Daniel Hruska Even before the new iPhone 6 was introduced, many people believed that the base model would have 32GB of storage and that Apple would go from 16GB, 32GB and 64GB variants to double that. Instead, however, it kept the 16GB variant and doubled the other two to 64GB and 128GB, respectively.
The iPhone with a capacity of 32 GB has completely dropped from Apple's offer. For an extra $100 (we'll stick to American prices for clarity), you won't get double, but quadruple, the basic version. For an extra $200, you get eight times the basic capacity. For those who wanted to purchase a higher capacity, this is good news. On the contrary, those who wanted to stay with the base and expected 32GB are disappointed, or they reach for the 64GB variant, because the added value for $100 is great.
If Apple introduced an iPhone with 32GB of memory as the cheapest model, the vast majority of users would be happy and few would pay extra for a larger capacity. But Apple (or any company) would not like that. Everyone wants to earn as much as possible with as little expense as possible. The production price of individual memory chips varies by several dollars, so it is logical that Apple would like the largest part of users to reach for more expensive models.
American railway companies took a similar route already in the 19th century. Third class travel was comfortable and good value for money. Only those who could afford this luxury traveled in second and first class. However, the companies wanted more passengers to buy the more expensive tickets, so they removed the roof from the third-class carriages. Those passengers who previously used third class and at the same time had finances for second class began to travel more often in the higher class.
Someone with a 16GB iPhone most likely also has an extra $100 to buy a 64GB iPhone. Quadruple memory is tempting. Or, of course, they can save, but then they don't get the "luxury" they deserve. It is important to mention that Apple is not forcing anyone to do anything - the basis is the same, for an additional fee (ie higher margins for Apple) higher added value. How this technology affects Apple's bottom line he calculated on your blog Iterative Path Rags Srinivasan.
The first table shows the actual data of iPhones sold for the last fiscal year. The second table is extended by several data, the first of which is the willingness to purchase higher capacity. With this, let's consider that roughly 25-30% of buyers would opt for a 64GB iPhone instead of 16GB, but at the same time, they would not be willing to pay extra if 32GB of memory was in the base or as an intermediate option. The second is the amount of increased cost to produce a memory chip with a higher capacity. Assume that the higher capacity costs Apple $16. But by charging an extra $100, he ends up with $84 (not including other expenses).
For an illustrative example, let's take the difference between the fictitious and the actual profit of the fourth quarter of 2013, which is 845 million dollars. This extra profit is higher because more customers bought the higher capacity iPhone. The cost of producing a chip with a higher capacity needs to be deducted from this profit. Then we get to an additional profit of 710 million dollars. As can be seen from the sum of the last line of the second table, omitting the 32GB variant will bring an extra $4 billion for basically nothing at a sober estimate. In addition, the calculations do not take into account the fact that the production of the iPhone 6 Plus is not much more expensive than the iPhone 6, so the margins are even higher.
that with the roof is interesting information. Thanks for broadening my horizons :)
Unfortunately, they forget one thing. They constantly boasted that they had the most satisfied and loyal customers. But now they will have a lot of unsatisfied customers who will buy a relatively expensive phone, but will be unhappy with it, because they will always have to deal with what to delete, they will not have space to take pictures or record something, to be able to download a new album, etc. They also won't spend as much on apps because they won't have anywhere to store them.
Of course, the answer to that can be that one is only to blame, one should better think about what capacity to take. But the magic of Apple used to be that even a complete llama who doesn't understand phones could take the basic version and not spoil anything... It just worked. But that time is already gone.
Anyone with an iPhone or any other smartphone will not buy anything with 8GB. I don't know what sales are for 8gb iphones but it will be ridiculous. Everyone prefers to pay extra. So far, it looks like Apple knows what it's doing.
Yeah, well described. However, customers perceived it as too loud clapping when milking money. And that is not a good strategy for the future. The table itself is also not complete because it does not take into account one crucial fact. If the capacity of iPhones started at the 32 GB variant and at the same time the capacity of the so-called cheap iPhones – currently 5C, was not 8 but 16 GB, how would the sales of these variants increase. If you look at how many 8GB iPhone 4S were sold last year, it might be very interesting. Because there is a fairly large target group that simply thinks about what they will get for their money - a lot, for example, in the case of parents who buy phones for children. Well, here today, compared to the competition, the capacity-price ratio is really sad. And children are simply multimedia, so they need that capacity.
As they say, you can eat, but you shouldn't smack. I personally don't have a problem with buying expensive devices, but I've been getting fed up with this Apple bashing lately, and I can imagine, at some point in the future, that this might be a reason to say goodbye to Apple.
It's true that I can't even imagine an 8GB phone for a child. When only iOS8 required 5GB of space, a minute of video is 150MB, a better game is 1,5 to 2GB... This is just crazy. It should be in Apple's interest that people use their iPhones as much as possible (spend on content)... But that is not possible with a small capacity. So I don't understand this strategy.
A part of customers who do not focus so much on the ecosystem and functionality will switch to a competitor, and another part will extend the life of their older phone. This behavior is not a product of Apple, but a consequence of stock companies and the stock market. It's just that the priority goal of the shareholders is not that the company is the best from the point of view of customers, but that they collect money as soon as possible.
But it won't be so terrible, we look at it from the point of view that 100 USD is several days' work for many people. In more developed countries, it's just the greening of another trifle during the year. Apple customers are not those who count every penny, whether it will work out for them.
Exactly, for me, as a person who earns up to €650 per month, it is very questionable whether I am willing to pay such an amount for the 64BG version. Until now, I have always bought the 32GB version and have never had any doubts about buying them. I've been thinking for about 2 months now whether to buy a 64GB iP6 or a 32GB iP5S.
The gluttony of apple shareholders is already at the ceiling. I would also like to add that the Chinese market has the same problem of dealing with this price difference, and that is already a BIG market for Apple. That's why there are ONE+ or Miui brands in the world that are killing their overpriced nonsense. And the thing that annoys me the most is their conversion of $ to € to 1:1, they have to make terrible millions from that alone.
The 1:1 conversion is not a product of Apple, but of most American companies and is caused by a different warranty (1 year in the USA, 2 years in the EU) and a different VAT rate. And rather than making different prices based on the USD to EU exchange rate, it's easier to do it this way - unfortunately, few people realize it and think it's some kind of theft.
Nonsense. The 2-year warranty is circumvented by the fact that it only applies to the end consumer and the VAT rate has nothing to do with it, since the base prices in the US in dollars and the base prices in the EU in euros (after 1:1 conversion) are without VAT. On the contrary, the price should be the same in the US and the EU, albeit in dollars... that would be simpler. Here, on the other hand, a more complicated path is followed in order to increase the price by another 20-30%.
Thanks to Apple's bricked-up philosophy and their business policy, after many years I switched from using an iPhone (I've had them all since the beginning) to an Android (Sony Xperia Z3 compact). It has its ups and downs, but I grunt happily. Just talking on the phone is an incredible luxury - far more intelligent than an iPhone - all from one screen. microSD memory expansion - I can finally fit maps, videos, etc.
Apple = Nokia (we'll see).
If the ios+osx ecosystem does not bring you any benefits, then there is certainly no reason to stay with Apple. Sony makes good phones. Here, everyone spits on Apple's business model, while all manufacturers are quietly envious. Which Apple model would you recommend? A Samsung model that churns out one mobile phone after another like Nokia and is losing positions everywhere? Or the LG model, which sells a flagship for 12 and still doesn't impress anyone, and according to Apple, its sales are ridiculous. I will not mention Chinese business models. What is poor Apple to do? Record sales, record profits, record company value. About your Sony: I waited so long for them to discount the Z1 compact, until they gave me an expensive and larger z3 compact, which does not suit me. Sony itself had to change the model and start releasing flagships after half a year. It is practically not worth it for Note 2 owners to switch to Note 4. And why buy Note 4 when I can get Note 3 for 9 thousand in the sale. Apple only does what its customers allow it to do.
We still see it through the lens of the poor man from the East. For us, anything from Apple is a luxury and very expensive product. I have a girlfriend in Austria. She's a doctor, so behind the water. 3 years ago, she bought the then flagship iPhone 4s. Here he became 15+k. She signed a contract with Orange for 2 years for a tariff of 25 euros, used some loyalty points she collected during her time with them, and the phone cost her 70 words, seventy euros. And that was 24 crowns at the time. She went to buy an iPhone 6 this past Zari. She bought the 64GB version. You don't care about money, so go ahead and buy it for cash. Price in Reich 800 euro. Meanwhile, Orange became Drei. The guy offered her that if she extends the tariff she has for 25 euros (4000 minutes to Austria, 1000 minutes to the EU and 1,5 GB), he will sell it to her for 419 euros. So who is the thief then? Apple or perhaps our operators. Nowhere in the developed world do people do this. Now everyone complains that the Mac mini has a frame on the board and cannot be added. Nowhere in the developed world does it work like you buy a Mac with the biggest memory and buy a bigger one on Algae and then replace it. Just buy a Mac with as much memory as you need for work. And done. Hell, we're a developing country council.
If I take it from the "optics" of people earning in Prague in attractive positions or owners of companies, the situation will not be so different compared to the West. In addition, today's competition, willy-nilly, is not able to maintain the premium prices of its products like Apple, and thus a unique offer of flagships in a completely different price contrast is gradually appearing. And that is attractive, especially when today's competition can handle HW perfectly, including used (valuable-looking) materials with connections to Google/Microsoft services.
Oh, and a little pacifier. Yes, Apple is expensive, but what company will hold down the price of a product like Apple? You buy a flagship from Sony or Samsung and in half a year you're at a fraction of the price. Buy Apple and the price stays. You will sell it without any problems. The Mac mini won't even warm up in the bazaar for a week. You won't sell a normal PC for anything. Not to mention the one in Austria. Not only that 3 years ago iP 4s cost her 70 euros. Now that she bought an iP 419 for 6 euros, she wanted to give me the old one. The flashlight was worth the fart, stupid headphone jack. At the Apple service, they told her that it was not worth repairing and that they would send a new one for 150 euros. So segra paid for it and I have a new iPhone 4s 16gb for 150 euro + 40 euro unblocking, but it was blocked in Austria. So the first iPhone purchase was 70, now 190 euros. She was happy for 3 years and I will be for a while too. She also replaced an iPad 2 that was broken by the kids. I'm asking: does it work like this with Samsung or Sony? Or for phones imported from China? If you call someone a thief, it's our operators first and foremost. Apple takes care of its customers above standard.
It seems quite unfair to me to turn one above-standard positive example into a general trend. I live in Ireland, the warranty is 1 year, it can be extended to 18 months by a backbreaking legal trick, it definitely does not cover careless handling and replacement parts cost about the same as a new phone/iPad/Macbook.. Screen replacement on a Macbook Air that my son broke , 680 Euros. The operators here do not unlock the iPhone and are completely the same wretched people as in the Czech Republic. I have exactly the same experience from England and France. Of course, if you subscribe to them for 2-10 years, the phone subsidy will be returned to them handsomely. Blocked smartphones are the biggest selling point for all operators at prices of around 1 Euro/1MB for roaming data, when you don't sit on your ass all your life... The key, I think, is in how you write that the nurse doesn't care about money, unfortunately not everyone can say that.
Keeping the price of products is quite a double-edged sword, especially when Apple increases the price of its iPhones every year. Then there is a huge price gap between the offer of the competition of flagships (when they become cheaper after a while) and Apple. Especially when the competition today offers something that Apple does not have (watches, waterproofing, functional NFC, wireless charging, etc.).
A few months ago I was selling an iPhone5, new - serviced and was glad someone took it after 3 weeks. The time when I immediately sold the iPhone4s, the Macbook is definitely gone.
Yes Apple is expensive and I thought it was worth it for 5 years! But today, for the third time, Apple has robbed me of money in terms of ringtones!! I don't know how to solve it anymore, where to write, can someone help? This is not normal anymore, a person buys a ringtone and after an hour it disappears from his phone! I would appreciate any advice, thank you.