and till then Apple will continue to sell iPhone at a good margin. So whats your point?
You want Apple to sacrifice profits for no reason?
No I want Apple to be about making the best products and providing the best user experience. Do that and the revenue and profits will follow.
If it was up to you we'd still be paying for iWork and OS X software updates and iPod touch users would be paying to upgrade their software. Because that's leaving money on the table, right?
I'd like if they made the 64 or 32 GB iPhone as expencive as the 16 GB Version is nowadays. My iPhone has got 16 GB, and it became too few very quickly. Today, 16GB are often not enough because of all these large Applications. Another option would be to make all Versions of the iPhone 100$ cheaper, so they cost as much as the version with less storage costed before. But with option 2, they'd earn less money, so it's more likely that Apple chooses the option I mentioned first.
No I want Apple to be about making the best products and providing the best user experience. Do that and the revenue and profits will follow.
If it was up to you we'd still be paying for iWork and OS X software updates and iPod touch users would be paying to upgrade their software. Because that's leaving money on the table, right?
Yep. Apple has made it clear many times that their philosophy isn't "we can't leave any money on the table". If that was the case, they would have 5000 SKUs of products. They're willing to take short term hits if they think it will enhance customer satisfaction and retention, and enhance the stickiness an usefulness ecosystem.
Making OSX free was a good movie. Free iWork/iLife was a good move. Free iCloud was a good move.
I think upping iCloud storage would also be a good movie. It's not about how "cheap" it is for the user to upgrade. Its the fact thay most won't, will get frustrated, and will blame the product. The vast majority of people do not understand how iCloud works, and why they need cloud storage. They can leave everything as is, just bump the free tier from 5 to10GB, the 20GB tier can stay @ $0.99/m. Since iCloud is more and more driving their services and software, you don't want most users running into storage issues. For those that keep all their photos/video in iCloud, they will need more than 10Gb eventually anyway.
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. That is what I meant by "negative consequences" - pissing off the carrier customers. Working with the carrier partners (who I believe sell more iPhones directly than Apple does) would get a whole lot harder after Apple announced they were going to build a competitive system.
Fortunately (so far at least) Apple has shown itself to be smarter than that (Google, maybe not so much).
Apple's 2015 iPhone update will purportedly add the possibility of pre-installing the Apple SIM, giving users the ability to select a carrier on their own out of the box.
This makes sense for unsubsidized models - iPads are sold unsubsidized. For sales through carriers, it looks like they buy the phones from Apple outright and then lock a buyer into a contract to pay it back plus profit. Carriers couldn't possibly buy the phones outright and then offer them with a competitor's service.
If Apple doesn't need upfront payments, they can get their cut from whatever carrier the user chooses.
The contracts really shouldn't be necessary. Say that Apple is to make $650 for an iPhone and they get $99 upfront. If they sell it with a sim that lets the customer use any service on a month to month basis, Apple can recoup the remaining $551 revenue ($22.95 per month for 2 years) from that. So they have plans like $40/month on any service rolling month to month. If you go away to another area for 2-3 weeks, you can switch carrier just for that time - you can even have two services ongoing just for backup and Apple just takes the $22.95 every time you pay for this service.
They'd need to be able to control it though and avoid someone not paying for the contract but this should be ok as any time the device tries to connect to a service, it will know it hasn't been paid up.
They'd need to be able to control it though and avoid someone not paying for the contract but this should be ok as any time the device tries to connect to a service, it will know it hasn't been paid up.
What good is that for Apple? The customer can't use the phone, but Apple is out of the remaining balance. It's much smarter to leave that headache to the carriers.
Apparently it does since the iPhone still starts at 16GB.
I don't get why you all think you are smarter than the exectutives at Apple who deal with this stuff everyday. To you it may seem like a simple solution to start the iPhone at 32GB, but you have no IDEA what the consequences of such a move would have on Apple's bottom line.
Any consequence would be literally be a drop in the bucket. It's a handicapped device, its user, and future owners will forever be limited to how many apps, how much music, and media that can be purchased.
did you not see my link? NAND memory cost $7 for 128GB. I'm talking about the iPhone6. Past years models have nothing to do with this discussion.
The 64/128 phones make a higher gross margin than the 16GB.
Sure past models are relevant. Apple showed a willingness to make less profit on the 64GB version. I may not know more than a executive but I do know that right before Christmas the only models of iPads available were the 16GB ones. I didn't buy one because that's too little memory and I'm sure I'm not the only. The profit margin on a device that doesn't sell is zero.
Let's pray that Apple takes a leaf out of Samsung's playbook and makes 32GB the base storage capacity, so as to avoid a repeat of UpdateGate.
Why? 16GB is more than enough for corporate users and those that stream most of their content over the internet. Of course, for me, I went with the 128GB since I have lousy internet and cannot stream anything where I live, so I have several thousand pictures, a few thousand songs, and many movies on my 6 plus. It really is tiring seeing all of the people that know more than Apple does. How do YOU know that the 16GB model isn't the best selling model WORLD WIDE? Please provide us with your insight and expert knowledge that says Apple isn't selling these.
Meh.. I would not be surprised if Apple makes 32Gb the standard, bumps middle to 128, and 256 the high end. MAINLY when they start pushing 4k Video and Photos that will happen..
Unlikely will happen with the 6s, likely the iPhone 7.. By then 4k, in ~2 years, should be fairly standard...
No, iphone 8 maybe, but 4k may be shot by camera, but it won't be better in other ways.
Are you rich? Not everybody has the cash to go for higher options where for an upgrade in flash space cost a hundred more, where they (apple) only pay few more cents for it. It comes into 32gb because it is becoming standard nowadays and if they go with a higher resolution camera, everyone needs more space. A lot of people are downloading more apps, which again need more space. More updates need more space. In fact just have fun paying more because as you can see what they did with the iphone 6, they skipped the 32gb so people will get more influenced into buying the 64 rather than staying with the 16gb, because there is a huge difference.
I understand there profits by this, but maybe if flash drops enought there willing 32, 64, 128 again.
Not what I want. I think that the base model has the lowest fixed costs, which require Apple to sell it for $649, and make their margins on the sale.
But NAND pricing isn't as low as thought by most people. I keep saying that. What I constantly see is people looking at a cheap usb stick, and thinking that NAND should cost no more than that. But that's all wrong. That's cheap, and very slow, low quality memory. We need to look at the pricing of the fastest SD card memory that are used for cameras. That's much closer to the memory in a good phone. And that's expensive!
The reason why Apple has 90% of the profits in the cell industry isn't because Apple overcharges on their phones, or even the memory. It's bwcause other companies are giving it away for cost. That's wrong. Manufacturing pricing requires that parts are charged to the buyer of the product for at least double the price they were bought for by the manufacturer. And three times isn't considered to be excessive.
We don't know Apple's pricing, but If they're buying high quality, fast NAND, then they could be paying as much as $35 per 64GB. If so, then they're pricing is at the high end of the range, but within it. We don't know though. It could be that the base model is priced below their average margins, and the more expensive models brings that back up again to their goal.
I've read that Samsung's new S6 with 32GB might cost $749, and the Edge might be $849. I did read today that in Soain, the S6 would go for the equivalent of $840. Why? Perhaps it's more expensive to manufacture a high quality phone than most people expect.if so, then making it up on NAND, makes sense.
What if moving the base model to 32GB causes 20% more sales of the bottom model? Do you know how much lost REVENUE and PROFIT that is?
Apple is estimated to sell 230,000,000 iphones FY2015
230,000,000 x 20% = 46,000,000 more bottom model iPhone sales
46,000,000 x $100 = $4,600,000,000
How the HELL is $4.6 BILLION in revenue not a big deal?
And that $4.6 BILLION in extra revenue is almost all profit.
So you want Apple to throw away over $4 BILLION in profit? Thats 10% of their profit in FY2014.
Again you guys just need to STFU. You have no idea of the consequences of making such a move would be. Apple is the most successful company in the world. They know what the hell they are doing, you don't.
Wouldn't those same numbers apply for the 64GB version. Funny how you keep ignoring that.
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.
Why didn't all the carriers get together and build a super network they could all share at a fraction of the cost it was to build multiple, and in some cases incompatible networks? Competition that's why.
The numbers are not the same since very few people bought the 64GB in previous generations.
For iPhone 5S it was:
40% 16GB
40% 32GB
20% 64GB
If Apple did the switch to 32GB lowest tier it would be an ABSOLUTE BLOODBATH if 80% of iPhones sold were 32GB. That would kill Average selling price, margin, and profits.
They would give up litearlly BILLIONS in PROFITS.
You have the numbers of sales of the 64GB? Is memory the only thing that eats into profit? Why not keep the RAM at 512 MB, or a older processor, or stay with a 4" screen. All that costs more. Why not stay with the status quo, and make even more money?
What if moving the base model to 32GB causes 20% more sales of the bottom model? Do you know how much lost REVENUE and PROFIT that is?
Apple is estimated to sell 230,000,000 iphones FY2015
230,000,000 x 20% = 46,000,000 more bottom model iPhone sales
46,000,000 x $100 = $4,600,000,000
How the HELL is $4.6 BILLION in revenue not a big deal?
And that $4.6 BILLION in extra revenue is almost all profit.
So you want Apple to throw away over $4 BILLION in profit? Thats 10% of their profit in FY2014. That $10 billion is literally all the profit that Apple makes on iPad and Mac COMBINED! So you want Apple to sacrifice their entire profit for iPad/Mac to please a few cheapskates? HELL NO.
Again you guys just need to STFU. You have no idea of the consequences of making such a move would be. Apple is the most successful company in the world. They know what the hell they are doing, you don't.
Sorry, that's some really messed up math.
Also, I will make a prediction now that 2015 iPhones will start at 32GB, at least for the 6S models. I hardly ever make predictions about these kinds of specifics, but there you go. I like to think I understand Apple pretty well, I believe there are enough reasons to rationalize doing so, from Apple's point of view, one of which is that their main competitor (ie. S6) now starts at 32GB. People are stupid, so when they see both phones, at the same price, with one of them at double the capacity, that will make a difference. The other reasons are things to do with customer satisfaction, and making sure a majority of people can update to the latest OS OTA. I think we're at a tipping point where the pros outweigh the cons.
I may be right, I may be wrong. But you can call me a moron when/if I'm wrong. Feel free to bookmark this post. Also, it doesn't mean I know "better" than Apple's execs, because they may have very well already made the decision, or will make the decision, to do just that. Neither of us know, but I am of the opinion that they will do so.
Also, I will make a prediction now that 2015 iPhones will start at 32GB, at least for the 6S models. I hardly ever make predictions about these kinds of specifics, but there you go. I like to think I understand Apple pretty well, I believe there are enough reasons to rationalize doing so, from Apple's point of view, one of which is that their main competitor (ie. S6) now starts at 32GB. People are stupid, so when they see both phones, at the same price, with one of them at double the capacity, that will make a difference. The other reasons are things to do with customer satisfaction, and making sure a majority of people can update to the latest OS OTA. I think we're at a tipping point where the pros outweigh the cons.
I may be right, I may be wrong. But you can call me a moron when/if I'm wrong. Feel free to bookmark this post. Also, it doesn't mean I know "better" than Apple's execs, because they may have very well already made the decision, or will make the decision, to do just that. Neither of us know, but I am of the opinion that they will do so.
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.
Well, the sale before iP6/6S was majority of 16GB version. I remember reading it somewhere that it accounted for more than 60% of iPhone sales. So, pumping second tier of storage from 32GB to 64GB makes it more attractive to those with the needs more than 16GB. I have always bought 16GB version since iPhone 3 and never had problem with over 100 apps + few GB pictures/video on board but still have a few GB left. iPhone 6+ was my first 64GB and I don't even pass 30GB yet with 10GB of pictures and video carried over from the last few iPhone when I upgraded.
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.
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 don't know about you guys, but I think it's quite dumb to have line up such as: 32/64/128 for additional $100/ea. This is storage capacity, not performance capability where each double cost $100. Why the hell would someone pay $100 for additional 32GB (32-64) while another guy pays $100 for 64GB (64-128)? That's one of the reason that I refused to buy 32GB before instead of 16GB.
Comments
No I want Apple to be about making the best products and providing the best user experience. Do that and the revenue and profits will follow.
If it was up to you we'd still be paying for iWork and OS X software updates and iPod touch users would be paying to upgrade their software. Because that's leaving money on the table, right?
My iPhone has got 16 GB, and it became too few very quickly.
Today, 16GB are often not enough because of all these large Applications.
Another option would be to make all Versions of the iPhone
100$ cheaper, so they cost as much as the version with less storage costed before.
But with option 2, they'd earn less money, so it's more likely that Apple chooses the option I mentioned first.
No I want Apple to be about making the best products and providing the best user experience. Do that and the revenue and profits will follow.
If it was up to you we'd still be paying for iWork and OS X software updates and iPod touch users would be paying to upgrade their software. Because that's leaving money on the table, right?
Yep. Apple has made it clear many times that their philosophy isn't "we can't leave any money on the table". If that was the case, they would have 5000 SKUs of products. They're willing to take short term hits if they think it will enhance customer satisfaction and retention, and enhance the stickiness an usefulness ecosystem.
Making OSX free was a good movie. Free iWork/iLife was a good move. Free iCloud was a good move.
I think upping iCloud storage would also be a good movie. It's not about how "cheap" it is for the user to upgrade. Its the fact thay most won't, will get frustrated, and will blame the product. The vast majority of people do not understand how iCloud works, and why they need cloud storage. They can leave everything as is, just bump the free tier from 5 to10GB, the 20GB tier can stay @ $0.99/m. Since iCloud is more and more driving their services and software, you don't want most users running into storage issues. For those that keep all their photos/video in iCloud, they will need more than 10Gb eventually anyway.
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. That is what I meant by "negative consequences" - pissing off the carrier customers. Working with the carrier partners (who I believe sell more iPhones directly than Apple does) would get a whole lot harder after Apple announced they were going to build a competitive system.
Fortunately (so far at least) Apple has shown itself to be smarter than that (Google, maybe not so much).
So why improve anything at all? Everything eats into profit, more RAM, faster processor, bigger screen, etc, etc, etc. That argument makes zero sense.
This makes sense for unsubsidized models - iPads are sold unsubsidized. For sales through carriers, it looks like they buy the phones from Apple outright and then lock a buyer into a contract to pay it back plus profit. Carriers couldn't possibly buy the phones outright and then offer them with a competitor's service.
If Apple doesn't need upfront payments, they can get their cut from whatever carrier the user chooses.
The contracts really shouldn't be necessary. Say that Apple is to make $650 for an iPhone and they get $99 upfront. If they sell it with a sim that lets the customer use any service on a month to month basis, Apple can recoup the remaining $551 revenue ($22.95 per month for 2 years) from that. So they have plans like $40/month on any service rolling month to month. If you go away to another area for 2-3 weeks, you can switch carrier just for that time - you can even have two services ongoing just for backup and Apple just takes the $22.95 every time you pay for this service.
They'd need to be able to control it though and avoid someone not paying for the contract but this should be ok as any time the device tries to connect to a service, it will know it hasn't been paid up.
Yes they are. The 64GB model is now $100 cheaper than the previous ones.
What good is that for Apple? The customer can't use the phone, but Apple is out of the remaining balance. It's much smarter to leave that headache to the carriers.
Any consequence would be literally be a drop in the bucket. It's a handicapped device, its user, and future owners will forever be limited to how many apps, how much music, and media that can be purchased.
Sure past models are relevant. Apple showed a willingness to make less profit on the 64GB version. I may not know more than a executive but I do know that right before Christmas the only models of iPads available were the 16GB ones. I didn't buy one because that's too little memory and I'm sure I'm not the only. The profit margin on a device that doesn't sell is zero.
Let's pray that Apple takes a leaf out of Samsung's playbook and makes 32GB the base storage capacity, so as to avoid a repeat of UpdateGate.
Why? 16GB is more than enough for corporate users and those that stream most of their content over the internet. Of course, for me, I went with the 128GB since I have lousy internet and cannot stream anything where I live, so I have several thousand pictures, a few thousand songs, and many movies on my 6 plus. It really is tiring seeing all of the people that know more than Apple does. How do YOU know that the 16GB model isn't the best selling model WORLD WIDE? Please provide us with your insight and expert knowledge that says Apple isn't selling these.
You don't
I understand there profits by this, but maybe if flash drops enought there willing 32, 64, 128 again.
Hmm, S6 at note 4 price?
Wouldn't those same numbers apply for the 64GB version. Funny how you keep ignoring that.
Why didn't all the carriers get together and build a super network they could all share at a fraction of the cost it was to build multiple, and in some cases incompatible networks? Competition that's why.
You have the numbers of sales of the 64GB? Is memory the only thing that eats into profit? Why not keep the RAM at 512 MB, or a older processor, or stay with a 4" screen. All that costs more. Why not stay with the status quo, and make even more money?
and how do you know this?
What if moving the base model to 32GB causes 20% more sales of the bottom model? Do you know how much lost REVENUE and PROFIT that is?
Apple is estimated to sell 230,000,000 iphones FY2015
230,000,000 x 20% = 46,000,000 more bottom model iPhone sales
46,000,000 x $100 = $4,600,000,000
How the HELL is $4.6 BILLION in revenue not a big deal?
And that $4.6 BILLION in extra revenue is almost all profit.
So you want Apple to throw away over $4 BILLION in profit? Thats 10% of their profit in FY2014. That $10 billion is literally all the profit that Apple makes on iPad and Mac COMBINED! So you want Apple to sacrifice their entire profit for iPad/Mac to please a few cheapskates? HELL NO.
Again you guys just need to STFU. You have no idea of the consequences of making such a move would be. Apple is the most successful company in the world. They know what the hell they are doing, you don't.
Sorry, that's some really messed up math.
Also, I will make a prediction now that 2015 iPhones will start at 32GB, at least for the 6S models. I hardly ever make predictions about these kinds of specifics, but there you go. I like to think I understand Apple pretty well, I believe there are enough reasons to rationalize doing so, from Apple's point of view, one of which is that their main competitor (ie. S6) now starts at 32GB. People are stupid, so when they see both phones, at the same price, with one of them at double the capacity, that will make a difference. The other reasons are things to do with customer satisfaction, and making sure a majority of people can update to the latest OS OTA. I think we're at a tipping point where the pros outweigh the cons.
I may be right, I may be wrong. But you can call me a moron when/if I'm wrong. Feel free to bookmark this post. Also, it doesn't mean I know "better" than Apple's execs, because they may have very well already made the decision, or will make the decision, to do just that. Neither of us know, but I am of the opinion that they will do so.
I agree, that's why I pointed out that it was just marketing
Did Apple ever have to add gimmicks for marketing? To me 2K/4K on a 5"+ screen is purely gimmick and ridiculous.
Will you self ban if you're wrong?
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.
Well, the sale before iP6/6S was majority of 16GB version. I remember reading it somewhere that it accounted for more than 60% of iPhone sales. So, pumping second tier of storage from 32GB to 64GB makes it more attractive to those with the needs more than 16GB. I have always bought 16GB version since iPhone 3 and never had problem with over 100 apps + few GB pictures/video on board but still have a few GB left. iPhone 6+ was my first 64GB and I don't even pass 30GB yet with 10GB of pictures and video carried over from the last few iPhone when I upgraded.
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.
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 don't know about you guys, but I think it's quite dumb to have line up such as: 32/64/128 for additional $100/ea. This is storage capacity, not performance capability where each double cost $100. Why the hell would someone pay $100 for additional 32GB (32-64) while another guy pays $100 for 64GB (64-128)? That's one of the reason that I refused to buy 32GB before instead of 16GB.