Notice the component price of the 499 iphone is estimated at $245.83. So 499 represents a 50% profit. Even apple research and development cannot justify a 50% markup.. motorola have research and development cost too, so do nokia, etc.. and apple already knew how to make an ipod so this research was basically apple figuring out how to make an ipod make phone calls and before you scream touch screen.. my treo has a touch screen. Apple has not reinvented the wheel.. there is no leap in technology. Apple can claim leap in UI (that is still to be determined by consumers) but the tech was already there, apple putting it together does not justify 50% margin.
Gross margin isn't net margin. Apple's iPods have 50% gross margin too, but that doesn't mean that Apple's 10-Q shows anything close to 50% margin. It's been 10-15% for the last few years. More of Apple's net income comes from the interest and dividends on their investments than it comes from their own products.
What is the gross margin of Moto and Nokia phones? The article you linked doesn't mention that.
I do not think it is fair to consider the R&D on it, you always have R&D for new models of anything including a paperclip.
So you think all business do R&D out of the kindness of their heart and should never expect a return on investment?
Apple has a well documented policy of amortizing R&D costs over the expected unit sales for three years following introduction. A policy is generally required for both for tax and SEC purposes, Apple just chose the three years since that fits major tech device development cycles relatively well. Those costs are justifiably and necessarily considered as part of the gross and net profit margin computations for the devices.
So you think all business do R&D out of the kindness of their heart and should never expect a return on investment?
Apple has a well documented policy of amortizing R&D costs over the expected unit sales for three years following introduction. A policy is generally required for both for tax and SEC purposes, Apple just chose the three years since that fits major tech device development cycles relatively well. Those costs are justifiably and necessarily considered as part of the gross and net profit margin computations for the devices.
R&D is like you said normaly recovered in a 3 to 5 year period. It is part of doing business and the only way to keep their products fresh. Selling 1 mil phones in 1 year is going to more than cover the R&D. It is build into the price.
Right, because iPhones manufacture, package, ship, advertise, account, and offer phone assistance and Apple Care for themselves.
That other $255 is just PURE profit.
What don't you understand?.. the price i stated included MANUFACTURING.
It must cost apple a million bucks to package and ship an iphone.. good thing customers are NEVER CHARGED FOR SHIPPING AND HANDLING and as to advertising, well we all know.. you have to charge 100 bucks per product for advertising. I mean, the fact that you can get a razr for less than 100 only means that motorola doesn't advertise, otherwise, they too would need a $225 profit..
But i get what you are saying.. u saying it cost apple to manufacture, package, ship, advertise, account and offer phone assistance but it cost motorola nothing to do the same for the razr.
Apple is the only company in the world who cannot ccontrol their cost sufficiently.. and apple call themselves an advanced company.. Really, they should advertise themselves as a backwards tech company.. costs are so high, that advertising, packaging, shipping and account management exceeds manufacturing cost..
Yes but three phones is more than one isn't it?. Would you get three iphones if each phone resulted in a plan cost of $150?. I presume the conversation was about the bill for one phone or else the comparison is meaningless.. there are companies that pay thousands for phone bills (some cab companies for instance), there are some small businesses that also pay hundreds and possibly thousands.. just cause the phone bill for ONE iphone is less than their aggregate bill does not mean they run out and get an iphone.
So yes, anyone who pays 150 for a single phone bill has too much money and i can direct them where to donate it to a worthy cause (me). The only reason i would ever pay $150 for a phone plan is if somehow it is responsible for revenue that far exceeds it's cost (ie, a business tool)... i remember saying in another post that unless apple opens this iphone to outside development, it will be limited as a business tool. Businesses don't care if they can play itunes on their phones. I am finding it hard to fanthom exactly what customer demographic (except for the apple diehards who would buy shit if it came out of jobs ass) apple is aiming for. It's a weak business tool so the people who would most likely pay the exorbitant fee is disinterested, it's way more expensive than a consumer device.. who exactly are they aiming for?.. Richie rich kids?.
That's good that you can count. Yes, of course, it's for three, I wasn't exactly hiding that.
But the point, which I suppose I should have made more clearly, is that with more expensive plans, you get extra features that you don't get with cheaper ones.
For $100 a month I got a 2,000 minute per month plan. With that price plan, they gave me unlimited data for that one phone for $15 per month. But, then they also gave me an extra phone, with data. so, that worked out to two. Then, as a result, they gave me a discount for my daughters plan, plus the same $15 per month data plan. That added up to $150 per month (plus fees, taxes, etc.).
Of course, my daughter downloads all kinds of junk every month, so add another $50 per month for that, and it comes to $190. But that $50 worth of junk doesn't really count.
The point is that if I got a cheaper plan, I wouldn't have gotten all of the freebies, and discounts.
By the way, no one ever has too much money. If you earn it, you deserve it. Then you have the right to spend it on anything you want. No one has the right to criticize you for it. There is jealousy of course.
Companies are different. They spend much money on phones because it's cheaper than having to meet in person. They are actually saving money.
Right, because iPhones manufacture, package, ship, advertise, account, and offer phone assistance and Apple Care for themselves.
That other $255 is just PURE profit.
Lot's of people have NO understanding of manufacturing. They are naive. They think that the part breakdown is the end of it. And the phone isn't even out yet!
They also don't understand that this phone could easily have entailed $100 million in R&D. Manufacturers try to get that money back, not only in government tax writeoffs for R&D, but upfront. They calculate a certain number of sales over a period, and then add the R&D to the prices for that period.
Usually, once the R&D is paid off, they drop the price.
R&D is like you said normaly recovered in a 3 to 5 year period. It is part of doing business and the only way to keep their products fresh. Selling 1 mil phones in 1 year is going to more than cover the R&D. It is build into the price.
But hey we can agree to disagree.
R&D is often recovered much more quickly that 3 years, often one. In an area where technology changes rapidly, R&D is recovered quickly. Otherwise the models are discontinued, and the R&D is never recovered fully. Each new model has it's own R&D costs associated with them, though not as much as the forst product in the line.
I've never heard of R&D costs being recovered over a 5 year period. The product is long gone by then.
What don't you understand?.. the price i stated included MANUFACTURING.
It must cost apple a million bucks to package and ship an iphone.. good thing customers are NEVER CHARGED FOR SHIPPING AND HANDLING and as to advertising, well we all know.. you have to charge 100 bucks per product for advertising. I mean, the fact that you can get a razr for less than 100 only means that motorola doesn't advertise, otherwise, they too would need a $225 profit..
But i get what you are saying.. u saying it cost apple to manufacture, package, ship, advertise, account and offer phone assistance but it cost motorola nothing to do the same for the razr.
Apple is the only company in the world who cannot ccontrol their cost sufficiently.. and apple call themselves an advanced company.. Really, they should advertise themselves as a backwards tech company.. costs are so high, that advertising, packaging, shipping and account management exceeds manufacturing cost..
That's good that you can count. Yes, of course, it's for three, I wasn't exactly hiding that.
But the point, which I suppose I should have made more clearly, is that with more expensive plans, you get extra features that you don't get with cheaper ones.
For $100 a month I got a 2,000 minute per month plan. With that price plan, they gave me unlimited data for that one phone for $15 per month. But, then they also gave me an extra phone, with data. so, that worked out to two. Then, as a result, they gave me a discount for my daughters plan, plus the same $15 per month data plan. That added up to $150 per month (plus fees, taxes, etc.).
Of course, my daughter downloads all kinds of junk every month, so add another $50 per month for that, and it comes to $190. But that $50 worth of junk doesn't really count.
The point is that if I got a cheaper plan, I wouldn't have gotten all of the freebies, and discounts.
By the way, no one ever has too much money. If you earn it, you deserve it. Then you have the right to spend it on anything you want. No one has the right to criticize you for it. There is jealousy of course.
Companies are different. They spend much money on phones because it's cheaper than having to meet in person. They are actually saving money.
Interesting, you paid more but got freebies?.. are you one of those people who still think there is such a thing as a free lunch?. Hmmm.. hate to break it to you but your 100 dollar plan included unlimited data.. i once had a plan for 46.74 per month for 1200 minutes. Actually, i could have gotten 2000 minutes for 75 bucks so either you are overpaying or the company you are with had already factored in the "freebies" you supposedly got.
also, i am with sprint.. i have unlimted data plan on my phone too.. i pay less than 70 bucks a month and my unlimited data plan was 15 bucks a month. I'm not that impressed with your freebies to be honest. I could do better.
My point is/was that $150 a month per phone for a plan is exorbitant.. i don't care what freebies the phone company gives me, i am not paying $150 for service a month (unless of course they offer to wash my clothes for me weekly, iron them, make me dinner, etc). I mean, these would have to be pretty unusual freebies for me to give them 150 bucks a month. I suspect a lot of people feel that way. I've never met anyone who said.. "i'm gonna get the most expensive plan cell company A has to offer cause i want the freebies". What does your freebies have to do with anything?
I don't think so.. when apple overcharges for a product, the mac fanatics are quick to point out apple has cost as if the person making the original argument is stupid and don't understand that. Of course apple has cost.. duh!!... the point is that the cost does not justify the profit margin they seek. Every company in the world has cost. That is a constant. No company has ever developed a product for free. How the fact that apple has to pay to develop a product justifies them overcharging for it escapes me. The same stupid argument is made relative to computers. As if Dell, etc don't have manufacturing cost, advertising cost, etc. According to the apple apologists, apple has R&D, manufacturing cost, etc.. they should be allowed to charge anything for their products.
Here is what people should understand. Apple charges ridiculous prices cause the apple fanatics will pay for them. Apple will only become a responsible company when their base demands it. The more you just eat whatever shit jobs feed you, the more he takes advantage of you. Why do people think Jobs is altrustic and is looking out for us?. Mac fanatics seems to think cause apple is good, microsoft is evil that implies that apple would never try to rip their customers off. Yeah, right ok and i have a bridge in brooklyn to sell to anyone with that belief. The apple economy (everything apple) is the only economy that seems tod defy the laws of capitalism that states competition drives prices down. Apple prices their products oblivious to the fact that competition exist and then apple apologist get on forums just like this wailing about they don't undersand why 90% of the world is still buying microsoft crappy operating system and not the beautiful mac.. could it be that 90% of the world don't like being ripped of?.
BTW, how is that overpriced apple TV selling.. i'm sure it's exceeding apple modest expectation (probably some small number like 100,000). Anyway, i would be surprised if it doesn't reach 1 million before the year is out.. apple have lots of mac fanatics (more than a million). I would be curious to see quarter to quarter sales results, once the fanatics have all bought their apple TV, will sales drop dramatically or will the general public too be fooled into buying a high priced, low resolution product.
If your examples held any water you might have a point, but they don't. 5G iPods have a parts cost at about 45% of the retail cost. They are estimated for a 22% gross profit margin. That means about 33% of the cost of that iPod is in R&D, manufacturing, marketing, shipping, storage, etc.
Given that those type of costs are not inconsistent across product lines it indicates an expected 12-15% gross profit margin for first release iPhones. About the smallest institutional investors will tolerate before punishing stock prices. No apologies here, just stark business reality.
If your examples held any water you might have a point, but they don't. 5G iPods have a parts cost at about 45% of the retail cost. They are estimated for a 22% gross profit margin. That means about 33% of the cost of that iPod is in R&D, manufacturing, marketing, shipping, storage, etc.
Given that those type of costs are not inconsistent across product lines it indicates an expected 12-15% gross profit margin for first release iPhones. About the smallest institutional investors will tolerate before punishing stock prices. No apologies here, just stark business reality.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick. Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Thanks apple.
Don't let the door hit you on the way out. I'm sorry you feel so taken advantage of. The answer is easy: don't buy Apple products in the future.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick.
In all seriousness then, why do you own these products? I'm sure you are aware of the less expensive MP3 players and the cheaper Dell computers? Certainly you could be saving loads by buying these products next time you are buying.
Quote:
...Anyway, I love apple products...
Ah, OK. And why do you love these products? Could it be that they are better products? Is it the extra mile that Apple goes in design, engineering, that produces such superior products? Is that not worth something? Obviously a lot of people think so. Maybe you don't. The choice is yours. But yeah, there is a real hate that comes through in your posts.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick. Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Thanks apple.
You overdo your posts. Don't use the bad poetry and philosophy. These are products. You either buy them or not.
If you refuse to investigate your purchases, shame on you.
Interesting, you paid more but got freebies?.. are you one of those people who still think there is such a thing as a free lunch?. Hmmm.. hate to break it to you but your 100 dollar plan included unlimited data.. i once had a plan for 46.74 per month for 1200 minutes. Actually, i could have gotten 2000 minutes for 75 bucks so either you are overpaying or the company you are with had already factored in the "freebies" you supposedly got.
also, i am with sprint.. i have unlimted data plan on my phone too.. i pay less than 70 bucks a month and my unlimited data plan was 15 bucks a month. I'm not that impressed with your freebies to be honest. I could do better.
My point is/was that $150 a month per phone for a plan is exorbitant.. i don't care what freebies the phone company gives me, i am not paying $150 for service a month (unless of course they offer to wash my clothes for me weekly, iron them, make me dinner, etc). I mean, these would have to be pretty unusual freebies for me to give them 150 bucks a month. I suspect a lot of people feel that way. I've never met anyone who said.. "i'm gonna get the most expensive plan cell company A has to offer cause i want the freebies". What does your freebies have to do with anything?
Since you obviously don't know anything about the plan, and didn't carefully read what I said it was, your comment is irrelevent.
If you don't want to spend the money, or can't afford to, that's fine. just say it.
Don't let the door hit you on the way out. I'm sorry you feel so taken advantage of. The answer is easy: don't buy Apple products in the future.
Then don't fucking complain when no one is buying apple products and keep buying microsoft crappy operating system. Just sit in the corner and enjoy your mac all by yourself. What a dumbass comment you made. What's the point of apple making products if not for more people to buy them?
Since you obviously don't know anything about the plan, and didn't carefully read what I said it was, your comment is irrelevent.
If you don't want to spend the money, or can't afford to, that's fine. just say it.
Don't criticize others.
Gee dude.. who said i couldn't afford to?. I think the original point of my post is lost in all these replies and counter replies. My point is that the market for people who want to afford these devices at these prices is limited. Someone will always buy some expensive products. Heck, there are cell phones made of diamonds thta cost thousands that someone bought. That is not the point. The point was that the product is not competitevly priced to attract a largue customer base. I think i was replying to someone who thought these things would sell very well. Why would i ever argue these things would not sell?. Lamborgini's sell, not many people buy them but they sell. I am 100% sure at least one person will buy the iphone (if not more).
As to critizing others, what's wrong with that?.. this is the problem our society has today.. suddenly, it's wrong to tell people when they are full of shit. I see it all the time.. people make dumbass comments and then claim that their opinion, regardless of how dumb it is, is just as valid as any other person opinion. Why is that?. Don't critize others?.,. please!!.. why, cause the others are immune from criticism?. I'm certainly not immune from criticism, you never catch me saying i shouldn't be critised but now you shouldn't?.. get of your horse!!.
Look, your opinion (which i think is wrong) is that $150 for a plan is perfectly reasonable. My opinion is that it is not. It's that simple. We should be allowed to critize each other positions. Regardless, this is all academic. We shall see when the iphone comes out who is right and who is not.
You overdo your posts. Don't use the bad poetry and philosophy. These are products. You either buy them or not.
If you refuse to investigate your purchases, shame on you.
Actually, something we agree on. Shame on me indeed. Actually, my windows loving friend laughed at me. He was like.. dude, it's ok to buy a mac (interestingly, that's all he uses at work, he's a designer) but at that price?. When he heard the price i paid, he whistled. (you know, that whistle that says "wow, that's a lot of money").
He thought i should have bought a cheaper mac or try to hack the macOS (i'm lazy, that would never happen).
But you are right there.. apple didn't put a gun to my head. Shame on me indeed.
Question: Do you think there is a market for G5's on ebay?. Maybe there are mac fans nostalgic for the powerpc processor?. I have to find out.
In all seriousness then, why do you own these products? I'm sure you are aware of the less expensive MP3 players and the cheaper Dell computers? Certainly you could be saving loads by buying these products next time you are buying.
Ah, OK. And why do you love these products? Could it be that they are better products? Is it the extra mile that Apple goes in design, engineering, that produces such superior products? Is that not worth something? Obviously a lot of people think so. Maybe you don't. The choice is yours. But yeah, there is a real hate that comes through in your posts.
You mistake bitterness and buyers remorse for hate. I can see how though.. bitterness coupled with buyers remose looks a lot like hate. Besides, since i made my fateful purchase, i have been on a rampage against apple elitism (you know, apple philosophy of "we'll price our products so that 90% of you wouldn't give a shit, we only want the coolaid drinking crowd"). Actually, to be honest, the ipod is competitevly priced (i guess they did give a shit about the other 90%). My only complaint with the ipod is apple stupid battery policy. So i have to give apple kudos for pricing the ipod appropriately but i will not let up on the other products. The apple TV is overpriced, macs are still overpriced and the iphone will arrive overpriced.
Comments
Notice the component price of the 499 iphone is estimated at $245.83. So 499 represents a 50% profit. Even apple research and development cannot justify a 50% markup.. motorola have research and development cost too, so do nokia, etc.. and apple already knew how to make an ipod so this research was basically apple figuring out how to make an ipod make phone calls and before you scream touch screen.. my treo has a touch screen. Apple has not reinvented the wheel.. there is no leap in technology. Apple can claim leap in UI (that is still to be determined by consumers) but the tech was already there, apple putting it together does not justify 50% margin.
Gross margin isn't net margin. Apple's iPods have 50% gross margin too, but that doesn't mean that Apple's 10-Q shows anything close to 50% margin. It's been 10-15% for the last few years. More of Apple's net income comes from the interest and dividends on their investments than it comes from their own products.
What is the gross margin of Moto and Nokia phones? The article you linked doesn't mention that.
I do not think it is fair to consider the R&D on it, you always have R&D for new models of anything including a paperclip.
So you think all business do R&D out of the kindness of their heart and should never expect a return on investment?
Apple has a well documented policy of amortizing R&D costs over the expected unit sales for three years following introduction. A policy is generally required for both for tax and SEC purposes, Apple just chose the three years since that fits major tech device development cycles relatively well. Those costs are justifiably and necessarily considered as part of the gross and net profit margin computations for the devices.
So you think all business do R&D out of the kindness of their heart and should never expect a return on investment?
Apple has a well documented policy of amortizing R&D costs over the expected unit sales for three years following introduction. A policy is generally required for both for tax and SEC purposes, Apple just chose the three years since that fits major tech device development cycles relatively well. Those costs are justifiably and necessarily considered as part of the gross and net profit margin computations for the devices.
R&D is like you said normaly recovered in a 3 to 5 year period. It is part of doing business and the only way to keep their products fresh. Selling 1 mil phones in 1 year is going to more than cover the R&D. It is build into the price.
But hey we can agree to disagree.
Right, because iPhones manufacture, package, ship, advertise, account, and offer phone assistance and Apple Care for themselves.
That other $255 is just PURE profit.
What don't you understand?.. the price i stated included MANUFACTURING.
It must cost apple a million bucks to package and ship an iphone.. good thing customers are NEVER CHARGED FOR SHIPPING AND HANDLING and as to advertising, well we all know.. you have to charge 100 bucks per product for advertising. I mean, the fact that you can get a razr for less than 100 only means that motorola doesn't advertise, otherwise, they too would need a $225 profit..
But i get what you are saying.. u saying it cost apple to manufacture, package, ship, advertise, account and offer phone assistance but it cost motorola nothing to do the same for the razr.
Apple is the only company in the world who cannot ccontrol their cost sufficiently.. and apple call themselves an advanced company.. Really, they should advertise themselves as a backwards tech company.. costs are so high, that advertising, packaging, shipping and account management exceeds manufacturing cost..
Yes but three phones is more than one isn't it?. Would you get three iphones if each phone resulted in a plan cost of $150?. I presume the conversation was about the bill for one phone or else the comparison is meaningless.. there are companies that pay thousands for phone bills (some cab companies for instance), there are some small businesses that also pay hundreds and possibly thousands.. just cause the phone bill for ONE iphone is less than their aggregate bill does not mean they run out and get an iphone.
So yes, anyone who pays 150 for a single phone bill has too much money and i can direct them where to donate it to a worthy cause (me). The only reason i would ever pay $150 for a phone plan is if somehow it is responsible for revenue that far exceeds it's cost (ie, a business tool)... i remember saying in another post that unless apple opens this iphone to outside development, it will be limited as a business tool. Businesses don't care if they can play itunes on their phones. I am finding it hard to fanthom exactly what customer demographic (except for the apple diehards who would buy shit if it came out of jobs ass) apple is aiming for. It's a weak business tool so the people who would most likely pay the exorbitant fee is disinterested, it's way more expensive than a consumer device.. who exactly are they aiming for?.. Richie rich kids?.
That's good that you can count. Yes, of course, it's for three, I wasn't exactly hiding that.
But the point, which I suppose I should have made more clearly, is that with more expensive plans, you get extra features that you don't get with cheaper ones.
For $100 a month I got a 2,000 minute per month plan. With that price plan, they gave me unlimited data for that one phone for $15 per month. But, then they also gave me an extra phone, with data. so, that worked out to two. Then, as a result, they gave me a discount for my daughters plan, plus the same $15 per month data plan. That added up to $150 per month (plus fees, taxes, etc.).
Of course, my daughter downloads all kinds of junk every month, so add another $50 per month for that, and it comes to $190. But that $50 worth of junk doesn't really count.
The point is that if I got a cheaper plan, I wouldn't have gotten all of the freebies, and discounts.
By the way, no one ever has too much money. If you earn it, you deserve it. Then you have the right to spend it on anything you want. No one has the right to criticize you for it. There is jealousy of course.
Companies are different. They spend much money on phones because it's cheaper than having to meet in person. They are actually saving money.
Right, because iPhones manufacture, package, ship, advertise, account, and offer phone assistance and Apple Care for themselves.
That other $255 is just PURE profit.
Lot's of people have NO understanding of manufacturing. They are naive. They think that the part breakdown is the end of it. And the phone isn't even out yet!
They also don't understand that this phone could easily have entailed $100 million in R&D. Manufacturers try to get that money back, not only in government tax writeoffs for R&D, but upfront. They calculate a certain number of sales over a period, and then add the R&D to the prices for that period.
Usually, once the R&D is paid off, they drop the price.
R&D is like you said normaly recovered in a 3 to 5 year period. It is part of doing business and the only way to keep their products fresh. Selling 1 mil phones in 1 year is going to more than cover the R&D. It is build into the price.
But hey we can agree to disagree.
R&D is often recovered much more quickly that 3 years, often one. In an area where technology changes rapidly, R&D is recovered quickly. Otherwise the models are discontinued, and the R&D is never recovered fully. Each new model has it's own R&D costs associated with them, though not as much as the forst product in the line.
I've never heard of R&D costs being recovered over a 5 year period. The product is long gone by then.
What don't you understand?.. the price i stated included MANUFACTURING.
It must cost apple a million bucks to package and ship an iphone.. good thing customers are NEVER CHARGED FOR SHIPPING AND HANDLING and as to advertising, well we all know.. you have to charge 100 bucks per product for advertising. I mean, the fact that you can get a razr for less than 100 only means that motorola doesn't advertise, otherwise, they too would need a $225 profit..
But i get what you are saying.. u saying it cost apple to manufacture, package, ship, advertise, account and offer phone assistance but it cost motorola nothing to do the same for the razr.
Apple is the only company in the world who cannot ccontrol their cost sufficiently.. and apple call themselves an advanced company.. Really, they should advertise themselves as a backwards tech company.. costs are so high, that advertising, packaging, shipping and account management exceeds manufacturing cost..
You have this whole thing wrong.
That's good that you can count. Yes, of course, it's for three, I wasn't exactly hiding that.
But the point, which I suppose I should have made more clearly, is that with more expensive plans, you get extra features that you don't get with cheaper ones.
For $100 a month I got a 2,000 minute per month plan. With that price plan, they gave me unlimited data for that one phone for $15 per month. But, then they also gave me an extra phone, with data. so, that worked out to two. Then, as a result, they gave me a discount for my daughters plan, plus the same $15 per month data plan. That added up to $150 per month (plus fees, taxes, etc.).
Of course, my daughter downloads all kinds of junk every month, so add another $50 per month for that, and it comes to $190. But that $50 worth of junk doesn't really count.
The point is that if I got a cheaper plan, I wouldn't have gotten all of the freebies, and discounts.
By the way, no one ever has too much money. If you earn it, you deserve it. Then you have the right to spend it on anything you want. No one has the right to criticize you for it. There is jealousy of course.
Companies are different. They spend much money on phones because it's cheaper than having to meet in person. They are actually saving money.
Interesting, you paid more but got freebies?.. are you one of those people who still think there is such a thing as a free lunch?. Hmmm.. hate to break it to you but your 100 dollar plan included unlimited data.. i once had a plan for 46.74 per month for 1200 minutes. Actually, i could have gotten 2000 minutes for 75 bucks so either you are overpaying or the company you are with had already factored in the "freebies" you supposedly got.
also, i am with sprint.. i have unlimted data plan on my phone too.. i pay less than 70 bucks a month and my unlimited data plan was 15 bucks a month. I'm not that impressed with your freebies to be honest. I could do better.
My point is/was that $150 a month per phone for a plan is exorbitant.. i don't care what freebies the phone company gives me, i am not paying $150 for service a month (unless of course they offer to wash my clothes for me weekly, iron them, make me dinner, etc). I mean, these would have to be pretty unusual freebies for me to give them 150 bucks a month. I suspect a lot of people feel that way. I've never met anyone who said.. "i'm gonna get the most expensive plan cell company A has to offer cause i want the freebies". What does your freebies have to do with anything?
You have this whole thing wrong.
I don't think so.. when apple overcharges for a product, the mac fanatics are quick to point out apple has cost as if the person making the original argument is stupid and don't understand that. Of course apple has cost.. duh!!... the point is that the cost does not justify the profit margin they seek. Every company in the world has cost. That is a constant. No company has ever developed a product for free. How the fact that apple has to pay to develop a product justifies them overcharging for it escapes me. The same stupid argument is made relative to computers. As if Dell, etc don't have manufacturing cost, advertising cost, etc. According to the apple apologists, apple has R&D, manufacturing cost, etc.. they should be allowed to charge anything for their products.
Here is what people should understand. Apple charges ridiculous prices cause the apple fanatics will pay for them. Apple will only become a responsible company when their base demands it. The more you just eat whatever shit jobs feed you, the more he takes advantage of you. Why do people think Jobs is altrustic and is looking out for us?. Mac fanatics seems to think cause apple is good, microsoft is evil that implies that apple would never try to rip their customers off. Yeah, right ok and i have a bridge in brooklyn to sell to anyone with that belief. The apple economy (everything apple) is the only economy that seems tod defy the laws of capitalism that states competition drives prices down. Apple prices their products oblivious to the fact that competition exist and then apple apologist get on forums just like this wailing about they don't undersand why 90% of the world is still buying microsoft crappy operating system and not the beautiful mac.. could it be that 90% of the world don't like being ripped of?.
BTW, how is that overpriced apple TV selling.. i'm sure it's exceeding apple modest expectation (probably some small number like 100,000). Anyway, i would be surprised if it doesn't reach 1 million before the year is out.. apple have lots of mac fanatics (more than a million). I would be curious to see quarter to quarter sales results, once the fanatics have all bought their apple TV, will sales drop dramatically or will the general public too be fooled into buying a high priced, low resolution product.
I digress.
If your examples held any water you might have a point, but they don't. 5G iPods have a parts cost at about 45% of the retail cost. They are estimated for a 22% gross profit margin. That means about 33% of the cost of that iPod is in R&D, manufacturing, marketing, shipping, storage, etc.
Given that those type of costs are not inconsistent across product lines it indicates an expected 12-15% gross profit margin for first release iPhones. About the smallest institutional investors will tolerate before punishing stock prices. No apologies here, just stark business reality.
So full of hate. And misunderstanding.
If your examples held any water you might have a point, but they don't. 5G iPods have a parts cost at about 45% of the retail cost. They are estimated for a 22% gross profit margin. That means about 33% of the cost of that iPod is in R&D, manufacturing, marketing, shipping, storage, etc.
Given that those type of costs are not inconsistent across product lines it indicates an expected 12-15% gross profit margin for first release iPhones. About the smallest institutional investors will tolerate before punishing stock prices. No apologies here, just stark business reality.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick. Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Thanks apple.
Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Thanks apple.
Don't let the door hit you on the way out. I'm sorry you feel so taken advantage of. The answer is easy: don't buy Apple products in the future.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick.
In all seriousness then, why do you own these products? I'm sure you are aware of the less expensive MP3 players and the cheaper Dell computers? Certainly you could be saving loads by buying these products next time you are buying.
...Anyway, I love apple products...
Ah, OK. And why do you love these products? Could it be that they are better products? Is it the extra mile that Apple goes in design, engineering, that produces such superior products? Is that not worth something? Obviously a lot of people think so. Maybe you don't. The choice is yours. But yeah, there is a real hate that comes through in your posts.
Actually, no. I own apple products so i am part of the base that eats jobs shit.. i have just lately (a little over a year) come around to the realization that we as the base have to critize apple when it is warranted and stop just blindly following the great one. My girlfriend loves mac, so do i (i own a powermac G5, which i am can tell you i overpaid for now that i think about it). I was blinded. i could not see the truth. I was asleep, in a dream world without knowing. Now I have awaken. Every other company manages to sell products at decent prices. I'm tired of people making excuses for apple. Every device they sell is expensive.. why is that so?. How can everything they make be expensive?. How can they have higher R&D cost in every area. I would expect it in some areas but all?. Are you saying Apple can never ever price a product similiar to their competitors?.. are you saying they cannot select one product line (just one) and price it competitively?.
I drank the coolaid with relish until i sat back and realized what a dupe i was for buying my powermac G5. The most overpriced computer i have ever owned. I'm willing to buy a mac again but not at the ridiculous price i bought my powermac. Same with my ipod. Can you believe an advanced technology company cannot make a audio device where the user gets to change their own battery?. Really, think about it.. if you have to send your ipod to apple or an authorized apple dealer to change something as simple as a battery (battery technology was invented before i was born).. how advanced can this company claim to be?. Now they create apple TV with crappy resolution. I laugh everytime someone in these forums post defending the resolution of apple tv. hahahaha, a company so advanced, their product resolution sucks. You should see it demonstrated in an apple store. I even read in one forum (can't remember where) people defending the crappy tv in the apple store as apple employees improperly calibrated their monitors or some other lame excuses. Wow.. a store where apple is supposed to display their products for the world to see and they calibrated their tv's incorrectly?.. who's running the stores, Elmo Fudd?. Forest Gump?.. makes me real confident taking my computer to the genius bar when the geniuses there cannot calibrate a tv properly. Hmm.. my take on it?.. either the apple TV is crap or the geniuses that work there are dumb. Take your pick. Anyway, I love apple products but it really pains me to watch apple take advantage of their base.. I've been buying apple products for a long time, it's people like me that kept that damn company afloat now all they can think about doing everytime they create a new product is how to fleece the base.
Thanks apple.
You overdo your posts. Don't use the bad poetry and philosophy. These are products. You either buy them or not.
If you refuse to investigate your purchases, shame on you.
Interesting, you paid more but got freebies?.. are you one of those people who still think there is such a thing as a free lunch?. Hmmm.. hate to break it to you but your 100 dollar plan included unlimited data.. i once had a plan for 46.74 per month for 1200 minutes. Actually, i could have gotten 2000 minutes for 75 bucks so either you are overpaying or the company you are with had already factored in the "freebies" you supposedly got.
also, i am with sprint.. i have unlimted data plan on my phone too.. i pay less than 70 bucks a month and my unlimited data plan was 15 bucks a month. I'm not that impressed with your freebies to be honest. I could do better.
My point is/was that $150 a month per phone for a plan is exorbitant.. i don't care what freebies the phone company gives me, i am not paying $150 for service a month (unless of course they offer to wash my clothes for me weekly, iron them, make me dinner, etc). I mean, these would have to be pretty unusual freebies for me to give them 150 bucks a month. I suspect a lot of people feel that way. I've never met anyone who said.. "i'm gonna get the most expensive plan cell company A has to offer cause i want the freebies". What does your freebies have to do with anything?
Since you obviously don't know anything about the plan, and didn't carefully read what I said it was, your comment is irrelevent.
If you don't want to spend the money, or can't afford to, that's fine. just say it.
Don't criticize others.
Don't let the door hit you on the way out. I'm sorry you feel so taken advantage of. The answer is easy: don't buy Apple products in the future.
Then don't fucking complain when no one is buying apple products and keep buying microsoft crappy operating system. Just sit in the corner and enjoy your mac all by yourself. What a dumbass comment you made. What's the point of apple making products if not for more people to buy them?
Since you obviously don't know anything about the plan, and didn't carefully read what I said it was, your comment is irrelevent.
If you don't want to spend the money, or can't afford to, that's fine. just say it.
Don't criticize others.
Gee dude.. who said i couldn't afford to?. I think the original point of my post is lost in all these replies and counter replies. My point is that the market for people who want to afford these devices at these prices is limited. Someone will always buy some expensive products. Heck, there are cell phones made of diamonds thta cost thousands that someone bought. That is not the point. The point was that the product is not competitevly priced to attract a largue customer base. I think i was replying to someone who thought these things would sell very well. Why would i ever argue these things would not sell?. Lamborgini's sell, not many people buy them but they sell. I am 100% sure at least one person will buy the iphone (if not more).
As to critizing others, what's wrong with that?.. this is the problem our society has today.. suddenly, it's wrong to tell people when they are full of shit. I see it all the time.. people make dumbass comments and then claim that their opinion, regardless of how dumb it is, is just as valid as any other person opinion. Why is that?. Don't critize others?.,. please!!.. why, cause the others are immune from criticism?. I'm certainly not immune from criticism, you never catch me saying i shouldn't be critised but now you shouldn't?.. get of your horse!!.
Look, your opinion (which i think is wrong) is that $150 for a plan is perfectly reasonable. My opinion is that it is not. It's that simple. We should be allowed to critize each other positions. Regardless, this is all academic. We shall see when the iphone comes out who is right and who is not.
You overdo your posts. Don't use the bad poetry and philosophy. These are products. You either buy them or not.
If you refuse to investigate your purchases, shame on you.
Actually, something we agree on. Shame on me indeed. Actually, my windows loving friend laughed at me. He was like.. dude, it's ok to buy a mac (interestingly, that's all he uses at work, he's a designer) but at that price?. When he heard the price i paid, he whistled. (you know, that whistle that says "wow, that's a lot of money").
He thought i should have bought a cheaper mac or try to hack the macOS (i'm lazy, that would never happen).
But you are right there.. apple didn't put a gun to my head. Shame on me indeed.
Question: Do you think there is a market for G5's on ebay?. Maybe there are mac fans nostalgic for the powerpc processor?. I have to find out.
In all seriousness then, why do you own these products? I'm sure you are aware of the less expensive MP3 players and the cheaper Dell computers? Certainly you could be saving loads by buying these products next time you are buying.
Ah, OK. And why do you love these products? Could it be that they are better products? Is it the extra mile that Apple goes in design, engineering, that produces such superior products? Is that not worth something? Obviously a lot of people think so. Maybe you don't. The choice is yours. But yeah, there is a real hate that comes through in your posts.
You mistake bitterness and buyers remorse for hate. I can see how though.. bitterness coupled with buyers remose looks a lot like hate. Besides, since i made my fateful purchase, i have been on a rampage against apple elitism (you know, apple philosophy of "we'll price our products so that 90% of you wouldn't give a shit, we only want the coolaid drinking crowd"). Actually, to be honest, the ipod is competitevly priced (i guess they did give a shit about the other 90%). My only complaint with the ipod is apple stupid battery policy. So i have to give apple kudos for pricing the ipod appropriately but i will not let up on the other products. The apple TV is overpriced, macs are still overpriced and the iphone will arrive overpriced.