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Amazon & Google pricing models = dangerous territory for manufacturers
- Thread starter MRU
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This is a non-issue that is frequently blown massively out of proportion. At least Google are transparent about what they are doing.
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Are you serious? You think that when you pay $199 for an iPhone on contract that it all you are paying? haha. The telcos are factoring these things into their price structure and you can be sure that one way or another, you are paying at least full price for your iPhone.
Some people just prefer to pay a bit more and not be stuck in 24 month contracts.
No, Google is an advertising company. They may be very software oriented but almost all their money is from advertising, which is why their software is free.
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Its pretty awesome how couple of months ago lte was hell nooooo around here but now its a must
Yea, because before iPhone 5, LTE was unreasonably expensive, unnecessarily fast, had very limited coverage and chewed through battery.
Now, just a very short time after the release of iPhone 5, it is an essential feature and any device without it completely lacking.
I wasn't trying to argue short term versus long term business goals. I agree with you there. But Apple is indeed a hardware company versus Google being a software company. To get into Apple's eco-system/software you must purchase their hardware. So while they churn out iOS and other software programs, they are very much in the hardware business, as that is where the majority of their profits come from. Google, while they generate all that profit off advertising, it is due to their software product. You can even argue that the Nexus 4 is an LG product, just as the GNex was a Samsung product, both just w/ Google's seal of approval.
As for singling out the Nexus 4, isn't this the argument when it comes to smartphone pricing? No other high end smartphone (GS3, Note, One X, Razr, Lumia) comes close, in fact as I tried to point out, they share the same 'premium' price. And price might be a factor, but there are others to consider b/c the lower cost of an unlocked phone comes w/ some compromises. LTE for 1, which might not matter to you but is heavily marketed in the US. And CDMA is another, which makes up 2 of the US' largest networks.
On your last note, every company refreshes their lineup yearly and at similar price points. Sure Apple did it twice this year on the iPad, but it is unreasonable to expect consumers to constantly get on this 1 year cycle no matter who the manufacturer is. Example, just as you argue how people can upgrade their $499 iPad yearly, people are just as unlikely to upgrade their $399 Nexus 10 yearly.
If that works for you that is fine. Sure, not being stuck in a contract is one thing to consider, but there are compromises too. But my argument was that there is a false sense of only Apple charging its customers a premium.
To put into an example: I arrive at similar total costs when
1) purchasing a $199 iPhone w/ a $80/mo plan w/ AT&T > $2119 investment over 2 years;
2) purchasing a $399 Nexus 4 (I selected the 16gb to be in line with the 16 gb iPhone) w/ a $80/mo plan w/ AT&T > $2319 investment over 2 years.
Sure, that $200 difference gives me the benefit of being off contract, but at a compromise of say LTE. It is a great value for a great phone. But for LTE and $200 less over 2 years, I can go with iPhone as an alternative. I don't want to push the LTE button too much, while it's an important factor for me, I am just merely using it as an example. Also, yes, I know you can come up w/ some cheaper plans at greater compromises (T-Mo offers plenty) but I am putting into perspective the whole outlook on pricing.
The thing that scares me is that google is already the king of content. By extending their advertising arm even further and digging up even more information on each person I feel that it's almost getting to the point of an invasion of privacy. There's not a whole lot you can do about of short of turning all the scripting off in your browser which would make half the sites on the internet useless.
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How much $$ is Amazon making off content? If it was profitable they wouldn't need advertising on the Kindle's would they? Seems to me right now they can sell hardware at cost (or a loss) because Wall Street doesn't care if they make a profit or not. Last quarter they reported a loss and their stock jumped like 5% the next day.
Iphone isnt 199 its 199 with a fixed contract . An iphone is 650 , you also can get simular contract for a lot less with at&t .making the cost of the iphone 5 a lot higher over those 2 years.
Amazon can afford to make what looks like a loss because they pay little to no taxes, because they have all their money sent to overseas accounts. Whilst it may look like they make a loss, they're probably still making a bit of profit by tax evasion.
You're missing the point. You can get an iPhone w/ a $199 down payment. $649 unlocked is merely another option, but it's not the only option. So to say that the Nexus unlocked is a better deal than any iPhone is a false statement. It is a great deal for an unlocked phone, no argument here. But I was offering a perspective on common ground (AT&T).
So my point was that it's not only the premium option ($649) for an iPhone. As a consumer (I guess I mistakenly used customer) the long term investment is roughly the same.
No you cant, you can get it for that price WITH a 2 year contract.
If you dont understand the rest of the rpice is in the more expensive contract ...
And AT&t trough contract is more expensive then not trough contract.
Or do you think AT&T is so nice to just reduce the price and swallow the difference?
In most cases coupled with contract is usualy more expensive overal for simular priced phones. Let aloen for a phone that costs almost half.
No it isnt, because google/amazon focus more on revenue trough content the price gets shifted partially to that.
For google they pay because you use google, with apple they dont and you pay the full price because thats where the profit is for apple.
If you dont believe me, try it youself. A contract iphone with a simular non contract google phone .
First, I pointed out the cost of a Nexus 4 over two years versus the cost of an iPhone 5 locked to the same priced contract. In that scenario, the iPhone 5 comes out $100 cheaper. Let me do the math for you ($199 + ($80 * 24) = $2119 investment over 2 years) or ($349 + ($80 * 24) = $2269). And this is a completely generic example that fits both phones.
Me personally, Nexus 4 is the least valuable phone on the market. I'd rather pay Verizon's prices for their locked contract for their service and 4G than have anything Nexus 4 offers.
Anyway, you completely missed the point that both sides come with compromises.
And your last point is redundant, if you bothered to read any of this old thread you'd know I already argued that Amazon and Google have a different agenda and that it is to get users on their product. Google doesn't care what Android phone it is as long as it is Android you're using. Apple has a different agenda and they're in the hardware business.
ANd someone must be really stupid to pay that, you dont NEED that 80$ contract with a nexus 4 . You DO need that with the iphone 5 as its coupled with the 199 price.
Because you dont seem to have a clue:
When you buy an iphone 5 from at&t tre cheapest plan is 40+45 = 85 $
"Mobile Share 1GB with Unlimited Talk & Text Includes
Unlimited Talk & Text
1GB Shared Data"
When I buy a nexus 4 loose I can take any of the plans offered by AT&T starting at 50$
The one the same as the iphone 5 plan is this one:
http://www.att.com/shop/wireless/pl...L00L&wtExtndSource=prepaidsp#fbid=XdY49Rsj4AW
65$/month for 1GB and the rest unlimited.
So the extra you pay for an iphone is 25$ a month for 24months or 600$ . Wich means an iphone is about 500$ MORE EXPENSIVE with a simular provider simular plan as the nexus 4 .
Its actually one of the best value phones out there. 4G for most is next to useless and it a high end phone for the price of mid end.
I dont know why you seem to dislike it so much.
And how would this matter to a consumer? He wants a great phone at low price, enter Nexus 4 .
By 4G, you mean LTE? And I don't understand why you say faster data connection is useless for anyone. I find my iPad and iPhone 5 on LTE very fast, and therefore useful.
Thanks for playing 1GB plan versus 4GB...
I was on AT&T w/ a Galaxy Nexus on HSPA+, no thanks. LTE isn't for everyone, but it's definitely a must for me and others.
I actually think the Nexus 4 is a great phone, I've mentioned this in other threads. I've only used it here and there when I stopped by a T-Mo store, but it is a great device. I'm not knocking it or prepaid plans, that original post I made was merely pointing out that both sides have compromises, and that at $299 there are compromises just like paying $199 for an iPhone.
Topic of this thread is about Amazon and Google pricing.
Most people dont have coverage for 4g, or actually need the extra speed above hdspa+
Oh yes in a couple of years no doubt this wont be true, but then you will probably have a new phone already.
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Euh do you see the "1 GB" with the iphone 5 85$ plan? You seem to think thats actually 4gb?
85$ plan IS 1GB of "shared data"
http://www.att.com/shop/wireless/plans/mobileshare.html
The 110$ plan is 4GB .
Of course but as I said now for most I doubt they would notice so as an argument its perhaps for you valid, but not for most.
And still its not as if hsdpa+ is soo slow to make the phone unusable as you hinted .
Indeed, one is live without 4g, the other is stuck to an expensive 85$+ contract for 2 years. Smaller screen, less space ,ios vs android,...
Lots of differences that usualy require a person itself to make up his mind.
So? Thats not an answer. Why do consumers care about the agenda of apple or google ? They want the best phone for them for the lowest price.