Maybe Apple is more expensive, but I don't want Good enough. I'm also not a fan of Android. Maybe that's why it seems Android users are replacing their phones at least every year. You ask them and they start throwing out a long this of Android phones they've owned. If you're always replacing your phone, that's costing you money!!! I had my iPhone 4 for over 4 years before replacing it with the iPhone 6. I think I got my money worth. Not only that, but was on Straight Talk for a couple years with it, so I had a cheap $45 a month unlimited plan which was better then the AT&T plan it replaced and of course almost half the price every month. If you're replacing your Android phone every year because you got that just good enough one, and now you need another good enough one. Every year dumping $250+ on a Android phone, that's $500+ every 2 years. That's even more cheap Android phones sold and sold to the same people unless they wised up and jumped ship to Apple.
I don't know what Microsoft's plan is. $45 a phone is laughable. Talking about going in with CHEAP phones. There is ZERO money to be made. Maybe that's why sales have climbed slightly. They're giving them away. In the end, you'll never make money doing that. No one is going to pay real money for them when you try to increase prices later.
It's simple, really. Apple keeps their margins (gross/net) the same year after year after year after year after year. Apple products were overprices before 2000 and the iMac (margins too high), IIRC.
I think their computer margins went down a tad, recently, but not by much at all.
For that, you could say Apple has always been expensive. Or not.
I would love to get an iPhone a lot cheaper, but truly not low enough to not appreciate it.
Poor MS. How do they keep subsiding and making almost no money on hardware? Now they are known as budget smartphones? Even though there are more expensive ones out there? The price range on Windows phones is too broad. From almost free to being hundreds of dollars.
You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.
I don't think anybody would argue your points. It is is not really a 'notion' that Apple is more expensive, it is a fact. And a good Android phone is definitely good enough for a lot of people - like all those texters in the Philipines (and the rest of the world), and unquestionably there is far more variety in the Android world.
You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.
Exactly. I've only used iPhones since the 3g but I do have an unlocked Android for overseas trip. Since I'm able to sell my two year old iPhones for what I paid for them I'd rather use the cheap Android the few times I'm overseas and get that high iPhone resale value
Remember the people on THIS FORUM that were mad the 5C wasn't $250?
Yup. Looking like idiots now.
Reasoning for a cheaper iPhone in other countries where incomes are a lot lower makes a lot of logical sense. You want to capture a certain percentage of the market, not really all of it (like Android, LOL).
Back to margins, Apple has it's margins, net and gross, and they stick to that. They would not be able to sell a 5C for $250. Not if they want to keep the margins, and they will.
No it does NOT make logical sense to sell a cheaper iPhone in poorer countries ($250). It would cheapen the brand big time.
Agreed! I've always been saying that Apple should have nothing at all to do with poor countries and poor people!
It looks like Apple is doing just fine with selling to customers who actually have money. Apple is busy enough with supplying their current devices to people who can actually afford it. Apple does not need to be making any cheap products for dirt poor countries and dirt poor people. Apple should ignore that entire market. Let 'em buy Android phones or some other cheap garbage.
while the iPhone is certainly the "top of the line" smartphone throughout the world, and is the only "prestige" smartphone anywhere for those who care about that sort of thing, it's not accurate to call it a "luxury" product. selling 200 million per year is far too many for that category, and really, its price @ ;<$1000 is still way too low to make it something "exclusive." ($1000 ain't what it used to be either.)
now, a $4000 gold Apple Watch, that will be a true "luxury" product. you won't see many. in fact, probably none since you'd be crazy to wear it on the street in many places. city thugs will be hunting for it and punch you out to get it, or worse.
actually i think it is the appeal of getting a top of the line product for such a modest price is why the iPhone is so popular with the world's middle class.
Reasoning for a cheaper iPhone in other countries where incomes are a lot lower makes a lot of logical sense. You want to capture a certain percentage of the market, not really all of it (like Android, LOL).
Back to margins, Apple has it's margins, net and gross, and they stick to that. They would not be able to sell a 5C for $250. Not if they want to keep the margins, and they will.
Apple doesn't rank market share high on its list of priorities.
"Prior to the season, Microsoft and the NFL struck a five-year $400 million deal with one of the major components being that the Microsoft Surface would become "the official tablet of the NFL" with coaches and players using the Surface on the sidelines during games."
funny this is will the Surface be around in 5 years?
Delta did some similar mass adoption deal for pilots didn't they? That was with a very early iteration of the junk too, I've been nervous about flying Delta ever since!
No it does NOT make logical sense to sell a cheaper iPhone in poorer countries ($250). It would cheapen the brand big time.
Poorer countries can buy used iPhones for $200-$300 right now. But no way should Apple be selling brand new iPhones for $250
iPhones last 3-5 years unlike Androids that last 6 months to 2 years tops. So even though Apple has about 17% of marketshare their install base is probably closer to 25%-30%
In what country can you buy an off-contact iPhone for $200?
Apple's blockbuster holiday quarter, in which it sold a record smashing 74.5 million iPhones on its way to $18 billion in profit, flew in the face of some market watchers who have claimed for years that the company should compete with low-cost Android devices to gain market share. But Apple has long established itself as a luxury brand, eschewing market share in favor of high margins on premium products that customers desire.
I wouldn't say that Apple has established itself as a luxury brand.
I think it's more a case of Apple has differentiated itself, or stands out from the pack.
In the Android universe, there is no differentiation. Other than some skin and different crapware pre-installed, what makes Samsung's flagship, different from Sony's, different from LG's, different from HTC's etc.? Answer: Nothing
They're all tripping all over themselves to get the most customers and the only way to do that is to cut their prices.
Apple on the other hand, is the only manufacturer that offers iOS. You can't get it anywhere else. That's why the so called analysis from various bloggers and analysts, talking about how a commoditized market will eventually hurt Apple, is just a bunch of gobbly-gook.
It hasn't hurt their Mac business after all these years and it will do even less damage to their iPhone business.
I wonder what the average selling price was for the Fire phone last quarter? I'm guessing the WSJ and ABI Research didn't use negative numbers to come up with their average selling price of an Android phone.
Personally, I consider my Apple iPhone 6 with 128 GB storage to be well worth is $1K price. It's the best iPhone ever, the best camera, the best iOS, etc.
I use it every day, and can't imagine life without it.
Until you try 6+, your 6 camera won't stand a chance. .
Is this a "no shit sherlock" article. Apple doesn't compete in the budget arena whilst most of the Android vendors do. What's the next article going to be Ferrari are selling more than Volvos?
The only viable comparison is the comparison between the high end Android handsets and Apple's. In which Apple are crushing all before them.
Michael Jordan doesn't mow his own lawn either. There's cheap gardeners for that task. Talking about profit margin huh. Economics 101.
Since there are no low end iPhones, but there certainly are low end Android handsets, comparing average selling prices alone doesn't give a very meaningful picture. Yes an approximately comparable iPhone sells for more than its Android counterpart, and yes Apple makes a higher margin on what it sells, but no, Apple doesn't dilute its product mix with basic models.
15 seconds on the AT&T site proves you wrong.
"Low End" iPhones are around to be had. From "free" to $0.99.
Remember the people on THIS FORUM that were mad the 5C wasn't $250?
Yup. Looking like idiots now.
Yeah, those people expected too much. I was betting at the time that 5C would never be priced below $450 when released and it was $550. Apple want their products differentiated from the rest with quality, support and user experience. You can't build a cheap device that would meet all these without sacrificing profit. Because of that, I didn't expect the Apple Watch to be under $300 as many speculated in last Sept keynote.
Delta did some similar mass adoption deal for pilots didn't they? That was with a very early iteration of the junk too, I've been nervous about flying Delta ever since!
The newer Surfaces have gotten good reviews. They're getting a lot of exposure with the NFL. Don't be surprised if they become a formidable #2.
Apple is defintely a luxury brand. Luxury is about getting the best of the best. And iPhones/iPads are exactly that.
Luxury is about buying an inessential, desirable item that is expensive or difficult to obtain. The iPhone is more expensive than other phones (although not that much more when compared to a comparable phone, just like Macs) but is not inessential or difficult to obtain. You might have to wait a little bit to get one but it's not like they're handmade for each purchaser. As for being inessential, you can say the same about any cell phone. It all depends on the person buying one if it's essential or not. I'm tired of hearing all the anti-Apple people criticize Apple for producing very good products and degrading their success as being simply bought by the rich. I see iPhones in the hands of people from all avenues of life.
The typical Chinese person doesn't make anywhere near what the normal American makes, even those on subsidies. Anything from the US is considered a luxury for most Chinese.
The newer Surfaces have gotten good reviews. They're getting a lot of exposure with the NFL. Don't be surprised if they become a formidable #2.
Good reviews by PC magazines paid by Microsoft to give them awards. There are also a lot of gullible people in this world. Yes, you can say the same for Apple product buyers but I believe too many people have been burned by Windows PC garbage and are finally thinking twice before buying another plastic doorstop.
Apple is defintely a luxury brand. Luxury is about getting the best of the best. And iPhones/iPads are exactly that.
Not only China, but India and most of Asia, south America, Africa....
Apple products have always been luxury as people in those countries could never afford it. Let's see: Chinese average salary is around $4500/year and iPhone cost $860-$990 or $900 average. So, it's 20% of a person salary. I don't think an American with average salary of $54000/year will spend close to $11,000 on a damn phone. So, if Apple products in general or iPhones especially are not luxury, I don't know what is.
Comments
Maybe Apple is more expensive, but I don't want Good enough. I'm also not a fan of Android. Maybe that's why it seems Android users are replacing their phones at least every year. You ask them and they start throwing out a long this of Android phones they've owned. If you're always replacing your phone, that's costing you money!!! I had my iPhone 4 for over 4 years before replacing it with the iPhone 6. I think I got my money worth. Not only that, but was on Straight Talk for a couple years with it, so I had a cheap $45 a month unlimited plan which was better then the AT&T plan it replaced and of course almost half the price every month. If you're replacing your Android phone every year because you got that just good enough one, and now you need another good enough one. Every year dumping $250+ on a Android phone, that's $500+ every 2 years. That's even more cheap Android phones sold and sold to the same people unless they wised up and jumped ship to Apple.
I don't know what Microsoft's plan is. $45 a phone is laughable. Talking about going in with CHEAP phones. There is ZERO money to be made. Maybe that's why sales have climbed slightly. They're giving them away. In the end, you'll never make money doing that. No one is going to pay real money for them when you try to increase prices later.
It's simple, really. Apple keeps their margins (gross/net) the same year after year after year after year after year. Apple products were overprices before 2000 and the iMac (margins too high), IIRC.
I think their computer margins went down a tad, recently, but not by much at all.
For that, you could say Apple has always been expensive. Or not.
I would love to get an iPhone a lot cheaper, but truly not low enough to not appreciate it.
Poor MS. How do they keep subsiding and making almost no money on hardware? Now they are known as budget smartphones? Even though there are more expensive ones out there? The price range on Windows phones is too broad. From almost free to being hundreds of dollars.
You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.
I don't think anybody would argue your points. It is is not really a 'notion' that Apple is more expensive, it is a fact. And a good Android phone is definitely good enough for a lot of people - like all those texters in the Philipines (and the rest of the world), and unquestionably there is far more variety in the Android world.
The important question however, is: So?
Exactly. I've only used iPhones since the 3g but I do have an unlocked Android for overseas trip. Since I'm able to sell my two year old iPhones for what I paid for them I'd rather use the cheap Android the few times I'm overseas and get that high iPhone resale value
Remember the people on THIS FORUM that were mad the 5C wasn't $250?
Yup. Looking like idiots now.
Reasoning for a cheaper iPhone in other countries where incomes are a lot lower makes a lot of logical sense. You want to capture a certain percentage of the market, not really all of it (like Android, LOL).
Back to margins, Apple has it's margins, net and gross, and they stick to that. They would not be able to sell a 5C for $250. Not if they want to keep the margins, and they will.
No it does NOT make logical sense to sell a cheaper iPhone in poorer countries ($250). It would cheapen the brand big time.
Agreed! I've always been saying that Apple should have nothing at all to do with poor countries and poor people!
It looks like Apple is doing just fine with selling to customers who actually have money. Apple is busy enough with supplying their current devices to people who can actually afford it. Apple does not need to be making any cheap products for dirt poor countries and dirt poor people. Apple should ignore that entire market. Let 'em buy Android phones or some other cheap garbage.
while the iPhone is certainly the "top of the line" smartphone throughout the world, and is the only "prestige" smartphone anywhere for those who care about that sort of thing, it's not accurate to call it a "luxury" product. selling 200 million per year is far too many for that category, and really, its price @ ;<$1000 is still way too low to make it something "exclusive." ($1000 ain't what it used to be either.)
now, a $4000 gold Apple Watch, that will be a true "luxury" product. you won't see many. in fact, probably none since you'd be crazy to wear it on the street in many places. city thugs will be hunting for it and punch you out to get it, or worse.
actually i think it is the appeal of getting a top of the line product for such a modest price is why the iPhone is so popular with the world's middle class.
Apple doesn't rank market share high on its list of priorities.
Delta did some similar mass adoption deal for pilots didn't they? That was with a very early iteration of the junk too, I've been nervous about flying Delta ever since!
In what country can you buy an off-contact iPhone for $200?
Apple's blockbuster holiday quarter, in which it sold a record smashing 74.5 million iPhones on its way to $18 billion in profit, flew in the face of some market watchers who have claimed for years that the company should compete with low-cost Android devices to gain market share. But Apple has long established itself as a luxury brand, eschewing market share in favor of high margins on premium products that customers desire.
I wouldn't say that Apple has established itself as a luxury brand.
I think it's more a case of Apple has differentiated itself, or stands out from the pack.
In the Android universe, there is no differentiation. Other than some skin and different crapware pre-installed, what makes Samsung's flagship, different from Sony's, different from LG's, different from HTC's etc.? Answer: Nothing
They're all tripping all over themselves to get the most customers and the only way to do that is to cut their prices.
Apple on the other hand, is the only manufacturer that offers iOS. You can't get it anywhere else. That's why the so called analysis from various bloggers and analysts, talking about how a commoditized market will eventually hurt Apple, is just a bunch of gobbly-gook.
It hasn't hurt their Mac business after all these years and it will do even less damage to their iPhone business.
I wonder what the average selling price was for the Fire phone last quarter? I'm guessing the WSJ and ABI Research didn't use negative numbers to come up with their average selling price of an Android phone.
Personally, I consider my Apple iPhone 6 with 128 GB storage to be well worth is $1K price. It's the best iPhone ever, the best camera, the best iOS, etc.
I use it every day, and can't imagine life without it.
Until you try 6+, your 6 camera won't stand a chance.
.
Is this a "no shit sherlock" article. Apple doesn't compete in the budget arena whilst most of the Android vendors do. What's the next article going to be Ferrari are selling more than Volvos?
The only viable comparison is the comparison between the high end Android handsets and Apple's. In which Apple are crushing all before them.
Michael Jordan doesn't mow his own lawn either. There's cheap gardeners for that task. Talking about profit margin huh. Economics 101.
Since there are no low end iPhones, but there certainly are low end Android handsets, comparing average selling prices alone doesn't give a very meaningful picture. Yes an approximately comparable iPhone sells for more than its Android counterpart, and yes Apple makes a higher margin on what it sells, but no, Apple doesn't dilute its product mix with basic models.
15 seconds on the AT&T site proves you wrong.
"Low End" iPhones are around to be had. From "free" to $0.99.
http://www.att.com/shop/wireless/devices/cellphones.html
Remember the people on THIS FORUM that were mad the 5C wasn't $250?
Yup. Looking like idiots now.
Yeah, those people expected too much. I was betting at the time that 5C would never be priced below $450 when released and it was $550. Apple want their products differentiated from the rest with quality, support and user experience. You can't build a cheap device that would meet all these without sacrificing profit. Because of that, I didn't expect the Apple Watch to be under $300 as many speculated in last Sept keynote.
The newer Surfaces have gotten good reviews. They're getting a lot of exposure with the NFL. Don't be surprised if they become a formidable #2.
1+ billion people in China disagree with you.
http://www.thestreet.com/story/13031290/1/apple-becomes-top-luxury-brand-among-chinas-millionaires.html?puc=yahoo&cm_ven=YAHOO
Apple is defintely a luxury brand. Luxury is about getting the best of the best. And iPhones/iPads are exactly that.
Luxury is about buying an inessential, desirable item that is expensive or difficult to obtain. The iPhone is more expensive than other phones (although not that much more when compared to a comparable phone, just like Macs) but is not inessential or difficult to obtain. You might have to wait a little bit to get one but it's not like they're handmade for each purchaser. As for being inessential, you can say the same about any cell phone. It all depends on the person buying one if it's essential or not. I'm tired of hearing all the anti-Apple people criticize Apple for producing very good products and degrading their success as being simply bought by the rich. I see iPhones in the hands of people from all avenues of life.
The typical Chinese person doesn't make anywhere near what the normal American makes, even those on subsidies. Anything from the US is considered a luxury for most Chinese.
The newer Surfaces have gotten good reviews. They're getting a lot of exposure with the NFL. Don't be surprised if they become a formidable #2.
Good reviews by PC magazines paid by Microsoft to give them awards. There are also a lot of gullible people in this world. Yes, you can say the same for Apple product buyers but I believe too many people have been burned by Windows PC garbage and are finally thinking twice before buying another plastic doorstop.
My sister bought a iPhone 5c last year for $99,and pays $60 (unadvertised VZW plan) for unlimited talk, text, and 2GB of data.
1+ billion people in China disagree with you.
http://www.thestreet.com/story/13031290/1/apple-becomes-top-luxury-brand-among-chinas-millionaires.html?puc=yahoo&cm_ven=YAHOO
Apple is defintely a luxury brand. Luxury is about getting the best of the best. And iPhones/iPads are exactly that.
Not only China, but India and most of Asia, south America, Africa....
Apple products have always been luxury as people in those countries could never afford it. Let's see: Chinese average salary is around $4500/year and iPhone cost $860-$990 or $900 average. So, it's 20% of a person salary. I don't think an American with average salary of $54000/year will spend close to $11,000 on a damn phone. So, if Apple products in general or iPhones especially are not luxury, I don't know what is.