5 ms·

There was a very interesting podcast that went into all the details of the AI supply chain shortage [1] The key takeaway for smartphones isn't so much that iph

by cm2187 4mo ago

There was a very interesting podcast that went into all the details of the AI supply chain shortage [1] The key takeaway for smartphones isn't so much that iphones will cost $150-200 more, which apple customers have shown they can stomach. But that cheap $200 chinese smartphones will need have to hike prices by about the same amount, which will decimate that market. [1] https://www.youtube.com/watch?v=mDG_Hx3BSUE https://www.youtube.com/watch?v=mDG_Hx3BSUE

brailsafe 4mo ago
> But that cheap $200 chinese smartphones will need have to hike prices by about the same amount, which will decimate that market. Hmm. Even if iPhone users can theoretically stomach the increase, they have many other options available, whereas if the cheap $200 phones are the bottom of the market, there's no other real options. I'm in the ~$450 USD Pixel range atm, and never buy the current flagship or anything. If that increases by $200, I'll look to the used market for the same phone. I really don't care that much about it, and it mostly acts as a fancy 5g modem for tethering. Plenty of younger people are already reverting to more primitive phones or physical media, and I wonder if it's just older addicted richer millenials that'll keep buying at even more than the already idiotic prices.
- teiferer 4mo ago
  > Plenty of younger people are already reverting to more primitive phones That's an effect that has always been claimed (younger generations rejecting new tech and going offline/low-tech/anti-...) but it's never been more than a minor very temporary fad. In the mid to long term, younger people are always at the forefront of tech adoption and it would be very surprising if it was different this time.
  - cm2187 4mo ago
    I can't tell the difference between a 5 years old smartphone model and the latest generation.
    - y2244 4mo ago
      That's why Apple changed the lense layout and introduced new colours in latest iPhone!
    - mrweasel 4mo ago
      For the average consumer, I'd argue that any phone made in the past 10+ years would be absolutely fine. It issues are: battery life/battery replacement, lack of updates, developers targeting newer devices only. In Apples case a good solution would be to rollback at least part of the liquid glass UI updates, as it severely affects older devices. Then announce upfront that every Apple phone will be supported for no less than 10 years after the device was removed from the market. That would be good for everyone, except Apple shareholders. I understand that Apple pricing, compared to inflation haven't changed that much since the first iPhone, but for many of us it really does push the limit. I simply do not get enough value to justify purchasing a new iPhone, or in many cases a second hand one. My perceived value peaked around the iPhone 7 era, everything after is pointless. Apple doesn't really cater to my needs, and that's their choice, I just feel a bit stuck.
      - frollogaston 4mo ago
        I do use an iPhone 6S. The hardware is fine, but I basically can't install apps because they all target newer OSes that can't be installed on it, and the older versions of those apps available are broken.
        brailsafe 4mo ago
        I think that's the unfortunate cycle of iOS and iPadOS. Their hardware more or less served its purpose eons ago and there's little reason why it couldn't still, aside from OS compatibility. Even as a mac user, I've only ever purchased on iOS product, and that was the iPad 3. No subsequent iPad seems to have introduced anything more compelling than what the iPad 3 was capable of (which wasn't much), so as the software compatibility story has degraded over time, it still sits here serving as an occasional epub reader. It would feel bizarre to spend thousands on a new one to effectively be able to do what I did with it in ~2012. My android phones eventually run their course due to excessive physical damage, theft, etc.. but since I've never paid much for them, it's usually not so disruptive to just pay a few hundred and get something used or basic to replace it, or order a new screen and repair it.
  - deleted 4mo ago
    [deleted]
  - brailsafe 4mo ago
    Frankly I don't think I've ever heard of this being claimed for prior generations at a scale that any other generation would notice. There was always that kid who kept their CD collection or their dumbphone longer than most, but it was more of a niche thing to do. That said, I don't wholly disagree that it's a fad, time will tell. Considering there hasn't really been (to my knowledge) other instances where involvement of media and technology has been remotely as intense as now from day one in a kid's life, it doesn't seem like any prior time period would be as likely to produce a sense of repulsion as now. Sure, I didn't carry my Gen X relative's obsession with television into my adult life, but something like that I'd consider to be a bit of a tenuous comparison to make to the breadth of insidious mind-altering media delivery conduits we're constantly exposed to now.
- high_na_euv 4mo ago
  >Plenty of younger people are already reverting to more primitive phones or physical media Id love to know how many of em
  - SllX 4mo ago
    Not enough to have stopped the iPhone 17 Pro line from being a runaway success that even Apple—famously excellent at projecting demand and already invested in selling as many as possible given its the flagship model line of their flagship product line—completely underestimated the demand at launch. I’d love to know how much “plenty” in the parent’s perspective stacks up against just this one individual model line and whether it is at all distinguishable from noise.
    - brailsafe 4mo ago
      Surprising amount of hostility to what was a speculative anecdotal observation. I'd be surprised if many people under the age of 17 would be buying a $2000+ phone anyway, but given tough economic situations, decreasing opportunity, and decreasing stability, the likelihood seems low that significantly increased prices for effectively the same (boring) product would be absorbed by anyone other than the richest or older established crowd. Whether it holds true at global level, or in your social circle, I don't know.
      - SllX 4mo ago
        Well let’s see: > Plenty of younger people are already reverting to more primitive phones or physical media, and I wonder if it's just older addicted richer millenials that'll keep buying at even more than the already idiotic prices. You don’t sell as many iPhones as Apple does if your market is only as narrow as “older addicted richer millennials” and your most expensive products in your flagship lines don’t fly off the shelves if they’re not already at some level of affordability. Under today’s prices, and this is due to change per Tim Cook’s comments of course, but under today’s prices the iPhone Pro line starts at $1099 and $1199 for the Pro & Pro Max line specifically, which you can get down by trading in an older phone, looking for a deal (prices in the channel are often discounted by $100 or so below Apple’s list price) and can be financed through either the carrier or Apple. Now you can get that price up to $1999 if you specifically go for the Pro Max 2TB option, but the existence of a 2TB option doesn’t mean that’s the default option for most people. You can also get that price as low as $599 if you forego the flagship models entirely, and again, that’s Apple’s list prices, not necessarily prices in the channel. I think your frugality is great, and if there’s some young people behaving more frugally, that’s also great. I haven’t upgraded my phone in about 5 years and don’t anticipate doing so this year either, but your remarks don’t read like they were sourced from real observations of either the American or the International markets, and in fact read like an eye-rolling generalization about millennials. Such as this: > the likelihood seems low that significantly increased prices for effectively the same (boring) product would be absorbed by anyone other than the richest or older established crowd 1) we don’t know what Apple’s prices are going up to yet. They haven’t announced any actual price increases, so we also don’t know how significant the price increase will be. Naturally we should expect sales to be hurt by any price increase, but it’s a bit premature to overstate their significance. 2) their most recent iPhones were not so boring that they didn’t fly off the shelves at a pace Apple couldn’t anticipate because they sold well above expectations, and that is specifically the flagship models. Now it often follows that the following year’s model is more “boring” by comparison, but the view you take their new products is not borne by market evidence.
- yieldcrv 4mo ago
  If the smartphone is not economically viable, it will go away Apple’s margin targets aside, the prices are rational Trendy teens and 20 something’s still have iPhones, many just also have point and shoot cameras. This is more of a desire to be present in some contexts alongside aesthetics (of the photos and the gear), than a rejection of having 2 teraflops in their pocket. It’s important to understand the why
frollogaston 4mo ago
I'd expect the iPhone price hikes to be less even in absolute $ than with the cheap phones. iPhones already had relatively large margins (as a %) for the newly increased costs to partially eat into.
- Maakuth 4mo ago
  Why would you expect Apple to give up their margin? The DRAM price hikes affect every smartphone vendor, even Samsung through opportunity cost. That means the competition will also need to hike their prices. And the competition has lower margin, so they have less choice here.
  - frollogaston 4mo ago
    Because Apple's main competition is themselves a few years ago, when they sold an iPhone or whatever to a happy customer who might return for an upgrade even though it still works. Not many people are switching platforms nowadays.
  - theturtletalks 4mo ago
    Apple has services and the App Store that still collects 30%. I don’t think they will raise iPhones prices by much but rumors say the iPhone Foldable is coming and that will be $2K+. People will pay it and that will subsidize the other models.
  - ben_w 4mo ago
    > Why would you expect Apple to give up their margin? Price go up, demand go down: https://en.wikipedia.org/wiki/Supply_and_demand#/media/File:Supply-demand-equilibrium.svg https://en.wikipedia.org/wiki/Supply_and_demand#/media/File:... (The iPhone is only a premium brand, not a Veblen good).
    - frollogaston 4mo ago
      That's if iPhone costs go up and there are no other changes. As the parent said, competitors' products are also going up in price. I just don't consider the products interchangeable enough. Apple has its margins for a reason. Also even if they had pure competitors, demand for high-end smartphones is pretty elastic. People will really just buy fewer phones if they get more expensive.
AnthonyMouse 4mo ago
Or they'll start making cheap phones with <=2GB of RAM again and people will have to write software that uses memory efficiently (the horror).
- dist-epoch 4mo ago
  As the HN saying goes, people who can't afford an iPhone or a MacBook will not be your paying customers anyway, so don't worry about them.
- a-french-anon 4mo ago
  You underestimate how poorly optimized Android (both the OS and ecosystem) is.
  - AnthonyMouse 4mo ago
    Why does it need to be Android? Make a phone that will send text messages and run a web browser and all the people who just need a phone will buy it to save $200. Also, when software is poorly optimized that implies it is possible to optimize it.
    - xienze 4mo ago
      > Why does it need to be Android? Make a phone that will send text messages and run a web browser I think we're quite a ways past the point where most people would be satisfied with phones that only do voice, text, and web browsing. People have become quite accustomed to phones that can run arbitrary applications and games. There's quite a sizable population for whom phones are their only computing device.
      - AnthonyMouse 4mo ago
        There is nothing stopping it from running arbitrary applications, those applications just wouldn't be Android apps. Which is just as well because 99% of Android apps are just a bloated skin over a web page anyway. I can't actually think of the last time that I wanted to (rather than was forced to) use a non-messaging non-browser app on my phone.
kjshsh123 4mo ago
>The Alchian–Allen effect was described in 1964 by Armen Alchian and William R Allen in the book University Economics (now called Exchange and Production[1]). It states that when the prices of two substitute goods, such as high and low grades of the same product, are both increased by a fixed per-unit amount such as a transportation cost or a lump-sum tax, consumption will shift toward the higher-grade product. This is because the added per-unit amount decreases the relative price of the higher-grade product. https://en.wikipedia.org/wiki/Alchian%E2%80%93Allen_effect?wprov=sfla1 https://en.wikipedia.org/wiki/Alchian%E2%80%93Allen_effect?w...
mindslight 4mo ago
Apple sure is lucky that the supply chains for those low end Chinese phones are in a country that is notoriously bad at building new manufacturing capacity and prioritizing their own industry </s>
halJordan 4mo ago
This is already the case in several African countries (cheap phones are no longer cheap, and sales drop precipitously)
jauntywundrkind 4mo ago
We'll see what happens but I wouldn't be shocked or offended if China obliges the state-sponsored memory makers to support other local industry, beyond AI. The consumer electronics world shutting down would be immensely bad, for China, and for many: someone steering us all away from this path seems highly advisable for everyone. Toms Hardware just put out an article talking about this, although they focused more on ssd and memory stick makers. The principle ought apply quite broadly though. https://www.tomshardware.com/pc-components/ssds/chinese-makers-of-dram-modules-ssds-have-a-serious-advantage-over-american-and-taiwanese-suppliers-says-smi-svp-state-guidance-secures-local-dram-and-ssd-supply-while-the-big-three-chase-ai-margins https://www.tomshardware.com/pc-components/ssds/chinese-make...
ksec 4mo ago
My bet is that all iPhone across the range will increase the price by $100. iPhone Ultra $1699 iPhone Pro Max $1199 iPhone Pro $1099 iPhone Air 2 $999 iPhone 18 (2027) $899 iPhone 17 $799 ( Same Price ) iPhone 17e $599 ( Same Price ) And there won't be an 18e. Or May be an 18e at $699.

by cm2187 4mo ago

brailsafe 4mo ago

> But that cheap $200 chinese smartphones will need have to hike prices by about the same amount, which will decimate that market. Hmm. Even if iPhone users can theoretically stomach the increase, they have many other options available, whereas if the cheap $200 phones are the bottom of the market, there's no other real options. I'm in the ~$450 USD Pixel range atm, and never buy the current flagship or anything. If that increases by $200, I'll look to the used market for the same phone. I really don't care that much about it, and it mostly acts as a fancy 5g modem for tethering. Plenty of younger people are already reverting to more primitive phones or physical media, and I wonder if it's just older addicted richer millenials that'll keep buying at even more than the already idiotic prices.

teiferer 4mo ago
> Plenty of younger people are already reverting to more primitive phones That's an effect that has always been claimed (younger generations rejecting new tech and going offline/low-tech/anti-...) but it's never been more than a minor very temporary fad. In the mid to long term, younger people are always at the forefront of tech adoption and it would be very surprising if it was different this time.
- cm2187 4mo ago
  I can't tell the difference between a 5 years old smartphone model and the latest generation.
  - y2244 4mo ago
    That's why Apple changed the lense layout and introduced new colours in latest iPhone!
  - mrweasel 4mo ago
    For the average consumer, I'd argue that any phone made in the past 10+ years would be absolutely fine. It issues are: battery life/battery replacement, lack of updates, developers targeting newer devices only. In Apples case a good solution would be to rollback at least part of the liquid glass UI updates, as it severely affects older devices. Then announce upfront that every Apple phone will be supported for no less than 10 years after the device was removed from the market. That would be good for everyone, except Apple shareholders. I understand that Apple pricing, compared to inflation haven't changed that much since the first iPhone, but for many of us it really does push the limit. I simply do not get enough value to justify purchasing a new iPhone, or in many cases a second hand one. My perceived value peaked around the iPhone 7 era, everything after is pointless. Apple doesn't really cater to my needs, and that's their choice, I just feel a bit stuck.
    - frollogaston 4mo ago
      I do use an iPhone 6S. The hardware is fine, but I basically can't install apps because they all target newer OSes that can't be installed on it, and the older versions of those apps available are broken.
      - brailsafe 4mo ago
        I think that's the unfortunate cycle of iOS and iPadOS. Their hardware more or less served its purpose eons ago and there's little reason why it couldn't still, aside from OS compatibility. Even as a mac user, I've only ever purchased on iOS product, and that was the iPad 3. No subsequent iPad seems to have introduced anything more compelling than what the iPad 3 was capable of (which wasn't much), so as the software compatibility story has degraded over time, it still sits here serving as an occasional epub reader. It would feel bizarre to spend thousands on a new one to effectively be able to do what I did with it in ~2012. My android phones eventually run their course due to excessive physical damage, theft, etc.. but since I've never paid much for them, it's usually not so disruptive to just pay a few hundred and get something used or basic to replace it, or order a new screen and repair it.
- deleted 4mo ago
  [deleted]
- brailsafe 4mo ago
  Frankly I don't think I've ever heard of this being claimed for prior generations at a scale that any other generation would notice. There was always that kid who kept their CD collection or their dumbphone longer than most, but it was more of a niche thing to do. That said, I don't wholly disagree that it's a fad, time will tell. Considering there hasn't really been (to my knowledge) other instances where involvement of media and technology has been remotely as intense as now from day one in a kid's life, it doesn't seem like any prior time period would be as likely to produce a sense of repulsion as now. Sure, I didn't carry my Gen X relative's obsession with television into my adult life, but something like that I'd consider to be a bit of a tenuous comparison to make to the breadth of insidious mind-altering media delivery conduits we're constantly exposed to now.
high_na_euv 4mo ago
>Plenty of younger people are already reverting to more primitive phones or physical media Id love to know how many of em
- SllX 4mo ago
  Not enough to have stopped the iPhone 17 Pro line from being a runaway success that even Apple—famously excellent at projecting demand and already invested in selling as many as possible given its the flagship model line of their flagship product line—completely underestimated the demand at launch. I’d love to know how much “plenty” in the parent’s perspective stacks up against just this one individual model line and whether it is at all distinguishable from noise.
  - brailsafe 4mo ago
    Surprising amount of hostility to what was a speculative anecdotal observation. I'd be surprised if many people under the age of 17 would be buying a $2000+ phone anyway, but given tough economic situations, decreasing opportunity, and decreasing stability, the likelihood seems low that significantly increased prices for effectively the same (boring) product would be absorbed by anyone other than the richest or older established crowd. Whether it holds true at global level, or in your social circle, I don't know.
    - SllX 4mo ago
      Well let’s see: > Plenty of younger people are already reverting to more primitive phones or physical media, and I wonder if it's just older addicted richer millenials that'll keep buying at even more than the already idiotic prices. You don’t sell as many iPhones as Apple does if your market is only as narrow as “older addicted richer millennials” and your most expensive products in your flagship lines don’t fly off the shelves if they’re not already at some level of affordability. Under today’s prices, and this is due to change per Tim Cook’s comments of course, but under today’s prices the iPhone Pro line starts at $1099 and $1199 for the Pro & Pro Max line specifically, which you can get down by trading in an older phone, looking for a deal (prices in the channel are often discounted by $100 or so below Apple’s list price) and can be financed through either the carrier or Apple. Now you can get that price up to $1999 if you specifically go for the Pro Max 2TB option, but the existence of a 2TB option doesn’t mean that’s the default option for most people. You can also get that price as low as $599 if you forego the flagship models entirely, and again, that’s Apple’s list prices, not necessarily prices in the channel. I think your frugality is great, and if there’s some young people behaving more frugally, that’s also great. I haven’t upgraded my phone in about 5 years and don’t anticipate doing so this year either, but your remarks don’t read like they were sourced from real observations of either the American or the International markets, and in fact read like an eye-rolling generalization about millennials. Such as this: > the likelihood seems low that significantly increased prices for effectively the same (boring) product would be absorbed by anyone other than the richest or older established crowd 1) we don’t know what Apple’s prices are going up to yet. They haven’t announced any actual price increases, so we also don’t know how significant the price increase will be. Naturally we should expect sales to be hurt by any price increase, but it’s a bit premature to overstate their significance. 2) their most recent iPhones were not so boring that they didn’t fly off the shelves at a pace Apple couldn’t anticipate because they sold well above expectations, and that is specifically the flagship models. Now it often follows that the following year’s model is more “boring” by comparison, but the view you take their new products is not borne by market evidence.
yieldcrv 4mo ago
If the smartphone is not economically viable, it will go away Apple’s margin targets aside, the prices are rational Trendy teens and 20 something’s still have iPhones, many just also have point and shoot cameras. This is more of a desire to be present in some contexts alongside aesthetics (of the photos and the gear), than a rejection of having 2 teraflops in their pocket. It’s important to understand the why

frollogaston 4mo ago

I'd expect the iPhone price hikes to be less even in absolute $ than with the cheap phones. iPhones already had relatively large margins (as a %) for the newly increased costs to partially eat into.

Maakuth 4mo ago
Why would you expect Apple to give up their margin? The DRAM price hikes affect every smartphone vendor, even Samsung through opportunity cost. That means the competition will also need to hike their prices. And the competition has lower margin, so they have less choice here.
- frollogaston 4mo ago
  Because Apple's main competition is themselves a few years ago, when they sold an iPhone or whatever to a happy customer who might return for an upgrade even though it still works. Not many people are switching platforms nowadays.
- theturtletalks 4mo ago
  Apple has services and the App Store that still collects 30%. I don’t think they will raise iPhones prices by much but rumors say the iPhone Foldable is coming and that will be $2K+. People will pay it and that will subsidize the other models.
- ben_w 4mo ago
  > Why would you expect Apple to give up their margin? Price go up, demand go down: https://en.wikipedia.org/wiki/Supply_and_demand#/media/File:Supply-demand-equilibrium.svg https://en.wikipedia.org/wiki/Supply_and_demand#/media/File:... (The iPhone is only a premium brand, not a Veblen good).
  - frollogaston 4mo ago
    That's if iPhone costs go up and there are no other changes. As the parent said, competitors' products are also going up in price. I just don't consider the products interchangeable enough. Apple has its margins for a reason. Also even if they had pure competitors, demand for high-end smartphones is pretty elastic. People will really just buy fewer phones if they get more expensive.

AnthonyMouse 4mo ago

Or they'll start making cheap phones with <=2GB of RAM again and people will have to write software that uses memory efficiently (the horror).

dist-epoch 4mo ago
As the HN saying goes, people who can't afford an iPhone or a MacBook will not be your paying customers anyway, so don't worry about them.
a-french-anon 4mo ago
You underestimate how poorly optimized Android (both the OS and ecosystem) is.
- AnthonyMouse 4mo ago
  Why does it need to be Android? Make a phone that will send text messages and run a web browser and all the people who just need a phone will buy it to save $200. Also, when software is poorly optimized that implies it is possible to optimize it.
  - xienze 4mo ago
    > Why does it need to be Android? Make a phone that will send text messages and run a web browser I think we're quite a ways past the point where most people would be satisfied with phones that only do voice, text, and web browsing. People have become quite accustomed to phones that can run arbitrary applications and games. There's quite a sizable population for whom phones are their only computing device.
    - AnthonyMouse 4mo ago
      There is nothing stopping it from running arbitrary applications, those applications just wouldn't be Android apps. Which is just as well because 99% of Android apps are just a bloated skin over a web page anyway. I can't actually think of the last time that I wanted to (rather than was forced to) use a non-messaging non-browser app on my phone.

kjshsh123 4mo ago

>The Alchian–Allen effect was described in 1964 by Armen Alchian and William R Allen in the book University Economics (now called Exchange and Production[1]). It states that when the prices of two substitute goods, such as high and low grades of the same product, are both increased by a fixed per-unit amount such as a transportation cost or a lump-sum tax, consumption will shift toward the higher-grade product. This is because the added per-unit amount decreases the relative price of the higher-grade product. https://en.wikipedia.org/wiki/Alchian%E2%80%93Allen_effect?wprov=sfla1 https://en.wikipedia.org/wiki/Alchian%E2%80%93Allen_effect?w...

mindslight 4mo ago

Apple sure is lucky that the supply chains for those low end Chinese phones are in a country that is notoriously bad at building new manufacturing capacity and prioritizing their own industry </s>

halJordan 4mo ago

This is already the case in several African countries (cheap phones are no longer cheap, and sales drop precipitously)

jauntywundrkind 4mo ago

We'll see what happens but I wouldn't be shocked or offended if China obliges the state-sponsored memory makers to support other local industry, beyond AI. The consumer electronics world shutting down would be immensely bad, for China, and for many: someone steering us all away from this path seems highly advisable for everyone. Toms Hardware just put out an article talking about this, although they focused more on ssd and memory stick makers. The principle ought apply quite broadly though. https://www.tomshardware.com/pc-components/ssds/chinese-makers-of-dram-modules-ssds-have-a-serious-advantage-over-american-and-taiwanese-suppliers-says-smi-svp-state-guidance-secures-local-dram-and-ssd-supply-while-the-big-three-chase-ai-margins https://www.tomshardware.com/pc-components/ssds/chinese-make...

ksec 4mo ago

My bet is that all iPhone across the range will increase the price by $100. iPhone Ultra $1699 iPhone Pro Max $1199 iPhone Pro $1099 iPhone Air 2 $999 iPhone 18 (2027) $899 iPhone 17 $799 ( Same Price ) iPhone 17e $599 ( Same Price ) And there won't be an 18e. Or May be an 18e at $699.