I can't believe people are saying iPhone buyers are cheap. It is a fact that other companies are making nice phones for much cheaper than iPhone. Not as good as iPhone but still decent phones. I want to see Apple get in to other markets and not just cling on to high margin iPhones forever.
Show me a single analysis or industry insider who thinks the low memory models have higher margins. You won't fine any.
Literally 100% of the analysis state the high memory models have higher margins. Its called up-sell for a reason. Its literally the only thing Analysis can agree on. High memory models = higher margins.
This isn't 1994. Memory is not that expensive. Estimate is 42 cents per GB and less because of volume purchase.
I don't really care about what they say, they're wrong all the time. But I'll say again, it could be true, but we don't "know" that its true. Good memory is expensive. Cheap memory isn't.
Look at the pricing for the fastest SD cards. They have some other features, in some cases, but this is good retail pricing.
Why couldn’t the top tech companies (Apple, Google, Microsoft) cooperate on a new cellular network to compete against AT&T and Verizon? Form a consortium and buy Sprint or T-Mobile or both. Still make your phones available to the existing carriers but offer the enhanced services and features that the big carriers refuse to offer.
Nothing preventing them, but it wouldn't be the best use of their money, and can of course would have negative consequences, beyond suggesting that three intense competitors should go into business together. And that is only for the US market - what about the rest of the world?
Well, for me, I hope they update the 5S to includes some of the goodies of the 6S. For my personal use the 4 inch screen (shoot Id be tempted to go back to 3.5 inch) is best; a larger phone/screen is too cumbersome... for my purposes(YMMV).
(I do have 'the other guys' large screen phone for work, and for that purpose, larger is fine)
2GB RAM is no brainer. Now all we need is bump 16GB to 32GB. If Apple is all about delivering the best products and user experience that should be a no brainer too.
I don't think there'll be such move: 16GB-32GB ever. Apple want you to buy 64GB version by making it look cheaper to go from 16GB-64GB. Making 32GB will reduce their margin because people will fall back to 32GB instead of 64GB and that's the last thing they want to do.
Dear Mr. Operators. You had years to attempt a mutually-beneficial relationship with your mobile customers prior to the iPhone. Instead, you took every opportunity to gouge and milk your customer for everything. You have failed miserably. You provide the "dumb pipe". That is the only relationship I - and many - mobile users have with you. I do not want anything more from you. You will not get anything more from me. Do that, and do it right, and you'll keep my business. Fail me, and I will look elsewhere... easily.
We can all thank Apple for blazing the way, wrestling control away from the telecoms and back to the consumer. Everyone - including Fandroids - should be grateful for the disruption that Apple has introduced to what was once a stranglehold.
but but but...with Apple SIM, people won't be able to use Android Pay which requires special SIM from carriers.
There'a a story in one of the pop economics books about how bread machines weren't selling when they came on the market. Basically nobody knew if they were worth the price or not. There was one model which cost ( if I recall correctly) $349. So the manufacturers produced a gimped model -- which could bake a half loaf -- at $239. The top model cost $439. Slightly more bells and whistles.
Result -- the middle priced machine flew of the shelves. This is Apple's strategy with the cheap iPhone. I used to buy the cheapest iphone but 16G wasn't enough so I got the 64G iphone 6 I am not even filling 32G yet.
They will move from this 16G entry only when they can go 32G, 128G, 256G.
Gimp the lower model, Drive custom to the middle model. It works.
And Samdung is selling you cheap POS plastic phones.
Its not high margin. Those 'high margins' is what allows Apple to provide the best ecosystem, keep the best talent, update the OS, great customer service, ect. All those other brands that sell cheap phones don't pay a CENT to maintain the OS, AppStore, ect.
AGain HTC, Windows, Xiamoi, Acer, WTF China, Sony brand are ALL LOSING MONEY. Not charging a good margin is not a sustainable business model for smartphones unless you pump endless ads to the user (google) or sell cheap POS plastic phones and spend $30 billion on advertising (Shamedung)
Again Apples profit margin is only 20%. That's lower than Microsoft and Google.
That's why I said I want Apple to get in other areas so they're not so dependent on high margin iPhones.
Ok...why don't Apple become their own carrier? I mean build ground up or buy TMO. Beef up their network, offer great data plans and maybe offer modest discounts for iPhone users switching from verizon or att.
Am I missing something impossible here? Folks would switch on brand loyalty alone.
Is that a money maker. Seems pretty capital intensive to me.
The 16GB model has the LOWEST MARGIN. Apple is making the least profit selling those 16GB phones.
In other words whoever buys the 16GB is acutally getting an AWESOME deal.
The guys who buy the 64/128GB models are actually subsidzing the 16GB buyers. AND THATS A FACT.
You are not really capable of reading and understanding at the same time, huh. I said nothing in my post ( nor have most of the people who responded to you ) about the entry machine being a bad deal for customers. I said the 16G is designed to upsell the 64G to make the higher margins you are so concerned about.
No. The 16GB is designed for people who only need 16GB or only can afford $650.
Apple studies buyer behavior, demand, price elasticity, ect.
The bottom line Apple concluded that starting the iPhone at 32GB was not a good decision.
To conclude that the 16GB phone only exists to upsale other phones is ridiculous. Will some people decide that the 64GB is the better value? Of course. It all depends on your needs and usages. Now if Apple sold a 8GB iPhone6 then you would have a point. But Apple sold over 10,000,000 16GB phones so your argument holds no water.
I don't know where you got those figures. I know that in the recent conference calls they were "pleased" with the product mix which brought in higher margins. in any case if 10M is true its just 13% of the 73M in that last Q and I bet the entry level phones were higher percentage wise in previous years, even the 5C.
Dear Mr. Operators. You had years to attempt a mutually-beneficial relationship with your mobile customers prior to the iPhone. Instead, you took every opportunity to gouge and milk your customer for everything. You have failed miserably. You provide the "dumb pipe". That is the only relationship I - and many - mobile users have with you. I do not want anything more from you. You will not get anything more from me. Do that, and do it right, and you'll keep my business. Fail me, and I will look elsewhere... easily.
We can all thank Apple for blazing the way, wrestling control away from the telecoms and back to the consumer. Everyone - including Fandroids - should be grateful for the disruption that Apple has introduced to what was once a stranglehold.
Yep, noone else has done one fucking iota of effort to take control away. Quite the opposite actually. Google, and Android OEMS have given MORE power to carriers, sucking up them, in order to get them to push their phones instead of iPhones (a shitload of carrier branding, carrier specific apps and crapware, payment systems tied to the sim card, etc). They don't give a **** about the consumer beyond getting the carriers to shove their phones and their throats. I shudder to think where we'd be without Apple to actually take a stand on this stuff.
Quote:
Originally Posted by sog35
why stop at 32GB? Why not 128GB? That would be an even better user experience. What about drop the price by $200? even better?
/s
When will people learn. Apple needs high margins to keep the eco-sytem and R&D and customer service running at a top level.
IF YOU WANT TO PLAY YOU GOTTA PAY.
YOU GET WHAT YOU PAY FOR.
If you want cheap shit go buy android.
Normally, I'd agree with you. However, in this specific case I think it IS in Apple's best interests to increase the minimum storage level, both in hardware (to 32GB) and the free tier of iCloud (to 10GB). Not because I feel I'm entitled to it, or that consumers "deserve" it, but because based on my personal experience with the people around me, people are pretty fucking stupid, as well as cheap. Their phones will filll up, they'll start getting iCloud error messages, and they will blame Apple, get confused, and frustrated at the company, lowering satisfaction levels. Not to mention OS updates, and the fact that many people simply do not update because their 16GB devices won't allow them to. That's the main reason for the slower adoption of iOS8, and something that harms Apple. I'm sure you know that "margin" isn't the main factor to Apple's success, and sometimes a small hit on margin to improve customer experience is smart good tradeoff. It's not a ridiculous concept- the first iPhone came with 4GB of storage. We've been at 16GB for several years now, even though the software and storage needs has been expanding, so we might be due for a bump.
Nothing preventing them, but it wouldn't be the best use of their money, and can of course would have negative consequences, beyond suggesting that three intense competitors should go into business together. And that is only for the US market - what about the rest of the world?
I believe that Google recently made an announcement of this kind.
One lesson you're tought early on in business is to not go into business in competition with your biggest customers. If Google does start a cell service, that's what they will be doing.
Yep, noone else has done one fucking iota of effort to take control away. Quite the opposite actually. Google, and Android OEMS have given MORE power to carriers, sucking up them, in order to get them to push their phones instead of iPhones (a shitload of carrier branding, carrier specific apps and crapware, payment systems tied to the sim card, etc). They don't give a **** about the consumer beyond getting the carriers to shove their phones and their throats. I shudder to think where we'd be without Apple to actually take a stand on this stuff.
We'd still be raped by high text-message fees, a crapload of badly-designed, barely working apps that would only work with that one phone and only available from that one wireless carrier.
It was horrible prior to the iPhone. I tuned-out what it used to be like. I would never want to go back to that. Feature phones were fine, and my favorite phone back then was the Motorola StarTac. Loved it, and it was basic. My last phone prior to the iPhone was the Motorola Razr and while it was fine for phone calls and I did like the design, the software on the phone sucked donkey-balls big-time. Apps were horrible, and the entire experience outside of using it as a phone were horrible. That defined the entire industry, and you're only option was to only deal with the carrier.
Google/Android just sucked-up to them too... Allowing carriers to essentially hijack their phones and put whatever bloatware/crapware on it in the hopes that consumers would be suckered into paying for extra features that didn't add one iota of value. Shame on them.
I remember some articles years ago about some carriers demanding Apple allow carriers to pre-install software, disable iMessage, or even allow them to put their company logo on the phone... and Apple just giving them the middle-finger, essentially telling the carriers to go fcuk themselves. They no longer had the ball, and it was sweet watching Apple hammer them. They deserved it. All it took was a veiled threat to pull the iPhone, or give preference to another carrier and that was enough to shut their pie-holes. Lovely.
Google would never have that kind of pull with the carriers. Google is the lowest denominator. They just care about selling you, the consumer as their product.
Your hopeless. Just find me A SINGLE ANAYLYSIS THAT SAYS THE LOW MEMORY IPHONES HAVE BETTER MARGINS. JUST FIND ME ONE!!!!
You don't think these analysis have a very good estimate on how much NAND cost Apple? Of course they do. They have contacts are they themself cover these memory chip companies.
And why are you comparing an SD card to the HUNDREDS OF MILLIONS OF UNITS Apple buys.
But go ahead and live in your dream world where Apple buys 132GB of Memory for $200.
Boy, you just don't get it, do you? Before you started this, I had already said that Apple could be subsidizing their $649 model with NAND upgrades. All I'm saying is that we don't have the numbers. Apple has never said, and their suppliers haven't either. So every article and number you see, is pure speculation. They don't know. What is it with you? Don't you understand that? They may be right, but they don't KNOW. That 'sall I'm saying about that.. Why are you in such a snit about that?
The other part is that fast, reliable NAND doesn't cost 45 cents a GB. It costs more. These memory cards I showed are evidence that you can't sell this for $20. Yes, these cards don't sell in the hundreds of millions, but many do sell in the millions, particularly SanDisk and other large, well known manufacturers. And if you think that prices for parts continues to go down to infinity the more you buy, it doesn't work that way. Pricing for parts is on a sliding scale. Once you begin to get to really large numbers, the drops in price begin to become minuscule. There is a bottom to pricing. Each chip costs so much to produce. As some point, these production costs stop declining. So maybe a hundred thousand chips could be, just to just use an easy number, $15. One million might be $11. Ten million may cost $9.50. A hundred million might cost $9.00. Two hundred million could be $8.85, and so on.
I mean WTF guy! If it was so easy for Apple to find another product line that produces $100,000,000,000 in revenue and $30,000,000,000 in profit they would do it.
That's like telling Exxon I wish they were not so depended on Gas and find another business so they can sell gas for 99 cents.
Last year Tim Cook told the WSJD that iPhone would be Apple's main revenue driver for the next 5 years. If Apple execs are not thinking about what comes after iPhone they're stupid.
My point is a ton of people bought 16GB phones. It is NOT just to upsell the 64GB phone. There is real demand for the 16GB and its an awesome deal if you don't need to much memory.
You have no idea how many people bought 16GB iPhones. All we know is ASPs Apple reported were higher. Which isn't surprising as I'll bet lots of people jumped to 64GB as they didn't have enough space to update to iOS 8. There were LOTS of complaints about that on Twitter. Most people upgrade OTA and I'll bet a large percentage of iOS users don't even know about being able to update software via iTunes....because they've never had to do it before. Believe me Apple doesn't want another year of slower OS upgrades because of storage issues. But while I think they should increase base storage most likely they're just cracking the whip on software engineers to make the OTA download smaller. But that still doesn't solve for the "documents & data" components of apps that can't be cleared witthout deleting and reinstalling the app.
Comments
Screw the carriers! I like Apple but despise the carriers! The less I have to deal with them the better!
why stop at 32GB? Why not 128GB? That would be an even better user experience. What about drop the price by $200? even better?
/s
When will people learn. Apple needs high margins to keep the eco-sytem and R&D and customer service running at a top level.
IF YOU WANT TO PLAY YOU GOTTA PAY.
YOU GET WHAT YOU PAY FOR.
If you want cheap shit go buy android.
Didn't someone once say great products and great user experience naturally bring high profits?
I don't really care about what they say, they're wrong all the time. But I'll say again, it could be true, but we don't "know" that its true. Good memory is expensive. Cheap memory isn't.
Look at the pricing for the fastest SD cards. They have some other features, in some cases, but this is good retail pricing.
http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&IsNodeId=1&N=100007962 600006200 600006211 600006188 4017 100007962+600006188+600006200+600006211+&cm_sp=Cat-Flash-Memory-Readers_2-_-VisNav-_-SD
Why couldn’t the top tech companies (Apple, Google, Microsoft) cooperate on a new cellular network to compete against AT&T and Verizon? Form a consortium and buy Sprint or T-Mobile or both. Still make your phones available to the existing carriers but offer the enhanced services and features that the big carriers refuse to offer.
Nothing preventing them, but it wouldn't be the best use of their money, and can of course would have negative consequences, beyond suggesting that three intense competitors should go into business together. And that is only for the US market - what about the rest of the world?
Well, for me, I hope they update the 5S to includes some of the goodies of the 6S. For my personal use the 4 inch screen (shoot Id be tempted to go back to 3.5 inch) is best; a larger phone/screen is too cumbersome... for my purposes(YMMV).
(I do have 'the other guys' large screen phone for work, and for that purpose, larger is fine)
2GB RAM is no brainer. Now all we need is bump 16GB to 32GB. If Apple is all about delivering the best products and user experience that should be a no brainer too.
I don't think there'll be such move: 16GB-32GB ever. Apple want you to buy 64GB version by making it look cheaper to go from 16GB-64GB. Making 32GB will reduce their margin because people will fall back to 32GB instead of 64GB and that's the last thing they want to do.
Dear Mr. Operators. You had years to attempt a mutually-beneficial relationship with your mobile customers prior to the iPhone. Instead, you took every opportunity to gouge and milk your customer for everything. You have failed miserably. You provide the "dumb pipe". That is the only relationship I - and many - mobile users have with you. I do not want anything more from you. You will not get anything more from me. Do that, and do it right, and you'll keep my business. Fail me, and I will look elsewhere... easily.
We can all thank Apple for blazing the way, wrestling control away from the telecoms and back to the consumer. Everyone - including Fandroids - should be grateful for the disruption that Apple has introduced to what was once a stranglehold.
but but but...with Apple SIM, people won't be able to use Android Pay which requires special SIM from carriers.
Result -- the middle priced machine flew of the shelves. This is Apple's strategy with the cheap iPhone. I used to buy the cheapest iphone but 16G wasn't enough so I got the 64G iphone 6 I am not even filling 32G yet.
They will move from this 16G entry only when they can go 32G, 128G, 256G.
Gimp the lower model, Drive custom to the middle model. It works.
That's why I said I want Apple to get in other areas so they're not so dependent on high margin iPhones.
Is that a money maker. Seems pretty capital intensive to me.
You are not really capable of reading and understanding at the same time, huh. I said nothing in my post ( nor have most of the people who responded to you ) about the entry machine being a bad deal for customers. I said the 16G is designed to upsell the 64G to make the higher margins you are so concerned about.
I don't know where you got those figures. I know that in the recent conference calls they were "pleased" with the product mix which brought in higher margins. in any case if 10M is true its just 13% of the 73M in that last Q and I bet the entry level phones were higher percentage wise in previous years, even the 5C.
Dear Mr. Operators. You had years to attempt a mutually-beneficial relationship with your mobile customers prior to the iPhone. Instead, you took every opportunity to gouge and milk your customer for everything. You have failed miserably. You provide the "dumb pipe". That is the only relationship I - and many - mobile users have with you. I do not want anything more from you. You will not get anything more from me. Do that, and do it right, and you'll keep my business. Fail me, and I will look elsewhere... easily.
We can all thank Apple for blazing the way, wrestling control away from the telecoms and back to the consumer. Everyone - including Fandroids - should be grateful for the disruption that Apple has introduced to what was once a stranglehold.
Yep, noone else has done one fucking iota of effort to take control away. Quite the opposite actually. Google, and Android OEMS have given MORE power to carriers, sucking up them, in order to get them to push their phones instead of iPhones (a shitload of carrier branding, carrier specific apps and crapware, payment systems tied to the sim card, etc). They don't give a **** about the consumer beyond getting the carriers to shove their phones and their throats. I shudder to think where we'd be without Apple to actually take a stand on this stuff.
why stop at 32GB? Why not 128GB? That would be an even better user experience. What about drop the price by $200? even better?
/s
When will people learn. Apple needs high margins to keep the eco-sytem and R&D and customer service running at a top level.
IF YOU WANT TO PLAY YOU GOTTA PAY.
YOU GET WHAT YOU PAY FOR.
If you want cheap shit go buy android.
Normally, I'd agree with you. However, in this specific case I think it IS in Apple's best interests to increase the minimum storage level, both in hardware (to 32GB) and the free tier of iCloud (to 10GB). Not because I feel I'm entitled to it, or that consumers "deserve" it, but because based on my personal experience with the people around me, people are pretty fucking stupid, as well as cheap. Their phones will filll up, they'll start getting iCloud error messages, and they will blame Apple, get confused, and frustrated at the company, lowering satisfaction levels. Not to mention OS updates, and the fact that many people simply do not update because their 16GB devices won't allow them to. That's the main reason for the slower adoption of iOS8, and something that harms Apple. I'm sure you know that "margin" isn't the main factor to Apple's success, and sometimes a small hit on margin to improve customer experience is smart good tradeoff. It's not a ridiculous concept- the first iPhone came with 4GB of storage. We've been at 16GB for several years now, even though the software and storage needs has been expanding, so we might be due for a bump.
I believe that Google recently made an announcement of this kind.
One lesson you're tought early on in business is to not go into business in competition with your biggest customers. If Google does start a cell service, that's what they will be doing.
but but but...with Apple SIM, people won't be able to use Android Pay which requires special SIM from carriers.
Really? I haven't heard that one... why a SIM change?
Yep, noone else has done one fucking iota of effort to take control away. Quite the opposite actually. Google, and Android OEMS have given MORE power to carriers, sucking up them, in order to get them to push their phones instead of iPhones (a shitload of carrier branding, carrier specific apps and crapware, payment systems tied to the sim card, etc). They don't give a **** about the consumer beyond getting the carriers to shove their phones and their throats. I shudder to think where we'd be without Apple to actually take a stand on this stuff.
We'd still be raped by high text-message fees, a crapload of badly-designed, barely working apps that would only work with that one phone and only available from that one wireless carrier.
It was horrible prior to the iPhone. I tuned-out what it used to be like. I would never want to go back to that. Feature phones were fine, and my favorite phone back then was the Motorola StarTac. Loved it, and it was basic. My last phone prior to the iPhone was the Motorola Razr and while it was fine for phone calls and I did like the design, the software on the phone sucked donkey-balls big-time. Apps were horrible, and the entire experience outside of using it as a phone were horrible. That defined the entire industry, and you're only option was to only deal with the carrier.
Google/Android just sucked-up to them too... Allowing carriers to essentially hijack their phones and put whatever bloatware/crapware on it in the hopes that consumers would be suckered into paying for extra features that didn't add one iota of value. Shame on them.
I remember some articles years ago about some carriers demanding Apple allow carriers to pre-install software, disable iMessage, or even allow them to put their company logo on the phone... and Apple just giving them the middle-finger, essentially telling the carriers to go fcuk themselves. They no longer had the ball, and it was sweet watching Apple hammer them. They deserved it. All it took was a veiled threat to pull the iPhone, or give preference to another carrier and that was enough to shut their pie-holes. Lovely.
Google would never have that kind of pull with the carriers. Google is the lowest denominator. They just care about selling you, the consumer as their product.
Boy, you just don't get it, do you? Before you started this, I had already said that Apple could be subsidizing their $649 model with NAND upgrades. All I'm saying is that we don't have the numbers. Apple has never said, and their suppliers haven't either. So every article and number you see, is pure speculation. They don't know. What is it with you? Don't you understand that? They may be right, but they don't KNOW. That 'sall I'm saying about that.. Why are you in such a snit about that?
The other part is that fast, reliable NAND doesn't cost 45 cents a GB. It costs more. These memory cards I showed are evidence that you can't sell this for $20. Yes, these cards don't sell in the hundreds of millions, but many do sell in the millions, particularly SanDisk and other large, well known manufacturers. And if you think that prices for parts continues to go down to infinity the more you buy, it doesn't work that way. Pricing for parts is on a sliding scale. Once you begin to get to really large numbers, the drops in price begin to become minuscule. There is a bottom to pricing. Each chip costs so much to produce. As some point, these production costs stop declining. So maybe a hundred thousand chips could be, just to just use an easy number, $15. One million might be $11. Ten million may cost $9.50. A hundred million might cost $9.00. Two hundred million could be $8.85, and so on.
Last year Tim Cook told the WSJD that iPhone would be Apple's main revenue driver for the next 5 years. If Apple execs are not thinking about what comes after iPhone they're stupid.
You have no idea how many people bought 16GB iPhones. All we know is ASPs Apple reported were higher. Which isn't surprising as I'll bet lots of people jumped to 64GB as they didn't have enough space to update to iOS 8. There were LOTS of complaints about that on Twitter. Most people upgrade OTA and I'll bet a large percentage of iOS users don't even know about being able to update software via iTunes....because they've never had to do it before. Believe me Apple doesn't want another year of slower OS upgrades because of storage issues. But while I think they should increase base storage most likely they're just cracking the whip on software engineers to make the OTA download smaller. But that still doesn't solve for the "documents & data" components of apps that can't be cleared witthout deleting and reinstalling the app.