(1) is myopic. Poor people (and especially their kids) will not always be poor, and if they grow up with Android phones, that's what they will keep using.
(2) Cheaper products frequently have much higher margins.
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
Wow, have you applied to be the CEO of Apple? Because they are obviously really in need of your expertise.
You seem to be making the same mistake that somebody else did a few days ago on this forum. I have never once claimed that I'd be a good CEO of Apple. As a matter of fact, I would be a terrible CEO of Apple, and I can easily admit that.
And this is not about criticizing Apple, because Apple hasn't released any cheap phone to date, and they have not hinted that there are any plans to do so. The ones who are whining about cheap phones, such as the analysts and others are those who think that they know better than Apple. And guess what, those clueless people wouldn't make good CEO's of Apple either. They'd run Apple in the ground so fast, that it would make RIM's downfall look good in comparison.
All in all, the company with the the higher net margin wins. Apple, starting with the largest gross margin, and assuming all costs are the same for both parties can make a little bit more if it discounts to the same price as Samsung.
I'm not sure you meant that the way it came out, or at least in the way that I read it.
If the costs are the same and they both discount to the same price, then they will both have the same net profit.
Apple's high gross margin is mostly because of its high prices.
Both get good deals on components. In fact, Samsung recently took over Apple's spot as the largest consumer of electronic components in the world. After all, Samsung makes twice as many smartphones and four times as many phones, as Apple. Samsung's other divisions also make memory and CPUs, and hopefully the Mobile division gets some discount for buying from corporate (but maybe not).
Manufacturing costs might be slightly higher for Samsung when it comes to top of the line smartphones, which are made in Korea itself to ensure better quality. (Lower level phones are made in other countries.)
So, while not a big source of income relative to the iPhone, it's huge in the industry, and provides the current core base for the Apple Ecosystem (how do you burn CDs onto your iPhone?).
In 5 years the Mac may not be that important... as iCloud becomes the 'backend' for all iOS services, and the iTunes/Mac umbilical becomes a historical footnote.
Today, however, 4-6Billion a year in PROFITS on 22B in sales is not too shabby.
Yes, the iPhone is on the vanguard, but the Mac is holding it's flank quite well.
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
1. And your point is? My parents used pen, paper, books printed on paper and occasionally telephones with a big spirally cord. I suspect yours did too. My taste in books is probably somewhat influenced by theirs, as for technology, since we grew up in a vacuum, we filled it ourselves (in my case, I used just about every computing technology that was, from IBM mainframes, to every possible apple device, to android devices, to windows PCs and phones -- I am lucky enough to be able to afford to try things out). People (in India or elsewhere) all of whose friends have Android phones will probably buy such a phone when they can. Maybe they will buy an iPhone as a status symbol. And maybe not.
2. What do you not consider exceptional? Aside from Apple last-years model, such things as fountain soda and greeting cards are considered common and have enormous markups. Cheap clothing does, too. I assume you know all this.
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
1. And your point is? My parents used pen, paper, books printed on paper and occasionally telephones with a big spirally cord. I suspect yours did too. My taste in books is probably somewhat influenced by theirs, as for technology, since we grew up in a vacuum, we filled it ourselves (in my case, I used just about every computing technology that was, from IBM mainframes, to every possible apple device, to android devices, to windows PCs and phones -- I am lucky enough to be able to afford to try things out). People (in India or elsewhere) all of whose friends have Android phones will probably buy such a phone when they can. Maybe they will buy an iPhone as a status symbol. And maybe not.
2. What do you not consider exceptional? Aside from Apple last-years model, such things as fountain soda and greeting cards are considered common and have enormous markups. Cheap clothing does, too. I assume you know all this.
OK, let's leave both our sets of parents out of it (since, I guess, they were not computer users). Any evidence to back up the sweeping claim that "kids growing up using Android phones (or like products) will keep using Android phones (or like products)"? Or did you just make it up on the fly, like you seem to do a lot?
What are the margins on "fountain soda", "greeting cards", and "cheap clothing"? How does it compare to, say, margins that Apple currently has? Or, did you just make that up on the fly as well, like you seem to have done above?
OK, let's leave both our sets of parents out of it (since, I guess, they were not computer users). Any evidence to back up the sweeping claim that "kids growing up using Android phones (or like products) will keep using Android phones (or like products)"? Or did you just make it up on the fly, like you seem to do a lot?
What are the margins on "fountain soda", "greeting cards", and "cheap clothing"? How does it compare to, say, margins that Apple currently has? Or, did you just make that up on the fly as well, like you seem to have done above?
Post first, think later?
Believe it or not, I actually checked the margins on soda and greeting cards before posting -- they are between 200 and 600%. Margin on Starbucks coffee is about 400%.
As for kids and android, I have plenty of evidence on computer use (from much student interaction), less for phone use (the poor kids all have android phones, actually, and this is becoming a bit of a class pride thing). I know that my son is an adept iDevice user at five years old, and if this goes on, there will not be much choice of what kind of phone to get him. Inertia is a powerful force.
Believe it or not, I actually checked the margins on soda and greeting cards before posting -- they are between 200 and 600%. Margin on Starbucks coffee is about 400%.
Can you provide some actual cites? Or links? What 'margins'?
As for kids and android, I have plenty of evidence on computer use (from much student interaction), less for phone use (the poor kids all have android phones, actually, and this is becoming a bit of a class pride thing). I know that my son is an adept iDevice user at five years old, and if this goes on, there will not be much choice of what kind of phone to get him. Inertia is a powerful force.
OK, on this one, you're basically saying that your personal experience, and "inertia" as a "powerful source" say so. Cool. Very persuasive.
Apple is falling into the same trap it did in Australia and other places with pricing where they rip off the public by charging more than they do in the US. This is terrible customer relations as everyone knows and are really offended by it. This is the reason also why everyone outside the US has a US iTunes account.
iPhones cost less on plans in Australia than they do in America.
iPhone 4 free on a $30 plan, iPhone 5 16GB $6 pm on a $60 plan
While there are some ridiculously wealthy people in India there is a whole spectrum including those who that struggle to afford the most basic of handsets. The nokia phone I owned prior to my iPhone was a very basic candybar Nokia that supported a bicycle charger for markets where the customer might not have access to mains electricity.
It will be interesting to see what impact a budget-oriented iPhone can make (if any). You either have to seek volume, values, or valued customers. While I'm quite happy with apple focussing on providing a premium experience there is a great deal of room for movement. The question is how to provide a spectrum of experiences that both meet the needs of low-end customers but also provide incentive for customers to opt for products associated with higher profit margins.
Maybe a day late and a dollar short, but I just wanted to comment on this thread. As with every other place, there are uber-rich, rich, middle class and poor people in India. However, being as populous as India is, the numbers in each section are huge.
Leaving aside the rich, so far the upper-middle class could afford an Apple product (and I'm not talking about iPods). However, ever since Apple tied up with a new distribution partner, widespread ads for the iPhone, coupled with instalment plans and trade-ins means that Apple is now bringing people from the lower-middle class into their target market.
So now, you have people from 3 different economic sections that can afford an iPhone in India - the super-rich, the rich and the middle-class. This means that, contrary to what Apple][ thinks, Apple does have a big potential market here. Apple knows this and I am sure they are doing everything possible to dig their heels in here.
With all due respect to you Author and content of this post, I feel he must pay close attention to the information. Apple's iPhone 4 7,000 discount offer expired on 14th April 2013 while Samsung is the only one which is offering 15% discount but only on Credit Card users in a country where CC penetration is less than 1%.
While there are some ridiculously wealthy people in India there is a whole spectrum including those who that struggle to afford the most basic of handsets. The nokia phone I owned prior to my iPhone was a very basic candybar Nokia that supported a bicycle charger for markets where the customer might not have access to mains electricity.
It will be interesting to see what impact a budget-oriented iPhone can make (if any). You either have to seek volume, values, or valued customers. While I'm quite happy with apple focussing on providing a premium experience there is a great deal of room for movement. The question is how to provide a spectrum of experiences that both meet the needs of low-end customers but also provide incentive for customers to opt for products associated with higher profit margins.
India has a lot of billionaires who don't mind spending money:-
Very Interesting yet another Apple Vs. Samsung sales squabble. After doing a bit of research my opinion is as follows. Apple must lower their prices for products sold in India. As I understand it any Apple product, an example the iPhone has a massive(30-35%) cost over US sales prices, there was in fact an internet campaign of some sorts by their countries youth regarding the same, This must change. Additionally If true, the rumoured low cost iPhone should do wonders for Apples sales in this country. The Indians have shown they have quite an appetite for Apple products but will only buy if it makes sense financially & at the time it doesn't.
Maybe a day late and a dollar short, but I just wanted to comment on this thread. As with every other place, there are uber-rich, rich, middle class and poor people in India. However, being as populous as India is, the numbers in each section are huge.
Leaving aside the rich, so far the upper-middle class could afford an Apple product (and I'm not talking about iPods). However, ever since Apple tied up with a new distribution partner, widespread ads for the iPhone, coupled with instalment plans and trade-ins means that Apple is now bringing people from the lower-middle class into their target market.
So now, you have people from 3 different economic sections that can afford an iPhone in India - the super-rich, the rich and the middle-class. This means that, contrary to what Apple][ thinks, Apple does have a big potential market here. Apple knows this and I am sure they are doing everything possible to dig their heels in here.
I disagree about India having huge number of 'rich' people. Only 16 million people belong to a household that makes $35k a year. Corresponding US figure is over 160 million people.
Comments
Quote:
Originally Posted by igriv
(1) is myopic. Poor people (and especially their kids) will not always be poor, and if they grow up with Android phones, that's what they will keep using.
(2) Cheaper products frequently have much higher margins.
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
Quote:
Originally Posted by Mac_128
Wow, have you applied to be the CEO of Apple? Because they are obviously really in need of your expertise.
You seem to be making the same mistake that somebody else did a few days ago on this forum. I have never once claimed that I'd be a good CEO of Apple. As a matter of fact, I would be a terrible CEO of Apple, and I can easily admit that.
And this is not about criticizing Apple, because Apple hasn't released any cheap phone to date, and they have not hinted that there are any plans to do so. The ones who are whining about cheap phones, such as the analysts and others are those who think that they know better than Apple. And guess what, those clueless people wouldn't make good CEO's of Apple either. They'd run Apple in the ground so fast, that it would make RIM's downfall look good in comparison.
Quote:
Originally Posted by TheOtherGeoff
All in all, the company with the the higher net margin wins. Apple, starting with the largest gross margin, and assuming all costs are the same for both parties can make a little bit more if it discounts to the same price as Samsung.
I'm not sure you meant that the way it came out, or at least in the way that I read it.
If the costs are the same and they both discount to the same price, then they will both have the same net profit.
Apple's high gross margin is mostly because of its high prices.
Both get good deals on components. In fact, Samsung recently took over Apple's spot as the largest consumer of electronic components in the world. After all, Samsung makes twice as many smartphones and four times as many phones, as Apple. Samsung's other divisions also make memory and CPUs, and hopefully the Mobile division gets some discount for buying from corporate (but maybe not).
Manufacturing costs might be slightly higher for Samsung when it comes to top of the line smartphones, which are made in Korea itself to ensure better quality. (Lower level phones are made in other countries.)
Quote:
Originally Posted by dasanman69
Do you really think that Macs are a big source of income for Apple, their bread and butter since 2007 is the iPhone.
Bigger source of income than THE OTHER TOP 5 PC MANUFACTURERS, COMBINED;-).
(source Asymco http://www.asymco.com/wp-content/uploads/2013/04/Screen-Shot-2013-04-16-at-4-16-4.05.57-PM.png)
So, while not a big source of income relative to the iPhone, it's huge in the industry, and provides the current core base for the Apple Ecosystem (how do you burn CDs onto your iPhone?).
In 5 years the Mac may not be that important... as iCloud becomes the 'backend' for all iOS services, and the iTunes/Mac umbilical becomes a historical footnote.
Today, however, 4-6Billion a year in PROFITS on 22B in sales is not too shabby.
Yes, the iPhone is on the vanguard, but the Mac is holding it's flank quite well.
Quote:
Originally Posted by anantksundaram
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
1. And your point is? My parents used pen, paper, books printed on paper and occasionally telephones with a big spirally cord. I suspect yours did too. My taste in books is probably somewhat influenced by theirs, as for technology, since we grew up in a vacuum, we filled it ourselves (in my case, I used just about every computing technology that was, from IBM mainframes, to every possible apple device, to android devices, to windows PCs and phones -- I am lucky enough to be able to afford to try things out). People (in India or elsewhere) all of whose friends have Android phones will probably buy such a phone when they can. Maybe they will buy an iPhone as a status symbol. And maybe not.
2. What do you not consider exceptional? Aside from Apple last-years model, such things as fountain soda and greeting cards are considered common and have enormous markups. Cheap clothing does, too. I assume you know all this.
Quote:
Originally Posted by igriv
Quote:
Originally Posted by anantksundaram
1) Really!? Did you parents use all Apple products (since you claim to be a big Apple user)?
2) Really!? Examples? (Not exceptions, but the "frequent" ones).
1. And your point is? My parents used pen, paper, books printed on paper and occasionally telephones with a big spirally cord. I suspect yours did too. My taste in books is probably somewhat influenced by theirs, as for technology, since we grew up in a vacuum, we filled it ourselves (in my case, I used just about every computing technology that was, from IBM mainframes, to every possible apple device, to android devices, to windows PCs and phones -- I am lucky enough to be able to afford to try things out). People (in India or elsewhere) all of whose friends have Android phones will probably buy such a phone when they can. Maybe they will buy an iPhone as a status symbol. And maybe not.
2. What do you not consider exceptional? Aside from Apple last-years model, such things as fountain soda and greeting cards are considered common and have enormous markups. Cheap clothing does, too. I assume you know all this.
OK, let's leave both our sets of parents out of it (since, I guess, they were not computer users). Any evidence to back up the sweeping claim that "kids growing up using Android phones (or like products) will keep using Android phones (or like products)"? Or did you just make it up on the fly, like you seem to do a lot?
What are the margins on "fountain soda", "greeting cards", and "cheap clothing"? How does it compare to, say, margins that Apple currently has? Or, did you just make that up on the fly as well, like you seem to have done above?
Post first, think later?
Quote:
Originally Posted by anantksundaram
OK, let's leave both our sets of parents out of it (since, I guess, they were not computer users). Any evidence to back up the sweeping claim that "kids growing up using Android phones (or like products) will keep using Android phones (or like products)"? Or did you just make it up on the fly, like you seem to do a lot?
What are the margins on "fountain soda", "greeting cards", and "cheap clothing"? How does it compare to, say, margins that Apple currently has? Or, did you just make that up on the fly as well, like you seem to have done above?
Post first, think later?
Believe it or not, I actually checked the margins on soda and greeting cards before posting -- they are between 200 and 600%. Margin on Starbucks coffee is about 400%.
As for kids and android, I have plenty of evidence on computer use (from much student interaction), less for phone use (the poor kids all have android phones, actually, and this is becoming a bit of a class pride thing). I know that my son is an adept iDevice user at five years old, and if this goes on, there will not be much choice of what kind of phone to get him. Inertia is a powerful force.
Quote:
Originally Posted by igriv
Believe it or not, I actually checked the margins on soda and greeting cards before posting -- they are between 200 and 600%. Margin on Starbucks coffee is about 400%.
Can you provide some actual cites? Or links? What 'margins'?
Quote:
Originally Posted by igriv
As for kids and android, I have plenty of evidence on computer use (from much student interaction), less for phone use (the poor kids all have android phones, actually, and this is becoming a bit of a class pride thing). I know that my son is an adept iDevice user at five years old, and if this goes on, there will not be much choice of what kind of phone to get him. Inertia is a powerful force.
OK, on this one, you're basically saying that your personal experience, and "inertia" as a "powerful source" say so. Cool. Very persuasive.
Quote:
Originally Posted by KDarling
Sales are further apart, with Samsung over 33% share vs. Apple under 5%.
Samsung just dropped the Grand price in India to 19,500 rupees.
Found a site that calculates import duty and sure enough, it all adds up for the $640 iPhone:
Rs. 34,500 base price + Rs. 11,000 import duty = 45,500 rupees
Working backward, the Samsung Grand must have a base price of Rs. 15,000 ($280) in order to hit Rs. 19,500.
Nice info but import duty is levied on the cost price of the device, not the American selling price. So the import duty is much lesser than Rs. 11000.
Everyone is comparing the Indian price to $650. Note The Indian price is inclusive of all taxes. American price is $650 + local taxes.
http://www.toptenz.net/top-10-biggest-price-markups.php
Even though the data was from 2010
Quote:
Originally Posted by anantksundaram
Can you provide some actual cites? Or links? What 'margins'?
The same way you plug in your iPhone to a landline or wired Ethernet... You don't.
The [URL=http://www.gsmarena.com/samsung_galaxy_grand_i9082-5163.php]Grand[/URL] is a mid range phone with most of the high end features stripped out in order to make it cheap.
The price comparison should be based on the iPhone 4, for the iPhone 5 the price should be compared to the Galaxy S III.
Evidence of bias in the source of this article, done purely to make Apple look more expensive.
Galaxy Note 2 Rs.37380, Galaxy S III Rs. 30950
[URL=https://www.samsungindiaestore.com/products/Mobiles/Galaxy_Note_II_GT-N7100TAD]Source[/URL]
iPhones cost less on plans in Australia than they do in America.
iPhone 4 free on a $30 plan, iPhone 5 16GB $6 pm on a $60 plan
It will be interesting to see what impact a budget-oriented iPhone can make (if any). You either have to seek volume, values, or valued customers. While I'm quite happy with apple focussing on providing a premium experience there is a great deal of room for movement. The question is how to provide a spectrum of experiences that both meet the needs of low-end customers but also provide incentive for customers to opt for products associated with higher profit margins.
Maybe a day late and a dollar short, but I just wanted to comment on this thread. As with every other place, there are uber-rich, rich, middle class and poor people in India. However, being as populous as India is, the numbers in each section are huge.
Leaving aside the rich, so far the upper-middle class could afford an Apple product (and I'm not talking about iPods). However, ever since Apple tied up with a new distribution partner, widespread ads for the iPhone, coupled with instalment plans and trade-ins means that Apple is now bringing people from the lower-middle class into their target market.
So now, you have people from 3 different economic sections that can afford an iPhone in India - the super-rich, the rich and the middle-class. This means that, contrary to what Apple][ thinks, Apple does have a big potential market here. Apple knows this and I am sure they are doing everything possible to dig their heels in here.
India has a lot of billionaires who don't mind spending money:-
http://www.simplyweddings.com/wedding/Newsworthy/General/content/Steel-tycoons-daughter-60-million-wedding/1163.htm
Apple must lower their prices for products sold in India. As I understand it any Apple product, an example the iPhone has a massive(30-35%) cost over US sales prices, there was in fact an internet campaign of some sorts by their countries youth regarding the same, This must change. Additionally If true, the rumoured low cost iPhone should do wonders for Apples sales in this country. The Indians have shown they have quite an appetite for Apple products but will only buy if it makes sense financially & at the time it doesn't.
Quote:
Originally Posted by BestKeptSecret
Maybe a day late and a dollar short, but I just wanted to comment on this thread. As with every other place, there are uber-rich, rich, middle class and poor people in India. However, being as populous as India is, the numbers in each section are huge.
Leaving aside the rich, so far the upper-middle class could afford an Apple product (and I'm not talking about iPods). However, ever since Apple tied up with a new distribution partner, widespread ads for the iPhone, coupled with instalment plans and trade-ins means that Apple is now bringing people from the lower-middle class into their target market.
So now, you have people from 3 different economic sections that can afford an iPhone in India - the super-rich, the rich and the middle-class. This means that, contrary to what Apple][ thinks, Apple does have a big potential market here. Apple knows this and I am sure they are doing everything possible to dig their heels in here.
I disagree about India having huge number of 'rich' people. Only 16 million people belong to a household that makes $35k a year. Corresponding US figure is over 160 million people.
http://www.openthemagazine.com/article/business/the-wealth-report