I'm frankly in disbelief that Apple can achieve this level of penetration in any market any where. An average iPhone is about 2 to 3 times more expensive than an average Android or other competitor device. It really speaks to the zero interest 30mo payment plans, at least in the USA, that carriers use as incentives to lock in customers.
Good point. You can walk into just about any of the bigger cell phone stores and walk out with what they claim is a free iPhone.
It is not of course but the way it's marketed, and as attractive as they make it sound, people with little disposable income get sucked in. My jobless grandson and part-time working girlfriend both have the latest iPhones, tho they often have issues with service being cut-off for non-payment.
That's not Apple's problem though, that's for ATT, T-Mo or whoever to build-in the loss on the prices we all pay for service when we're being responsible customers.
I don’t see as a differentiating factor as every phone is offered that way.
I think the mass market consumer has an amount of money per month where they feel something is affordable and something is not. If it is something like $50/mo, customers will start seeing that as too expensive. $30? $35? There is some number per month where there is a mass of consumers who feel that it is payable, without much thought, and it is also price inelastic to lower prices per mo. Customers see $20/mo, $27/mo and $34/mo, and don't think $34/mo is much more, and will take the more expensive device.
For more expensive devices, the carriers will just stretch out the payments. Instead of 24 months, they will stretch it to 30 months to keep the monthly payment in the $35/mo range. As devices get yet more expensive, 36 mo payment plans will be coming into play. It's an inevitability now. They will start running into the limits of what consumer think a phone lifespan and trade-in value is going to be too. So, this next round of phones is really going to be exploring how long a consumer thinks a phone will last and how long OEMs and carriers can make a phone last.
The 2nd owner of a phone is going to be pretty valuable for a carrier if they can get advantageous trade-in values for them.
These type of payment policies is advantageous to Apple and other premium phone OEMs as it gets more of the mass market to get premium phones. The low end and mid range are then left to the thriftiest of consumers and the last desirable consumers for carriers. So, it is differentiating factor for Apple. If consumers had to pay upfront, I don't think there is anyway they could get 50% sales share. There just isn't enough people with $1000 to spend upfront on a phone.
I'm frankly in disbelief that Apple can achieve this level of penetration in any market any where. An average iPhone is about 2 to 3 times more expensive than an average Android or other competitor device. It really speaks to the zero interest 30mo payment plans, at least in the USA, that carriers use as incentives to lock in customers.
Good point. You can walk into just about any of the bigger cell phone stores and walk out with what they claim is a free iPhone.
It is not of course but the way it's marketed, and as attractive as they make it sound, people with little disposable income get sucked in. My jobless grandson and part-time working girlfriend both have the latest iPhones, tho they often have issues with service being cut-off for non-payment.
That's not Apple's problem though, that's for ATT, T-Mo or whoever to build-in the loss on the prices we all pay for service when we're being responsible customers.
I don’t see as a differentiating factor as every phone is offered that way.
I think the mass market consumer has an amount of money per month where they feel something is affordable and something is not. If it is something like $50/mo, customers will start seeing that as too expensive. $30? $35? There is some number per month where there is a mass of consumers who feel that it is payable, without much thought, and it is also price inelastic to lower prices per mo. Customers see $20/mo, $27/mo and $34/mo, and don't think $34/mo is much more, and will take the more expensive device.
For more expensive devices, the carriers will just stretch out the payments. Instead of 24 months, they will stretch it to 30 months to keep the monthly payment in the $35/mo range. As devices get yet more expensive, 36 mo payment plans will be coming into play. It's an inevitability now. They will start running into the limits of what consumer think a phone lifespan and trade-in value is going to be too. So, this next round of phones is really going to be exploring how long a consumer thinks a phone will last and how long OEMs and carriers can make a phone last.
The 2nd owner of a phone is going to be pretty valuable for a carrier if they can get advantageous trade-in values for them.
These type of payment policies is advantageous to Apple and other premium phone OEMs as it gets more of the mass market to get premium phones. The low end and mid range are then left to the thriftiest of consumers and the last desirable consumers for carriers. So, it is differentiating factor for Apple. If consumers had to pay upfront, I don't think there is anyway they could get 50% sales share. There just isn't enough people with $1000 to spend upfront on a phone.
Of course. But it seems as though you’re assuming that the only phones Apple sells are the high end Pro Max models vs everyone else selling just cheaper ones. We know that’s not true.
I'm frankly in disbelief that Apple can achieve this level of penetration in any market any where. An average iPhone is about 2 to 3 times more expensive than an average Android or other competitor device. It really speaks to the zero interest 30mo payment plans, at least in the USA, that carriers use as incentives to lock in customers.
Good point. You can walk into just about any of the bigger cell phone stores and walk out with what they claim is a free iPhone.
It is not of course but the way it's marketed, and as attractive as they make it sound, people with little disposable income get sucked in. My jobless grandson and part-time working girlfriend both have the latest iPhones, tho they often have issues with service being cut-off for non-payment.
That's not Apple's problem though, that's for ATT, T-Mo or whoever to build-in the loss on the prices we all pay for service when we're being responsible customers.
I don’t see as a differentiating factor as every phone is offered that way.
I think the mass market consumer has an amount of money per month where they feel something is affordable and something is not. If it is something like $50/mo, customers will start seeing that as too expensive. $30? $35? There is some number per month where there is a mass of consumers who feel that it is payable, without much thought, and it is also price inelastic to lower prices per mo. Customers see $20/mo, $27/mo and $34/mo, and don't think $34/mo is much more, and will take the more expensive device.
For more expensive devices, the carriers will just stretch out the payments. Instead of 24 months, they will stretch it to 30 months to keep the monthly payment in the $35/mo range. As devices get yet more expensive, 36 mo payment plans will be coming into play. It's an inevitability now. They will start running into the limits of what consumer think a phone lifespan and trade-in value is going to be too. So, this next round of phones is really going to be exploring how long a consumer thinks a phone will last and how long OEMs and carriers can make a phone last.
The 2nd owner of a phone is going to be pretty valuable for a carrier if they can get advantageous trade-in values for them.
These type of payment policies is advantageous to Apple and other premium phone OEMs as it gets more of the mass market to get premium phones. The low end and mid range are then left to the thriftiest of consumers and the last desirable consumers for carriers. So, it is differentiating factor for Apple. If consumers had to pay upfront, I don't think there is anyway they could get 50% sales share. There just isn't enough people with $1000 to spend upfront on a phone.
Of course. But it seems as though you’re assuming that the only phones Apple sells are the high end Pro Max models vs everyone else selling just cheaper ones. We know that’s not true.
I consider everything above about $600 as a premium or high end phone. The only non high-end phone Apple sells is the iPhone SE. Apple obviously has very competitive offerings for >$600 phones. Their ASP for phones is something like $750 to $800. They aren't selling that many iPhone SE units with an ASP that high.
Apple and carriers are also doing a good job to get people to upgrade. Phones seem quite commoditized now, where a $500 phone can do 95% of the job of $1000 phone. The only thing I can really attribute it to are payment plans through the carriers.
I'm frankly in disbelief that Apple can achieve this level of penetration in any market any where. An average iPhone is about 2 to 3 times more expensive than an average Android or other competitor device. It really speaks to the zero interest 30mo payment plans, at least in the USA, that carriers use as incentives to lock in customers.
Good point. You can walk into just about any of the bigger cell phone stores and walk out with what they claim is a free iPhone.
It is not of course but the way it's marketed, and as attractive as they make it sound, people with little disposable income get sucked in. My jobless grandson and part-time working girlfriend both have the latest iPhones, tho they often have issues with service being cut-off for non-payment.
That's not Apple's problem though, that's for ATT, T-Mo or whoever to build-in the loss on the prices we all pay for service when we're being responsible customers.
I don’t see as a differentiating factor as every phone is offered that way.
I think the mass market consumer has an amount of money per month where they feel something is affordable and something is not. If it is something like $50/mo, customers will start seeing that as too expensive. $30? $35? There is some number per month where there is a mass of consumers who feel that it is payable, without much thought, and it is also price inelastic to lower prices per mo. Customers see $20/mo, $27/mo and $34/mo, and don't think $34/mo is much more, and will take the more expensive device.
For more expensive devices, the carriers will just stretch out the payments. Instead of 24 months, they will stretch it to 30 months to keep the monthly payment in the $35/mo range. As devices get yet more expensive, 36 mo payment plans will be coming into play. It's an inevitability now. They will start running into the limits of what consumer think a phone lifespan and trade-in value is going to be too. So, this next round of phones is really going to be exploring how long a consumer thinks a phone will last and how long OEMs and carriers can make a phone last.
The 2nd owner of a phone is going to be pretty valuable for a carrier if they can get advantageous trade-in values for them.
These type of payment policies is advantageous to Apple and other premium phone OEMs as it gets more of the mass market to get premium phones. The low end and mid range are then left to the thriftiest of consumers and the last desirable consumers for carriers. So, it is differentiating factor for Apple. If consumers had to pay upfront, I don't think there is anyway they could get 50% sales share. There just isn't enough people with $1000 to spend upfront on a phone.
Of course. But it seems as though you’re assuming that the only phones Apple sells are the high end Pro Max models vs everyone else selling just cheaper ones. We know that’s not true.
I consider everything above about $600 as a premium or high end phone. The only non high-end phone Apple sells is the iPhone SE. Apple obviously has very competitive offerings for >$600 phones. Their ASP for phones is something like $750 to $800. They aren't selling that many iPhone SE units with an ASP that high.
Apple and carriers are also doing a good job to get people to upgrade. Phones seem quite commoditized now, where a $500 phone can do 95% of the job of $1000 phone. The only thing I can really attribute it to are payment plans through the carriers.
It’s possible. Though people the past three years or so have been incentivized to buy a phone outright and move to a new one every year. I’ve heard that it has had some success. We sometimes buy a new phone two years in a row, though usually every other year. I’m pretty sure, if the rumors about the cameras and some other features are correct, that we’ll do that again this year. I know we’re not typical buyers.
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For more expensive devices, the carriers will just stretch out the payments. Instead of 24 months, they will stretch it to 30 months to keep the monthly payment in the $35/mo range. As devices get yet more expensive, 36 mo payment plans will be coming into play. It's an inevitability now. They will start running into the limits of what consumer think a phone lifespan and trade-in value is going to be too. So, this next round of phones is really going to be exploring how long a consumer thinks a phone will last and how long OEMs and carriers can make a phone last.
The 2nd owner of a phone is going to be pretty valuable for a carrier if they can get advantageous trade-in values for them.
These type of payment policies is advantageous to Apple and other premium phone OEMs as it gets more of the mass market to get premium phones. The low end and mid range are then left to the thriftiest of consumers and the last desirable consumers for carriers. So, it is differentiating factor for Apple. If consumers had to pay upfront, I don't think there is anyway they could get 50% sales share. There just isn't enough people with $1000 to spend upfront on a phone.
Apple and carriers are also doing a good job to get people to upgrade. Phones seem quite commoditized now, where a $500 phone can do 95% of the job of $1000 phone. The only thing I can really attribute it to are payment plans through the carriers.