Not necessarily. They could be making a lower profit on other model and a higher profit here. Overall it evens out. You also don't know how those component costs were determined. If the 64GB phone sells far less then the 16 or 32 then thy buy less of those chips and the cost is more per chip vs. the 16gb or 32gb. Apple also has a hand in the RD of the flash memory and the design. Additional costs could be attributable to R&D to get that speed on that size chip, etc over a 16gb or 32gb. Apple's flash memory is usually on the cutting edge of speed, design etc vs regular flash memory so its possible that the costs are wrong or are comparing standard flash memory wholesale costs.
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iPhone 5s Component Costs Estimated to Begin at $199
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Not necessarily. They could be making a lower profit on other model and a higher profit here. Overall it evens out. You also don't know how those component costs were determined. If the 64GB phone sells far less then the 16 or 32 then thy buy less of those chips and the cost is more per chip vs. the 16gb or 32gb. Apple also has a hand in the RD of the flash memory and the design. Additional costs could be attributable to R&D to get that speed on that size chip, etc over a 16gb or 32gb. Apple's flash memory is usually on the cutting edge of speed, design etc vs regular flash memory so its possible that the costs are wrong or are comparing standard flash memory wholesale costs.
I still take issue with the storage options. 16GB should not exist in 2013 and the margins are too high from 16GB to 32GB and 32GB to 64GB while 64GB to 128GB does not feel too ridiculous.
Many companies are greedy. Profit is fine greed is not.
Many companies are greedy. Profit is fine greed is not.
Apple have always had huge markups on storage. Be it memory or drives. It's a valid point that apple really does put thier tax on these. It's kinda silly telling apple fans not to buy it if they don't like it. Big difference between been a fan and wanting something , and being a fan and realising that Apple is putting a huge markup .
Thousands of in-house employees. Server farms. Legal fees. Building ownership/lease. R&D.
I know. How about you cook all of my meals. I'll supply the ingredients and provide a free place for you to work. I'll even pay you a nominal amount for your labour. This is a huge opportunity for you, as you avoid all of the other costs I mentioned. It's a far better deal than you're affording Apple.
Also, iPhone users do not mind spending more $, they have it!
Hmmmm last I checked council some estate residents walk around with iPhones, though they hardly have money to burn
Having an iPhone does not mean your have spare cash.
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You want him to be your butler?
Apple makes about a 38% profit margin, though they dont reveal profit margins on specific products, if we assume the iPhone 5S has 'average profit' and a 16GB sells for $649 then then Apple's cost is about $470 per unit, if i am doing the math correctly ($470 * 1.38 =~ $649)
However we may figure that Apple's cost is actually much higher than $470, if the difference in cost to Apple for 16->64GB is only $19, and they sell it for $200 more, if the average profit across all 3 models is 38% you could calculate that Apple might be at a 20% profit on a 16GB, 40% profit on a 32GB, 60% profit on a 64GB or something like that. It's not unusual for a company to make all their cash on extras or add-ons..
Hmmmm last I checked council some estate residents walk around with iPhones, though they hardly have money to burn
Having an iPhone does not mean your have spare cash.
Agreed, what I meant to say is that the price differential between an entry level iPhone and the 32 or 64GB models is irrelevant to the people considering those storage sizes. They charge that much on the size upgrades to help offset the lower margin on the 16GB. It is a great business model, clearly.
$19 to 200 for 16GB to 64 GB: this is the thing I love most from Apple.
I suggest Apple to prepare a list of the "proud to spend more if asked by Apple" and charge them $100 more on every new Apple product, whatever it will be.
Just to increase their profits, you know. It seems the only thing important for someone here
the "extra" $80 that 64GB users are paying is going to offset some of the cost of the lower-end Iphones
WIthout the "extra" markup over the costs of the flash memory the Iphone Pricing structure may be simmilar to this:
16GB=$729
32GB=$749
64GB=$769
Instead We have the high-end phone pay a premium that offsets the costs of the low end phone to allow for a lower point of entry.
Companies do this ALL the time. BMW charges $2,100 for their navigation system (on a 3 series) Does anyone think a navigation system cost $2,100 to make? when A TomTom is $100?
There is also a big difference between understanding that the 32 GB & 64 GB iPhones have higher margins and accusing Apple of ripping you off.
Reasonable profit.
The difference to me would be like a company paying people a living wage and making less profit yet MORE then enough for everyone to have their millions vs paying people hardly enough to get by and make more just for the sake of it.
Apple has so much money they don't have to change what they do. However, since they are selling luxury items and not life saving medication (which should be affordable) they can charge a bit more as there are other and older options. Having an iPhone is not a need. The prince margin from 16GB to 64GB is still too large.
I agree with your logic, however, you're using Apple's overall margin percentage which I do not think is entirely correct for the iPhone because it is very evident that the iPhone has much higher margins. The overall margin is being dragged down by Apple's entry level devices (MBA, iPad mini, etc.) There is very little difference between an iPod touch and and iPhone but the price is set way higher on the iPhone because people will line up to get one. Apple has no need to lower prices or raise storage sizes, they can barely keep up with demand as it is.
Apple has always done this, ever since Jobs came back anyway.They make up their money on the upgrades so that they can make their products more "affordable", this is why there is yet to be a decent price/performance competitor to the MBA.
Reasonable being what? Is a 20% profit margin reasonable? Or is it a floating scale based on whether or not you want to accuse a company of being greedy?
At what point does desire for profit transition into greed? Is there a definitive line where - under a certain profit margin, a company is exercising reasonable desire for profit and above the line, it is just flat out greed? If so, what is that number?
Apple and every other publicly held company in there world, they are in it for the money. What governs their prices is simply what the market is willing to pay for their products and services. To sell products for less than what the market is willing to pay is a disservice to the stockholders of that company. Believe me, if Samsung/LG/HTC/Nokia and whoever else makes cell phones these days could sell their handsets and get 10x the profits, they would not hesitate.
Pi$$ing and moaning about these things in the internet is not an effective solution when millions of people are lining up to buy every new iteration of iPhone. The only leverage we have as consumers against any company is the money in our pockets. And right now, too many people are voting to keep paying the money to get the upgraded storage. That's not Apple's fault, that is the consumer's fault.
This is so funny... fanboys defending the 100/200$ extra charge for more storage.. as if they'd benefit from that money somehow.
And they think they're so clever. But it's a nobrainer from a business standpoint this method means a lot of cash from many (stupid) people who pay 200$ for 48gb nand nowadays.
I'm a customer, and I'd rather have 32gb stock and spend that 100$ I saved for some cool new music on the itunes store...
And they think they're so clever. But it's a nobrainer from a business standpoint this method means a lot of cash from many (stupid) people who pay 200$ for 48gb nand nowadays.
I'm a customer, and I'd rather have 32gb stock and spend that 100$ I saved for some cool new music on the itunes store...
Publicly held companies like Apple don't maximize profit simply for the sake of making more money (although that in of itself is sufficient motivation). Apple's management also have shareholders to answer to.
I doubt it is that simple. Plus a publicly held company has more to deal with then a privately held company. They really can't do anything to kill their profit margins now that they have them. I'm only really getting on Apple about the hundred dollars difference in storage options. It's an odd choice as the main factor of price difference aside from 64GB to 128GB. It would make more sense at 32GB (starting) to 64GB being $50 and 64GB to 128GB being $100.
Likely a complicated issue. I'm not too thrilled how our society in run in general, the system is too flawed so my opinion is going to go a couple different ways along with having to base it on how everything currently runs. There is nothing set in stone from profit to greed, case by case basis.
Since we are talking phones I would have to ask myself, if people were willing to pay five hundred for a phone I made would I do it? I would pay everyone working for me excellent wages and if people wish to pay those prices I doubt I would complain. Not money for the sake of money, good would come of it.
Apple started it and are continuing it, the same storage options should not be here five years later at the same price point. They could take it upon themself to fix it. Apple is suppose to be all about the future they forget the present yet they still use 16GB storage and 5400 hard drives.
Which I thought of and had to address above. Publicly held companies have a lot more to deal with.
We all have an opinion on that.
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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?
That's a little ambiguous. What's reasonable to you is certainly different than what's reasonable to anyone else. As a consumer, I'd certainly prefer the 64GB to be, say, $50 more than the 16GB because then I would buy it and wouldn't have to worry about deleting apps and photos and video and music to get iOS 7 to load. Alas, I can live with 16GB and the extra $200 in my pocket and put up with, what is to me, a minor inconvenience. If 64GB is worth an extra $200 (or 32GB for $100 more) to some people, I don't begrudge that. And I certainly don't begrudge Apple for charging what they do. And it's certainly working so more power to them!