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$500 for a smartphone you'll use for 2 years? It's amazing how some of you have become so accustomed to these exorbitant prices that you've begun to believe that they're worth the price.
The unlocked iPhone sells for more than the iPad. Now why is that?
1) Because Apple CAN.
2) They collude with the major carriers. How can the major 2 year contract carriers stay relevant in a world of Skype, pay-as-you-go, Virgin, etc? By giving the consumer a sweet deal on the new iPhone they're salivating over. Who would sign up for a 2 year mobile phone contract when the regular asking price of high end smart phone is 3-400 bucks?
I don't see how that could possibly be reasonable.
Why not?
$300 on a $200 device is 50% markup; many manufacturers of electronics would kill to have that much markup. I mean, obviously if you can get 350% markup, which is about what Apple gets on the 64 GB iPhone 5, you're going to, but a 50% markup is quite healthy.
$500 for a smartphone you'll use for 2 years? It's amazing how some of you have become so accustomed to these exorbitant prices that you've begun to believe that they're worth the price.
The unlocked iPhone sells for more than the iPad. Now why is that?
1) Because Apple CAN.
2) They collude with the major carriers. How can the major 2 year contract carriers stay relevant in a world of Skype, pay-as-you-go, Virgin, etc? By giving the consumer a sweet deal on the new iPhone they're salivating over. Who would sign up for a 2 year mobile phone contract when the regular asking price of high end smart phone is 3-400 bucks?
I've never paid close to $500 for a phone so your accusation is misplaced. A person may use a particular phone for as little as 3 months to as long as 5 years or more. We cannot assume that it will be 2 years.
The pricing is based on the cost to deliver such a product to customers. Sure, the ideal price would be 25 cents. But that's not practical.
$300 on a $200 device is 50% markup; many manufacturers of electronics would kill to have that much markup. I mean, obviously if you can get 350% markup, which is about what Apple gets on the 64 GB iPhone 5, you're going to, but a 50% markup is quite healthy.
It costs just under $250 to manufacture a single iPhone 5. You're calculations make no sense. Apple isn't making 300% + profit on each phone. You can't compare something like an iPhone 5 to a commodity like a low end TV or laptop.
I can understand what Apple pays for manufacturing and building an iPhone, but there's also software development, investment in innovation, in concept design... And many other things we are paying that are not tangible to us.
Although all that I think Apple'a profit margin is quite high.
I can understand what Apple pays for manufacturing and building an iPhone, but there's also software development, investment in innovation, in concept design... And many other things we are paying that are not tangible to us.
Although all that I think Apple'a profit margin is quite high.
Right, Malloric is suggesting that the R&D, marketing, support/upgrades and a healthy margin are all attainable in about $100.
I think it's crazy to pay that kind of money for a phone, but I don't care what you do with your money. It's your money. Why anyone CARES that people spend this kind of money on a phone is beyond me.
Quote:
Originally Posted by NJBest
I've never paid close to $500 for a phone so your accusation is misplaced. A person may use a particular phone for as little as 3 months to as long as 5 years or more. We cannot assume that it will be 2 years.
I don't know many, if any, people with a phone more then 2 years old 3 at the very most. 5 years? Come on Best.
Although if you pay $500+ for a phone, that is a huge incentive to keep it longer I suppose.
Apple can certainly afford to sell phones much cheaper as it makes most of it's money on iTunes.
Although I totally have no clue why we are picking on just Apple.
A no-contract unlocked Samsung Galaxy 3 is $550.
It costs just under $250 to manufacture a single iPhone 5. You're calculations make no sense. Apple isn't making 300% + profit on each phone. You can't compare something like an iPhone 5 to a commodity like a low end TV or laptop.
And it retails for $850 off contract. $850/$250 = 340% markup. Of course you can compare it to a commodity. Markup is markup, doesn't matter what its on. You need to learn how to read. I never said they made 300%+ profit on each phone. They charge $200 less for the iPhone 5 with 16 GB which only costs them a few dollars less to make. So they only get a 250%+ markup on that one. The 4 sells for $450, probably get a bit over 200% on that one. Who knows what the carriers pay for them. Based on the $350 ETF and $400 price from Verizon, it's probably still quite a bit.
Apple could sell its phones for less, but why would they? If the cheap commodity laptops with better hardware than the Macbooks, that sell for hundreds of dollars more with their inferior hardware, could charge more they would too. People like Apple branded stuff or are too stupid to know how to put OS X on generic software or too worried about the potential legal consequences of delving into that gray area. Doesn't matter why, really. Enough people will pay a much higher markup for Apple branded stuff.
Right, Malloric is suggesting that the R&D, marketing, support/upgrades and a healthy margin are all attainable in about $100.
Actually, I didn't. But yes, I'd say it's very possible. The Samsung Galaxy Nexus sells off-contract for $370, probably costs about $200 to make. No shortage of R&D or healthy margins from either Google or Samsung, both are very profitable companies. Frequent updates on my phone. Perhaps they could market more? Both brands appear to do a fair amount of marketing. Support is fine. All on $170. Could Apple do all that on less than $600 ($850 less $250 manufacturing cost)? Sure. Why would they? Companies are in the business of making the most profit possible, not a "healthy" or "reasonable" profit.
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