raybo

sirozha said:

raybo said:

sirozha said:

mattinoz said:

sirozha said:

Who will be paying for it? If Apple sells a $800 phone and gets paid 1/24 of the total price per month, they won’t bag the entire price until after 2 years. This will take more than two years to ramp up until Apple starts collecting the same amount per month as they would if they sold the iPhone outright. 

I don’t know if this can be considered a sign of strength. From the automotive perspective, when a company does 0% financing, its usually a sign of weakness via-a-vis consumer demand for the cars. When there’s strong demand, automotive manufacturers usually don’t offer 0% interest deals. 

Apple is basically lending money to their customers for free, which is not something that any manufacturer would ever do unless they are expecting sagging demand for their product. The 0% financing is a way to stimulate demand. Apple pays to manufacture the iPhone upfront, but doesn’t get to recoup its costs for over a year and doesn’t make all the profit until after two years. 

The more I think of that, the more I see this as a desperate measure to prop up sales. 

Apple has this deal already using 3rd party credit providers so may not be getting all the sales value upfront anyway. So they are moving it in-house and getting a bigger slice of the pie as they cut out another middle man.

Bonus they get additional revenue out of each customer from general spending on card.

When they do it via third-party providers, Apple gets paid 100% upfront. The third-party provider lends the money to the customer and charges an  interest on the loan. 

This is totally different. With this new scheme, Apple doesn’t get paid the whole amount upfront. Instead, they get paid 1/24 of the amount after a month, and 1/24 of the total amount every consecutive month until they get paid the entire amount in 2 years. 

It’s not a scheme - they’re giving a discount, much like when they pay you for your trade-in. They’re building brand loyalty for the iPhone and for their card. It’s brilliant. 

A scheme doesn’t have to have a negative connotation. 

sirozha said:

mattinoz said:

sirozha said:

Who will be paying for it? If Apple sells a $800 phone and gets paid 1/24 of the total price per month, they won’t bag the entire price until after 2 years. This will take more than two years to ramp up until Apple starts collecting the same amount per month as they would if they sold the iPhone outright. 

I don’t know if this can be considered a sign of strength. From the automotive perspective, when a company does 0% financing, its usually a sign of weakness via-a-vis consumer demand for the cars. When there’s strong demand, automotive manufacturers usually don’t offer 0% interest deals. 

Apple is basically lending money to their customers for free, which is not something that any manufacturer would ever do unless they are expecting sagging demand for their product. The 0% financing is a way to stimulate demand. Apple pays to manufacture the iPhone upfront, but doesn’t get to recoup its costs for over a year and doesn’t make all the profit until after two years. 

The more I think of that, the more I see this as a desperate measure to prop up sales. 

Apple has this deal already using 3rd party credit providers so may not be getting all the sales value upfront anyway. So they are moving it in-house and getting a bigger slice of the pie as they cut out another middle man.

Bonus they get additional revenue out of each customer from general spending on card.

When they do it via third-party providers, Apple gets paid 100% upfront. The third-party provider lends the money to the customer and charges an  interest on the loan. 

This is totally different. With this new scheme, Apple doesn’t get paid the whole amount upfront. Instead, they get paid 1/24 of the amount after a month, and 1/24 of the total amount every consecutive month until they get paid the entire amount in 2 years. 

coolfactor said:

Wait for it..... people are going to ask "What makes it Pro then? Great! Apple overcharging again!"

My response .... "The regular iPhone 11 is just as capable with a discounted price!"