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Price points for iPhones do not add up in general.

nikhsub1

nikhsub1

macrumors 68030
Original poster
Jun 19, 2007
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mmmm... jessica.'s beer...
This is not a complaint about subsidized vs. unsubsidized, let's get that out of the way first. There is one huge point that everyone seems to be forgetting or just don't want to discuss. If you guys remember when the original iPhone came out the 4GB was $499 and the 8GB was $599. I remember because I bought one at that price point! 67 days later, Apple cut the price to $299 and $399 respectively. Why? Because they could sell more phones (make a bit less money however) and supplies were (and are) cheaper.

This brings me to iPhone 3G and 3GS. AT&T says that the 'unsubsidized' price of the 3GS phone to be $599 and $699 (16 and 32GB respectively). Now, if we look back in Apple's price point history, they never raise prices on refreshed products... they generally keep them the same price and increase the specs just as they've done to the 3G and now the 3GS. Problem is, if you listen to AT&T they will have you believe their price is $599 and $699 which I believe is utter BS. It is convenient that Apple has nothing to do with the price points because this is controlled by AT&T.

My theory is that if Apple were still selling the iPhones unsubsidized that the price points would still be $299 and $399. And that is RETAIL. If anyone is to blame for these stupid price points it is AT&T.

Anyway, what are your thoughts on the matter? Am I missing something here?
 
299 for a 16gb and 399 for a 32 gb?

There's no reason the iPhone should cost as much as a comparable iPod Touch with less features. Doubly so with the iPhone Dev team offering unlocks and jailbreaks within days of new releases. No one buy the iPod touch.

I can't say I agree with you unless you offer a little bit more logic. We don't know the cost of everything that goes into making the iPhone, but we do know that the unsubsidized pricing they are charging is right in line with other high end smartphones. The HTC Touch Pro is around 600. Best buy lists the unsubsidized price of the Palm Pre as 850 dollars. I don't disagree that there is probably a decent markup on these phones but no single manufacturer (apple) is doing this.
 
nikhsub1 said:
This brings me to iPhone 3G and 3GS. AT&T says that the 'unsubsidized' price of the 3GS phone to be $599 and $699 (16 and 32GB respectively). Now, if we look back in Apple's price point history, they never raise prices on refreshed products... they generally keep them the same price and increase the specs just as they've done to the 3G and now the 3GS. Problem is, if you listen to AT&T they will have you believe their price is $599 and $699 which I believe is utter BS. It is convenient that Apple has nothing to do with the price points because this is controlled by AT&T.
Click to expand...

The first gen iphone has revenue sharing --- so Apple was getting $400 for the handset plus maybe $10 a month for 24 months. So the real price is indeed around $700.
 
The unsubsidized price is $600/$700, that is about what they cost everywhere that sells them without a contract (most countries in Europe, for example). So it has nothing to do with AT&T.
 
dukebound85 said:
imo thats insanely high
Click to expand...

You should try adding up what the iPhone costs you over two years and comparing how much it costs us. I payed that for the iPhone but my plan is only $25 a month and I'm not bound to a contract.

That is about the price of any subsidized smartphone, people just don't realize it because they're used to the subsidized price. But that price is only a "down payment" on your phone, you end up paying a lot more than that.
 
samab said:
The first gen iphone has revenue sharing --- so Apple was getting $400 for the handset plus maybe $10 a month for 24 months. So the real price is indeed around $700.
Click to expand...
Actually, Apple receive closer to $15 per month per phone on the "revenue" sharing agreement for the $20 iPhone data plan

Makes you wonder why they did not make it harder to unlock / jailbroke....

Dave
 
anjinhamarota said:
You should try adding up what the iPhone costs you over two years and comparing how much it costs us. I payed that for the iPhone but my plan is only $25 a month and I'm not bound to a contract.

That is about the price of any subsidized smartphone, people just don't realize it because they're used to the subsidized price. But that price is only a "down payment" on your phone, you end up paying a lot more than that.
Click to expand...

oh i know as im paying it lol

just when i think of other items, like laptops, game consoles, whatever these prices are relatively high
 
If APPLE was selling iPhones for less than $299/$399 to AT&T, and AT&T was selling unsubsidized iPhones to the consumer for $599/$699, would APPLE just sit there and let AT&T rip APPLE product users off almost like a robber?

I know AT&T is ripping iPhone users off with certain fees and with lack of certain services, but your claim is just can't be true.
 
dukebound85 said:
oh i know as im paying it lol

just when i think of other items, like laptops, game consoles, whatever these prices are relatively high
Click to expand...

You still pay those prices, just not upfront. And at least here we have total freedom on what we pay for cell phone service. If I was around wi-fi all day and didn't need data on my iPhone I could pay only $13 a month for service. If I, for some reason, don't use my iPhone for a month I don't pay anything.
 
coolwater said:
If APPLE was selling iPhones for less than $299/$399 to AT&T, and AT&T was selling unsubsidized iPhones to the consumer for $599/$699, would APPLE just sit there and let AT&T rip APPLE product users off almost like a robber?

I know AT&T is ripping iPhone users off with certain fees and with lack of certain services, but your claim is just can't be true.
Click to expand...
This is why I asked the question, I didn't say I knew, I put out all the facts I had, turns out I was missing a key one...
 
dave006 said:
Makes you wonder why they did not make it harder to unlock / jailbroke....
Click to expand...

Geohotz and the others involved are rather talented people, especially the guys on the iPhone Dev Team.

Many , including myself, believe it was an inside job with help from none other than the Woz himself. He would have more than enough need-to-know access to figure out where the proper modifications need to happen to make a unbreakable unlock (which apparently has been followed in to 3.0 according to their blog).
 
Just for shts and giggles, I started an upgrade request through the Apple store, and this is the price point for me as an AT&T customer. (As you can see, I am not eligible for the full discount yet, but they are willing to make me a discount offer).



"As a valued AT&T customer, AT&T can offer you an early iPhone upgrade with a new 2-yr commitment and an $18 upgrade fee. You may qualify for a standard iPhone upgrade on 10/01/2010.

* $299.00* — 8GB iPhone 3G (black)
* $399.00* — 16GB iPhone 3G S (black or white)
* $499.00* — 32GB iPhone 3G S (black or white)"

IMO, this is still too much for a cell phone, but I guess it really depends on each individual's needs/wants/desires. For those tech-whores out there, (a category of which I am a part), it might be ok. Apple knows that they have a superior product, and plenty of research goes into where they set their price point. Just look at their computers, which routinely sell for almost two times as much as the average PC... and they get that much all day long. If you read the fine print at the bottom of the Apple store page, it calls out the $699/$799 price points for each of the 3G S models.
http://store.apple.com/us/browse/home/shop_iphone/family/iphone?mco=MTE2OTU
 
What the OP is missing is a basic understanding of capitalism. What it costs (however you define cost) to make a product sets the minimum selling price. What it actually sells for is what people will pay for it.
 
When Apple lowered the price of the iPhone to $399, they also discontinued the 4GB. The 4GB was never $299. It was $499 and then it was discontinued.
 
BigWill said:
IMO, this is still too much for a cell phone...
Click to expand...

Whether you pay $300 or $500 upfront the iPhone's price is still $600/$700 and you do end up paying that (and more) through your contract. The only difference is that you might pay a bigger or smaller "down-payment". But don't kid yourselves, you do pay $600/$700 for the iPhone, it doesn't matter how you spin it.
 
anjinhamarota said:
Whether you pay $300 or $500 upfront the iPhone's price is still $600/$700 and you do end up paying that (and more) through your contract. The only difference is that you might pay a bigger or smaller "down-payment". But don't kid yourselves, you do pay $600/$700 for the iPhone, it doesn't matter how you spin it.
Click to expand...

You really can't look at it that way. Your plan cost is the same even after the contract is up. It's not like your plan price is reduced once you get through your two years. In other words, anyone who pays $600 for their phone ends up paying a heck of a lot more than I do when I get mine for $199.
 
The General said:
When Apple lowered the price of the iPhone to $399, they also discontinued the 4GB. The 4GB was never $299. It was $499 and then it was discontinued.
Click to expand...

I bought a 4 GB for $299 from an Apple store in October 2007. Two weeks later I bought an 8 GB for $399. I don't think they discontinued the 4 GB until February of 2008 when they released the 16 GB first gen.
 
BigWill said:
You really can't look at it that way. Your plan cost is the same even after the contract is up. It's not like your plan price is reduced once you get through your two years. In other words, anyone who pays $600 for their phone ends up paying a heck of a lot more than I do when I get mine for $199.
Click to expand...

I bought mine without a contract for $600. But my plan is only $25. Do the math, you end up paying a lot more than I do.
 
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