Apple is anti free market?

mark28

macrumors 68000
Original poster
Jan 29, 2010
1,632
2
So I went shopping for an iPhone 4S. I was quiet surprised how none of the providers would give me special deals, because they weren't allowed by Apple? :confused:

How is this allowed that Apple is placing restrictions on what the telecom providers can do in a free market?

At first, I was 100% set on getting an iPhone 4S. But after recieving special deals for the new Samsung Galaxy Prime at the fraction of the price of an iPhone 4S, I'm really starting to doubt. ( it's really tiny and underspecced so no idea where this massive price difference comes from besides Apple fixing the prices ).

Apple is lucky that I really don't like the current Android 2.3.3 I tried on the Samsung Galaxy S2. So if ICS 4.0 on the Samsung Nexus Prime is just as bad as 2.3.3, I'll just suck it up and just buy the iPhone 4S at the fixed price. :(
 

tardman91

macrumors 65816
Oct 21, 2009
1,032
171
Tampa Area, FL
It's simple. Apple tells retailers that they can't sell their products below a price of $XXX.XX. If the retailer wants to sell Apple products, they agree. If not, they don't sell them. That is why a lot of places will bundle gift cards with iPods and such around the holidays. They can't lower the price, but they can make it more attractive to buyers that way. This is not an uncommon practice.
The minimum advertised price, or MAP, is the absolute lowest price retailers are allowed to advertise a product for. (If you've ever shopped at a site that won't reveal a product's price until you add it to your shopping cart, MAP is the reason.) MAP is usually enforced through marketing subsidies offered by a manufacturer to its resellers. If a retailer keeps prices at or above the minimum advertised price, then a manufacturer like Apple will give them money to help advertise. If a store's price dips too low, on the other hand, the manufacturer can withdraw these advertising subsidies.
 

Jordan921

macrumors 601
Jul 7, 2010
4,669
1,457
Bay Area
So I went shopping for an iPhone 4S. I was quiet surprised how none of the providers would give me special deals, because they weren't allowed by Apple? :confused:

How is this allowed that Apple is placing restrictions on what the telecom providers can do in a free market?

At first, I was 100% set on getting an iPhone 4S. But after recieving special deals for the new Samsung Galaxy Prime at the fraction of the price of an iPhone 4S, I'm really starting to doubt. ( it's really tiny and underspecced so no idea where this massive price difference comes from besides Apple fixing the prices ).

Apple is lucky that I really don't like the current Android 2.3.3 I tried on the Samsung Galaxy S2. So if ICS 4.0 on the Samsung Nexus Prime is just as bad as 2.3.3, I'll just suck it up and just buy the iPhone 4S at the fixed price. :(
Apple has never given any deals on their current iPhone. This shouldn't be new news to anyone.
 

likethesoup2

macrumors 6502a
Mar 29, 2011
529
21
Orlando, Florida
Apple has never given any deals on their current iPhone. This shouldn't be new news to anyone.
Apparently it is to him.

To the OP: the reason Apple doesn't give deals on the new iphone is really simple -- they don't have to.

Additionally, how, exactly, does that make Apple 'anti free market'?
 

Small White Car

macrumors G4
Aug 29, 2006
10,907
1,191
Washington DC
How is this allowed that Apple is placing restrictions on what the telecom providers can do in a free market?
Back at ya' the other way: What makes you think there's anything wrong with this?

All you've told us is that it surprised you. But what's the actual problem here?
 

Interstella5555

macrumors 603
Jun 30, 2008
5,219
12
So I went shopping for an iPhone 4S. I was quiet surprised how none of the providers would give me special deals, because they weren't allowed by Apple? :confused:

How is this allowed that Apple is placing restrictions on what the telecom providers can do in a free market?

At first, I was 100% set on getting an iPhone 4S. But after recieving special deals for the new Samsung Galaxy Prime at the fraction of the price of an iPhone 4S, I'm really starting to doubt. ( it's really tiny and underspecced so no idea where this massive price difference comes from besides Apple fixing the prices ).

Apple is lucky that I really don't like the current Android 2.3.3 I tried on the Samsung Galaxy S2. So if ICS 4.0 on the Samsung Nexus Prime is just as bad as 2.3.3, I'll just suck it up and just buy the iPhone 4S at the fixed price. :(
That IS free market, they can pick whatever price they want, and sell it at that price. Consumers are more than free to choose something else if they want.
 

scaredpoet

macrumors 604
Apr 6, 2007
6,627
342
Apple is lucky that I really don't like the current Android 2.3.3 I tried on the Samsung Galaxy S2.
No, they're not lucky: they know they have a product that people are willing to buy, and thus they are charging what the market will bear. This is the epitome of a free market.

Right now, people are buying iPhones faster than they can be made. Another tenet of supply and demand states that high demand and low supply tends to lead to increased prices. Consequently, Apple doesn't need to discount their products. They have named a price, and people are still lining up to buy them.

Actually... if you wanted to be a real purist about this, then technically you're right: Apple is anti-free-market because they are artificially deflating the price of their phones through subsidies and not letting the market truly dictate the price.

If you truly want to buy an iPhone 4S at the "free market" price, you're welcome to do so. There are places where people are selling the 4S at as high a price as the market will pay for them, and not at prices controlled or dictated by Apple. There, the White 16GB 4S, for instance is going at the free-market price of US $750+, which is at least $100 over the "imposed" Apple retail price on an unlocked model.

So there you go. You're welcome to go all freaky-deeky free-market on them and buy your iPhone 4S, and thumb your nose at Apple. How dare they try to inhibit capitalism!
 

asleep

macrumors 68040
Sep 26, 2007
3,452
1,404
iPhones are really worth about $1,000.00 each...

Feel better?
 

mark28

macrumors 68000
Original poster
Jan 29, 2010
1,632
2
Thank you. That's the point I was going to make to him when I asked how what he described was anti free market.
The group of sellers ( telecom providers ) are controlled by Apple to sell a product at fixed prices it seems, because they aren't allowed to enter into special deals, leading to more profits and higher prices for the customers. I don't call that free markets at work.
 

Certinfy

macrumors 6502a
Jan 29, 2011
933
0
London
Doesn't really make sense because here in the UK as well as other countries you can get the iPhone 4S 16GB free on even £35 contracts. From using a converter online that's just under $55, and from what I've read on these forums Americans are paying a lot more per month than that as well as the $199+ for the phone. :confused:
 

BlaqkAudio

macrumors 6502
Jun 24, 2008
487
14
New York
The group of sellers ( telecom providers ) are controlled by Apple to sell a product at fixed prices it seems, because they aren't allowed to enter into special deals, leading to more profits and higher prices for the customers. I don't call that free markets at work.
A free market is a competitive market where prices are determined by supply and demand...A free-market economy is one within which all markets are unregulated by any parties other than market participants.
http://en.wikipedia.org/wiki/Free_market

I don't see where Apple deviates from a free market. Demand is high, so they set the price high.
 

SporkLover

macrumors 6502
Nov 8, 2011
498
1
They don't want re-sellers undercutting each other to push more iPhones, undercutting the Value of the overall iPhone brand.

Let's look at Android phones. Typical high end phone costs $600 off contract, 199 on contract. In one to two months, you can expect the phones to be cut to 99 on contract. In 6 Months you might find it for 1 Penny on Contract on amazon. Some of those timelines are a bit of an exaggeration, but it does happen. If you are buying an Android phone, never early adopt, because it will surely be cheaper within a reasonable window. Those price drops also kill the resale market, overall driving down perceived value of the brand (I.E if outlets discount the prices so quickly and so often, must not be worth the original contract subsidized pricing).

Not even the walmart effect will lower Apple's pricing much.
 

haruhiko

macrumors 603
Sep 29, 2009
5,096
2,753
So I went shopping for an iPhone 4S. I was quiet surprised how none of the providers would give me special deals, because they weren't allowed by Apple? :confused:

How is this allowed that Apple is placing restrictions on what the telecom providers can do in a free market?

At first, I was 100% set on getting an iPhone 4S. But after recieving special deals for the new Samsung Galaxy Prime at the fraction of the price of an iPhone 4S, I'm really starting to doubt. ( it's really tiny and underspecced so no idea where this massive price difference comes from besides Apple fixing the prices ).

Apple is lucky that I really don't like the current Android 2.3.3 I tried on the Samsung Galaxy S2. So if ICS 4.0 on the Samsung Nexus Prime is just as bad as 2.3.3, I'll just suck it up and just buy the iPhone 4S at the fixed price. :(
Can you buy other phones?
If yes, Apple is not against free market.

Every manufacturer has a suggested or mandated retail price.
Even if Apple does not require them to sell above $XXX, they will not give you any bargain (unless it's a subsidized cellular plan)... they don't need to!
 

lordofthereef

macrumors G5
Nov 29, 2011
12,904
3,476
Boston, MA
I believe what the OP is thinking about is price fixing, which is indeed illegal. A company cannot ADVERTISE their prices as lower. They can certainly actually SELL it to you as lower. They can also throw in whatever other perks they want, even if those perks are in the form of gift cards. The reason this is done is so that the smaller company isn't automatically beat out by the larger company. This is practiced by plenty of manufacturers, especially in niche markets. I am more in tune with the aquarium industry as far as pricing is concerned than any other market, and they have quite a bit of this.

Here's the kicker. No company wants to sell the phone cheaper because they don't have to. It's guaranteed to sell! if you don't buy it, the next guy through the door will!
 

aziatiklover

macrumors 68030
Jul 12, 2011
2,679
124
8.8.8.8 and 8.8.4.4
Doesn't really make sense because here in the UK as well as other countries you can get the iPhone 4S 16GB free on even £35 contracts. From using a converter online that's just under $55, and from what I've read on these forums Americans are paying a lot more per month than that as well as the $199+ for the phone. :confused:
that's because ya have tons and tons of carriers to choose from! We on the other hand have greedy and not much to choose from as carrier! Verizon and sprint are on cdma, then you have the only gsm carrier that have the 3g band working which is att! see make sense not much of choices here.
 

stormchaser

macrumors 6502
Mar 4, 2010
355
24
UK
Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A405 Safari/7534.48.3)

4s 16gb for £35 a month yes no doubt if you give them £289+ deposit first.
 

jeffg819

macrumors regular
Dec 25, 2006
228
65
The group of sellers ( telecom providers ) are controlled by Apple to sell a product at fixed prices it seems, because they aren't allowed to enter into special deals, leading to more profits and higher prices for the customers. I don't call that free markets at work.
Seriously? Is Apple stopping the carriers from offering other phones? Is Apple forcing people into their stores and holding a large stick to their heads in order to get them to buy the phone at the price set? Do you think the government should step in and set a "fair" price?

Free markets mean the people making the stuff get to pick the price they will accept for the product and to make it part of the contract for the stores that are carrying their product to not deviate from that price.

And then people that are looking for that particular product get to decide whether they think it’s a good deal. If enough people do, profits! If nobody does, no happy ending for the people making the stuff. That's about as free as it gets.
 

SporkLover

macrumors 6502
Nov 8, 2011
498
1
I believe what the OP is thinking about is price fixing, which is indeed illegal.......
Not necessarily. Horizontal price fixing is illegal (price fixing amongst competitors). An example of this is when all music labels more or less agreed to sell CDs at a fixed price, rather than letting the market set the price.

What apple does is vertical price fixing, which is legal. It is also called price maintenance. This isn't illegal because consumers can still choose to go to another manufacturer if they don't want to pay apples prices for a smart phone.

Horizontal price fixing is overtly anti-competitive.

----------

Doesn't really make sense because here in the UK as well as other countries you can get the iPhone 4S 16GB free on even £35 contracts. From using a converter online that's just under $55, and from what I've read on these forums Americans are paying a lot more per month than that as well as the $199+ for the phone. :confused:
In general, in the UK you can't fix prices. That's why you can get it at steep discounts. Apple does have the option of selling less product in the UK if they aren't happy with the pricing arrangements.
 

s15119

macrumors 68000
Nov 20, 2010
1,855
1,672
The group of sellers ( telecom providers ) are controlled by Apple to sell a product at fixed prices it seems, because they aren't allowed to enter into special deals, leading to more profits and higher prices for the customers. I don't call that free markets at work.


You don't seem to understand the concept of a free market
 

Shrink

macrumors G3
Feb 26, 2011
8,931
1,606
New England, USA
Be assured that Apple is not the only company that sets a price and does not allow the seller to alter it in any way. There are many companies that do not allow sellers to offer their product at a reduced price. I can think of one at the moment - the mattress maker Tempur Pedic does not allow any price reductions on their products.

I'm not clear what this has to do with "free market". A producer may set any price they wish on their product and requiring vendors to sell at that price. They may lose sales that way, but that is the producer's business. Not getting a product at a reduced price in no way restricts a "free market". There is nothing in the "free market" economic concept that requires producers to allow vendors to lower their prices.
 

Applejuiced

macrumors Westmere
Apr 16, 2008
40,672
6,532
At the iPhone hacks section.
That IS free market, they can pick whatever price they want, and sell it at that price. Consumers are more than free to choose something else if they want.
I agree.
That's exactly what free market is.
You set your own price, people make the choice to buy it or not.

I can think of one at the moment - the mattress maker Tempur Pedic does not allow any price reductions on their products.
That's why I went with a Bob-o-pedic:D
 

famoussasjohn

macrumors 6502a
Jul 7, 2010
748
8
The stores don't make much of a profit off any Apple products really. From what I've heard when I was working at best buy, they would make maybe 10-20$ and would push accessories and warranties to make some money off the sale. We would never be able to offer a discount on ANY apple product..

why are you acting like a cheap-o? iPhone 4S is $199, $299, $399 with a 2 year agreement, those are great prices for what you get. What other phone offers 64GB out of the box? None. What other phones offer 32GB without purchasing a microSD? None. How about 16GB? Very few..and are usually the same price or more. Apple isn't forcing you to buy anything, you as the consumer should be able to make your own decisions on what you want to buy, if you want to buy something you don't want at a cheaper rate, then go ahead, Apple isn't going to be hurt by it. They make a great product and there will always be someone that will buy their products. To you it may be "underspecced" but to others it's a phone that does a whole lot of other things great just like any other Smartphone.
 
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