That has kicked in already- those savings are offset by other higher priced components and manufacturing costs. You don't think the A6 and A7 were developed and made for free do you? Apple just spent almost $400 million to put a sensor under the home button of ONE model of phone. Who else does that? There are few other companies that would.
Tim Cook is doing a brilliant job of maximizing costs and always has. The design of the 5C is going to help push costs down, and eventually prices as well. Just wait and see. Apple wouldn't have released a second model unless they saw a need for it. The iPhone 5 will be the first iPhone where Apple is just going to have to eat the costs - probably turned out to a bigger pain than they originally planned for. You can bet the iPhone 6 will be designed around making it extremely easy to assemble but still be just as refined a product.
The moment Apple makes an aggressive pricing move, is the moment we all start worrying.
What does anything I said have to with the A7? Perhaps you should go back and re-read.
On the issue of 'worrying' about 'aggressive pricing,' look at the graph some posted above: especially, on the ONE product announcement that resulted in a stock price bump. 'Nuff said.
Incidentally, I think you mean 'minimizing costs.'
Good timing potentially four months after the new models are released and mostly outside the affordability of the Chinese consumer. No wonder the stock is continuing to get hammered.
Survey finds China's 'sweet spot' for Apple 'iPhone 5C' priced at $486
US $549 - US $486 == US $63 == 13% over "sweet spot"
I don't know about China resellers, but in the US the reseller, likely, pays Apple $400-$450 for the $549 iPhone 5C based on volume. And, the payment terms are normally net 30 days.
A high-volume reseller could hit the customer "sweet spot" price and still make a profit consistent with other consumer electronics -- $86 = 21% markup from $400.
Since the iPhones are unlocked and sell themselves -- the reseller doesn't have to do anything but hang a few signs, stock the shelves and ring up the sales. If the reseller knows what they are doing, they will turn their inventory often enough that they will have positive cash flow.
To say that 'marketshare for marketshare's sake is meaningless' is a truism.
With the kind of volumes Apple sells -- and therefore of components they purchase -- I would have expected the much-vaunted economies of scale and supply chain efficiencies to kick in quite solidly by now, allowing Cook to make an aggressive pricing move. Indeed, operations and supply chain efficiencies were Cook's strong suit, as Jobs's super-successful COO.
What I am finding surprising -- while not minimizing the challenges associated with the sheer volumes involved -- is how misplaced the faith in Cook on that front (including on my part) has turned out to be thus far. Coming on top of a set of botched iMac introductions, supply shortages, dramatically slowed (and bunched) product intro schedules, the 5C pricing and features (e.g., only 32GB?) is quite unimpressive. At least, for me.
Don't get me wrong: the 5S is a huge leap (although I am slightly disappointed at the lack of the 128GB).
I agree re: botched iMac launch, weirdly rearranged product schedule. But, perhaps, these issues are bound to emerge when your top operations guy is no longer just running manufacturing operations, but has a whole company to run.
As for 5C pricing, let's wait and see. I get the feeling that Apple is pretty confident this will become their top seller by a large margin.
The 32 GB limit is typical of Apple. They won't deviate from the $100 increment when doubling storage, and imposes artificial ceilings on their non-premium offerings. We've been seeing this for a decade now.
Someone on the Verge forums made an intersting observation: that the 5C might be a transitional product and next year it becomes the low end and the 5S doesn't go plastic. Of course the question then might be why didn't Apple get rid of the 4S and replace it with the 5C and keep the 5 as the mid-range. I think we know why, but my guess is that's what Wall Street wanted. Until of course Apple reported quarterly results and margins and profits were down.
Actually, I think I know why. They needed the new radio frequency chips that would work globally including on China Telecom and the iPhone 5 didn't have it. So they had to release new phones that would work on China Mobile. They kept the 4S because there wasn't enough differentiation between the 5C and the 5.
They finally got the contract to be on the network, but too bad they forgot to bring the "inexpensive" phone they need to succeed in that market.
Apple is still selling as many devices as they can make for months after their release. Why lower prices and overwhelm the supply chain perpetually?
You seem to be measuring "success" as "taking most of the market". That's fine, but it isn't something any company can do all at once and remain healthy.
China Mobile has 740mm customers, 138mm smartphone users (and growing). If Apple released a "cheap" phone into that market, they'd have to mass-produce crappy, high-volume junk (akin to Samsung's "cheap crap" so-called 'mid-range smartphones') just to keep up.
Apple isn't about appealing to the general mass-market with their handsets. Not all at once, anyway. Next year, when the iPhone 6 releases, we'll see the 5C drop into that very range you're talking about. They'll have already captured a healthy chunk of CM's subscriber base, and poised to manageably acquire more.
Their strategy is clearly about making incremental, healthy and sustainable gains in market share while maintaining profitability AND brand principles. You only have to look to the U.S. market to see how well their strategy works. In the smartphone segment, Apple continues to increase their share, and owns nearly half that market now. It only took about five years to achieve that, from a zero point. Do you understand just how phenomenal that is? (And a fine case study of "Disruption" at its best.)
China has roughly 4 times our population. Growing into a market that large must be done carefully. Apple has said time and again how important it is to their future. They have every intention of doing it right.
Finally, I know quite a few people in China, and get tons of 'intel' from them. Incomes are steadily increasing. The iPhone remains a highly aspirational device, and these new models will only make it more so. The buzz around them has been huge. There's NO doubt they'll do quite well there.
I think your "analysis" of the situation is rather shallow and shortsighted. Do you understand why I think so?
What does anything I said have to with the A7? Perhaps you should go back and re-read.
On the issue of 'worrying' about 'aggressive pricing,' look at the graph some posted above: especially, on the ONE product announcement that resulted in a stock price bump. 'Nuff said.
Incidentally, I think you mean 'minimizing costs.'
You mentioned economies of scale... that prices should come down.
I argued that those savings are offset by the use of higher priced custom components and manufacturing costs.
Maybe you should re-read what I wrote?
No, "maximizing costs" is appropriate - it means you get the most for your money. "Minimizing costs" means to spend less. One applies to money already spent, the other is how much you're willing to spend.
Personally, I'm rather proud of how they "unapologetically" refused to sell a cheaper iPhone.
IMO, by judging Apple with the optics of the stock market, we risk losing sight of what this company is about. I appreciate, respect that some here have much invested. But going against the grain is Apple's trademark, lest we forget.
First, 'less expensive' does not equal 'cheap.'
Second, I truly wish Apple would 'go against the grain' some more, and break a few molds. What we're seeing out of this team -- so far -- is conservatism.
I think you underestimate the courage, skill and risk... yes risk -- that it took to upgrade iOS 7 to 64-bit and maintain 32-bit compatibility -- without missing a beat. This easily could have been a disaster! It took Microsoft years to upgrade Windows to 64-bit.
And 64-bit iOS provides tremendous advantages to iDevices for the near term and the future.
I don't know if you realize this but the gaming video shown running on the iPhone 5S outperformed any mobile gaming device and most gaming consoles.
Also, what about the daring (and risk) with: total redesign of the iOS UI... the ground-breaking design of the new Mac Pro... the release of Final Cut Pro X revolutionary features and pricing (1/5 of FCP 7)... free iWork and iLife on every new iDevice (probably Macs, too).
I am now convinced that Apple's refusal to make a bigger screen iPhone was a mistake. It is following almost the same strategy as BlackBerry did a few years ago, of ignoring market trends. Even if they do damage control within the next few months, the momentum they have now lost to compete with the likes of Samsung, Sony and LG will affect Apple in the long run. The short sellers are going to have a field day for the next couple of months.
How has Apple getting licensed for China Mobile somehow "convinced you" that not making a bigger screen is "a mistake"? I don't get the connection. As for the rest, you clearly haven't been watching Apple's market share and sales trends over time… doing 'damage control' assumes there is damage. What damage? And as for momentum, they keep posting record sales and profits quarter after quarter (net margins were down recently, but that was expected in the current climate, and far less than the rest of the market). Will you come back after their 1st quarter report and discuss this again? We can talk about how wrong you were. Will you own up to it?
<div class="quote-container">Quote:
<div class="quote-block">Originally Posted by <strong>dasanman69</strong> <a href="/t/159476/apple-granted-iphone-network-license-for-china-mobile-worlds-largest-carrier#post_2394318"><img alt="View Post" src="/img/forum/go_quote.gif" /></a><br />
<br />
<br />
Isn't the 4S $450 now?</div>
</div>
<p> </p>
<p>imo $450 for a 8g 3.5" phone is insulting. The 4.7" Nexus 4 at $200 beats the 4s on almost all metric. That being said, Apple could still do good on the tablet side, the stock could be a buy around $400 </p>
That's your opinion and you are entitled to it.
I have a 4" iPhone 5, but I prefer the 3.5" size of the iPhone 4S (and earlier) -- better fit in a shirt pocket.
I mainly use the iPhone to make and receive occasional phone calls, texts. I have an iPad which I always have with me... so the iPhone is just a necessary evil.
The AI forums have been relatively troll-free (except for a few, known, regulars) for the past month or so...
Today, it seems we are inundated with a lot of complaints from "long time Apple users, fans, supporters" and the like... Who, for some reason have just discovered AI and decided to join the forums to bash Apple and offer their unsolicited advice... They all have a relatively few posts to their name, are recently registered and totally anti Apple...
Coincidence... Hardly! How naive they must be -- to think we wouldn't notice!
The AI forums have been relatively troll-free (except for a few, known, regulars) for the past month or so...
Today, it seems we are inundated with a lot of complaints from "long time Apple users, fans, supporters" and the like... Who, for some reason have just discovered AI and decided to join the forums to bash Apple and offer their unsolicited advice... They all have a relatively few posts to their name, are recently registered and totally anti Apple...
Coincidence... Hardly! How naive they must be -- to think we wouldn't notice!
Are you just now noticing what happens after every product/service/OS announcement? Most join to spew pure hatred and rarely return.
Every one is a Pandit here! Yes, it is a great news. Yes, the pricing of iPhone 5C for unlocked phone is high, but the question is what makes you think China Mobile iPhone consumers are going with to be buying unlocked phones. You think Apple operated out from a well? All this announcement happens in the vacuum? Tim Cook has been visiting China lately. Maybe, the China Mobile customer might be getting those iPhone 5Cs at $99 rates. Maybe China Mobile is also looking at the No payment down model like AT&T is doing and the model AirTel India has been doing for years.
This is great news and all those people who downgraded AAPL is going to change the tune when the phone hits the street (even in China). Not like they haven't done so before.
What does anything I said have to with the A7? Perhaps you should go back and re-read.
On the issue of 'worrying' about 'aggressive pricing,' look at the graph some posted above: especially, on the ONE product announcement that resulted in a stock price bump. 'Nuff said.
Incidentally, I think you mean 'minimizing costs.'
You mentioned economies of scale... that prices should come down.
I argued that those savings are offset by the use of higher priced custom components and manufacturing costs.
Maybe you should re-read what I wrote?
No, "maximizing costs" is appropriate - it means you get the most for your money. "Minimizing costs" means to spend less. One applies to money already spent, the other is how much you're willing to spend.
I think "minimizing" costs is the appropriate goal -- or "maximizing" results or profits.
It depends on the perspective:
1) if you have $100 to spend (your cost), you want to maximize the number or quality of the things you buy.
2) If you need to build 3 houses to sell for $100,000 you want to minimize your costs and maximize your profits (or quality, brand, etc.).
3) if you can minimize your costs and maintain the same quality you may be able to maximize your market share.
The AI forums have been relatively troll-free (except for a few, known, regulars) for the past month or so...
Today, it seems we are inundated with a lot of complaints from "long time Apple users, fans, supporters" and the like... Who, for some reason have just discovered AI and decided to join the forums to bash Apple and offer their unsolicited advice... They all have a relatively few posts to their name, are recently registered and totally anti Apple...
Coincidence... Hardly! How naive they must be -- to think we wouldn't notice!
Are you just now noticing what happens after every product/service/OS announcement? Most join to spew pure hatred and rarely return.
Nah! Just pointing it out to the offenders...
I particularly like the AI Noobs with minimal posts who join together in a tag-team to ping-pong posts supporting each's negative agenda!
This high level of "troll activity" indicates to me -- that the fans/shills of Apple competitors must be really frightened about what Apple announced yesterday.
Comments
Huh. The larger the fall, the greater the success and impact.
Hopefully Apple's stock keeps falling right now.
That has kicked in already- those savings are offset by other higher priced components and manufacturing costs. You don't think the A6 and A7 were developed and made for free do you? Apple just spent almost $400 million to put a sensor under the home button of ONE model of phone. Who else does that? There are few other companies that would.
Tim Cook is doing a brilliant job of maximizing costs and always has. The design of the 5C is going to help push costs down, and eventually prices as well. Just wait and see. Apple wouldn't have released a second model unless they saw a need for it. The iPhone 5 will be the first iPhone where Apple is just going to have to eat the costs - probably turned out to a bigger pain than they originally planned for. You can bet the iPhone 6 will be designed around making it extremely easy to assemble but still be just as refined a product.
The moment Apple makes an aggressive pricing move, is the moment we all start worrying.
What does anything I said have to with the A7? Perhaps you should go back and re-read.
On the issue of 'worrying' about 'aggressive pricing,' look at the graph some posted above: especially, on the ONE product announcement that resulted in a stock price bump. 'Nuff said.
Incidentally, I think you mean 'minimizing costs.'
Survey finds China's 'sweet spot' for Apple 'iPhone 5C' priced at $486
http://appleinsider.com/articles/13/08/20/survey-finds-chinas-sweet-spot-for-apple-iphone-5c-priced-at-486
5C Price - Sweet spot
US $549 - US $486 == US $63 == 13% over "sweet spot"
I don't know about China resellers, but in the US the reseller, likely, pays Apple $400-$450 for the $549 iPhone 5C based on volume. And, the payment terms are normally net 30 days.
A high-volume reseller could hit the customer "sweet spot" price and still make a profit consistent with other consumer electronics -- $86 = 21% markup from $400.
Since the iPhones are unlocked and sell themselves -- the reseller doesn't have to do anything but hang a few signs, stock the shelves and ring up the sales. If the reseller knows what they are doing, they will turn their inventory often enough that they will have positive cash flow.
To say that 'marketshare for marketshare's sake is meaningless' is a truism.
With the kind of volumes Apple sells -- and therefore of components they purchase -- I would have expected the much-vaunted economies of scale and supply chain efficiencies to kick in quite solidly by now, allowing Cook to make an aggressive pricing move. Indeed, operations and supply chain efficiencies were Cook's strong suit, as Jobs's super-successful COO.
What I am finding surprising -- while not minimizing the challenges associated with the sheer volumes involved -- is how misplaced the faith in Cook on that front (including on my part) has turned out to be thus far. Coming on top of a set of botched iMac introductions, supply shortages, dramatically slowed (and bunched) product intro schedules, the 5C pricing and features (e.g., only 32GB?) is quite unimpressive. At least, for me.
Don't get me wrong: the 5S is a huge leap (although I am slightly disappointed at the lack of the 128GB).
I agree re: botched iMac launch, weirdly rearranged product schedule. But, perhaps, these issues are bound to emerge when your top operations guy is no longer just running manufacturing operations, but has a whole company to run.
As for 5C pricing, let's wait and see. I get the feeling that Apple is pretty confident this will become their top seller by a large margin.
The 32 GB limit is typical of Apple. They won't deviate from the $100 increment when doubling storage, and imposes artificial ceilings on their non-premium offerings. We've been seeing this for a decade now.
Someone on the Verge forums made an intersting observation: that the 5C might be a transitional product and next year it becomes the low end and the 5S doesn't go plastic. Of course the question then might be why didn't Apple get rid of the 4S and replace it with the 5C and keep the 5 as the mid-range. I think we know why, but my guess is that's what Wall Street wanted. Until of course Apple reported quarterly results and margins and profits were down.
Actually, I think I know why. They needed the new radio frequency chips that would work globally including on China Telecom and the iPhone 5 didn't have it. So they had to release new phones that would work on China Mobile. They kept the 4S because there wasn't enough differentiation between the 5C and the 5.
They finally got the contract to be on the network, but too bad they forgot to bring the "inexpensive" phone they need to succeed in that market.
Apple is still selling as many devices as they can make for months after their release. Why lower prices and overwhelm the supply chain perpetually?
You seem to be measuring "success" as "taking most of the market". That's fine, but it isn't something any company can do all at once and remain healthy.
China Mobile has 740mm customers, 138mm smartphone users (and growing). If Apple released a "cheap" phone into that market, they'd have to mass-produce crappy, high-volume junk (akin to Samsung's "cheap crap" so-called 'mid-range smartphones') just to keep up.
Apple isn't about appealing to the general mass-market with their handsets. Not all at once, anyway. Next year, when the iPhone 6 releases, we'll see the 5C drop into that very range you're talking about. They'll have already captured a healthy chunk of CM's subscriber base, and poised to manageably acquire more.
Their strategy is clearly about making incremental, healthy and sustainable gains in market share while maintaining profitability AND brand principles. You only have to look to the U.S. market to see how well their strategy works. In the smartphone segment, Apple continues to increase their share, and owns nearly half that market now. It only took about five years to achieve that, from a zero point. Do you understand just how phenomenal that is? (And a fine case study of "Disruption" at its best.)
China has roughly 4 times our population. Growing into a market that large must be done carefully. Apple has said time and again how important it is to their future. They have every intention of doing it right.
Finally, I know quite a few people in China, and get tons of 'intel' from them. Incomes are steadily increasing. The iPhone remains a highly aspirational device, and these new models will only make it more so. The buzz around them has been huge. There's NO doubt they'll do quite well there.
I think your "analysis" of the situation is rather shallow and shortsighted. Do you understand why I think so?
What does anything I said have to with the A7? Perhaps you should go back and re-read.
On the issue of 'worrying' about 'aggressive pricing,' look at the graph some posted above: especially, on the ONE product announcement that resulted in a stock price bump. 'Nuff said.
Incidentally, I think you mean 'minimizing costs.'
You mentioned economies of scale... that prices should come down.
I argued that those savings are offset by the use of higher priced custom components and manufacturing costs.
Maybe you should re-read what I wrote?
No, "maximizing costs" is appropriate - it means you get the most for your money. "Minimizing costs" means to spend less. One applies to money already spent, the other is how much you're willing to spend.
Walter is spewing total BS!
How soon we forget:
[VIDEO]
This was the same memorable event that introduced the iPod "leather" case...
I think you underestimate the courage, skill and risk... yes risk -- that it took to upgrade iOS 7 to 64-bit and maintain 32-bit compatibility -- without missing a beat. This easily could have been a disaster! It took Microsoft years to upgrade Windows to 64-bit.
And 64-bit iOS provides tremendous advantages to iDevices for the near term and the future.
I don't know if you realize this but the gaming video shown running on the iPhone 5S outperformed any mobile gaming device and most gaming consoles.
Also, what about the daring (and risk) with: total redesign of the iOS UI... the ground-breaking design of the new Mac Pro... the release of Final Cut Pro X revolutionary features and pricing (1/5 of FCP 7)... free iWork and iLife on every new iDevice (probably Macs, too).
Hardly conservative traits, IMO!
I am now convinced that Apple's refusal to make a bigger screen iPhone was a mistake. It is following almost the same strategy as BlackBerry did a few years ago, of ignoring market trends. Even if they do damage control within the next few months, the momentum they have now lost to compete with the likes of Samsung, Sony and LG will affect Apple in the long run. The short sellers are going to have a field day for the next couple of months.
How has Apple getting licensed for China Mobile somehow "convinced you" that not making a bigger screen is "a mistake"? I don't get the connection. As for the rest, you clearly haven't been watching Apple's market share and sales trends over time… doing 'damage control' assumes there is damage. What damage? And as for momentum, they keep posting record sales and profits quarter after quarter (net margins were down recently, but that was expected in the current climate, and far less than the rest of the market). Will you come back after their 1st quarter report and discuss this again? We can talk about how wrong you were. Will you own up to it?
The beauty of it is that other resellers can sell unlocked iPhone 5Cs at a sweet spot price -- that will run on any of China's carrier networks.
That's your opinion and you are entitled to it.
I have a 4" iPhone 5, but I prefer the 3.5" size of the iPhone 4S (and earlier) -- better fit in a shirt pocket.
I mainly use the iPhone to make and receive occasional phone calls, texts. I have an iPad which I always have with me... so the iPhone is just a necessary evil.
... the iPhone 5s and iPhone 5c were both revealed to support China Mobile's TD-LTE bands ...
BOOM.
The AI forums have been relatively troll-free (except for a few, known, regulars) for the past month or so...
Today, it seems we are inundated with a lot of complaints from "long time Apple users, fans, supporters" and the like... Who, for some reason have just discovered AI and decided to join the forums to bash Apple and offer their unsolicited advice... They all have a relatively few posts to their name, are recently registered and totally anti Apple...
Coincidence... Hardly! How naive they must be -- to think we wouldn't notice!
Are you just now noticing what happens after every product/service/OS announcement? Most join to spew pure hatred and rarely return.
This is great news and all those people who downgraded AAPL is going to change the tune when the phone hits the street (even in China). Not like they haven't done so before.
I think "minimizing" costs is the appropriate goal -- or "maximizing" results or profits.
It depends on the perspective:
1) if you have $100 to spend (your cost), you want to maximize the number or quality of the things you buy.
2) If you need to build 3 houses to sell for $100,000 you want to minimize your costs and maximize your profits (or quality, brand, etc.).
3) if you can minimize your costs and maintain the same quality you may be able to maximize your market share.
Bingo!
And don't forget the AppleTV and Content creators/developers!
Nah! Just pointing it out to the offenders...
I particularly like the AI Noobs with minimal posts who join together in a tag-team to ping-pong posts supporting each's negative agenda!
This high level of "troll activity" indicates to me -- that the fans/shills of Apple competitors must be really frightened about what Apple announced yesterday.