Rogifan is deliberately spreading doom and gloom FUD. Almost every story about the 5s or 5c contain FUD posts from him.
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
I thought analysts are never wrong. Just goes to show you that you can't trust every thing you read unless it came from the horse's mouth. And we know Apple doesn't comment in rumors.
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Again show me a SINGLE phone that gives the total package of the 5C at $400. Show me one. Even the $700 Galaxy S4 is slower than the 5C because it lags big time.
Show me one phone with 5C's ecosystem, stable AND guaranteed updated OS, awesome build quality, retail stores that will give you excellent customer service, and awesome re-sale value. Show me ONE? There is NONE.
It's not a question of value, it's a question of whether or not Apple has priced the phone well enough to sell into the middle-class smartphone market. They already own the premium market. The 5c will sell VERY well, I don't think anyone is really disputing that. The question is if they are going to cannibalize 5s sales in the process. It will be some time before we're able to answer that question. At $549, it is still a premium phone. If you can't afford it, you can't afford it. $400 is what a lot of people were hoping for.
In case you can read Chinese, you can check the package offered by China Unicom.
They offer 10 different plans from monthly fee of US$11 to US$270 for contract period of 12 to 30 months. Each plan will have certain amount of rebate.
Another option is to sign up 36 myths contract with monthly fee of US$62, then you will have a 16g 5S for free.
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
The iPad expands the iOS market share. The C will do the same. Apple makes money on the high-end. Other than Sammy, what other Android vendor makes money? iOS users spend more $$$ and use the Internet more.
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Pricing is always secret that's why contracts aren't public.
Name me a SINGLE phone maker who makes significant money selling $400 phones. There is NONE. There is only money to make at the $500-$600 for now until tech catches up. Its the same thing happening to PC builders now. Only Apple makes money, everyone else is in race to sell the cheapest PC. A losers game.
Analysis estimate that Apple would get 20% gross margins selling the 5C for $400. But then you need to take out advertising, OS development, OS updates, retail stores, overhead, and of course R&D. Once you take all those out you are basically at $0. That's why Nokia/LG and all the other guys who sell $400 MAKE NO MONEY AT ALL. Why would Apple want to do that? Not to mention the 5C at $400 would cause MASSIVE canibalization to the 5S.
Hate to be blunt but if $6.25 more a month (difference between $550 and $400 divided by 24 months) is going to kill a person than apple is not interested in that consumer for now. It's not just about buying phones. Its buying into the eco-system. If a person can't afford the extra $6.25 a month do you think they will buy much on itunes?
People hope for a lot of things. I though the 5C was going to be $400 because I believe all the BS by these analysis. Now I'm going to buy the 5S. Mission accomplished for Apple. I also hope Ferrari sells a $50,000 car. You can HOPE for many things.
Merc Benz's sells about 1 million cars a year. The entire industry sells over 15 million. Do you think they are fretting about the $20k car buyer?
So you're saying the only way Apple can make any profit off the 5C is to sell it for $550 off contract? Oh and btw, I can afford to buy the 5S but I can't remember the last time I spent money in the iTunes Store. I have Spotify where I get all my music and DirecTV where I get most of my TV and movies. I do use the HBO Go app on my Apple TV but that's tied to my DirecTV account so again, not spending money in iTunes. OK maybe I'm the exception to the norm but I still think its a mistake for Apple to only market iPhone to people with lots of disposable income (assuming that's what they're doing). There are middle class people who would love to own iPhone but $550 is expensive. To me this attitude of 'Sorry if you can't afford what Apple charges than you don't deserve to be their customer' is really off putting.
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Couldn't agree more. Information voids always get filled, only question being whether with useful or useless info.
Consider this:
# non-earnings-related press releases put out by AMZN's IR in 2013? 125.
# non-earnings-related press releases put out by AAPL's IR in 2013? Zero.
AMZN's P/E? Ridiculously stratospheric.
AAPL's P/E? Ridiculously subterranean.
I am sure the truth lies somewhere between zero and 125. A lot of the suckiness in the stock price is of Apple's own making.
Even Samsung makes no money on $400 phones.
Notice how their profits only went up once they sold the $600 Galaxy S3.
You can expect a premium product ( excellent customer service, stable and updated OS, strong eco-system, great trade-in value, awesome build quality) at a non-premium price. Even Google who sells phones at cost can't produce a true premium phone for $400.
Do you have sources for this or are you just guessing? I haven't used a Moto X but it got good reviews. Maybe it's not a "premium phone" but maybe people don't care. And maybe there are some people who will never consider plastic (no matter how great the build quality) to be "premium". Just saying...
Couldn't agree more. Information voids always get filled, only question being whether with useful or useless info.
Consider this:
# non-earning-related press releases by AMZN in 2013? 125. # non-earning-related press releases by AAPL in 2013? Zero. AMZN's P/E? Ridiculously stratospheric. AAPL's P/E? Ridiculous subterranean.
I am sure the truth lies somewhere between zero and 125. A lot of the suckiness in price is of Apple's own making.
I don't get it. Amazon is one of the most secretive companies around but when a story started making the rounds that they were building a smartphone and were going to sell it for free with no contract it didn't take them long to deny it. I think there are times when it would be beneficial to Apple to NOT be silent.
Look at Samsungs profits. It only exploded AFTER they started selling a ton of $600 phones. And why aren't other phone makers who sell a large quantity of <$450 phones making any money? Like LG/Nokia/Chinese brands? None of them make money. Only the two companies that sell $600 in large quantities make money.
The MotoX is $199 with contract. That's more than the 5C at $99. Plus we all know Google does not mind selling hardware at cost.
Google does appear to sell some smartphones and tablets at close to cost, for example the Google-branded Nexus 4 phone and Nexus 7 tablet along with the HDTV product Chromecast. The MotoX is not a Google product but instead built by Motorola Mobility, a separately operated company. I believe MM sets it's own pricing and they chose to position this one as higher end.
Noteworthy that Google has yet to have MM build a Google-branded device which probably says there's other companies building a better product than MM at the moment.
People hope for a lot of things. I though the 5C was going to be $400 because I believe all the BS by these analysis. Now I'm going to buy the 5S. Mission accomplished for Apple.
I have to agree with this. Until we knew what components Apple was going to put into the iPhone 5c, it was pure speculation (hope?) that Apple would bring the cost down more than normal. I think seeing that it's essentially an iPhone 5 (with some good updates for LTE, battery), it's not too surprising that they've done their typical $100 off for last year's model strategy. Colors give it a fun, fresh look and free up the machines that make the aluminum frames to concentrate on the 5s models.
I also was waiting to see what the 5c would offer (vs the 5s) and now that I see both models, will go for the 5s.
Would people have been happier with the guts of a 4s in the colored plastic for $450 instead?
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
The iPad expands the iOS market share. The C will do the same. Apple makes money on the high-end. Other than Sammy, what other Android vendor makes money? iOS users spend more $$$ and use the Internet more.
Quote:
Originally Posted by Rogifan
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Pricing is always secret that's why contracts aren't public.
The C is being targeted as a more flexible mid range device… maintains apple's target margin, and allows the carriers to make money on the sale of the device (about 30% of the subscriber fee… before data/usage fees)… And Apple users use more bandwidth (I've got 4 phones on my plan, running a 6gb plan (and we had overages last month… a lot of time on the road)… which again is more profit (if you don't want that overage… you overbuy… and there are no 'rolloverg GBs' yet)….
Key item all carriers have learned: Sell iPhones to the whales… at whatever cost up front… and you will reap benefits for at least 4 years.
Key item Apple is learning: With the cost of short term stock price…. push down ASP slightly to drive up iOS adoption to drive revenue via
halo to iPad and Mac, iTMS/AppStore/iBook/Newpaper purchases, inApp purchases, and iAds
And the cheapest China iPhone, the iPhone 4 (soon to get iOS 7, same as the newest devices) just got extra legs with the ability to download older versions of apps.
People shouldn't worry about day-to-day stock changes. Even year-to-year borders on gambling. Play at your own risk, but the "house" has the edge!
Couldn't agree more. Information voids always get filled, only question being whether with useful or useless info.
Consider this:
# non-earnings-related press releases put out by AMZN in 2013? 125. # non-earnings-related press releases put out by AAPL in 2013? Zero. AMZN's P/E? Ridiculously stratospheric. AAPL's P/E? Ridiculously subterranean.
I am sure the truth lies somewhere between zero and 125. A lot of the suckiness in the stock price is of Apple's own making.
(Edited typos).
There will always be voids. Analysts can make up sh1t just so Apple can respond.
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
And anyone should care about your opinion based on what exactly? Your vast experience running a Global 100 company with 50+ billion in quarterly revenues?
edit: From what I see on other sites, they get a much lower monthly plan with a high price phone than if they get a $99 phone. This is one wierd system, its subsidies in reverse... I like it... I would do that actually because in the end you pay less than american plans, but you need to have cash up front.
Yes, this is how phone subsidies work in China - you pay up front for the phone and you get a portion or all of it back over the life of your contract (you get a discount on your monthly bill). If they did it the US way, the Chinese carriers would end up with people running off with the "free" phones before their contracts were up.
I should add that many folks here get reimbursed by their employer for their mobile phone charges. For these folks the higher cost of iPhone 5c/5s here vs. in the US won't matter as they end up paying less or nothing for the phone.
Comments
Again show me a SINGLE phone that gives the total package of the 5C at $400. Show me one. Even the $700 Galaxy S4 is slower than the 5C because it lags big time.
Show me one phone with 5C's ecosystem, stable AND guaranteed updated OS, awesome build quality, retail stores that will give you excellent customer service, and awesome re-sale value. Show me ONE? There is NONE.
It's not a question of value, it's a question of whether or not Apple has priced the phone well enough to sell into the middle-class smartphone market. They already own the premium market. The 5c will sell VERY well, I don't think anyone is really disputing that. The question is if they are going to cannibalize 5s sales in the process. It will be some time before we're able to answer that question. At $549, it is still a premium phone. If you can't afford it, you can't afford it. $400 is what a lot of people were hoping for.They offer 10 different plans from monthly fee of US$11 to US$270 for contract period of 12 to 30 months. Each plan will have certain amount of rebate.
Another option is to sign up 36 myths contract with monthly fee of US$62, then you will have a 16g 5S for free.
http://www.chinareviewnews.com/doc/1027/4/2/8/102742883.html?coluid=0&kindid=0&docid=102742883&mdate=0916113536
CU and CT are doing some preemptive pricing here. A sure sign that China Mobile is on its way.
http://www.marketwatch.com/story/techs-rally-but-apple-falls-on-china-news-2013-09-16
Silly, pointless story. And obviously FUD.
The iPhone 5s is sold out in China.
All of it, or only unlocked? Cite?
The iPad expands the iOS market share. The C will do the same. Apple makes money on the high-end. Other than Sammy, what other Android vendor makes money? iOS users spend more $$$ and use the Internet more.
Pricing is always secret that's why contracts aren't public.
So you're saying the only way Apple can make any profit off the 5C is to sell it for $550 off contract? Oh and btw, I can afford to buy the 5S but I can't remember the last time I spent money in the iTunes Store. I have Spotify where I get all my music and DirecTV where I get most of my TV and movies. I do use the HBO Go app on my Apple TV but that's tied to my DirecTV account so again, not spending money in iTunes. OK maybe I'm the exception to the norm but I still think its a mistake for Apple to only market iPhone to people with lots of disposable income (assuming that's what they're doing). There are middle class people who would love to own iPhone but $550 is expensive. To me this attitude of 'Sorry if you can't afford what Apple charges than you don't deserve to be their customer' is really off putting.
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Couldn't agree more. Information voids always get filled, only question being whether with useful or useless info.
Consider this:
# non-earnings-related press releases put out by AMZN's IR in 2013? 125.
# non-earnings-related press releases put out by AAPL's IR in 2013? Zero.
AMZN's P/E? Ridiculously stratospheric.
AAPL's P/E? Ridiculously subterranean.
I am sure the truth lies somewhere between zero and 125. A lot of the suckiness in the stock price is of Apple's own making.
(Edited typos).
Google does appear to sell some smartphones and tablets at close to cost, for example the Google-branded Nexus 4 phone and Nexus 7 tablet along with the HDTV product Chromecast. The MotoX is not a Google product but instead built by Motorola Mobility, a separately operated company. I believe MM sets it's own pricing and they chose to position this one as higher end.
Noteworthy that Google has yet to have MM build a Google-branded device which probably says there's other companies building a better product than MM at the moment.
Look at Samsungs profits. It only exploded AFTER they started selling a ton of $600 phones.
It may also have something to do with the fact that they started selling better phones. Just saying....
People hope for a lot of things. I though the 5C was going to be $400 because I believe all the BS by these analysis. Now I'm going to buy the 5S. Mission accomplished for Apple.
I have to agree with this. Until we knew what components Apple was going to put into the iPhone 5c, it was pure speculation (hope?) that Apple would bring the cost down more than normal. I think seeing that it's essentially an iPhone 5 (with some good updates for LTE, battery), it's not too surprising that they've done their typical $100 off for last year's model strategy. Colors give it a fun, fresh look and free up the machines that make the aluminum frames to concentrate on the 5s models.
I also was waiting to see what the 5c would offer (vs the 5s) and now that I see both models, will go for the 5s.
Would people have been happier with the guts of a 4s in the colored plastic for $450 instead?
fine. Look at the major players in the mid-range market <$400
LG - sold 50,000,000 smart phones - zero profits
Leveno - sold 40,000,000 - very little profits
ZTE - sold 40,000,000 - very little
Nokia sold 50,000,000 and BROKE EVEN!
http://video.foxbusiness.com/v/2647243301001/microsoft-nokia-unit-breaks-even-at-50m-smart-phone-sales-a-year/
LOL!
Even if Apple sells an additional 100,000,000 5C's at $400 it won't bring in any profits.
Show me a single manufacter who makes GREAT money on $400 phones. Then Apple will bring out a $400 5C.
No one is saying that prices don't matter for profits.
Your analysis is unfortunately confusing causality regarding the Econ 101 links between demand and price.
Quote: Originally Posted by jungmark
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
The iPad expands the iOS market share. The C will do the same. Apple makes money on the high-end. Other than Sammy, what other Android vendor makes money? iOS users spend more $$$ and use the Internet more.
To me this is the exact kind of thing Apple should be commenting on. If WSJ and Bloomberg are flat out wrong on pricing Apple should say so. Stock dropped over 3% in part on these stories about reduced subsidies. Unless these pricing schemes were some big secret that Apple couldn't comment on?
Pricing is always secret that's why contracts aren't public.
The C is being targeted as a more flexible mid range device… maintains apple's target margin, and allows the carriers to make money on the sale of the device (about 30% of the subscriber fee… before data/usage fees)… And Apple users use more bandwidth (I've got 4 phones on my plan, running a 6gb plan (and we had overages last month… a lot of time on the road)… which again is more profit (if you don't want that overage… you overbuy… and there are no 'rolloverg GBs' yet)….
Key item all carriers have learned: Sell iPhones to the whales… at whatever cost up front… and you will reap benefits for at least 4 years.
Key item Apple is learning: With the cost of short term stock price…. push down ASP slightly to drive up iOS adoption to drive revenue via
halo to iPad and Mac, iTMS/AppStore/iBook/Newpaper purchases, inApp purchases, and iAds
People shouldn't worry about day-to-day stock changes. Even year-to-year borders on gambling. Play at your own risk, but the "house" has the edge!
There will always be voids. Analysts can make up sh1t just so Apple can respond.
Call it FUD if you want, I don't care. $550 off contract for a plastic phone is too expensive IMO. But if Apple is content keeping a sliver of the market at the high end and not expanding iOS ecosystem, then fine, that's their choice. But I don't know if its a good move long term....same thing with doubling down on carrier subsidies when more and more people are looking to get out of being tied to long term carrier contracts.
And anyone should care about your opinion based on what exactly? Your vast experience running a Global 100 company with 50+ billion in quarterly revenues?
edit: From what I see on other sites, they get a much lower monthly plan with a high price phone than if they get a $99 phone. This is one wierd system, its subsidies in reverse... I like it... I would do that actually because in the end you pay less than american plans, but you need to have cash up front.
Yes, this is how phone subsidies work in China - you pay up front for the phone and you get a portion or all of it back over the life of your contract (you get a discount on your monthly bill). If they did it the US way, the Chinese carriers would end up with people running off with the "free" phones before their contracts were up.
I should add that many folks here get reimbursed by their employer for their mobile phone charges. For these folks the higher cost of iPhone 5c/5s here vs. in the US won't matter as they end up paying less or nothing for the phone.