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399$ is a low price. It is not the lowest it could be, sure, and Apple will indeed never lower their margins to chase volume. But like they did with the SE, th

399$ is a low price. It is not the lowest it could be, sure, and Apple will indeed never lower their margins to chase volume. But like they did with the SE, they will lower their parts costs to chase volume. Like they did here, by keeping the same iPhone production lines that built the iPhone 8 going (I'd presume it would be the same production lines that built their phones all the way back to the iPhone 6).

AnthonyMouse 6y ago
$399 is not a low price. $50 is a low price. $250 is a medium price. $399 is a medium-high price, but that's as low as Apple goes because they don't want to cannibalize sales of their very high price models. > But like they did with the SE, they will lower their parts costs to chase volume. This has very little to do with their parts cost. Their problem is that smartphones are increasingly becoming a low margin commodity because the existing hardware is "good enough" and many people would rather save hundreds of dollars than have a phone which is marginally faster in a way they can barely notice. So the price of Android phones goes down over time and on some level they have to compete with that. But that's true independent of their costs. If Android phone prices get lower and Apple's production costs stay the same, they have to lower prices at the expense of margins or they'll start losing volume to Android. If Android phone prices stay the same and Apple's costs go down, nothing is making them sell for a lower price, so they just get to enjoy higher margins. In theory there is an optimal sale price which maximizes profits and changing unit costs can affect what it is, but it isn't even guaranteed to be lower when margins are higher. Apple's brand is as a luxury product. If they lowered prices too much at the low end for any reason, that impairs exclusivity and their ability to extract very high margins at the high end.
- philistine 6y ago
  You don’t get to give an opinion on what’s the numerical value of a low price without any facts to back you up and then deny me doing the same. That’s preposterous.

AnthonyMouse 6y ago

$399 is not a low price. $50 is a low price. $250 is a medium price. $399 is a medium-high price, but that's as low as Apple goes because they don't want to cannibalize sales of their very high price models. > But like they did with the SE, they will lower their parts costs to chase volume. This has very little to do with their parts cost. Their problem is that smartphones are increasingly becoming a low margin commodity because the existing hardware is "good enough" and many people would rather save hundreds of dollars than have a phone which is marginally faster in a way they can barely notice. So the price of Android phones goes down over time and on some level they have to compete with that. But that's true independent of their costs. If Android phone prices get lower and Apple's production costs stay the same, they have to lower prices at the expense of margins or they'll start losing volume to Android. If Android phone prices stay the same and Apple's costs go down, nothing is making them sell for a lower price, so they just get to enjoy higher margins. In theory there is an optimal sale price which maximizes profits and changing unit costs can affect what it is, but it isn't even guaranteed to be lower when margins are higher. Apple's brand is as a luxury product. If they lowered prices too much at the low end for any reason, that impairs exclusivity and their ability to extract very high margins at the high end.

philistine 6y ago
You don’t get to give an opinion on what’s the numerical value of a low price without any facts to back you up and then deny me doing the same. That’s preposterous.