Honestly the secret is out! The iPhone is the best cellphone in the world. I seen others experience this as well as myself, the iPhone is just more reliable and more beneficial! Motorola, Nokia, and Sony Ericsson are the ones actually made over priced crap. Just it takes a company like Apple to wake us up in this delusional world we live in. This ironically will continue well as introduce more exposure to Apple computers because now with people experiencing Mac OS X and Safari on a iPhone they will be more intrigued on experiencing it on a MacBook Pro, iMac or a Mac Pro. Hence increased new customers to Apple Stores. See its not just price but does the end justified the means. With Apple it not only does but also definitely increase consumer confidence. That's something Microsoft has lost a lot of in the past 10 years.
+1! The iPhone was the phone that made me believe touchscreens are the way to go and the fact that it integrates OS X mobility into phones made me awe. I'll always look back to the day when I bought an 8GB iPhone and know that I'll never regret my buying decision.
You really need to learn how to read, that has nothing to do with what I wrote, the key word was "margin"
Huge margin ≠ overprice. iPhone has much advantage over the other phones in the market and it comes with a price. You pay for what you get. Whether the advantage justify the cost is up to you, but seeing the growth of iPhone, it seems the iPhone worth every penny to the majority.
Huge margin ≠ overprice. iPhone has much advantage over the other phones in the market and it comes with a price. You pay for what you get. Whether the advantage justify the cost is up to you, but seeing the growth of iPhone, it seems the iPhone worth every penny to the majority.
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
Most people don't have smart phones, so I don't think that's a significant point. If you don't need a smart phone, then you're not in the market for an iPhone.
Apple isn't too bad from a smart phone price points. They probably make money where most don't because they don't try to be all things to everyone, instead of a dozen smart phone models, just do two, and let the economies of scale take effect.
Most people don't have smart phones, so I don't think that's a significant point. If you don't need a smart phone, then you're not in the market for an iPhone.
Apple isn't too bad from a smart phone price points. They probably make money where most don't because they don't try to be all things to everyone, instead of a dozen smart phone models, just do two, and let the economies of scale take effect.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
Oh. The N97 is a good $100 cheaper than the 16GB 3GS in the place where I live. With Nokia Comes With Music, N97 is still $20 cheaper.
The price of the N97 has been dropping since its introduction, and at least in the US, is now cheaper than a non-subsidized 16GB iPhone 3GS. I think it has to do with the fact that the N97 is not selling the way Nokia expected it to.
(That's not to say that it isn't selling. It certainly is, just not in the volume that Nokia wants.)
When a company makes an obscene margin on an item you are being overcharged, no matter who the company is, if you are happy to encourage with them taking more of your money than they need then carry on.
Margin doesn't determine if you're being overcharged. Value gained relative to price paid is the determining factor.
If Apple is overcharging for the iPhone, then pretty much all smartphone mfrs are overcharging since most other smartphones in the iPhone class cost as much as or more than the iPhone. And it doesn't matter how much or little margin those other mfrs make.
Do those other smartphones provide more value? For most, it's arguably not, though it's up to each user to decide.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
They're succeeding when it seemed like most people said it wouldn't happen. Call it a vindication.
It's probably a lot like the psychology of those events where people kick round balls into rectangular frames. For some reason, that makes people very happy, or very angry when the wrong people put the ball through the rectangular frame, even if it doesn't hurt anyone. Most people couldn't do it with the same opponents if they tried. Probably some vicarious experience.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
If other mfrs were providing the value of an iPhone at a much lower price (due to lower margins), then you'd have an argument.
The fact of the matter is that Apple has been driving smartphone prices lower relative to value - when the iPhone 3G went down to $199, it was providing a much better experience (for most) relative to other phones costing $199 and up (and requiring a data plan).
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
As I pointed out in my post, it is up to you how you value it. If you think it's overpriced, that means you don't think that extra advantage iPhone has over the other phones in the market worth the margin. Yes, there are many people don't think that added value justify that extra cost, as you say overpriced, but from the growth of it, I can see more and more consumers see the value.
When a company makes an obscene margin on an item you are being overcharged, no matter who the company is, if you are happy to encourage with them taking more of your money than they need then carry on.
Sure, that is one definition but by that definition there are a huge number of products where you are overcharged. Take oil, in some countries the production costs of a gallon of crude oil might be only about $5/gallon, yet it sells for $60. In other countries (oil sands, Canada), production costs might be $55/gallon. Are you being overcharged by Saudi Arabia or do they simply have a competitive advantage.
Should Apple have sell its smartphones for less than Palm, just because they have lower production costs (due to economies of scale)?
Apple needs to make a higher margin and that's because they are basically making almost all the R&D in the industry. Most other companies simply copy them and that's about it (some with very little success if I may add).
Before the iPhone: how many smartphones didn't have a keyboard? How many allowed you to purchase apps from an organized and well thought after store? How many allowed you to browse the internet on a complete browser (admittedly without flash though)? How big was the average screen for a smartphone? Which form factors where imposed on customers (strange turning, sliding and moving devices which were really prone to breaking after a month of use?
I admire Apple, more than being a fan of the company, because they did true innovation. Maybe they don't get everything right all the time (policies for the app store come to mind) but at least they stir the water. Far too many companies are just followers that try to squeeze manufacturing costs and copy successful products.
Microsoft has turned into one of them. They lost vision. They have some interesting prototypes and have shown them, but the erratic way in which the company is managed prevents them from focusing on a path and sticking to it, no matter what. The passion and the time it takes for Apple to release a product usually result in a well thought after device.
Netbooks for instance: everyone jumped on the bandwagon, without actually bringing anything new to them. Apple avoided the rush. Maybe they'll come out with something great, maybe not. But at least they take their time and actually THINK about things before building them.
Nobody's perfect, companies are much less "perfect" than people, but some of them make a difference with their products and some just exist.
Microsoft (still) exists.
Apple innovates.
Palm has become quite innovating it seems.
Nokia exists.
RIM is sticking to their path, innovating but could do more.
SonyEricsson exists (though I might have to change this part of my post soon).
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
The problem is that you are taking a number that is not meant for the consumer to use as an indication that they are being gouged. The "gross margin" is a number used by investors to gauge how efficient a company is at making their products. It is assumed that the price of any product sold will settle at the price that the consumers finds competitive. Thus if several companies were selling a similar product at about the same price and one of them has a gross margin of 50% while the others are at 25%. And the consumers are buying the product with the 50% gross margin over the others. Then the company with the 50% gross margin is more efficient at manufacturing their product. You can not say that they are overpriced if all their competitors sells similar products at the same price. And if the consumers are willing to buy the product with the 50% gross margin over it's competitors, even if it cost more. Then obviously these consumers sees value in the extra cost. Otherwise they would buy the cheaper competitors products.
The gross margin is nothing but how much it cost to make a product divided by how much it sells for. It's not how much profit is made. It's the operating margin that is the better indicator of how much profit a company is making. The operating margin is the total cost of doing business divided by total revenue. A company with a gross margin of 50% could have an operating margin of only 15% because they have to maintain and staff retail stores and invest a lot in RD. So a company with 25% gross margin can actually be making more profit because they only sell online and don't invest heavy in RD. Thus they have a lower cost of doing business. So their operating margin could come in at 18%.
Oh. The N97 is a good $100 cheaper than the 16GB 3GS in the place where I live. With Nokia Comes With Music, N97 is still $20 cheaper.
And about 8x slower, 2x bigger/thicker/uglier, and with that POS OS from the 1990s. Man, I hate Nokia phones. Was more than happy to ditch S60 when the iPhone 3G came out, and now my 3GS whips everything.
Comments
The consumer has a choice to buy the phone or not, if you are willing to purchase the product, then do not complain, if it is overpriced.
Not purchasing an item is a way of complaining.
From what you wrote, all softwares are overpriced because CD cost $1 but some softwares are selling for hundreds.
You really need to learn how to read, that has nothing to do with what I wrote, the key word was "margin"
Honestly the secret is out! The iPhone is the best cellphone in the world. I seen others experience this as well as myself, the iPhone is just more reliable and more beneficial! Motorola, Nokia, and Sony Ericsson are the ones actually made over priced crap. Just it takes a company like Apple to wake us up in this delusional world we live in. This ironically will continue well as introduce more exposure to Apple computers because now with people experiencing Mac OS X and Safari on a iPhone they will be more intrigued on experiencing it on a MacBook Pro, iMac or a Mac Pro. Hence increased new customers to Apple Stores. See its not just price but does the end justified the means. With Apple it not only does but also definitely increase consumer confidence. That's something Microsoft has lost a lot of in the past 10 years.
+1! The iPhone was the phone that made me believe touchscreens are the way to go and the fact that it integrates OS X mobility into phones made me awe. I'll always look back to the day when I bought an 8GB iPhone and know that I'll never regret my buying decision.
never mind, I'm probably thinking of the wrong article.
You really need to learn how to read, that has nothing to do with what I wrote, the key word was "margin"
Huge margin ≠ overprice. iPhone has much advantage over the other phones in the market and it comes with a price. You pay for what you get. Whether the advantage justify the cost is up to you, but seeing the growth of iPhone, it seems the iPhone worth every penny to the majority.
Huge margin ≠ overprice. iPhone has much advantage over the other phones in the market and it comes with a price. You pay for what you get. Whether the advantage justify the cost is up to you, but seeing the growth of iPhone, it seems the iPhone worth every penny to the majority.
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
You know I'm going to hate myself for even replying to this ridiculous rant but what the hell ......
....
In closing ... if you're going to be a troll ... at least be a GOOD one, o.k.?
He got you to reply, and about 10 others. Isn't that the definition of a good troll?
Nokia has millions of unsold obsolete phones poisoning our garbage dumps.
You might want to check your facts there, Bob. Nokia always does very well in Greenpeace's green studies.
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
Most people don't have smart phones, so I don't think that's a significant point. If you don't need a smart phone, then you're not in the market for an iPhone.
Apple isn't too bad from a smart phone price points. They probably make money where most don't because they don't try to be all things to everyone, instead of a dozen smart phone models, just do two, and let the economies of scale take effect.
Most people don't have smart phones, so I don't think that's a significant point. If you don't need a smart phone, then you're not in the market for an iPhone.
Apple isn't too bad from a smart phone price points. They probably make money where most don't because they don't try to be all things to everyone, instead of a dozen smart phone models, just do two, and let the economies of scale take effect.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
Oh. The N97 is a good $100 cheaper than the 16GB 3GS in the place where I live.
The price of the N97 has been dropping since its introduction, and at least in the US, is now cheaper than a non-subsidized 16GB iPhone 3GS. I think it has to do with the fact that the N97 is not selling the way Nokia expected it to.
(That's not to say that it isn't selling. It certainly is, just not in the volume that Nokia wants.)
When a company makes an obscene margin on an item you are being overcharged, no matter who the company is, if you are happy to encourage with them taking more of your money than they need then carry on.
Margin doesn't determine if you're being overcharged. Value gained relative to price paid is the determining factor.
If Apple is overcharging for the iPhone, then pretty much all smartphone mfrs are overcharging since most other smartphones in the iPhone class cost as much as or more than the iPhone. And it doesn't matter how much or little margin those other mfrs make.
Do those other smartphones provide more value? For most, it's arguably not, though it's up to each user to decide.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
They're succeeding when it seemed like most people said it wouldn't happen. Call it a vindication.
It's probably a lot like the psychology of those events where people kick round balls into rectangular frames. For some reason, that makes people very happy, or very angry when the wrong people put the ball through the rectangular frame, even if it doesn't hurt anyone. Most people couldn't do it with the same opponents if they tried. Probably some vicarious experience.
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
If other mfrs were providing the value of an iPhone at a much lower price (due to lower margins), then you'd have an argument.
The fact of the matter is that Apple has been driving smartphone prices lower relative to value - when the iPhone 3G went down to $199, it was providing a much better experience (for most) relative to other phones costing $199 and up (and requiring a data plan).
From a consumers point of view it is overpriced, maybe that is why the majority of people don't have one.
As I pointed out in my post, it is up to you how you value it. If you think it's overpriced, that means you don't think that extra advantage iPhone has over the other phones in the market worth the margin. Yes, there are many people don't think that added value justify that extra cost, as you say overpriced, but from the growth of it, I can see more and more consumers see the value.
When a company makes an obscene margin on an item you are being overcharged, no matter who the company is, if you are happy to encourage with them taking more of your money than they need then carry on.
Sure, that is one definition but by that definition there are a huge number of products where you are overcharged. Take oil, in some countries the production costs of a gallon of crude oil might be only about $5/gallon, yet it sells for $60. In other countries (oil sands, Canada), production costs might be $55/gallon. Are you being overcharged by Saudi Arabia or do they simply have a competitive advantage.
Should Apple have sell its smartphones for less than Palm, just because they have lower production costs (due to economies of scale)?
Before the iPhone: how many smartphones didn't have a keyboard? How many allowed you to purchase apps from an organized and well thought after store? How many allowed you to browse the internet on a complete browser (admittedly without flash though)? How big was the average screen for a smartphone? Which form factors where imposed on customers (strange turning, sliding and moving devices which were really prone to breaking after a month of use?
I admire Apple, more than being a fan of the company, because they did true innovation. Maybe they don't get everything right all the time (policies for the app store come to mind) but at least they stir the water. Far too many companies are just followers that try to squeeze manufacturing costs and copy successful products.
Microsoft has turned into one of them. They lost vision. They have some interesting prototypes and have shown them, but the erratic way in which the company is managed prevents them from focusing on a path and sticking to it, no matter what. The passion and the time it takes for Apple to release a product usually result in a well thought after device.
Netbooks for instance: everyone jumped on the bandwagon, without actually bringing anything new to them. Apple avoided the rush. Maybe they'll come out with something great, maybe not. But at least they take their time and actually THINK about things before building them.
Nobody's perfect, companies are much less "perfect" than people, but some of them make a difference with their products and some just exist.
Microsoft (still) exists.
Apple innovates.
Palm has become quite innovating it seems.
Nokia exists.
RIM is sticking to their path, innovating but could do more.
SonyEricsson exists (though I might have to change this part of my post soon).
This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?
The problem is that you are taking a number that is not meant for the consumer to use as an indication that they are being gouged. The "gross margin" is a number used by investors to gauge how efficient a company is at making their products. It is assumed that the price of any product sold will settle at the price that the consumers finds competitive. Thus if several companies were selling a similar product at about the same price and one of them has a gross margin of 50% while the others are at 25%. And the consumers are buying the product with the 50% gross margin over the others. Then the company with the 50% gross margin is more efficient at manufacturing their product. You can not say that they are overpriced if all their competitors sells similar products at the same price. And if the consumers are willing to buy the product with the 50% gross margin over it's competitors, even if it cost more. Then obviously these consumers sees value in the extra cost. Otherwise they would buy the cheaper competitors products.
The gross margin is nothing but how much it cost to make a product divided by how much it sells for. It's not how much profit is made. It's the operating margin that is the better indicator of how much profit a company is making. The operating margin is the total cost of doing business divided by total revenue. A company with a gross margin of 50% could have an operating margin of only 15% because they have to maintain and staff retail stores and invest a lot in RD. So a company with 25% gross margin can actually be making more profit because they only sell online and don't invest heavy in RD. Thus they have a lower cost of doing business. So their operating margin could come in at 18%.
Oh. The N97 is a good $100 cheaper than the 16GB 3GS in the place where I live.
And about 8x slower, 2x bigger/thicker/uglier, and with that POS OS from the 1990s. Man, I hate Nokia phones. Was more than happy to ditch S60 when the iPhone 3G came out, and now my 3GS whips everything.
N97 = lol.