iPhones/Galaxy S5/Note 4... Consumer Price Gouging

[booksbooks]

I will say that it really is non-issue at this point since carriers are buying back customer's old phones. I just signed up with Verizon and they gave me $300 for my iPhone 4S that had a crack in it and a bad battery. The actual price of the 4S is $649 so I basically paid $300 for my phone out of pocket. With that I was perfectly fine with buying my iPhone 6 Plus subsidized.

Oh god...

I wonder if we just make a thread that explains the facts of life to people. You realize that they're bartering with you, right? They actually aren't out cash, they're marketing to you. They'll sell those phones off and you think you just got paid $300 for the phone. That's why they don't care about cracked screens and bad batteries. They'll give you a credit on your bill, and then turn around and sell your phone for say $150 or whatever. You get a credit on your bill but they'll be getting their money out of you one way or another with you sucked into a subsidized plan, and you're paying FULL SUBSIDIZED PRICE for your new phone.

They might even make money off of you as a result of this transaction. LOL.

 

[terraphantm]

Carrier certification
Buying all the equipment to build the phones
About $50 or more of patents
R&d into antennas and other fields
Better radio

And since the other stores discount the iphone, apple most likely kicks in part of the money

All of those costs apply to the cellular iPads.

 

[booksbooks]

Carrier certification
Buying all the equipment to build the phones
About $50 or more of patents
R&d into antennas and other fields
Better radio

And since the other stores discount the iphone, apple most likely kicks in part of the money

You don't know what you're talking about, I'm sorry to say.

 

[HenryDJP]

You're theorizing the iPad mini is cheaper due to having a lesser screen and smaller battery. And you're theorizing the iPhones are more expensive because having the same technology in a smaller package is more expensive to make

That's fact that the iPad mini uses a lower quality screen and smaller battery than the Air, so you can let that argument go. Unless you could come with a "theory" why the iPad mini is cheaper even though it's smaller than the Air?

More equipment is being packed into the iPhone than the iPad mini so my "theory" isn't totally wrong. It doesn't sound like you understand computer components much. I do, that's what I went to school for.

 

[Dmunjal]

But everything you're saying is only a theory. The iPad mini also uses a lower quality screen and dimmer screen than the Air. I believe the battery is also longer on the Air.

This isn't theory. This is the law of supply and demand. With the subsidy, you increase the demand since more people can afford it. A higher demand means a higher price in the market.

I already showed the iPad mini COGS which are the same (or more) as the iPhone despite different materials.

 

[booksbooks]

That's fact that the iPad mini uses a lower quality screen and smaller battery than the Air, so you can let that argument go. Unless you could come with a "theory" why the iPad mini is cheaper even though it's smaller than the Air?

More equipment is being packed into the iPhone than the iPad mini so my "theory" isn't totally wrong. It doesn't sound like you understand computer components much. I do, that's what I went to school for.

You're into a rabbit hole. BOTH the iPad rMini and the iPad Air are cheaper than the iPhone 6 Plus. And the most expensive is the glass/touchscreen. This is much larger in the rMini than the iPhones, with less volume.

Just let it go.

 

[HenryDJP]

You're into a rabbit hole. BOTH the iPad rMini and the iPad Air are cheaper than the iPhone 6 Plus. And the most expensive is the glass/touchscreen. This is much larger in the rMini than the iPhones, with less volume.

Just let it go.

Nah, the iPhone 6 Plus base model isn't much higher than the iPad Air. I bought both. And don't forget man, you started this thread so telling people (ME) to just "let it go" when this is a discussion forum is ridiculous. Don't start at thread of discussion if you expect everyone to agree with you. That's senseless.

 

[booksbooks]

Nah, the iPhone 6 Plus base model isn't much higher than the iPad Air. I bought both. And don't forget man, you started this thread so telling people (ME) to just "let it go" when this is a discussion forum is ridiculous. Don't start at thread of discussion if you expect everyone to agree with you. That's senseless.

Yes, the iPhone 6 Plus is much higher than the iPad Air. One is $629, the other $749, a full $120 more money or $220 more than the rMini. $120 and $220 is substantial. Why is it so much more money...

 

[terraphantm]

Nah, the iPhone 6 Plus base model isn't much higher than the iPad Air. I bought both. And don't forget man, you started this thread so telling people (ME) to just "let it go" when this is a discussion forum is ridiculous. Don't start at thread of discussion if you expect everyone to agree with you. That's senseless.

Base iPhone 6 plus is $120 more than the base iPad air... Hell, the vanilla iPhone 6 is $20 more. I just can't see a technological reason for the 6 and 6 plus to cost more than the iPad mini (let alone the air). All cost estimates indicate the iPads are more expensive to build thanks to their screens.

 

[HenryDJP]

Oh god...

I wonder if we just make a thread that explains the facts of life to people. You realize that they're bartering with you, right? They actually aren't out cash, they're marketing to you. They'll sell those phones off and you think you just got paid $300 for the phone. That's why they don't care about cracked screens and bad batteries. They'll give you a credit on your bill, and then turn around and sell your phone for say $150 or whatever. You get a credit on your bill but they'll be getting their money out of you one way or another with you sucked into a subsidized plan, and you're paying FULL SUBSIDIZED PRICE for your new phone.

They might even make money off of you as a result of this transaction. LOL.

Nice if you feel that way. Nobody is marketing to me. I already signed up with Verizon. I called them to ask if they buy back phones. They said they do and gave me a $300 gift card to use towards Verizon anyway I see fit. I'm perfectly fine with that. Not exactly sure how that's a negative... and at this time I'm starting to wonder why you have a such chip on your shoulder in regards to these carriers and Apple? I'm noticing by many of the replies to your post that hardly anyone seems to have an issue about Apple and carriers as much as you do.

Please do yourself a favor and don't use a cell phone or any cellular communication device because you seem to feel everything is a conspiracy. Sheesh.

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Base iPhone 6 plus is $120 more than the base iPad air... Hell, the vanilla iPhone 6 is $20 more. I just can't see a technological reason for the 6 and 6 plus to cost more than the iPad mini (let alone the air). All cost estimates indicate the iPads are more expensive to build thanks to their screens.

The iPhones have cellular voice/data communications in them. That's just one of the reasons. The iPads only have cellular data systems.

 

[woodekm]

Are we talking about a luxury item?

I think so. It's not gouging when you just want to keep up with the Jones.

 

[terraphantm]

The iPhones have cellular voice/data communications in them. That's just one of the reasons. The iPads only have cellular data systems.

They have the same baseband processors. Meaning the iPads are capable of voice/data communications - they're simply missing the software support (which is trivial with their volume). The screens in all likelihood are more expensive than the cost of implementing voice support

The only reason the iPhones are more expensive is because they can get away with it. Consumers only see the subsidized prices and are already accustomed to paying the monthly fees.

 

[HenryDJP]

They have the same baseband processors. Meaning the iPads are capable of voice/data communications - they're simply missing the software support (which is trivial with their volume). The screens in all likelihood are more expensive than the cost of implementing voice support

The only reason the iPhones are more expensive is because they can get away with it. Consumers only see the subsidized prices and are already accustomed to paying the monthly fees.

Excellent. Thanks much.

 

[booksbooks]

Nice if you feel that way. Nobody is marketing to me. I already signed up with Verizon. I called them to ask if they buy back phones. They said they do and gave me a $300 gift card to use towards Verizon anyway I see fit. I'm perfectly fine with that. Not exactly sure how that's a negative... and at this time I'm starting to wonder why you have a such chip on your shoulder in regards to these carriers and Apple? I'm noticing by many of the replies to your post that hardly anyone seems to have an issue about Apple and carriers as much as you do.

Please do yourself a favor and don't use a cell phone or any cellular communication device because you seem to feel everything is a conspiracy. Sheesh.

----------



The iPhones have cellular voice/data communications in them. That's just one of the reasons. The iPads only have cellular data systems.

I am interested and concerned for every consumer and person in society. I care about quality of life. People are shelling out what adds up to be thousands of dollars over a two year period for a bloody cell phone. A significant number of people, if you read some of the data, struggle with their bill. Yes, we're all responsible but the whole industry is laced with complexity and massive limitations of service that can be argued to set the consumer up to extract more money from them through additional fees.

Governments like in Canada have already begun to crackdown on the industry. In Canada, here is what has happened:

• The CRTC heavily regulates the telecommunciations industry that keeps things in check;
• The system access fee that used to be a tax to the consumer and continued being charged by carriers when the Canadian Government dropped it is finally gone with lawsuits associated;
• Smaller carriers are now getting much better deals on roaming, which they pass on to their customers, thanks to government stepping in;
• The government has blocked buyouts of incumbents buying smaller players that fosters competition and lower pricing and choice for consumers; and
• The government has been more proactive leasing wireless spectrum to new players and making the climate more friendly for newcomers and foreign/domestic investment: less barriers to entry.

All of this has resulted in an improved telecommunications industry. Without such steps and regulations, the larger carriers would continue to abuse their position and we'd be paying absurdly high roaming and monthly plan fees.

The tangible result is that WIND, a relatively new carrier to Canada, allows me to have a plan that is only $35 per month and gives me unlimited data (fair usage applies), unlimited Canadawide calling and texting, voicemail, blah blah.

 

[McCool71]

We're paying more for iPhones than we are any other mainstream phone, in some cases by several hundred dollars

Why is this ok?

It is ok because high price in itself makes a lot of consumers feel like they are getting a more valuable product simply because of the pricing.

Look at almost any forum thread where competing products to whatever Apple might have in the same niche is mentioned in a positive way, and the same argument pops up time and time again:

''You buy brand xxx because you can't afford the best''. There is rarely a discussion or even the faint thought that the other product maybe offering something better - or be better value for money. No, the argument from a lot of people always boils down to Apple being best because of its selected price points, which most of the time is higher than for competing products.

Price is one of Apples main selling points, and in countries where the gap between the rich and the poor is large (not like mine (I live in Norway) where everyone and their grandmother has an iPhone) it also helps Apple from being used by 'uncool' people, strenghtening the feel of being someone special if you have one.

This is largely the same tactics used by several fashion brands, albeit in a different way: They on purpose do not offer a lot of their clothes in sizes larger than for example Large, since they do not want fatties to tarnish their brand. They would sell more if they did, but in the long run (which might not be that long in the fashion world) it would hurt the brand.

 

[logeox]

We as consumers allowed this to happen.

 

[Big Dawg 23]

Like what.

Camera, flash and assemble of those parts.

At the end of the day, Apple and Samsung are for profit companies. If you don't like the cost or feel it's not worth it, then buy a different device. I have owned several Samsung and Apple products. Apple clearly makes a higher quality prodcut and resale of used devices prove that.

 

[booksbooks]

We as consumers allowed this to happen.

Not entirely.

The system access fee tax that carriers continued to charge customers in Canada tricking them into thinking the tax was still in play is one example of the lengths carriers have and will go to to extract money out of you.

This industry requires heavy regulation from the government to protect consumers, and this should be extended realistically to cell phones in terms of the government probing contracts with companies like Apple and seeing the advertising practices and costs consumers have to pay for cell phone service. You cannot delink the cost of a smartphone from cell phone service plans as the two are necessarily interlinked due to the subsidy model and also by virtue of the carrier/supplier relationship.

Do not forget: the entire telecom industry here is pseudo-public. That's because the network infrastructure is effectively owned by, or in some cases at least controlled by, the government. As a result it becomes a matter of public interest in terms of what happens with the industry. This requires regulation in compliance with government policy.

 

[GLS]

This thread is stupid.

In 2004, a Motorola Razr was $500 on a 2 year contract through Cingular. 10 years later, an iPhone---any modern smartphone---is light years more refined, more capable, and cheaper on a 2 year contract. Unlocked Razr's on Ebay were going for almost $700 at that time.

A contract free TMobile iPhone 6 is $650 from Apple's website now.

Point I'm making...phones are now several orders of magnitude more capable than a Razr...yet price is roughly the same. If you want a subsidized device, a modern Android, iPhone...anything..is cheaper than a Razr was 10 years ago.

If you want a cheap smartphone now, you can have one. You can get an iPhone for free with a 2 year contract, if you so choose. Or, you can go grab some Android variant for free from somewhere else. There are choices; no one is forcing anyone to purchase a flagship Android or iPhone.

 

[questionmark32]

You forgot to add the Apple sticker tax

Edit.....forgot we don't get apple stickers anymore

Serious? I got Apple stickers in my 6+ box

 

[booksbooks]

Camera, flash and assemble of those parts.

At the end of the day, Apple and Samsung are for profit companies. If you don't like the cost or feel it's not worth it, then buy a different device. I have owned several Samsung and Apple products. Apple clearly makes a higher quality prodcut and resale of used devices prove that.

You're missing the point by oversimplifying this.

 

[HenryDJP]

I am interested and concerned for every consumer and person in society. I care about quality of life. People are shelling out what adds up to be thousands of dollars over a two year period for a bloody cell phone. A significant number of people, if you read some of the data, struggle with their bill. Yes, we're all responsible but the whole industry is laced with complexity and massive limitations of service that can be argued to set the consumer up to extract more money from them through additional fees.

Yes we are ALL responsible for own destiny. Your point is just getting nowhere. I have never had a problem with my cellphone bill. I'm smart enough to understand what I just bought. If a company (Apple) wants to charge thousands for their phones when they are worth only $5 and someone pays for it it's not Apple's fault. That's on the consumer.

If the consumer wants to get the cheapest cellular plan with almost no MB's for data but turns their phone into a YouTube video player and runs up the bill, that's their own negligence.

I watch this forum everyday here and it just baffles me how people create threads and argue that's it's the company's fault and not their own. It's Apple's fault, it's AT&T's fault, it's Verizon's fault, it's Sprint's fault.

Some of the posts here of people saying their iPhone 6 is bent. They claim they did absolutely NOTHING to cause it bend. They just woke up the next morning and it was bent. Well how is that even possible? Are phones now just magically bending themselves? I saw two people today claim that. Absurd.

The moment someone questions the OP as to why aren't they taking responsibility for anything then they get mad and say "How dare you blame me, da da da da".

Even your post here saying that Verizon was marketing to me about giving me a phone credit. No they weren't. I ordered online and ported my own number online. After I received my iPhone 6 Plus I called Verizon about any deals. It was my choice to switch to Verizon and I chose a plan that works for my budget.

You have to keep in mind that we all have choices. Nobody needs any of these tech toys. It's a want. I grew up without it. There were no cell phones, there was no world wide web and nobody had a personal computer other than the ones we had to learn how to build when I went to school for electronics.


So many people here take responsibility for nothing and I can't respect that.

 

[nikhsub1]

After reading all of this, there is only one thing I have to ask.

Why does the OP feel the need to be such a condescending little douche?

That aside, I believe there may be some realization by folks just how expensive these phones have really been all along. Now that all the carriers want to do away with the 'hidden' subsidy model and move to a more transparent model, folks will see the lunacy in the pricing model. The flipside to this is that iPhones tend to hold their value very well - generally they can be sold for 40% - 50% of their value a year later. I'm not talking about gazelle or these places that reem people, I mean doing the work on ebay or craig's list. Last year I sold my iPhone 5 for $575.00, the year before that my 4s for $550.00.

Point is, the cost is not a throw away purchase like an expensive dinner or renting a car, there is value associated with it that can be turned into real money when you are done with the device. This has to be factored in when compared to other brands which surely don't hold their value as much as Apple products do.

 

[booksbooks]

This thread is stupid.

In 2004, a Motorola Razr was $500 on a 2 year contract through Cingular. 10 years later, an iPhone---any modern smartphone---is light years more refined, more capable, and cheaper on a 2 year contract. Unlocked Razr's on Ebay were going for almost $700 at that time.

A contract free TMobile iPhone 6 is $650 from Apple's website now.

Point I'm making...phones are now several orders of magnitude more capable than a Razr...yet price is roughly the same. If you want a subsidized device, a modern Android, iPhone...anything..is cheaper than a Razr was 10 years ago.

If you want a cheap smartphone now, you can have one. You can get an iPhone for free with a 2 year contract, if you so choose. Or, you can go grab some Android variant for free from somewhere else. There are choices; no one is forcing anyone to purchase a flagship Android or iPhone.

Seriously? Ok, here we go:

YOU SAID: "Unlocked Razr's on Ebay were going for almost $700 at that time."
You read the Engadget article right? They were going for $650, not "almost $700".
THEN YOU SAID: "A contract free TMobile iPhone 6 is $650".

This would make the two phones the same price unlocked. But the problem with your analysis is that the Razr came out in 2004, not 2014. For the time it was a great phone and there wasn't really much else like it. The price quickly fell and it sold on volume, something Motorola didn't expect as it was marketed as a high-end fashion device.

Then you said:

"Point I'm making...phones are now several orders of magnitude more capable than a Razr...yet price is roughly the same."

They are not "roughly the same". The Note 4 starts at $750 and as does the iPhone 6 Plus and can run you up to $950. Yes, on contract the Razr's price was stupid but I'm talking unlocked.

Anyway, this doesn't contribute much to the issue of whether there's any bookdoor dealing going on in the industry when it comes to subsidies and gouging the consumer. Because today, everything is pretty much a "Razr", as the market is flooded with smartphones where things are trending toward a state of perfect competition.

 

[booksbooks]

Yes we are ALL responsible for own destiny. Your point is just getting nowhere. I have never had a problem with my cellphone bill. I'm smart enough to understand what I just bought. If a company (Apple) wants to charge thousands for their phones when they are worth only $5 and someone pays for it it's not Apple's fault. That's on the consumer.

If the consumer wants to get the cheapest cellular plan with almost no MB's for data but turns their phone into a YouTube video player and runs up the bill, that's their own negligence.

I watch this forum everyday here and it just baffles me how people create threads and argue that's it's the company's fault and not their own. It's Apple's fault, it's AT&T's fault, it's Verizon's fault, it's Sprint's fault.

Some of the posts here of people saying their iPhone 6 is bent. They claim they did absolutely NOTHING to cause it bend. They just woke up the next morning and it was bent. Well how is that even possible? Are phones now just magically bending themselves? I saw two people today claim that. Absurd.

The moment someone questions the OP as to why aren't they taking responsibility for anything then they get mad and say "How dare you blame me, da da da da".

Even your post here saying that Verizon was marketing to me about giving me a phone credit. No they weren't. I ordered online and ported my own number online. After I received my iPhone 6 Plus I called Verizon about any deals. It was my choice to switch to Verizon and I chose a plan that works for my budget.

You have to keep in mind that we all have choices. Nobody needs any of these tech toys. It's a want. I grew up without it. There were no cell phones, there was no world wide web and nobody had a personal computer other than the ones we had to learn how to build when I went to school for electronics.


So many people here take responsibility for nothing and I can't respect that.

1. It wasn't the consumers choice to be lied to about a system access fee that continued to be charged to them when the tax was repealed so cell carriers could extract extra profit from people;
2. It wasn't the consumers choice when a cell carrier and device makers continued to profit off of them after a post-subsidized plan without making that explicit to the consumer;
3. It wasn't the consumer's choice when incumbent carriers colluded together to fix roaming prices to make it harder for smaller players to compete who needed to use such infrastructure; and
4. It wasn't the consumer's choice to be stuck on 3 year cell phone plans when in the US and other places there were 2 year plans, etc. And we had big industry players pushing back saying it will hurt consumers, etc. and the exact opposite has happened.

Turns out, the government, lawmakers, and consumers agreed, and they did something about it. And now the industry is much better for it.

And don't expect anyone to believe you weren't aware of the Verizon Device Recycling Program. Regardless, it changes nothing. They bartered with you and they're out no cash. You think you got paid $300 for your phone but you didn't. They'll sell your phone and make money from you accordingly. You are not in the driver's seat with cell carriers.

And if everyone thought like you, nobody would confront that industry can and does unfairly profit from consumers. Nobody would stand up for it. We'd all continue to live our lives ignorant of these things and let it continue. And any of these "toys" that basically are in many ways required to be competitive as a working professional would just be looked at as "toys", and not for what they really are: an essential tool in a person's life today.