Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
$99 iPhone this Christmas? That's how you sell 10 million units
- Thread starter iphonewiz
- Start date
- Sort by reaction score
- Status
in theory, i agree that there is a demand for iPhones, gen 1 and definately gen 2, where apple won't have to discount. however with launching the app store, and subsequently getting revenue from apps, it could be conceivable that they will lower the price of the hardware, as they did with aTV. to lock in subscription charges every month, as well as adding app purchases, not to mention the standing purchases of music, video, movies, rentals, etc. Point is, we may have a time that apple will do what so many other cell phone manufacturers in the past have done, that is lower the profit on hardware to get it in consumers hands to then have 10 million "advertisements" out there, as well as revenue they would never had gotten if they hadn't dropped the 1 time price of the phone by $100 or so...will it be $99? doubt it...will there be carrier rebates? prb not...we will see.
I'm curious what you think.... If apple were to make the price completely accessable to all, or almost all, at approx $99, thus making happen to the iPhone what happened when the Razr was dropped from $400 to mostly free and then EVERYONE picked one up. Would having iPhones in the hands of so many people be a good or bad thing? Good for developers who would have a wider base of consumers demanding various programs. Bad that the phone is no longer novel...i hate seeing people with Razrs. I think they are followers, and i don't want that to happen to a device so dissimilar to the Razr.
I'm curious what you think.... If apple were to make the price completely accessable to all, or almost all, at approx $99, thus making happen to the iPhone what happened when the Razr was dropped from $400 to mostly free and then EVERYONE picked one up. Would having iPhones in the hands of so many people be a good or bad thing? Good for developers who would have a wider base of consumers demanding various programs. Bad that the phone is no longer novel...i hate seeing people with Razrs. I think they are followers, and i don't want that to happen to a device so dissimilar to the Razr.
I'm curious Marvin1379...
what phone do you own, since it's obvious that you don't own "the iPhone?"
what phone do you own, since it's obvious that you don't own "the iPhone?"
Like the first reply says it cost more to manufacture if they cut the price will be like $50 or 100 on each old model and probably the new 3g model will cost similar to the iphone firstr elease model, like $500 or maybe 600!.
Carriers will subsidize
Apple has a number of ways to get the iPhone down to $99.
1. Manufacturing volume: As they approach 10 million units the overall cost per unit will decrease dramatically. The iTouch will help in getting the unit volume number up.
2. Carrier Subsidize units: Right now the carriers do not subsidize the iPhone, unlike other phones. Once Apple gets the per unit cost down, the carriers will want to subsidize the iPhone to expand demand.
3. Revenue per unit. One thing that seperates the iPhone from other phones is it's potential to be a real money maker in music and application sales. The iTunes platform is far superior than any other mobile ecommerce platform. This thing could mint money. Carriers will want a piece of this action and the more people who have them the more money that can make.
Apple is being very aggressive with this platform. If they don't hit the $99 mark this Christmas, it will be the next!
Apple has a number of ways to get the iPhone down to $99.
1. Manufacturing volume: As they approach 10 million units the overall cost per unit will decrease dramatically. The iTouch will help in getting the unit volume number up.
2. Carrier Subsidize units: Right now the carriers do not subsidize the iPhone, unlike other phones. Once Apple gets the per unit cost down, the carriers will want to subsidize the iPhone to expand demand.
3. Revenue per unit. One thing that seperates the iPhone from other phones is it's potential to be a real money maker in music and application sales. The iTunes platform is far superior than any other mobile ecommerce platform. This thing could mint money. Carriers will want a piece of this action and the more people who have them the more money that can make.
Apple is being very aggressive with this platform. If they don't hit the $99 mark this Christmas, it will be the next!
1) No. I'm not sure if you get the point, but the iPhone costs more than $100 to make, and no matter how much prices go down on supplies for the iPhone, i'm pretty positive it will still cost over $100 to make within the next year.
Scratch that.
I'm positive it won't dip below $100 to make.
Then where does Apple make profit?
2) Carriers? The iPhone is only for AT&T, and it's going to stay that way for roughly 4+ more years.
3) You're forgetting something. It's a phone. It's made for calls. If someone wants music and applications, what's stopping them from buying a touch? If a 8GB iPhone costs $99, then how much will a 8GB touch be, $50?
You're sounding like you want to turn the iPhone into another crapless RAZR. Apple doesn't work like Motorola. That's why Motorola sucks.
You should apply for a job as product manager at Apple. They will be very impressed with your reasoning. However, I think Apple will try to sell 10 million iPhones at $399 each. You may think, what's the difference, 10 million is 10 million. The difference is 10 million times 300 dollars, that is three billion dollars in profits.
I can see an 8GB iPhone being sold this fall for only $299, but there is no way the iPhone will ever be only $99!
what phone do you own, since it's obvious that you don't own "the iPhone?"
i have a 1.5 year old Treo 650. I don't have 400-500$ to spend on a phone right now.
Refurbished at $199 already!
Never say never in the technology world. A $99 iPhone selling 50 million units a year is possible.
Apple doesn't have to get the cost down to $99 to sell it at $99. Sony and Microsoft both sell their video game hardware below their cost. The reason they can do that is they make their money up on software sales.
Apple will make 30% off if each application sold. They are probably sendng some of that to AT&T, who, BTW is more than happy to sign you up for $100/month for 24 months.
When you are talking 50 - 100 million units a year, you can do some amazing stuff. It's the razor and blades strategy.
Never say never in the technology world. A $99 iPhone selling 50 million units a year is possible.
Apple doesn't have to get the cost down to $99 to sell it at $99. Sony and Microsoft both sell their video game hardware below their cost. The reason they can do that is they make their money up on software sales.
Apple will make 30% off if each application sold. They are probably sendng some of that to AT&T, who, BTW is more than happy to sign you up for $100/month for 24 months.
When you are talking 50 - 100 million units a year, you can do some amazing stuff. It's the razor and blades strategy.
right, the moto strategy that has made them sooo successfull in the last year
and i really really really don't see apple giving ATT any money for the apps sold
You amaze me.
They only sell their systems at that low of price because VIDEO GAMES COST NOTHING TO MAKE. A $50 video game costs maybe $2 to make at the most. A CD, packaging, booklet, and then the content put on each CD.
What does AT&T have to do with Apples applications? Nothing. AT&T won't see a penny from the Application profit.
Plus, not many apps are going to cost money, and the ones that do, won't be above $5. That's $2 Apple gets on a $5 item. Apple also has to pay for bandwidth as well.
We aren't talking 50 - 100 million units a year. Let's recap.
This is the iPhone. It's AT&T exclusive. Key note there. The RAZR can be used on most networks. The RAZR is also an affordable phone. I had a KRZR before i got my iPhone. I only had it for 2 months, and thank god it was only 2 months.
Sorry to hear that...
I was just curious, b/c I had the RZR then the KRZR, before the iPhone and I just thought the RZR was the BOMB! Then the KRZR was a more compact RZR, and then the next thing I knew is everyone had either the RZR or the KRZR. Good Luck (I'm hoping you get the iPhone!)
I was just curious, b/c I had the RZR then the KRZR, before the iPhone and I just thought the RZR was the BOMB! Then the KRZR was a more compact RZR, and then the next thing I knew is everyone had either the RZR or the KRZR. Good Luck (I'm hoping you get the iPhone!)
operators are paying apple between $8-30% of revenue/iphone subscriber/month. how is that not subsidy??
but your right in saying that the iphone price must come down for apple to sell 10m phones this year. in europe they need to cut the price of the plans significantly as well to get any significant number of iphones moving from the shelves.
Dude, the cheapest iPod classic is $250 and this is after hundreds of millions of sales. This idea that the iPhone (and iPod Touch) are going to follow the game console model is completely wrong. People buy consoles with the expectation of buying games. People don't buy iPhones with the expectation of buying apps. Also there are a large number of people willing to create free programs for the iPhone.
Apple themselves have said the 30% is just to cover costs of running and administering the store. These programs are not going to cost $50 or $60 like console games. My guess is they will be in the range of $5 - $10. 30% of that is not a huge sum of money. This is not a major revenue stream. The iPhone is a more complex and more expensive device than the iPod classic which I will remind you costs $250/$350.
You really killed your argument by saying that AT&T was going to get a cut of the app sales. Do you think Apple would volunteer to do that and do you think AT&T has any leverage to make Apple do that? Of course not.
99.00 iPhone? Nope... I'm thinking the iPhone 3G might go for 799.00 and rev one will stay at the same price its at right now!
Actually, that's only $3 billion in revenues...
It's $3 billion _more_ in revenues, at the same cost.
- Status