"The problem with the current approach of selling outdated handsets for "free" is that the handsets are obviously outdated." - Blackbook
Even with a new form factor wouldn't any iPhone with an A4 chip be considered outdated? By next year they could use an updated 4... that might work.
Still not sure how Apple could do it without killing margins... and we all know what will happen to the stock price if there is any mention of lower margins... even if they sell 100 million of them in one quarter.
I have to say though, that I think that Cook is more concerned with market share than Jobs... your example, the iPad Mini, is why I think that.
I have a 3GS, a 4, a 4S, and an iPhone 5 running in the family. The only thing that makes the phone outdated, is there being a newer model.
"The problem with the current approach of selling outdated handsets for "free" is that the handsets are obviously outdated." - Blackbook
Even with a new form factor wouldn't any iPhone with an A4 chip be considered outdated? By next year they could use an updated 4... that might work.
Still not sure how Apple could do it without killing margins... and we all know what will happen to the stock price if there is any mention of lower margins... even if they sell 100 million of them in one quarter.
I have to say though, that I think that Cook is more concerned with market share than Jobs... your example, the iPad Mini, is why I think that.
The iPad Mini is why the oft rumored iPhone Nano could become a possibility.
Honestly the iPad Mini is just old components thrown together in a new form factor and it's a smash success. That's all I expect from an iPhone Nano. Either old iPod or iPhone parts put together. Because it'll be a "new form factor," it won't look or feel outdated to consumers, hence why it would be a success rather than the current obviously 3 year old phones Apple sells for "free".
If Apple were to produce a less expensive iPhone, the first thing Wall Street will be yelling about is cannibalization of the higher end model iPhone. Either way, Apple can't win because there will always be someone who sees some flaw in Apple's decisions. It's as though only Apple can make mistakes and other companies can't which is absolutely ridiculous. Currently, Apple has the best financial model of any hardware company around and yet analysts continue to say Apple's financial model is flawed in some way because Apple only sells high-end products to those who can afford them. Why should Apple sacrifice margins for growth if that's not the company's goal.
Every company can't have a goal of having the highest market share, because that wouldn't work, either. Eventually each company would just have to keep building cheaper and cheaper products and that's not going to be a good financial model. Apple may not have the best growth model, but the financial model seems very good. Why Wall Street continues to push growth models over financial models really doesn't make any sense to me. We wouldn't have any high-end brands if that was the case.
What puzzles me is this claim about iPhones no longer being worth the premium price. Since more consumers are buying them, it would appear they're worth the higher price. That Android smartphones are just as good or have better features for less money is merely an opinion that hasn't been proven.
Apple sells a free iPhone. They have zero control over how much plans cost. They have literally done everything that they can possibly do. The ball is in the telecoms' court, both domestically and internationally.
The only possible thing that Apple can do in the future is to further lower manufacturing costs to absurd levels, which could potentially (though is not guaranteed to) lower the off-contract purchase price.
The reason monthly payments are so high is that the phone is so expensive. If the phone was cheaper to buy upfront, even for consumers, perhaps more would go to Virgin, or even T-Mobile next year.
Apple can put a good (but not great) screen on a cheaper iPhone, like they did with the iPod Touch up until this year. They could also use plastic instead of aluminum or glass. Maybe Apple will never do these things because they only sell "premium" products, but no iPhone is "free," and they do have some control over how much plans cost, even if that meant making a phone cheap enough that consumers could buy it directly and avoid the carriers' subsidization model.
The iPad Mini is why the oft rumored iPhone Nano could become a possibility.
Honestly the iPad Mini is just old components thrown together in a new form factor and it's a smash success. That's all I expect from an iPhone Nano. Either old iPod or iPhone parts put together. Because it'll be a "new form factor," it won't look or feel outdated to consumers, hence why it would be a success rather than the current obviously 3 year old phones Apple sells for "free".
Like I said before... I'm not yet convinced either way. Good arguments for both sides of the fence. If pressed I'd have to side with those thinking it will happen... but I stand at 4.95, with 5 being the middle.
Apple needs a cheap iPhone like it needs an entry in the NetBook market. Just like it needs to license OS X and iOS.
This. The existing model of keeping the older models available at a lower price (and on lower pricing plans from carriers) is fine. A "cheap iPhone for the masses" who most likely be spec'd virtually the same as an iPhone 4. Why would Apple go to all that expense of development and re-tooling and manufacturing another phone?
People should be calling for the carriers in the US to have a "data pricing plan for the masses."
The reason monthly payments are so high is that the phone is so expensive. If the phone was cheaper to buy upfront, even for consumers, perhaps more would go to Virgin, or even T-Mobile next year.
Their plans cost the same regardless of the phone that you get. Gonna need to try again.
I still rock an iPod touch and a TracFone. Why? It's not because the iPhone is too expensive. It's because the PLANS ARE (subsidized or not)!
Making a cheaper iPhone won't make me buy one. Someone offering a plan that isn't pure, unadulterated extortion would.
Virgin Mobile - $30/month - 300 minutes, unlimited data (2GB at 4G speeds) and unlimited texts.
T-Mobile - $30/month - 100 minutes, unlimited data (5GB at 4G speeds) and unlimited texts
I have the T-Mobile plan (not on an iphone but I would have been willing to spend $400 had the option been there). These pre-paid plans are still more than I am used to paying for similar service in Europe, but US and Canadians are just used to paying more than double for their phones than pretty much every other country in the world.
Gotta really admire this Muenster guy. He apparently has a job that pays him to make shit up. Where do I get in on that scam?
I can see a future for some interesting tech that Apple might be really good at. The nano wristwatch had all kinds of promise, but that form seems abandoned by AAPL. I'm guessing because they had a business reason to do so. But just because I have some ideas about what I think makes sense isn't a reason people should beleive me if I say "Apple will do this."
Bold prediction: Apple will do what it thinks is in its shareholders' best interests. Even Steve-o did that, even if he did window dress it with blah blah blah change the world blah blah blah. Oddly - changing the world is opten in the shareholder's best interests as well.
Telco's like money, phones on contracts are good for making it, pull your head out of your US-centric butt and smell the roses.
Get out of english speaking worlds where non-smartphones are the norm. The issue is that MOST of the phones in the world are not not smartphones almost all pre-paids (if not throw-in [BOGO]). The primary reason is the cost of entry.
Telco's like money and would love to sell you a a $30-60 month to month plan with no subsidy back to apple, as that is nearly free money. They won't turn you away.
Virgin Mobile - $30/month - 300 minutes, unlimited data (2GB at 4G speeds) and unlimited texts.
T-Mobile - $30/month - 100 minutes, unlimited data (5GB at 4G speeds) and unlimited texts
I have the T-Mobile plan (not on an iphone but I would have been willing to spend $400 had the option been there). These pre-paid plans are still more than I am used to paying for similar service in Europe, but US and Canadians are just used to paying more than double for their phones than pretty much every other country in the world.
Yes, I'm seriously considering the Virgin Mobile option. Seems the least expensive option long term. However, still waiting for them to get the iPhone 5.
Oh here we are again let's see again At this time the 5S will be out so
IPhone 5S=========== IPhone mini $200 with contract.=====Free with contract $650 with out contract===$100-200 W.O. C. 16 gig.(or 32 at this time)=8 gig.(or 16) Upgrade to 32 and 64===upgrade to 16, 32 p. =====$100 + for each upgrade=========== = 4 inch retina display=====3.5 maybe 3by now
8 or more megapixel m.==5 probably 1.2 meg. FaceTime======VGA FaceTime A7==================A5 Battery improved=======battery probably 1/2 = This is not a Apple advertising, a IPad mini is a different category
Apple sells a free iPhone. They have zero control over how much plans cost. They have literally done everything that they can possibly do. The ball is in the telecoms' court, both domestically and internationally.
The telecoms subsidize quite a bit of the cost either way. The iphone 5 is $649 unlocked. I'm not sure exactly how much the carriers pay, but they're at least tying up several hundred dollars per customer. In some markets subsidies don't exist, so it's 100% on Apple and their retail partners. If they're trying to appeal to price sensitivity, it would need to be lower off contract. If there was no market there, used phones wouldn't sell. The thing is I don't think they'll do this. It's unlikely that they would hit these price points at their desired margins simply by using older hardware. Things like NAND costs would decrease over time. Their development and setup costs would essentially be paid for at that point. You're left with the issue that it still costs a certain amount to produce each unit and keep the factories . It's also unlikely they'd reverse engineer the design to something usable. It would squeeze an unpleasant area like storage. It would still need to meet certain criteria. Apple tries to keep things on the same version of iOS as much as possible, so any new product would have to conform to that, while being specifically designed as a low cost device. I don't see as much of an advantage for Apple as some others. This is the same kind of thing that happens with televisions and displays. Volume products essentially subsidize the higher margin products, as they need to overcome development costs of certain commodity parts. Apple doesn't seem to have a problem there. I'd be surprised if they went up against hardware sold on thin margins by companies that make things like chips and lcd panels. I'm not the best at describing this. Anyone who wants to add corrections is welcome to do so.
Quote:
The only possible thing that Apple can do in the future is to further lower manufacturing costs to absurd levels, which could potentially (though is not guaranteed to) lower the off-contract purchase price.
Off contract pricing would be your budget market, as it encompasses prepaid plans. T-mobile has some plans marked as "value plans". They offer a sort of subsidy option there. $20/month higher for the first 20 months gets you a fairly wide range of phones, although many of them still have some up front cost. The one thing where I'm kind of surprised is the Nexus. The reviews have been pretty good, and it's $350 off contract.
Apple could use a less expensive phone - in developing countries, most phones are sold off-contract... In those markets, the iPhone is relatively expensive to crummy Android phones...
I've not seen a breakdown of iPhone sales by model. I've seen guesses, and surveys and analyst estimates. Nothing official tho.
I've only seen analysts estimates too.
Last year when the iPhone 4S was new... it was estimated that the current 4S was 89% of iPhone sales... with the 4 and 3GS taking up the rest.
I can imagine the same situation this year too. The iPhone 5 is hot right now... there's no doubt the iPhone 5 is the overwhelming majority of iPhone sales today.
As several people noted, they're not necessarily talking about needing cheaper phones for the first world markets. (As it turns out, people in those countries usually spring for the more expensive phones anyway, because of the subsidies.)
The world needs a good price: It's the rest of the world that needs and buys more affordable smartphones. Especially in today's economic climate. For example, last year over half the phones sold in Greece were the Samsung Mini, which sold from $125-$140 contract free.
A $200 device: This year the Samung Mini 2 came out. It sells for $150-$200 contract free. Its specs include 3G, GPS, 320x480 3.3" screen, 0.5GB RAM, 4GB Storage + up to 32GB microSD, 800MHz Cortex A5, FM Stereo. That's better than the the iPhone 3GS in some ways, and is basically the kind of model that the analysts want to see.
Subsidies: Carriers that subsidize are also beginning to push back on that model, some more, some less. It ties up a lot of their money for almost two years each time a customer upgrades. (Over a half billion just with AT&T some years.) Therefore some carriers have stopped offering iPhones subsidies, and Wall Street fears that if more do, sales of the high priced iPhone models will drop radically. Will it happen? Who knows, but that's the worry.
There's also the desire to attract first time buyers, who tend to be loyal to the first brand they get.
Apple's profit margin: Currently, Apple's phone has about a 30% net profit margin. E.g. for an average $640 iPhone, Apple clears $200 after paying for manufacturing, corporate, sales, licenses and taxes. That's a lot. The only other maker that ever came really close to that was RIM, who used to get about 28% a few years ago.
So could Apple build and sell a $200 phone with 3GS specs? Sure, if Samsung can do it, so can Apple. They'd net less than $50 per phone though, and it's hard to tell if Apple would go for that, unless they simply considered them like iPod Nanos... worth selling lots.
The problem with the current approach of selling outdated handsets for "free" is that the handsets are obviously outdated. A better example would be the fact that the iPad Mini outsells the iPad 2.
A new iPhone at a low end price point would outsell the current old iPhones and likely wouldn't cannibalize the premium top tier iPhone.
The iPhone 4 is "outdated" only because it has a processor from 2 years ago. In other words... a slow processor.
So... what kind of processor would a cheaper iPhone built today have?
It would be slower, right?
So what's wrong with just using the 2 year old processor that you've already got millions of... and the factories to assemble the iPhone 4 ?
I think Apple's plan to keep selling a certain model for 3 years to wring out every bit of profit is genius.
The other guys are actually spending time and money to make "cheaper" phones.
Comments
Quote:
Originally Posted by island hermit
"The problem with the current approach of selling outdated handsets for "free" is that the handsets are obviously outdated." - Blackbook
Even with a new form factor wouldn't any iPhone with an A4 chip be considered outdated? By next year they could use an updated 4... that might work.
Still not sure how Apple could do it without killing margins... and we all know what will happen to the stock price if there is any mention of lower margins... even if they sell 100 million of them in one quarter.
I have to say though, that I think that Cook is more concerned with market share than Jobs... your example, the iPad Mini, is why I think that.
I have a 3GS, a 4, a 4S, and an iPhone 5 running in the family. The only thing that makes the phone outdated, is there being a newer model.
I still rock an iPod touch and a TracFone. Why? It's not because the iPhone is too expensive. It's because the PLANS ARE (subsidized or not)!
Making a cheaper iPhone won't make me buy one. Someone offering a plan that isn't pure, unadulterated extortion would.
Quote:
Originally Posted by island hermit
"The problem with the current approach of selling outdated handsets for "free" is that the handsets are obviously outdated." - Blackbook
Even with a new form factor wouldn't any iPhone with an A4 chip be considered outdated? By next year they could use an updated 4... that might work.
Still not sure how Apple could do it without killing margins... and we all know what will happen to the stock price if there is any mention of lower margins... even if they sell 100 million of them in one quarter.
I have to say though, that I think that Cook is more concerned with market share than Jobs... your example, the iPad Mini, is why I think that.
The iPad Mini is why the oft rumored iPhone Nano could become a possibility.
Honestly the iPad Mini is just old components thrown together in a new form factor and it's a smash success. That's all I expect from an iPhone Nano. Either old iPod or iPhone parts put together. Because it'll be a "new form factor," it won't look or feel outdated to consumers, hence why it would be a success rather than the current obviously 3 year old phones Apple sells for "free".
If Apple were to produce a less expensive iPhone, the first thing Wall Street will be yelling about is cannibalization of the higher end model iPhone. Either way, Apple can't win because there will always be someone who sees some flaw in Apple's decisions. It's as though only Apple can make mistakes and other companies can't which is absolutely ridiculous. Currently, Apple has the best financial model of any hardware company around and yet analysts continue to say Apple's financial model is flawed in some way because Apple only sells high-end products to those who can afford them. Why should Apple sacrifice margins for growth if that's not the company's goal.
Every company can't have a goal of having the highest market share, because that wouldn't work, either. Eventually each company would just have to keep building cheaper and cheaper products and that's not going to be a good financial model. Apple may not have the best growth model, but the financial model seems very good. Why Wall Street continues to push growth models over financial models really doesn't make any sense to me. We wouldn't have any high-end brands if that was the case.
What puzzles me is this claim about iPhones no longer being worth the premium price. Since more consumers are buying them, it would appear they're worth the higher price. That Android smartphones are just as good or have better features for less money is merely an opinion that hasn't been proven.
Quote:
Originally Posted by Tallest Skil
Apple sells a free iPhone. They have zero control over how much plans cost. They have literally done everything that they can possibly do. The ball is in the telecoms' court, both domestically and internationally.
The only possible thing that Apple can do in the future is to further lower manufacturing costs to absurd levels, which could potentially (though is not guaranteed to) lower the off-contract purchase price.
The reason monthly payments are so high is that the phone is so expensive. If the phone was cheaper to buy upfront, even for consumers, perhaps more would go to Virgin, or even T-Mobile next year.
Apple can put a good (but not great) screen on a cheaper iPhone, like they did with the iPod Touch up until this year. They could also use plastic instead of aluminum or glass. Maybe Apple will never do these things because they only sell "premium" products, but no iPhone is "free," and they do have some control over how much plans cost, even if that meant making a phone cheap enough that consumers could buy it directly and avoid the carriers' subsidization model.
Quote:
Originally Posted by blackbook
The iPad Mini is why the oft rumored iPhone Nano could become a possibility.
Honestly the iPad Mini is just old components thrown together in a new form factor and it's a smash success. That's all I expect from an iPhone Nano. Either old iPod or iPhone parts put together. Because it'll be a "new form factor," it won't look or feel outdated to consumers, hence why it would be a success rather than the current obviously 3 year old phones Apple sells for "free".
Like I said before... I'm not yet convinced either way. Good arguments for both sides of the fence. If pressed I'd have to side with those thinking it will happen... but I stand at 4.95, with 5 being the middle.
Quote:
Originally Posted by jungmark
Apple needs a cheap iPhone like it needs an entry in the NetBook market. Just like it needs to license OS X and iOS.
This. The existing model of keeping the older models available at a lower price (and on lower pricing plans from carriers) is fine. A "cheap iPhone for the masses" who most likely be spec'd virtually the same as an iPhone 4. Why would Apple go to all that expense of development and re-tooling and manufacturing another phone?
People should be calling for the carriers in the US to have a "data pricing plan for the masses."
Originally Posted by shadash
The reason monthly payments are so high is that the phone is so expensive. If the phone was cheaper to buy upfront, even for consumers, perhaps more would go to Virgin, or even T-Mobile next year.
Their plans cost the same regardless of the phone that you get. Gonna need to try again.
Quote:
Originally Posted by KazKam
I still rock an iPod touch and a TracFone. Why? It's not because the iPhone is too expensive. It's because the PLANS ARE (subsidized or not)!
Making a cheaper iPhone won't make me buy one. Someone offering a plan that isn't pure, unadulterated extortion would.
Virgin Mobile - $30/month - 300 minutes, unlimited data (2GB at 4G speeds) and unlimited texts.
T-Mobile - $30/month - 100 minutes, unlimited data (5GB at 4G speeds) and unlimited texts
I have the T-Mobile plan (not on an iphone but I would have been willing to spend $400 had the option been there). These pre-paid plans are still more than I am used to paying for similar service in Europe, but US and Canadians are just used to paying more than double for their phones than pretty much every other country in the world.
Gotta really admire this Muenster guy. He apparently has a job that pays him to make shit up. Where do I get in on that scam?
I can see a future for some interesting tech that Apple might be really good at. The nano wristwatch had all kinds of promise, but that form seems abandoned by AAPL. I'm guessing because they had a business reason to do so. But just because I have some ideas about what I think makes sense isn't a reason people should beleive me if I say "Apple will do this."
Bold prediction: Apple will do what it thinks is in its shareholders' best interests. Even Steve-o did that, even if he did window dress it with blah blah blah change the world blah blah blah. Oddly - changing the world is opten in the shareholder's best interests as well.
Quote:
Originally Posted by hill60
Really?
The rest of the world?
Lives on prepaid phones?
(Hint:- see my earlier post.)
Telco's like money, phones on contracts are good for making it, pull your head out of your US-centric butt and smell the roses.
Get out of english speaking worlds where non-smartphones are the norm. The issue is that MOST of the phones in the world are not not smartphones almost all pre-paids (if not throw-in [BOGO]). The primary reason is the cost of entry.
Telco's like money and would love to sell you a a $30-60 month to month plan with no subsidy back to apple, as that is nearly free money. They won't turn you away.
Quote:
Originally Posted by willb2064
Virgin Mobile - $30/month - 300 minutes, unlimited data (2GB at 4G speeds) and unlimited texts.
T-Mobile - $30/month - 100 minutes, unlimited data (5GB at 4G speeds) and unlimited texts
I have the T-Mobile plan (not on an iphone but I would have been willing to spend $400 had the option been there). These pre-paid plans are still more than I am used to paying for similar service in Europe, but US and Canadians are just used to paying more than double for their phones than pretty much every other country in the world.
Yes, I'm seriously considering the Virgin Mobile option. Seems the least expensive option long term. However, still waiting for them to get the iPhone 5.
deleted
At this time the 5S will be out so
IPhone 5S=========== IPhone mini
$200 with contract.=====Free with contract
$650 with out contract===$100-200 W.O. C.
16 gig.(or 32 at this time)=8 gig.(or 16)
Upgrade to 32 and 64===upgrade to 16, 32 p.
=====$100 + for each upgrade===========
=
4 inch retina display=====3.5 maybe 3by now
8 or more megapixel m.==5 probably
1.2 meg. FaceTime======VGA FaceTime
A7==================A5
Battery improved=======battery probably 1/2
=
This is not a Apple advertising, a IPad mini is a different category
Quote:
Originally Posted by Tallest Skil
Apple sells a free iPhone. They have zero control over how much plans cost. They have literally done everything that they can possibly do. The ball is in the telecoms' court, both domestically and internationally.
The telecoms subsidize quite a bit of the cost either way. The iphone 5 is $649 unlocked. I'm not sure exactly how much the carriers pay, but they're at least tying up several hundred dollars per customer. In some markets subsidies don't exist, so it's 100% on Apple and their retail partners. If they're trying to appeal to price sensitivity, it would need to be lower off contract. If there was no market there, used phones wouldn't sell. The thing is I don't think they'll do this. It's unlikely that they would hit these price points at their desired margins simply by using older hardware. Things like NAND costs would decrease over time. Their development and setup costs would essentially be paid for at that point. You're left with the issue that it still costs a certain amount to produce each unit and keep the factories . It's also unlikely they'd reverse engineer the design to something usable. It would squeeze an unpleasant area like storage. It would still need to meet certain criteria. Apple tries to keep things on the same version of iOS as much as possible, so any new product would have to conform to that, while being specifically designed as a low cost device. I don't see as much of an advantage for Apple as some others. This is the same kind of thing that happens with televisions and displays. Volume products essentially subsidize the higher margin products, as they need to overcome development costs of certain commodity parts. Apple doesn't seem to have a problem there. I'd be surprised if they went up against hardware sold on thin margins by companies that make things like chips and lcd panels. I'm not the best at describing this. Anyone who wants to add corrections is welcome to do so.
Quote:
The only possible thing that Apple can do in the future is to further lower manufacturing costs to absurd levels, which could potentially (though is not guaranteed to) lower the off-contract purchase price.
Off contract pricing would be your budget market, as it encompasses prepaid plans. T-mobile has some plans marked as "value plans". They offer a sort of subsidy option there. $20/month higher for the first 20 months gets you a fairly wide range of phones, although many of them still have some up front cost. The one thing where I'm kind of surprised is the Nexus. The reviews have been pretty good, and it's $350 off contract.
I've only seen analysts estimates too.
Last year when the iPhone 4S was new... it was estimated that the current 4S was 89% of iPhone sales... with the 4 and 3GS taking up the rest.
I can imagine the same situation this year too. The iPhone 5 is hot right now... there's no doubt the iPhone 5 is the overwhelming majority of iPhone sales today.
As several people noted, they're not necessarily talking about needing cheaper phones for the first world markets. (As it turns out, people in those countries usually spring for the more expensive phones anyway, because of the subsidies.)
The world needs a good price: It's the rest of the world that needs and buys more affordable smartphones. Especially in today's economic climate. For example, last year over half the phones sold in Greece were the Samsung Mini, which sold from $125-$140 contract free.
A $200 device: This year the Samung Mini 2 came out. It sells for $150-$200 contract free. Its specs include 3G, GPS, 320x480 3.3" screen, 0.5GB RAM, 4GB Storage + up to 32GB microSD, 800MHz Cortex A5, FM Stereo. That's better than the the iPhone 3GS in some ways, and is basically the kind of model that the analysts want to see.
Subsidies: Carriers that subsidize are also beginning to push back on that model, some more, some less. It ties up a lot of their money for almost two years each time a customer upgrades. (Over a half billion just with AT&T some years.) Therefore some carriers have stopped offering iPhones subsidies, and Wall Street fears that if more do, sales of the high priced iPhone models will drop radically. Will it happen? Who knows, but that's the worry.
There's also the desire to attract first time buyers, who tend to be loyal to the first brand they get.
Apple's profit margin: Currently, Apple's phone has about a 30% net profit margin. E.g. for an average $640 iPhone, Apple clears $200 after paying for manufacturing, corporate, sales, licenses and taxes. That's a lot. The only other maker that ever came really close to that was RIM, who used to get about 28% a few years ago.
So could Apple build and sell a $200 phone with 3GS specs? Sure, if Samsung can do it, so can Apple. They'd net less than $50 per phone though, and it's hard to tell if Apple would go for that, unless they simply considered them like iPod Nanos... worth selling lots.
The iPhone 4 is "outdated" only because it has a processor from 2 years ago. In other words... a slow processor.
So... what kind of processor would a cheaper iPhone built today have?
It would be slower, right?
So what's wrong with just using the 2 year old processor that you've already got millions of... and the factories to assemble the iPhone 4 ?
I think Apple's plan to keep selling a certain model for 3 years to wring out every bit of profit is genius.
The other guys are actually spending time and money to make "cheaper" phones.