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> The exception are models like Apple's where they've figured out how to consistently drive profits by focusing on the consumer and using the phone as a platfor
by Touche 13y ago
> The exception are models like Apple's where they've figured out how to consistently drive profits by focusing on the consumer and using the phone as a platform for selling other things (i.e.: apps and content like movies and music) -- the carriers are almost incidental in Apple's model. Almost.
This is absolutely untrue. Apple's business model is to sell $650 phones to carriers, who then turn around and sell them to consumers for the same price as $350 dollar phones. This is why they have fantastic margins. If the carrier model ever goes away it would be bad news for Apple, who would have to compete on price to a greater extent than they do today.
- incongruity 13y agoTo an extent, you're right, I overstated my case. They make their profits from hardware, yes, but they don't sell to carriers. They sell to consumers, some of whom buy from individual carriers but the majority channel for iPhone sales is from Apple itself. No other phone maker can say that. Secondly, Apple's profit is uniquely enriched because it has built the platfrom that it has -- again, no other phone manufacturer reaps the direct from consumer benefit Apple does. Lastly, because Apple sells markets/sells to the consumer, the consumer picks Apple first and then the carrier -- many change carriers but continue to be loyal to Apple as a phone maker. This is definitely the culmination of a major sea change in the mobile industry. Apple may not the only phone maker that has ever had a consumer act this way, but they are the first to have it happen on a widespread basis.
- FeloniousHam 13y agoHorace Dediu makes the case that carriers pay more for Apple hardware because Apple does a better job of getting high value customers onto the network (use more data or more expensive contracts).