The iPhone5 was selling for $650 last week. Do you really believe that a plastic case is $250 cheaper to make than a metal one? That's what are you asking Apple to do.
Do you really believe it costs $650 to make an iPhone5. The BOM is around $200 or less. I think what people are asking for is apple to trade profit margin for market share. Not saying I agree with it but it's got nothing to do with a plastic case being $250 cheaper to make.
The great news about the lack of facts is that analysts and wall st hacks will amuse themselves with what fiction is already bouncing around inside their head.
Wow is wallstreet that insecure? What a bunch of foolish nervous nellies. Seriously! No wonder the stock market sucks so bad. Like was said in other posts Apple will most likely announce both after the 5s opening weekend. What a bunch of children.
It appears to me that Wall Street suffers from cognitive dissonance when it comes to Apple. They wanted a cheap iPhone, but if they actually got a cheap iPhone they would instantly switch gears to fears about declining margins.
My sentiments exactly. If like you said they sold cheap phones there margins would suffer and wall street would get all twisted in a knot about it as well.
Problem is with that is that Apple at the time was only selling one new model phone. 4s one year and the 5. This year there selling two.
so I would expect that the announcement will come next week after the 5s sales numbers from the first weekend come in, they will probably mention the 5c too at that time.
I don't know if its that much cheaper to go plastic and maybe the way Apple has built this phone it's not that much cheaper. But public perception is that something plastic should be cheaper. Regardless I think there is a whole swath of people Apple is not catering to by pricing at the upper range of the middle. Maybe at one point they could do that because other phones sucked so bad but that's not the case anymore. I'd rather see someone buy an iPhone than a Moto X or Nexus. But for people who are price conscious those phones might be good enough. Does Apple really want to give those people away to Android?
Good post.
Quote:
Originally Posted by Curtis Hannah
I don't think the market for the 5C would be preorders, more like in store.
People probably want to see it and feel it first in person before buying it as well. Its really hard to gauge what the colors really look like, as well as if the plastic looks/feels nice or not.
The iPhone5 was selling for $650 last week. Do you really believe that a plastic case is $250 cheaper to make than a metal one? That's what are you asking Apple to do.
One could also ask is the 4S all of the sudden $100 cheaper to make this week than last week?
Apple has already been sacrificing margins on their lower end phones. Honestly I would think the 4S would be more expensive for Apple to produce than the 5C. Likely the only reason they kept the 5C's price artificially high was to help prop up 5S sales.
Meanwhile the 5C doesn't seem to be selling at any record pace. With preorders in China this year as well as DoCoMo and T-Mobile one would think the 5C could at least sell significantly enough for an honorable mention from Apple?
If it were cheaper (and it easily could have been) I think we would have seen blow out preorders globally for the device over the past weekend.
Good lord! The relevant,comparable sales figure for the last 3 years will need to include the iPhone 5S, which doesn't go on sale until Friday... Let's all relax a bit...
What is more interesting is that Apple is starting pre-orders AND retail availability for the 5S on the same day... That's new... Tim Cook has spoken about driving more traffic and sales into the stores - I think they've discovered that flagship phone pre-sales last year had the effect of reducing store traffic... An interesting experiment this year, we'll see if there is more action in the retail stores as a result... Some folks (myself included) will want to check out the 5S in person before ordering online...
Do you really believe it costs $650 to make an iPhone5. The BOM is around $200 or less. I think what people are asking for is apple to trade profit margin for market share. Not saying I agree with it but it's got nothing to do with a plastic case being $250 cheaper to make.
Thanks for bringing some reason into this discussion. Apple can sell the C for $450 and still make a HUGE profit.
I don't get why if they were willing to take such a chance with the iPad on price why not the iPhone. Apple is in a position to get BOTH huge marketshare and profits.
Who is to say Apple will not lower the price of iPhone 5c in a few months? I recall Apple dropping the price of the first generation iPhone a few months after it launched in 2007 by a few hundred dollars. Apple has built in a big enough margin in the iPhone 5c that it can find the sweet spot at which they can maximize the profit. But they have to start with a higher price to gauge the demand at the introduction price point.
The 5c is the old 5 in a new skin. Apple wont release numbers on old iphones. People need to wait next monday, if nothing, then they can worry.
Disclosure: Sold my stocks at $502 at iphone event. Bought back a little at $470 and more at $455. I am short 2 $450 puts that expires on sept 27th.
Sure, I believe you, even though I normally think that anybody who posts their stock trades (in detail especially) on AI doesn't own any. Guess I will just block you and avoid all your posts
Who is to say Apple will not lower the price of iPhone 5c in a few months? I recall Apple dropping the price of the first generation iPhone a few months after it launched in 2007 by a few hundred dollars. Apple has built in a big enough margin in the iPhone 5c that it can find the sweet spot at which they can maximize the profit. But they have to start with a higher price to gauge the demand at the introduction price point.
I think a lot of buyers may have the same expectations and are holding off purchasing. Nobody wants to be burned for early adoption, deal with refunds via apple store gift card.
The only number that matters is how many iPhones were sold this coming weekend. Counting Internet preorders of one particular model doesn't mean very much.
Who is to say Apple will not lower the price of iPhone 5c in a few months? I recall Apple dropping the price of the first generation iPhone a few months after it launched in 2007 by a few hundred dollars. Apple has built in a big enough margine in the iPhone 5c that it can find the sweet spot at which they can maximize the profit. But they have to start with a higher price to gauge the demand at the introduction price point.
They may do that but it would probably mean that they would also have to drop the price of the 4s and I'm not sure they would want to do that. They should have just dropped the 4s all together earlier and had 2 phones. Now they're having to play within this model that they painted themselves into.
One of the Chinese carriers announced pre-orders of over 100K phones. That seems pretty bad considering the 5 sold 2 million phones in the first three days it was available in China. So double 100K because there are two carriers and lets say preorders are at 200K that means between now and next Monday they need to sell 1.8 million phones just to equal the iPhone5.
So enjoy the great products, but the stock is going nowhere.
Sold and pre-order are two different number. In Apple jargon, any unit ship to the carrier is consider a sales. Any unit ship to Apple store are not considered as sales until a customer pay for the phone. The initial sales number increase inventory build up in any product launch. Pre-order consist of only customer order. And in China, it is all over the place as there is a lot of 3rd party reseller that the pre-order number doesn't get counted. Apple launch weekend number are 70-80% set as the order from all the carriers in the launch countries were known a lot time ago and they would be counted as part of the initial launch number. 5S/5C units already arrived in places like China. The only variable for initial weekend number is customer sales through Apple stores. The more countries that Apple launch the product, the bigger the initial weekend sales number unless carrier cut their order yoy. And Apple would be able to add more countries to the initial launch date list. The launch day sales number is very much a supply driven number.
China is already start pre-ordering today (they have a different reservation system than US or Europe because of the chaotic launch with 4S . They have a lotto like reservation system and no one will wait in line for store purchase) for the Sept 20th purchase and it is doing mighty good. Looks like all the gold and white are sold out in Hong Kong after 3 hours. And it is also gone in most Beijin, Shanghai stores.
5C is going to do better than 4S last year. If nothing else, adding Docomo 61M 3g user to the potential customer pool in a country with 40% penetration rate is pretty good recipe of increase sales.
Comments
The iPhone5 was selling for $650 last week. Do you really believe that a plastic case is $250 cheaper to make than a metal one? That's what are you asking Apple to do.
Do you really believe it costs $650 to make an iPhone5. The BOM is around $200 or less. I think what people are asking for is apple to trade profit margin for market share. Not saying I agree with it but it's got nothing to do with a plastic case being $250 cheaper to make.
Come on, sheep, let's leave out the fanboism for second and be realistic adults!!
If the iPhone 5C would be (pre-) selling well -- Apple would brag about it!
iPhone 5C = Cheap (for Apple, that is), Child labor
iPhone 5S = Same
Wow is wallstreet that insecure? What a bunch of foolish nervous nellies. Seriously! No wonder the stock market sucks so bad. Like was said in other posts Apple will most likely announce both after the 5s opening weekend. What a bunch of children.
I hope everything is ok at Apple headquarters, as the lack of an announcement really is really something to worry about for our Apple fans.
Get a grip. This is nothing to worry about. lol. You sound like wallstreet scared of there own shadow.
It appears to me that Wall Street suffers from cognitive dissonance when it comes to Apple. They wanted a cheap iPhone, but if they actually got a cheap iPhone they would instantly switch gears to fears about declining margins.
My sentiments exactly. If like you said they sold cheap phones there margins would suffer and wall street would get all twisted in a knot about it as well.
Really?
http://www.apple.com/pr/library/2011/10/10iPhone-4S-Pre-Orders-Top-One-Million-in-First-24-Hours.html
Problem is with that is that Apple at the time was only selling one new model phone. 4s one year and the 5. This year there selling two.
I don't know if its that much cheaper to go plastic and maybe the way Apple has built this phone it's not that much cheaper. But public perception is that something plastic should be cheaper. Regardless I think there is a whole swath of people Apple is not catering to by pricing at the upper range of the middle. Maybe at one point they could do that because other phones sucked so bad but that's not the case anymore. I'd rather see someone buy an iPhone than a Moto X or Nexus. But for people who are price conscious those phones might be good enough. Does Apple really want to give those people away to Android?
Good post.
I don't think the market for the 5C would be preorders, more like in store.
People probably want to see it and feel it first in person before buying it as well. Its really hard to gauge what the colors really look like, as well as if the plastic looks/feels nice or not.
The iPhone5 was selling for $650 last week. Do you really believe that a plastic case is $250 cheaper to make than a metal one? That's what are you asking Apple to do.
One could also ask is the 4S all of the sudden $100 cheaper to make this week than last week?
What is more interesting is that Apple is starting pre-orders AND retail availability for the 5S on the same day... That's new... Tim Cook has spoken about driving more traffic and sales into the stores - I think they've discovered that flagship phone pre-sales last year had the effect of reducing store traffic... An interesting experiment this year, we'll see if there is more action in the retail stores as a result... Some folks (myself included) will want to check out the 5S in person before ordering online...
Do you really believe it costs $650 to make an iPhone5. The BOM is around $200 or less. I think what people are asking for is apple to trade profit margin for market share. Not saying I agree with it but it's got nothing to do with a plastic case being $250 cheaper to make.
Thanks for bringing some reason into this discussion. Apple can sell the C for $450 and still make a HUGE profit.
The 5c is the old 5 in a new skin. Apple wont release numbers on old iphones. People need to wait next monday, if nothing, then they can worry.
Disclosure: Sold my stocks at $502 at iphone event. Bought back a little at $470 and more at $455. I am short 2 $450 puts that expires on sept 27th.
Sure, I believe you, even though I normally think that anybody who posts their stock trades (in detail especially) on AI doesn't own any. Guess I will just block you and avoid all your posts
The price for the iPhone 5c will go lower.
It will either happen in the coming months, IF demand is soft. OR it will happen once the iPhone 6 comes out with its larger screen.
It will happen. But it's smart for Apple not to start out with a lower price.
Why? Because you can always lower the price. What you can't do is raise it.
This way Apple can see what the demand is.
And I predict, in my personal opinion, that the demand for the 5c is going to be huge.
But then again, don't just take my word for it:
http://www.shinyshiny.tv/2013/09/huge_uk_demand.html
I think a lot of buyers may have the same expectations and are holding off purchasing. Nobody wants to be burned for early adoption, deal with refunds via apple store gift card.
Who is to say Apple will not lower the price of iPhone 5c in a few months? I recall Apple dropping the price of the first generation iPhone a few months after it launched in 2007 by a few hundred dollars. Apple has built in a big enough margine in the iPhone 5c that it can find the sweet spot at which they can maximize the profit. But they have to start with a higher price to gauge the demand at the introduction price point.
They may do that but it would probably mean that they would also have to drop the price of the 4s and I'm not sure they would want to do that. They should have just dropped the 4s all together earlier and had 2 phones. Now they're having to play within this model that they painted themselves into.
One of the Chinese carriers announced pre-orders of over 100K phones. That seems pretty bad considering the 5 sold 2 million phones in the first three days it was available in China. So double 100K because there are two carriers and lets say preorders are at 200K that means between now and next Monday they need to sell 1.8 million phones just to equal the iPhone5.
So enjoy the great products, but the stock is going nowhere.
Sold and pre-order are two different number. In Apple jargon, any unit ship to the carrier is consider a sales. Any unit ship to Apple store are not considered as sales until a customer pay for the phone. The initial sales number increase inventory build up in any product launch. Pre-order consist of only customer order. And in China, it is all over the place as there is a lot of 3rd party reseller that the pre-order number doesn't get counted. Apple launch weekend number are 70-80% set as the order from all the carriers in the launch countries were known a lot time ago and they would be counted as part of the initial launch number. 5S/5C units already arrived in places like China. The only variable for initial weekend number is customer sales through Apple stores. The more countries that Apple launch the product, the bigger the initial weekend sales number unless carrier cut their order yoy. And Apple would be able to add more countries to the initial launch date list. The launch day sales number is very much a supply driven number.
China is already start pre-ordering today (they have a different reservation system than US or Europe because of the chaotic launch with 4S . They have a lotto like reservation system and no one will wait in line for store purchase) for the Sept 20th purchase and it is doing mighty good. Looks like all the gold and white are sold out in Hong Kong after 3 hours. And it is also gone in most Beijin, Shanghai stores.
5C is going to do better than 4S last year. If nothing else, adding Docomo 61M 3g user to the potential customer pool in a country with 40% penetration rate is pretty good recipe of increase sales.
Worry harder.
Apple fans don't worry about FUD.