Apple Analysts Letdown: There is No Low-End iPhone

[Guest]

Apple's decision to simply upgrade iPhone 4S and lower the prices for the iPhone 4 and 3GS could have been a strategic mistake, or, at least, a missed business opportunity.

Apple Analysts Letdown: There is No Low-End iPhone : Read more

 

[agnickolov]

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.

Duh! Of course, if the article had started by stating the obvious, there would hardly be need to write anything else at all...

Also, I'd question the credibility of an analyst that doesn't understand Apple's core business model.

 

[dthx]

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.

 

[neiroatopelcc]

Apple doesn't have a business model, they've just got an effective marketing model and randomly planned gadget releases

 

[Ragnar-Kon]

[citation][nom]neiroatopelcc[/nom]Apple doesn't have a business model, they've just got an effective marketing model and randomly planned gadget releases[/citation]
Seems to me that those planned gadget releases and the heavy marketing is their business model.

 

[mrmike_49]

[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]

Exactly right - I really don't understand it

 

[JOSHSKORN]

Smart phones are just not cheap. They won't be for quite some time, now, particularly with service providers doing away with unlimited plans. Give it a couple of years.

 

[zybch]

I thought ALL iPhones were decidedly low end.

 

[back_by_demand]

It depends what people class as low-end, having a bigger screen is something people seem to clamour for but I think there would be a serious market for an iPhone Nano.

 

[Stardude82]

[citation][nom]WhysoBluepandabear[/nom]It's the same reason BMW doesn't deliver a car for $20,000.[/citation]

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.

 

[unksol]

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

 

[Stardude82]

Odd, Apple isn't going into the developing market. Plenty of handset makers make smartphones only for the developing market. Nokia's market-share is collapsing and its surprising they aren't going anything to capitalize on that.

 

[DjEaZy]

... what is 'low-end'... is not every previous model low-end now? They have a 3GS for free. Is that not low-end?

 

[guanyu210379]

What could be more "lower" than the current iPhones?

 

[fancarolina]

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.

 

[amk-aka-Phantom]

Of course there's no low-end iPhone. If you set your standard as low as the iPhone, you can't go any lower.

@everyone: there's a request in the Feedback section of the forums to make Gruener write articles on topics that make sense (PC hardware/benchmarks/etc) instead of Apple. Please support

 

[dthx]

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...

 

[amk-aka-Phantom]

[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]

More customers = more money. Don't want more customers = don't want more money.

Apple phones aren't expensive. They cost as much as a top HTC/Samsung model (okay, maybe a little more) and with a contract, all smartphones are literally a steal (Really, $200 for an SGS II? Buy, jailbreak, PROFIT), including the iPhone. There're just better options for money.

 

[watcha]

[citation][nom]amk-aka-phantom[/nom]More customers = more money. Don't want more customers = don't want more money[/citation]

This is 100% incorrect.

The PRICE you pay for gaining more customers is REDUCING your revenue from customers who would previously have paid the increased amount and now elect to go with the cheaper option.

This is very basic business logic - there is a sweet spot between the price you charge and the volume of sales you achieve which generates you the most profit. This sweet spot does NOT necessarily occur at the highest volume. As the maker of the most profitable mobile phone the world has ever seen (the iPhone 4) - Apple arguably got far closer to that sweet spot than anyone has before them.

 

[Filiprino]

From here to the eternity.