iOS 7 Now on 73% of Devices, But Adoption Rates 'Much Slower' Than iOS 6

[kdarling]

Just saying: That's not gross margin.

Right, good point. It's not actual gross margin, but a comparison of the basic piece that would be most different. I should've put in that we're assuming all the rest of the cost of goods is roughly equivalent between the two devices.

Although even that is relative to the price, since (as I noted) there are taxes and other percentage related costs.

Another such item is is the price of licensing IP, which is quite often based on the cost of the device. For example, just the Qualcomm section has a 3%+ IP royalty rate based on what Apple pays Foxconn to build a device. So if Apple pays Foxconn say, $210 for a 5C and $240 for a 5S, there's a 90 cent difference in royalties.

 

[iChrist]

He seems to be close. Comparing estimated BOMs for the iPhone 5S and the iPhone 5C...

• CPU - $6 more on 5S
• Case - $8 more
• Sensors and M7 - $7 more
• Camera - $2 more

Total = $23

Sure. Let's see a source for that.

I can make up numbers too.

 

[xxBURT0Nxx]

I can make up numbers too.

you could be wrong too.



but since you can't do things yourself, here you go. Tons of proof, without making up numbers!

 

[attila]

I belong to the blessed 27%.

 

[kdarling]

Sure. Let's see a source for that.
I can make up numbers too.

Or you could research the numbers, like the rest of us non-lazy people do

However, the costs I originally gave were a mix between two different sources. Here's a comparison using one source, which suggests the difference, including manufacturing, is more like $25:

 

[balamw]

Sure. Let's see a source for that.

I can make up numbers too.

Here's just one link of many

http://m.computerworld.com/s/article/9242700/How_Apple_could_have_built_a_cheaper_iPhone_5C

B

 

[iChrist]

Or you could research the numbers, like the rest of us non-lazy people do

However, the costs I originally gave were a mix between two different sources. Here's a comparison using one source, which suggests the difference, including manufacturing, is more like $25:

View attachment 442224

And....

I suppose Apple used no internal resources for R&D and software development for the fingerprint recognition and the M7 chip.

C'mon people. Think a little bit.

 

[k2k koos]

mixed feelings on iOS7

I like iOS7 for some of the new features it offers, I like the clean look of some of the apps and the new fonts used (The weather app is very nice for example), I even don't mind the 'flat' look of the app icons, but I do not like the childish colours they've chosen. It really puts down a premium product like the iPhone is supposed to be.
I'm all in favour of simplicity and clarity, but the colours are very poorly chosen in my opinion.
A slight restyle of the originals would have sufficed IMHO.

So these might be some of the reasons why people haven't bothered to upgrade. I know in my household my wife hasn't changed here iPhone yet, because she dislikes to look of iOS7. I upgraded her iPad to it, and she hates me for it, I did upgrade my phone purely because I want to keep up and use the latest (stable) version of the OS, but as said, I'm not keen on the colours, makes it rather 'cheap' compared to the premium case it runs in...

 

[Cubytus]

I don't think Apple or Jony Ive view iOS 7 as the end-all-be-all. Remember, Apple constantly tweaks OS X. Turn on a Mac with 10.1 or 10.2 and it looks significantly different, even though it is broadly familiar. For that matter, even between 10.6, 10.7, and 10.8 there have been tweaks.

I think we'll see evolution of the UI in iOS 8. Remember, the iPhone is essentially released on a fixed schedule. iOS needed a lot of behind-the-scenes work that was done in iOS 7. There will be more if the rumors of the larger screen iPhone are true, but on top of that I think we'll see more refinement of the UI and elimination of many of the inconsistencies.

Looks have been taking a major hit between 10.6 and 10.7. All system icons are now grayscale, making them harder to tell apart on a moderately-backlit screen, for example. Buttons have no 3D aspect now.

I doubt Apple will bring back what we mourn from iOS pre-7.

Using iSuppli BOM figures and a 16GB price:

• 5C - BOM $173 sold @ $549 = $376 gross = 68% gross profit margin
• 5S - BOM $199 sold @ $649 = $450 gross = 69% gross profit margin

So percentage wise, they're equivalent. Cash profit wise, the 5S grosses ~$74 more ($14 of which would go to taxes if sold in the US).

I just don't see how making $376 on a $173 product qualifies s 68% margin. Calculates as 117% margin here.

FWIW, I made an approximate comparison for the iPod Touch (likely less expensive to make than an iPhone 5C):
Touch 16GB, BOM $173 @ 229 = $56 = 32,3% profit margin.

It wouldn't except for a much lower price, but what I said was that _if_ you bought it years ago, and you are either still using it or you passed it on to someone else who is happily using it, that proves that you made a good purchase back then.

Still using it since iPhone 4S is still staggeringly expensive (more than $500 from Apple)

 

[KPOM]

Looks have been taking a major hit between 10.6 and 10.7. All system icons are now grayscale, making them harder to tell apart on a moderately-backlit screen, for example. Buttons have no 3D aspect now.

I doubt Apple will bring back what we mourn from iOS pre-7.


I just don't see how making $376 on a $173 product qualifies s 68% margin. Calculates as 117% margin here.

I think he's saying that 68% of the sale price is margin.

As for OS X, whether the looks have improved or not is subjective. 10.8 did bring back some of the Expose functionality that was lost between 10.6 and 10.7. 10.8 also looks more polished than 10.7. My point, though, was that OS X has definitely deliberately lost some of its "transparency" and gloss, so I wouldn't be surprised to see a bit more contrast return to future versions of iOS. I don't see Apple bringing back skeumorphism. Apparently Steve Jobs and Scott Forstall were the only execs at Apple who liked it, and Jony Ive hated it.

 

[gnasher729]

I just don't see how making $376 on a $173 product qualifies s 68% margin. Calculates as 117% margin here.

FWIW, I made an approximate comparison for the iPod Touch (likely less expensive to make than an iPhone 5C):
Touch 16GB, BOM $173 @ 229 = $56 = 32,3% profit margin.

Again: The difference between BOM and sales price isn't gross margin.

BOM is Bills of Material - the price of a bag full of parts, somewhere in China.

You add the cost of building and testing and replacing iPhones that don't work.
You add the cost of shipping and any import taxes.
You add the cost of putting the phone into a store.
You add the cost of running a store.
You add the cost of processing a payment.
You add the cost of giving service, warranty repairs, returns and so on.
You add the cost of theft, damaged goods, and so on.
You add the cost of recycling.

When you have added all the things that Apple has to pay because you buy a phone, the difference between that total and the sales price is by definition "gross margin".

Then you add all the development cost, cost of advertisement and marketing, building stores, all the cost for all kinds of legal things, cost of running the company and so on. All the cost that Apple has to pay whether you buy an iPhone or not. The difference between that total and the sale price is "profit margin".

If that iPod Touch had a BOM of $173 and a sales price of $229 then you could bet that the gross margin would be negative. Apple would stop selling them because they would lose money on every sale. Profit margin would be massively negative.

 

[melendezest]

Only the ecosystem keeps me on Apple now.

I think the Music app alone sums up my suspicion that the development team must have been dropping acid while making iOS 7. It would certainly explain the garish colors at least.

Whose bright idea was it to jam so many settings into the bottom right corner of the Music app anyway? So now while I'm driving and want to skip a track, I wind up either:

Disabling the Shuffle All
Adjusting the Volume
Rating The Song

You know, everything except skipping the track. There's no margin for error now. And the gray and pink, gees, I'm a night driver and used to appreciate the darker, understated colors of the music player. Now it's like a scene out of Close Encounters of the Third Kind.

I have friends, long time rabid fans of Apple that jumped ship to Droid. This is why I worry.

And after 4 years, I've done something I thought I'd never have to do with Apple: bury the default apps and replace most of them with alternatives. They are that bad.

As far as functionality goes, it IS a step up, and with regular use, I've gotten used to the annoyances. But as far as aesthetics and user friendliness, it's so offputting that I'm no longer loyal to Apple. If they're going to foist this kind of neon green, anorexic font crap on us, they better wise up and start giving us more autonomy in customizing our setups. Because I could see myself prancing about with a Droid, a Surface Pro, Google Glass and a Asus Laptop, even if I have to deal with the complications of bridging different platforms.

You are not alone. I agree 100%. I was in sync with Apple's style until now. This has me looking for alternatives as well, something I would've never done before.

The way I see it, if I'm going to use a device that's "Android-ish", then I might as well get the larger screen and customization that Apple refuses to give its customers. They have opened the door for people like me, die-hard Apple fans, to start really looking for alternatives.

In a way, it is somewhat liberating. But I'm not giving up my OSX yet...

 

[macred]

You are not alone. I agree 100%. I was in sync with Apple's style until now. This has me looking for alternatives as well, something I would've never done before.

The way I see it, if I'm going to use a device that's "Android-ish", then I might as well get the larger screen and customization that Apple refuses to give its customers. They have opened the door for people like me, die-hard Apple fans, to start really looking for alternatives.

In a way, it is somewhat liberating. But I'm not giving up my OSX yet...

Just a few short months ago I would never have thought about leaving iOS, yet today I'm absolutely thrilled with my Android phone.

After 12 years with Apple laptops that I've relied on and enjoyed, I'd be lying if I failed to say that I'm very concerned about Apples direction. If they turn OS X into a cartoon like, NOVICE consumer focused entertainment OS, the industry will have lost a good competitor.

Those of us who make our living with Macs may find ourselves seriously looking at alternatives. Why Apple feels compelled to obsess over some of the changes like we've seen in iOS 7, can only be understood by the die hard Apple yes men.

 

[xxBURT0Nxx]

sorry but every year, every release people are saying the same things. If apple keeps getting rid of pro features and doesn't stop catering to these new users it will be the end of them. If apple doesn't release a bigger phone, people will stop buying them. If apple doesn't open their eco system, they will fail. If apple doesn't do this, they are going to go bankrupt.

We hear the same things over and over, every year, every release. You think we didn't hear complaints about iOS 6 when it came out and how terrible maps was and when antenna gate was going on how doomed apple was. You guys can keep saying it, but the truth of the matter is it has yet to happen. Apple continues to sell devices at record numbers, so I don't think they need to listen to a couple of people on the internet claiming that they are going to fail. Seems they are doing pretty damn good without your advice.

 

[LincolnsiPod]

Just a few short months ago I would never have thought about leaving iOS, yet today I'm absolutely thrilled with my Android phone.

After 12 years with Apple laptops that I've relied on and enjoyed, I'd be lying if I failed to say that I'm very concerned about Apples direction. If they turn OS X into a cartoon like, NOVICE consumer focused entertainment OS, the industry will have lost a good competitor.

Those of us who make our living with Macs may find ourselves seriously looking at alternatives. Why Apple feels compelled to obsess over some of the changes like we've seen in iOS 7, can only be understood by the die hard Apple yes men.

Yes, photo/video editing on my MBP has always been a rewarding experience, something MS just could never measure up to. The upside is that Mavericks seems to improve rather than just scramble the OS for the sake of change, so that's an update I'm looking forward to, also assuring me OS X won't dramatically change for another year. A stay of execution if you will.

 

[Cubytus]

I am not sure I am getting your point Gnasher729. When the BOM + satellite fees are accounted for and still are below the sale price, the company is making a profit. That's basic capitalism. The "satellite fees" must be much lower per-unit than what you expect. Assuming these are comparable between an iPod Touch and an iPhone, but knowing the iPhone sells for two times the price of an equivalent iPod Touch, it is reasonable to assume that Apple is making twice as much money on an iPhone.

 

[nickpickard]

iOS 6 was better

I delayed upgrading to iOS 7 on my iPhone 5S until recently, and now wish I hadn't. Most of it is OK (but not better), but to me the Calendar App was vastly better in iOS 6 - easier to use and read etc. For one thing, in iOS 6, the Calendar enabled you to see all the days of the month (month view) whilst simultaneously seeing your entries for whichever day you had selected in that view in the section at the bottom in a neat little line-by-line view. I cannot find any view that mimics that in the iOS 7 calendar. It's a real pity as it was my default view and I found it incredibly useful.

There also doesn't appear to be a List view (also useful) and the closest thing is to go into the Search function in Calendar on iOS 7.

If I could go back to iOS 6 I'd do it in a flash. Unless there is a real benefit from every angle, I really don't see the need for all these regular iOS upgrades (it's almost like a new iOS is brought out for the sake of launching something new, rather than the need) - each time requires some getting used to the new system and if this happens often enough it simply causes inefficiency and added burden for the user. And if there is going to be an upgrade, make sure it's an upgrade, not a downgrade.

 

[bawbac]

I delayed upgrading to iOS 7 on my iPhone 5S until recently, and now wish I hadn't. Most of it is OK (but not better), but to me the Calendar App was vastly better in iOS 6 - easier to use and read etc. For one thing, in iOS 6, the Calendar enabled you to see all the days of the month (month view) whilst simultaneously seeing your entries for whichever day you had selected in that view in the section at the bottom in a neat little line-by-line view. I cannot find any view that mimics that in the iOS 7 calendar. It's a real pity as it was my default view and I found it incredibly useful.

There also doesn't appear to be a List view (also useful) and the closest thing is to go into the Search function in Calendar on iOS 7.

If I could go back to iOS 6 I'd do it in a flash. Unless there is a real benefit from every angle, I really don't see the need for all these regular iOS upgrades (it's almost like a new iOS is brought out for the sake of launching something new, rather than the need) - each time requires some getting used to the new system and if this happens often enough it simply causes inefficiency and added burden for the user. And if there is going to be an upgrade, make sure it's an upgrade, not a downgrade.

And when are they going to address the app crashes!

The last couple of updates only address minute issues and not critical app crashes.
Why can't Apple make rolling back to a previous iOS version a standard feature!

 

[Quu]

iOS 7 is okay but I don't love it. It's just adequate. I will say this though, I preferred the iOS 6 appearance. It was old, sure. But I still liked it more.

 

[Technarchy]

Only Apple knows iOS7's adoption rate. Anyone else is pulling numbers out their behind.

Also, after being on iOS7 since it first launched, no way in hell would I go back to iOS6.