Barclays Proposes Apple Could Lessen iPhone 8 Pricing Impact by Including Apple Music/iCloud Bundle

[citysnaps]

And they added features in the past without raising the price. This is purely a play to keep demand low due to low yields.

*Any* extra costs incurred by Apple, resulting in a higher COGS, will be added (along with their respective margins) to the price of the phone. It's also important to distinguish between net and gross profit margins.

GPMs are generally much higher. At my last tech company, GPM targets were around 80%. If I were to propose a product that doesn't at least get close to that number, it would never get off the ground. With respect to publicly traded companies, it's about Wall Street expectations. And profit margins are a huge analyst metric that companies live by.

 

[borgqueenx]

wait, giving stuff away thats already successfull?
no chance.

 

[SmileyBlast!]

I've upgraded 3 years in a row.
Just not going to get one this year.
Iris scanner unlock is just a deal breaker; If it is true.
These personal devices are just getting too personal.

 

[DevNull0]

*Any* extra costs incurred by Apple, resulting in a higher COGS, will be added (along with their respective margins) to the price of the phone. It's also important to distinguish between net and gross profit margins.

But what is the COGS for a year of iCloud storage on the 200 gig tier. They'll sell it for $30 and margin is very high on cloud storage.

It is absurd that these days when everyone is pushing their cloud services that Apple gives you 5 gig total storage to use with your shiny new 256 gig iPad pro and shiny new 256 gig iPhone. They should *at least* include the storage capacity of your devices so you can use it as a backup. Especially given their fat margins on hardware for a "premium" product.

MS gives you 1TB for $70/year, a lot cheaper than Apple. And MS throws in Office for free. Say what you will about MS products, it proves how cheap cloud services are to run and you can't say MS is second rate when iCloud has shown more outages and problems than OneDrive.
[doublepost=1504896813][/doublepost]

Why would Apple do that? There's going be plenty of demand, huge I suspect, without unnecessary freebies.

Makes no sense...

Because now that they've slipped to the number 3 smartphone vendor, there's got to be huge pressure on Cook to get back to second place. It would be humiliating for Apple to wait and see what happens and then add these freebees later if their rank is still falling. Adding it at launch sounds like a nice part of the premium Apple experience, adding it later would smell of desperation.

 

[WatchFromAfar]

I've upgraded 3 years in a row.
Just not going to get one this year.
Iris scanner unlock is just a deal breaker; If it is true.
These personal devices are just getting too personal.

Facial unlock uses a 3D model of your face; there is no iris scanner so you've got nothing to worry about.

 

[AZ63]

So are we just supposed to forget the (forced) free U2 album?

I wish we could.

 

[ArtOfWarfare]

I think I'd protest Apple's attempt to force me into paid services I don't want, and boycott it.

If they want to make the service free as a perk for owners, okay. If they want to just give one year "free", they can go f themselves.

 

[AZ63]

Apple could reduce the price simply by reducing the amount of profit from each unit!

Bite your tongue. Apple reducing profits. Riiiight. It took years for Apple to reduce the price on a unit (Mac Pro)that sold few in comparison. Apple has no incentive to reduce the price of their most popular product. It is predicted that the phone will be difficult to get with long wait times even with the increased price tag. Does that sound like an environment in which Apple wants to increase demand even more for the phone? Then Apple gets complaints about not making enough phones. It is just another way Apple can increase the cachet of the device.

 

[SmileyBlast!]

Facial unlock uses a 3D model of your face; there is no iris scanner so you've got nothing to worry about.

So does that mean that the front facing camera is constantly on? Seems like an even bigger privacy violation. Might have to stay with IOS 10 then.

 

[WatchFromAfar]

So does that mean that the front facing camera is constantly on? Seems like an even bigger privacy violation. Might have to stay with IOS 10 then.

Apparently yes, that's how it's going to work.

 

[skitidetdu]

Apple subsidising themselves

 

[AFEPPL]

2 pointless offerings for free - I'm not sure how that lessens anything.
I cant see this happening. Just price it right to start with.

 

[nexesnex]

I wonder how many of the iPhone 8 rumors will be true....

 

[citysnaps]

But what is the COGS for a year of iCloud storage on the 200 gig tier. They'll sell it for $30 and margin is very high on cloud storage.

It is absurd that these days when everyone is pushing their cloud services that Apple gives you 5 gig total storage to use with your shiny new 256 gig iPad pro and shiny new 256 gig iPhone. They should *at least* include the storage capacity of your devices so you can use it as a backup. Especially given their fat margins on hardware for a "premium" product.

MS gives you 1TB for $70/year, a lot cheaper than Apple. And MS throws in Office for free. Say what you will about MS products, it proves how cheap cloud services are to run and you can't say MS is second rate when iCloud has shown more outages and problems than OneDrive.
[doublepost=1504896813][/doublepost]

Because now that they've slipped to the number 3 smartphone vendor, there's got to be huge pressure on Cook to get back to second place. It would be humiliating for Apple to wait and see what happens and then add these freebees later if their rank is still falling. Adding it at launch sounds like a nice part of the premium Apple experience, adding it later would smell of desperation.

Perhaps you have insight on Apple's business model with respect to cloud services, their costs, and GPM expectations. I don't and therefore it would be extremely foolish to speculate.

If you require a large amount of iCloud storage, simply pay for it. Or use another service like MS (why haven't you signed up for that and moved on?). There are plenty to choose from. Most people don't need a large amount of cloud storage. Building out Apple's cloud infrastructure so that every one of their billion customers can potentially have a TB of storage would be incredibly stupid, and a huge waste of resources and capital.

Cook has nothing to worry about. He'll for sure exceed last quarter's expected guidance projections, by a good amount IMO, and life will go on. Apple is doing extremely well right now, and on multiple metrics.

 

[TMRJIJ]

I'd much rather not be forced to pay for Apple Music and a 200GB iCloud subscription. Looks like a classic example of trying to trap users into the Apple ecosystem to me. Why not give users the option to take out these services like everyone else? Come to think of it, there won't be many users wanting the 256GB or 512GB version if they're getting 200GB of iCloud storage and Apple Music included. 64GB users will be stung once their 12 month 'free' iCloud ends, whilst 256GB/512gb users will be stung by shelling out more for their iPhones in the first place. Seems like Apple wins all round.

To be fair I would rather have a cheaper iPhone.

Barclays also used to be (and maybe still are) the 3rd party loan company of choice by Apple for the UK, maybe some insider knowledge so a kernel of truth here?

Even if it cost just $5 more than a normal iPhone, I would still wouldn't get it. I never use apple music and I refuse paying a fee every month for online storage.

You guys aren't being forced to pay for these subscriptions. The phone was going to be $1,000 regardless of whether these 1 year gifts were included or not just like the Apple Stickers and legacy headphone jack dongle.

 

[Michael Scrip]

I've upgraded 3 years in a row.
Just not going to get one this year.
Iris scanner unlock is just a deal breaker; If it is true.
These personal devices are just getting too personal.

The last 3 years the phones were kinda the same.

And yet this is the first year of a BIG transition... but you're NOT gonna upgrade.

I get it though. Before you fire back at me... I understand your dealbreaker iris scanner. I'm just having fun.

I just thought it was funny that you had no problems upgrading during the minor-upgrade years... but you're skipping a major upgrade year. Perhaps the biggest upgrade ever.

Just curious about your plans in the future though. You know TouchID probably is gone forever on the premium iPhones, right? Does this mean no more iPhones for you ever again?

And speaking of the future... I wonder what next year's lineup will be? Will Apple keep 7-series around along with this new 8-series?

Perhaps the 7-series will be like the SE is today... the "legacy" model.

 

[Razeus]

lol. Apple won't even include a pair of earbuds with the iPad.

 

[Lacasse]

Lololol that’s a good one!

Yeah, ...they don't have to do anything. This thing will be a huge success on its own, the cycle is ripe. A successful small business owner I once knew gave me this tip: never give anything away for free. If you need to add value to your product or service, then your value proposition (business) needs a review.

 

[trizzil]

Rather have them include airpods

 

[Ds6778]

Whatever happened to fighting for our upgrade dollar? Now its like they want to charge and insane premium to do what they should be doing in the first place lol

 

[Attirex]

OUTRAGE OVER SOMETHING THAT NO ONE KNOWS IS EVEN TRUE = CONFIRMED. TWEET IT! POST ON BLOGS! FACEBOOK!!!!!!!!!!

lol @ humans.

 

[DevNull0]

Perhaps you have insight on Apple's business model with respect to cloud services, their costs, and GPM expectations. I don't and therefore it would be extremely foolish to speculate.

Apple sells a product for $30. It would be foolish to speculate that their COGS on that product is less than $30? Okay.

If you require a large amount of iCloud storage, simply pay for it. Or use another service like MS (why haven't you signed up for that and moved on?). There are plenty to choose from.

I quite happily am using services that suit my purposes. I am also free to suggest that Apple's 5 gig of cloud storage for a $1200 256 gig iPP makes them look pathetic with storage costing what it does in 2017.

Building out Apple's cloud infrastructure so that every one of their billion customers can potentially have a TB of storage would be incredibly stupid, and a huge waste of resources and capital.

Which is one reason it's so cheap to offer storage. You don't have 1 TB of storage for every TB you sell, you have enough for your customers current needs, anticipated needs over the next few quarters, and a margin for a sudden surge. I do have leased dedicated servers in a datacenter, I resell space on them, and the physical space I have is much smaller than what I've sold. If you want to suggest I'm smarter than Apple's VP of iCloud, I'll take the compliment, but it's certainly not true, Apple knows what they're doing here.

Cook has nothing to worry about. He'll for sure exceed last quarter's expected guidance projections, by a good amount IMO, and life will go on. Apple is doing extremely well right now, and on multiple metrics.

Yep, life will go on squeezing the fattest possible margins from an every decreasing market share. At least until it collapses. But Tim Cook will be gone right before that happens. Tim Cook = John Sculley version 2. And Sculley made huge profits for Apple...until he collapsed the company with his greed.

 

[ovo6]

Nobody wants this ****, we want free AirPods

 

[citysnaps]

Apple sells a product for $30. It would be foolish to speculate that their COGS on that product is less than $30? Okay.



I quite happily am using services that suit my purposes. I am also free to suggest that Apple's 5 gig of cloud storage for a $1200 256 gig iPP makes them look pathetic with storage costing what it does in 2017.



Which is one reason it's so cheap to offer storage. You don't have 1 TB of storage for every TB you sell, you have enough for your customers current needs, anticipated needs over the next few quarters, and a margin for a sudden surge. I do have leased dedicated servers in a datacenter, I resell space on them, and the physical space I have is much smaller than what I've sold. If you want to suggest I'm smarter than Apple's VP of iCloud, I'll take the compliment, but it's certainly not true, Apple knows what they're doing here.



Yep, life will go on squeezing the fattest possible margins from an every decreasing market share. At least until it collapses. But Tim Cook will be gone right before that happens. Tim Cook = John Sculley version 2. And Sculley made huge profits for Apple...until he collapsed the company with his greed.

OK... You clearly know a lot about Apple, their market, business model, cloud/manufacturing systems, marketing, costs, overhead, margin requirements, etc. and how the 120,000+ employee company should be run and organized in order to be and stay successful.

 

[Technarchy]

I just sent a text to Tim Cook about this bundle...

He responded with a selfie...