So $550 isn't expensive for the middle class? I'm not saying Apple needs to get into a race to the bottom but there is something in between the high end and the low end, no?
$5 for a cup of coffee isn't cheap either but no one is begging Starbucks to release a $.50 coffee option.
They will mysteriously go away when they're proven wrong. No mea culpa, no sticking around to stand corrected or take their punishment. They slink away, back to their Android holes. Only to emerge again when there's a future opportunity to spread FUD, in the gap between the start of sales and real numbers.
I just dont get all the attention the 5c is getting. Functionally it isnt much different than the 5 so pricing the 5c at the old phone's price makes sense as it will serve largely the same function from a price point standpoint. I can only assume it is cheaper to make and Cook is trying to improve margins by filling a role by replacing the 5 with a phone with better margins. That leads me to wonder if every prior model is going to be discontinued to be replaced by a "plastic" phone once the new premium phone comes out. Or maybe I'm wrong and they just need the 5C to work in developing countries as a premium phone. Either way expecting big sales seems like a stretch.
Considering later model phones make up half of Apple's smartphone sales if they can improve margins that could have a nice boost to EPS.
I just dont get all the attention the 5c is getting. Functionally it isnt much different than the 5 so pricing the 5c at the old phone's price makes sense as it will serve largely the same function from a price point standpoint. I can only assume it is cheaper to make and Cook is trying to improve margins by filling a role by replacing the 5 with a phone with better margins.
I doubt if that's the driving force. I think they've decided that they want to broaden the line to appeal to a different group of customers. The lower cost (which is probably not as big a difference as you think) is just a side benefit.
I think they priced it at $550 because they can. Since none of us knows how much the damn thing costs to manufacture or license tech for, let's assume the margin is huge. Fine. They did it because they're Apple and they can get away with it, and that's business. If it fails then maybe they'll lower the price but I'd be surprised to see that happen.
The day someone else makes a smartphone I trust (security and stability), find to be attractive and durable (build quality), and actually look forward to using (OS/ecosystem) - AND they sell it for drastically less money, then myself and millions like me will defect to that mystical company with the low margins and more friendly prices. But since no such product or company exists, I will continue to pay the "Apple tax" for fantastically well-designed devices that work - and I'll feel secure in the knowledge that I need not worry about malware, illicit theft of personal information, or progressively declining performance due to cheap drivers, software, lack of engineering forethought etc.
You can't base your estimate of a products' sales potential solely on your own personal preference. Tim Cook clearly doesn't. I would imagine his next iPhone will be a 5s, not the 5c. Because he specifically would have reason to care about the added security measures and the speed. Others of us don't need a fingerprint reader or play graphics-intensive games and would prefer to spend that "negligible" $100 on groceries. TC sees that and is positioning Apple to provide a device that meets our needs.
The issue with all the detractors who begin their complaints with the question, "Who would pay $550 for THAT?!" is that they mistakenly consider the question rhetorical when it's not. There are many, many answers to that question. I happen to be one of them. I'm bored of the glass and aluminum design and can't wait for my baby blue iPhone 5c since the more-expensive 5s includes several differentiating features that mean nothing to me. A couple more potential buyers are mentioned in this thread. Assuming everyone should get the 5s simply because it's "better" is silly and makes me think of a Best Buy salesman trying to sell an Alienware machine to an elderly person who just wants access to email. I get that it's more advanced...but it's not for me.
The 5c is worth $550 to me and probably a lot of other people too. For me it's simply the upgrade from my iPhone 4 to a 4G/LTE 4" screen phone that is exciting. The 5s isn't worth $650 to me because quite frankly it's not worth $600 to me either. Because it's not the model I choose to fit my needs. Options are good, people.
So we're supposed to believe Apple priced the 5C at $550 because if they priced it any lower they wouldn't have been able to make them fast enough? I guess then I'd tell people who aren't desperate to wait a few months when it comes down in price.
Not a few months, but a little longer. In twelve months when the next product realignment takes place because of new model introductions, the 5c will take the place of the 4S as the new "free on contract" offering.
I doubt if that's the driving force. I think they've decided that they want to broaden the line to appeal to a different group of customers. The lower cost (which is probably not as big a difference as you think) is just a side benefit.
Who are they appealing to at $550? I just saw on another site that French media is reporting low interest in 5C but 5S should do well. If Apple had priced th 5C at $50-$100 cheaper I think it would do better at broadening the customer base.
Apple, of course, could have priced the 5C as 'free' with contract, and/or, let's say, $399 off-contract, but there would be massive global buying, short supply...
And that's bad for Apple how? Apple has always fed off of buying frenzies and short supply of their products.
Quote:
Originally Posted by diplication
Not a few months, but a little longer. In twelve months when the next product realignment takes place because of new model introductions, the 5c will take the place of the 4S as the new "free on contract" offering.
As if Apple has the luxury of waiting a year to price the 5C where it should have been priced now.
In a year it will be old news and no one is going to care what price it is (much like how no one cares or notices the price of the 4S today). Also by then the innards of the phone will be 2 years old. I personally wouldn't want someone to buy an outdated plastic phone even if it were from Apple, and $450 would be far too much for such a device.
Quote:
Originally Posted by diplication
You could be right, but this is the same thing that was said when the original iPhone was introduced - too expensive and niche product.
And Apple promptly lowered the price by $300 weeks after launch....
Who are they appealing to at $550? I just saw on another site that French media is reporting low interest in 5C but 5S should do well. If Apple had priced th 5C at $50-$100 cheaper I think it would do better at broadening the customer base.
The same group that bought the 4S last year or the 4 two years ago for $550.
Who are they appealing to at $550? I just saw on another site that French media is reporting low interest in 5C but 5S should do well. If Apple had priced th 5C at $50-$100 cheaper I think it would do better at broadening the customer base.
This is especially an issue overseas.
I think the $99 on contract price was the right decision but off contract it should have been $399.
Not a few months, but a little longer. In twelve months when the next product realignment takes place because of new model introductions, the 5c will take the place of the 4S as the new "free on contract" offering.
The problem is this US centric on contract mentality. The rest of the world is not as hooked on carrier subsidies. Also some carriers are reducing their subsidies. Bloomberg is reporting two Chinese carriers have done just that. And when that happens its the customer that pays more for the phone up front. Also the trend is starting to get away from carrier subsidies. A lot of people don't want to be locked into two year contacts any more. For them $550 for a plastic phone is expensive.
I think the $99 on contract price was the right decision but off contract it should have been $399.
Except the AT&T/Verizon subsidy is $450. So that basically puts a floor on the off contract price. But why couldn't Apple price the phone at $450 with a $350 carrier subsidy? Bottom line is $549 for a 16GB unlocked plastic phone is expensive. I don't care if its the best fucking plastic phone Jony Ive ever built.
I think they priced it at $550 because they can. Since none of us knows how much the damn thing costs to manufacture or license tech for, let's assume the margin is huge. Fine. They did it because they're Apple and they can get away with it, and that's business. If it fails then maybe they'll lower the price but I'd be surprised to see that happen.
It remains to be seen if Apple can get away with it. The question becomes, is Apple a product company or a profit margin company? Because the 5C pricing wreaks of some bean counter saying 'older models are selling well so we need an older model that is cheaper to make so margins are better'. Now don't get me wrong, I don't doubt that 5C is a great phone, a well built phone. Jony Ive & Co. don't build junk. But I think it's too expensive. Price it $50-$100 cheaper and it would be huge. As it is priced now I think it will be modestly successful.
Or...you can wait until Apple does announce numbers. You know: real data? Something investors in financial markets used to make buy/sell decisions on? Before hysteria and hearsay took over? Sheesh.
Wall Street doesn't have that luxury. If every stock was priced on its current value and latest reported sales, there would be no stock markets and people wouldn't invest in companies. People don't invest $5 to get $5 back, they invest on speculation that their $5 is going to be worth more in the future. The whole trick to it is who can most accurately predict the future. That is analysts' job and its not an easy one.
Wall Street looks at where there's more money to be made. Hmmmm..... phone market stagnant in more advanced countries. Growth market is in Asia, especially China. If Apple makes a low cost cell phone that appeals to the Chinese, they'll make a lot more money (Wall Street doesn't give a rats ass about 'quality' or 'good'- they care about $). Apple indicates they are making a lower cost phone....
Wall Street guesses they will be worth quite a bit more when that happens and starts buying and estimating a higher valuation. Apple delivers.... not what Wall Street expected. "Oh, Apple isn't going for that juicy Chinese market and is giving it up to Android and the Chinese manufacturers. They still make nice phones, but they aren't going to make as much money as we had expected." Stock drops. Its really not an evil process and no one is getting 'punished'
What the jitteriness really shows is no one really knows what to make of the 5c. Fasten your seat belt and hang on for the ride, this one could go either way.
AAPL doesn't deserve the benefit of any doubt. If they were trying to match the bodily functions of death the company couldn't have picked 4 fuglier colors! Any magic this company had is gone and as a Apple early adopter and investor I couldn't be more disgusted with management. We have the worst of Jerry Yang and Steve Balmer in Tim Cook, a guy who couldn't get it right if his life depended on it. Based on its new products I can confidently say APPLE SUCKS!
The problem with the internet is anyone can post a totally ridiculous comment, and unfortunately they often do. The fact is that Apple is still firing on all cylinders beautifully. The fact that you don't like the colors is inconsequential to everything Apple is doing right. The colors will appeal to some, and to others not. However, as DED stated so eloquently this week right here on AI, Apple has done an incredible job of innovating in the last year. If you are unable to see that, then you are not a very smart investor.
Apple indicates they are making a lower cost phone....
Wall Street guesses they will be worth quite a bit more when that happens and starts buying and estimating a higher valuation. Apple delivers.... not what Wall Street expected.
When exactly did Apple officially indicate they were preparing a low-cost iPhone? What's amusing to me about this whole debacle is that they never said any such thing. People just made that up for page views. Correct me if I'm wrong but as far as I can tell the only thing APPLE ever officially indicated was that there was an event on September 10th. Everything else was made up for page views.
Right now China is the REAL target. Right now it's 1984 in China. Not in the Orwellian sense. China is obsessed with status, style, and impressions. The flashier and more costly something is the more desirable it is. America was this way in the 80s (and still is to a certain extent). The Chinese are obsessed with showing off what they got. Trust me. The colorful iPhones (in a palette, by the way, very appealing to the fashion conscious Chinese) with a still premium price will sell very well where it counts. Anyone discounting Apple for this strategy needs to open their eyes to the new world around them and realize that life isn't lived in one's own backyard.
Tim Cook is brilliant.
The new iPhones are spot on for what the market needs.
I think this will all work and work very well.
Well said!!!!! As an expat living in China you are spot on...
Comments
$5 for a cup of coffee isn't cheap either but no one is begging Starbucks to release a $.50 coffee option.
Until someone gets back on his/her regular meds, To The Banned User List Ye Go! (That would be for MJ Web, Esquire)
They will mysteriously go away when they're proven wrong. No mea culpa, no sticking around to stand corrected or take their punishment. They slink away, back to their Android holes. Only to emerge again when there's a future opportunity to spread FUD, in the gap between the start of sales and real numbers.
I just dont get all the attention the 5c is getting. Functionally it isnt much different than the 5 so pricing the 5c at the old phone's price makes sense as it will serve largely the same function from a price point standpoint. I can only assume it is cheaper to make and Cook is trying to improve margins by filling a role by replacing the 5 with a phone with better margins. That leads me to wonder if every prior model is going to be discontinued to be replaced by a "plastic" phone once the new premium phone comes out. Or maybe I'm wrong and they just need the 5C to work in developing countries as a premium phone. Either way expecting big sales seems like a stretch.
Considering later model phones make up half of Apple's smartphone sales if they can improve margins that could have a nice boost to EPS.
I doubt if that's the driving force. I think they've decided that they want to broaden the line to appeal to a different group of customers. The lower cost (which is probably not as big a difference as you think) is just a side benefit.
The day someone else makes a smartphone I trust (security and stability), find to be attractive and durable (build quality), and actually look forward to using (OS/ecosystem) - AND they sell it for drastically less money, then myself and millions like me will defect to that mystical company with the low margins and more friendly prices. But since no such product or company exists, I will continue to pay the "Apple tax" for fantastically well-designed devices that work - and I'll feel secure in the knowledge that I need not worry about malware, illicit theft of personal information, or progressively declining performance due to cheap drivers, software, lack of engineering forethought etc.
You can't base your estimate of a products' sales potential solely on your own personal preference. Tim Cook clearly doesn't. I would imagine his next iPhone will be a 5s, not the 5c. Because he specifically would have reason to care about the added security measures and the speed. Others of us don't need a fingerprint reader or play graphics-intensive games and would prefer to spend that "negligible" $100 on groceries. TC sees that and is positioning Apple to provide a device that meets our needs.
The issue with all the detractors who begin their complaints with the question, "Who would pay $550 for THAT?!" is that they mistakenly consider the question rhetorical when it's not. There are many, many answers to that question. I happen to be one of them. I'm bored of the glass and aluminum design and can't wait for my baby blue iPhone 5c since the more-expensive 5s includes several differentiating features that mean nothing to me. A couple more potential buyers are mentioned in this thread. Assuming everyone should get the 5s simply because it's "better" is silly and makes me think of a Best Buy salesman trying to sell an Alienware machine to an elderly person who just wants access to email. I get that it's more advanced...but it's not for me.
The 5c is worth $550 to me and probably a lot of other people too. For me it's simply the upgrade from my iPhone 4 to a 4G/LTE 4" screen phone that is exciting. The 5s isn't worth $650 to me because quite frankly it's not worth $600 to me either. Because it's not the model I choose to fit my needs. Options are good, people.
Apple, of course, could have priced the 5C as 'free' with contract, and/or, let's say, $399 off-contract, but there would be massive global buying, short supply...
And that's bad for Apple how? Apple has always fed off of buying frenzies and short supply of their products.
Not a few months, but a little longer. In twelve months when the next product realignment takes place because of new model introductions, the 5c will take the place of the 4S as the new "free on contract" offering.
As if Apple has the luxury of waiting a year to price the 5C where it should have been priced now.
In a year it will be old news and no one is going to care what price it is (much like how no one cares or notices the price of the 4S today). Also by then the innards of the phone will be 2 years old. I personally wouldn't want someone to buy an outdated plastic phone even if it were from Apple, and $450 would be far too much for such a device.
You could be right, but this is the same thing that was said when the original iPhone was introduced - too expensive and niche product.
And Apple promptly lowered the price by $300 weeks after launch....
The same group that bought the 4S last year or the 4 two years ago for $550.
And how would the French media know anything?
Who are they appealing to at $550? I just saw on another site that French media is reporting low interest in 5C but 5S should do well. If Apple had priced th 5C at $50-$100 cheaper I think it would do better at broadening the customer base.
This is especially an issue overseas.
Or...you can wait until Apple does announce numbers. You know: real data? Something investors in financial markets used to make buy/sell decisions on? Before hysteria and hearsay took over? Sheesh.
Wall Street doesn't have that luxury. If every stock was priced on its current value and latest reported sales, there would be no stock markets and people wouldn't invest in companies. People don't invest $5 to get $5 back, they invest on speculation that their $5 is going to be worth more in the future. The whole trick to it is who can most accurately predict the future. That is analysts' job and its not an easy one.
Wall Street looks at where there's more money to be made. Hmmmm..... phone market stagnant in more advanced countries. Growth market is in Asia, especially China. If Apple makes a low cost cell phone that appeals to the Chinese, they'll make a lot more money (Wall Street doesn't give a rats ass about 'quality' or 'good'- they care about $). Apple indicates they are making a lower cost phone....
Wall Street guesses they will be worth quite a bit more when that happens and starts buying and estimating a higher valuation. Apple delivers.... not what Wall Street expected. "Oh, Apple isn't going for that juicy Chinese market and is giving it up to Android and the Chinese manufacturers. They still make nice phones, but they aren't going to make as much money as we had expected." Stock drops. Its really not an evil process and no one is getting 'punished'
What the jitteriness really shows is no one really knows what to make of the 5c. Fasten your seat belt and hang on for the ride, this one could go either way.
AAPL doesn't deserve the benefit of any doubt. If they were trying to match the bodily functions of death the company couldn't have picked 4 fuglier colors! Any magic this company had is gone and as a Apple early adopter and investor I couldn't be more disgusted with management. We have the worst of Jerry Yang and Steve Balmer in Tim Cook, a guy who couldn't get it right if his life depended on it. Based on its new products I can confidently say APPLE SUCKS!
The problem with the internet is anyone can post a totally ridiculous comment, and unfortunately they often do. The fact is that Apple is still firing on all cylinders beautifully. The fact that you don't like the colors is inconsequential to everything Apple is doing right. The colors will appeal to some, and to others not. However, as DED stated so eloquently this week right here on AI, Apple has done an incredible job of innovating in the last year. If you are unable to see that, then you are not a very smart investor.
When exactly did Apple officially indicate they were preparing a low-cost iPhone? What's amusing to me about this whole debacle is that they never said any such thing. People just made that up for page views. Correct me if I'm wrong but as far as I can tell the only thing APPLE ever officially indicated was that there was an event on September 10th. Everything else was made up for page views.
Right now China is the REAL target. Right now it's 1984 in China. Not in the Orwellian sense. China is obsessed with status, style, and impressions. The flashier and more costly something is the more desirable it is. America was this way in the 80s (and still is to a certain extent). The Chinese are obsessed with showing off what they got. Trust me. The colorful iPhones (in a palette, by the way, very appealing to the fashion conscious Chinese) with a still premium price will sell very well where it counts. Anyone discounting Apple for this strategy needs to open their eyes to the new world around them and realize that life isn't lived in one's own backyard.
Tim Cook is brilliant.
The new iPhones are spot on for what the market needs.
I think this will all work and work very well.
Well said!!!!! As an expat living in China you are spot on...