Can Apple afford to go cheaper with new iPhones?

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  • Reply 101 of 138
    solipsismxsolipsismx Posts: 19,566member

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

    Whomever looks to Zuckerberg for how to behave in society is etiphuqked.
  • Reply 102 of 138
    Another reason to introduce a new, less expensive iPhone mini is to unite everything this year with the lightning connector. Apple replaces the iPad 2 at $399 with the current iPad (4) when introducing the new iPad, and no more 30 pin connectors.

    iPod Classic.
  • Reply 103 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by Chandana View Post



    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.


     


    Very interesting post. Is there a market for high end Samsungs where you are? What are they selling for? Also, what percentage of the price is taxes and import duties? How big is the final markup? (these questions can be summarized by: how much of the $750 actually goes to Apple?

  • Reply 104 of 138
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by Marvin View Post







    Will that be enough to satisfy the prepaid markets though? $350 is still expensive when prepaid smartphones start as low as $100.




     These things always get too absolute, and it's partly an artifact of Apple's marketing and keynotes. The iPad mini costs more than a lot of alternatives. The sole point isn't typically price points. That is something that is left for products that are somewhat misaligned with their market or simply lacking in differentiation. I don't think it's just price. They likely figure out how many could be sold at a particular price point and whether a different design would better align with that market. The older one also competes with used sales, which would be less of a factor with something more compelling.

  • Reply 105 of 138

    Quote:

    Originally Posted by SolipsismX View Post



    3) Again (because I'm familiar with you), if you want to promote your site or link to another site feel free but if you post a link with no lead in as to why one should click the link you don't yourself any favours. Even a summary of what is stated would be sufficient otherwise you come across as someone trying to increase their page rank (at best) to some but that hands out his manifesto on street corners between yelling at his own shadow (worst).


    Couldn't agree more.


     


    Otherwise, it is simply cheap, self-promoting spam that should be taken elsewhere.

  • Reply 106 of 138

    Quote:

    Originally Posted by erann View Post



    As far as "cheap" is concerned, is e.g. BMW Mini Cooper or BMW 1 series or Audi A1 or Mercedes Benz A class cars cheap or low cost? Do you think that BMW, Audi or MB can afford those models?


    I generally hate car analogies. But this one is spot on: car companies use this strategy based on their assessment of lifetime value of a consumer. Perhaps, based on that logic, there is something to be said for Apple pursuing such a strategy as well.


     


    I am still dubious, but your post makes me go "hmmm......"

  • Reply 107 of 138


    Any article which starts with the sentence "can apple afford to.." has got to be a pile of shite.

  • Reply 108 of 138
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by anantksundaram View Post


    I generally hate car analogies. But this one is spot on: car companies use this strategy based on their assessment of lifetime value of a consumer. Perhaps, based on that logic, there is something to be said for Apple pursuing such a strategy as well.


     


    I am still dubious, but your post makes me go "hmmm......"





    The thing I still abhor about car analogies is that they don't follow well. Whether someone can afford a $40k+ car isn't indicative of whether they can afford an iphone.

  • Reply 109 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by hmm View Post




    The thing I still abhor about car analogies is that they don't follow well. Whether someone can afford a $40k+ car isn't indicative of whether they can afford an iphone.



     


    It is not a question of being "able to afford", but being willing to spend the money for something where you can get the basic functionality for half the price, so the mentality going into buying a "premium" car is the same mentality that goes into a "premium" phone, even while what different people consider desirable (in both cars and phones) is quite different.

  • Reply 110 of 138
    superbasssuperbass Posts: 688member


    The future of mobile devices is in monetizing content. Apple is already the king of that, and the best thing they can do is expand their user base to maximize profits inside the walled garden and with phone company payouts.


     


    Getting bigger payouts from telecoms and suck(er)ing more people into the iTunes ecosystem.


     


    The average person with an iPhone in the UK spends £345/$525 in iTunes, not including in-App purchases. Apple gets 30% of that, which is over $150 per phone.


     


    http://www.gadgetlist.co.uk/news/average-itunes-account-is-worth-345/


     


    That's a more money than Apple makes for the hardware, isn't it? Sure, cheaper iPhones would probably cannibalize a lot of the high-margin top of the line userbase, but Apple's business model is all about maximizing people inside the iTunes walled garden, and then extracting their 30% from the music/programming/film/tv/gaming industries.

  • Reply 111 of 138
    Apple can afford to take every human on earth to a steak dinner.
  • Reply 112 of 138
    rogifanrogifan Posts: 10,669member
    superbass wrote: »
    The future of mobile devices is in monetizing content. Apple is already the king of that, and the best thing they can do is expand their user base to maximize profits inside the walled garden and with phone company payouts.

    Getting bigger payouts from telecoms and suck(er)ing more people into the iTunes ecosystem.

    The average person with an iPhone in the UK spends £345/$525 in iTunes, not including in-App purchases. Apple gets 30% of that, which is over $150 per phone.

    http://www.gadgetlist.co.uk/news/average-itunes-account-is-worth-345/

    That's a more money than Apple makes for the hardware, isn't it? Sure, cheaper iPhones would probably cannibalize a lot of the high-margin top of the line userbase, but Apple's business model is all about maximizing people inside the iTunes walled garden, and then extracting their 30% from the music/programming/film/tv/gaming industries.
    Has Apple ever provided information on how much profit they make off iTunes/ App Store? I'd be curious to know what that figure is. How much of that 30% goes to the bottom line?
  • Reply 113 of 138
    piotpiot Posts: 1,346member

    Quote:

    Originally Posted by Superbass View Post


    but Apple's business model is all about maximizing people inside the iTunes walled garden, and then extracting their 30% from the music/programming/film/tv/gaming industries.



     


    No it isn't.

  • Reply 114 of 138


    Would not work out well for them.

  • Reply 115 of 138
    superbasssuperbass Posts: 688member

    Quote:

    Originally Posted by piot View Post


     


    No it isn't.



     


    So dropping optical drives, not supporting blu-ray, integration of the App Store into OSX and putting what seems like 95% of marketing focus on the iPad, iPod and iPhone (all of which require users to give Apple their 30% commission on any content bought for the device) is just a coincidence? And blocking any app that emulates functions of iTunes while allowing apps that emulate other core functions such as mail, VOIP and messaging was also just a coincidence? The whole product and UI design is being driven by making iTunes the only place people go for to purchase music/applications/video/etc.


     


    2012 profits from iTunes were close to $13 billion, not including developer payouts. Growth was something like 40% in iTunes revenues.

  • Reply 116 of 138
    piotpiot Posts: 1,346member

    Quote:

    Originally Posted by Superbass View Post


     


    2012 profits from iTunes were close to $13 billion, not including developer payouts.



     


    Look, sorry, but your figures are wrong. Very wrong.


     


    That 13 Billion is REVENUE. And it includes rev from the Mac App store plus it includes Apple's own software. iWork, Aperture, Final Cut etc.

  • Reply 117 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by piot View Post


     


    Look, sorry, but your figures are wrong. Very wrong.


     


    That 13 Billion is REVENUE. And it includes rev from the Mac App store plus it includes Apple's own software. iWork, Aperture, Final Cut etc.



     


    So presumably between $3BN and $4BN profit. Not too shabby.

  • Reply 118 of 138
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by Superbass View Post


    The future of mobile devices is in monetizing content. Apple is already the king of that, and the best thing they can do is expand their user base to maximize profits inside the walled garden and with phone company payouts.


     


    Getting bigger payouts from telecoms and suck(er)ing more people into the iTunes ecosystem.


     


    The average person with an iPhone in the UK spends £345/$525 in iTunes, not including in-App purchases. Apple gets 30% of that, which is over $150 per phone.


     


    http://www.gadgetlist.co.uk/news/average-itunes-account-is-worth-345/


     


    That's a more money than Apple makes for the hardware, isn't it? Sure, cheaper iPhones would probably cannibalize a lot of the high-margin top of the line userbase, but Apple's business model is all about maximizing people inside the iTunes walled garden, and then extracting their 30% from the music/programming/film/tv/gaming industries.



     


    Your figure is over the lifetime of the account? In that case (at least in the US) Apple still makes a lot more money off the hardware (don't forget, there are carrier kickbacks).

  • Reply 119 of 138
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by Superbass View Post

    …is just a coincidence?


     


    No, it's just random information you're pretending fits your argument.






    The whole product and UI design is being driven by making iTunes the only place people go…



     


    Wow, that's just completely and utterly wrong.

  • Reply 120 of 138
    piotpiot Posts: 1,346member

    Quote:

    Originally Posted by igriv View Post


     


    So presumably between $3BN and $4BN profit. Not too shabby.



     


    Actually... more like $2 Billion.


     


    Just think about that (Superbass!).... divided by around, what around 650 million, iPhones, iPads, iPads and Macs out there. That's about $3.00 profit per device, per year.


     


    Not the most lucrative business plan. Ask Amazon how it's working out.

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