Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Just saw a comment on Facebook about the market drop being led by Apple: "$1000 phones, what do you expect!" LOL
I shake my head whenever I hear some market analyst say something like "lower than expected profits at company X caused the market to decline." If the market had gone up then they would have found some company with good news to explain it.
Honestly, though, Apple is a business. They make products that we buy. They happen to be quite good products, so I'm willing to pay what they ask. Any and all of us are free to buy products made by another company. To say that any company is robbing you is just incorrect.
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Last week I posted to Facebook and LinkedIn asking my contacts whether their Apple purchasing patterns have changed in the last year or two. Are they buying more Apple products, fewer, or about the same? If they purchased more or less, what was the reason?
I only got a few responses, but they were all the same: Buying less, not because they don't WANT new Apple products, but because they think new Apple products are too expensive now.
I don't know why Apple's prices are going up so much, but I'm not sure the reason matters. The bottom line is I just can't afford current prices. So far this year we've skipped three planned purchases in our house -- a 15" MacBook Pro and a pair of iPhones. We've been on a three-year upgrade cycle, but the difference between what we paid last time and what those items cost now is enough to interrupt that inertia.
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Or maybe they’re spending more on R&D
R&D is a spending decision.
I'm not saying all spending is bad. I'm saying Apple's prices are quantifiably higher now than in the recent past, and if margins haven't changed, the only other variable is costs. Maybe some of Apple's costs are good and some are wasteful. Maybe they spend too much overall. Maybe ALL Apple's costs are valid and that's just how much products like what Apple makes are going to cost now. I don't pretend to have the slightest idea. All I know is that Apple products now cost more than my demographic can afford. Maybe that's just the way it is now.
In respect to the discussion about how people feel that Apple is charging too much for their products, depends on their view of things.
A lot of iPhone owners consider Apple’s current price of the iPhone excessive because of several reasons. They don’t understand how R&D works when you are a company that invests in a product that will last you longer than the competition. They have no idea how much the R&D costs. They also don’t understand that a lot of competitors devices get sold at a discount as loss leaders, or in the case of Samsung, they will sacrifice profits for marketshare.
They also are STILL comparing the cost of purchasing an iPhone to the past when you had carrier financing. They don’t know the true cost of the iPhone and instead believe that Apple is ripping them off. Original iPhone owners understood what the true cost of the device was because they had to shell out the full retail price.
They also do not know the difference between lcd screens and OLED screens.
On the Mac side, they don’t value the changes Apple has made merit the same costs. They believe that Apple should still be able to reduce the price since the changes that were made are not noteworthy and they feel that Apple has ripped them off by removing ports and selling dongles now.
So the the bottom line is the general public’s perception of Apple products. They are not educated enough to understand the why behind the changes in technology and the costs associated with them. They don’t understand what kind of development goes into making a phone you can still use after 4-5 years.
The general public is getting dumber. They expect a battery to last over 2 years no matter how it was used. They don’t understand the costs involved for free tech support, or a visit to the Genius bar. Those things cost money and Apple is footing the bill. You don’t see an Android store, Google store or Samsung store do you? Where do you go for support or repairs?
This is an extremely biased article! Some of the claims are pure claims with no supporting data and are obscured by other financial metrics which make sense in their own context but not more than that. And at the end of such an "informative" article filled with numbers, saying or claiming that Apple is not prioritizing money over design? Why would you even need to point that in here?
I never did and never will support the common idea that anything (iPhone or something else, anything by any company) "should" be in the range of "x" to "y" dollars. It's not a social support agency. That company is not obliged to feed people with new tech product every "x" years. It is a private institution, not your mama's bakery. BUT, nobody can present such concrete financial numbers and tell me that "Some company is not prioritizing x over y.". You-just-dont-know-that-period
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
GM does tell you anything about purchase decisions. Despite it being higher now. It should be about the consumers purchasing power.
Maybe apply an iPod equivalent test for parity’s sake: How many iPod equivalents does it cost to buy a MBP today compared with 2009? You could use Big Macs instead of iPods if you like.
[...] They also don’t understand that a lot of competitors devices get sold at a discount as loss leaders, or in the case of Samsung, they will sacrifice profits for marketshare.
Loss-leaders and low-profit marketing strategies may be bad for certain companies, but they're a hands-down no-brainer WIN for the buyer! What's not to understand about a lower price? If Apple's price is justified because it offers a high feature-per-dollar ratio, then ipso facto, a device that offers less may also be a good value because the price is lower. Which is a better value -- an $80,000 Mercedes or a $30,000 Toyota? The answer is "it depends on what you want." Same with phones.
They also are STILL comparing the cost of purchasing an iPhone to the past when you had carrier financing. They don’t know the true cost of the iPhone and instead believe that Apple is ripping them off.
I suppose there may be a few who don't know the difference between carrier subsidized versus retail price, but they're going to be the same people who don't know the difference between a skunk and a cute kitty with a pretty white stripe.
MOST people go to their carrier's web site and look at how much it will cost to get a new iPhone. That presents an even playing field, as the phones from each manufacturer are presented the same way.
People know how much it costs, and they know it's "a lot."
They also do not know the difference between lcd screens and OLED screens.
It's not that people can't tell the difference, it's that it doesn't matter to them, or that they don't perceive enough value in it to justify the cost premium. They could also get a car that accelerates twice as fast as their Honda if they paid more, but they don't because that capability isn't on their list of things to care about.
[...] They don’t understand what kind of development goes into making a phone you can still use after 4-5 years.
Neither do I. Which phone are we talking about? Each iPhone I've used has been rendered all but useless after three years. Because each successive model is two or three times as fast as the last one, developers write increasingly demanding code. After two or three years the current software requires faster processing than what's available on an old phone.
Technically a phone that old may still be supported, and would work fine if you installed whatever you want at the time of purchase, never installed any new apps after the first year, and never installed any app or OS updates, but for most people that's obviously not an attractive option. That means the idea that an iPhone is worth more because it lasts longer is a non-starter. It doesn't matter that the hardware continues to function if using it is a drag.
The general public is getting dumber. They expect a battery to last over 2 years no matter how it was used. They don’t understand the costs involved for free tech support, or a visit to the Genius bar. Those things cost money and Apple is footing the bill. You don’t see an Android store, Google store or Samsung store do you? Where do you go for support or repairs?
Alternative view: if my phone costs half as much as an iPhone, I can afford to replace it twice as often. My daughter gets a new LG or Samsung every year. That's often enough that she doesn't have service issues. She also enjoys the novelty of frequently getting a new device with new features.
I'm not saying Apple needs to make a cheaper iPhone. What I am saying is that it's either fanboyism or snobbery to insist that the reason people don't all buy iPhones is because they're stupid. Different people have different priorities and value different things. If I wear only high quality bespoke suits, is it fair for me to say you're stupid because you don't?
The issue is not just that Apple is far richer than they’ve ever been, but the money Apple is making from overall doesn’t match the attitude the company would have you believe they have toward their customers, more than ever. If you really want leave the world better than you’ve found it, then treat the people who live in it with respect. Making this much money from people while continually rising prices should leave a bad taste in our mouths. A disgusting display of greed.
And as many staff writing for AI are shareholders of AAPL, I believe they should refrain from commenting on such matters, as it’s an obvious journalistic conflict of interest.
I paid $1000 for the XS, but I intend to use it for five years just like the 5S that it replaced. $200 per year for the hardware is a nominal expense vs. other recurring costs that are connected to smartphone use.
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Or maybe they’re spending more on R&D
R&D is a spending decision.
I'm not saying all spending is bad. I'm saying Apple's prices are quantifiably higher now than in the recent past, and if margins haven't changed, the only other variable is costs. Maybe some of Apple's costs are good and some are wasteful. Maybe they spend too much overall. Maybe ALL Apple's costs are valid and that's just how much products like what Apple makes are going to cost now. I don't pretend to have the slightest idea. All I know is that Apple products now cost more than my demographic can afford. Maybe that's just the way it is now.
The problem here is that you and I (and AppleInsider) don't have enough information to say what Apple's costs are, and how they're allocated. You use the word 'maybe' because you actually don't know.
The cost of software development. Perhaps you think they should stop developing MacOS, or charge for every release. You know how they could really shave costs off the hardware? Easy, don't bother with MacOS or iOS, and just use Android instead. Since the cost of OS development is baked into the hardware (because how else would it be paid for) then that's a sure fire way of bringing the price down.
They could also pay the retail staff less. That would help. And stop working on projects that would ensure future income streams when folk have had enough of iPhones. Let's can the car project for one, and just imagine how much they would have saved if they spent all the money on medical and health research for the Apple Watch. Think of the money they could have saved if they hadn't bothered with all those high-fallutin' audio engineers for the AirPods, the HomePod, the phones, the pads and the Macs.
Just how much they could lower prices if they didn't keep spending money on customised chips and just used standard parts from Intel and Samsung. Just how much less the iPhones would cost if they didn't care so much about getting the best screen performance they possibly could.
All I know is that Apple products now cost more than my demographic can afford.
Well, guess what? Apple targets customers, not demographics. Lamborghinis aren't in my target demographic, so I have a couple of choices: get myself into a position where I can afford one, or buy something else.
The issue is not just that Apple is far richer than they’ve ever been, but the money Apple is making from overall doesn’t match the attitude the company would have you believe they have toward their customers, more than ever. If you really want leave the world better than you’ve found it, then treat the people who live in it with respect. Making this much money from people while continually rising prices should leave a bad taste in our mouths. A disgusting display of greed.
And as many staff writing for AI are shareholders of AAPL, I believe they should refrain from commenting on such matters, as it’s an obvious journalistic conflict of interest.
Yep. Here it is again.
"I want Apple to give me exactly what I want, and I want to tell them the price I want to pay for it, regardless of how much it costs to build it."
The issue is not just that Apple is far richer than they’ve ever been, but the money Apple is making from overall doesn’t match the attitude the company would have you believe they have toward their customers, more than ever. If you really want leave the world better than you’ve found it, then treat the people who live in it with respect. Making this much money from people while continually rising prices should leave a bad taste in our mouths. A disgusting display of greed.
And as many staff writing for AI are shareholders of AAPL, I believe they should refrain from commenting on such matters, as it’s an obvious journalistic conflict of interest.
Just look how much Jobs invested back versus how much cash has piled up since he died.
Steve was interested in product improvement, not in real-estate, luxury, or extreme wealth as such.
He warned against greedyness, and almost anything the current leadership prioritizes. Pioneers shouldn’t be compared to milkers anyway
Just look how much Jobs invested back versus how much cash has piled up since he died.
Steve was interested in product improvement, not in real-estate, luxury, or extreme wealth as such.
He warned against greedyness, and almost anything the current leadership prioritizes. Pioneers shouldn’t be compared to milkers anyway
iOS 12.0 was quick but it’s upgrade version 12.1 makes older iPhone models, e.g. iPhone 6 Plus into a standstill! Is it a planned ‘robbery’?
It does nothing of the sort. This is a drum you continue to beat on your own, and appear to have copied and pasted a previous response in two different spots in the forums. I've already warned you to not do that.
Comments
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Honestly, though, Apple is a business. They make products that we buy. They happen to be quite good products, so I'm willing to pay what they ask. Any and all of us are free to buy products made by another company. To say that any company is robbing you is just incorrect.
I only got a few responses, but they were all the same: Buying less, not because they don't WANT new Apple products, but because they think new Apple products are too expensive now.
I don't know why Apple's prices are going up so much, but I'm not sure the reason matters. The bottom line is I just can't afford current prices. So far this year we've skipped three planned purchases in our house -- a 15" MacBook Pro and a pair of iPhones. We've been on a three-year upgrade cycle, but the difference between what we paid last time and what those items cost now is enough to interrupt that inertia.
I'm not saying all spending is bad. I'm saying Apple's prices are quantifiably higher now than in the recent past, and if margins haven't changed, the only other variable is costs. Maybe some of Apple's costs are good and some are wasteful. Maybe they spend too much overall. Maybe ALL Apple's costs are valid and that's just how much products like what Apple makes are going to cost now. I don't pretend to have the slightest idea. All I know is that Apple products now cost more than my demographic can afford. Maybe that's just the way it is now.
feel that Apple is charging too much for their products, depends on their view of things.
A lot of iPhone owners consider Apple’s current price of the iPhone excessive because of several reasons. They don’t understand how R&D works when you are a company that invests in a product that will last you longer than the competition. They have no idea how much the R&D costs. They also don’t understand that a lot of competitors devices get sold at a discount as loss leaders, or in the case of Samsung, they will sacrifice profits for marketshare.
They also are STILL comparing the cost of purchasing an iPhone to the past when you had carrier financing. They don’t know the true cost of the iPhone and instead believe that Apple is ripping them off. Original iPhone owners understood what the true cost of the device was because they had to shell out the full retail price.
They also do not know the difference between lcd screens and OLED screens.
On the Mac side, they don’t value the changes Apple has made merit the same costs. They believe that Apple should still be able to reduce the price since the changes that were made are not noteworthy and they feel that Apple has ripped them off by removing ports and selling dongles now.
So the the bottom line is the general public’s perception of Apple products. They are not educated enough to understand the why behind the changes in technology and the costs associated with them. They don’t understand what kind of development goes into making a phone you can still use after 4-5 years.
The general public is getting dumber. They expect a battery to last over 2 years no matter how it was used. They don’t understand the costs involved for free tech support, or a visit to the Genius bar. Those things cost money and Apple is footing the bill. You don’t see an Android store, Google store or Samsung store do you? Where do you go for support or repairs?
I never did and never will support the common idea that anything (iPhone or something else, anything by any company) "should" be in the range of "x" to "y" dollars. It's not a social support agency. That company is not obliged to feed people with new tech product every "x" years. It is a private institution, not your mama's bakery. BUT, nobody can present such concrete financial numbers and tell me that "Some company is not prioritizing x over y.". You-just-dont-know-that-period
Maybe apply an iPod equivalent test for parity’s sake:
How many iPod equivalents does it cost to buy a MBP today compared with 2009? You could use Big Macs instead of iPods if you like.
I suppose there may be a few who don't know the difference between carrier subsidized versus retail price, but they're going to be the same people who don't know the difference between a skunk and a cute kitty with a pretty white stripe.
MOST people go to their carrier's web site and look at how much it will cost to get a new iPhone. That presents an even playing field, as the phones from each manufacturer are presented the same way.
People know how much it costs, and they know it's "a lot."
It's not that people can't tell the difference, it's that it doesn't matter to them, or that they don't perceive enough value in it to justify the cost premium. They could also get a car that accelerates twice as fast as their Honda if they paid more, but they don't because that capability isn't on their list of things to care about.
Neither do I. Which phone are we talking about? Each iPhone I've used has been rendered all but useless after three years. Because each successive model is two or three times as fast as the last one, developers write increasingly demanding code. After two or three years the current software requires faster processing than what's available on an old phone.
Technically a phone that old may still be supported, and would work fine if you installed whatever you want at the time of purchase, never installed any new apps after the first year, and never installed any app or OS updates, but for most people that's obviously not an attractive option. That means the idea that an iPhone is worth more because it lasts longer is a non-starter. It doesn't matter that the hardware continues to function if using it is a drag.
I'm not saying Apple needs to make a cheaper iPhone. What I am saying is that it's either fanboyism or snobbery to insist that the reason people don't all buy iPhones is because they're stupid. Different people have different priorities and value different things. If I wear only high quality bespoke suits, is it fair for me to say you're stupid because you don't?
And as many staff writing for AI are shareholders of AAPL, I believe they should refrain from commenting on such matters, as it’s an obvious journalistic conflict of interest.
The problem here is that you and I (and AppleInsider) don't have enough information to say what Apple's costs are, and how they're allocated. You use the word 'maybe' because you actually don't know.
The cost of software development. Perhaps you think they should stop developing MacOS, or charge for every release. You know how they could really shave costs off the hardware? Easy, don't bother with MacOS or iOS, and just use Android instead. Since the cost of OS development is baked into the hardware (because how else would it be paid for) then that's a sure fire way of bringing the price down.
They could also pay the retail staff less. That would help.
And stop working on projects that would ensure future income streams when folk have had enough of iPhones. Let's can the car project for one, and just imagine how much they would have saved if they spent all the money on medical and health research for the Apple Watch. Think of the money they could have saved if they hadn't bothered with all those high-fallutin' audio engineers for the AirPods, the HomePod, the phones, the pads and the Macs.
Just how much they could lower prices if they didn't keep spending money on customised chips and just used standard parts from Intel and Samsung. Just how much less the iPhones would cost if they didn't care so much about getting the best screen performance they possibly could.
Well, guess what? Apple targets customers, not demographics. Lamborghinis aren't in my target demographic, so I have a couple of choices: get myself into a position where I can afford one, or buy something else.
Yep. Here it is again.
"I want Apple to give me exactly what I want, and I want to tell them the price I want to pay for it, regardless of how much it costs to build it."
Steve was interested in product improvement, not in real-estate, luxury, or extreme wealth as such.
He warned against greedyness, and almost anything the current leadership prioritizes.
Pioneers shouldn’t be compared to milkers anyway