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Especially given that Apple has significantly raised prices on new phones over the last few years already. I'm no economist, but there must be a limit to how mu
by save_ferris 7y ago
Especially given that Apple has significantly raised prices on new phones over the last few years already. I'm no economist, but there must be a limit to how much Apple can keep raising prices while still maintaining the same or similar revenue.
- Retric 7y agoThis actually reduces the impact of higher construction costs. If a 1000$ phone with a 300$ profit margin needs say 3 hours of labor to create it’s not that important if the labor is 2$/hour or 20$/hour. Further, higher construction costs would quickly push automation which is almost competitive at China’s labor rates.
- jdsully 7y agoIt does if Apple wants to keep growing their profit margin. Its the changes that matter to wall street, not the overall number.
- ninth_ant 7y agoRespectfully, I think you fundamentally misunderstand how companies approach these issues if you think the labour rated you mention don’t matter. Labour costs are certainly not the only thing that matters, but even the $56 per unit you mention is deeply significant and motivating.
- Retric 7y agoApple clearly cares about their costs. My point is labor cost is vastly less important than for example long term supply chain disruptions. Moving to another country where it costs even 10c more per phone is not going to happen. However, if they need to chose between higher costs and being unable to manufacture any phones for 8 months they would be willing to eat much higher costs.