iPhone 5s Component Costs Estimated to Begin at $199

[kwrzesien]

And somehow you think charging more because people are willing to pay more is a bad thing.



And the recourse for not agreeing with the price a company chooses to charge for their product is simply to not purchase the product. That's why I did not purchase a higher priced iPhone than I did. Simple. No accusations of greed are needed.

In the future Apple has a user base of sub-par 16 GB models with 64 bit processors but not enough space to install a new OS, purchase and keep all of their music on their device, or purchase/use the next great feature that Apple could be first to market with due to their vertical control of the entire product stack. They are shooting themselves in the foot down the road by still having 16 GB as the base model, it should be 32 GB on the 5s and it would have been perfect timing with the 5c which I think appropriately has 16/32 GB options.

Now whether there is ample supply of 64 GB NAND chips, and whether 128 GB chips exist in the quantity and packaging to fit the size and power profile of the iPhone circuit board is another story. At this point I would have been happy with the 5s being just 32 and 64 GB models with a $100 price bump for the upgrade. Maybe they could consider 128 GB for the iPhone 6, it might be a bigger chassis (*crosses fingers*) and have more circuit board real estate and a larger battery.

But my other issue with the memory situation and the $100 price bump is that it co-mingles Apples products all over the place. iPods, iTouchs, iPhones, iPad Minis and iPads. Upgrading the memory makes them more expensive than the next more premium device. This somehow says to me that the memory is more expensive than a larger screen, faster & newer CPU, 3G & LTE radios etc. except that when we see the BOM it just isn't true. So Apple is unfairly marking up the memory and blowing up the differentiators so that it is more important (and costly) to the consumer for storage than the different models. I'm not angry, I'll chose not to buy the more expensive memory options. I merely think this isn't in Apple's best choice, they could be selling more apps and content. It certainly weakens their premium product in real world usability, which can't be a good thing.

 

[kwrzesien]

An iPhone is not shelter, food or water.

You pay for it because you want to, not because you need to.

You can always refuse to pay what Apple demands. If not, and you choose to pay, you're not being ripped off. Rather, you're a compulsive consumer with no self control that engages in purchases you openly believe are not in your interest.

Then why buy a new model at all? Every generation we expect better performance as well as incremental improvements to features, size and battery life. Isn't storage size part of that? Do you still have a 40 GB hard drive on your desktop? Don't you expect every other new generation of SSD to increase the size capacities along with performance? This is what makes a new model, well, NEW.

 

[MYB]

No one ripped you off. Don't like it, don't buy. Pretty simple.

 

[BaldiMac]

In the future Apple has a user base of sub-par 16 GB models with 64 bit processors but not enough space to install a new OS, purchase and keep all of their music on their device, or purchase/use the next great feature that Apple could be first to market with due to their vertical control of the entire product stack. They are shooting themselves in the foot down the road by still having 16 GB as the base model, it should be 32 GB on the 5s and it would have been perfect timing with the 5c which I think appropriately has 16/32 GB options.

Now whether there is ample supply of 64 GB NAND chips, and whether 128 GB chips exist in the quantity and packaging to fit the size and power profile of the iPhone circuit board is another story. At this point I would have been happy with the 5s being just 32 and 64 GB models with a $100 price bump for the upgrade. Maybe they could consider 128 GB for the iPhone 6, it might be a bigger chassis (*crosses fingers*) and have more circuit board real estate and a larger battery.

But my other issue with the memory situation and the $100 price bump is that it co-mingles Apples products all over the place. iPods, iTouchs, iPhones, iPad Minis and iPads. Upgrading the memory makes them more expensive than the next more premium device. This somehow says to me that the memory is more expensive than a larger screen, faster & newer CPU, 3G & LTE radios etc. except that when we see the BOM it just isn't true. So Apple is unfairly marking up the memory and blowing up the differentiators so that it is more important (and costly) to the consumer for storage than the different models. I'm not angry, I'll chose not to buy the more expensive memory options. I merely think this isn't in Apple's best choice, they could be selling more apps and content. It certainly weakens their premium product in real world usability, which can't be a good thing.

I think you are over-generalizing your own use case over the entire iPhone market.

 

[kwrzesien]

So, it costs apple $19 to go from 16 to 64 gig and they charge the sucker....er customer $200 for it. There is just no way in 2013 they should be offering the tiny storage sizes they do at the high prices they do.

I think what all of us on this side of the argument are saying is that it is NOT the cost of the NAND or the "commerce" of it holding Apple back from bumping the base memory to 32 GB. So what is?

 

[avanpelt]

Have you ever purchased a diamond or a diamond ring?

Touché!

 

[BrockC]

So you're against Apple making a profit?

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If Samsung could increase their profit margin to Apple's level, you don't think they'd do it in a heartbeat? Obviously Apple is more successful in bringing value to the market that isn't strictly based on raw components. I mean, how hard would it be to match Samsung's BOM?

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That doesn't even make sense.

Notice I said the bulk of their profit. It's UNFORTUNATE they make a huge profit on increasing the size of the storage when it is very cheap for them to produce. I never said I dont want them to make a profit, perhaps elsewhere.

 

[giantfan1224]

Notice I said the bulk of their profit. It's UNFORTUNATE they make a huge profit on increasing the size of the storage when it is very cheap for them to produce. I never said I dont want them to make a profit, perhaps elsewhere.

So you are only in favor of Apple making as much profit as YOU think they should? Would some unilateral percent mark up based on component cost be agreeable to you? Or are you just against HUGE profits in general, speaking arbitrarily, of course?

 

[Dascoyne]

A 2014 Porsche 991 is probably around $27k-35k of parts. At $131k MSRP it's surely a ripoff.
Those crooks should be selling them for $60k tops and still turn a profit. (Sarcasm)

 

[Xiroteus]

But that's my point. Your "personal standards" are arbitrary.

Regardless if they are or not. Most people don't agree with the memory pricing structure. When a device is upgraded year after year in every other way and one part continues to remain the same it really is just an excuse to alter prices because it is the easiest mark.

 

[BaldiMac]

Most people don't agree with the memory pricing structure.

Shocking that most people would like to pay less.

When a device is upgraded year after year in every other way and one part continues to remain the same it really is just an excuse to alter prices because it is the easiest mark.

Yep. Why is that a problem? I would bet a whole lot of product have higher margins for the higher priced items. Including other mobile phone companies.

 

[Xiroteus]

Shocking that most people would like to pay less.

Quite.

Yep. Why is that a problem? I would bet a whole lot of product have higher margins for the higher priced items. Including other mobile phone companies.

It just bugs me that the margins are so high for something that has not changed in years. Aside from that there are not too many issues. There could be some complex reason for their pricing that really has nothing to do with the memory and they ware just making it appear that way, no idea.

 

[verpeiler]

Or some people have an understanding of basic economics and choose to discuss the misinformation in this thread.

Other than the insults, who do you think disagrees with you?

Again, who wouldn't?

Well.. q.e.d.

 

[SteveCarriere]

It all boils down to what people are willing to pay - for any product. If people aren't willing to pay what is asked, either the price is reduced until they will pay, or the product ceases to exist.