Well, you can't buy subsidized phones off-contract.
anantksundaram is correct. The fifty dollar difference is pretty negligible when looking at the Total Cost of Ownership for the device + service.
For subsidized handsets, the price of the hardware is a fraction of the TCO.
Americans pay way too much for cellular service, particular those on postpaid contract plans. The minor Wal-mart discount helps perpetuate that poor value.
And that's just it. The $199 is just a faction of the TCO. For the 2 biggest carrier here in the US, the difference between the TCO with a $199 subsidized phone and without is about ...... $199. The two biggest carrier don't offer a lot of incentive to buy an unlock phone or use and already paid for one, by significantly reducing the cost of the plan. Everyone like to say that you're not really paying only $199 for the phone because you're subsidizing it in the cost of your plan. But in reality, you are paying for the subsidization of a phone even if you didn't get a subsidized phone for $199.
This is just Marketing 101. Price is just one of the levers that a marketer is able to pull to establish and sustain their product in the marketplace. To say that this price reduction is a response to something that a competitor has done is overly simplistic and does not recognize the multifaceted dynamics of the marketplace.
To say that the smartphone market is commodity is also a lazy simplification of reality. Even markets that are much closer to being actual commodity, say gasoline, are not really commodity either. Even though there is very little actual differentiation between the function of a gallon of gas from any vendor the marketers of the larger oil companies still invest huge amounts in marketing outside of the price variable. Same for bottled water.
The last thing that any vendor in any industry ever wants to do is to compete solely on price. Unless you can force your suppliers into continuous cost concessions and beat every micro-cent of cost out of your operations, competing on price alone is a formula for mutually assured destruction. WalMart gets away with it to a large extent because there is no company of similar magnitude who is willing to go toe to toe against WalMart on the everyday low price strategy for commodity-like products. WalMart can continue to crush the smaller competitors into a pulp but if a viable competitor came along to challenge WalMart at the game WalMart is playing where lowest price and commodity-like products are in the mix - not only would WalMart lose but so would the competitor. It would be a death match. Try getting venture capital to fund a company to engage in that business plan.
In the Android smartphone market we're seeing Samsung playing the WalMart strategy against the other Android vendors because of the lack of perceived product differentiation and the fact that Samsung is vertically integrated in components. They can shift costs internally to subsidize their smartphone battles. But so far Samsung has not been able to do this against Apple because price is not the biggest deciding factor - so far. They've been relentlessly copying Apple feature for feature and look & feel not because they covet what Apple is able to deliver technologically, but because they want to remove the perceived product differentiation so they can compete head to head against Apple on price. They must believe they can win a price death match against Apple. Apple is not going to sit back and let that happen, so any notion that Apple is dropping prices on its current product lines in response to Samsung's pricing is crazy. Tim Cook didn't get to where he's at for no good reason. He knows what he's doing and every move he makes is with a clear set on intentions.
Even price is not a "pure" variable either. It's very common for some vendors to religiously hold the line on price and only put the highest end of their product mix into certain markets to maintain brand appeal and exclusively. German automakers are particularly adept at this pricing strategy in the US market.
Not really a big deal when you consider that in a couple months, the 5s will be the $99 (with contract) phone anyway. And you got to figure that anybody whose contract is up, is not going to get a 5s now, not when they can get a 6 (small screen version) for the $199 subsidized price if they wait a couple of months. The real buyers here are the people that were already planning to buy the 5s for $99 (subsidized) when the 6 comes out. They get their iPhone a couple of months early. It's just normal inventory clearance before the release of a new product. Who knows, maybe a price reduction this early might be a sign that the iPhone 6 will be released earlier than rumored. But most likely, Apple is already seeing a huge slow down in iPhones sales as nearly everyone is waiting for the 6 and therefore reduced the price of the current models. Samsung saw the same slow down, for the same reason and responded the same way right after they released their new Galaxy 5 .................. 3 months ago.
Well if Apple follows what they did last year the 5S will be replaced by a plastic "C" variant.
Elsewhere around the world? No. Outside of the USA, subsidized handsets are the exception, not the norm.
Note that international revenue exceeds that of domestic revenue for Apple; that has been the case for many years now.
Who told you that people usually buy new phones unsubsidized outside the US?
Here in Europe I can get a new phone, subsidized, each year if I re-up for another year.
Who told you that people usually buy new phones unsubsidized outside the US?
Here in Europe I can get a new phone, subsidized, each year if I re-up for another year.
He did not say it is not possible to get a subsidized phone in Europe. He said it is the exception, not the norm. Most in Europe recognize the higher cost they pay overall from the subsidized phones so they buy their phones outright and get the substantially less expensive plans.
That is generally considered to be one of the primary reasons the iPhone fares so much poorer in the EU than in the US, or do you suspect some other reason?
Not entirely without precedent. I think around 1 in 5 iPhones sold last year were iPhone 4's being given away for free. The smart thing Apple did is lower the price not when they release their new phones, but sooner.
We are entering the trough in sales before the wave hits. Everyone knows people stop buying iPhones before the new model hits, and when the new model hits sales spike through the roof. This move is a good way to try and encourage people to sign up for phones during the lull.
This isn't for the people that read this site. Seriously, who here is going to buy a phone in the next few months before the iPhone 6 launch?
I was tempted to give in and get a 5S at the $99 price a few weeks back. Largely because I would prefer a 4" model. Decided to wait and see what the 6 looks like, and even if they discontinue the 5S and replace it with a new 5C, stores will still have inventory for a few weeks.
He did not say it is not possible to get a subsidized phone in Europe. He said it is the exception, not the norm. Most in Europe recognize the higher cost they pay overall from the subsidized phones so they buy their phones outright and get the substantially less expensive plans.
That is generally considered to be one of the primary reasons the iPhone fares so much poorer in the EU than in the US, or do you suspect some other reason?
The cost! Apple products are much more expensive in Europe than in the US.
Some are willing and able to pay the higher costs, many are not. Some in Europe are able to get devices from the US so of course their purchases don't appear in Europe statistics.
Normally next quarter (July-Sep) is the lowest for sales for Apple
Normally, in October, these are the prices (the 5c would be .99, but that's an anomaly) we would be seeing for these models.
If 'permanently' is the operative word, Every retailer will match... or eat inventory in the channel. This is effectively an Apple Price drop.
It's pretty obvious that
a) Apple is clearing the channels of products (iMac, iPod, iPhone, and it's early... I wouldn't be surprise back to school deals on MBAs and iPads)
b) This isn't cannabilizing iPhone 6 sales, so much as it's competing with the $19.99 and 69.99 Android phones (on contract) at this moment (Phone buyers who care will wait).
c) Apple is still making a profit at these prices [assembly lines, R&D, supply chain all amortized], and I'm sure that financial wonks have figured out where the price point is.
d) The 5c in its current parts list is gone after september. My guess is 5s is the .99 subsidized phone, or a new 5c is released with TouchID (and the 5s is retired). Ergo: All phones sold in FY 2015 are touchID, meaning that Apple is selling security as a primary differentiator.
And this could infer
d) an earlier release date for the iPhone 6.
e) a strong desire to soft retire the iPhone 4 and 4s's out there for reason's we will find out when iOS 8 is released and we find out what is 'fully supported' on a A5 chip and 3.5" screen.
f) a pending price drop on unsubsidized phones in emerging markets and/or Apple flooding the resale market with iPhone 4/4s phones to the same effect (Every iPhone resold is a potential AppleID, and a potential long term lock-in into the EcoSystem.
g) Apple is going to squeeze the market profit margin and force the bit players to race to the bottom (and out) faster. Whether this is Angela, or if this is Tim, or if this is Maestri (CFO), it's a strong sign that the 'pricing umbrella' just dropped, and Apple will compete on price at the low end, no matter how much you want to enter/stay in(cc: Jeff Bezos)
And that's just it. The $199 is just a faction of the TCO. For the 2 biggest carrier here in the US, the difference between the TCO with a $199 subsidized phone and without is about ...... $199. The two biggest carrier don't offer a lot of incentive to buy an unlock phone or use and already paid for one, by significantly reducing the cost of the plan. Everyone like to say that you're not really paying only $199 for the phone because you're subsidizing it in the cost of your plan. But in reality, you are paying for the subsidization of a phone even if you didn't get a subsidized phone for $199.
Piling on... with an unsub'ed phone, TCO is the same, only with freedom. the vendors don't give you a discount on the plan, you can just switch without penalty.
Therefore the value proposition of a subscription phone for the mass consumer is that $70, $99, $199... up front. If you need a phone, you need a phone now, and you're looking for savings now, and you assume that you won't need to change plans (You can assume that a majority of phones for US 16-19 year olds are bought between May and September, as they become fully 'mobile' or 'free' from their parents).
It may only be 2-5% savings over the life of the plan, but to the consumer, it's saving a week of groceries... today. The mind of the consumer doesn't see TCO... they see TSTS (Total Short Term Savings)
Normally next quarter (July-Sep) is the lowest for sales for Apple
Normally, in October, these are the prices (the 5c would be .99, but that's an anomaly) we would be seeing for these models.
If 'permanently' is the operative word, Every retailer will match... or eat inventory in the channel. This is effectively an Apple Price drop.
It's pretty obvious that
a) Apple is clearing the channels of products (iMac, iPod, iPhone, and it's early... I wouldn't be surprise back to school deals on MBAs and iPads)
b) This isn't cannabilizing iPhone 6 sales, so much as it's competing with the $19.99 and 69.99 Android phones (on contract) at this moment (Phone buyers who care will wait).
c) Apple is still making a profit at these prices [assembly lines, R&D, supply chain all amortized], and I'm sure that financial wonks have figured out where the price point is.
d) The 5c in its current parts list is gone after september. My guess is 5s is the .99 subsidized phone, or a new 5c is released with TouchID (and the 5s is retired). Ergo: All phones sold in FY 2015 are touchID, meaning that Apple is selling security as a primary differentiator.
And this could infer
d) an earlier release date for the iPhone 6.
e) a strong desire to soft retire the iPhone 4 and 4s's out there for reason's we will find out when iOS 8 is released and we find out what is 'fully supported' on a A5 chip and 3.5" screen.
f) a pending price drop on unsubsidized phones in emerging markets and/or Apple flooding the resale market with iPhone 4/4s phones to the same effect (Every iPhone resold is a potential AppleID, and a potential long term lock-in into the EcoSystem.
g) Apple is going to squeeze the market profit margin and force the bit players to race to the bottom (and out) faster. Whether this is Angela, or if this is Tim, or if this is Maestri (CFO), it's a strong sign that the 'pricing umbrella' just dropped, and Apple will compete on price at the low end, no matter how much you want to enter/stay in(cc: Jeff Bezos)
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
Hmmm... Apple''s products are getting cheaper to buy without an actual price decrease.
I'd say Apple is squeezing the juice out of the bottom of the smart phone market without actually releasing a lower-end iPhone.
Apple has always had the ability to cut their product prices because of their bigger profit margins. It would seem they are getting aggressive on pricing (as well as on marketing methods) without telegraphing that they may be behind it... they are letting T-mobile, Walmart, Best Buy and others do the apparent discounting and keep the spotlight away from Apple. It could be a way of avoiding letting their products become commodities...
If Apple lowers the price, they take the hit, as they'd also be wholesaling for less to these other retailers.
Unless there really is cooperation behind the scenes, retailers like WalMart are the ones taking the profit hit with these price discounts.
On the other hand, the retailers are also getting the credit for being customer-centric, while Apple is missing the chance
to score those public-relations points. Wouldn't matter to folks like most of us here, who feel that, for the most part,
we are getting quality for the extra $$$, but the thing I frequently hear is, "yeah, I'd love to buy Apple if I could afford it".
You can't necessarily explain to those folks that life-span/resale/ease-of-use/security all even the balance, so, unless
you are happy with the idea of ignoring a large part of the retail marketplace, an image adjustment might be a good thing.
And that may be what Apple is trying to signal with these various new pricing strategies…I'd just like them to get the credit for it,
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
exactly... But people who are 'looking to buy' are who Apple wants to lock into their ecosystem, and I think the differentiator next year will be TouchID everywhere. Every product sold will be Touch ID enabled. That's my prediction, with the exceptions of the Pad Air, and iPad Mini Rd.
It's a requirement for secure transactions, financially and health info wise, therefore 'press to unlock' will be come the new 'swipe to unlock' motion.
If Apple lowers the price, they take the hit, as they'd also be wholesaling for less to these other retailers.
Unless there really is cooperation behind the scenes, retailers like WalMart are the ones taking the profit hit with these price discounts.
On the other hand, the retailers are also getting the credit for being customer-centric, while Apple is missing the chance
to score those public-relations points. Wouldn't matter to folks like most of us here, who feel that, for the most part,
we are getting quality for the extra $$$, but the thing I frequently hear is, "yeah, I'd love to buy Apple if I could afford it".
You can't necessarily explain to those folks that life-span/resale/ease-of-use/security all even the balance, so, unless
you are happy with the idea of ignoring a large part of the retail marketplace, an image adjustment might be a good thing.
And that may be what Apple is trying to signal with these various new pricing strategies…I'd just like them to get the credit for it,
instead of the WalMarts of the world
the hit will be shared.
I'm sure Walmart got more profit margin from a list price iPhone 5x than any phone before it. the 5c was priced in a manner to allow retail pricing 'flexibility' from the get go. Cutting their profits in half is business as usual for them. Again, it's the back to school season. Walmart wants families to come in to buy a $29 phone and the other $300 of stuff they could buy at Target, Costco, etc, because in the parent's eyes, they are getting a $70 off coupon from Walmart on the get go.
And Target, BestBuy, etc etc will all follow suit, because they want the same customer.
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
That's not my understanding. There are older devices that won't run iOS 8, but those that will will have all the features. Now for iOS 9...
I think a lot of the recent discounting we have seen could be the doing of Angela Ahrendts the new retail chief.
Discounting of this sort is common in retail, and it's something Apple rarely did before she got there.
Angela Ahrendts has nothing to do with Apple's product pricing! She is in charge of real estate and the brick and mortar stores. Apple charges a fixed price to all retailers. Walmart can afford to slash the initial price of the phones at a loss in the hope that they will recover the loss with the cell phone plans. It's business 101. Most companies can't afford to do this like Walmart can.
This should put a little downward pricing pressure on Walmart's value cellular plan, Straight Talk. 3GB at high speed per month, then throttles down. Unlimited text/talk. The bill, with taxes, is under $50/month and you can buy 3/6/12 month packages for discounts. The catch is if you want the latest iPhone 5S w/ 64gb, you have to purchase it from Apple sans plan.
My beef is the high-end phones are often left out of these plans.
The catch is if you want the latest iPhone 5S w/ 64gb, you have to purchase it from Apple sans plan.
If you buy it from Apple, you take it to them, they give you a SIM, and you’re stuck on AT&T’s network. If you buy it from THEM, they use the internal CDMA and you get Verizon.
What you mean is that you have to buy it outright, full price.
Comments
Well, you can't buy subsidized phones off-contract.
anantksundaram is correct. The fifty dollar difference is pretty negligible when looking at the Total Cost of Ownership for the device + service.
For subsidized handsets, the price of the hardware is a fraction of the TCO.
Americans pay way too much for cellular service, particular those on postpaid contract plans. The minor Wal-mart discount helps perpetuate that poor value.
And that's just it. The $199 is just a faction of the TCO. For the 2 biggest carrier here in the US, the difference between the TCO with a $199 subsidized phone and without is about ...... $199. The two biggest carrier don't offer a lot of incentive to buy an unlock phone or use and already paid for one, by significantly reducing the cost of the plan. Everyone like to say that you're not really paying only $199 for the phone because you're subsidizing it in the cost of your plan. But in reality, you are paying for the subsidization of a phone even if you didn't get a subsidized phone for $199.
This is just Marketing 101. Price is just one of the levers that a marketer is able to pull to establish and sustain their product in the marketplace. To say that this price reduction is a response to something that a competitor has done is overly simplistic and does not recognize the multifaceted dynamics of the marketplace.
To say that the smartphone market is commodity is also a lazy simplification of reality. Even markets that are much closer to being actual commodity, say gasoline, are not really commodity either. Even though there is very little actual differentiation between the function of a gallon of gas from any vendor the marketers of the larger oil companies still invest huge amounts in marketing outside of the price variable. Same for bottled water.
The last thing that any vendor in any industry ever wants to do is to compete solely on price. Unless you can force your suppliers into continuous cost concessions and beat every micro-cent of cost out of your operations, competing on price alone is a formula for mutually assured destruction. WalMart gets away with it to a large extent because there is no company of similar magnitude who is willing to go toe to toe against WalMart on the everyday low price strategy for commodity-like products. WalMart can continue to crush the smaller competitors into a pulp but if a viable competitor came along to challenge WalMart at the game WalMart is playing where lowest price and commodity-like products are in the mix - not only would WalMart lose but so would the competitor. It would be a death match. Try getting venture capital to fund a company to engage in that business plan.
In the Android smartphone market we're seeing Samsung playing the WalMart strategy against the other Android vendors because of the lack of perceived product differentiation and the fact that Samsung is vertically integrated in components. They can shift costs internally to subsidize their smartphone battles. But so far Samsung has not been able to do this against Apple because price is not the biggest deciding factor - so far. They've been relentlessly copying Apple feature for feature and look & feel not because they covet what Apple is able to deliver technologically, but because they want to remove the perceived product differentiation so they can compete head to head against Apple on price. They must believe they can win a price death match against Apple. Apple is not going to sit back and let that happen, so any notion that Apple is dropping prices on its current product lines in response to Samsung's pricing is crazy. Tim Cook didn't get to where he's at for no good reason. He knows what he's doing and every move he makes is with a clear set on intentions.
Even price is not a "pure" variable either. It's very common for some vendors to religiously hold the line on price and only put the highest end of their product mix into certain markets to maintain brand appeal and exclusively. German automakers are particularly adept at this pricing strategy in the US market.
Who told you that people usually buy new phones unsubsidized outside the US?
Here in Europe I can get a new phone, subsidized, each year if I re-up for another year.
The iPhone 6 is going to be huge. "Huger" than huge!
Figuratively and literally!
Who told you that people usually buy new phones unsubsidized outside the US?
Here in Europe I can get a new phone, subsidized, each year if I re-up for another year.
He did not say it is not possible to get a subsidized phone in Europe. He said it is the exception, not the norm. Most in Europe recognize the higher cost they pay overall from the subsidized phones so they buy their phones outright and get the substantially less expensive plans.
That is generally considered to be one of the primary reasons the iPhone fares so much poorer in the EU than in the US, or do you suspect some other reason?
Not entirely without precedent. I think around 1 in 5 iPhones sold last year were iPhone 4's being given away for free. The smart thing Apple did is lower the price not when they release their new phones, but sooner.
We are entering the trough in sales before the wave hits. Everyone knows people stop buying iPhones before the new model hits, and when the new model hits sales spike through the roof. This move is a good way to try and encourage people to sign up for phones during the lull.
This isn't for the people that read this site. Seriously, who here is going to buy a phone in the next few months before the iPhone 6 launch?
The cost! Apple products are much more expensive in Europe than in the US.
Some are willing and able to pay the higher costs, many are not. Some in Europe are able to get devices from the US so of course their purchases don't appear in Europe statistics.
Note:
Normally next quarter (July-Sep) is the lowest for sales for Apple
Normally, in October, these are the prices (the 5c would be .99, but that's an anomaly) we would be seeing for these models.
If 'permanently' is the operative word, Every retailer will match... or eat inventory in the channel. This is effectively an Apple Price drop.
It's pretty obvious that
a) Apple is clearing the channels of products (iMac, iPod, iPhone, and it's early... I wouldn't be surprise back to school deals on MBAs and iPads)
b) This isn't cannabilizing iPhone 6 sales, so much as it's competing with the $19.99 and 69.99 Android phones (on contract) at this moment (Phone buyers who care will wait).
c) Apple is still making a profit at these prices [assembly lines, R&D, supply chain all amortized], and I'm sure that financial wonks have figured out where the price point is.
d) The 5c in its current parts list is gone after september. My guess is 5s is the .99 subsidized phone, or a new 5c is released with TouchID (and the 5s is retired). Ergo: All phones sold in FY 2015 are touchID, meaning that Apple is selling security as a primary differentiator.
And this could infer
d) an earlier release date for the iPhone 6.
e) a strong desire to soft retire the iPhone 4 and 4s's out there for reason's we will find out when iOS 8 is released and we find out what is 'fully supported' on a A5 chip and 3.5" screen.
f) a pending price drop on unsubsidized phones in emerging markets and/or Apple flooding the resale market with iPhone 4/4s phones to the same effect (Every iPhone resold is a potential AppleID, and a potential long term lock-in into the EcoSystem.
g) Apple is going to squeeze the market profit margin and force the bit players to race to the bottom (and out) faster. Whether this is Angela, or if this is Tim, or if this is Maestri (CFO), it's a strong sign that the 'pricing umbrella' just dropped, and Apple will compete on price at the low end, no matter how much you want to enter/stay in(cc: Jeff Bezos)
And that's just it. The $199 is just a faction of the TCO. For the 2 biggest carrier here in the US, the difference between the TCO with a $199 subsidized phone and without is about ...... $199. The two biggest carrier don't offer a lot of incentive to buy an unlock phone or use and already paid for one, by significantly reducing the cost of the plan. Everyone like to say that you're not really paying only $199 for the phone because you're subsidizing it in the cost of your plan. But in reality, you are paying for the subsidization of a phone even if you didn't get a subsidized phone for $199.
Piling on... with an unsub'ed phone, TCO is the same, only with freedom. the vendors don't give you a discount on the plan, you can just switch without penalty.
Therefore the value proposition of a subscription phone for the mass consumer is that $70, $99, $199... up front. If you need a phone, you need a phone now, and you're looking for savings now, and you assume that you won't need to change plans (You can assume that a majority of phones for US 16-19 year olds are bought between May and September, as they become fully 'mobile' or 'free' from their parents).
It may only be 2-5% savings over the life of the plan, but to the consumer, it's saving a week of groceries... today. The mind of the consumer doesn't see TCO... they see TSTS (Total Short Term Savings)
Note:
Normally next quarter (July-Sep) is the lowest for sales for Apple
Normally, in October, these are the prices (the 5c would be .99, but that's an anomaly) we would be seeing for these models.
If 'permanently' is the operative word, Every retailer will match... or eat inventory in the channel. This is effectively an Apple Price drop.
It's pretty obvious that
a) Apple is clearing the channels of products (iMac, iPod, iPhone, and it's early... I wouldn't be surprise back to school deals on MBAs and iPads)
b) This isn't cannabilizing iPhone 6 sales, so much as it's competing with the $19.99 and 69.99 Android phones (on contract) at this moment (Phone buyers who care will wait).
c) Apple is still making a profit at these prices [assembly lines, R&D, supply chain all amortized], and I'm sure that financial wonks have figured out where the price point is.
d) The 5c in its current parts list is gone after september. My guess is 5s is the .99 subsidized phone, or a new 5c is released with TouchID (and the 5s is retired). Ergo: All phones sold in FY 2015 are touchID, meaning that Apple is selling security as a primary differentiator.
And this could infer
d) an earlier release date for the iPhone 6.
e) a strong desire to soft retire the iPhone 4 and 4s's out there for reason's we will find out when iOS 8 is released and we find out what is 'fully supported' on a A5 chip and 3.5" screen.
f) a pending price drop on unsubsidized phones in emerging markets and/or Apple flooding the resale market with iPhone 4/4s phones to the same effect (Every iPhone resold is a potential AppleID, and a potential long term lock-in into the EcoSystem.
g) Apple is going to squeeze the market profit margin and force the bit players to race to the bottom (and out) faster. Whether this is Angela, or if this is Tim, or if this is Maestri (CFO), it's a strong sign that the 'pricing umbrella' just dropped, and Apple will compete on price at the low end, no matter how much you want to enter/stay in(cc: Jeff Bezos)
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
Hmmm... Apple''s products are getting cheaper to buy without an actual price decrease.
I'd say Apple is squeezing the juice out of the bottom of the smart phone market without actually releasing a lower-end iPhone.
Apple has always had the ability to cut their product prices because of their bigger profit margins. It would seem they are getting aggressive on pricing (as well as on marketing methods) without telegraphing that they may be behind it... they are letting T-mobile, Walmart, Best Buy and others do the apparent discounting and keep the spotlight away from Apple. It could be a way of avoiding letting their products become commodities...
If Apple lowers the price, they take the hit, as they'd also be wholesaling for less to these other retailers.
Unless there really is cooperation behind the scenes, retailers like WalMart are the ones taking the profit hit with these price discounts.
On the other hand, the retailers are also getting the credit for being customer-centric, while Apple is missing the chance
to score those public-relations points. Wouldn't matter to folks like most of us here, who feel that, for the most part,
we are getting quality for the extra $$$, but the thing I frequently hear is, "yeah, I'd love to buy Apple if I could afford it".
You can't necessarily explain to those folks that life-span/resale/ease-of-use/security all even the balance, so, unless
you are happy with the idea of ignoring a large part of the retail marketplace, an image adjustment might be a good thing.
And that may be what Apple is trying to signal with these various new pricing strategies…I'd just like them to get the credit for it,
instead of the WalMarts of the world
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
exactly... But people who are 'looking to buy' are who Apple wants to lock into their ecosystem, and I think the differentiator next year will be TouchID everywhere. Every product sold will be Touch ID enabled. That's my prediction, with the exceptions of the Pad Air, and iPad Mini Rd.
It's a requirement for secure transactions, financially and health info wise, therefore 'press to unlock' will be come the new 'swipe to unlock' motion.
If Apple lowers the price, they take the hit, as they'd also be wholesaling for less to these other retailers.
Unless there really is cooperation behind the scenes, retailers like WalMart are the ones taking the profit hit with these price discounts.
On the other hand, the retailers are also getting the credit for being customer-centric, while Apple is missing the chance
to score those public-relations points. Wouldn't matter to folks like most of us here, who feel that, for the most part,
we are getting quality for the extra $$$, but the thing I frequently hear is, "yeah, I'd love to buy Apple if I could afford it".
You can't necessarily explain to those folks that life-span/resale/ease-of-use/security all even the balance, so, unless
you are happy with the idea of ignoring a large part of the retail marketplace, an image adjustment might be a good thing.
And that may be what Apple is trying to signal with these various new pricing strategies…I'd just like them to get the credit for it,
instead of the WalMarts of the world
the hit will be shared.
I'm sure Walmart got more profit margin from a list price iPhone 5x than any phone before it. the 5c was priced in a manner to allow retail pricing 'flexibility' from the get go. Cutting their profits in half is business as usual for them. Again, it's the back to school season. Walmart wants families to come in to buy a $29 phone and the other $300 of stuff they could buy at Target, Costco, etc, because in the parent's eyes, they are getting a $70 off coupon from Walmart on the get go.
And Target, BestBuy, etc etc will all follow suit, because they want the same customer.
Isnt that "Talk Like a Pirate Day"?
Arg!!!
I suspect the A5 driven products will get as many iOS 8 features as the iPhone 4 got from iOS 7; relatively few. The iPad Mini may be an exception, but I would bet this update to be EOL for the iPad 2, iPad Mini, iPod Touch 5, etc.
That's not my understanding. There are older devices that won't run iOS 8, but those that will will have all the features. Now for iOS 9...
This should put a little downward pricing pressure on Walmart's value cellular plan, Straight Talk. 3GB at high speed per month, then throttles down. Unlimited text/talk. The bill, with taxes, is under $50/month and you can buy 3/6/12 month packages for discounts. The catch is if you want the latest iPhone 5S w/ 64gb, you have to purchase it from Apple sans plan.
My beef is the high-end phones are often left out of these plans.
If you buy it from Apple, you take it to them, they give you a SIM, and you’re stuck on AT&T’s network. If you buy it from THEM, they use the internal CDMA and you get Verizon.
What you mean is that you have to buy it outright, full price.