3 ms·

you're making a whole lot of assumptions there. I'm not sure all of them pass the test of reality. 1- How about the Nexus 7. it sells for 200 $, built by anoth

by sami36 14y ago

you're making a whole lot of assumptions there. I'm not sure all of them pass the test of reality. 1- How about the Nexus 7. it sells for 200 $, built by another vendor. There are no carriers in that equation, is it also being sold at a loss or near break-even ? 2- How big of a margin do you need before you deem a business profitable. AAPL has margins in the 40~45%, I don't know about Samsung but the've just released quarterly results indicating record profits. if a business operates at 7% profit margins, would you describe them as pursuing a loss leader strategy ? countless public companies are doing just fine with those margins. What if it's just high time in this stabilizing/ somewhat mature business for the very fat operating margins to come down. 3- the 649 $ price point makes it impossible to have competition because nobody (or very few) would pay that for a handset, thus the carrier/ subsidy model longevity. WHAT IF that 299/349 $ price is just the sweet spot that is needed to unleash true competition between devices without the interference of carriers & Google were simply blindsided by the success of the Nexus 4. 4-How about the fact that the Nexus devices come without skinning. don't underestimate the cost that goes into that exercise (however misguided, in my opinion.) It also indirectly lowers the cost of the device by putting less pressure on choosing (powerful) hardware components sue to the extra-lean nature of the OS.

2muchcoffeeman 14y ago
http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufacturing-cost-design-time http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufac... The Nexus 7 is sold at cost according to Google.
2muchcoffeeman 14y ago
http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufacturing-cost-design-time http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufac... The Nexus 7 is sold at cost according to Google.
beagle3 14y ago
> 1- How about the Nexus 7, is it also being sold at a loss or near break-even ? Reportedly break even. It is not surprising that a mobile phone costs more (in the same way that for a very long time, a laptop cost more than an equivalent desktop+screen: less forgiving constrains make a more expensive product). > How big of a margin do you need before you deem a business profitable. positive. Really, that's what profitable means: positive profit, regardless of percentage. > if a business operates at 7% profit margins, would you describe them as pursuing a loss leader strategy ? Loss leader has some gray areas, but basically: If something is sold at below-marginal-cost: (bill of materials + cost of assembly + cost of shipping + cost of support), then it is a loss leader, otherwise it is usually not considered one. The uncertainty comes from R&D cost attribution, which is subjective. > the 649 $ price point makes it impossible to have competition because nobody (or very few) would pay that for a handset, thus the carrier/ subsidy model longevity And yet, most of Europe manages that easily. You have to revise your axioms, as they are inconsistent with evidence. > How about the fact that the Nexus devices come without skinning. don't underestimate the cost that goes into that exercise Ok, what's the price you'd put on that? $1M would be super generous in my opinion, which would translate to a couple of dollars per device in the long run for the likes of Samsung or LG.
- sami36 14y ago
  >And yet, most of Europe manages that easily. You have to revise your axioms, as they are inconsistent with evidence. What's the % of smartphones in Europe that are sold at full price ? Please. > Ok, what's the price you'd put on that? $1M would be super generous in my opinion That's a laughable number. That's the cost of 8 senior Devs per year. Samsung has hundreds of people working on their skins.
  - beagle3 14y ago
    > What's the % of smartphones in Europe that are sold at full price ? Please. Most, in some countries all. Many of them come with a loan (so you pay $200 upfront for a $600 phone, and then $30/month for 20 months) , but unlike in the US, it's a line item; you can pay it upfront and not suffer any disadvantage. (I've tried to pay for me iphone with verizon upfront; it would have been $400-$500 more than on a 2-year plan). > That's a laughable number. That's the cost of 8 senior Devs per year. Samsung has hundreds of people working on their skins. Well, they should be more efficient then. There's no reason it would take so much man power.
    - sami36 14y ago
      >".. with a loan..." I rest my case. that still obscures the full price of a transaction. interest is involved, different payment plans are presented, repayment modalities are different. That does not comport with your earlier claim that Europe does it without subsidies. >Well, they should be more efficient then. There's no reason it would take so much man power. or you could be more thoughtful instead of throwing completely made-up numbers just to support some wild assertion of yours.
      - beagle3 14y ago
        > I rest my case. that still obscures the full price of a transaction. interest is involved, different payment plans are presented, repayment modalities are different. That does not comport with your earlier claim that Europe does it without subsidies. Then you should look up the definition of subsidy in the dictionary, and don't rest so quickly. That's exactly like saying that if you pay for it upfront with a credit card (in the US) then you aren't really paying upfront, because you didn't put any money down at that point (and might not in a year, depending on how you manage your credit). Last I checked (which was a couple of years ago), in Germany, the UK, Finland and few other countries that aren't the US, you didn't pay less if you signed up for two years in advance - in some cases (Finland, I think, and recently also Israel) it's actually against the law to do so. > or you could be more thoughtful instead of throwing completely made-up numbers just to support some wild assertion of yours. I've managed projects that are somewhat comparable. I had three designers doing skin design for branded apps, and they were spewing very high quality skins at the rate of 1 skin / 1 week / 1 designer. Now, that was only the graphic design. I'm aware that samsung/HTC skins also involve lots of functionality "skinning", and they cover a lot more than the few different screens/modalities of those apps (10 or so per app). However, If they have hundreds of people doing these skins, they ARE being inefficient. (And you know what? They can afford to be, they don't need to be as picky as I was hiring people. But that does not mean they can't do that at a small percent of the budget they actually have. A few hundred people is ALL of the Google Android team ("default skin", apps, kernel, drivers, userspace, testing, integration, security, ...). It can't find numbers right now, but it was 200 in 2010.

by sami36 14y ago

2muchcoffeeman 14y ago

http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufacturing-cost-design-time http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufac... The Nexus 7 is sold at cost according to Google.

2muchcoffeeman 14y ago

http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufacturing-cost-design-time http://mobile.theverge.com/2012/6/28/3122811/nexus-7-manufac... The Nexus 7 is sold at cost according to Google.

beagle3 14y ago

> 1- How about the Nexus 7, is it also being sold at a loss or near break-even ? Reportedly break even. It is not surprising that a mobile phone costs more (in the same way that for a very long time, a laptop cost more than an equivalent desktop+screen: less forgiving constrains make a more expensive product). > How big of a margin do you need before you deem a business profitable. positive. Really, that's what profitable means: positive profit, regardless of percentage. > if a business operates at 7% profit margins, would you describe them as pursuing a loss leader strategy ? Loss leader has some gray areas, but basically: If something is sold at below-marginal-cost: (bill of materials + cost of assembly + cost of shipping + cost of support), then it is a loss leader, otherwise it is usually not considered one. The uncertainty comes from R&D cost attribution, which is subjective. > the 649 $ price point makes it impossible to have competition because nobody (or very few) would pay that for a handset, thus the carrier/ subsidy model longevity And yet, most of Europe manages that easily. You have to revise your axioms, as they are inconsistent with evidence. > How about the fact that the Nexus devices come without skinning. don't underestimate the cost that goes into that exercise Ok, what's the price you'd put on that? $1M would be super generous in my opinion, which would translate to a couple of dollars per device in the long run for the likes of Samsung or LG.

sami36 14y ago
>And yet, most of Europe manages that easily. You have to revise your axioms, as they are inconsistent with evidence. What's the % of smartphones in Europe that are sold at full price ? Please. > Ok, what's the price you'd put on that? $1M would be super generous in my opinion That's a laughable number. That's the cost of 8 senior Devs per year. Samsung has hundreds of people working on their skins.
- beagle3 14y ago
  > What's the % of smartphones in Europe that are sold at full price ? Please. Most, in some countries all. Many of them come with a loan (so you pay $200 upfront for a $600 phone, and then $30/month for 20 months) , but unlike in the US, it's a line item; you can pay it upfront and not suffer any disadvantage. (I've tried to pay for me iphone with verizon upfront; it would have been $400-$500 more than on a 2-year plan). > That's a laughable number. That's the cost of 8 senior Devs per year. Samsung has hundreds of people working on their skins. Well, they should be more efficient then. There's no reason it would take so much man power.
  - sami36 14y ago
    >".. with a loan..." I rest my case. that still obscures the full price of a transaction. interest is involved, different payment plans are presented, repayment modalities are different. That does not comport with your earlier claim that Europe does it without subsidies. >Well, they should be more efficient then. There's no reason it would take so much man power. or you could be more thoughtful instead of throwing completely made-up numbers just to support some wild assertion of yours.
    - beagle3 14y ago
      > I rest my case. that still obscures the full price of a transaction. interest is involved, different payment plans are presented, repayment modalities are different. That does not comport with your earlier claim that Europe does it without subsidies. Then you should look up the definition of subsidy in the dictionary, and don't rest so quickly. That's exactly like saying that if you pay for it upfront with a credit card (in the US) then you aren't really paying upfront, because you didn't put any money down at that point (and might not in a year, depending on how you manage your credit). Last I checked (which was a couple of years ago), in Germany, the UK, Finland and few other countries that aren't the US, you didn't pay less if you signed up for two years in advance - in some cases (Finland, I think, and recently also Israel) it's actually against the law to do so. > or you could be more thoughtful instead of throwing completely made-up numbers just to support some wild assertion of yours. I've managed projects that are somewhat comparable. I had three designers doing skin design for branded apps, and they were spewing very high quality skins at the rate of 1 skin / 1 week / 1 designer. Now, that was only the graphic design. I'm aware that samsung/HTC skins also involve lots of functionality "skinning", and they cover a lot more than the few different screens/modalities of those apps (10 or so per app). However, If they have hundreds of people doing these skins, they ARE being inefficient. (And you know what? They can afford to be, they don't need to be as picky as I was hiring people. But that does not mean they can't do that at a small percent of the budget they actually have. A few hundred people is ALL of the Google Android team ("default skin", apps, kernel, drivers, userspace, testing, integration, security, ...). It can't find numbers right now, but it was 200 in 2010.