Why do people think the iPhone is "overpriced"?

[redman042]

1. People just want it to be cheaper, and whining makes them feel good.
2. Saying Apple products are overpriced is a very popular troll against Apple that has been in play since not long after they were founded. It's tradition.
3. Some people think the lack of a removable battery, MicroSD slot, OLED display, gesture scrolling, eyeball recognition, curved edge display, or whatever gimmick of the week means it should be sold cheaper.

 

[sunking101]

1. People just want it to be cheaper, and whining makes them feel good.
2. Saying Apple products are overpriced is a very popular troll against Apple that has been in play since not long after they were founded. It's tradition.
3. Some people think the lack of a removable battery, MicroSD slot, OLED display, gesture scrolling, eyeball recognition, curved edge display, or whatever gimmick of the week means it should be sold cheaper.

1) It arguably should be cheaper.
2) They're very expensive, whether they're overpriced is subjective.
3) The removable battery thing that seemingly all manufacturers have adopted is nothing more than built in obsolescence. Sure the iPhone battery is more replaceable than most (for instance the HTC One has to be destroyed to get to the battery) but in my mind there is no reasonable argument against having a sliding metal cover to get to the battery. The missing Micro SD slot is a blatant method for gaining more money from storage upgrade sales. Oh and OLED displays aren't gimmicks...

 

[Qbnkelt]

Probably. All we hear from US guys is how they're $800 phones, but in the UK they're $1000+ phones. In Canada and some parts of Eastern Europe they're prohibitively expensive.

I understand that. However that's due to import fees, VAT, etc. There are usually added fees to imported goods.

The same Irish wool sweater that I can get in Galway for 60 euros will cost me 160 bucks on Gaelsong. Same with electronics.

Would I love for my phone to have cost me 550 bucks? Yah. But that's not going to happen.

 

[warrior2000]

...with more storage space, better screens, more RAM and arguably better cameras etc. Plus they come down in price the following 12 months. I'm not saying that they're better, merely that the parts cost more and that they could be considered better value for money.

better screen? slightly better maybe.
More RAM. Does not matter since its still slower and laggy.
Better cameras? about the same.

But Apple had to pay big bucks for R&D on TouchID, Multi-touch, A-series chips, and iOS. Samsung pays close to zero for those things.

With Apple you are paying extra for a far better and more secure OS, guaranteed updates, Retail support, and better resale.

 

[warrior2000]

I do think the iPhone is expensive considering it's made in China like all the other phones and products these days. I do value apples build quality and support over other brands, but I do believe Apple could charge less and still make tons of profit.

why the hell would they lower the price when they can barely keep up with demand?

 

[warrior2000]

Android can be 'cheaper' than iPhone for several reasons:

1. Android makers are DESPERATE. They are willing to make close to zero profit.
2. Android OS and Google services are free for phone makers. This is supported by data mining you to death. Don't kid yourself. It costs billions for Apple to develop and maintain iOS and all their services - Maps, App store, ect.
3. Android has such crappy resale value they can't charge too much for new phones

So if you don't mind owning a phone from a company that is inches from bankruptcy, spies on your and sells your data, and expect to get $0 resale then its fine to get an Android and save a few bucks.

 

[warrior2000]

Do you really think Android manufacturers don't spend time on the OS, drivers etc as well? There's lots of work required to get each release working on every phone model and carrier. Lots of manufacturers also add their own software (whether good or not) too.

For me it's not that I cannot afford an Apple phone, it's just that I find their prices so insulting I choose not to. Apple has plenty of products that I consider worth their price, the latest batch of iPhones just isn't it.

You can't afford it. Deal with it.

 

[warrior2000]

Exactly. Most people can afford to buy a mobile phone outright, either by going short one month or by saving up. Getting it on a carrier contract is even easier. A Ferrari or luxury penthouse apartment maybe not...
The argument that people who criticise Apple's prices can't afford their products is lame.

Wrong. In many countries you have to buy it alright. So its $1000+

Even in the USA there is a difference between paying $0 for a new Android or $200 for an iPhone. Some people can't afford the $200.

 

[bchreng]

Do you really think Android manufacturers don't spend time on the OS, drivers etc as well? There's lots of work required to get each release working on every phone model and carrier. Lots of manufacturers also add their own software (whether good or not) too.

For me it's not that I cannot afford an Apple phone, it's just that I find their prices so insulting I choose not to. Apple has plenty of products that I consider worth their price, the latest batch of iPhones just isn't it.

That's the problem. Between the manufacturers and carriers, a lot of time has to be spent on updates. Because of this, they're often few and far in-between, especially with older models.

But you get more customer service and support; including seemingly updates for at least 4 years.

This sums up why I choose owning an iPhone over an Android device.

 

[warrior2000]

However you choose to package it, Apple products are very expensive. They sell exceedingly well so why change the business model, but one look at their bank account should tell you that despite all their R&D and premium customer service costs etc they still rake in more moolah than you can shake a stick at. Their profits are obscene. They have a monopoly because if you want iOS they're the only game in town. We all convince ourselves that we get value for money, and yes their products are very good, but they absolutely see us coming.

Give me a break.

Apple's profit margins were only 22% last year. Lower than Google. Lower than Microsoft.

You think the cost of a phone is simply the materials. WRONG. Apple spends more on R&D, customer service, OS updates, App Store, Maps, retail stores, than anyone else. Those stuff ain't free. While companies like Samsung just copy Apple's innovations, Apple has to actually pay BIG BUCKS to develop it themself.

So if you think Apple's profit margin of 22% is obscene then Google/Microsoft is also obscene.

 

[bchreng]

1) It arguably should be cheaper.
2) They're very expensive, whether they're overpriced is subjective.
3) The removable battery thing that seemingly all manufacturers have adopted is nothing more than built in obsolescence. Sure the iPhone battery is more replaceable than most (for instance the HTC One has to be destroyed to get to the battery) but in my mind there is no reasonable argument against having a sliding metal cover to get to the battery. The missing Micro SD slot is a blatant method for gaining more money from storage upgrade sales. Oh and OLED displays aren't gimmicks...

The nonremovable battery and absence of a micro SD slot are probably money grabs, but the reasoning behind them seem legit. Not having to deal with a cover allows for a more tightly knit and slimmer shell and, from my experience, adding external memory can seriously bog down performance.

 

[Sgt.ThroatPunch]

Isn't it the same cost as any other flagship phone (USD)?

When you look at the cost of an iPad, the phone does seem overpriced. I don't care about the "price" of miniaturization or the extra chip needed. They make it for about 2 bills and sell it for 8.

 

[warrior2000]

1) It arguably should be cheaper.
2) They're very expensive, whether they're overpriced is subjective.
3) The removable battery thing that seemingly all manufacturers have adopted is nothing more than built in obsolescence. Sure the iPhone battery is more replaceable than most (for instance the HTC One has to be destroyed to get to the battery) but in my mind there is no reasonable argument against having a sliding metal cover to get to the battery. The missing Micro SD slot is a blatant method for gaining more money from storage upgrade sales. Oh and OLED displays aren't gimmicks...

SD cards slow down performance. Also pose a possible security danger. SD cards also are notrious for having a short life.

Removable battery wastes space and makes the phone thicker and larger. Also removable battery also make the entire phone shell weaker.

 

[warrior2000]

When you look at the cost of an iPad, the phone does seem overpriced. I don't care about the "price" of miniaturization or the extra chip needed. They make it for about 2 bills and sell it for 8.

bull crap.

Apples profit margin last year was 22%

 

[sunking101]

Give me a break.

Apple's profit margins were only 22% last year. Lower than Google. Lower than Microsoft.

You think the cost of a phone is simply the materials. WRONG. Apple spends more on R&D, customer service, OS updates, App Store, Maps, retail stores, than anyone else. Those stuff ain't free. While companies like Samsung just copy Apple's innovations, Apple has to actually pay BIG BUCKS to develop it themself.

So if you think Apple's profit margin of 22% is obscene then Google/Microsoft is also obscene.

I dare say that their profit margin is more than 22% but if they themselves claim that, and provide statistical proof to back it up then who am I to doubt it. I haven't said once that their products are overpriced, or that they aren't worth the money. I have merely said that they're very expensive. OK so I have alluded to the possibility that they're overpriced but their worth to someone is subjective. I buy iPhones despite their high price and not because of it.

 

[warrior2000]

I dare say that their profit margin is more than 22% but if they themselves claim that, and provide statistical proof to back it up then who am I to doubt it. I haven't said once that their products are overpriced, or that they aren't worth the money. I have merely said that they're very expensive. OK so I have alluded to the possibility that they're overpriced but their worth to someone is subjective. I buy iPhones despite their high price and not because of it.

Here is the link, scroll to the bottom which shows last years results.
http://www.apple.com/pr/library/2014/10/20Apple-Reports-Fourth-Quarter-Results.html

$182 billion in revenue
$39 billion in profit
21% profit margin

 

[sunking101]

Here is the link, scroll to the bottom which shows last years results.
http://www.apple.com/pr/library/2014/10/20Apple-Reports-Fourth-Quarter-Results.html

$182 billion in revenue
$39 billion in profit
21% profit margin

Where's the figure for iPhone profit? It doesn't appear to be broken down, but I have only flicked over it. Mind you, Macs and iPads are overpriced, I mean very expensive too....

 

[warrior2000]

Where's the figure for iPhone profit? It doesn't appear to be broken down, but I have only flicked over it. Mind you, Macs and iPads are overpriced, I mean very expensive too....

iPhone is about 70% of revenue and profit. So company wide profit margin is pretty much the same as the iPhone.

iPad/Mac maybe a bit lower and services higher. Either way the iPhone is about 25% profit margin max.

People forget about all the expenses after gross margin such as:

1. Taxes. Apple's tax rate is 25%
2. R&D
3. OS costs
4. Costs for services - Maps, messages, App store, AppleMusic, ect
5. Retail stores
6. Admin staff, legal fees, currency costs
7. Warranty costs (in the billions)
8. Free software costs - iOS, Notes, iWork, News, photo, movie, ext

 

[Sgt.ThroatPunch]

$182 billion in revenue
$39 billion in profit
21% profit margin

Am I correct in saying that you are referencing the entire company's product portfolio instead of specifically the iPhone?

 

[warrior2000]

As a whole? The iPhone 6 profit margin was 69%

Am I correct in saying that you are referencing the entire company's product portfolio instead of specifically the iPhone?

22% is the company wide profit margin.

That 69% figure is total bullsheet. Its statistically impossible for the iPhone to have 69% profit margins while the whole company is at 22%.

iPhone is about 60-70% of revenue.
If the iPhone has 69% profit margins it means the rest of Apple is selling products at a massive loss.

Total Apple revenue was $182 billion.
iPhone revenue was $100 billion
$100 billion x 69% = $69 billion in profit just for iPhone

Problem is Apple recorded only $39 billion in profit.
So for iPhone to have 69% profit margin it would mean Mac/iPad/Services lost $30 billion last year. No way.

 

[CEmajr]

Expensive, yes
Overpriced, no. You're getting the best product on the market.

 

[warrior2000]

Expensive, yes
Overpriced, no. You're getting the best product on the market.

People here are expecting to get a BMW for Kia prices.

You want the best? You pay a bit more. Thats true for ANY product.

 

[bchreng]

People here are expecting to get a BMW for Kia prices.

You want the best? You pay a bit more. Thats true for ANY product.

The K900 has BMW squarely in its sights.

 

[sunking101]

People here are expecting to get a BMW for Kia prices.

You want the best? You pay a bit more. Thats true for ANY product.

I agree. However, when many customers have to exchange their phones umpteen times due to out of the box faults and when they then spend most of the year firmly entrenched in an iOS beta program, the prices seem a little high. Perfection costs, absolutely, but semi-perfection shouldn't cost quite so much.

 

[Sgt.ThroatPunch]

People here are expecting to get a BMW for Kia prices.

You want the best? You pay a bit more. Thats true for ANY product.

The only difference is Apple has about 25X more cash on hand than BMW.