortunately it's pretty easy to refute.
At the same time, RIM is doing a OS overhaul and is selling underpowered handsets (of course the ASP is lowered). It is a reflection that they are using a 600 MHz CPU.
Wall Street analysts don't ever mention BOGO when they talked about RIM's results.
At the same time, RIM is doing a OS overhaul and is selling underpowered handsets (of course the ASP is lowered). It is a reflection that they are using a 600 MHz CPU.
Wall Street analysts don't ever mention BOGO when they talked about RIM's results.
"In the United States Sprint had a strong quarter with significant promotion of both the BlackBerry Tour and BlackBerry Curve smart phones. The BlackBerry Tour achieved the highest customer satisfaction rating of any device in RIM?s portfolio and the BlackBerry Curve became the most successful device in the history following a $49 BOGO promotion on the 8330 and the launch of the new 8530 in an exclusive purple color at an attractive price point."
Given that RIM talks about BOGO in their earnings calls I think that analysts probably do talk about BOGO in relation to RIM results...
Lowered ASPs are partly product mix as RIM claims. It's also Verizon and other carriers not willing to take it completely in the shorts when it does BOGO offers on BB. The need to do BOGO promotions to move BB units forces the negotiated unit prices downwards which impacts ASPs.
That the units suck in comparison to other devices from either a CPU or OS perspective is reflected in the lowered demand leading to lowered ASPs....that's hardly insightful.
At the same time, we are also talking about this week European carriers saying that they are going to subsidize the ipad.
It's different there. It isn't done here, it's done there. When it's done here, it mean they are scrambling for volume. You pay for that in the rates you pay there anyway. It's just 20%, or so, more to subsidize the whole thing. Someone is getting a bloodbath here when they have an expensive phone, where one is already heavily subsidized, and they then give another one away. That second phone is costing someone a lot. Who? The manufacturer? The carrier?
It's the carriers that are doing BOGO and/or subsidies. RIM has nothing to do with it.
The question isn't --- no one is oing to look at subsidized ipads and wonder if they are just cheap kit --- the question is whether people would buy an unsubsidized ipad.
First of all about the BOGO, you don't know that You're just guessing. It could very well be RIM.
Lots of people are buying an unsubsidized iPad. This just locks them into a carrier. I thought that over there most people paid for their phones. So what's different here? An iPad isn't more expensive than any high end phone.
But it isn't sold at less than cost. RIM still has the second highest profit margin in the industry.
iPhones don't change prices throughout the year, even the week before a new model comes out --- does it mean that it is "worth" more? No. Is it "worth" less just because an android phone price drops to $99 after 3 months? No.
The question is how much sales get hit by not subsidizing the ipad and/or not doing BOGO.
RIM makes a big profit on their servers and services, that could easily be paying for the BOGO.
Comments
But it isn't sold at less than cost. RIM still has the second highest profit margin in the industry.
iPhones don't change prices throughout the year, even the week before a new model comes out --- does it mean that it is "worth" more? No. Is it "worth" less just because an android phone price drops to $99 after 3 months? No.
The question is how much sales get hit by not subsidizing the ipad and/or not doing BOGO.
If Apple can sell everything they make at whatever they charge, what possible motivation do they have to discount? If every RIM handset could be sold without BOGO, why do it?
If RIM and/or the carriers have to prop up market share at the expense of profits, then that's a choice they're free to make. If Apple doesn't need to, there's no choice at all.
If Apple can sell everything they make at whatever they charge, what possible motivation do they have to discount? If every RIM handset could be sold without BOGO, why do it?
If RIM and/or the carriers have to prop up market share at the expense of profits, then that's a choice they're free to make. If Apple doesn't need to, there's no choice at all.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
In this case Apple wants people to warm up to this kind of devices, because it's the feature. Yes, it marketshare, but it's a new market.
That's easy! The answers are None and None!
Until the very end of September (the last period for which we have sales figures) the iPad was supply constrained -- to the point it was not offered in some countries and not sold through some channel partners.
Only a fool would suggest not discounting under these condition would negatively "hit" sales.
http://news.yahoo.com/s/ap/20101018/...us_earns_apple
Apple did just get it's channel inventory aligned at the end of September, though there were a few momentary blips -- Apple Store shipments went from 24 hours to 3 days for several days.
Further, Apple is anticipating very large iPad sales during the holidays -- so they had approximately 2 months to add resellers, build inventory, and stock the channel for the anticipated sales.
You, obviously, have no concept of how manufacturing and the supply chain works. It isn't magic -- it's hard work: analysis, planning, reporting, and execution -- with the built-in agility to adjust to conditions. Apple, and especially Tim Cook are masters at this -- that's Tim's job!
Apple sometimes misses the mark, but it's usually on the conservative side.
Others miss the mark, flood the channel -- then discount or BOGO their product... making it even less desirable.
.
If it was only GSM-based carriers doing 2 for 1 deals Samab would be using that as proof that GSM/UMTS is an inferior technology over CDMA/EV-DO.
Furthermore, he?s completely wrong (as noted in previous threads) regarding the vendors potential say in BOGO sales.
On top of that, RiM?s profit per device has significantly dropped since the emergence of the iPhone. To their credit RiM is a very well managed company and have increased profit YoY, despite having to lower the average retail price in order to compete in today?s smartphone market.
I?m surprised they?ve managed to tread water for so long, but we all know that this isn?t a sustainable model and without proper innovation they will crash.
I have mixed feelings about the Playbook?s OS short and longterm feasibility, wonder if they can adopt their QNX+AIR OS for a multi-touch smartphones, and wonder how long phones with physical keyboards can continue to be the bulk of their smartphone business. All those questions should be answered within the next year.
Personally, I like the idea of RiM focusing now on a tablet after the Storm/Thunder failure. I had hoped MS would have done this with Windows Phones 7. My reasoning is that the smartphone market has changed a lot for this smartphone ?dinosaurs? but the tablet market Apple reinvented is still nascent, which means both MS and RiM could come in with something pretty good, take a hefty chunk of the market, use that to refine their OS and build support for a smartphone.
After all, part of the iPad?s appeal for the average user was the built in acceptance of iPhone OS being well designed for the iPhone and iPod Touch, but neither RiM nor MS had nothing even their most rabid fans could directly compare when moving from BB OS or WM6 to a tablet. In other words, I think MS missed the boat here (even though I do like WP7 for what it is) and think RiM is actually on the right path (even though it remains to be seen if they used their great managing ability to add the requisite technical prowess that was so severely lacking).
In this case Apple wants people to warm up to this kind of devices, because it's the feature. Yes, it marketshare, but it's a new market.
Actually, Samab?s statement is axiomatically wrong.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
He?s saying that Apple is focusing on marketshare, not profits with the iPad, but that patently false in every aspect.
First of all, his statement tries to convince us that Apple?s primary concern is how many unit of their iPad are sold compared the entire tablet market. Since Apple hasn?t dropped its price to meet or beat all the other tablets hitting the market he is clearly incorrect.
Secondly, Apple has a lower the profit margin, in order to gain more unit sales, thereby increasing their profits. His statement first suggest that it?s not about increasing their unit sales for the sake of increasing profit, but increasing sales to increase their share of the whole market, hence marketshare. He then finishes his statement by saying that Apple is choosing to lose profits by using a lower than their usual profit margin for this new iOS-based device, when in fact they choose this price point to maximize their profits.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
On top of that, RiM’s profit per device has significantly dropped since the emergence of the iPhone. To their credit RiM is a very well managed company and have increased profit YoY, despite having to lower the average retail price in order to compete in today’s smartphone market.
I’m surprised they’ve managed to tread water for so long, but we all know that this isn’t a sustainable model and without proper innovation they will crash.
I believe the services business is RIMs cash cow. If they recognized that they could develop interfaces for iOS, Android, whatever comes along, gradually ceding the handset business -- and still remain a major force.
I have mixed feelings about the Playbook’s OS short and longterm feasibility, wonder if they can adopt their QNX+AIR OS for a multi-touch smartphones, and wonder how long phones with physical keyboards can continue to be the bulk of their smartphone business. All those questions should be answered within the next year.
I like QNX -- AIR, not so much!
Except for the lack of Cell radio and 7" screen, the PlayBook has "Hecka-Hardware" specs (to paraphrase my granddaughter).
Personally, I like the idea of RiM focusing now on a tablet after the Storm/Thunder failure. I had hoped MS would have done this with Windows Phones 7. My reasoning is that the smartphone market has changed a lot for this smartphone “dinosaurs” but the tablet market Apple reinvented is still nascent, which means both MS and RiM could come in with something pretty good, take a hefty chunk of the market, use that to refine their OS and build support for a smartphone.
Don't forget HP/Palm -- the great unknown in the tablet business! I agree in principle with what you say! Why beat a dead horse -- the tablet is the future (even when once revisited, like yourself). That's where the potential is.
What amazes me is that the MS, RIM management don't have the business acumen to take advantage of the situation. MS and RIM should be writing iPad apps (and later Android) apps -- making $, learning the ropes, keeping their brands in "front and center" view of all those consumers currently buying the iPad. How many would buy iPad Excel, Word, or BB Email if available,
Steve Jobs is the penultimate Apple Fan -- but he knows when to cede ground to gain strategic advantage -- iTunes on Windows,
BTW, I include AT&T among the short-sighted. Why in the world don't they have an app that streams from their AT&T U-Verse boxes to iDevices. SlingBox and Verizon will clean AT&T's clock -- real soon now!
After all, part of the iPad’s appeal for the average user was the built in acceptance of iPhone OS being well designed for the iPhone and iPod Touch, but neither RiM nor MS had nothing even their most rabid fans could directly compare when moving from BB OS or WM6 to a tablet. In other words, I think MS missed the boat here (even though I do like WP7 for what it is) and think RiM is actually on the right path (even though it remains to be seen if they used their great managing ability to add the requisite technical prowess that was so severely lacking).
What both RIM and MS fail to realize is the iOS interface blazed the trail for WebOS and Android -- RIM seems to be starting over with QNX/AIR, MS has about 80-90% of a Tablet OS in WP7. Both would be miles ahead if they had apps running on the iPad that they could "migrate and excel" to their own platforms -- when ready in mid 2011.
I am afraid, and a little sorry, that the MS and RIM "all or Nothing" approach will leave them nothing.
C'mon, guys -- This is the "Oklahoma Territory", "49'ers" and "Alaska Gold Rush" rolled into one... Get in the game, for God's sake!
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
+++ QFT!
Nailed!
As Povilas says, Apple needed to decide on a price point that would establish the iPad as the dominate incumbent, with little chance for the competition to compete on price. They're still making very healthy margins, so it's not as if they're giving the things away to drive adoption.
Again, there's quite a bit of difference between an aggressive price point and BOGO, which is what we're talking about.
If history is anything to go by Apple will hold prices on iPads but add valuable features over time at no additional costs. Of course we don't know what possible new iOS products might be coming.
http://brooksreview.net/2010/11/tab-review/
Admittedly, the PlayBook is a different device from a different company -- but they have similarities: 7" Form factor; Flash support; Cameras: App Ecosystem, etc.
Here's a sober review of the Samsung Galaxy Tab.
http://brooksreview.net/2010/11/tab-review/
Admittedly, the PlayBook is a different device from a different company -- but they have similarities: 7" Form factor; Cameras: App Ecosystem, etc.
That thing looks like a prop electronic at a furniture store, but that?s aesthetics. I?m sure it works a hell or a lot better than the $99 Android-based tablet found at Walgreens which is so bad that I want one for sake of owning the worst gadget of the century.
That thing looks like a prop electronic at a furniture store, but that?s aesthetics. I?m sure it works a hell or a lot better than the $99 Android-based tablet found at Walgreens which is so bad that I want one for sake of owning the worst gadget of the century.
From Jacqui Cheng's review:
The truth of the matter is that the M-150 is so painful to use that you'll rarely find yourself looking forward to using it (not to mention that it feels cheap, flimsy, and barely lasts longer than a drunken fratboy in bed). Why would you do that to yourself?
If history is anything to go by Apple will hold prices on iPads but add valuable features over time at no additional costs. Of course we don't know what possible new iOS products might be coming.
Yes...which means that Apple choose iPad price points based on their analysis of expected maxima for a consumer tablet device: $499. Then upsold from there. The ASP for iPads is $645. The ASP for iPhones is $610. Gross margins are down a little but still...36.9% is good (no worse than RIM) and net income was up.
In comparison RIM's ASP is $304 down from it's peak $371 in 2009 and they announced they'd stop reporting ASPs and subscription numbers. Gee...I wonder why. Reporting on downward trend lines is always unpleasant...and those BOGO offers probably are reflected in the ASP unless you think the carrier is sucking up all the damage (unlikely). Subsidizing does not since that cost delta IS covered by the carrier. Either way, RIM saw nearly a $70 drop in ASP in a year.
I don't know why anyone bothers to argue with samab. He clearly has no more knowledge about sales than he does about anything else and makes stuff up. Fortunately it's pretty easy to refute.
Yes...which means that Apple choose iPad price points based on their analysis of expected maxima for a consumer tablet device: $499. Then upsold from there. The ASP for iPads is $645. The ASP for iPhones is $610. Gross margins are down a little but still...36.9% is good (no worse than RIM) and net income was up.
In comparison RIM's ASP is $304 down from it's peak $371 in 2009 and they announced they'd stop reporting ASPs and subscription numbers. Gee...I wonder why. Reporting on downward trend lines is always unpleasant...and those BOGO offers probably are reflected in the ASP unless you think the carrier is sucking up all the damage (unlikely). Subsidizing does not since that cost delta IS covered by the carrier. Either way, RIM saw nearly a $70 drop in ASP in a year.
I don't know why anyone bothers to argue with samab. He clearly has no more knowledge about sales than he does about anything else and makes stuff up. Fortunately it's pretty easy to refute.
At the same time, RIM is doing a OS overhaul and is selling underpowered handsets (of course the ASP is lowered). It is a reflection that they are using a 600 MHz CPU.
Wall Street analysts don't ever mention BOGO when they talked about RIM's results.
At the same time, RIM is doing a OS overhaul and is selling underpowered handsets (of course the ASP is lowered). It is a reflection that they are using a 600 MHz CPU.
Wall Street analysts don't ever mention BOGO when they talked about RIM's results.
"In the United States Sprint had a strong quarter with significant promotion of both the BlackBerry Tour and BlackBerry Curve smart phones. The BlackBerry Tour achieved the highest customer satisfaction rating of any device in RIM?s portfolio and the BlackBerry Curve became the most successful device in the history following a $49 BOGO promotion on the 8330 and the launch of the new 8530 in an exclusive purple color at an attractive price point."
http://seekingalpha.com/article/1965...all-transcript
Given that RIM talks about BOGO in their earnings calls I think that analysts probably do talk about BOGO in relation to RIM results...
Lowered ASPs are partly product mix as RIM claims. It's also Verizon and other carriers not willing to take it completely in the shorts when it does BOGO offers on BB. The need to do BOGO promotions to move BB units forces the negotiated unit prices downwards which impacts ASPs.
That the units suck in comparison to other devices from either a CPU or OS perspective is reflected in the lowered demand leading to lowered ASPs....that's hardly insightful.
At the same time, we are also talking about this week European carriers saying that they are going to subsidize the ipad.
It's different there. It isn't done here, it's done there. When it's done here, it mean they are scrambling for volume. You pay for that in the rates you pay there anyway. It's just 20%, or so, more to subsidize the whole thing. Someone is getting a bloodbath here when they have an expensive phone, where one is already heavily subsidized, and they then give another one away. That second phone is costing someone a lot. Who? The manufacturer? The carrier?
It's the carriers that are doing BOGO and/or subsidies. RIM has nothing to do with it.
The question isn't --- no one is oing to look at subsidized ipads and wonder if they are just cheap kit --- the question is whether people would buy an unsubsidized ipad.
First of all about the BOGO, you don't know that You're just guessing. It could very well be RIM.
Lots of people are buying an unsubsidized iPad. This just locks them into a carrier. I thought that over there most people paid for their phones. So what's different here? An iPad isn't more expensive than any high end phone.
But it isn't sold at less than cost. RIM still has the second highest profit margin in the industry.
iPhones don't change prices throughout the year, even the week before a new model comes out --- does it mean that it is "worth" more? No. Is it "worth" less just because an android phone price drops to $99 after 3 months? No.
The question is how much sales get hit by not subsidizing the ipad and/or not doing BOGO.
RIM makes a big profit on their servers and services, that could easily be paying for the BOGO.
But the ipad has a much lower profit margin than the iphone. So Apple is also making a choice to grab market share at the expense of profits.
I'd be willing to bet that Apple will be making more profit on iPads than other manufacturers will be making on their tablets.