Why is iPad cheaper than iPhone?

[Geckotek]

I'm not sure where logic comes into your argument. It's a pretty simple concept that when only one product meets your needs it is more valuable than products that don't.

Not at all. The values are static. Why would it suddenly change? Did they add some functionality all of a sudden? No..it's the same product. THAT is logic. Some variable value that you mention is not logic at all.

Does a Lambo suddenly gain value in my eyes becuase a Kia Rio sucks? Nope. But it still does not hold the same value to me as the price on the sticker. But perhaps I still buy one someday because I have to win a race or something. Doesn't change the value of that car in my eyes, but my needs may have changed.

Value is determined by the buyer. They may or may not make a buying decision entirely on value though. There are many other factors to be considered when making a purchase.

It also has more capability than most netbooks priced slightly higher. You know. The capabilities that caused you to buy it instead of the cheaper netbook.

A different set of features that I desired, yes. Computing capability? (which is what I was focusing on) No

So, by your argument, a $299 netbook that you don't want is just as valuable to you as a $499 iPad that you do want. But the iPad isn't worth $499. Even though it was worth $499 of your money. But it's not worth $499. Even though you thought it was at the time of your purchase. Do you not see the gaps in your reasoning?

Who mentioned a $299 netbook? I certainly didn't. And no, I don't because what you just said was not my reasoning at all. It just happened that there were some other reasons that drove me to buy the iPad....reasons other than value.

I'm done discussing this.

 

[CHSeifert]

This in combination:

1. iPhone is still more popular, thus Apple can push the price up

2. Smaller parts in iPhone are more expensive

3. Better retina display and digicam in iPhone are more expensive

 

[BaldiMac]

Not at all. The values are static. Why would it suddenly change? Did they add some functionality all of a sudden? No..it's the same product. THAT is logic. Some variable value that you mention is not logic at all.

Values are static? What in the world?! Have you even a basic knowledge of economics? Supply and Demand? A bottle of water is a lot more valuable if it's the only water source in the middle of the desert than if you are sitting at home with easy access to tap water.

Does a Lambo suddenly gain value in my eyes becuase a Kia Rio sucks? Nope. But it still does not hold the same value to me as the price on the sticker. But perhaps I still buy one someday because I have to win a race or something. Doesn't change the value of that car in my eyes, but my needs may have changed.

Value is what something is worth. It isn't some number that you get to make up based on a subset of it's features.

Value is determined by the buyer. They may or may not make a buying decision entirely on value though. There are many other factors to be considered when making a purchase.

Value is determined by the buyer. In a transaction conducted without duress, the value is exactly equal to what you are willing to exchange for it.

A different set of features that I desired, yes. Computing capability? (which is what I was focusing on) No

Why would you only consider some features and not others to determine value?

Who mentioned a $299 netbook? I certainly didn't.

Sure you did:

My original target price was $299 based on the fact that it had less capability that most netbooks priced slightly higher.

And no, I don't because what you just said was not my reasoning at all. It just happened that there were some other reasons that drove me to buy the iPad....reasons other than value.

Those other reasons... they are part of the value of the iPad to you. Why eliminate them?

 

[kdarling]

This in combination:

1. iPhone is still more popular, thus Apple can push the price up

Yes

2. Smaller parts in iPhone are more expensive

3. Better retina display and digicam in iPhone are more expensive

Nope. As pointed out before, the smaller iPhone 4 specific parts cost LESS. For example:

iPad2

LCD and Touchscreen = $127 (!!) ... probably half that is the touch
Battery = $25
Case = ~$25

iPhone4

LCD and Touchscreen = $39
Battery = $6
Case = ~$10

That's $177 vs $55 right there.

--

PS. There are probably a couple of reasons why the larger touchscreen costs so much. Modern ones use overlaid circuit traces made of indium tin oxide (ITO), which is a unique transparent substance that conducts electricity very well. ITO is brittle, so it might be difficult to get good yields on large screens.

Indium itself is a rare earth element which comes almost completely from mines in China, and that supply is predicted to run out in 2020, so it's going to get very expensive soon. Everyone is looking for substitutes, but they're even more expensive at this point. Shifting to camera based touch detection (such as HP uses in their Touchsmart series) might become popular.

 

[msb3079]

Simple. Because they can.

 

[staeit]

You are adding additional meaning to my statement by saying that the value of an Apple product and the value of the competing product are the same. I never said that. (you must be a w....nevermind)

OBVIOUSLY, I found enough additional value in the Apple product to purchase it. However, I am saying that the additional value doesn't exactly match the additional cost. But I made the deicision to do it anyway for my own reasons. No need to discuss further.

That's not necessarily true. Perhaps it is for you...but I don't agree.

BaldiMac's argument is based on the fact that people part with their money only if the agreed upon amount is less or equal to the amount the customer is willing to pay. Geckotek, you seem to imply that you are willing to pay more than what you believe it is worth. BaldiMac (correctly IMO) disagrees with you.

Let me use an example. I bought a $4 drink at Second Cup today. I enjoyed it, it tasted very good, but I think it was ridiculously overpriced. Probably should have been $2.50, but I still paid for it. Even though I believe it was overpriced, the fact of the matter is my money spoke on behalf of me. I parted with my $4 even though I claim it was worth less than that. The fact that I claim it wasn't worth that much is completely irrelevant - the only relevant thing is that I paid money for it. This implies that I believe it was worth it. Consumers have the power to control what money they spend on what items, and thus as a consumer if you purchase something, you are undeniably stating that you believe it is worth the value you paid (or more, and you are therefore experiencing consumer surplus)... BY DEFINITION.

You can try to claim all you want that it didn't have some features (wasn't as usable as a netbook in some regards), but as spoken by the money you spent on it, the features the iPad DOES have were enough or more than enough for you to purchase the iPad instead.

 

[Geckotek]

But what you say is wrong. My perceived value is relevant. It goes toward long term customer satisfaction.

Argue rules of economics all you like. I don't give a crap. My perception is what is ultimately the only important factor to me. I could care less what the rules of economics "say" is true. Those rules don't change my perception at all. I believe this is the case for most customers. I understand the whole voting with your $ bit, but it isn't the only factor worth considering. But you guys are looking from a strictly business perspective....I am looking at it from my perspective.

Baldimac. I won't be able to see any of your posts going forward so you may as well drop it. Tired of your arguing.

 

[BaldiMac]

But what you say is wrong. My perceived value is relevant. It goes toward long term customer satisfaction. Argue rules of economics all you like. I don't give a crap. My perception is what is ultimately the only important factor to me. I could care less what the rules of economics "say" is true. Those rules don't change my perception at all. I believe this is the case for most customers. I understand the whole voting with your $ bit, but it isn't the only factor worth considering. But you guys are looking from a strictly business perspective....I am looking at it from my perspective.

You are certainly entitled to your perception. But you are not entitled to making up your own definition of a word in a rational discussion. Especially if you are not going to take the time to pass on that definition.

Baldimac. I won't be able to see any of your posts going forward so you may as well drop it. Tired of your arguing.

What a strange comment considering this is a discussion forum that you come to voluntarily. At least you got the last word in your own mind.

 

[staeit]

But what you say is wrong. My perceived value is relevant. It goes toward long term customer satisfaction.

Argue rules of economics all you like. I don't give a crap. My perception is what is ultimately the only important factor to me. I could care less what the rules of economics "say" is true. Those rules don't change my perception at all. I believe this is the case for most customers. I understand the whole voting with your $ bit, but it isn't the only factor worth considering. But you guys are looking from a strictly business perspective....I am looking at it from my perspective.

Baldimac. I won't be able to see any of your posts going forward so you may as well drop it. Tired of your arguing.

I didn't say perceived value is unimportant - it's completely relevant. You're happy with what you paid, ergo you believe you got your value (money's worth) out of the purchase. It's not a business perspective, it's just the way things work. I guess you don't have to believe/understand it, but that doesn't mean it's untrue. I'm not arguing "rules" of economics, just facts about how this stuff works. Does your perception tell you that you made a good purchase? From what I gather, you believe that you did make a good purchase.

 

[Geckotek]

You're happy with what you paid

Incorrect assumption.

Does your perception tell you that you made a good purchase? From what I gather, you believe that you did make a good purchase.

No, but I made the best purchase I could at the time. I honestly would have waited for a better value if other circumstances hadn't pushed me to buy sooner.

Edit: I enjoy my iPad, but I don't get $500 worth of use out of it. But yes, I knew the limitations when I purchased it. It was a compromise I made. But similar to a Starbucks coffee, I don't like the taste, I think it's overpriced, but sometimes they are the only choice or at least the most convenient choice. (Please don't compare this to water in the desert) Based on the rule of economics, does this make them more valuable? I guess so, but does it make me happy to drink Starbucks? Nope.

 

[ESPN]

You are certainly entitled to your perception. But you are not entitled to making up your own definition of a word in a rational discussion. Especially if you are not going to take the time to pass on that definition.



What a strange comment considering this is a discussion forum that you come to voluntarily. At least you got the last word in your own mind.

After reading all the comments in this thread.....

If you don't mind what was your major in college?

 

[BaldiMac]

After reading all the comments in this thread.....

If you don't mind what was your major in college?

No offense, but I prefer not to post personal information.

 

[MacBH928]

A decade later, I still wonder why my large screen iPad costs less than my small screen iphone. As for people saying iphone has smaller parts, I think they share the same parts anyhow. I guess the iPhone camera is more expensive.

 

[Robbosan]

A decade later, I still wonder why my large screen iPad costs less than my small screen iphone. As for people saying iphone has smaller parts, I think they share the same parts anyhow. I guess the iPhone camera is more expensive.

You really must be bored lol, 2011 thread resurrection 😳

 

[WNYX]

I haven't given it much though. I figure it's because not everyone needs an iPad (or tab) but everyone needs an iPhone (or cell phone). I'll also compare it to how you can purchase a 2-liter of soda for 99¢ but a 24 pack of soda is almost $10. The smaller form factor makes is more convenient.

 

[MacBH928]

You really must be bored lol, 2011 thread resurrection 😳

I was surprised that the iPad Air 4 was cheaper than the iPhone Mini 12, I searched for an answer and this came up.

 

[rui no onna]

A decade later, I still wonder why my large screen iPad costs less than my small screen iphone. As for people saying iphone has smaller parts, I think they share the same parts anyhow. I guess the iPhone camera is more expensive.

Because the market has already shown it's willing to bear that price for phones. Iirc, Apple's profit margins on iPhones are higher compared to iPads.

Besides, smartphone purchases tend to be subsidized by 24- to 30-month 0% APR installment plans. Most would look at a $100-200 price increase for iPad as outright cash while a $100-200 increase on iPhone is often viewed in terms of "just $3-8 more per month".

 

[steelhauler34]

Simple a phone is much more of a must have item and therefore will bare a higher price.

 

[MacBH928]

Because the market has already shown it's willing to bear that price for phones. Iirc, Apple's profit margins on iPhones are higher compared to iPads.

Besides, smartphone purchases tend to be subsidized by 24- to 30-month 0% APR installment plans. Most would look at a $100-200 price increase for iPad as outright cash while a $100-200 increase on iPhone is often viewed in terms of "just $3-8 more per month".

I don't know of any other product in the world that is basically the same, or actually better since it has the larger screen, yet cheaper in price. Again I will say this that today iphone might be more expensive because of the cameras or the faceid notch which I think are more advanced and expensive, but as thread shows...it has always been this way.

 

[ian87w]

I don't know of any other product in the world that is basically the same, or actually better since it has the larger screen, yet cheaper in price. Again I will say this that today iphone might be more expensive because of the cameras or the faceid notch which I think are more advanced and expensive, but as thread shows...it has always been this way.

iPhones have more hardware, eg the taptic engine. iPads don't have those.
Also, iPhone has the hardware AND licenses and regulatory certifications needed for the phone functionality on the cellular radios. Those things do add up to the cost. iPads don't, and cellular iPads are only for data.