Can Apple Inc. (NASDAQ:AAPL) Sustain its $600-plus iPhone Price?

[BiggAW]

Do you have access to Verizon's books? If not, then you cannot definitively say that Verizon didn't gain any new subscribers out of the iPhone deal. Nor can you definitively say whether or not it was a good business decision.

Let's say your assumptions are right - why should their decision be baffling? A revenue increase of $30+/line for everyone who switched to the iPhone isn't chump change. That revenue increase will more than pay for the subsidies over the term of the contract. They also prevent those users from jumping ship to AT&T. It would've been a terrible business decision not to carry the iPhone.

It was a win-win for both apple and verizon.nApple gained sales from those who were not willing to jump ship; Verizon gained revenue from those who switched, and they gained subscribers (people who jumped ship from AT&T to Verizon.). Many people did not want to sacrifice their coverage and quality of service to get the iPhone - I think during the launch they mentioned that Apple was constantly flooded with calls that were something to the effect of "When is Verizon getting the iPhone? I'd buy one immediately if they get it". And until recently, AT&Ts 3G coverage was pathetic compared to Verizon's. I'd much rather be on EVDO than GPRS/EDGE. I had no 3G where I live until a little after the iPhone 4 launched.

There's been so many numbers published. In aggregate, there wasn't any massive switch anywhere when the iPhone became available on another carrier, except for originally when AT&T picked up some subs, but Verizon still held their own without the iPhone.

It sort of makes sense that Verizon did what they did, what I don't get is why people are buying the iPhone, as it is an antiquated device on Verizon without 4G LTE. However, without the iPhone, I think Verizon could have up-sold almost as many users into DROIDs, and retained their customers in a similar manner.

True, if you live on the edge (no pun intended) of AT&T 3G, or totally away from it, you'd want to have Verizon EVDO. But that doesn't really impact anything, as those users would just be EVDO Android users without the iPhone on Verizon.

 

[terraphantm]

There's been so many numbers published. In aggregate, there wasn't any massive switch anywhere when the iPhone became available on another carrier, except for originally when AT&T picked up some subs, but Verizon still held their own without the iPhone.

It sort of makes sense that Verizon did what they did, what I don't get is why people are buying the iPhone, as it is an antiquated device on Verizon without 4G LTE. However, without the iPhone, I think Verizon could have up-sold almost as many users into DROIDs, and retained their customers in a similar manner.

True, if you live on the edge (no pun intended) of AT&T 3G, or totally away from it, you'd want to have Verizon EVDO. But that doesn't really impact anything, as those users would just be EVDO Android users without the iPhone on Verizon.

You underestimate the reality distortion field.

 

[MacManTexas56]

I am sorry but who cares about the carriers. So they pay $650 for the iPhone 4S 16GB version then charge people $200 with a two year contract meaning that they lose $450 upfront but over 2 years they will make a profit of $1590 (85*24-450) off of a customer. They charge ridiculous rates for data, texting, and minutes.

Why should Apple sell their phones to carriers at a lower cost so that the carriers can make more profit off of their customers?

$650 for the latest launch product is not overpriced. Especially with the support that Apple offers (Their LEGIT one year warranty with over 200 Apple Stores around the country, with if I am not mistaken 24/7 Technical support and an amazing return policy)

If you think something is too much money then don't buy it. A smart phone is not a necessity, especially an iPhone. Apple does not tailor their goods to people who can't afford their products. They offer premium quality for a premium price.

You get what you pay for.

End of Story

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All phone manufacturers would lose a lot of customers if phones were not subsidized. Even dumb phones can cost around $100 +


Also I don't buy that people can't afford a subsidized iPhone.
They can get the iPhone 3GS from AT&T for free with a two year contract. Or they can just pay $100 for an iPhone 4.

And if $200 is a lot of money for someone to the point where it may dictate whether they can "afford" a phone then they have no idea what they are getting themselves into. It cost minimum $70-75 to own a smart phone (with a two contract) every month. By getting a phone subsidize you agree to pay a minimum of basic minutes with basic data plan. If you can't afford that then you're going to screw over with credit and trouble.

bc a lot of people don't have money in the bank this very minute. They live pay check to pay check...so they look at things as a monthly payment instead of a specific dollar amount. They can magically pay the phone bill bc they get paid once or twice a month and sometimes it's auto drafted so it's automatically paid.

 

[taedouni]

bc a lot of people don't have money in the bank this very minute. They live pay check to pay check...so they look at things as a monthly payment instead of a specific dollar amount. They can magically pay the phone bill bc they get paid once or twice a month and sometimes it's auto drafted so it's automatically paid.

If they don't have the specific money in the bank then they shouldn't be making a purchase. It's people like that who always screw up in life (credit wise).

If they can afford the monthly payment then they can wait 3-4 months and put the money aside.

 

[MacManTexas56]

If they don't have the specific money in the bank then they shouldn't be making a purchase. It's people like that who always screw up in life (credit wise).

If they can afford the monthly payment then they can wait 3-4 months and put the money aside.

haha i didn't say it was right, just what i've observed. People can fork out big monthly payments that cost WAY more than if an item was bought in cash today. They would always go with the monthly payments. It's usually the people at work that constantly talk about pay day lol