A lot of the rumours surrounding the 2019 iPhone refresh have included mention of cost reductions at some level. Up to now I've been hopeful that it would translate into lower starting prices as I believe one of Apple's biggest obstacles to shipping more units is directly related to price.If tariffs get in the way I don't think Apple will pass them onto the consumer.
If you think that costs will drop 10% YoY you are delusional. If you think Apple will absorb all additional costs without passing it on to the user then we'll see the revenue and earnings for the quarter.
If I were running a company that had major CE product affected by new tariffs my next product would take into account the tariff and then adjust costs so that I can maintain the same price point without losing profit. With so many components involved it would only be difficult to choose with components need to be held back from being updated that year or which vendor(s) I can turn to which have components within a new, lower acceptable window of usability. I certainly wouldn't be eating $120 in profit on a device that costs $1,200 to make—with a 21.50% net profit margin do you really think we'll see a 11.50% next year?
I think prices will be adjusted down but if that happens I wouldn't like to guess by how much.
That said, 10% YoY? I wouldn't consider that delusional. $674 for an entry level 2019 iPhone? Why not? Why not go for $650 and grab everyone's attention. Or go one step further and bundle a six month subscription to something?
Trading in an iPhone 6 gets you an XR today for $649. With cost reductions, $650 for an entry level 2019 iPhone is far from delusional.
Costs do not equal prices. To adjust costs down 10% to some oddball $674 price point and then to say “why not” to reducing the price even further with zero accountability for costs, profit margin, or device changes shows that your comments are delusional.
Of course, you believe that Apple just jacks up the price without actually improving devices, but even in your world that would still affect profit margins… unless, well…
A lot of the rumours surrounding the 2019 iPhone refresh have included mention of cost reductions at some level. Up to now I've been hopeful that it would translate into lower starting prices as I believe one of Apple's biggest obstacles to shipping more units is directly related to price.If tariffs get in the way I don't think Apple will pass them onto the consumer.
If you think that costs will drop 10% YoY you are delusional. If you think Apple will absorb all additional costs without passing it on to the user then we'll see the revenue and earnings for the quarter.
If I were running a company that had major CE product affected by new tariffs my next product would take into account the tariff and then adjust costs so that I can maintain the same price point without losing profit. With so many components involved it would only be difficult to choose with components need to be held back from being updated that year or which vendor(s) I can turn to which have components within a new, lower acceptable window of usability. I certainly wouldn't be eating $120 in profit on a device that costs $1,200 to make—with a 21.50% net profit margin do you really think we'll see a 11.50% next year?
I think prices will be adjusted down but if that happens I wouldn't like to guess by how much.
That said, 10% YoY? I wouldn't consider that delusional. $674 for an entry level 2019 iPhone? Why not? Why not go for $650 and grab everyone's attention. Or go one step further and bundle a six month subscription to something?
Trading in an iPhone 6 gets you an XR today for $649. With cost reductions, $650 for an entry level 2019 iPhone is far from delusional.
Costs do not equal prices. To adjust costs down 10% to some oddball $674 price point and then to say “why not” to reducing the price even further with zero accountability for costs, profit margin, or device changes shows that your comments are delusional.
Of course, you believe that Apple just jacks up the price without actually improving devices, but even in your world that would still affect profit margins… unless, well…
The fact remains, 10% is not delusional IMO.
One of the most expensive elements of the phone (storage) has seen its price plummet this year. If you add on the savings they are supposedly achieving in other areas (including the most expensive element, the screen), 10% doesn't seem as outlandish to be delusional.
Techinsights will no doubt clue us in on a pretty good estimate of how far they managed pull costs down shortly after the release of the new phones.
And yes, I do believe Apple has jacked up prices to see how far they can go but not that there haven't been improvements. The problem is that there haven't been enough improvements.
A lot of the rumours surrounding the 2019 iPhone refresh have included mention of cost reductions at some level. Up to now I've been hopeful that it would translate into lower starting prices as I believe one of Apple's biggest obstacles to shipping more units is directly related to price.If tariffs get in the way I don't think Apple will pass them onto the consumer.
If you think that costs will drop 10% YoY you are delusional. If you think Apple will absorb all additional costs without passing it on to the user then we'll see the revenue and earnings for the quarter.
If I were running a company that had major CE product affected by new tariffs my next product would take into account the tariff and then adjust costs so that I can maintain the same price point without losing profit. With so many components involved it would only be difficult to choose with components need to be held back from being updated that year or which vendor(s) I can turn to which have components within a new, lower acceptable window of usability. I certainly wouldn't be eating $120 in profit on a device that costs $1,200 to make—with a 21.50% net profit margin do you really think we'll see a 11.50% next year?
I think prices will be adjusted down but if that happens I wouldn't like to guess by how much.
That said, 10% YoY? I wouldn't consider that delusional. $674 for an entry level 2019 iPhone? Why not? Why not go for $650 and grab everyone's attention. Or go one step further and bundle a six month subscription to something?
Trading in an iPhone 6 gets you an XR today for $649. With cost reductions, $650 for an entry level 2019 iPhone is far from delusional.
I thought you were delusional too -- but that iPhone 6 example is valid: Apple has no earthly need for an iPhone 6 -- in fact, they will be obsoleted in a few weeks. But, I just traded in my iPhone 6 for $150 to get the $649 Xr for my grandson (he was kind enough to let me have his iPhone 7 --- he's good that way! LOL)
Apple has multiple ways of lowering prices -- especially now that they're increasingly marketing through 3rd parties. They can simply let the 3rd party give a "discount".
A lot of the rumours surrounding the 2019 iPhone refresh have included mention of cost reductions at some level. Up to now I've been hopeful that it would translate into lower starting prices as I believe one of Apple's biggest obstacles to shipping more units is directly related to price.If tariffs get in the way I don't think Apple will pass them onto the consumer.
If you think that costs will drop 10% YoY you are delusional. If you think Apple will absorb all additional costs without passing it on to the user then we'll see the revenue and earnings for the quarter.
If I were running a company that had major CE product affected by new tariffs my next product would take into account the tariff and then adjust costs so that I can maintain the same price point without losing profit. With so many components involved it would only be difficult to choose with components need to be held back from being updated that year or which vendor(s) I can turn to which have components within a new, lower acceptable window of usability. I certainly wouldn't be eating $120 in profit on a device that costs $1,200 to make—with a 21.50% net profit margin do you really think we'll see a 11.50% next year?
I think prices will be adjusted down but if that happens I wouldn't like to guess by how much.
That said, 10% YoY? I wouldn't consider that delusional. $674 for an entry level 2019 iPhone? Why not? Why not go for $650 and grab everyone's attention. Or go one step further and bundle a six month subscription to something?
Trading in an iPhone 6 gets you an XR today for $649. With cost reductions, $650 for an entry level 2019 iPhone is far from delusional.
Costs do not equal prices. To adjust costs down 10% to some oddball $674 price point and then to say “why not” to reducing the price even further with zero accountability for costs, profit margin, or device changes shows that your comments are delusional.
Of course, you believe that Apple just jacks up the price without actually improving devices, but even in your world that would still affect profit margins… unless, well…
The fact remains, 10% is not delusional IMO.
One of the most expensive elements of the phone (storage) has seen its price plummet this year. If you add on the savings they are supposedly achieving in other areas (including the most expensive element, the screen), 10% doesn't seem as outlandish to be delusional.
Techinsights will no doubt clue us in on a pretty good estimate of how far they managed pull costs down shortly after the release of the new phones.
And yes, I do believe Apple has jacked up prices to see how far they can go but not that there haven't been improvements. The problem is that there haven't been enough improvements.
As previously stated, costs can adjusted in multiple ways, but you said that Apple will eat their profit margin by absorbing a 10% tarifff and then not passing on costs to the customer. That is distinct from my statement about using less expensive components or not advancing some tech so that price points and profit margins can remain the same after tariffs are applied.
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One of the most expensive elements of the phone (storage) has seen its price plummet this year. If you add on the savings they are supposedly achieving in other areas (including the most expensive element, the screen), 10% doesn't seem as outlandish to be delusional.
Techinsights will no doubt clue us in on a pretty good estimate of how far they managed pull costs down shortly after the release of the new phones.
And yes, I do believe Apple has jacked up prices to see how far they can go but not that there haven't been improvements. The problem is that there haven't been enough improvements.
Apple has multiple ways of lowering prices -- especially now that they're increasingly marketing through 3rd parties. They can simply let the 3rd party give a "discount".