Apple Analysts Letdown: There is No Low-End iPhone

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neiroatopelcc

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[citation][nom]WhysoBluepandabear[/nom]It's the same reason BMW doesn't deliver a car for $20,000 (Not counting rare occurrences that may exist that I am largely unaware of), they simply design a product with certain expectations - It's what they're known for, luxury, performance cars -- NOT cheap imitations.[/citation]

If they're not known for cheap, do explain why their 1 series competes with run of the mill junk and why there are so many 318's about ... I've got nothing against bmw (same can't be said about those driving em), but they ARE aiming for cheap. Like merc they've lowered build quality in order to compete on pricing. It's not a choice, is a nessecity.
 

fancarolina

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[citation][nom]dthx[/nom]Dear Fancarolina,It's so foolish to believe tht a phone is free because you didn't pay anything on day one. If you want to buy a car and take a loan for 100% of the amount, you haven't paid a dollar before you received the keys... but how cheap is that once you sum up all you mortgage payments???That's what telecom contracts are all about. You have this great feeling that you get a phone for free, you feel like a world champion of shopping, but after two years, or if you cancel your contract too early as well, you'll have paid your phone twice the price eventhough you barely used it. Everything has a price and free often turns out to be the most expensive of all solutions...[/citation]

Ok answer me this. What smartphone is available for less the free without a contract on a major carrier. All smartphones have the associated costs you speak of. All cell phone contacts have early termination fees. If you can't afford the whole contract don't sign one.

Apple wants to attract customers who are affluent enough not only to buy their phones but who will also buy Apps. This is where Apple makes their money. The concept is the exact same as a strip club charging low cover because they will make it all back at the bar. Apple has set their prices as low as they can. the 3GS is free with a contract, the cheapes that any contract phone costs initially. Setting their prices for the iPhone 4 at $99 the iPhones 4S at $199 and I assume the big brother iPhone 5 will come in at $299. They have covered all the customers who can continue to afford to feed their Apple device Apps.
 

back_by_demand

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[citation][nom]stardude82[/nom]BMW makes plenty of $20K cars, they are called MINI Coopers. I will have a hard time ever buying a MINI because BMWs are also known to be unreliable money sinks once out of warranty, sort of like Apple.[/citation]
Daft analogy, Fiat owns Ferrari so does that mean all Ferraris are as cheap as Fiats?

I know what he meant, you know what he meant, everyone knew what he meant, you had to be pedantic just for the sake of it.
 

AndrewMD

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[citation][nom]dthx[/nom]Sames story repeats again... Apple may eventually miss the train to a market they almost created on their own. That's exactly what they did with the Mac. They don't want any low margin product in their range, good for them... but that's what most of the market is made from! I think they already reached the biggest market share they could get with their current products range and if they stick to that strategy, they will soon end-up in a niche, but for some reasons, they seem to like that position.[/citation]


I love that people here believe they understand the market place. Maybe Apple should stop paying market researchers and just hire a bunch of people from Tomshardware Page...

It is obvious that Apple knows what people want. It is apparent since they sold out of their pre-sales within hours of going online. How many other smartphone manufactures are able to pull this off?

 

del35

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Apple simply doesn't want a reputation or association with low-end trash. They deliver what they want in a reasonable priced device, and in return, get to bring their consumers what they deem fit.
Most of what Apple produces is really part of the low-end-trashmarket when you factor out the casing an the hype surrounding it.

 

neiroatopelcc

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[citation][nom]AndrewMD[/nom]I love that people here believe they understand the market place. Maybe Apple should stop paying market researchers and just hire a bunch of people from Tomshardware Page... It is obvious that Apple knows what people want. It is apparent since they sold out of their pre-sales within hours of going online. How many other smartphone manufactures are able to pull this off?[/citation]

No other manufacturer caters specificly to the uninformed customers, so no other manufacturer can.
 

Harby

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[citation][nom]fancarolina[/nom]The 3GS is free with a contact! What do you want them to give you a phone and pay you too! Where did this authors expectations come from do you not understand business at all. Apple doesn't want budget customers.[/citation]

Free with a 2 year $50+/mo contract. Big deal. For a 2 year locked expensive contract I can get a SGSII for free. Guess which one I'd pick or every other sane person out there.
 

dthx

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[citation][nom]fancarolina[/nom]Ok answer me this. What smartphone is available for less the free without a contract on a major carrier. All smartphones have the associated costs you speak of. All cell phone contacts have early termination fees. If you can't afford the whole contract don't sign one.Apple wants to attract customers who are affluent enough not only to buy their phones but who will also buy Apps. This is where Apple makes their money. [/citation]
Well, in the US, perception may be different as the bundled sales principle is more common, so you miss the point. But if it was possible to buy a iPhone 3Gs without a contract for a data plan, it's pricing would probably be nowhere competitive compared to the other manufacturers.
In Europe there are countries out there where bundled sales (devices + contracts) are illegal (for the sake of transparency and consumer protection).
In those countries like Belgium where iPhones are to be bought "standalone", the iPhone 4g 's full price is >650euros/32Mb and price for the 4Gs still unknown. Android phones such as HTC sensation or SGSII sell for 450 to 550€.
You won't see an iPhone 3GS in those countries as they are simply "unavailable": they are only in countries where they can be bundled with a contract and in those countries, you can only buy the latest model.
To get the "free" 3Gs phone with AT&T in the US, you'll have to pay at least 1320$ over two years, and that's the cheapest plan (450minutes/200mb)... The situation in Europe is quite similar with an initial fee of 59€ + contract of minimum 50€/month for 24 months. So, you'll never know how much the iPhone 3gs costs to the operator, but they make you pay a huge price for it as you can have a voice/data plan for almost half of the price if you buy it without a phone.
So, the truth is that the iPhone 3Gs is not priced competitively and that's hidden in the contracts. Apple starts loosing more and more market against competitors as cheap smartphones are getting better in quality. The examples of Nokia in the posts here above are irrelevant as well. Nokia has enjoyed great profits and a market leader position for more than 10 years thanks to their diversified products range before they totally missed the smartphone turn for different reasons (OS strategy mainly). In fact, had Nokia not managed to keep important sales volume in the low end phones, they would be dead long ago already!
 

STravis

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[citation][nom]neiroatopelcc[/nom]If they're not known for cheap, do explain why their 1 series competes with run of the mill junk and why there are so many 318's about ... I've got nothing against bmw (same can't be said about those driving em), but they ARE aiming for cheap. Like merc they've lowered build quality in order to compete on pricing. It's not a choice, is a nessecity.[/citation]

LOL - sorry, but in the US there haven't been any 318's in quite a while. BMW may be targetting cheap in Europe but NOT in the US.
 

STravis

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[citation][nom]del35[/nom]Most of what Apple produces is really part of the low-end-trashmarket when you factor out the casing an the hype surrounding it.[/citation]

BS. Apple products are part of an ecosystem and are well supported (which is why software upgrades that are in the iPhone 4S will also be rolled back all the way to the 3GS). When you buy your Android phone, you'll be lucky if your particular phone is supported for more than 6months, never mind 3 years.

That level of support/integration is worth something to people; not having to fiddle with the phone settings all the time is worth even more.
 

watcha

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[citation][nom]amk-aka-phantom[/nom]As the world's most successful mass brainwashing campaign on making tech-illiterate people buy underpowered crappy electronics and boast about it[/citation]

1 - Whatever the reasons, doesn't change the profit figure.
2 - Your silly, silly claims about it being tech-illiterate people who buy the fastest mobile phone on the market right now, could not be more wrong. The iPhone demographic is largely successful, college graduates, with a high income, on average 31 year old male. http://thereisnobox.wordpress.com/2007/06/19/iphone-demographics-and-six-degrees-of-separation-from-the-source/
And there's good reason too. Some people don't need something to be 'difficult to use' to see how powerful it is. The fact that anybody could operate their phone doesn't send them into a spiralling tearful mess because they are more secure than that. They appreciate the extra features that only the iPhone can offer such as the fastest GPU in ANY phone, full stop, plus great battery life, fantastic manufacturer reputation (top of all satisfaction polls), and all in a slim attractive package. It's just basic logic.
3 - The only 'boasting' which goes on here is people who slag off the people who buy iPhones and try to big up their Android devices and have a seriously geeky issue of 'hating' Apple. It's pretty pathetic really.
 

watcha

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[citation][nom]back_by_demand[/nom]Daft analogy, Fiat owns Ferrari so does that mean all Ferraris are as cheap as Fiats?I know what he meant, you know what he meant, everyone knew what he meant, you had to be pedantic just for the sake of it.[/citation]

For once, I agree! +1

:)
 

southernshark

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[citation][nom]unksol[/nom]this honestly confuses me. Since the networks force you to have a data plan the second you stick your sim in or activate a smartphone who cares if its "subsidized" you're going to have to pay it anyway, might as well get a phone discount. I suppose the 3g is pretty low end for a phone, but apple has to keep that double markup or the apple logo wouldn't mean as much if you didnt overpay[/citation]

Most people in "emerging markets" what you may call the 3d world don't use data plans, but rather just buy minutes as they go. As such, the phones have to be sold without a contract.
 

jacobdrj

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They have entry level devices: Their old phones. Isn't the 3GS going for free with a 2 year contract? That was a fairly capable phone, so long as you made sure you are on the right version of iOS...

Nothing wrong with both killing old stock and feeding into your business ecosystem at the same time to capture the lower-end market...
 

STravis

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[citation][nom]sonofliberty08[/nom]the current iphones are already the low end phones that made by foxconn in china[/citation]

Sorry to break this to you Virginia, but most electronics these days are built in China either by Foxconn or some other manufacturer.
 

deadlockedworld

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[citation][nom]DjEaZy[/nom]... what is 'low-end'... is not every previous model low-end now? They have a 3GS for free. Is that not low-end?[/citation]

There is a difference between outdated parts and cheaply produced parts. Products with low development costs and low cost materials typically have a higher failure rate, etc.
 

andy5174

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However, it may be worth noting that Apple never had interest in a low-end, low-margin business. There is no conceivable reason to change that strategy now.
WRONG! They have great interest in selling LOW-END products with pricing of HIGH-END.

MacBook Pro is a good example!
 
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