Can Apple afford to go cheaper with new iPhones?

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  • Reply 81 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by Slurpy View Post



    I honestly think in their next update, Apple needs to drop both the 4 and the 4S, and come out with one "lower end" phone to replace those, and one "higher end" to replace the succeed the 5.



    For the iPad, they should drop both the iPad 2 and the iPad4, update the mini to retina, and introduce the iPad 5 ("new iPad) for $399. This will simplify the product line and make the full sized iPad more lucrative. I doubt they want the mini eating most of the sales of the regular sized iPad, and right now the price gap between the 2 is too large. So they would have:



    - new lower end iPhone (polycarbonate?)

    - iPhone 5

    - new higher end iPhone (5S? Larger screen?)



    - iPad mini (retina)

    - iPad (using mini design)



    This would also serve to deprecate all non lightning products, and I think make it easier for people to make a decision. I understand the need for the "in between" products because of pricing dynamics, but I think they can move past that now. Oh, and they should also drop the old style MBPs soon.


     


    Since the cost of the case is a small fraction of the cost of the device, there would have to be a substantial difference in functionality between the "cheap" and the "premium" iPhone. Since, whatever you may say about the software, the hardware level of the good Android phones is quite close to that of the flagship iPhone, the margin for error is quite narrow (presumably Apple would not want to be viewed as an also run to Galaxy SII). Note also that the phone market is different from the notebook market, where some people use their laptop for heavy duty computing, others use it to write term papers, and still others use it to check their email and surf the web (this last group is increasingly migrating to tablets, but whatever), so it makes sense that there are a number of laptop lines (and does NOT make sense for Apple not to have a flagship desktop line, expect as a way of announcing that they are not interested in the desktop business at all).

  • Reply 82 of 138
    philboogiephilboogie Posts: 7,435member
    gwmac wrote: »
    Reading the same fights and ideas between the multi-thousand post crowd every day gets very boring.

    Not exactly mandatory, is it?
    gwmac wrote: »
    But isn't that what the report button is for and not further hijacking the discussion by pointing it out? That is what bothered me, if you see a post that breaks the rules report it and move on with the discussion.

    What is the purpose of that button and where do you think it links to?
    mac_128 wrote: »
    Unless Apple wants to make iTunes available on the Android platform the way they made it available on Windows, then they probably should start looking at how to get poorer customers into their hardware sooner rather than later.

    Can't people using Android move their music over to a different device/platform, just like iTunes after they dropped DRM? If that's the case, talk about open platform ¡
  • Reply 83 of 138
    a2gsga2gsg Posts: 26member

    Quote:

    Originally Posted by Apple ][ View Post




    That is one of the disadvantages of technology and new social trends I guess. Kids are dumber today, no doubt about that. And it seems as if many of the newer generation can barely write or spell correctly, even if their lives depended upon it.


     


    Fortunately, we'll all be dead by the time that this happens, but I can definitely see some sort of idiocracy type of society happening in the not too distant future. 






    here's the "landmark documentary" everyone


    needs to see on exactly the issues you raise:


     


    The Internet - a warning from history


     


    image


     


    http://www.youtube.com/watch?v=ycwsF77NP_A

  • Reply 84 of 138
    flaneurflaneur Posts: 4,506member
    igriv wrote: »
    Since the cost of the case is a small fraction of the cost of the device, there would have to be a substantial difference in functionality between the "cheap" and the "premium" iPhone.

    I seem to remember that the machined aluminum case of the iPad mini cost as much as the display, about $35. A similar costliness might br true of the iPhone 5 and the touch, when you get done with all the fitting and handling details pertaining to a variable metal part that has to be beveled, anodized, textured, etc.

    By comparison, a molded plastic part is always the same and costs pennies, I would think. Radio transparency saves on some more engineering and assembly.
  • Reply 85 of 138
    philboogiephilboogie Posts: 7,435member
    a2gsg wrote: »
    The Internet - a warning from history

    Too funny!
  • Reply 86 of 138
    Daniel,

    APPLE NEED A LOW PRICE MODEL FOR THE ASIA. PERIOD.

    I have been running a small Apple Products related shop in Colombo suburbs in Sri Lanka and have quite a bit of experience on how our markets behave.

    1. As anywhere else our mobile market is very active and lucrative business right now.

    2. We have five GSM operators (Dialog GSM, Mobitel, Etisalat, Hutch, Airtel) very competitive and few have repeatedly tried a subsidized model without any form of success. Subsidized phones with contracts CANNOT be sold here even the phone is FREE. But contract free, top-up,
    SIM swappable phones sell like hot cakes. We are pre-paid market.

    3. At the market price today (20 APR 2013) cheapest new iPhone 5 costs you Rs.100,000/- or 794USD here. Whatever brand recognition or hype Apple has, you can not convince many persons to spend that kind of money on a phone even if they have money unless he or she is an Apple fanatic. LKR 1LAK is a mind barrier even for the people who drives 100,000/- USD cars. Here most business men, doctors, lawyers who used to carry iPhones now carry the latest Galaxy's, only celebrities and few other carry the latest iPhones.

    4. Walk in to any phone shop, they have but condemn Chinese Androids and recommend Samsung Galaxy over it. No Apple. And the cheapest piece of Samsung Android shit sells as Galaxy Y (Android 2.3) for Rs. 15,000/- or 110USD a sweet package. Roughly a monthly wage of young worker. An Apple can easily sell as double as that around 250-300USD model. I think 3GS can be made at that price.

    5. On contrast I had been selling enough iPhones to grow my business last two years which are consists of refurbished iPhone 3GS to 4S priced below 750USD mark. I have been selling 3GS quite well till last year, for around Rs. 30,000/- or 230USD a unit. The issue here is with iOS 6.0 baseband corruption renders iPhone unlocking near impossible now and the Maps fiasco make it worse. No new 3GS/4 or 4S (factory Unlocked or not) can be obtained from the market easily to sell here either. So last six months Apple advocate me and my company has to start offering Androids without any other solution left for us to survive.

    6. Say for Chinese, locals have bad perception, but say Samsung, it is now well renowned or portrayed as the highest profile brand like SONY used to be and riding the high waves here, no one knows or cares they copied Apple, it is highly irrelavent and all they want to go online (Facebook) and play games on their phones, browse on their tablets. Samsung is the new Apple for that here, I guess this is exactly the way Indian market is heating up.

    7. iOS 6.0 update brought few real surprise for Apple die hard here, Google Maps always work near perfect here, any darn corner of the street name can be looked upon. Apple crowd here was pretty used to it and now Apple Maps killed the chance even to search the city I live in, where an Apple shop is available. Imagine?

    8. Samsung and carrier backed Android marketing is in full SWING here for the last two years, So Apple brand name is never heard of for new breed of people who look at my iPad units and ask, what is this tab? Is it Chinese? Don't you have Galaxies? what the heck?

    So Daniel, make sure Apple hear these, any market is for Apple is a market for Apple, and killing it for whatever ignorance they have with that 150B of cash pile is a shame for the Steve's name, the greatest marketeer of our time.

    Someone has nicely put,
    Apple don't make junk products. It follows that there are 2 ways they might move forward from here: They can surely figure out a way.

    (1) They figure out how to make a low-cost iPhone that's not junk
    (2) They just can't figure it out so can make plastic 3GS (iOS 6 device) and market it aggressively.
  • Reply 87 of 138
    philboogiephilboogie Posts: 7,435member
    chandana wrote: »
    Daniel,

    APPLE SERIOUSLY NEED A LOW PRICE MODEL FOR THE ASIA. PERIOD.

    I have been running a small Apple Products related shop in Colombo suburbs in Sri Lanka (www.someobscurespamselfpromotingwebsitelink.com) and have quite a bit of experience on how our markets behave.

    1. As anywhere else our mobile market is very active and lucrative business right now.

    2. We have five GSM operators (Dialog GSM, Mobitel, Etisalat, Hutch, Airtel) very competitive and few have repeatedly tried a subsidized model without any form of success. Subsidized phones with contracts CANNOT be sold here even the phone is FREE. But contract free, top-up SIM swappable phones sell like hot cakes. We are pre-paid market.

    3. At the market price today (20 APR 2013) cheapest new iPhone 5 costs you Rs.100,000/- or 794USD here. Whatever brand recognition or hype Apple has, you can not convince many persons to spend that kind of money on a phone even if they have money unless he or she is an Apple fanatic. LKR 1LAK is a mind barrier even for the people who drives 100,000/- USD cars. Here most business men, doctors, lawyers who used to carry iPhones now carry the latest Galaxy's, only celebrities and few other carry the latest iPhones.


    4. Walk in to any phone shop, they have but condemn Chinese Androids and recommend Samsung Galaxy over it. No Apple. And the cheapest piece of Samsung Android shit sells as Galaxy Y (Android 2.3) for Rs. 15,000/- or 110USD a sweet package. Roughly a monthly wage of young worker.

    5. On contrast I had been selling enough iPhones to grow my business last two years which are consists of refurbished iPhone 3GS to 4S priced below 750USD mark. I have been selling 3GS quite well till last year, for around Rs. 30,000/- or 230USD a unit. The issue here is with iOS 6.0 baseband corruption renders iPhone unlocking near impossible now and the Maps feasco. No new 3GS/4 or 4S (factory Unlocked or not) can be obtained from the market easily to sell here either. So last six months Apple advocate me and my company has to start offering Androids without any other solution left for us to survive.

    6. Say for Chinese, locals have bad perception, but say Samsung, it is now well renowned or portrayed as the highest profile brand like SONY used to be and riding the high waves here, no one knows or cares they copied Apple, all they want to go online (Facebook) and play games on their phones, browse on their tablets. Samsung is the new Apple here, I guess this is exactly the way Indian market is.

    7. iOS 6.0 update brought few real surprise for Apple die hards here, Google Maps always work near perfect here, any darn corner of the street name can be looked upon. Apple crowd here was pretty used to it and now Apple Maps killed the chance even to search the city I live in, where a Apple shop is available. Imagine?

    8. Samsung and carrier backed Android marketing is in full swing here for the last two years, So Apple brand name is never heard of for new breed of people who look at my iPad units and ask, what is this tab? Is it chinese? Don't you have Galaxies? what the heck?

    So please Daniel, make sure Apple hear these, any market is for Apple is a market for Apple, and killing it for whatever ignorance they have with that 150B of cash pile is a shame for the Steve's name, the greatest marketeer of our time.

    Someone has nicely put,
    Apple don't make junk products. It follows that there are 2 ways they might move forward from here:

    (1) They figure out how to make a low-cost iPhone that's not junk
    (2) They just can't figure it out so can make 3GS (iOS 6 device) and market it agressively.

    Let me go look for your IQ; must be here somewhere:
    1000
  • Reply 88 of 138
    ksecksec Posts: 1,549member

    Quote:

    Originally Posted by SolipsismX View Post





    1) Is that the same profit or profit margin.



    2) Nice thoughtful post.


     


    Same Profit Margin. Or To be precise I should say same level of Profits Margin. In reality it will be slightly lower profit margin  ( since the bottom line and overhead cost will eat into the affordable iPhone line ). But it should be very very small and insignificant in the grand view of things.  

  • Reply 89 of 138
    erannerann Posts: 37member

    Quote:

    Originally Posted by jungmark View Post





    The mini isn't branded a BMW.

    Do any of the other cars cost $20000?


    E.g. BMW 135is Convertible starting price is $47,950.

  • Reply 90 of 138
    I think the question of a low cost iPhone is probably satisfied by the use of the older model. The real issue is why they want to do this and that's surely to get people into the ecosystem so they can carry on buying from App Store and also other apple products. Apple will undoubtedly know the lifetime value of a new customer and that will determine their positioning of a new phone.

    I think a more interesting issue is that of larger screen sizes. I know my use of the iPhone has changed since it was first introduced. I now only really use it for telephone and texting and all the other stuff I used to do (web etc.) is now done on the iPad. Is there a market for people who want to use a single device for everything? A larger screen iPhone could satisfy that, as is being shown by Samsung with some of their phablets.

    So let's wait and see what they come up with!
  • Reply 91 of 138
    erannerann Posts: 37member

    Quote:

    Originally Posted by jungmark View Post





    The mini isn't branded a BMW.

    Do any of the other cars cost $20000?


    Mercedes A 180 (the basic model) costs in Germany $31.750.

  • Reply 92 of 138
    timmydaxtimmydax Posts: 284member
    Ah... Americans.

    The Sri Lankan dude made several great points, and his ability to write in English in no way hindered his eloquence in my book.

    Although anecdotal, this is the main reason Apple need a low-cost iPhone. American Students? American Children? Who gives a flying... ...the perception of Apple in the rest of the world is arguably more important than any "cheap" American market. Apple have been focussing on China, but they seem to have not realised the rest of Asia's view of China, especially compared to South Korea. There are some very interesting points in his post, if we try to read it without judgement, we might learn something.
  • Reply 93 of 138
    msanttimsantti Posts: 1,377member
    Almost 140 billion in the bank.

    Apple can't afford to do anything.

    :(
  • Reply 94 of 138
    andysolandysol Posts: 2,506member
    apple ][ wrote: »
    Nope.


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    4 reelz. U no what ur talkin bout. Lol ????

    Not to mention they can't make eye contact while they talk to save their life. Not only are they illiterate but they're socially retarded. At least my dad taught me to look into a persons eyes and shake their hand- you know- like you have to communicate in the real world- no in Facebook of texting.


    Back to the subject- why not just have an "export only" cheap phone. Still keep their premium image in America and just sell the cheapo to emerging markets. Tons of alcohol companies do this- several car manufacturers, etc.
  • Reply 95 of 138
    froodfrood Posts: 771member


    With more developed countries reaching a point of saturation or at least slowing growth, the growth markets demand a lower cost phone.


     


    It is a challenge for Apple.  If they do release one, is it going to be full featured?  If it has all of the features of the high end phone, they are going to cannibalize.  Consumers even in the more developed countries:


     


    'Hmmm do I want to buy the high end one for $800 which is beautiful Aluminum and thin which I am going to spend $40 on a case which is extra fat and plastic in order to protect it, or spend $300 on one which is plastic to start with and has all the functionality'


     


    If they build it so it is lacking a lot of functionality that would probably be even worse for Apple.


     


     


    After an initial surge of cheap iPhones are sold, it is not going to take long for those ultra cost conscious consumers to realize they have entered the most expensive ecosystem by far.  Apple fans are quite proud to point out that they are 20% of the market yielding 70% of the profits.  Is that going to create a backlash and/or increase demand for budget Apps to whom paying the  iTunes 'Apple tax' of 10-40 bucks a month is going to be significant?


     


    If Apple can pull it off and get budget users a great experience in their ecosystem, they will do tremendously.  I think last year was the first they broke out their ecosystem/iTunes profits separately and that is significant.  As Apple revenue from software and services grow it will provide a larger (but still small) percentage of their revenues from 'software&services' as opposed to hardware.  Software and services in turn can justify a much higher p/e ratio.  As Apple continues to report it, I think we'll see an increased focus on App store percentage growth which can mitigate the impact of hardware margins.

  • Reply 96 of 138
    MarvinMarvin Posts: 14,200moderator
    frood wrote: »
    With more developed countries reaching a point of saturation or at least slowing growth, the growth markets demand a lower cost phone.

    It is a challenge for Apple.  If they do release one, is it going to be full featured?  If it has all of the features of the high end phone, they are going to cannibalize.  Consumers even in the more developed countries:

    'Hmmm do I want to buy the high end one for $800 which is beautiful Aluminum and thin which I am going to spend $40 on a case which is extra fat and plastic in order to protect it, or spend $300 on one which is plastic to start with and has all the functionality'

    That's the problem and it's not quite the same as the iPad mini. If you look at the following:

    1000

    The one on the left is based on the iPod Touch design with a plastic shell, much like the photo that was posted earlier. I used a photo of the Nokia Lumia 820 to mockup the plastic case.

    We know that the current iPhone 5 to the right sells for $650. We also know that the iPhone 4 currently sells for $450. Given that the iPod Touch 5G is $299, it's likely that the price would be above it, even though they can cut the 32GB of storage to 16GB. There's little point in making it the same price as the iPhone 4 - it would have to be significantly lower in price. IMO, this would point to a $350 price point.

    The question is not how they build a phone for $350. The question is how do they sell a $650 phone when they have one that isn't much different for $350?

    They'd both have 16GB storage, same display, the cheap one would have the A5 (which is the same CPU as the iPhone 4S), both have Facetime, both have wifi, both have decent cameras.

    The iPad mini is different because it has a lower resolution screen, smaller size and the price difference is $170.

    They could start having just two iPhone models - basic and premium and somehow lower the price of the top model so that you'd end up with say $350 and $550. That would allow them to get rid of the naming conventions.

    Will that be enough to satisfy the prepaid markets though? $350 is still expensive when prepaid smartphones start as low as $100.
  • Reply 97 of 138
    a2gsga2gsg Posts: 26member


    N.B. in furtherance of your keen observation that ... high school graduates need to relearn basic skills of


    Quote:

    Originally Posted by Andysol View Post



    ... Not to mention they can't make eye contact while they talk to save their life. Not only are they illiterate but they're socially retarded. At least my dad taught me to look into a persons eyes and shake their hand- you know- like you have to communicate in the real world- no in Facebook of texting...

     


     


    please, kindly note/observe that:


     


    Mark Zuckerberg Says It's Totally OK To Ignore Dinner Guests While Checking Your Phone:


    http://www.businessinsider.com/mark-zuckerberg-ignore-dinner-guests-check-your-phone-2013-4

  • Reply 98 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by a2gsg View Post


    N.B. in furtherance of your keen observation that ... high school graduates need to relearn basic skills of


     


    please, kindly note/observe that:


     


    Mark Zuckerberg Says It's Totally OK To Ignore Dinner Guests While Checking Your Phone:


    http://www.businessinsider.com/mark-zuckerberg-ignore-dinner-guests-check-your-phone-2013-4



     


    Emily Post must be generating a strong magnetic field right now.

  • Reply 99 of 138
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by a2gsg View Post


    Mark Zuckerberg Says It's Totally OK To Ignore Dinner Guests While Checking Your Phone:



     


    That must mean it's perfectly fine¡

  • Reply 100 of 138

    Quote:

    Originally Posted by a2gsg View Post


    N.B. in furtherance of your keen observation that ... high school graduates need to relearn basic skills of


     


    please, kindly note/observe that:


     


    Mark Zuckerberg Says It's Totally OK To Ignore Dinner Guests While Checking Your Phone:


    http://www.businessinsider.com/mark-zuckerberg-ignore-dinner-guests-check-your-phone-2013-4





    I always look to Mark Zuckerberg for my rules of etiquette.

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