Well yeah, no one can compete because Apple is the only company that controls every aspect of their hardware and software.
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Tim Cook Says Apple Products 'Change the World' and Aren't Priced Just 'For the Rich'
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Well yeah, no one can compete because Apple is the only company that controls every aspect of their hardware and software.
Of course the incomes of people in those countries didn't suddenly go up. That's not the issue. But the reality is that the purchasing power of their currency - of the income they receive denominated in that currency - went down when it came to buying from other nations which use different currencies. There's no way around that reality.
Businesses selling into Canada, which don't have a lot of offsetting expenses in Canada, have to take the money they get from there - in whatever currency they receive there - and convert it to the currencies of the places where they have expenses. They can't ignore that reality. If you pay me in seashells and the people I pay (out of what you pay me) want or need to be paid in gems, I have to convert the seashells you gave me to gems. That's not an accounting trick. It's a basic reality of how life works and in particular of how trade works.
Also, did the price of the iPhone (comparable base models) go from 650 to 899 CAD overnight? I thought it went from 749 to 899 CAD, going from the iPhone 6 to the iPhone 6S? Either way, what that means is that for a time (prior to the price change) the price in Canada for comparable iPhones was less than their price in the United States.
This line of discussion is really a bit of a "tightrope" from the perspective that it is okay for companies to choose to sell to different customer segments, such as premium products. However, we don't generally see the likes of Ferrari trying to disingenuously rationalize that they're selling vehicles for the slightly-above-Average Joe.
The customer demographic research on Apple consumers is that their household income is IIRC ~$120K, which we need to keep reminding ourselves is that is ~2x the Median Household Income (USA)...as such, this customer base is already better off financially than 80% of all Americans (and on a worldwide scale, even higher).
Point of reference: Tanzania's per capita GDP has soared recently, to now be $880/yr ... that's $2.41/day.
And while pedantically that's more than £1/day, it suffices to illustrate the point that a $1000 product is more than what some percentage of the world's population make in a year - - but this does whiplash back to the above point, which is that for-profit corporations are under no particular obligation to not sell to premium products (etc); the philosophical question we're really pushing up against is what do they _say_ about their products and if this is really a (reasonably) honest claim.
Just as the "£1/day" was hyperbola, so too has the prospects of spending ONLY a "couple of grand" on a Mac. Case in point:
$3800? Oh, so then about HALF of what a "Trash Can" Mac Pro would cost me today to supersede my now-ancient "Cheesegrater" Mac Pros with virtually zero actual upgrades. Sounds like a damn good deal from Dell!
And herein lies the rub with technology - - progress marches on and the costs for hardware-centric commodities of RAM, storage, CPU, etc ... invariably provide us with better stuff at lower prices even after inflation, so why is it that an "iMac Pro" is going to be $5K retail when companies like Dell are already selling hardware that's arguably equal or better at substantially lower retail prices? Sure, we can point to how OS X is a successful example of product differentiation vs MS-Windows, as nice as OS X is, it is pushing things to claim that it is "worth an extra $2000-per-machine" nice.
A fair enough point in that "rich" has a flexible definition. Personally, this is why I like to address this factor instead as multiples of the US Median Household Income (approx. $55K/yr): the Apple customer demographic is that their household is ~2x the US Median ... and that's roughly the "Top 20%" instead of the "Top 1%" we hear in politics. FWIW for point of comparison, the demographic for the average Porsche owner is a shade under $300K (~3%). Unfortunately, I don't have comparable numbers for BMW 5-Series owners (Tim) or Aston Martin DB9's (Ive) or Italian/Exotics (Eddy Cue & Phil Schiller).
But that's a contradiction of a sort too - - if a product is becoming such an integral part of more & more peoples' lives, then its no longer as much of a 'premium niche' product.
A fair enough sounding point (1/52th of $55K) until we recall that a lot of basic living expenses have functional floors (food, housing, taxes, retirement savings, etc) before we consider what fraction of income remains for more discretionary items. All in all, that's why the smartphone market tends to skew to Android for lower incomes, because there are product offerings which start at well below Apple's ~$650 minimum, and 57% of Americans today don't have enough cash reserves to cover an unexpected $500 expense (car repair, appliance, etc).
-hh
even if it goes up to 2.000, that does not have anything to do with "cost"
my opinion is, Apple is always cheaper in the end.
yes, overnight. I regularly look at new devices, because I'm a geek. and one week it was $650 (unlocked based off Apple.ca) then the next week it was $899. there was no gradual change.
You do not have to buy the iPhone X. You can buy the iPhone 8 at the normal price.
Maybe the iPhone X will be a one off to celebrate the tenth anniversary.
No, you seem to be confused. How did what I say somehow equal all active iOS devices are $1000 iPhones? You seem to have taken the post a bit to seriously and now you’re treating me like an idiot. And the post just wouldn’t be the same if it read “Next day: announces a $1000+ smartphone, while also offering models priced from $399 to $969.”One billion people have a $1000+ smartphone? That's incredible!
You seem to be confused. Cook said that Apple don't just make products for the rich, not that Apple don't make any very expensive products.
This is why, for example, lots of students have Apple laptops, but don't necessarily have a $3,000+ Mac.
But hey - why let common sense get in the way of a flippant cliche?
No, I just don't like lazy posters. Your unfounded claim that the CEO of Leica has never been asked about profit margins, is like claiming the earth is not round and then wanting others to waste time disproving it. But since we all have more important things to discuss...
Okay, perhaps you just don't know anything about Leica. It almost went under because a previous CEO wanted to stick to film only. It needed to rebound, and it needed to get its margins back up.
In this interview, when asked about getting the best margin, he states that he knows his product is premium.
In a interview reported with Handelsblatt, he brags that "the profitability of the producer of cameras and lenses has also grown. "We have a double-digit EBIT margin, and we are investing eleven percent of our sales in research and development."
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Where said "normal price" was just announced: the base model's cost is up +8%:
iPhone 8: $699 (7 was $649)
8 plus is $799 (7 plus was $769)
Apparently, in both cases, the base storage was tweaked to make them less readily comparable: the 7's were 32GB whereas the 8's are 64GB.
As I said before, it takes a lot of work to free yourself from the Apple ecosystem. This is especially true of the Photos app and the DRM-laden iTunes videos for which there is not a player on Linux and Android. Not exactly competitive.
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It's not really surprising that Apple "pegged their prices at an arbitrary number" of US dollars since they're a US company.
But that bit about monetary inflation is interesting because Canada isn't the only country with that problem - the US has had that problem ever since 1971.
Did the Canadian dollar actually dive 40%? I haven't been watching the USD-CAD conversion rates for a little while, so I don't know about the decline in the value of the Canadian dollar.
Yep... it's a little more difficult to compare directly.
I'm just amazed at such a hefty lineup of iPhones at the following starting prices:
$999 - iPhone X - 64GB
$799 - iPhone 8 Plus - 64GB
$699 - iPhone 8 - 64GB
$669 - iPhone 7 Plus - 64GB
$549 - iPhone 7 - 64GB
$549 - iPhone 6s Plus - 64GB
$449 - iPhone 6s - 64GB
$349 - iPhone SE - 32GB
It's the same sorta price reductions on older models that we've seen before: last year's models are $100 cheaper... two-year old models are $200 cheaper. The older models also start at 64GB too!
I would think that even the bottom iPhones on that list will still be powerful enough to last a while. All iPhones sold today have at least the A9 processor and 2GB of RAM.
I'm using a 6S at the moment... and I've never thought it was "slow"
The A9 processor in the 6S and SE is still a beast. To be able to get that kind of power at $349-$549... that's new territory for Apple.
The iPhone has never been "cheap"... but this lineup certainly covers a wider range of prices.
You certainly implied it, right where you said:
"Next day: announces $1000+ smartphone"
as some sort of counter to Cook's comment about Apple not just being for the rich.
You're right - it wouldn't have been the same. One would be a sarcastic, misplaced attempt to suggest Cook was wrong to have said what he did, the other would simply be restating what Cook had said.
I can't have taken it that seriously, or I wouldn't have ended the post with a
No, it went from par to about 30%, but has since recovered to about 22% difference. (1 CAD will buy 78c US this week).
the prices however have not adjusted. the iPhone 8 is now priced at 929 CAD, and the iPhone X is starting at $1319 CAD
So Apple is still charging an additional $100 above exchange on the X, and about $80 on the 8. Which would put the Apple conversion rate at 32% on these new devices, or essentially 68c on the CAD dollar.
I disagree, “announces a $1000 smartphone” implies it is a new price for an iPhone. “announces another $1000 smartphone” would have definitely implied it. Still think your looking to far into it, it was just a light-hearted comment.You certainly implied it, right where you said:
"Next day: announces $1000+ smartphone"
as some sort of counter to Cook's comment about Apple not just being for the rich.
You're right - it wouldn't have been the same. One would be a sarcastic, misplaced attempt to suggest Cook was wrong to have said what he did, the other would simply be restating what Cook had said.
I can't have taken it that seriously, or I wouldn't have ended the post with a
if you're so concerned with spin, maybe consider whether or not you're spinning prior to worrying about if others are doing so.
?
it's quite literally the topic of the thread you're posting in
so it turn out that they had a few different models at different prices, not a bad selling strategy, at least they did't named iPhone Pro
If Apple's average customer's household income is just twice that of the U.S. median, then Apple is selling to quite a lot of people who aren't - by any reasonable consideration - rich. If that's the average, then many people buying Apple products have a lower household income. And I wouldn't even consider someone with twice the average U.S. income to be rich; I think most people wouldn't.
At any rate, when it comes to Apple's customers, we aren't talking about the same kind of narrow range of people that, e.g., Ferrari or Gucci are selling to. We're talking about a large swath of people representing the mainstream of America (and some other countries). Though as a group they skew toward being a little better off financially than the average, plenty among them are not. The point being, it's a fair observation that Apple's products aren't priced only for the rich.
I wouldn't consider smartphones, or even iPhones themselves, to be niche products. And I wasn't suggesting that smartphones as a category are premium products. But even though as a category they have become ubiquitous and play an integral role in modern life, there are premium products within that category. That's the case with many product categories. With many of the things we use everyday, there are product offerings on the less expensive and/or lower quality end of the spectrum and offerings on the more expensive and/or higher quality end of the spectrum.
Sure, that's an aspect of the consideration which to me goes without saying - having $50,000 in annual income doesn't, speaking practically, mean having $50,000 which you can spend on whatever you want. Some amount of income is needed to pay for basic necessities. But beyond that, we decide how best (based on a multitude of factors) to spend incremental income. The more we have, the more we get to spend. Do we spend some of it on a little bit better place to live, a little bit better vehicle, a little bit better food, a little bit better clothes, entertainment, taking a vacation - all sorts of stuff. The median household income, at least in many areas and in many people's situations, allows them to spend on more than just the bare necessities - even if it only means spending on a little bit better version of some of those necessities.
My point is that, when considering where to spend incremental income, it makes sense that for many some of it gets spent on their smartphone as it plays such an important role in their lives. For many they get quite a bit of bang for their buck, so to speak, when it comes to how (extra) money spent on a smartphone improves their lives (based on their own situations and priorities) relative to how much that same money spent elsewhere would. When we compare smartphones to other things we buy, and consider how integral they respectively are in our lives, the amount of money that many spend on smartphones doesn't seem out of bonds. A smartphone, which we might use constantly (and for all manner of things) for 2, 3, or 4 years, might cost the equivalent of 2 car payments.
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Fair enough. When did that price change occur, if you recall?
Also, is this report wrong? According to it the price of the base iPhone increased to 749 CAD when the iPhone 6 was introduced (in September 2014?). Then in March 2015 it was increased to 839 CAD. Then when the iPhone 6S was introduced in September 2015 its base price was 899 CAD.
http://www.iphoneincanada.ca/news/canada-iphone-6s-preorder/
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At 1 CAD to 0.78 USD, which is what you're using and about where the average over the last 3 months, the base iPhone 8 and iPhone X are priced in Canada about $25 and $30 above where they're priced in the United States (699 USD and 999 USD).
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I realize paying $1,000 for a cell phone sounds expensive in isolation.
But how many people pay for their phone through their cell phone carrier? How many people have never paid the full retail price for a phone?
You're gonna have a monthly cell phone bill for the rest of your life... so why not roll the cost of the phone into the bill you're gonna pay anyway?
My current iPhone had a retail price of $850. But it worked out to $35 a month over two years for the phone itself... plus around $70 a month for the service.
I'm fine with that.
The $1,000 iPhone will be around $42 a month for the phone portion of my bill. I'm fine with that too. It's an extra $7 a month for this new phone.
I don't consider that "going into debt" for an expensive toy since I'll be paying monthly to the cell carrier anyway.
Perhaps if carriers demanded an entire year or two worth of payments all at once... then it'd be a different story.
You know when you do that and work the math, they never give it to you for the same price. The 'financing' price is built in to the monthly cost. You usually end up paying about an extra 100.00 more for the phone by doing it month to month thru the carrier. Even Koodo which is Canada's cheaply version of Telus, their 'tab' ends up costing you much more than the phone actually cost in the end. But hey, you get it now and for nothing down so people go for it. I won't do it that way ever again.
so looking back at this thread now that the phone prices have been released.
I was right with the 999 pricing of the iPhone X, but i was seriously wrong about the iPhone 8. Where I figured they'd be able to save some costs and tried to differentiate the iPhone 8 by lowering the price by $50, they did the opposite and raised it $50
This is pretty opposite and counter tim cook's claims. Raising prices constantly and saying "not just for the rich" tends to feel disingenuous. LIke he was trying to "Spin" before the prices were released.
the aWatch pricing is very reasonable. So when that was announced I figured that was a good sign for the rest of the day. Then the Apple TV at 179 made me spit out my coffee and wonder what they were thinking. But now $50 price increase across the iPhone 8 as well is a bit rich.
I was right with the 999 pricing of the iPhone X, but i was seriously wrong about the iPhone 8. Where I figured they'd be able to save some costs and tried to differentiate the iPhone 8 by lowering the price by $50, they did the opposite and raised it $50
This is pretty opposite and counter tim cook's claims. Raising prices constantly and saying "not just for the rich" tends to feel disingenuous. LIke he was trying to "Spin" before the prices were released.
the aWatch pricing is very reasonable. So when that was announced I figured that was a good sign for the rest of the day. Then the Apple TV at 179 made me spit out my coffee and wonder what they were thinking. But now $50 price increase across the iPhone 8 as well is a bit rich.
That may be the case in Canada, but in the U.S. the major carriers don't add financing costs if you pay for the device in installments rather than in full.
An iPhone which costs, e.g., $649.99 from Verizon will be sold for 24 monthly payments of $27.08.
That's not how it's presented on the Verizon website, for instance.
Retail Price: $969.99
or
$40.41 /mo. $0 Down (for qualified customers) for 24 months; 0% APR
If they're lying... then they'd be in trouble.
And remember... the carrier doesn't need to make money on the phone itself anyway.
You're also paying them $80/month for the service too.
So they'll let you pay the price of the phone spread out over 24 months... because they're making their money on the actual service.
Cell carriers aren't really in the business of selling phones... they're a service company. And you can't have service if you don't have a phone.
That's not how it's presented on the Verizon website, for instance.
Retail Price: $969.99
or
$40.41 /mo. $0 Down (for qualified customers) for 24 months; 0% APR
If they're lying... then they'd be in trouble.
And remember... the carrier doesn't need to make money on the phone itself anyway.
You're also paying them $80/month for the service too.
So they'll let you pay the price of the phone spread out over 24 months... because they're making their money on the actual service.
Cell carriers aren't really in the business of selling phones... they're a service company. And you can't have service if you don't have a phone.
There are other ways like only certain plans are available etc. Those plans cost more. Trust me they still make their money lol
1% of 7 Billion is 70 million... Apple sold "The iPhone 6 and 6 Plus have helped Apple sell an astounding 74.5 million iPhones during the first quarter of the company's fiscal 2015 year" so the numbers are about right. Maybe the 1% is not correct, but it's a small fraction of the world that can actually afford such devices. 'm sure people pick up 2nd and 3rd hand phones as well