8 ms·

For an average consumer, are those things worth hundreds of dollars? I know the value, but I work in tech and spend tons of time digging into hardware as a hob

by hajile 5y ago

For an average consumer, are those things worth hundreds of dollars? I know the value, but I work in tech and spend tons of time digging into hardware as a hobby. Camera matters to some, but most of the rest are pretty bare features compared to the $200 (20%) increase in price. When I list all the things I can buy with $200, where do these features rank in comparison to those other things? I'm blessed with a good job, so I can afford the luxury. I was poor when I was younger and I definitely wouldn't be spending that for those features. $220 out the door would be almost 20 hours of work at $15/hr (after taxes).

deleted 5y ago
[deleted]
dangus 5y ago
I think that's a valid question. Objectively, no, those features are not necessarily worth the literal dollar value the price segmentation is commanding. But, there are some other points to consider: - It seems like most people in the USA who buy mid to high-end phones finance their phones from carriers, and pay 0% interest for it. So, what the consumer is really considering is "is the Pro model worth $5-8/month more to me?" or "Would I pay $200 extra over 2-3 years?" and I think that's an easier justification for many people. - Carriers offer a number of financial incentives and discounts in exchange for loyalty (there aren't any contracts anymore, but there are "bill credits" that function the same way). - You did use $15/hour as an example, which around the median US salary, but Pro models are not intended to be the top selling model for the median earner in the US. They're marketed at, I would guess, the top 20% of earners, which lines up with the Pro/Pro Max models only making up 20% of iPhone sales in 2020 [1]. That would mean that Apple would expect individuals buying the iPhone Pro models to make about $75,000/year or greater. About 10% of the population makes a 6-figure salary. [2] - Smartphones are the primary communication and computing device for many if not most people. I think that there are many people who see the smartphone as the most valuable possession they own. [1] https://www.knowyourmobile.com/phones/most-popular-iphone-model/ https://www.knowyourmobile.com/phones/most-popular-iphone-mo... [2] https://en.wikipedia.org/wiki/Personal_income_in_the_United_States https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
- nicoburns 5y ago
  > So, what the consumer is really considering is "is the Pro model worth $5-8/month more to me?" or "Would I pay $200 extra over 2-3 years?" and I think that's an easier justification for many people. I find this attitude bizarre. It's not any cheaper! I guess it can make a difference if you have cash flow issues. But an iPhone Pro is decidedly a luxury, so if you have cash flow issues then you probably just shouldn't buy one?
  - faeriechangling 5y ago
    >an iPhone Pro is decidedly a luxury With my ADHD issues, the combination of >The generally long battery of the ProMax in particular (I had issue with my phone dying midday, forgetting to charge) >iOS 15 Focus mode >UWB wireless trackers >The most effective ANC in any wireless headphones >Apple watch for notifications, timers, etc Are all very helpful and the promax is just good for pragmatic and practical reasons. I would definitely say it's a high priced item but I wouldn’t frame it as a luxury. I fundamentally see my phone as assistive technology, it can’t die on me, Apple makes their longest lasting phone their most expensive.
  - dangus 5y ago
    Your point about cash flow is absolutely why this happens. I think that a lot of people operate on monthly budgets, not total cost. It's not really about the total price paid, it's about whether the item is affordable on a monthly basis. I agree with your philosophy where a lot of people are way too willing to let easy financing change their budget. I also assume that free financing would inflate prices (e.g.: cars and homes). Would the iPhone and other flagship phones cost $700-1000 if financing wasn't so common? I don't think so, personally. The other aspect of this is that, mathematically, $200 paid now is objectively worth more than $200 paid over time thanks to the time value of money. [1] Let's say we're at a "normal" 2% rate of inflation. If I buy a $30,000 car today with 0% financing over 6 years, by the time I hit year 6 my monthly payment is representing a 12% lower value (inflation compounded yearly) than when I started. Technically, even if you have $1000 in cash to buy your new iPhone, you "should" just finance it and invest/save/use the rest elsewhere. [1] https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp

by hajile 5y ago

deleted 5y ago

[deleted]

dangus 5y ago

I think that's a valid question. Objectively, no, those features are not necessarily worth the literal dollar value the price segmentation is commanding. But, there are some other points to consider: - It seems like most people in the USA who buy mid to high-end phones finance their phones from carriers, and pay 0% interest for it. So, what the consumer is really considering is "is the Pro model worth $5-8/month more to me?" or "Would I pay $200 extra over 2-3 years?" and I think that's an easier justification for many people. - Carriers offer a number of financial incentives and discounts in exchange for loyalty (there aren't any contracts anymore, but there are "bill credits" that function the same way). - You did use $15/hour as an example, which around the median US salary, but Pro models are not intended to be the top selling model for the median earner in the US. They're marketed at, I would guess, the top 20% of earners, which lines up with the Pro/Pro Max models only making up 20% of iPhone sales in 2020 [1]. That would mean that Apple would expect individuals buying the iPhone Pro models to make about $75,000/year or greater. About 10% of the population makes a 6-figure salary. [2] - Smartphones are the primary communication and computing device for many if not most people. I think that there are many people who see the smartphone as the most valuable possession they own. [1] https://www.knowyourmobile.com/phones/most-popular-iphone-model/ https://www.knowyourmobile.com/phones/most-popular-iphone-mo... [2] https://en.wikipedia.org/wiki/Personal_income_in_the_United_States https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

nicoburns 5y ago
> So, what the consumer is really considering is "is the Pro model worth $5-8/month more to me?" or "Would I pay $200 extra over 2-3 years?" and I think that's an easier justification for many people. I find this attitude bizarre. It's not any cheaper! I guess it can make a difference if you have cash flow issues. But an iPhone Pro is decidedly a luxury, so if you have cash flow issues then you probably just shouldn't buy one?
- faeriechangling 5y ago
  >an iPhone Pro is decidedly a luxury With my ADHD issues, the combination of >The generally long battery of the ProMax in particular (I had issue with my phone dying midday, forgetting to charge) >iOS 15 Focus mode >UWB wireless trackers >The most effective ANC in any wireless headphones >Apple watch for notifications, timers, etc Are all very helpful and the promax is just good for pragmatic and practical reasons. I would definitely say it's a high priced item but I wouldn’t frame it as a luxury. I fundamentally see my phone as assistive technology, it can’t die on me, Apple makes their longest lasting phone their most expensive.
- dangus 5y ago
  Your point about cash flow is absolutely why this happens. I think that a lot of people operate on monthly budgets, not total cost. It's not really about the total price paid, it's about whether the item is affordable on a monthly basis. I agree with your philosophy where a lot of people are way too willing to let easy financing change their budget. I also assume that free financing would inflate prices (e.g.: cars and homes). Would the iPhone and other flagship phones cost $700-1000 if financing wasn't so common? I don't think so, personally. The other aspect of this is that, mathematically, $200 paid now is objectively worth more than $200 paid over time thanks to the time value of money. [1] Let's say we're at a "normal" 2% rate of inflation. If I buy a $30,000 car today with 0% financing over 6 years, by the time I hit year 6 my monthly payment is representing a 12% lower value (inflation compounded yearly) than when I started. Technically, even if you have $1000 in cash to buy your new iPhone, you "should" just finance it and invest/save/use the rest elsewhere. [1] https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp