Tim Cook Says Apple Products 'Change the World' and Aren't Priced Just 'For the Rich'

[tipoo]

"Well it's not high margin. I wouldn't use that word."


Gross Profit Margin (Quarterly) of 38.51%...That's decidedly high for tech, only Intel and sometimes Nvidia play in that field. Sure if you look at clothing or something, you'll find much higher margins, but also for much cheaper products.

Is there an iPad for under 300? The 2017 ipad is 329 and the Mini is 400, what is he talking about? I guess the Mini 4 from the refurb store, the 329 iPad isn't there yet.

Still waiting on rMBP pricing to return to normal though...

 

[LordVic]

I think you're all missing the point. I bought my last iPhone (6s) on the "old" carrier model; few hundred bucks up front and a new 2 year contract. That is not an option anymore, so instead I have to drop the full cost up front or else pay way, way more by using the carrier financing (which I would never do.)

I'm not poor, but I'm not fantastically rich, either. This means that even if I can drop $1000 on something I don't need, I can only do this so many times in any given period (roughly 2 months, in my case.) So 6 times a year I can buy an iPhone unit of toys. The question is, paying up front, do I actually want a thousand dollar phone more than anything else? The answer I find myself reaching is, no, not really. When an iPhone cost me 4 or 5 hundred dollars I definitely saw the value, but now it is effectively double that. What used to be a reasonable impulse buy is now 2 months of discretionary spending, or else trimming expenses and actually feeling the cost as a reduction in quality of life. Even if the new iPhone were very good, I seriously doubt it would be twice as good as the one I have now. The value proposition just isn't there for me. I'm betting I'm not alone in that thinking. This is partly a result of the end of carrier subsidies and partly the inflation of the actual cost. Taken together, I don't think iPhone sales are going to keep up with historical levels, although that isn't to say they aren't going to sell a lot.

This is how I feel with the comments and pricing. at $650, it was maybe a month or two of savings and putting aside with little impact to the rest of my disposable income.

at potentially $1500, I have to seriously question it. For $1500, the opportunity cost becomes real. There's a lot I can do with that money so that now it's not "hey I feel like buying a new phone and putting aside some money one month", now it's "I want a new phone, I need to play saving 4-5 months in advance, and likely give up ____________ purchase that I also want"

 

[OllyW]

They have models that carriers offer on discount or that stores like Best Buy and Target have phenomenal deals to purchase. No, they are not the latest and greatest iPhones, but they ARE iPhones and plenty of people buy them and enjoy them because they suit their needs and their budgets.

And when the next iOS upgrade slows them to crawling pace they come onto MacRumors to ask for advice and get slaughtered by the owners of the latest & greatest iPhones for being foolish and buying a product based on older technology.

 

[FrenchRoasted]

If you buy a new iPhone once every 3 or 4 years, then they are a good value for the money. As far as the mac mini... don't know how to relate it to this post, but it needs to be mentioned because WE WANT A NEW MAC MINI!

 

[bunnicula]

Not priced for the rich. Hmmm ok. Certainly not priced for the poor.

Serious question: who prices major electronics of any kind "for the poor?" Nobody! You can go into an appliance department and the only really "budget" models of refrigerator (which we all need if we have a house and like our food not to get spoiled) are really just the older versions that suck power and are repackaged in prettier case. They're not cutting edge refrigeration tech. We have an LG that pulls almost no power whatsoever, but it's only 2 years old. If you look at the tags on the cheapo models, you see that they pull way more power.

So, no... nobody makes stuff for poor people. Period. They assume poor folks will buy old models on sale, refurbs, scratch and dent, or off Craigslist.

 

[deany]

Go back and actually see what Apple charged for the Macintosh, Lisa, etc. There's a reason Windows has the largest market share. Apple has been charging a "premium," it's their business decision, and noting is wrong with that.
But please, only for the rich? Do you think a $400 iPhone SE or 2017 iPad are too expensive? Get real.
[doublepost=1505148364][/doublepost]
The question is "Does Apple only sell a $1k iPhone?"
The answer is no.

To be fair apples less expensive iPhone 6S & SE are 2 years old, and if my '14 iPhone 6 is anything to go by will be like walking through treacle next year.

I think you could replace my £1000 dollar question with £700.

 

[itsmilo]

well he is the CEO, do you expect him to tell the truth when it comes to the products he is trying to sell?

 

[OldSchoolMacGuy]

You see a lot of poor people with them. Then again you see a lot of poor people with a $70k Lincoln Navigator sitting on $15k worth of rims. Doesn't mean they can afford it or should have purchased it.

Most people make horrid choices with their money and buy more than they can afford, which is why the US nation credit card debt is more than $1 trillion.

 

[LordVic]

Serious question: who prices major electronics of any kind "for the poor?" Nobody! You can go into an appliance department and the only really "budget" models of refrigerator (which we all need if we have a house and like our food not to get spoiled) are really just the older versions that suck power and are repackaged in prettier case. They're not cutting edge refrigeration tech. We have an LG that pulls almost no power whatsoever, but it's only 2 years old. If you look at the tags on the cheapo models, you see that they pull way more power.

So, no... nobody makes stuff for poor people. Period. They assume poor folks will buy old models on sale, refurbs, scratch and dent, or off Craigslist.

There are plenty of products out there that are geared directly towards low income and low cost options. just because you've never shopped for them, doesn't mean they don't exist.

 

[timswim78]

Which iPad model is under $300? When I look at the store, the least expensive iPad looks to be $329.
https://www.apple.com/ipad/compare/

 

[OldSchoolMacGuy]

Tim is out of touch with the average family household then.

The numbers would tend to support that even a large percentage of lower incomes still spend their money on iPhones, even if they can't really afford them

http://www.pewinternet.org/files/old-media/7D0F36D85E384C379AFA58707C5B1592.jpg

 

[bunnicula]

And when the next iOS upgrade slows them to crawling pace they come onto MacRumors to ask for advice and get slaughtered by the owners of the latest & greatest iPhones for being foolish and buying a product based on older technology.

Well, is that the people who bought the phone at fault or MR members who are jerks?

We have some older family members who have older phones. My inlaws and my grandma in law have 5c/5s phones. They know not to upgrade to the new OS and they don't really need it. No complaints. They'll probably get some newer phones this round from us (the 6s and 6 SE models we're upgrading from... my 7 plus and my son's 7 plus will get sold) and my inlaws will then move up a little on OS, but not to iOS 11 on those. Nope.

It helps them to get these phones from us. They're on a budget and phones aren't their top priority. My FIL's is his golf game, even though he loves gadgets and would probably dig my 7 plus.

 

[576316]

Next joke, Timmy. Stop with the garbage marketing spiel. Does he believe the crap coming out of his mouth? Tell me about Apple products being for everyone, and then explain why iOS 11 has definitely slowed my iPhone 7 Plus.

Every year they run the measly Back to School program under the guise of a ‘deal’ and yet, as a student, I don’t know many of my peers who can afford Apple products with the kind of finance a student typically has. Laughable.

 

[deany]

I think you're all missing the point. I bought my last iPhone (6s) on the "old" carrier model; few hundred bucks up front and a new 2 year contract. That is not an option anymore, so instead I have to drop the full cost up front or else pay way, way more by using the carrier financing (which I would never do.)

I'm not poor, but I'm not fantastically rich, either. This means that even if I can drop $1000 on something I don't need, I can only do this so many times in any given period (roughly 2 months, in my case.) So 6 times a year I can buy an iPhone unit of toys. The question is, paying up front, do I actually want a thousand dollar phone more than anything else? The answer I find myself reaching is, no, not really. When an iPhone cost me 4 or 5 hundred dollars I definitely saw the value, but now it is effectively double that. What used to be a reasonable impulse buy is now 2 months of discretionary spending, or else trimming expenses and actually feeling the cost as a reduction in quality of life. Even if the new iPhone were very good, I seriously doubt it would be twice as good as the one I have now. The value proposition just isn't there for me. I'm betting I'm not alone in that thinking. This is partly a result of the end of carrier subsidies and partly the inflation of the actual cost. Taken together, I don't think iPhone sales are going to keep up with historical levels, although that isn't to say they aren't going to sell a lot.

Totally agree, iPhone since 2007 and expect (used to) a £500 price point.
My iPhone 1st gen was £169 from memory.
So £169 to £1000 in 10 years is unexceptable in my view.

 

[ck2875]

It's the entitlement generation. These are the same people that thinks 99c a month of icloud is too expensive.

My iCloud Rant: I just wish I could pay annually instead of the monthly billings. It used to be annual, so it's annoying seeing those 3.99 (200gb) charges every month. So yeah, since that is my biggest worry about iCloud atm, entitlement gen. is probably a good descriptor for me, because I don't really have a justification for wanting it annually other than I don't want to receive the email receipt every month.

 

[576316]

MR members who are jerks?

And Bingo was his name, oh.

 

[bunnicula]

The numbers would tend to support that even a large percentage of lower incomes still spend their money on iPhones, even if they can't really afford them

http://www.pewinternet.org/files/old-media/7D0F36D85E384C379AFA58707C5B1592.jpg

The numbers don't tell us if they bought off Craigslist, got the phone for Christmas, or it's their work phone, though.

 

[kdarling]

Well it's not high margin. I wouldn't use that word.

Except in quarterly calls, where you brag about margins.

A quarter trillion dollars in the bank tells anyone with a brain that your primary motive is profit.

Which is okay, but stop pretending otherwise.

There's a lot of companies that have much higher margins.

Not phone and computer making companies, Tim.

 

[mmomega]

It's the entitlement generation. These are the same people that thinks 99c a month of icloud is too expensive.

I had a discussion with my nephew who says he isn't entitled.

It took me a while to figure it out but people in my generation are creating this.
Us late30 to 40 somethings were so determined to remove "the struggle" from our children and family we forget that "the struggle" is what got us where we are.
So by trying to help we're ***** it up.
Now when I have a discussion with my kids or nephew and nieces, I'm an jerk because I'm trying to hold them back, lol. Sometimes you want to hug them other times you want to slap them and say wake up kid, that struggle bus is coming when you least expect it.

 

[python0704]

Why does Apple always make stupid statements like this when their ridiculous prices are questioned? Phil responded with something along the lines of we're paying for the experience, not the product. Whatever that means.

We are paying for the experience of wake up at 3am ET and find out the item we want is sold out at 3:01am ET.

 

[bunnicula]

There are plenty of products out there that are geared directly towards low income and low cost options. just because you've never shopped for them, doesn't mean they don't exist.

My son works in appliance sales. These "geared toward" models are old tech in a new package. So, yes... you are right in a way. But, did Apple not do the same when they took the Series 2 and created the Series 1 AW that was cheaper with less options?

Yes... not everyone needs a smart watch, but they did their part to reach out to people who might be looking for the most affordable AW model. Did the same with the SE models of iPhones. It is being done. Just not with flagship products. Flagship implies "the very best thing we can create" and who is aiming for people near the poverty line with a flagship product in the electronics space? Nobody.

 

[DanielDD]

Tim Cook needs to get out of San Francisco and New York more often and check the wages of real people outside major cities.
I live in a small town in Europe (read: the continent with the highest standard of living) and I have yet to see AirPods, the new MacBook Pros, and iPad pros in the wild

 

[satchmo]

Maybe the diaper business, but I'm not sure there are very many tech companies with higher profit margins than Apple.

 

[Mr. Dee]

You have to be exaggerating about people living on £1 a day. I get your sentiment tho but Tim Cook actually comes from a modest back ground and not a rich one. When you think about it Apple products really aren't that expensive for example spending a couple of grand on a Mac that will last you many years doesn't work out that much really, the next iPhone will be accompanied by the iPhone X but don't forget that there will be a cheaper 8 and 8 Plus.

Clearly you didn't read what I wrote. I said, most of his "Adult" life. Coming from a modest background doesn't have anything to do with this. Tim Cook worked at IBM from 1982 to 1994. Which means, he started there when he was 22. Considering he is college educated and has an advanced STEM degree, he might have come from a humble background, but he didn't remain in it long. Michael Jackson came from a modest background, sleeping in a 1 bed room with 8 siblings. Yet, he spent $6 million dollars in 1 day at age 45.

Steve Jobs also came from a modest background and he spoke proudly of it in interviews, describing his father as the salt of the earth. He also lived modestly, not owning furniture and sleeping on only a mattress (partly because had a difficulty time choosing furniture he liked). That didn't stop him from buying a 90 million dollar private jet, or owning a Mercedes or taking regular trips to Hawaii or purchasing a mansion in Memphis when recovering from cancer.

As for countries living on $1 per day, well, some are $1.90 per day, but that does not make it any better:
https://en.wikipedia.org/wiki/List_of_countries_by_percentage_of_population_living_in_poverty

Again, the fact that you think I am exaggerating, is an example of how out of touch some of us can be with what happens in other parts of the world. Maybe its me, but I think deeply about these things. From the children who sometimes have to mine for the precious metals that go into my iPhone, to the assembly line worker in Shenzen, China.

 

[Arkanok]

Right Tim. Apple products aren’t just for the super rich, because every average person can afford the cheapest 15” Apple laptop at a measly $3199.99 (Canadian).