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Are flagship Smartphone prices artificially high?


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Old 16-06-2014, 12:02
swordman
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I suspect as usual you are talking your usual level of nonsense.
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Old 16-06-2014, 12:07
tdenson
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I suspect as usual you are talking your usual level of nonsense.
And you being as rude as usual
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Old 16-06-2014, 12:16
swordman
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I suspect he's asking you because you are the one that turned a general discussion about smartphones into a rant agains Apple
Well depends if you consider claiming without a reason someone had started and turned a discussion into a rant justified and correct, do you?
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Old 16-06-2014, 12:41
alanwarwic
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Actually, I quite doubt any Samsung phone would have a retail price much above £300, but for that so called 'premium' price elsewhere.

That Apple price certainly help the competition sell some very high specced goods at a premium. I quite doubt that many would be so fussed otherwise.

Amazon are said to have their phone launching next week. It might be another walled garden phone so might also be popular with those who usually buy an iPhone.
When I think 'kindle' I also think 'iTunes'. The concept is similar, that that it will have one main conduit for content.

It is all a battle for monopolization of content. The actual devices are much secondary.
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Old 16-06-2014, 12:58
tdenson
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Well depends if you consider claiming without a reason someone had started and turned a discussion into a rant justified and correct, do you?
Perhaps rant was a bit strong. But certainly an excuse to make anti Apple statements.
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Old 16-06-2014, 13:31
Dan Sette
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Economics 101. Anything you manufacture you will have to sell at four to five times that price for everyone involved to make a profit. (then local taxes have to be added on top.

So, you have the raw materials and the labour to pay for and as a manufacturer you'll need a mark up (your profit). Then there is, in the case of companies needing a distibutor THEIR costs and profit markup. Finally, the retailer will have their costs and markup to cover - then the government steps in and takes their cut.

Apple do have an advantage as their distributors and retailers can be one and the same.

Equally, they will take a hit, as if you've bought an iPhone from, say The Carphone Warehouse, Apple will generally offer a warranty in one of their stores.
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Old 16-06-2014, 13:45
swordman
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Perhaps rant was a bit strong. But certainly an excuse to make anti Apple statements.
Again it seems you are the one with an agenda here, statements of fact are not anti apple as far as I am aware.

You clearly have some issue here that is beyond anything I have said.
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Old 16-06-2014, 15:31
tdenson
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Again it seems you are the one with an agenda here, statements of fact are not anti apple as far as I am aware.

You clearly have some issue here that is beyond anything I have said.
Yes, the issue I have is why you picked on Apple as making more than 50% profit (when Apple hadn't been mentioned). Why did you not cite Microsoft as an example making 99.99% profit ?
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Old 16-06-2014, 15:55
jonmorris
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Why the need for anyone to argue about one company versus another? Surely every company would seek as a high a profit margin as possible - but it depends on what you're selling.

You might sell a Moto G with very low margins, intending to sell billions of them, while Apple wants to obviously sell loads of Apple products but would never do so by reducing prices and the perceived value. Instead, it will release new products and remove the old models almost simultaneously, and offer added value in terms of software etc.

Both methods can work just fine, and in the case of the Android manufacturers - many have been quite keen to make hardware for Google which is sold for far less than their own devices, despite being very similar in terms of specification.

What the consumer needs to be more aware of is what they're getting for their money, and understanding what a Moto G or Nexus 5 offers and how it isn't necessarily far inferior because it's cheaper than the phones that are heavily advertised and pushed by retailers.
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Old 16-06-2014, 17:02
swordman
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Yes, the issue I have is why you picked on Apple as making more than 50% profit (when Apple hadn't been mentioned). Why did you not cite Microsoft as an example making 99.99% profit ?
Did I and wasn't it, tell you what read the thread properly (unlike your usual skimming for posts) then you can decide if an apology is warranted.

Judging by your comments so far I won't hold my breath
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Old 16-06-2014, 19:52
swordman
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The cads.
Was there a reason this became about iPhones so quickly, when it was originally about smartphones?
No idea, any reason why you're asking me then?
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Yes, the issue I have is why you picked on Apple as making more than 50% profit (when Apple hadn't been mentioned). Why did you not cite Microsoft as an example making 99.99% profit ?
Did I and wasn't it, tell you what read the thread properly (unlike your usual skimming for posts) then you can decide if an apology is warranted.
Judging by your comments so far I won't hold my breath
Both asked to explain accusations, both avoided.

A more suspicious person may think there is an agenda at work here, hmmm
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Old 16-06-2014, 20:01
klendathu
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Yes .

Harder question next time please
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Old 17-06-2014, 01:35
zantarous
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Economics 101. Anything you manufacture you will have to sell at four to five times that price for everyone involved to make a profit. (then local taxes have to be added on top.

So, you have the raw materials and the labour to pay for and as a manufacturer you'll need a mark up (your profit). Then there is, in the case of companies needing a distibutor THEIR costs and profit markup. Finally, the retailer will have their costs and markup to cover - then the government steps in and takes their cut.

Apple do have an advantage as their distributors and retailers can be one and the same.

Equally, they will take a hit, as if you've bought an iPhone from, say The Carphone Warehouse, Apple will generally offer a warranty in one of their stores.
Exactly this, components are just one of many costs for a device, hundreds of people will have spent many years researching and developing components for these devices and as described above there is a whole retail chain involved plus tax. That other £250/300 is shared amounts a lot of companies. I would be surprised if Apple were making more then £100 on each device.

And let's not forget there is their retail presence that supports these devices very few manufactures let you walk into a store and just swap a handset there and then.

I am no apple fan I have a Galaxy Note 3 but it really is not as simple as saying the cost of components is the whole cost of a device.
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Old 17-06-2014, 08:36
clonmult
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Exactly this, components are just one of many costs for a device, hundreds of people will have spent many years researching and developing components for these devices and as described above there is a whole retail chain involved plus tax. That other £250/300 is shared amounts a lot of companies. I would be surprised if Apple were making more then £100 on each device.

And let's not forget there is their retail presence that supports these devices very few manufactures let you walk into a store and just swap a handset there and then.

I am no apple fan I have a Galaxy Note 3 but it really is not as simple as saying the cost of components is the whole cost of a device.
Agreed that the pricing is down to way more than physical costs, but Apple are damnably efficient. Probably more so these days with their being run by an accountant. As a result, Apple are likely making way more than £100 on the "entry level" iPhone. And that increases as you move up to the larger capacity models - the difference in R&D, marketing, etc. between a 16 and 64gb model are non existent. The difference in price there is almost pure profit.

Not saying that is a bad thing at all, its just the way it is.
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Old 17-06-2014, 08:45
swordman
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People understand the profit made through iphones yes? Huge profits are made through all phones but especially iPhone, £100 per iPhone

Apple will pay very little per phone above component costs manufacture will be a few bucks etc. They make 50% an iPhone more for the extra ram models.
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Old 17-06-2014, 10:14
jonmorris
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Charging so much more for pretty cheap storage space is very clever, especially as I doubt many people buy the entry level model.
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Old 17-06-2014, 10:33
grumpyoldbat
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Samsung have to put a premium on their high end phones to support the enormous marketing budget they put behind the devices - things like re-branding the whole of Terminal 5 Heathrow don't come cheap!

As someone said above, judging the cost of a phone purely by components is incorrect. The cost of creating something has to include all of the other costs involved in running a business - shipping from point of manufacture, cost of employing staff to market and promote them, cost of that promotion, cost of the packaging and items that are shipped with the phone… the list is endless.
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Old 17-06-2014, 11:00
swordman
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Still all relatively small costs and I would say unlikely to make an iPhone more than £200 for Apple to get to market.
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Old 17-06-2014, 13:16
calico_pie
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No idea, any reason why you're asking me then?
Probably because you singled out Apple, combined with the fact that you don't seem happy unless you are criticising Apple for something.

You could say that your reputation precedes you. It wouldn't surprise me to see this thread full of some of your signature rudeness before long.
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Old 17-06-2014, 13:16
calico_pie
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I suspect as usual you are talking your usual level of nonsense.
Oh, and there it is. Timing, huh.
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Old 17-06-2014, 13:18
calico_pie
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Both asked to explain accusations, both avoided.

A more suspicious person may think there is an agenda at work here, hmmm
Don't confuse not replying instantly with avoiding anything.

Don't confuse gross hypocrisy with some sort of moral high ground either.
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Old 17-06-2014, 13:20
swordman
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Probably because you singled out Apple, combined with the fact that you don't seem happy unless you are criticising Apple for something.

You could say that your reputation precedes you. It wouldn't surprise me to see this thread full of some of your signature rudeness before long.
As i said to the other misinformed poster, if you are going to accuse people of something please provide a basis for you accusations.

It seems now that certain posters simply troll threads looking for any apple related posts to jump all over.

As per usual you offer nothing constructive to any discussion, no opinion. In fact I don't think I even see you post anything that is not in the context of apple. Frankly a waste of time engaging with you, nothing to offer.
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Old 17-06-2014, 13:28
swordman
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However before this thread gets railroaded by the usual crowd.

All these calculations about profit on phones are to some extent back of the fag packet sums but something which backs up what I have been saying in relation to component costs+additional costs.

http://www.digitaltrends.com/mobile/...ple-is-paying/
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Old 17-06-2014, 13:41
kidspud
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However before this thread gets railroaded by the usual crowd.

All these calculations about profit on phones are to some extent back of the fag packet sums but something which backs up what I have been saying in relation to component costs+additional costs.

http://www.digitaltrends.com/mobile/...ple-is-paying/
The article you linked to claims a profit of 45% with lots of 'if's' and 'but's'.

Where have you said 45%?
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Old 17-06-2014, 13:48
swordman
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Components will be by far the biggest cost everything else put together will probably not double that cost. You can safely say that an iphone is over 50% profit.
As I said previously I guesstimated 50% profit and more for higher memory models.

I said above it is all back of a fag packet calculations, why would you think it would be any different. No one has access to the accurate figures for to market costs. However ifs and buts can go either way remember and as I said previously given Apples position and power in the market i would bet those component costs are much lower.

However given iphone sales are half of Apple profits it is not hard to make reasonable guesstimates of profit. Much as reuters have done
(Reuters) - Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012
linked from that article.
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