assuming Apple wanted a $200 less expensive version of the iPhone, what would it take to upgrade the $300 iPod touch into a cellphone? antenna, chip, bigger case and more battery. we know Apple charges +$130 for 4G iPads vs. wifi only iPads with the chip and antenna added. add $20 for the bigger battery and case. so totals $450 unsubsidized. vs. $650 for an unsubsidized iPhone 5. it makes sense IF the iPod touch profit margins are as good as iPhone margins.
what Apple will never do is cut its profit margins to chase market share.
The cheaper iPhone will probably have a smaller screen, but it will likely share a lot of specs and cues from the iPad Mini and iPod Touch.
I don't think Apple will ever make an iPhone below $400 and I'm sure they can make a pretty good profit at that range.
WSJ said... . Digitimes said... . Bwaaaahaaahaaa - - haahaaaa. Next week's, confirmed, rumors here: Apple is making a cheap iPhone half the size of the iPhone 5. An unnamed eye-witness has pictures showing the devise to look uncannily like the Kin.
The cheaper iPhone will probably have a smaller screen, but it will likely share a lot of specs and cues from the iPad Mini and iPod Touch.
I don't think Apple will ever make an iPhone below $400 and I'm sure they can make a pretty good profit at that range.
i doubt that. the way to hold manufacturing costs down is change as few things as possible in a current product, notably the screen. and Apple would want to standardize its small device screens on the new 16:9 format the current iPod touch uses without fussing with resolutions at all. so for both reasons it would use exactly the same screen as the iPod touch does now. while the next iPhone 6 might get a new improved screen technology of some kind to differentiate it as the "premium" iPhone.
the current iPod touch in many ways - its internal components - is really a simplified iPhone 4S, which proves that point. to morph that now into an iPhone lite in some real sense would be merely a re-branding of the 4S. except the screen would be in the new 16:9 format the 4S lacks that Apple wants to push from now on anyway.
as with the iPad mini vs. full size, Apple would not care which you buy - as long as it makes its 40%+ profit margin either way. increasing the total gross sales of both the regular iPhone and an iPhone lite combined, more than total sales of just the regular iPhone alone would be, WHILE also continuing the same profit margin is obviously the best possible business outcome.
so actually, this rumor is making a lot of sense to me.
That was Steve Jobs Apple. This is Tim's Apple. I wouldn't be surprised if we see some changes in company's business philosophy.
I said a couple of months ago that I believed that Tim Cook was concerned about market share. Not to the point where he will join the race to the bottom but that he is devising a plan to address the issue.
Two weeks ago I predicted that we will see that plan in the next 3 months.
the current iPod touch in many ways - its internal components - is really a simplified iPhone 4S, which proves that point. to morph that now into an iPhone lite in some real sense would be merely a re-branding of the 4S. except the screen would be in the new 16:9 format the 4S lacks that Apple wants to push from now on anyway.
Why does Apple want to push the 16:9 format from now on? Where is that goal published?
The 4S is likely going to be around for almost two more years, and so is its screen. If Apple were going to maintain a cheaper phone, wouldn't they use a cheaper screen? I have to imagine the iPhone 5 screen costs more than the 4/S. Along with a larger battery, those are two significant ways to reduce costs. Maybe in a year, they bump the 4S down to the free phone, and introduce the iPhone mini, a redesigned 4S with lighting port and 4G LTE. There's your distinct product lines.
Your statements have nothing whatsoever to do with the conversation.
We're talking about the product lineup. You're talking about bugs with software.
Really? I have to explain this to you.
Nikon 133 said that Cook had a different philosophy. You said he didn't... same as Steve's.
Cook, even by making that apology has shown that his "philosophy" is different from Steve's. His approach to problems is different. I find it safe to say that his approach to the business overall will follow the same path. Different man. Different ideas. The iPad Mini is part of that approach in my mind and a different approach to market share, I believe, will be another [and I think it's safe to say that the iPad Mini was also an approach to increase market share].
This would be the worse decision ever. Expect stock to tank (again) tomorrow because of this. Apple's worth as a solid brand and strong rep is more important than selling cheap, low end stuff to get a bit more money. True Apple loyalists will be ticked and the overall margins will then get clobbered because more will go the cheaper route or choose an alternative premium brand rather than stay with an Apple that does not care about brand quality anymore.
what Apple will never do is cut its profit margins to chase market share.
Err, they have just done that with the iPad mini...
"the iPad mini's gross profit margin is "significantly below" the company's average", according to Apple's Chief Financial Officer Peter Oppenheimer during Apple's Q4 2012 earnings call.
i doubt that. the way to hold manufacturing costs down is change as few things as possible in a current product, notably the screen. and Apple would want to standardize its small device screens on the new 16:9 format the current iPod touch uses without fussing with resolutions at all. so for both reasons it would use exactly the same screen as the iPod touch does now. while the next iPhone 6 might get a new improved screen technology of some kind to differentiate it as the "premium" iPhone.
the current iPod touch in many ways - its internal components - is really a simplified iPhone 4S, which proves that point. to morph that now into an iPhone lite in some real sense would be merely a re-branding of the 4S. except the screen would be in the new 16:9 format the 4S lacks that Apple wants to push from now on anyway.
as with the iPad mini vs. full size, Apple would not care which you buy - as long as it makes its 40%+ profit margin either way. increasing the total gross sales of both the regular iPhone and an iPhone lite combined, more than total sales of just the regular iPhone alone would be, WHILE also continuing the same profit margin is obviously the best possible business outcome.
so actually, this rumor is making a lot of sense to me.
Apple kept around the 4th gen iPod touch and the iPhone 4/4S.
They have no stated goals of transitioning their products to 16:9. If they did they wouldn't still be selling millions of 3:2 devices every month.
Another fact. There are hundreds of millions of 3:2 iOS devices in the wild. It will take years before developers stop supporting the format.
Why does Apple want to push the 16:9 format from now on? Where is that goal published?
The 4S is likely going to be around for almost two more years, and so is its screen. If Apple were going to maintain a cheaper phone, wouldn't they use a cheaper screen? I have to imagine the iPhone 5 screen costs more than the 4/S. Along with a larger battery, those are two significant ways to reduce costs. Maybe in a year, they bump the 4S down to the free phone, and introduce the iPhone mini, a redesigned 4S with lighting port and 4G LTE. There's your distinct product lines.
Exactly right.
I expect the iPhone Mini out sooner than later. iPhone 4/4S internals. iPhone 5 externals. Extremely thin sexy design.
To be fair... the iPad mini is a product on its own... with its own prices and margins. And we don't know yet how the iPad mini has affected sales of the bigger iPads.
The big iPad still has well-padded margins... especially as you go up the line to the $829 iPad 64GB LTE
Conversely... what's the margin on the $50 iPod Shuffle? Did that ruin the margins on all other iPods? Is it really fair to compare one product to every product they make?
How about the cheap 11" Macbook Air? Hell... the original Macbook Air started at $1799.
Why does Apple want to push the 16:9 format from now on? Where is that goal published?
The 4S is likely going to be around for almost two more years, and so is its screen. If Apple were going to maintain a cheaper phone, wouldn't they use a cheaper screen? I have to imagine the iPhone 5 screen costs more than the 4/S. Along with a larger battery, those are two significant ways to reduce costs. Maybe in a year, they bump the 4S down to the free phone, and introduce the iPhone mini, a redesigned 4S with lighting port and 4G LTE. There's your distinct product lines.
are you kidding? the future of small device iOS is plainly 16:9. the 2012 iPhone 5 and iPod touch made that move already. it's a done deal. it's plainly irrevocable. all new apps are being optimized for that screen aspect, and old ones updated for it. (while the iPads remain at 4:3).
and the whole point of a new iPhone lite or whatever it's called would be Apple would cease selling the older iPhones entirely. instead it would always have a "brand new" product to offer at that lower price tier (but same profit margin). that obviously is a stronger market position than offering "last year's model at a discount"
I know, right? Apple had 0% market share in 2007. Every point earned over the years has only increased Apple's net market share FROM ZERO.
Quite true but Android is gaining more market share (worldwide) year over year and and Apple needs to react. You can already see it as they are speeding up their release cycle for their phones/tablets because they will not be able to keep up if they only release a new product ever 12 months. They also realize that they are ignoring a pretty big (but not as profitable) segment of the market. The mid-low end. Granted, they take care of the mid range with their 4 and 4S offerings but those phones are quite small and while it appears there are quite a few people on this site that think the 3.5" screens are perfect (or were until they got their hands on a 4" screen), there are a lot of people who have been enjoying 4" + screens for over 3 years now.
Apple needs to go after the lower end market because someday, the people who are buying the lower end phones are going to graduate into something bigger and if that person likes the eco-system that they were brought up on, chances are they may not change.
I see a lot of purists on here who want Apple to remain the true to their roots in that they only make top notch products but I think that dream is over. We've seen a pretty big decline in the quality of their hardware/software as the company has grown into the titan it is today and to think it will go back to the way it was before is a bit naive I think. When you get that big, things falls through the cracks. It is inevitable. I'm not Apple's biggest fan but I think they are making a good move here from a long term business perspective albeit they are going to p*ss off their oldest and most supportive customers (a lot of you on this forum) with some of their decisions.
Err, they have just done that with the iPad mini...
"the iPad mini's gross profit margin is "significantly below" the company's average", according to Apple's Chief Financial Officer Peter Oppenheimer during Apple's Q4 2012 earnings call.
Comments
Where exactly is this "dominance" they speak of?
Apple already makes billions of dollars selling mid to high-end phones... do they really need to dip into lower markets?
Quote:
Originally Posted by Tallest Skil
Did you mean for your sentences to pertain to the same topic? Because they don't at all. Might want to look to that.
"That was Steve Jobs Apple. This is Tim's Apple. I wouldn't be surprised if we see some changes in company's business philosophy." - Nikon133
That was where Nikon 133 started and that was exactly the line I followed.
Steve did things differently. No doubt about it. Hard to say where Tim will go. He's the not the same guy as Steve at all.
You might want to follow the conversation a little better.
Quote:
Originally Posted by Michael Scrip
The iPhone is only 20% of smartphones worldwide... and only 10% of ALL phones worldwide.
Where exactly is this "dominance" they speak of?
Apple already makes billions of dollars selling mid to high-end phones... do they really need to dip into lower markets?
I know, right? Apple had 0% market share in 2007. Every point earned over the years has only increased Apple's net market share FROM ZERO.
Analyst are just mad because the iPhone is only growing in double digit percentages instead of triple digit like before...
The cheaper iPhone will probably have a smaller screen, but it will likely share a lot of specs and cues from the iPad Mini and iPod Touch.
I don't think Apple will ever make an iPhone below $400 and I'm sure they can make a pretty good profit at that range.
Quote:
Originally Posted by blackbook
The cheaper iPhone will probably have a smaller screen, but it will likely share a lot of specs and cues from the iPad Mini and iPod Touch.
I don't think Apple will ever make an iPhone below $400 and I'm sure they can make a pretty good profit at that range.
i doubt that. the way to hold manufacturing costs down is change as few things as possible in a current product, notably the screen. and Apple would want to standardize its small device screens on the new 16:9 format the current iPod touch uses without fussing with resolutions at all. so for both reasons it would use exactly the same screen as the iPod touch does now. while the next iPhone 6 might get a new improved screen technology of some kind to differentiate it as the "premium" iPhone.
the current iPod touch in many ways - its internal components - is really a simplified iPhone 4S, which proves that point. to morph that now into an iPhone lite in some real sense would be merely a re-branding of the 4S. except the screen would be in the new 16:9 format the 4S lacks that Apple wants to push from now on anyway.
as with the iPad mini vs. full size, Apple would not care which you buy - as long as it makes its 40%+ profit margin either way. increasing the total gross sales of both the regular iPhone and an iPhone lite combined, more than total sales of just the regular iPhone alone would be, WHILE also continuing the same profit margin is obviously the best possible business outcome.
so actually, this rumor is making a lot of sense to me.
Quote:
Originally Posted by nikon133
That was Steve Jobs Apple. This is Tim's Apple. I wouldn't be surprised if we see some changes in company's business philosophy.
I said a couple of months ago that I believed that Tim Cook was concerned about market share. Not to the point where he will join the race to the bottom but that he is devising a plan to address the issue.
Two weeks ago I predicted that we will see that plan in the next 3 months.
I could be wrong but I'm with you on this one.
Originally Posted by island hermit
You might want to follow the conversation a little better.
Your statements have nothing whatsoever to do with the conversation.
We're talking about the product lineup. You're talking about bugs with software.
The 4S is likely going to be around for almost two more years, and so is its screen. If Apple were going to maintain a cheaper phone, wouldn't they use a cheaper screen? I have to imagine the iPhone 5 screen costs more than the 4/S. Along with a larger battery, those are two significant ways to reduce costs. Maybe in a year, they bump the 4S down to the free phone, and introduce the iPhone mini, a redesigned 4S with lighting port and 4G LTE. There's your distinct product lines.
Quote:
Originally Posted by Tallest Skil
Your statements have nothing whatsoever to do with the conversation.
We're talking about the product lineup. You're talking about bugs with software.
Really? I have to explain this to you.
Nikon 133 said that Cook had a different philosophy. You said he didn't... same as Steve's.
Cook, even by making that apology has shown that his "philosophy" is different from Steve's. His approach to problems is different. I find it safe to say that his approach to the business overall will follow the same path. Different man. Different ideas. The iPad Mini is part of that approach in my mind and a different approach to market share, I believe, will be another [and I think it's safe to say that the iPad Mini was also an approach to increase market share].
This would be the worse decision ever. Expect stock to tank (again) tomorrow because of this. Apple's worth as a solid brand and strong rep is more important than selling cheap, low end stuff to get a bit more money. True Apple loyalists will be ticked and the overall margins will then get clobbered because more will go the cheaper route or choose an alternative premium brand rather than stay with an Apple that does not care about brand quality anymore.
"the iPad mini's gross profit margin is "significantly below" the company's average", according to Apple's Chief Financial Officer Peter Oppenheimer during Apple's Q4 2012 earnings call.
http://www.theverge.com/2012/10/25/3555664/apple-ipad-mini-margin-is-significantly-below-corporate-average
Apple kept around the 4th gen iPod touch and the iPhone 4/4S.
They have no stated goals of transitioning their products to 16:9. If they did they wouldn't still be selling millions of 3:2 devices every month.
Another fact. There are hundreds of millions of 3:2 iOS devices in the wild. It will take years before developers stop supporting the format.
Exactly right.
I expect the iPhone Mini out sooner than later. iPhone 4/4S internals. iPhone 5 externals. Extremely thin sexy design.
To be fair... the iPad mini is a product on its own... with its own prices and margins. And we don't know yet how the iPad mini has affected sales of the bigger iPads.
The big iPad still has well-padded margins... especially as you go up the line to the $829 iPad 64GB LTE
Conversely... what's the margin on the $50 iPod Shuffle? Did that ruin the margins on all other iPods? Is it really fair to compare one product to every product they make?
How about the cheap 11" Macbook Air? Hell... the original Macbook Air started at $1799.
Quote:
Originally Posted by Mac_128
Why does Apple want to push the 16:9 format from now on? Where is that goal published?
The 4S is likely going to be around for almost two more years, and so is its screen. If Apple were going to maintain a cheaper phone, wouldn't they use a cheaper screen? I have to imagine the iPhone 5 screen costs more than the 4/S. Along with a larger battery, those are two significant ways to reduce costs. Maybe in a year, they bump the 4S down to the free phone, and introduce the iPhone mini, a redesigned 4S with lighting port and 4G LTE. There's your distinct product lines.
are you kidding? the future of small device iOS is plainly 16:9. the 2012 iPhone 5 and iPod touch made that move already. it's a done deal. it's plainly irrevocable. all new apps are being optimized for that screen aspect, and old ones updated for it. (while the iPads remain at 4:3).
and the whole point of a new iPhone lite or whatever it's called would be Apple would cease selling the older iPhones entirely. instead it would always have a "brand new" product to offer at that lower price tier (but same profit margin). that obviously is a stronger market position than offering "last year's model at a discount"
Quote:
Originally Posted by Suddenly Newton
I know, right? Apple had 0% market share in 2007. Every point earned over the years has only increased Apple's net market share FROM ZERO.
Quite true but Android is gaining more market share (worldwide) year over year and and Apple needs to react. You can already see it as they are speeding up their release cycle for their phones/tablets because they will not be able to keep up if they only release a new product ever 12 months. They also realize that they are ignoring a pretty big (but not as profitable) segment of the market. The mid-low end. Granted, they take care of the mid range with their 4 and 4S offerings but those phones are quite small and while it appears there are quite a few people on this site that think the 3.5" screens are perfect (or were until they got their hands on a 4" screen), there are a lot of people who have been enjoying 4" + screens for over 3 years now.
Apple needs to go after the lower end market because someday, the people who are buying the lower end phones are going to graduate into something bigger and if that person likes the eco-system that they were brought up on, chances are they may not change.
I see a lot of purists on here who want Apple to remain the true to their roots in that they only make top notch products but I think that dream is over. We've seen a pretty big decline in the quality of their hardware/software as the company has grown into the titan it is today and to think it will go back to the way it was before is a bit naive I think. When you get that big, things falls through the cracks. It is inevitable. I'm not Apple's biggest fan but I think they are making a good move here from a long term business perspective albeit they are going to p*ss off their oldest and most supportive customers (a lot of you on this forum) with some of their decisions.
Quote:
Originally Posted by Sensi
Err, they have just done that with the iPad mini...
"the iPad mini's gross profit margin is "significantly below" the company's average", according to Apple's Chief Financial Officer Peter Oppenheimer during Apple's Q4 2012 earnings call.
http://www.theverge.com/2012/10/25/3555664/apple-ipad-mini-margin-is-significantly-below-corporate-average
a few % is "significant" to him. plus that is for the first cycle of a brand new product. product margins improve greatly over time.