4 ms·

Interesting though, what if Apple gave away the hardware for free? It's a crazy business model, but if they can take 30% cut from everything it might work.

• reaperducer 5y ago
  what if Apple gave away the hardware for free? It's a crazy business model, It's been done before. Remember in the 90's when thousands (millions?) of people got free computers in exchange for allowing banner ads at the top of their screens?
• FredPret 5y ago
  They’d be forgoing a huge upfront cash injection when the user pays for the device. And by targeting consumers that can shell out circa $1k for a premium device without too much bother, they not only collect a high-income user base, but create an aura of exclusivity around their devices and ecosystem. Giving hoi polloi free iPhones would throw a spanner in these highly profitable works
• smoldesu 5y ago
  While it's not as crazy, the video game console industry operates on negative cash flow in the hardware sales department. Consoles that cost $500 at retail cost $525 to build, and the Nintendo Switch was famously being shipped at a loss of nearly $50 per console sold. It's not an entirely foreign concept, but it is definitely lucrative. Apple could defend their 30% cut if they reduced the price of their hardware, but I get the feeling that their business relies on pumping those profit margins as fat as the customer can tolerate...