Did you read the article? It's not even close, depending on who's numbers you go by. It took 2 months for Razr to sell 750,000 units, who knows how many iPhones Apple has sold. The numbers are all over the board.
It wasn't until 2005... when MOT started lowering the RAZRs $600? price tag did the phone REALLY start to pickup steam...
They lowered it to $500. But, I'm not talking price points, I'm just pointing out that they sold a shitload of phones pretty quickly. Moto also had most of the major Cell companies selling their phones, and it was selling world wide.
Quote:
Originally Posted by DaveGee
It wasn't until 2005... when MOT started lowering the RAZRs $600? price tag did the phone REALLY start to pickup steam...
Like apple computers, the iPhone is all about the hardware, design, and the attention to detail. Of course they cant have a fusion engine in the thing, there are techlimits resulting from many other companys. This means that apple has the same Hardware materials to work with as all the other computer makers. What make apple differnt is what they can make the hardware do.
People always argue about how macs are over priced or underpowered. Even if this was the case, macs still have one huge advantage over the competition and this eliminates almost all other factors. They run a OS that just works and has unlimited potential. Even a simple mac mini can one click tasks that the most powerful windows server array couldent even dream of. True that the server array has 1000s of times more power then the mac mini, but it is severly limited by a horrible OS.
Now onto the iPhone. The iPhone is a truly breakthrough product not because of the hardware, but because of the software. Any other company could have built the iPhone yet it would have no impact on the market due to its horrid UI. All other phones out right now, at least every one i have tried, have all been limited by one factor, they have clunky slow UIs that make users want to smash the phone. This is where the iPhone is revolutionary. It has, in my judgement, the best UI of any phone on the market. This will hopfully make other phone makers create products that have a ok UI. If things go right, then the iPhone should revolutionize the mobil phone OS, except for the not being open part.
For me, this Great UI is enough for the margin to be so high. I would pay more for this feature.
Did you read the article? It's not even close, depending on who's numbers you go by. It took 2 months for Razr to sell 750,000 units, who knows how many iPhones Apple has sold. The numbers are all over the board.
I've seen numbers as low as 250K to highs of 700k. Apple has yet to release any official numbers.
You are amazing. Did you miss this:
Quote:
Motorola by contrast took much longer?the final three months of 2004?to sell 750,000 RAZRs.
Even if the iPhone "only" sold 250k, that is just over the weekend; that is, two days (are Apple stores open on Sunday?) and a few hours on Friday. And that is a very conservative estimate. So for the time between Friday and today, it's pretty definite that the iPhone is selling much, much faster. I would predict it would take at least a 4-5 months for the initial run to calm down and the historical Razr to start catching up.
They lowered it to $500. But, I'm not talking price points, I'm just pointing out that they sold a shitload of phones pretty quickly. Moto also had most of the major Cell companies selling their phones, and it was selling world wide.
Exactly. iPhone is selling this well in spite of all the service provider issues that are against it. And by the end of this year, iPhone will be in Europe, right? Who knows on what terms? Imagine what an unlocked, 3G (this is pretty much confirmed for Europe, right?), and maybe higher capacity iPhone would do to the race between Razr and iPhone. So, who knows what will happen in the future. But for the present, the iPhone is definitely selling much faster, in spite of the limitations you mentioned.
They lowered it to $500. But, I'm not talking price points, I'm just pointing out that they sold a shitload of phones pretty quickly. Moto also had most of the major Cell companies selling their phones, and it was selling world wide.
It took several YEARS before the US #2 cellular provider had it.... but yea... talking world-wide most everyone did have it as an offering. Hmm did Cingular & T-Mobile & Sprint ALL have the RAZR at the same time??? I'm not sure... but I do know Verizon did get it last given their network.
3G (this is pretty much confirmed for Europe, right?), and maybe higher capacity iPhone
Steve Jobs said in January that new models are coming, with new features, and specifically stated that 3G is a feature that will come. (No timeframe given.) Higher capacity is a safe bet in future too. GPS? Hopefully!
Probably the biggest difference is it was quite easy to find unlocked RAZRs for sale. That may change eventually, but until Apple makes thing like visual voicemail more friendly to other carriers (5 years?), I don't think it'll really take off in the unlocked market. There are some folks who, rightfully so, due to where they live and/or travel, won't consider a locked cellphone.
I don't think it'll really take off in the unlocked market.
You do realize that a VAST majority of the cell phone consumers in the US have no idea what that even means.... Many of them couldn't even tell you the name of the cell phone they CURRENTLY use... Even if they were looking right at it.
Hey, if a simple-minded report from iSuppli can kick AAPL up to $126... who am I to complain? It just reflects badly on the real-world understanding of the costs of doing business by AAPL investors and stock speculators.
Heh I've been saying the same thing. It's about bloody time my stock went up.
Quote:
Originally Posted by city
With regard to profit margins, how much does it cost Mirocsoft to make a copy of Vista OS? Maybe $5US.
That is a good point. If we go by the actual HW then a copy of Leopard, Vista, or PhotoShop are all worth about 5 cents for the cost of the DVD they are imprinted on.
PS: Samsung is more on iPhones that it is on most of the crappy cell phones it sells.
You'll be surprised how much royalties cost, patents are all over the place and they all want their share.
What? A Home button! That's outrageous! It's our patent, the iPhone is infringing on our patent, cease and desist, irrepairable damages, expensive lawyers etc?
The many law-suits that Apple will have to fend-off in the future is gonna be rough, remember Creative?
Once you factor all that in you can divide the 50% profits by two if not more.
"Before royalties and logistics expenses are factored in, Apple Inc. stands to generate gross margin in excess of 50 percent on each 8GB iPhone sold at $599, according to one market intelligence service. "
While the hardware cost is the most significant cost on a unit basis, there are costs that far exceed the "royalties & logistics ". Keep in mind that Apple has been in development of the iPhone for yearS. Two years ago they approached Verizon and would have had some form of prototype to show them. Apple also built the phone in-house, which would cost exponentially more than any other handset maker, since they can build many phone models from one basic design. Motorola is very adept at this.
Software engineering was left off completely. Clearly a team of software architects had a hand in the beautiful interface. Simple it is not. Apple diverted its resources away from their next OS to finish the product on schedule.
iPhone.com, this domain name was reportedly purchased at a seven digit expense to Apple. They are also likely paying naming royalties to Cisco, who was using the iPhone name first. There are two technology firms, which Apple purchased in pursuit of the iPhone, one developed the multi-touch interface, the other Cover Flow which Apple uses in iTunes and now the OS. Add in the advertising (Oscar), technical support, on going development, and Apple's cost of operations, the total bill is well into $100 mil, of unaccounted costs which iSuppli just ignored. Granted, these are costs which are spread out over many years and are not hard costs per unit. Any discussion of Apple's profit per unit must include this as well.
There are two technology firms, which Apple purchased in pursuit of the iPhone?
After reading your post, one would think that Apple is a totally inefficient company, struggling to contain costs. Exaggerating much? For instance CoverFlow was bought on the cheap, the feature is based on concepts that some guy posted on his blog and was later developed by Jonathan del Strother, known as Catfish in ArsTechnica's Mac Achaia. From what he said he got paid a flat fee, likely less than $50,000. Purchasing a domain name at a seven digit expense is insignificant, that's just a molehill. Apple's costs are not ballooning, advertising expense was $338 million for 2006, that's not much for a company of Apple's size (1.7 percent of revenue). R&D costs are not overwhelming either (3.7 percent of revenue in FY2006).
Of course iSuppli is ignoring these costs, they're talking about Apple's gross margin. Last quarter Apple reported a gross margin of 35.1 percent and there is nothing scandalous about this, nor about the iPhone gross margin. Apple is a "boutique" computer manufacturer branching into consumer electronics, they're not supposed to operate on razor thin margins. As a comparison, Research In Motion's gross margin was a whooping 51.8 percent for the June quarter, down from 55.1 percent in the year-ago quarter. Yet customers are not at the gates with pitchforks and torches.
Upon reading this, I asked myself, "Should I be upset that Apple is making so much money off of this product? Is the consumer being taken advantage of?"
I decided NO. I'm not upset. I didn't get an iPhone, #1, so this doesn't really affect me all that much. I think this is actually good news.
Apple is making more of a profit off of this device. That means more money into R&D on making the iPhone better and cheaper to produce (i.e. less expensive for me when I can actually afford one!)
Apple typically doesn't make such high profit margins; I'm sure that some PC companies make higher ones on a regular basis. I'm sure the true cost of producing the iPhone is higher than the stated cost of materials. You have to remember that manufacture and shipping costs money, as well as the years of development that went into this baby; the developers need to get paid for their work! It's likely that this is not the whole story.
Basically, good for Apple. They can produce a product that people still want to buy by the hundreds of thousands, even when they mark it up by 50% of cost of parts. I admire that.
Hmm, apple had the same margins for ipod and it has never gotten cheaper for same model. Apple might make cheaper iphone with less memory but they will never give you the current iphone cheaper. come on, you know this.. why live in denial?. Apple never makes their product cheaper. The profit margin goes to jobs and his friends, not to make cheaper products for you.
Also apple does make such high profit margins. Dude, you ought to read post from a few more threads.. everyone knows apple has high profit margin.. it's been discussed to death. Most apple fans think it's justified, me, i think it's not (i've never known apple to reduce the price of their products so why would i agree that the margins are reasonable?). Don't let me stop you though... keep dreaming.. by the time you want an iphone and it's the same price, i am sure you will justify buying the iphone using another rationale.
Well in MS vs. Apple debates, saying "Steve Jobs isn't in it for the money...blah blah blah" should never be brought up again.
People are saying "Steve isn't in it for the money" cause he isn't come on, neither is Gates... they both have gobs of money and basically everything they'd ever want material wise... Something else is DRIVING both of them.
As far as APPLE not being 'in it for the money'?!?!?!
NOBODY to the best of my knowledge has EVER EVER EVER indicated such... The same hold true for Microsoft or any other corporation...
THEY ARE ALL IN IT TO MAXIMIZE PROFITABILITY BY ANY AND ALL MEANS*
The original iPod was $399 in October 2001. In March 2002, they sold a 10 GB version for $499.
Today's most expensive iPod is $349.
Yes, apple will improve their products and charge the same price while other companies also improve their products and lower the price. Apple fans think improving the product at same price is same as lowering the price while everyone else EXPECTS a company to improve their products AND lower price. Hey, the apple world is different.. i get that.. just don't feed me FUD about apple lowering price.
also, 349 is not that big a difference from 399.. we are not talking a drop from $500 to $99 are we?.
I mean, if you can't afford it at $599.. why would you afford it at $559?.
Comments
Did you read the article? It's not even close, depending on who's numbers you go by. It took 2 months for Razr to sell 750,000 units, who knows how many iPhones Apple has sold. The numbers are all over the board.
It wasn't until 2005... when MOT started lowering the RAZRs $600? price tag did the phone REALLY start to pickup steam...
Dave
It wasn't until 2005... when MOT started lowering the RAZRs $600? price tag did the phone REALLY start to pickup steam...
Dave
People always argue about how macs are over priced or underpowered. Even if this was the case, macs still have one huge advantage over the competition and this eliminates almost all other factors. They run a OS that just works and has unlimited potential. Even a simple mac mini can one click tasks that the most powerful windows server array couldent even dream of. True that the server array has 1000s of times more power then the mac mini, but it is severly limited by a horrible OS.
Now onto the iPhone. The iPhone is a truly breakthrough product not because of the hardware, but because of the software. Any other company could have built the iPhone yet it would have no impact on the market due to its horrid UI. All other phones out right now, at least every one i have tried, have all been limited by one factor, they have clunky slow UIs that make users want to smash the phone. This is where the iPhone is revolutionary. It has, in my judgement, the best UI of any phone on the market. This will hopfully make other phone makers create products that have a ok UI. If things go right, then the iPhone should revolutionize the mobil phone OS, except for the not being open part.
For me, this Great UI is enough for the margin to be so high. I would pay more for this feature.
Did you read the article? It's not even close, depending on who's numbers you go by. It took 2 months for Razr to sell 750,000 units, who knows how many iPhones Apple has sold. The numbers are all over the board.
I've seen numbers as low as 250K to highs of 700k. Apple has yet to release any official numbers.
You are amazing. Did you miss this:
Motorola by contrast took much longer?the final three months of 2004?to sell 750,000 RAZRs.
Even if the iPhone "only" sold 250k, that is just over the weekend; that is, two days (are Apple stores open on Sunday?) and a few hours on Friday. And that is a very conservative estimate. So for the time between Friday and today, it's pretty definite that the iPhone is selling much, much faster. I would predict it would take at least a 4-5 months for the initial run to calm down and the historical Razr to start catching up.
They lowered it to $500. But, I'm not talking price points, I'm just pointing out that they sold a shitload of phones pretty quickly. Moto also had most of the major Cell companies selling their phones, and it was selling world wide.
Exactly. iPhone is selling this well in spite of all the service provider issues that are against it. And by the end of this year, iPhone will be in Europe, right? Who knows on what terms? Imagine what an unlocked, 3G (this is pretty much confirmed for Europe, right?), and maybe higher capacity iPhone would do to the race between Razr and iPhone. So, who knows what will happen in the future. But for the present, the iPhone is definitely selling much faster, in spite of the limitations you mentioned.
They lowered it to $500. But, I'm not talking price points, I'm just pointing out that they sold a shitload of phones pretty quickly. Moto also had most of the major Cell companies selling their phones, and it was selling world wide.
It took several YEARS before the US #2 cellular provider had it.... but yea... talking world-wide most everyone did have it as an offering. Hmm did Cingular & T-Mobile & Sprint ALL have the RAZR at the same time??? I'm not sure... but I do know Verizon did get it last given their network.
Dave
3G (this is pretty much confirmed for Europe, right?), and maybe higher capacity iPhone
Steve Jobs said in January that new models are coming, with new features, and specifically stated that 3G is a feature that will come. (No timeframe given.) Higher capacity is a safe bet in future too. GPS? Hopefully!
I don't think it'll really take off in the unlocked market.
You do realize that a VAST majority of the cell phone consumers in the US have no idea what that even means.... Many of them couldn't even tell you the name of the cell phone they CURRENTLY use... Even if they were looking right at it.
Dave
Hey, if a simple-minded report from iSuppli can kick AAPL up to $126... who am I to complain? It just reflects badly on the real-world understanding of the costs of doing business by AAPL investors and stock speculators.
Heh I've been saying the same thing. It's about bloody time my stock went up.
With regard to profit margins, how much does it cost Mirocsoft to make a copy of Vista OS? Maybe $5US.
That is a good point. If we go by the actual HW then a copy of Leopard, Vista, or PhotoShop are all worth about 5 cents for the cost of the DVD they are imprinted on.
PS: Samsung is more on iPhones that it is on most of the crappy cell phones it sells.
What? A Home button! That's outrageous! It's our patent, the iPhone is infringing on our patent, cease and desist, irrepairable damages, expensive lawyers etc?
The many law-suits that Apple will have to fend-off in the future is gonna be rough, remember Creative?
Once you factor all that in you can divide the 50% profits by two if not more.
Only a screwball socialist would entertain such a thought. I'm glad you came up with the correct answer to your question.
While the hardware cost is the most significant cost on a unit basis, there are costs that far exceed the "royalties & logistics ". Keep in mind that Apple has been in development of the iPhone for yearS. Two years ago they approached Verizon and would have had some form of prototype to show them. Apple also built the phone in-house, which would cost exponentially more than any other handset maker, since they can build many phone models from one basic design. Motorola is very adept at this.
Software engineering was left off completely. Clearly a team of software architects had a hand in the beautiful interface. Simple it is not. Apple diverted its resources away from their next OS to finish the product on schedule.
iPhone.com, this domain name was reportedly purchased at a seven digit expense to Apple. They are also likely paying naming royalties to Cisco, who was using the iPhone name first. There are two technology firms, which Apple purchased in pursuit of the iPhone, one developed the multi-touch interface, the other Cover Flow which Apple uses in iTunes and now the OS. Add in the advertising (Oscar), technical support, on going development, and Apple's cost of operations, the total bill is well into $100 mil, of unaccounted costs which iSuppli just ignored. Granted, these are costs which are spread out over many years and are not hard costs per unit. Any discussion of Apple's profit per unit must include this as well.
Cheers!
There are two technology firms, which Apple purchased in pursuit of the iPhone?
After reading your post, one would think that Apple is a totally inefficient company, struggling to contain costs. Exaggerating much? For instance CoverFlow was bought on the cheap, the feature is based on concepts that some guy posted on his blog and was later developed by Jonathan del Strother, known as Catfish in ArsTechnica's Mac Achaia. From what he said he got paid a flat fee, likely less than $50,000. Purchasing a domain name at a seven digit expense is insignificant, that's just a molehill. Apple's costs are not ballooning, advertising expense was $338 million for 2006, that's not much for a company of Apple's size (1.7 percent of revenue). R&D costs are not overwhelming either (3.7 percent of revenue in FY2006).
Of course iSuppli is ignoring these costs, they're talking about Apple's gross margin. Last quarter Apple reported a gross margin of 35.1 percent and there is nothing scandalous about this, nor about the iPhone gross margin. Apple is a "boutique" computer manufacturer branching into consumer electronics, they're not supposed to operate on razor thin margins. As a comparison, Research In Motion's gross margin was a whooping 51.8 percent for the June quarter, down from 55.1 percent in the year-ago quarter. Yet customers are not at the gates with pitchforks and torches.
Upon reading this, I asked myself, "Should I be upset that Apple is making so much money off of this product? Is the consumer being taken advantage of?"
I decided NO. I'm not upset. I didn't get an iPhone, #1, so this doesn't really affect me all that much. I think this is actually good news.
Apple is making more of a profit off of this device. That means more money into R&D on making the iPhone better and cheaper to produce (i.e. less expensive for me when I can actually afford one!)
Apple typically doesn't make such high profit margins; I'm sure that some PC companies make higher ones on a regular basis. I'm sure the true cost of producing the iPhone is higher than the stated cost of materials. You have to remember that manufacture and shipping costs money, as well as the years of development that went into this baby; the developers need to get paid for their work! It's likely that this is not the whole story.
Basically, good for Apple. They can produce a product that people still want to buy by the hundreds of thousands, even when they mark it up by 50% of cost of parts. I admire that.
Hmm, apple had the same margins for ipod and it has never gotten cheaper for same model. Apple might make cheaper iphone with less memory but they will never give you the current iphone cheaper. come on, you know this.. why live in denial?. Apple never makes their product cheaper. The profit margin goes to jobs and his friends, not to make cheaper products for you.
Also apple does make such high profit margins. Dude, you ought to read post from a few more threads.. everyone knows apple has high profit margin.. it's been discussed to death. Most apple fans think it's justified, me, i think it's not (i've never known apple to reduce the price of their products so why would i agree that the margins are reasonable?). Don't let me stop you though... keep dreaming.. by the time you want an iphone and it's the same price, i am sure you will justify buying the iphone using another rationale.
Hmm, apple had the same margins for ipod and it has never gotten cheaper for same model.
The original iPod was $399 in October 2001. In March 2002, they sold a 10 GB version for $499.
Today's most expensive iPod is $349.
Well in MS vs. Apple debates, saying "Steve Jobs isn't in it for the money...blah blah blah" should never be brought up again.
People are saying "Steve isn't in it for the money" cause he isn't come on, neither is Gates... they both have gobs of money and basically everything they'd ever want material wise... Something else is DRIVING both of them.
As far as APPLE not being 'in it for the money'?!?!?!
NOBODY to the best of my knowledge has EVER EVER EVER indicated such... The same hold true for Microsoft or any other corporation...
THEY ARE ALL IN IT TO MAXIMIZE PROFITABILITY BY ANY AND ALL MEANS*
Dave
* Legal means one would hope...
The original iPod was $399 in October 2001. In March 2002, they sold a 10 GB version for $499.
Today's most expensive iPod is $349.
Yes, apple will improve their products and charge the same price while other companies also improve their products and lower the price. Apple fans think improving the product at same price is same as lowering the price while everyone else EXPECTS a company to improve their products AND lower price. Hey, the apple world is different.. i get that.. just don't feed me FUD about apple lowering price.
also, 349 is not that big a difference from 399.. we are not talking a drop from $500 to $99 are we?.
I mean, if you can't afford it at $599.. why would you afford it at $559?.