iPhone X Responsible for 35% of Total Worldwide Phone Profits in Q4 2017

[PickUrPoison]

I'm not usually so anti-capitalist, but I agree with you. It is greedy. It is permissible, and they are free to do it, but it is greedy.

I'm more surprised so many people are willing shell out $1000-$1150 for an iPhone and $200 more for AppleCare+ for it. That's $1200-$1350 all-in. For a first-gen device that almost everyone knows will be replaced by an improved model pretty darn soon. I really thought having it be so much over one grand to go all-in would put a lot of people off. I guess I was wrong. Where is the line then? Is $1500 too much for an iPhone? $2000? $5000?

The higher it goes, the fewer will sell. At $999 the X has sold maybe 40 million by now. At $1,500 that might have been 15 million. At $2,000, maybe 2 million. At $5,000, maybe 50,000.

Don’t worry about prices this September, Apple wants to sell a lot of iPhones. The 2018 X will be $899, the X Plus maybe $1,049. The 9 Plus with the 6.1” LCD display, I think $749. The 8/8 Plus are great products, and will be relative bargains at $599/$699.

 

[Darmok N Jalad]

I wonder if anyone here selling something on eBay would complain if that item sold for $100 instead of the $75 that was expected. Are you being greedy by completeling the sale? No, as you have reached an agreement with the buyer, who made a willing purchase. People act like Apple owes everyone their best phone for less money, like they are running a charity. There are cheaper iPhones to buy if $999 is too much. If you want a phone sold at just above margin, there are Android OEMs that do that, at least until they shutter their doors.

 

[macduke]

Don't you guys realize that market share is all that matters? Apple should just copy all the Android OEMs so that they can have all of those sweet, sweet market shares for themselves! I don't know why anyone would want anything but market share. I paid off my mortgage with market share! I'm here in my garage with my Ferrari's and shelves full of books. You know what got me here? MARKET SHARE.

 

[dirt_farmer]

LOL

Heaven forbid they should reinvest that in risky and groundbreaking innovation.

Instead the Accountant King will just add it to the bank account...a quarter trillion in cash from reselling the old ideas, not a meaningful innovation in sight.

Granted, they tried to do something exciting once (automotive) -- but didn't have the testicular fortitude for it.

They would rather keep milking Steve's original ideas from the 90's and 2000's at infinity margins and zero risk.

Just like PALM and Blackberry did, which worked out really well for their executives' compensation programs.

 

[bobenhaus]

Just more proof how overpriced the iPhone X is. Massively so looking at this report. One hell of a markup.

Yeah GREED at its finest. Apple learned by almost going out of business to becoming the King of GREED! They vow never to have it happen again. Go Apple! So proud of you!!

 

[m4mario]

Look at Apple's government regulated and compliance audited profit and loss statement. Their profit margin is around 35-38%. That does not seam like a ultra high, unfair profit margin to me. People fail to recognize that patents, software development and quality retail store experience... cost a lot. Cost of production is not a reflection of the cost of the product.

 

[69Mustang]

The math consequence is that the margin must be stellar

And/or the actual dollar figure much higher. Even if the margins are similar across the board, the profit dollar certainly won't be.

 

[fendersrule]

The iPhone X isn't necessarily too expensive when you compare to the rest of the line. Think about it, the iPhone x is onyl $200 more than the iPhone 8 (which I consider their mainstream "base" model). $200 difference is very expected.

If the iPhone X is $999 but the iPhone 8 was $499 or $599, then I'd cry foul. The cheapest iPhone (not including the 5c or whatever it's called now) is $799.

 

[joeblow7777]

Kind of surprised that the 8 was apparently more profitable than the 8 Plus.

 

[ani4ani]

Not me. I paid more for more. Like many others have as well.

A LOT more for LITTLE more...is a bit more accurate

 

[itsmilo]

Well no S if I sell an iPhone for 5.000 $ I am going to have more profit too

Look at Apple's government regulated and compliance audited profit and loss statement. Their profit margin is around 35-38%. That does not seam like a ultra high, unfair profit margin to me. People fail to recognize that patents, software development and quality retail store experience... cost a lot. Cost of production is not a reflection of the cost of the product.

Lets be honest, every company „cheats“ on those statements taking any loophole possible or shifting money elsewhere

 

[fendersrule]

A LOT more for LITTLE more...is a bit more accurate

Read my post above, that's just not true.

The iPhone X is $100 more than the iPhone 8 Plus.
The iPhone X is $200 more than the iPhone 8.

Is that really mind boggling or baffling? I don't think it is, it's very expected.

My statement is that ALL the Apple phones seem like they can come down a little, but Apple knows that customers buy them at their current price point just the same.

 

[Mr. Dee]

It was a expensive purchase, but I really love it. Don't miss Touch ID one bit. Its heavy though and using it for long, my hand feels like its about to drop off.

Is it a must have? Nope! But its really a good break with some of the original foundations of the iPhone. The gestures are mostly intuitive, although one hand operation can be a struggle at times. The Notch is neither here or nor there, but it does differentiate if that sorta thing matters.

The camera is an upgrade and you can see it, but thats partly due to the OLED, you see a difference, but is it worth 1000 dollars? Debatable. Portrait mode has been nothing but fail for me and I am already over animoji. I do know, its a phone that I will be hanging on to longer than most. Still have my 6s and it works just as good.

The iPhone or smartphones in general need something that is really good be ground breaking like 2007 to continue on this current trajectory. I honestly can't see what it is. I don't think its AR, VR, AI. Although we are at the tip of the iceberg. I do feel good about the Apple watch, it has turned out to be quite the companion and I love it too.

Health, Education and Standard of living are areas where I think Apple probably needs to look for innovation. Its out of their comfort zone, but thats probably what made Apple, Apple. Steve Jobs took the company out of its comfort zone with the iPod and then iPhone.

A TV or driving car is certainly not it; because people are likely to want to drive less in the future and how commuting works will be different. More people will work from home, vehicles will be on demand, drop off and go park or pick someone else up.

Looking at Steve's somewhat tragic end, I think health should be Apple's main focus over the next 10 years and into the future and maybe use the innovations they have invented to help drive that.

I really went of the rails here, but it really makes you think about what's next. I am not excited about an iPhone X Plus.

 

[BostonQuad]

In all this talk about Apple's high profit margin being good, bad, or acceptable, I'm not seeing any mention of how being well-capitalized is necessary for their broad, ambitious, and expanding R&D. We know Apple isn't sitting still; in addition to all the innovations they've brought to market, they are or have been investigating MicroLED, liquid metal, custom chips for iPhones and now Macs, autonomous car AI, etc. (Just one of these, creating custom chips to surpass Intel's, would be worthy of a massive war chest.)

I'm not persuaded that it's as simple as high profit margins = greed.

 

[Wowereit]

Sorry guys, but Apple is not even that greedy.
Margins are high, but not unusually high.
The issue is that most other vendors don't make money at all which makes Apple's about 30% margins sound insane.

Samsung does a bit of profit, Huawei does. Most other companies lose money.
It's like the good old days in the PC industry. All are doing a race to bottom, this time lead by the Chinese.

Xiaomi for example.
They are selling Mi A1, a device with 3 years of software support, 4 GB of RAM, 64 GB of storage, decent SoC and Camera, aluminium unibody for 150€. iPhone X is 1150€.
Do you think Xiaomi is making a single cent on this product? Ever looked at current RAM and NAND flash prices?
They are clearly selling at a loss to get into the market big time.

 

[fendersrule]

The Apple Watch excites me/is more useful/changed my life more than the iPhone 7/8/X can. That's why I keep holding onto my iPhone 6. It browses the web on the go, makes calls, does facetime, and does its job.

Regardless of which iPhone, if I left it at home on my way to work, I will leave it at home.

If I left my Apple watch at home, that's a different story

<brakes squeel>

 

[69Mustang]

I don't think it's wise for Apple to fragment their offerings like the 8/8+/X. In the past, the lineup would have a 'cheap' option, but that option was $500 or $400. Now, the cheap option is $700 (more than the flagship in the past).

I don't think it's wise for Apple to put the true new iPhone (X is clearly the true new iPhone) at a cost that is prohibitive for most everyday Americans. In the long term, I think it will hurt their bottom line and their ability to keep people in the ecosystem. People don't like to feel like their new device is substandard, but they also want things to cost a reasonable amount of money. If I have to pay $1500 every other year to buy into the latest iPhone, I'll probably just stop. And I'm well above the average American income.

EDIT: Apple had a great thing going. They could virtually guarantee $650 or $750 from iPhone users every other year. Now, they are making people actually think about whether or not to upgrade. That's a bad position to put your customers in.

Disagree. Apple is in a great place with their line up. They now have the ability to attract customers at pretty much every economic level. People can get an iPhone as cheap as $200 or as expensive as $1000. I think enough people purchased phones at each level to justify their strategy. They also made money at each level as evidenced by 8 of the top 10 profitable phones were iPhones - at the different levels.

I think Apple realizes people are going to buy or not buy. Most iPhone users buy another iPhone. Whether they get budafied this year, the next, or the one after is really immaterial as long as they get you eventually. They'll get others in the interim.

 

[mariusignorello]

Too much profit = greedy. iPhone X could have been $749.

Everything is just greed for people who know nothing about manufacturing and production costs and hate corporations.

Parts alone were ~$300. You also have to factor in R&D, shipping (FedEx held these things in warehouses at Apple’s request for a couple days), paying Foxconn (or whoever), salaries, marketing, etc. Then, and only then, do you break even. So the one who mentioned roughly 30% margin is probably correct. Apple could’ve never made the phone as advanced as it is and made it cheaper, but then it certainly wouldn’t be as successful.

 

[Black Tiger]

No wonder Apple is in a rush to “discontinue” the iPhone X. Clearly a total failure. Apple should shutter its doors tomorrow and surrender to Android.

 

[duervo]

Who buys Applecare? I know I don't.

"Where is the line then?" I don't know but what I do know is that Apple will push it.

I got it for my 7plus. If I didn’t, I would have had to buy a new phone last week, while still paying for the 7plus on my contract. That would have really sucked.

Thing just shut off while playing music over Bluetooth, and wouldn’t turn on, even with a hard reset. Battery was at 97% a few minutes prior, and plugged in. (Got the thing in Oct, 2016.) Failed the Apple Store diagnostic. They plugged it into a black dongle thingy, which was then plugged into a MacBook Air, from where they ran some special diagnostic tool.

Anyway, they replaced it. The invoice states a “flat rate repair” of $445.00, with $0 balance, thanks to AppleCare. (“Flate rate” because the nature of the failure was unknown, according to the employee.)

 

[newellj]

Just more proof how overpriced the iPhone X is. Massively so looking at this report. One hell of a markup.

Doesn't matter. What matters is: can Apple sell them? And the answer appears to be yes. Just not to you - but you're a market of one.

 

[mrzz]

Build and sell a fraction of the phones of your next competitor, but make many times the profit. That's the kind of business I'd like to own.

you just have to find enough fools willing to spend that much, luckily their greed seems to start hitting borders - looking forward to 2018 results

 

[Falhófnir]

Tell me again how important market share is.

Important enough to offer models down as far as the 6 and SE rather than only selling the X?

 

[Candlelight]

Love it how the SE is bringing up the rear.

 

[budafied]

Whether they get budafied this year, the next, or the one after is really immaterial as long as they get you eventually. They'll get others in the interim.

Good points overall. I think I will stay with iPhone, but I'm just frustrated with the current Apple gameplan.