3 ms·
Low-end disruption hasn't set in because of the carrier model. It doesn't matter than the iPhone costs twice as much as a Nexus 4 because most people will only
by Touche 13y ago
Low-end disruption hasn't set in because of the carrier model. It doesn't matter than the iPhone costs twice as much as a Nexus 4 because most people will only pay $200 anyways. This works in Apple's favor. It's also why the iPhone 5C is going to be so big for them; they can sell last year's phone as though it were new and barely drop the price. The margins on that phone are going to be gigantic. It's a direct response to their stock troubles, by the way.
I wonder at what point does the carrier model break. If a high end phone only costs $300 - $350, when that becomes the norm I mean, do people still agree to 2 year contracts in order to trim that down a hundred dollars?
- asveikau 13y agoThe carrier model doesn't exist equally in all places.
- Touche 13y agoBut the effect of it existing in the U.S. keeps smartphone prices artificially high every where. It benefits Samsung just as much as it benefits Apple.
- hollerith 13y agoCan you explain how it keeps smartphone prices artificially high everywhere?
- Touche 13y agoIt keeps the high-end phone prices artificially high. Manufacturers cannot sell the same phone to consumers for less than they sell to carriers. This is why high-end phones are less popular in areas where paying full price for a phone is the norm.
- hollerith 13y agoSo, Apple keeps the price of the iPhone high in countries where people pay for access to the cellular network separately from the phone hardware to keep US carriers happy. Is that your assertion? I still do not get it. It seems to me that US carriers subsidize the phone hardware because US consumers have an irrational unwillingness to pay the full price of the hardware -- or an irrational willingness to pay monthly contractually obligated payments to carriers. If that is true, then there I see no reason for US carriers to fear the availability of high-end phones at full price -- even if that price is not "artificially" high -- since US consumers have an irrational aversion to paying full price. So why would US carriers pressure manufactures to keep high-end phone prices high (in the US or in other countries)? ADDED. I agree with you that Apple is able to keep the price of the iPhone a lot higher than their cost to make iPhones. Where I disagree is where you assert that any policy of the US carriers has anything to do with the price of iPhones in non-US countries.
- Touche 13y agoYou misunderstand me. The prices of high-end smartphones are the result of market pressures, not carrier policy. But the market pressure is, primarily, between the manufacturers and carriers; not the manufacturers and consumers. Carriers would like to pay less, obviously, but they make so much money by keeping people on expensive contracts that the market prices the phones where they are. They prices of high-end smartphones have virtually unchanged in years, where the price of mid-range and low-end phones have plummeted. My assertion is that the reason for this is that high-end phones aren't targeted at consumers.
- asveikau 13y agoThis confuses me because it seems to contradict your original comment, and make exactly the point I was trying to nudge toward. I agree with you that the unsubsidized price does not matter in the United States for example, but one must acknowledge that this is a US-centric view and cannot explain what goes on worldwide. I read somewhere that most iPhone sales aren't in the US, so I suspect it doesn't even explain just Apple taken in isolation.