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Apple Increasing iPhone 5s Production by 75%, Cutting iPhone 5c Orders by 35%
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ha ha, every time you make the argument of $173 to manufacture, make sure you remember that there are warranty cost, marketing cost, distribution cos (do you know that Apple has to pay 15% of the msrp to the retailer like walmart/Target/ATT/Verizon?), shipping cost etc etc... It is no good that you only pick the manufacturing cost to talk about. Iphone has 50-60% gross margin (i.e. all the cost before Sg&A, marketing, R&D, and tax. And this data point came from the Samsung trial document last year). Once you substrate all the cost, it is more like 30% or so after tax profit.. or about $160ish a 5c. So the all in cost for Apple is around $390 ish a 5c including tax..
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You and I don't get to decide what go into a market share calculation and what is not. If you want to include feature phone in the discussion, I think IDC of the world put all phone grow at about 2% or so a year (feature + smartphone). If you want to define smartphone as a market, IDC of the world put it around 40% yoy growth this year. If you want to just include high end smartphone as a market, you are on your own. There is no definition or survey that define what a high end smartphone is and who has what market share. You can also define the market base not on unit volume but on revenue.. But good luck in finding those data..
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heh heh, you want to play CEO for a day when you proclaimed your believe that Apple is stupid about the pricing of 5c. But once your are challengef to show your thoughts and you don't want that CEO for a day role anymore? Could it be that you never think through all the implication of the big price cut?
Exactly. I've been using a 4th Gen iPod Touch for, 3-4 years now (I got it within a month of it being released however long ago that was). It's fantastic. Does e-mail and FaceTime, and games, and all the web stuff I need. It's the most useful gadget I've ever bought. Best of all I don't miss the phone part (and the bills) at all. I have an old LG dumb phone on the cheapest bottom end pay-as-you-go service I could find, and I get or make a call a month, maybe. I do nearly all my communication over the web via IM or Skype or FaceTime or E-mail using my iPodTouch and my home WiFi, or my work WiFi, or whatever Wifi iI can find at a coffee shop, or other office, or store, or wherever. Most of the phone calls I do need to make I use my company office phone.
But your point is basically wrong if you think that Apple is a commodity player in the PC market. It isn't. It sells a premium product and it has basically no competitors. I know many people who would not consider for one second buying anything other than a Mac for home use. I know poor people, people who struggle to make ends meet. And they would not consider buying anything but a Mac. Now those folks struggle to pull together the cash for a Mac laptop and then they use it for five years. But they won't try a Chromebook for 1/5 the price.
I feel like smart phones are still 20 years behind PCs in terms of reaching a commodity level where even the cheap stuff is good enough. So if Apple can command premium prices in the PC market (while only selling to 15% or so of the overall market), I feel like Apple could do the same in phones for the next decade.
Though that Nexus 5 for $350 looks like it will be a pretty impressive piece of kit.
Collectors should get all the colors of the 5c. They will be collector items in 20 something years. IMHO.
And what about all that ************ that was being thrown around about Apple needing to drop a cheap iPhone for the 3rd world markets? Really! Seriously!
And what about all that ************ that was being thrown around about Apple needing to drop a cheap iPhone for the 3rd world markets? Really! Seriously!
I got an email from BB on that, "Let's try that again - Get the iPhone 5c for $1". I was quite perplexed. The offer in the message body was $100 the 5s or 5c with the trade in of ANY smartphone. I hope that isn't how they were getting to $1. They could've said it better.
Although, since it was $100 trade-in for ANY smartphone, I was ready to trade in my old HTC Hero, but alas they didn't have the 5s model I wanted (64GB for Sprint).
Hey, why thank you!
Really, Apple isn't just a great products company, they are truly one of the most brilliant strategists in the world (so good, people don't think of them as strategists, where as Bill Gates' profit motive was too transparent and every Microsoft release liked look it was fulfilling some bigger strategy). (For an interesting, although negative depiction of Microsoft being strategists feel free to read this article: http://www.antipope.org/charlie/blog-static/2013/10/why-microsoft-word-must-die.html)
The best I can do is have an objective understanding of what and why Apple do what they do. I hope we here at MacRumors can have fun dissecting the what and the why.
Here's the key part of TZ's post that you seem to have glossed over.
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Way to drive home his point.
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Yep. The various-colors-of-a-product market is new for Apple. They've certainly never done anything like it before. Not even for the iMac, or iPod Mini, or the Smart Covers, or...
Oh, wait.
When was anything a boy or girl colour?Only by your stereotype. I have the Yellow 5C because the 5Ss are ugly phones IMHO with the cheap looking edging. Waiting for the iPhone 6 here.
Could Apple have afforded to sell the 5C on a equal or loss basis? Maybe, but they wouldn't budge from being a luxury brand. Luxury brands rarely sell below their mark and we shouldn't expect Apple to do so for a long while unless they get into big trouble.
Actually, historically speaking (up until sometime in the mid-1900s), pink was considered a 'boy' color, and blue was considered a 'girl' color. Pink is also still a popular color for dress shirts for men.
There seems to be a pretty severe undercurrent here of "I don't like those colors, and I'm a 'man', therefore those colors can't be 'manly', therefore they must be 'girly', because they're not good enough for me. Anyone who says otherwise is a 'girly man'."
As if 'girly' is somehow a *bad* thing.
This is going to be a stretch since we're stacking speculation on top of speculation and mixing that with areas where we're both probably out of our expertise.
Firstly, I'm not sure the same tool is necessary in both the iPhone 4 and iPhone 5 shell-styles, so I'm not sure that they would be buying another 1000 of these milling machine. I brought up that example because it showed why the iPhone 4 was limited, how expanding production capacity could be costly, and also where it's quite possible that throwing money at the problem wouldn't solve the production capacity problem because there's simply not enough tools to go around.
Next, I'm under the impression that many specialized tools aren't even built in the order of 1000s per year, more like 10s or 100s. As another example, I read an article a few years ago that some forge presses are built 1 per 3-5 years. Since I don't know details about the iPhone shell manufacturing, nor the rarity of the equipment, I can't say for certain that whatever tools they need are or arn't available. But given Apple's habits before, it's not out of the question that things they need simply might not be available in the quantities necessary to expand production further.
Finally, just because they were able to buy out 1000 units in one year doesn't necessarily mean they can buy out 1000 units the next year. It's quite possible that the first 1000 units were inventory built up over multiple years. If it's only possible to build ~300 a year, then that's 3 years of inventory being asked for when the typical customer asks for 1 unit.
I brought up the scenario as a possibility because it takes into account more externalities involved in making product. I'm not saying it's what happened, but I do appreciate the civil discussion.
Good god those are gorgeous. Too bad those colors don't exist however.
Thanks for the compliment. In that I only did this with Photoshop, I admit that I didn't create the image taking into account feasibility....
...however, this does lead to the question - "How feasible are those colors?"
So, let's look for examples:
Red:
White:
(All I did was Photoshop the white iPhone 5 face onto the white iPhone 5c back.)
Blue:
Green:
Yellow:
While I know that not all plastics are created equal, this shows that my mock-up is in the realm of possibility.... Now how to convince Jony Ive of this?!? 8^)
Much better. These colours and sensible pricing and I may have been tempted. in the end I got a nexus 4 and am very happy with it. $300 unlocked inc tax and shipping was too good to pass up.
