I feel cheated being on the apple upgrade program. I would have taken a Matte or jet black 128 or 256 gig 7 plus. Got on soon as preorders started with zero issues, clicked my store, choice of phone, and all models except 32 gig rose gold were out of stock. People wouldn't enroll in the apple upgrade program if they didn't want the newest one every year.
apple should send out first dibs emails of launch day stock before they give them to retailers and carriers and allow current upgrade program members to either agree to upgrade on launch day or not. Then what's left should go out everywhere else. Now I likely won't see an iPhone til December unless I stalk my local Apple Store and get there at the right time to get lucky when one comes in
Dude you are not special.
Being on the Apple upgrade plan does not give you special benefits. In fact Apple makes LESS PROFIT on upgrade customers.
You are getting AppleCare at a discounted rate AND no interest loan for 24 months.
The real SPECIAL customers are the carriers who buy HUNDREDS OF THOUSANDS OF PHONES and other customers who pay the full price UP FRONT.
Special or not this is the first iPhone launch I've had issues with getting on launch day or even a week after launch and I've had every iPhone since the beginning. They didn't do the upgrade program members right plain and simple. I shouldn't be able to get the minute the preorders go live and see out of stock on every single model and color in the 7 plus's. They should have at least allowed us to get in line with everyone else and set up an Apple Store Appointment on a later date to upgrade or be notified when your phone of choice is available
No dude. You don't expect the same privedge as people throwing down $1000 cash up front.
You are bumming your way to a 24 month interest free loan with discounting AppleCare. You don't deserve to have the same dibs to the new phones as cash buyers. Sorry.
Next time you should throw down $1000 upfront and not worry about being reliant on the financing of some bank.
The truth is the upgrade program is for poor people who can't afford to throw down $1000 upfront.
The upgrade program is for dumb fucks with no credit that's all I have to say about that. People with money don't go out and spend 1000 dollars on a phone when they can get it for 500. You obviously aren't rich and wouldn't know how to stay rich if you were
If you're getting the latest iPhone model for $500 when the starting price is $649 it means you're 1) not using Apple's iPhone Upgrade Program since that's based on the retail price, your sales tax (in the US), and AppleCare+ prorated over 2 years, and 2) buying a new iPhone "off the back of a truck."
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
Actually, the case could be made that loyal customers who upgrade every 12 months via the upgrade plan should be treated as preferred customers -- and maybe have a bigger allotment set aside for them... and a web site that is easier to use *
* This is the process to order an upgrade phone if you are already on the plan. If you want to change anything, you restart from step 1:
re-select the model
re-select the carrier
re-select the finish (color)
re-select the capacity
re-select the upgrade program
re-select "I'm already part of the program"
re-enter the serial number
re-enter the last 4 digits of IMEI number
re-qualify
re-select Reserve to Upgrade in Store
re-select a state
re-select a store
re-select Continue
re-enter your Apple ID
re-enter your Password
re-click the forward arrow
re-select a time
re-verify your contact information
re-select Confirm Reservation
It usually breaks down at step 11 or 12 as the store you selected doesn't have the model/carrier/finish/capacity you seek -- so you select another store until you find what you seek or none. In that case you go back to step 1.
It is my contention that the whole upgrade should be performed on-line (no reservation or trip to the store -- unless the customer wants it.
Apple ships you the new phone via email and charges your CC the full price of the iPhone.
When you receive the new iPhone you swap in the SIM from the old iPhone.
You use the shipping box and a free return label to return the old iPhone.
When Apple receives your old iPhone it examines/analyzes it.
Apple debits your Credit card accordingly.
5 steps quick, steps instead of 15 slow, tedious steps... For years, Apple has done iPhone repair/swaps this way!
Why should a customer that pays $0 down, gets 24 month of interest free financing, and discounted ApplePay get preferential treatment versus someone who is throwing down $900 cash?
You do know that Apple makes less money on the Payment plan because they need to pay the financing bank a cut? Plus they need to get your old phone, clean it, and resale it. They make much more profit on someone who buys the phone outright or through the carrier.
Could the process be better? Of course. But expecting Apple to cater to a customer base that is less profitable versus a customer base that is more profitable is crazy.
First, Apple isn't carrying the loan -- it's being financed through an independent financial organization, Citizens Bank. Likely, Apple gets most of the price of the iPhone up front from Citizens less a reasonable rate of interest given to Citizens to cover their costs and interest. So, Apple isn't losing much money compared to a cash customer.
Second, the upgrade program creates kind of a lock-in for the customer -- with an incentive to upgrade to a new iPhone every year. There is no lock-in advantage for Apple with a cash customer -- Apple may never see him again.
Third, with the upgrade customer Apple includes, and gets paid for AppleCare with every iPhone. AppleCare is very profitable to Apple -- and sold to reatailers at a heavy discount ~35%. So Apple gets the sale, and keeps the discount. With the cash customer, Apple is less likely to get the highly profitable AppleCare sale. For example your $900 cash customer, likely, didn't buy AppleCare.
Fourth, the upgrader knowing he is going to upgrade in 12 months, will, likely, take good care of his iPhone so he is not charged extra to upgrade -- and it's easier for Apple to clean and resell.
Fifth, when Apple sells an iPhone to a carrier or other reseller it does so at a discount ~25%. The upgrader buys directly from Apple -- and Apple keeps the discount (helps pay for Apple Stores, among other things).
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
How would that be possible? They're limited to stock on hand.
Don't you that it's a little odd that Apple can do a masterful job of supply chain management -- where parts, people, packaging, production are efficiently brought together to create the finished goods -- the iPhones,
Then that Apple allocating those finished goods to satisfy demand (when/how much/where) -- is a disaster.
Apple can do better, much better...
Based on:
Apple's past history
current economic situation
current competitive situation
marketing analysis
For example, one thing Apple could do is contact people already on the upgrade program and:
tell them they are eligible for an upgrade
ask if they are considering an upgrade
ask if they would like to pre-qualify to streamline the process
ask if they would like to pre-reserve for their convenience
Based on the feedback from this positive marketing program, Apple could more accurately match limited supply to demand -- and even get an idea of manufacturing requirements.
I think you can only "predict" demand once people have made their minds up whether or not they want the product. Since the 7 and 7 Plus with all of their features were just announced, it would've been impossible to determine demand. Overproduction of a product no one wants is a recipe for disaster and in the case of Samsung, production of a product that is extremely faulty but hugely in supply is also a disaster.
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
How would that be possible? They're limited to stock on hand.
Don't you that it's a little odd that Apple can do a masterful job of supply chain management -- where parts, people, packaging, production are efficiently brought together to create the finished goods -- the iPhones,
Then that Apple allocating those finished goods to satisfy demand (when/how much/where) -- is a disaster.
Apple can do better, much better...
Based on:
Apple's past history
current economic situation
current competitive situation
marketing analysis
For example, one thing Apple could do is contact people already on the upgrade program and:
tell them they are eligible for an upgrade
ask if they are considering an upgrade
ask if they would like to pre-qualify to streamline the process
ask if they would like to pre-reserve for their convenience
Based on the feedback from this positive marketing program, Apple could more accurately match limited supply to demand -- and even get an idea of manufacturing requirements.
I think you can only "predict" demand once people have made their minds up whether or not they want the product. Since the 7 and 7 Plus with all of their features were just announced, it would've been impossible to determine demand. Overproduction of a product no one wants is a recipe for disaster and in the case of Samsung, production of a product that is extremely faulty but hugely in supply is also a disaster.
I mostly disagree -- here's why: Every consumer goods company does/pays for some market analysis to try to determine the volume of his products will sell -- based on many factors.
The upgrader is an ideal subset to analyze based on his recent performance -- the last 12 months.
If you can get him to pre-qualify and pre-reserve -- you have what is known in the retail biz as a qualified customer. A qualified customer is someone with money to spend who is willing to spend it. What better marketing data can you get?
I feel cheated being on the apple upgrade program. I would have taken a Matte or jet black 128 or 256 gig 7 plus. Got on soon as preorders started with zero issues, clicked my store, choice of phone, and all models except 32 gig rose gold were out of stock. People wouldn't enroll in the apple upgrade program if they didn't want the newest one every year.
apple should send out first dibs emails of launch day stock before they give them to retailers and carriers and allow current upgrade program members to either agree to upgrade on launch day or not. Then what's left should go out everywhere else. Now I likely won't see an iPhone til December unless I stalk my local Apple Store and get there at the right time to get lucky when one comes in
Dude you are not special.
Being on the Apple upgrade plan does not give you special benefits. In fact Apple makes LESS PROFIT on upgrade customers.
You are getting AppleCare at a discounted rate AND no interest loan for 24 months.
The real SPECIAL customers are the carriers who buy HUNDREDS OF THOUSANDS OF PHONES and other customers who pay the full price UP FRONT.
Special or not this is the first iPhone launch I've had issues with getting on launch day or even a week after launch and I've had every iPhone since the beginning. They didn't do the upgrade program members right plain and simple. I shouldn't be able to get the minute the preorders go live and see out of stock on every single model and color in the 7 plus's. They should have at least allowed us to get in line with everyone else and set up an Apple Store Appointment on a later date to upgrade or be notified when your phone of choice is available
No dude. You don't expect the same privedge as people throwing down $1000 cash up front.
You are bumming your way to a 24 month interest free loan with discounting AppleCare. You don't deserve to have the same dibs to the new phones as cash buyers. Sorry.
Next time you should throw down $1000 upfront and not worry about being reliant on the financing of some bank.
The truth is the upgrade program is for poor people who can't afford to throw down $1000 upfront.
"The truth is the upgrade program is for poor people who can't afford to throw down $1000 upfront."
Actually, the upgrade program requires a high credit rating -- especially if you are buying multiple iPhones at one go.
The cash buyer is more likely to have a poor credit rating and is unable to finance the purchase... I'm not saying that's you, but it's one of the major reasons people pay cash -- they have no choice. Anonymity is another major reason.
The smart buyer understands the time value of money, and leverages his credit to get the best deal -- paying less than the cash buyer.
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
How would that be possible? They're limited to stock on hand.
Don't you that it's a little odd that Apple can do a masterful job of supply chain management -- where parts, people, packaging, production are efficiently brought together to create the finished goods -- the iPhones,
Then that Apple allocating those finished goods to satisfy demand (when/how much/where) -- is a disaster.
Apple can do better, much better...
Based on:
Apple's past history
current economic situation
current competitive situation
marketing analysis
For example, one thing Apple could do is contact people already on the upgrade program and:
tell them they are eligible for an upgrade
ask if they are considering an upgrade
ask if they would like to pre-qualify to streamline the process
ask if they would like to pre-reserve for their convenience
Based on the feedback from this positive marketing program, Apple could more accurately match limited supply to demand -- and even get an idea of manufacturing requirements.
I think you can only "predict" demand once people have made their minds up whether or not they want the product. Since the 7 and 7 Plus with all of their features were just announced, it would've been impossible to determine demand. Overproduction of a product no one wants is a recipe for disaster and in the case of Samsung, production of a product that is extremely faulty but hugely in supply is also a disaster.
I mostly disagree -- here's why: Every consumer goods company does/pays for some market analysis to try to determine the volume of his products will sell -- based on many factors.
The upgrader is an ideal subset to analyze based on his recent performance -- the last 12 months.
If you can get him to pre-qualify and pre-reserve -- you have what is known in the retail biz as a qualified customer. A qualified customer is someone with money to spend who is willing to spend it. What better marketing data can you get?
I partially agree.
Absent the final product details AND the state of the competitive field at the time of the announcement, consumers would lack substantive information about their options to purchase. Yes, you'd have a set of customers who are committed to making a purchase, but obviously since even a supply chain genius like Cook cannot crack it completely, it's more difficult and elusive than we may think.
With the Samsung blow-up, Apple just got a golden ticket handed to them for people who are not opposed to considering Apple products.
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
How would that be possible? They're limited to stock on hand.
Don't you that it's a little odd that Apple can do a masterful job of supply chain management -- where parts, people, packaging, production are efficiently brought together to create the finished goods -- the iPhones,
Then that Apple allocating those finished goods to satisfy demand (when/how much/where) -- is a disaster.
Apple can do better, much better...
Based on:
Apple's past history
current economic situation
current competitive situation
marketing analysis
For example, one thing Apple could do is contact people already on the upgrade program and:
tell them they are eligible for an upgrade
ask if they are considering an upgrade
ask if they would like to pre-qualify to streamline the process
ask if they would like to pre-reserve for their convenience
Based on the feedback from this positive marketing program, Apple could more accurately match limited supply to demand -- and even get an idea of manufacturing requirements.
I think you can only "predict" demand once people have made their minds up whether or not they want the product. Since the 7 and 7 Plus with all of their features were just announced, it would've been impossible to determine demand. Overproduction of a product no one wants is a recipe for disaster and in the case of Samsung, production of a product that is extremely faulty but hugely in supply is also a disaster.
I mostly disagree -- here's why: Every consumer goods company does/pays for some market analysis to try to determine the volume of his products will sell -- based on many factors.
The upgrader is an ideal subset to analyze based on his recent performance -- the last 12 months.
If you can get him to pre-qualify and pre-reserve -- you have what is known in the retail biz as a qualified customer. A qualified customer is someone with money to spend who is willing to spend it. What better marketing data can you get?
I partially agree.
Absent the final product details AND the state of the competitive field at the time of the announcement, consumers would lack substantive information about their options to purchase. Yes, you'd have a set of customers who are committed to making a purchase, but obviously since even a supply chain genius like Cook cannot crack it completely, it's more difficult and elusive than we may think.
With the Samsung blow-up, Apple just got a golden ticket handed to them for people who are not opposed to considering Apple products.
Yes! Apple needs to do better marketing analysis -- and I believe they can. It involves some risk -- but what doesn't -- especially supply chain management. I think Steve had very good intuition about what would sell -- and the talent to sell it. That's lacking in today's Apple -- so they need to fill that void.
Was it ever guaranteed or implied that Apple Upgrade participants would receive a new phone on the fist day of sale?
No but it also wasn't implied that they would be put in a different queue with access to a smaller quantity of stock. Why should an upgrade program customer have to wait until the 17th (or be told the phone won't be in stock until November) when other customers are still able to order? And if Apple has such a limited supply of black phones maybe don't launch the black phone until they can better meet demand?
Why would a phone locked to a carrier be available but not an unlocked device? Do you honestly not recall that Apple has traditionally left unlocked iPhones off the market until supply and demand equalized a bit, yet you're upset that some iPhone Upgrade Program members bought the unlocked iPhone model before you could get to it, but that some locked versions are still available? Seriously?!
its absurd. the more punch-list items apple knocks off the phone, the more desperate the trolls get and the more mental gymnastics they have to use to find new ways to hate. no surprise this is a guy who also hates on gays on other AI threads. go figure.
I reserved a phone as soon as the store opened -- iPhone 7 Plus 128GB Jet Black but says it won't ship until Sept 26-Oct 3. A little disappointed I won't have it on the 16th. Signed up for the upgrade program. Biggest frustration was that I could not have it shipped to a different address than what is on our AT&T account. Waited on hold for nearly 5 hours to speak with someone from Apple. I offered to pay for the phone in full just so I could have it shipped to me, but they said I would have to cancel my order and start over. They couldn't use the phone they had on reserve for me. That's a bit ridiculous. If I had done that, my ship date would have been November. They suggested I temporarily change my billing address with AT&T so I could have the phone shipped to me. Ended up doing that and it worked.
The whole point of the program is to be able to get a new phone after 12 months, not 14 or 15.
You seriously thought the point of the program was to magically make components appear out of thin air because you signed a contract? Did Dumbledore send this agreement to you via owl?
What are you talking about? Some iPhone Upgrade Program customers were unable to order phones when others were. All because Apple put them in a separate queue and limited them to in store stock. Some got a message saying Apple wasn't taking reservations anymore and to come back on September 17. Who wants to get up in the middle of the night to see that message? I'm sorry I think it's a mess and certainly could be handled better.
Boo-fucking-hoo! Just because no wants to "get up in the middle of the night to see that message" doesn't mean you need to act like an entitled prick when it comes to demand outstripping supply.
Again you're not getting it. Other people were able to order phones! Everyone should be treated the same.
How would that be possible? They're limited to stock on hand.
Stock isn't one pool for each store - units are allocated separately for upgrade and non-upgrade purchasers, and for different carriers. People not in the upgrade program are buying from a separate pool of stock than those in the upgrade program. Like many, I stayed up until 3am on east coast, spent 10 minutes opening and force-quitting the Apple App on my phone before it would let me connect to the store, and then found that every Black and Jet Black 7+ allocated for AT&T customers in the Upgrade Program in the state of Connecticut was already gone. Magical.
As others have stated, there are certainly bigger problems in the world, but this is also the first time I haven't been able to get an iPhone on release day if I wanted to.
Also, it has been said that the Upgrade Program customers get "discounted AppleCare" - this is not the case. We pay the same for AppleCare as anyone else, but it is included in the financing deal, so it's paid in installments.
I feel cheated being on the apple upgrade program. I would have taken a Matte or jet black 128 or 256 gig 7 plus. Got on soon as preorders started with zero issues, clicked my store, choice of phone, and all models except 32 gig rose gold were out of stock. People wouldn't enroll in the apple upgrade program if they didn't want the newest one every year.
apple should send out first dibs emails of launch day stock before they give them to retailers and carriers and allow current upgrade program members to either agree to upgrade on launch day or not. Then what's left should go out everywhere else. Now I likely won't see an iPhone til December unless I stalk my local Apple Store and get there at the right time to get lucky when one comes in
Dude you are not special.
Being on the Apple upgrade plan does not give you special benefits. In fact Apple makes LESS PROFIT on upgrade customers.
You are getting AppleCare at a discounted rate AND no interest loan for 24 months.
The real SPECIAL customers are the carriers who buy HUNDREDS OF THOUSANDS OF PHONES and other customers who pay the full price UP FRONT.
Special or not this is the first iPhone launch I've had issues with getting on launch day or even a week after launch and I've had every iPhone since the beginning. They didn't do the upgrade program members right plain and simple. I shouldn't be able to get the minute the preorders go live and see out of stock on every single model and color in the 7 plus's. They should have at least allowed us to get in line with everyone else and set up an Apple Store Appointment on a later date to upgrade or be notified when your phone of choice is available
No dude. You don't expect the same privedge as people throwing down $1000 cash up front.
You are bumming your way to a 24 month interest free loan with discounting AppleCare. You don't deserve to have the same dibs to the new phones as cash buyers. Sorry.
Next time you should throw down $1000 upfront and not worry about being reliant on the financing of some bank.
The truth is the upgrade program is for poor people who can't afford to throw down $1000 upfront.
Not being able to pay $1000 upfront does not make a person poor.
The only poor thing is that you write those arrogant things. I read this thread and I am disgusted by all your arrogant and presumptuous comments about telling people aren't special.
In fact you are the one not being special at all, although you may have money you aren't better than anyone. This is the reason why you should be ashamed of yourself.
In the spirit of Numbers is your friend, here's one analysis of paying cash for a new iPhone vs financing @ 0% interest using the Apple Upgrade Program
[chart]
The cost calculations are based on US retail price of a 256GB iPhone 7 Plus (maxed Out), purchased from Apple, and a state sales tax rate of 10%... YMMV.
The Future Value calculations assume a one-time deposit (investment) of the Total iPhone Cost in a bank @ an annual compound interest rate of 2%... YMMV.
If you pay cash for the iPhone, no amount is available for investment.
The outlined area shows what happens if you upgrade after 12 months -- you would start a new 24-month contract on the new iPhone and your credit card would be charged for the tax on the new phone. Assuming costs and interest and tax rates are about the same -- you would just start a new cycle.
Alternatively, you could choose to keep the iPhone for the full 24 months. You have an unlocked iPhone with some resale value -- I assumed $300.
In either case, you've had a low TCO, the use of the latest and greatest iPhone (or a 1-year-old), and AppleCare.
But, here's the biggie: You have more money in the bank than the total cost of the original iPhone!
You don't finance the taxes. You pay full tax on the device up front. I'm not sure if you pay for the first month installment upfront.
In the spirit of Numbers is your friend, here's one analysis of paying cash for a new iPhone vs financing @ 0% interest using the Apple Upgrade Program
The cost calculations are based on US retail price of a 256GB iPhone 7 Plus (maxed Out), purchased from Apple, and a state sales tax rate of 10%... YMMV.
The Future Value calculations assume a one-time deposit (investment) of the Total iPhone Cost in a bank @ an annual compound interest rate of 2%... YMMV.
If you pay cash for the iPhone, no amount is available for investment.
The outlined area shows what happens if you upgrade after 12 months -- you would start a new 24-month contract on the new iPhone and your credit card would be charged for the tax on the new phone. Assuming costs and interest and tax rates are about the same -- you would just start a new cycle.
Alternatively, you could choose to keep the iPhone for the full 24 months. You have an unlocked iPhone with some resale value -- I assumed $300.
In either case, you've had a low TCO, the use of the latest and greatest iPhone (or a 1-year-old), and AppleCare.
But, here's the biggie: You have more money in the bank than the total cost of the original iPhone!
If Apple can get this upgrade program right, we and they will have a very good thing going... maybe worth considering investing the iPhone cost in AAPL stock instead of a bank @ 2%
In the spirit of Numbers is your friend, here's one analysis of paying cash for a new iPhone vs financing @ 0% interest using the Apple Upgrade Program
[chart]
The cost calculations are based on US retail price of a 256GB iPhone 7 Plus (maxed Out), purchased from Apple, and a state sales tax rate of 10%... YMMV.
The Future Value calculations assume a one-time deposit (investment) of the Total iPhone Cost in a bank @ an annual compound interest rate of 2%... YMMV.
If you pay cash for the iPhone, no amount is available for investment.
The outlined area shows what happens if you upgrade after 12 months -- you would start a new 24-month contract on the new iPhone and your credit card would be charged for the tax on the new phone. Assuming costs and interest and tax rates are about the same -- you would just start a new cycle.
Alternatively, you could choose to keep the iPhone for the full 24 months. You have an unlocked iPhone with some resale value -- I assumed $300.
In either case, you've had a low TCO, the use of the latest and greatest iPhone (or a 1-year-old), and AppleCare.
But, here's the biggie: You have more money in the bank than the total cost of the original iPhone!
You don't finance the taxes. You pay full tax on the device up front. I'm not sure if you pay for the first month installment upfront.
Yeah, I new that... I upgraded the chart. The TCO figures changed.
A charge is made to your CC for the tax amount -- payable to Apple.
A second charge is made to your CC payable to Citizens for the first monthly payment (you pay in advance).
My problem with the whole mess is that the Verification Process that I was eligible to do the Upgrade Program since I already did the Apple Financing last year cost me getting the new phone. Just as I entered my phones serial # and some other code that you have to look up in Settings / General / Info... a 2 min process, the computer screen threw up "We are no longer taking In-Store reservations" . If I had simply just says I was buying the phone outright I would have been able to just reserve the phone no problems. Yeah, first world problems. At this point I realize that the financing was nice...but just buying the phone outright unlocked with Apple Care is the better plan. You don't have to pay cell phone carriers for UPGRADE fees ($40 at AT&T) and you get to keep the old phone and sell it for more than half the cost of the new phone. So at this point I am going to just pay off and cancel the Apple Financing and when the time comes, buy that phone outright. Though at this point I am beginning to wonder if I really want to upgrade at all. There really wasn't anything major on the phone that happened, and my iPhone 6s+ works great and so many people actually live just fine on phones that are 3-4 generations old. So maybe I should go meditate.
When Apple sells iPhones for resale to Walmart, Target, BestBuy, AT&T, Verizon, etc. -- the retailers probably get a discount of 25-30% based on volume.
When Apple sells an iPhone on the upgrade program -- they are, essentially, selling the iPhone to Citizens -- a virtual retailer with no storefront or inventory (Apple provides these, themselves). Likely, Citizens gets a discount of 10% on the iPhone to cover their costs.
Now, Apple Sales reps are very aggressive with their retailers, and likely, with Apple Store managers too... As a retailer, you have to submit 3 & 6 month forecasts/plans * and commit to meeting those sales objectives to sustain your discount. If you don't, you are billed for the missed volume -- effective lowering your discount. If you need to return unsold inventory, you are charged shipping and a 10% restocking charge. *
* At least that's the way it was when we were Apple retailers.
What I suspect has happened with the Apple Upgrade Program is that Apple Store managers are charged with doing the above forecasts/plans/commitments for upgraders...
But they don't know how to do it -- if they order (set aside) too much inventory/reservation time, they lose! If they order (set aside) too little inventory/reservation time, they lose.
It's a lose/lose situation.
The way I think that i'd handle it is to have a special section in the online store where a user could enter:
After entering everything he wants, one time, on one page, into a few simple fields, the user hits a search button. The program searches all stores for the desired model(s) and gives the user a list, on the same page, of available -- what/where/when -- based on his search preferences.
If he finds a hit he likes, he selects it, then presses a reserve button... and it's done!
If no hits, he can change whatever search preferences, on the same page, and re-search.
Aside: I could write an app to do this in less time than it takes to describe it.
This makes it a pleasant experience for the user -- as opposed to the tedious one-at-a-time method that is currently used.
And, AND... getting back to the point of this post -- the search log is a lodestone of information for Apple Store managers to forecast/allocate/commit resources for the upgrade program.
If no hits, based on what the user entered, he can be qualified -- then notified when his preferences are met...
Comments
If you're getting the latest iPhone model for $500 when the starting price is $649 it means you're 1) not using Apple's iPhone Upgrade Program since that's based on the retail price, your sales tax (in the US), and AppleCare+ prorated over 2 years, and 2) buying a new iPhone "off the back of a truck."
First, Apple isn't carrying the loan -- it's being financed through an independent financial organization, Citizens Bank. Likely, Apple gets most of the price of the iPhone up front from Citizens less a reasonable rate of interest given to Citizens to cover their costs and interest. So, Apple isn't losing much money compared to a cash customer.
Second, the upgrade program creates kind of a lock-in for the customer -- with an incentive to upgrade to a new iPhone every year. There is no lock-in advantage for Apple with a cash customer -- Apple may never see him again.
Third, with the upgrade customer Apple includes, and gets paid for AppleCare with every iPhone. AppleCare is very profitable to Apple -- and sold to reatailers at a heavy discount ~35%. So Apple gets the sale, and keeps the discount. With the cash customer, Apple is less likely to get the highly profitable AppleCare sale. For example your $900 cash customer, likely, didn't buy AppleCare.
Fourth, the upgrader knowing he is going to upgrade in 12 months, will, likely, take good care of his iPhone so he is not charged extra to upgrade -- and it's easier for Apple to clean and resell.
Fifth, when Apple sells an iPhone to a carrier or other reseller it does so at a discount ~25%. The upgrader buys directly from Apple -- and Apple keeps the discount (helps pay for Apple Stores, among other things).
The upgrader is an ideal subset to analyze based on his recent performance -- the last 12 months.
If you can get him to pre-qualify and pre-reserve -- you have what is known in the retail biz as a qualified customer. A qualified customer is someone with money to spend who is willing to spend it. What better marketing data can you get?
"The truth is the upgrade program is for poor people who can't afford to throw down $1000 upfront."
Actually, the upgrade program requires a high credit rating -- especially if you are buying multiple iPhones at one go.
The cash buyer is more likely to have a poor credit rating and is unable to finance the purchase... I'm not saying that's you, but it's one of the major reasons people pay cash -- they have no choice. Anonymity is another major reason.
The smart buyer understands the time value of money, and leverages his credit to get the best deal -- paying less than the cash buyer.
Absent the final product details AND the state of the competitive field at the time of the announcement, consumers would lack substantive information about their options to purchase. Yes, you'd have a set of customers who are committed to making a purchase, but obviously since even a supply chain genius like Cook cannot crack it completely, it's more difficult and elusive than we may think.
With the Samsung blow-up, Apple just got a golden ticket handed to them for people who are not opposed to considering Apple products.
As others have stated, there are certainly bigger problems in the world, but this is also the first time I haven't been able to get an iPhone on release day if I wanted to.
Also, it has been said that the Upgrade Program customers get "discounted AppleCare" - this is not the case. We pay the same for AppleCare as anyone else, but it is included in the financing deal, so it's paid in installments.
The only poor thing is that you write those arrogant things. I read this thread and I am disgusted by all your arrogant and presumptuous comments about telling people aren't special.
In fact you are the one not being special at all, although you may have money you aren't better than anyone. This is the reason why you should be ashamed of yourself.
In the spirit of Numbers is your friend, here's one analysis of paying cash for a new iPhone vs financing @ 0% interest using the Apple Upgrade Program
The cost calculations are based on US retail price of a 256GB iPhone 7 Plus (maxed Out), purchased from Apple, and a state sales tax rate of 10%... YMMV.
The Future Value calculations assume a one-time deposit (investment) of the Total iPhone Cost in a bank @ an annual compound interest rate of 2%... YMMV.
If you pay cash for the iPhone, no amount is available for investment.
The outlined area shows what happens if you upgrade after 12 months -- you would start a new 24-month contract on the new iPhone and your credit card would be charged for the tax on the new phone. Assuming costs and interest and tax rates are about the same -- you would just start a new cycle.
Alternatively, you could choose to keep the iPhone for the full 24 months. You have an unlocked iPhone with some resale value -- I assumed $300.
In either case, you've had a low TCO, the use of the latest and greatest iPhone (or a 1-year-old), and AppleCare.
But, here's the biggie: You have more money in the bank than the total cost of the original iPhone!
If Apple can get this upgrade program right, we and they will have a very good thing going... maybe worth considering investing the iPhone cost in AAPL stock instead of a bank @ 2%
A charge is made to your CC for the tax amount -- payable to Apple.
A second charge is made to your CC payable to Citizens for the first monthly payment (you pay in advance).
I've given this upgrade offering more thought.
When Apple sells an iPhone on the upgrade program -- they are, essentially, selling the iPhone to Citizens -- a virtual retailer with no storefront or inventory (Apple provides these, themselves). Likely, Citizens gets a discount of 10% on the iPhone to cover their costs.
Now, Apple Sales reps are very aggressive with their retailers, and likely, with Apple Store managers too... As a retailer, you have to submit 3 & 6 month forecasts/plans * and commit to meeting those sales objectives to sustain your discount. If you don't, you are billed for the missed volume -- effective lowering your discount. If you need to return unsold inventory, you are charged shipping and a 10% restocking charge. *
* At least that's the way it was when we were Apple retailers.
What I suspect has happened with the Apple Upgrade Program is that Apple Store managers are charged with doing the above forecasts/plans/commitments for upgraders...
But they don't know how to do it -- if they order (set aside) too much inventory/reservation time, they lose! If they order (set aside) too little inventory/reservation time, they lose.
It's a lose/lose situation.
The way I think that i'd handle it is to have a special section in the online store where a user could enter:
After entering everything he wants, one time, on one page, into a few simple fields, the user hits a search button. The program searches all stores for the desired model(s) and gives the user a list, on the same page, of available -- what/where/when -- based on his search preferences.
If he finds a hit he likes, he selects it, then presses a reserve button... and it's done!
If no hits, he can change whatever search preferences, on the same page, and re-search.
Aside: I could write an app to do this in less time than it takes to describe it.
This makes it a pleasant experience for the user -- as opposed to the tedious one-at-a-time method that is currently used.
And, AND... getting back to the point of this post -- the search log is a lodestone of information for Apple Store managers to forecast/allocate/commit resources for the upgrade program.
If no hits, based on what the user entered, he can be qualified -- then notified when his preferences are met...
Turning a lose/lose into a win/win!