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This is the type of innovation that doesn't get mentioned in the press because it isn't sexy enough.

It's entirely possible that there will only be one model of iPhone 6 that will work all around the world on every supported carrier (in your choice of color, of course). Is anybody else pursuing this as well?

Hell, Samsung even sells the GS4 with different CPUs for different markets around the world. Talk about fragmentation...

Because, given the way contracts are in the US, such a move doesn't in any way benefit the consumer in the US. That, of course, isn't the same overseas where it is prepaid.

But honestly, as a customer, I could care less about Apple innovating for its own profits only. It is only interesting from a business sense and from a shareholder view. Innovation to a consumer means, really, something new. The fingerprint censor is an innovation (but really a gimmicky one at this juncture that might mature into something useful). The faster chip, for most customers, is not. Similarly, a chip that allows Apple to build only one model? Worthless to most people. And, besides, those chips are generally built by Qualcomm, no? That's like saying Apple innovates over the Haswell chip.

Even though Apple still has to provide things to work well with the Haswell chip, get good life, not overheat, etc; but customers don't see that as innovation, as the prior model did all of those things fine.

Innovation = Bells and whistles and gimmicks, usually, to most people. Apple doesn't do that much until it releases a new product. They evolve from there. Hence why Apple is attacked for not innovating. An innovative iPhone would be an iPhone with a larger screen and user allowable code, simply because that'd be new for the line. That doesn't mean it is a good innovation (if you don't like the new screen/new software capbilities) or that it is actually innovative (jailbreaks aren't new, and big screens exist). That's simply what a customer thinks is "innovation"

Or you can call innovation "differentiation from existing product lines"
 
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.

It's not odd at all if you understand that pricing is about efficiency between supply and demand. And not a certain percentage of component costs.

Obviously, to an iPhone customer, 32 GB of flash memory is worth more installed in an iPhone than sitting on a bench next to one.
 
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!

I do take issue with their memory increases. Back in 2009 I paid for the 32GB 3GS vs the 16GB, at the time it was not too bad. Only options and memory was a bit more then. That does not hold up four years later, 16GB should not even exist. 32GB needs to be standard by iPhone 6. A lot of people pay it because there are no options if they want that space and since it's selling Apple does not see any issue.

It's not odd at all if you understand that pricing is about efficiency between supply and demand. And not a certain percentage of component costs.

Obviously, to an iPhone customer, 32 GB of flash memory is worth more installed in an iPhone than sitting on a bench next to one.

Charging more just because they can. And it's not about understanding it's about not agreeing with how it's done.
 
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.

And how exactly is "too much profit" defined?
 
Charging more just because they can.

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

And it's not about understanding it's about not agreeing with how it's done.

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.
 
These articles never take into thought of R & D costs, shipping costs, and labor costs. So now we will have 30 pages of apple is ripping people off posts

What we can say for certain though, is that they profit $181 on someone's decision to purchase 64GB over 16GB. Quite insane.
 
And how exactly is "too much profit" defined?

There is no defined way to measure that. This will likely fall into personal opinion of what we each find to be too much.

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

Depends on the item, overall I am only taking issue with the memory. It's a phone after all, if I or anyone needs a cheaper option they exist. Or even a used older iPhone.

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.

I purchased a used iPhone 4s last year because it was a lot cheaper. I still think there is greed within the memory.
 
Agreed...adding just the labor costs increases it to $200....:)

Generally, manufacturing is a "rule of three". So of an item had $199 in parts it would need to cost 3x or $597 in the box to sell at retail. That's actually pretty close to the price.
 
There is no defined way to measure that. This will likely fall into personal opinion of what we each find to be too much.

How much do you personally find to be too much of a profit margin? You're the one making the claim that Apple is greedy, so where is the line that they crossed in your opinion?
 
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Please stop the talk about "Greed". Humans are greedy, corporations are not. Corporations exist to maximize the value of their shareholders. And if that means charging $100 for 16 GB of Flash or having 58% margins then they will. It's not greed, it's execution.

If you want more affordable phones, don't appeal to a corporation's humanity, it doesn't exist. Instead hope that the conditions that enable them to have such high margins change, and they will. By that I mean they will change because the situation is unsustainable, not that they will change just because you hope for it. : )

Apple maintains their extraordinary margins because their phones are subsidized at a much higher level than the competition (in the US). And because they have a superior product. This means that they sell a better phone at the same cost point as their competition. This all started with the AT&T deal they worked out 6 years ago and have been able to maintain with the other US carriers. The consumer pays $200 for the iPhone because the carrier pays Apple the other $450. The carriers don't subsize Android phones $450, its more like $200.

This will change when carriers start offering lower cost data packages that don't include a $20 per month Apple subsidy. T-Mobile seems to be going that direction, and some smaller companies that buy bandwidth wholesale from the major carriers are doing the same. Once the subsidy is removed, Apple will need to compete on price. They won't need to undercut the Android phones because they havea superior product, but they will have to lower their price to stay competative. Eventually iPhone margins will approach iPad margins. I expect this transition will take a couple of more years and in the meantime Apple will continue to milk their $250 per phone hidden advantage.

This is a tale of 2 markets. In the US, the iPhone has 40% market share and growing. Internationally (without the subsidy advantage) Apple has 13% market share and its cratering.
 
What we can say for certain though, is that they profit $181 on someone's decision to purchase 64GB over 16GB. Quite insane.

if Apple decided to just charge $19 more for a 64GB vs a 16GB, 100% of sales would be for 64GB, and its very possible that the world could not supply enough 64GB chips. Which would cause the prices to skyrocket until someone figures out how to make them fast enough
 
I do take issue with their memory increases. Back in 2009 I paid for the 32GB 3GS vs the 16GB, at the time it was not too bad. Only options and memory was a bit more then. That does not hold up four years later, 16GB should not even exist. 32GB needs to be standard by iPhone 6. A lot of people pay it because there are no options if they want that space and since it's selling Apple does not see any issue.

Then take action by closing your pocketbook to all things Apple. What bothers me is your insinuation that Apple is somehow doing something morally wrong by charging what they do. You know, somehow forcing people to pay their outrageous prices for higher storage options. They might as well hold a gun to their heads, right?
 
The people complaining about the markup should think more. The higher end phones are subsidizing the entry level prices.

Apple could totally reduce the markup to only $50, or even $25. But to keep their income the same, the 16gb iphone would need to start at $700 or $725.
 
How much do you personally find to be too much of a profit margin? You're the one making the claim that Apple is greedy, so where is the line that they crossed in your opinion?

In my personal opinion their memory upgrades are greedy. Aside from that they may charge too much or not, if we feel their phones are worth it Since they sell millions I guess not. As like I said before, these are phones, not food or medication.

Then take action by closing your pocketbook to all things Apple. What bothers me is your insinuation that Apple is somehow doing something morally wrong by charging what they do. You know, somehow forcing people to pay their outrageous prices for higher storage options. They might as well hold a gun to their heads, right?

I pay what I feel is the right price for me, if too much I will avoid it.

Never was a fan of statements about holding a gun to ones head. I can dislike a companies pricing without thinking I'm forced to buy it.

Morally wrong to change a lot for phones? Nope, their phones. They can still be greedy to some degree. Morally wrong is changing too much for medication that can saves someones life, not high cost electronics.
 
Shocking that the general assumption could be wrong.

At this point we don't know if it's wrong. As I pointed out, this teardown didn't even comment on the cost of the case.

They provided an explanation. Better colors.

Just because Apple gives an explanation doesn't make it true. If they cut corners on a product and saved manufacturing costs but didn't pass those savings on to the consumer, they're not going to come out and say that, they're going to come up with some other excuse.

Remember this does not account for yield. The 5c probably has a much higher yield than the 5. That beautiful chamfered design is probably a QC nightmare.

Great point. If the manufacturing costs for one unit are the same but they have to throw out a lot more of the aluminum cases that makes them more expensive overall.


Like you said, an iPad is bigger, hence it is easier to fit all the components in there. Thin miniature products like iPod touch and iPhone would require more care.

Except that the iPod touch is way cheaper than an iPhone considering the features and components of each. The real reason for iPhone pricing is because people are willing to pay it. Which is mainly because the true pricing is hidden inside a monthly charge, and most people don't do the math to see what they're actually paying. Basically Apple keeps their iPhone off-contract prices sky high because they'd rather people stay on contract. So far that has worked well in the USA but it's a harder sell in other parts of the world where most people aren't on a contract.

Well, look at Intel CPUs, an extreme version is faster by 100MHz but cost you $400 more

Not really comparable. When you're comparing 16 versus 64 of storage chips, you just use four times as many chips and it really costs four times as much. With a CPU, the faster ones are more scarce so they actually can be disproportionally more expensive. One is a part that's more difficult to make, the other is sheer quantity.
 
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.

Geez, where can I line up to invest in a company like yours? Unless you have billions of dollars of your own to start this business, no one is going to give you money to run your do-gooder organization. I need to have my money grow when I invest it, because I'm putting it at risk and might loose it all, and if you are going to piss away the profits that I enabled by my investment in your company on the things you want to spend it on, there is no way you're getting my money.
 
Just because Apple gives an explanation doesn't make it true. If they cut corners on a product and saved manufacturing costs but didn't pass those savings on to the consumer, they're not going to come out and say that, they're going to come up with some other excuse.

This was so obvious, charge the same as the iPhone 5 yet costs less to make. Why else would they have even bothered. Reminds me of the iPod Nano when they took away video and recording for a tiny almost pointless touch screen yet had the same price.
 
In my personal opinion their memory upgrades are greedy. Aside from that they may charge too much or not, if we feel their phones are worth it Since they sell millions I guess not. As like I said before, these are phones, not food or medication.

You keep saying the same thing, but you refuse to provide an explanation. Why are 22% profit margins "greedy"? Or why would charging more for the 16 GB and less incrementally for the 32 & 64 GB version to arrive at the same profits be less "greedy"?

Why is offering a non-essential product at a price people are willing to pay "greedy" at all?

At this point we don't know if it's wrong. As I pointed out, this teardown didn't even comment on the cost of the case.

The estimate is that the cost diference between a 5S and 5C was only $25 or so.

Just because Apple gives an explanation doesn't make it true. If they cut corners on a product and saved manufacturing costs but didn't pass those savings on to the consumer, they're not going to come out and say that, they're going to come up with some other excuse.

Sure. But evidence sure fits there story more than the "general assumption".
 
Exactly, so criticizing it doesn't make any sense.

I'm criticizing based on my personal standards.

You keep saying the same thing, but you refuse to provide an explanation. Why are 22% profit margins "greedy"?

I have not said that a 22% profit margin is greedy.

Or why would charging more for the 16 GB and less incrementally for the 32 & 64 GB version to arrive at the same profits be less "greedy"?

16GB should no longer exist. I would not find a $50 increase from 32GB to 64GB greedy nor a $100 from 64GB to 128GB.

Why is offering a non-essential product at a price people are willing to pay "greedy" at all?

Since it is non-essential that is why I'm not giving them a hard time about their overall cost in general. It's hard not to see a $200 jump from 16GB to 64GB and anything other than that.
 
Oh, wait, your theory seems to ignore the fact that more people choose to buy the iPhone every year. :D
Nope. That's what I meant by "shrinking market share".


:confused:

So you :rolleyes: when someone else brings up shrinking market share, yet you bring it up yourself.

IMHO - Apple has a choice - dominate the $399+ mobile market(off contract), or sell a small % more iPhones each year, while watching the market share shrink further and further each year.
 
The estimate is that the cost diference between a 5S and 5C was only $25 or so.

I'd still like to see the full details on their breakdown, including the case. Also, their numbers are just estimates and the case is probably one of the harder things to estimate so they

But evidence sure fits there story more than the "general assumption".

"Evidence"? There is no evidence of anything at this point.

IMHO - Apple has a choice - dominate the $399+ mobile market(off contract), or sell a small % more iPhones each year, while watching the market share shrink further and further each year.

And the biggest factor in that choice is how much money the company makes. If the latter makes them more money overall, that's the choice they're going to make. If market share is dropping because other companies are selling shoddy phones at dirt cheap prices, the smart move for Apple is not to try and join that race to the bottom.
 
What I don't understand is the $19 cost difference between the 16GB and 64GB, and the $200 price difference. Same R&D, shipping, labor, marketing, etc. costs there.

Exactly. This is clearly where they make the bulk of their profits... Unfortunately
 
This is the type of innovation that doesn't get mentioned in the press because it isn't sexy enough.

It's entirely possible that there will only be one model of iPhone 6 that will work all around the world on every supported carrier (in your choice of color, of course). Is anybody else pursuing this as well?

Hell, Samsung even sells the GS4 with different CPUs for different markets around the world. Talk about fragmentation...

So, let's talk about this type of innovation... Apple simply uses baseband processor from Qualcomm which make it possible to use the phone on different carriers/countries. So does Samsung. In addition, Samsung actually designs and manufactures its own LTE modems. That's innovation. Also, in addition to having the right chip, one has to put the right antenna(s). In case of Verizon and Sprint (CDMA), implementing simultaneous LTE data and voice required addition of another antenna. All Android vendors did just that but Apple was too cheap. They skimped on antennas and as a result produced a crippled smart phone.
 
I pay what I feel is the right price for me, if too much I will avoid it.

Then maybe we agree. I'd rather have the 64GB but to me it's not worth it. I think it's too much and not providing me, personally, with enough value to warrant two more big bills from my wallet. Where I think we differ--and where you seem to be encountering some opposition by more than one person here--is factoring in any supposed component cost and calling it greed for Apple to charge $100/$200 more. The component cost is irrelevant really.
 
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