Do carrier subsidies mask the true market price of iPhone?

[bniu]

iPhones are always advertised at the $199 price point, but that price point is the subsidized price. However, since it's the heavily advertised one, that leads me to think that $199 is the supply/demand market price because that is what the carriers have conditioned us all to believe. However, the true cost is $649 which includes a substantial profit margin.

Now if subsidies were removed, I'm pretty sure $649 would not stand up as the true market price. Considering the component cost, Apple would have to price the iPhone north of $199. What do you think the iPhone's true market price would be? $399?

 

[Shrink]

iPhones are always advertised at the $199 price point, but that price point is the subsidized price. However, since it's the heavily advertised one, that leads me to think that $199 is the supply/demand market price because that is what the carriers have conditioned us all to believe. However, the true cost is $649 which includes a substantial profit margin.

Now if subsidies were removed, I'm pretty sure $649 would not stand up as the true market price. Considering the component cost, Apple would have to price the iPhone north of $199. What do you think the iPhone's true market price would be? $399?

All of us!?

Kind of an overstatement, don't you think?

 

[KeepCalmPeople]

I hope you're right... There will be sticker shock for many people. People who might otherwise have bought the latest and greatest under contract might move to the lower-priced, older phones. I think we might see discount prices at Walmart and similar stores of perhaps $100 on the flagship phone, which means Apple will be offering a bulk discount to their channels of about that amount, or around 15%.

 

[ugcop]

Average consumer had no idea what they were paying for the phone. They thought the phone company was giving them something for nothing. Just like they are thrilled when they get a check from IRS or a slot machine pays out.

 

[rablat]

All of us!?

Kind of an overstatement, don't you think?

Well it's in your sig for gods sake

 

[869639]

iPhones are always advertised at the $199 price point, but that price point is the subsidized price. However, since it's the heavily advertised one, that leads me to think that $199 is the supply/demand market price because that is what the carriers have conditioned us all to believe. However, the true cost is $649 which includes a substantial profit margin.

Now if subsidies were removed, I'm pretty sure $649 would not stand up as the true market price. Considering the component cost, Apple would have to price the iPhone north of $199. What do you think the iPhone's true market price would be? $399?

Apple prices its iPhones 3x as much as the cost because of that they can allow you to walk in with your dysfunctional iPhone in the 1 year warranty [Without applecare] and walk out with a 100% working iPhone, no other manufacturer allows this because they simply cannot afford to give everyone the same experience as they are only making a profit enough to let you have that one device and you be responsible for the next or go through hell trying to get the next one.

People don't factor in the insurance and what not that they end up paying usually to carriers or 3rd party just to have their products covered in the first year, for what apple gives you with the price.

Within the first year I have walked in to a Apple Store with my 4S, iPad 2, iPad 4 and iPhone 5 for minor issues and each time I walked out with a replacement

For that I will continue to support apple's ways because I truly get the best experience because I pay for it.

 

[T5BRICK]

However, the true cost is $649 which includes a substantial profit margin.

I'm not sure why this is a surprise. Cellphone prices have always been surprisingly high, and the subsidy covers a good portion of it.

Have you looked at the unsubsidized price of any other high end smartphones?

http://www.amazon.com/HTC-One-32GB-Silver-Unlocked/dp/B00CMVLH66

http://www.amazon.com/Samsung-Galaxy-GT-I9500-Factory-Unlocked/dp/B00BV1MVJ0

http://www.amazon.com/LG-G2-Snapdragon-Unlocked-Smartphone/dp/B00EK5FAH4

 

[blairh]

Apple prices its iPhones 3x as much as the cost because of that they can allow you to walk in with your dysfunctional iPhone in the 1 year warranty [Without applecare] and walk out with a 100% working iPhone, no other manufacturer allows this because they simply cannot afford to give everyone the same experience as they are only making a profit enough to let you have that one device and you be responsible for the next or go through hell trying to get the next one.

People don't factor in the insurance and what not that they end up paying usually to carriers or 3rd party just to have their products covered in the first year, for what apple gives you with the price.

Within the first year I have walked in to a Apple Store with my 4S, iPad 2, iPad 4 and iPhone 5 for minor issues and each time I walked out with a replacement

For that I will continue to support apple's ways because I truly get the best experience because I pay for it.

If they replaced your device it couldn't have been very minor. You also seem to be glossing over the fact that you have had issues with so many Apple devices. I'm not trying to pick a fight, but instead of praising Apple here maybe you should be questioning why 4 of their recent devices gave you problems to begin with.

 

[CEmajr]

iPhones are always advertised at the $199 price point, but that price point is the subsidized price. However, since it's the heavily advertised one, that leads me to think that $199 is the supply/demand market price because that is what the carriers have conditioned us all to believe. However, the true cost is $649 which includes a substantial profit margin.

Now if subsidies were removed, I'm pretty sure $649 would not stand up as the true market price. Considering the component cost, Apple would have to price the iPhone north of $199. What do you think the iPhone's true market price would be? $399?

It's irrelevant because the carriers will offer financing plans that still allow people to walk out with iPhones at $0 or $99 upfront. The carriers know most people can't/won't pay $649 upfront for a phone so the financing plans will allow people to continue to upgrade as much as they do now. Maybe even more often since programs like NEXT and JUMP let them trade in their financed phones early to upgrade after only 6 months to a year rather than the full two years. A win/win for carriers and consumers.

 

[869639]

If they replaced your device it couldn't have been very minor. You also seem to be glossing over the fact that you have had issues with so many Apple devices. I'm not trying to pick a fight, but instead of praising Apple here maybe you should be questioning why 4 of their recent devices gave you problems to begin with.

When you have a big immediate family and everyones got 2-3 apple products its possible to have issues.

iPhone 4S - We thought it had a issue with the microphone as sometimes people would tell us that they can't hear [maybe it was network] but apple replaced it without question - then we moved and never had the issue again.

iPad 2 - Mine - It fell off my lap - I didn't have a case on it so the side got dented slightly causing the volume button to get stuck - - luckily I found a slight amount of light leak in it and that was reason enough for apple to replace without any hassle.

iPad 4 - My nephew when removing the plastic off the brand new unit, accidentally chipped the 30-pin dock connector as he was doing it with a pen [trying to poke a hole in the plastic cause he didn't want to remove the whole thing until we got a screen protector and case for it] - Apple replaced it without a question.

iPhone 5 - I wanted the AWS Compatible A1428 model, so I walked into an Apple Store and explained that because I bought my 5 at launch, its not compatible with T-Moible's AWS bands, again within 5 minutes I walked out with a replacement iPhone 5 w/ AWS support.

Now you tell me, based on the "issues" should I praise apple or should I say they did me no good? because I'm 99% positive any other manufacturer would make me go through loops to get a replacement for such things that we experienced.

Not picking any fights, but you need to see above and beyond to truly appreciate Apple's support and willingness to tend to its customers experience. No company is perfect and I know apple isn't either, but since launch of the iOS products, all I have seen is Apple truly win me as a customer by offering me the absolute best customer service experience [not to mention I am very knowledgeable regarding all things Apple, at times I possess more knowledge than their own staff and tech support]

Also I'm hoping with the true value of the iPhones coming to light of those that never looked at it, people will be more careful with their devices. After all, it only takes little bit of care and things last forever.

With iPhone having one of the highest prices, people will truly appreciate it rather than looking at it like any other phone within the $200, $300, $400 price range [due to subsidy's]

 

[blairh]

When you have a big immediate family and everyones got 2-3 apple products its possible to have issues.

iPhone 4S - We thought it had a issue with the microphone as sometimes people would tell us that they can't hear [maybe it was network] but apple replaced it without question - then we moved and never had the issue again.

iPad 2 - Mine - It fell off my lap - I didn't have a case on it so the side got dented slightly causing the volume button to get stuck - - luckily I found a slight amount of light leak in it and that was reason enough for apple to replace without any hassle.

iPad 4 - My nephew when removing the plastic off the brand new unit, accidentally chipped the 30-pin dock connector as he was doing it with a pen [trying to poke a hole in the plastic cause he didn't want to remove the whole thing until we got a screen protector and case for it] - Apple replaced it without a question.

iPhone 5 - I wanted the AWS Compatible A1428 model, so I walked into an Apple Store and explained that because I bought my 5 at launch, its not compatible with T-Moible's AWS bands, again within 5 minutes I walked out with a replacement iPhone 5 w/ AWS support.

Now you tell me, based on the "issues" should I praise apple or should I say they did me no good? because I'm 99% positive any other manufacturer would make me go through loops to get a replacement for such things that we experienced.


With iPhone having one of the highest prices, people will truly appreciate it rather than looking at it like any other phone within the $200, $300, $400 price range [due to subsidy's]

My experiences with iPhone issues don't reflect yours. In the instances where they replaced my iPhone there had to be an obvious defect. In the 5 years that I owned different iPhone's I did have several issues that warranted a replacement.

Your 4S issue sounds pretty vague. Unless you stressed to them that it was a big problem for you I'm surprised they replaced it.

I had light leak on an iPhone model and they did not replace it. I'm surprised they did so.

Did your nephew's family lie that the damage to the iPad was there upon purchase? Because that doesn't make sense otherwise. A user causes their own damage and Apple replaces it no questions asked?

How long did you own your original iPhone 5? Unless you returned it within the period they allow I find it highly unusual that they would just give you a replacement because you switched carriers.

I don't think you need to say Apple 'did you no good'. I never implied such a thing. But 2 of these 4 instances is the user causing damage and Apple replacing the device. That's great, I guess, but also unusual. Most consumers who damage their Apple devices aren't going to get a quick replacement from Apple. Regarding the other 2 instances one was vague to begin with and the other requires more info for me to determine what I really think about it.

I'm certainly not implying that Apple provides bad customer service per se but I'm not sure your 4 instances really reflect what most of us have experienced. In most real life instances Apple doesn't issue replacements unless they can replicate issues. Hardware damage caused by the user is almost never met by Apple with a free replacement device.

Not really sure what you mean by your last point. Apple's phone prices unlocked or on-contract are on par with every other major flagship device, Nexus excluded.

 

[869639]

My experiences with iPhone issues don't reflect yours. In the instances where they replaced my iPhone there had to be an obvious defect. In the 5 years that I owned different iPhone's I did have several issues that warranted a replacement.

Your 4S issue sounds pretty vague. Unless you stressed to them that it was a big problem for you I'm surprised they replaced it.

I had light leak on an iPhone model and they did not replace it. I'm surprised they did so.

Did your nephew's family lie that the damage to the iPad was there upon purchase? Because that doesn't make sense otherwise. A user causes their own damage and Apple replaces it no questions asked?

How long did you own your original iPhone 5? Unless you returned it within the period they allow I find it highly unusual that they would just give you a replacement because you switched carriers.

I don't think you need to say Apple 'did you no good'. I never implied such a thing. But 2 of these 4 instances is the user causing damage and Apple replacing the device. That's great, I guess, but also unusual. Most consumers who damage their Apple devices aren't going to get a quick replacement from Apple. Regarding the other 2 instances one was vague to begin with and the other requires more info for me to determine what I really think about it.

I'm certainly not implying that Apple provides bad customer service per se but I'm not sure your 4 instances really reflect what most of us have experienced. In most real life instances Apple doesn't issue replacements unless they can replicate issues. Hardware damage caused by the user is almost never met by Apple with a free replacement device.

Not really sure what you mean by your last point. Apple's phone prices unlocked or on-contract are on par with every other major flagship device, Nexus excluded.

My iPhone 5 I purchased on launch, told the guy that I was not experiencing for full 4G on T-Moible since 1900MHz coverage would make my iPhone drop to E often. This isn't something that I only had success with but many users replaced their iPhones if you read through this the forum.

As for my 4S, I did stress to them at the time that it was an issue to me, they did a "one time replacement" and that one time replacement only applies per device and not to the owner.

To be honest I have had the greatest experience with Apple and I'm sorry to hear that you did not have exactly the experience you had hoped for. light leak is something that apple will replace no questions asked and its been covered on this forum multiple times. The iPad 2 I did not get replaced because of the damage but it was due to the light leak, things just worked in my favor at the right time and thats the experience I shared with you.

As for iPad 4, I'm not sure exactly what communication occurred with him and t he genius, all I know is my nephew went to the store and came back with a replacement as it was less than 1 day old.

If you read around on the forum, lots of people have experienced good service with getting replacements with next to no effort.

At the end of the day there are many factors that determine the experience you get:
- You [This includes many things - Replacement history, attitude, willing to listen and share your problem]
- Genius
- Your device [Condition, In / out of warranty status etc]

 

[blairh]

My iPhone 5 I purchased on launch, told the guy that I was not experiencing for full 4G on T-Moible since 1900MHz coverage would make my iPhone drop to E often. This isn't something that I only had success with but many users replaced their iPhones if you read through this the forum.

As for my 4S, I did stress to them at the time that it was an issue to me, they did a "one time replacement" and that one time replacement only applies per device and not to the owner.

To be honest I have had the greatest experience with Apple and I'm sorry to hear that you did not have exactly the experience you had hoped for. light leak is something that apple will replace no questions asked and its been covered on this forum multiple times. The iPad 2 I did not get replaced because of the damage but it was due to the light leak, things just worked in my favor at the right time and thats the experience I shared with you.

As for iPad 4, I'm not sure exactly what communication occurred with him and t he genius, all I know is my nephew went to the store and came back with a replacement as it was less than 1 day old.

If you read around on the forum, lots of people have experienced good service with getting replacements with next to no effort.

At the end of the day there are many factors that determine the experience you get:
- You [This includes many things - Replacement history, attitude, willing to listen and share your problem]
- Genius
- Your device [In / out of warranty status etc]

I'd like to know how long exactly did you own the iPhone 5. You say from launch but that doesn't explain when the exchange was made.

I had light leak with my iPhone 4 if my memory serves me right and they did not believe it warranted an exchange. They called it 'minor'. Whether I was out of warranty I do not remember.

I have mixed feelings about your nephew's experience. He caused the damage and Apple replaced the iPad a day after purchase. I honestly can't envision a scenario where his parents told the genius that he caused the damage and they replaced it for that reason. That simply does not make sense. I'm guessing they lied and said the iPad was in said condition upon opening the box. If that is the case I'm not exactly going to applaud the experience. I know, I'm making an assumption here, but I don't envision a possibility that the truth was told and an exchange was made because of it.

My personal experiences with the geniuses have been fine. Some are more helpful than others. Of the 3 iPhone's I owned I had a major problem arise with 2 of them. And with 1 of those 2 they twice had to give me a new replacement because what I was given on two instances had other issues entirely.

I don't think Apple will offer replacement iPhone's or iPad's unless you can demonstrate your issue and you are still under warranty. And that's how it should be. It's pretty bad business on their part if they are just handing out new hardware left and right.

 

[869639]

I'd like to know how long exactly did you own the iPhone 5. You say from launch but that doesn't explain when the exchange was made.

I had light leak with my iPhone 4 if my memory serves me right and they did not believe it warranted an exchange. They called it 'minor'. Whether I was out of warranty I do not remember.

I have mixed feelings about your nephew's experience. He caused the damage and Apple replaced the iPad a day after purchase. I honestly can't envision a scenario where his parents told the genius that he caused the damage and they replaced it for that reason. That simply does not make sense. I'm guessing they lied and said the iPad was in said condition upon opening the box. If that is the case I'm not exactly going to applaud the experience. I know, I'm making an assumption here, but I don't envision a possibility that the truth was told and an exchange was made because of it.

My personal experiences with the geniuses have been fine. Some are more helpful than others. Of the 3 iPhone's I owned I had a major problem arise with 2 of them. And with 1 of those 2 they twice had to give me a new replacement because what I was given on two instances had other issues entirely.

I don't think Apple will offer replacement iPhone's or iPad's unless you can demonstrate your issue and you are still under warranty. And that's how it should be. It's pretty bad business on their part if they are just handing out new hardware left and right.

I bought it on launch, had it in my hands by end of september and owned it all the way until August 2013 [Sold it few weeks before 5S release]. Got the 5 replaced end of April after I read all the buzz about the "revised" iPhone 5 supporting AWS - had a good talk with the genius regarding the issue [As explained in the previous reply] and he went on to replace it, now upon searching on this forum there is a thread on the topic and not everyone was successful at getting a replacement. As for the light leak issue, I can't speak on behalf of the genius turning you away but the only time I faced the issue it was taken care of by Apple.

Yes Apple wouldn't be just handing out replacements for no reason, they aren't as easy as you are taking my comments. They definitely do diagnosis, ask bunch of questions and talks go back n forth, for my person experience we have had great service from Apple that I can definitely say it pays off for the high price tag.

 

[blairh]

I bought it on launch, had it in my hands by end of september and owned it all the way until August 2013 [Sold it few weeks before 5S release]. Got the 5 replaced end of April after I read all the buzz about the "revised" iPhone 5 supporting AWS - had a good talk with the genius regarding the issue [As explained in the previous reply] and he went on to replace it, now upon searching on this forum there is a thread on the topic and not everyone was successful at getting a replacement. As for the light leak issue, I can't speak on behalf of the genius turning you away but the only time I faced the issue it was taken care of by Apple.

Yes Apple wouldn't be just handing out replacements for no reason, they aren't as easy as you are taking my comments. They definitely do diagnosis, ask bunch of questions and talks go back n forth, for my person experience we have had great service from Apple that I can definitely say it pays off for the high price tag.

The fact that they replaced your iPhone is pretty amazing. That is above and beyond IMO.

 

[kdarling]

Apple prices its iPhones 3x as much as the cost because of that they can allow you to walk in with your dysfunctional iPhone in the 1 year warranty [Without applecare] and walk out with a 100% working iPhone, ...

The extra high price you're talking about, is much more than is needed to do such replacements (most of which are refurbs).