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51 Comments
- nericus, on 10/12/2007, -2/+20No where does the article say that "apple analysts" have announced huge price cuts. A third party company is ESTIMATING that the cost to build the iPhone is roughly 1/2 the retail price.
"Apple will likely have some wiggle room to cut retail prices on the iPhone, if a report from iSuppli proves correct." - DaffyDuck, on 10/12/2007, -0/+12OK, now I will make an on-topic post.
I find the headline to be completely inaccurate. Apple is unlikely to lower the price very much. They usually keep their hardware at a fairly stable price and methodically add features to it. Then they come out with a lower tiered product at a lower price. The iPod with video did see a price reduction not too long ago but they are relatively rare.
Lastly, anyone who understands business understands that the BOM cost of a product does not nearly tell the story of how much profit is made from it. - DaffyDuck, on 10/12/2007, -1/+10I saw the top digg commenter statistics that were posted recently as well. Flag is the only one in the top 20 with a negative digg average. Those are troll numbers. I know Flag will blame it on Apple fanboys yet consider that there are many more Windows using diggers that could be digging him up if they cared about or agreed with what he has to say.
More than 50% of diggers are using Windows: http://fvvw.com/digg/report.html
Top digg commenters: http://krisbrower.com/2007/01/11/digg-user-comment-statistics/ - zang74, on 10/12/2007, -3/+11He's got a point, flag. You do seem to spend an awful lot of time posting on Apple threads. Sheesh, as a freelance graphic designer, I work from home, but I don't have time to bother to keep tabs on as many Apple stories as you do, let alone comment on them all.
What DO you do, flag? - zang74, on 10/12/2007, -3/+11We both know that's a lie, flag. You have to actively seek out Apple stories. This one wasn't on the front page of even so much as the technology section. A good number of the ones (more than half in your immediate comment history) you respond to are less than 50 diggs, which means they DID NOT show up on the front page.
No one asked you to "battle against the fanboys", so I don't know where you got the idea that it was welcome. Did you see that recent post about the highest-comment-posters on digg? You were the only one with a negative digg average. Shouldn't that tell you something?
I mean geez, by even posting on so many Apple stories, you're doing the equivalent of walking into a Honda owner's club and saying "you're all biased zealots for liking Honda!" Free speech aside, you intentionally insult, patronize and deride Apple users and treat everyone with a negative bias.
Live and let live, and ffs get out some more. Do something constructive. - zang74, on 10/12/2007, -0/+8Exactly, R&D, marketing, packaging, shipping all contribute greatly to the cost of a product and people often lose sight of that. I do see the cost of the phone dropping at some point in the future, but not for a while yet.
- HappyScrappy, on 10/12/2007, -0/+7This is completely lame.
iSuppli's estimates are just that, estimates. They calcualted the cost of producting a consumer product I worked on by 40%. The said we were losing money when we were making money.
And in that case, iSuppli had the advantage of buying one and taking it apart.
In this case, iSuppli doesn't have access to an iPhone and so no way to even inspect what is inside to price it out.
Because of that, this estimate of cost is completely useless.
Marked as inaccurate. - OandA, on 10/12/2007, -0/+6I guess people forgot what R+D cost for 2.5 years. And don't forget the first ipod cost 499 and it only had 5 gigs. Price drops will come fast and furious but wait 1 year.
- baxtermaddux, on 10/12/2007, -1/+6Since i have Flag Blocked, i have the pleasure of not being offended by his idiocy, but i wonder if that also allows him to go on ruining Digg since i am not able to warn others what a moron he is since i cant see his comments.
- Quix, on 10/12/2007, -1/+5"Oh I have a very nice position making lots of money and I run a small business on the side." - flag564
Read: "I'm currently unemployed."
Sorry flag, anyone with your obvious lack of intellectual development (your comment history says it all) is hardly in a "nice position making lots of money." Nice try.
"flag i admire you, and yeah ***** these stupid mac fanboys"
Awwww, flag has a friend. How cute! - kelly, on 10/12/2007, -0/+3Apple doesn't typically cut prices very dramatically on their products. Instead, they sell high end items at an industry average price and then rather than lowering the price after the feature set has worn thin, they simply make dramatic improvements to the specs and keep the price as-is and thus raise the bar on what the rest of the industry average has to adhear to to get a given price for a product.
- NeoRicen, on 10/12/2007, -0/+3That title is the biggest load of crap I've seen on Digg's front page recently. Marked inaccurate.
- hexydes, on 10/12/2007, -1/+4That's not looking at the entire picture, in my opinion.
The price of the original, 1st-gen 5GB iPod was $399 (via apple.com). There were no other versions, just the one; this is very similar to the iPhone today, in that it is priced fairly high starting at $499), and there is only one major model (two different storage capacities, but that comes as a legacy from the iPod platform).
Things to note from the evolution of the iPod:
- for each sub-platform of the iPod, Apple has released a major or semi-major update roughly every 12-18 months
- since the original incarnation, Apple has spawned two sub-platforms, the Mini/Nano and the Shuffle. The distinguishing differences between the sub-platforms are physical size, storage capacity, display capabilities, and function
- Apple has lowered the price of the highest-end sub-platform model (at least with the main iPod line, the highest-end device cost $399 at the time, and the highest-end device now costs $349), and has also split the sub-platform into a sub-sub-platform, which is distinguished by price and storage capacity.
- The iPod was one of the first portable MP3 devices to pass the GB barrier (note, I did not say the first, but one of the first), and was also one of the first to use a HDD. At the time, the portable MP3 market did not have many offerings, and very few were in the GB level of storage (the average size at the time was 64MB to 128MB).
Major differences in the two markets/platforms:
- The portable MP3 market did not have much competition when Apple entered, whereas the cell phone market does have a lot of competition.
- Apple didn't have to deal with the concept of service providers with the iPod, whereas that is not the case with the iPhone.
- The iPod serves one major function: to play digital media. The iPhone has to serve many functions, digital media playback being only one of them.
- Aside from the recently-released OS X, Apple did not have much trust from the industry to deliver a successful product. Due to the iPod being such a success, the industry now sees the iPhone as a sure-bet since Apple has been so successful as of late.
- Apple did not have another product that competed/sort of competed with the iPod, whereas the iPod and iPhone have some overlapping functions, and have the potential to compete with each other at some levels.
Similarities in the two markets/platforms:
- At the time, the iPod was considered way ahead of the competition, as far as features and capabilities went. This seems to be the general consensus with the iPhone as well.
- At their debut, both devices were/are considered to be on the high end of pricing for a device of that nature.
So now, taking that into consideration, what sort of predictions can we make about the iPhone's future? My guess would be:
1. The iPod isn't going anywhere, at least not in the short term. This is a HUGE revenue stream for Apple, and I think the iPhone is simply Apple trying to branch into new markets (see point #2). I could certainly see the iPod line being consolidated, though. Rather than a Shuffle/Nano/iPod, I could see there just being "iPod", and there would be a "small" iPod (replacing the Shuffle, but similar functionality), a "medium" iPod (replacing the Nano), and a "large" iPod (basically what it is now, but more space, maybe a few functions from the iPhone, etc).
2. What is left to add to the iPod, aside from more storage space? Maybe wireless transfer (for loading onto the device, as well as for playback) and....? I'm guessing that Steve & Co. see this, as well as the fact that just about everyone in America has a cell phone. At some point, the iPod line will probably be discontinued, or largely scaled back at any rate. My guess is this is probably in the 3-5 year plan.
3. As the iPod line consolidates, the iPhone line will diversify. Just as Apple did with the iPod/Nano/Shuffle, so will they do with the iPhone. The limiting factor here obviously is the size of the phone, which all but rules out an "iPhone Shuffle" (or does it, what do I know). I couldn't say how this would take place, maybe in a different size/storage/function phone, maybe a different form-factor altogether, who knows. However, I would be very willing to bet that there will be at least two sub-platforms in the iPhone line-up, and they will be priced accordingly.
4. As time goes on, the price will drop a bit. Others will copy the iPhone in style/function, and Apple will have to compete with that, as well as itself (people who already have a 1G iPhone, for example). What costs $499 in June could easily cost $399 in 2008. Perhaps even the cell phone company(ies?) will begin to subsidize the price even more.
So at the end of the day, I think the timeline will be short-term, the iPod and iPhone complement each other, long-term, the portable MP3 market simply gets replaced by the portable DEVICE (that does everything) market, and Apple wants to be at the fore-front of that. Right now, the price is high because...well, because it can be. People will buy this awesome new device, despite the price. When the awesomeness wears off (due to similar devices being released, the iPhone simply not being new, etc), Apple will start competing in price, capacity, etc. - SyDIGG, on 10/12/2007, -2/+5"Oh I have a very nice position making lots of money and I run a small business on the side."
You are a pimp that occasionally deals drugs? - Charlotte_Web, on 10/12/2007, -0/+2ok, I've watched Apple for a long time.
Apple doesn't like big price cuts. They are very deliberate in setting prices. They don't like to over-manufacturer and sit on a bunch of inventory. They build as many units as they think they can sell, and no more. If the channel runs out of inventory before the next version of a product rolls out of the factory, they are fine with that. In fact, that's exactly what they want.
Apple will sell through as many units as they can at this price point, and when sales starts to level off, they will introduce the next generation of iPhone, bumping up the amount of flash memory in the unit and what-not, so that there's more value, but they will remain at roughly the same price point.
Now, the cell phone industry works on a very different model, and Apple may be trying something new here. With the cellular business, the price of the phone can be outrageous, but the rebates for signing a two-year contract bring it down to something more reasonable. It's possible that Apple may be gearing up to do that, and they are cleverly creating value in the mind of the consumer by pre-announcing the full MSRP. But I doubt it. I'm very skeptical of there being ANY rebates on this phone.
Apple is a boutique vendor, and their brand image is that they cater to a discriminating consumer. - jalapeno, on 10/10/2007, -0/+2Haha reading these posts is hilarious now that the price dropped $200...
- AkshayGenius, on 10/12/2007, -0/+2It IS very unlikely for a price cut, but I really dont mind the price, the thing I really hate is its attachment with CINGULAR, for which you have to pay $175 for an early cancell fee, the CINGULAR attachment has also been a key reason for the delays in other countries than US, for ex Canada, and also a really negative thing about this phone is the lack of 3G, come on!!! more than 75% of the phones are already 3G, and by June, I'm sure there will be plenty more, and this could be a major factor for atleast me, not to buy the phone, and anyway I think a price reduction will come, but not anytime soon...
Also, I have a question, I might sound a little noobish, but anyway. I live in the middle east, where the iPhone is coming in 2008, so, suppose I buy the iPhone in June 07 and cancel the cingular attachment, and bring here to the Dubai, and put my SIM, will it work? Instead of digging me down, I would highly appreciate some answers. - chinaman1472, on 10/12/2007, -0/+1When the RAZR was first released, it was a $499 phone, $399 with a 2 year contract, here in California. Yes, now they give it away, but realize that the RAZR and iPhone are in COMPLETELY DIFFERENT LEAGUES.
The original RAZR had virtually no other extra features to that of other comparable phones at the time of its release. In fact, most PDAs were actually cheaper than the RAZR and had way more to offer. In all honesty, the ONLY thing the RAZR had going for it was the fact that it was slim. The Motorola V551 had exactly the same features (aside from a smaller screen, and a camera that wasn't 1.3 MP) and was released months before it. At the time when the RAZR was released, the V551 was $199 with a 2 year contract, in which shortly this phone dropped to $149 and then down to $99 within months while the RAZR was still in the $299-$399 range. I highly doubt you value something such as slim is worth to be worth $200+.
At least the iPhone has capabilities that are convienent.
People that write these "estimate costs" articles forget to factor in things that cost money. An advertisement campaign will cost millions of dollars that Apple won't see return to them for months, possibly years. Cingular is cutting a deal with Apple so money is getting thrown around there that either company might not see for months as well. Etc. etc. - TheGibson, on 10/12/2007, -1/+2Riiiiiiiiiiiiiiiiiiiiiiiiiiiight. The pone is 5 months away and analysts are talking about price cuts? Not until this time next year at the earliest, we've always paid a premium for awesome stuff from Apple. And when they DO lower the price, it'll be when they're introducing the next-gen version.
- tdhurst, on 10/12/2007, -0/+1This is COMPLETELY correct, as we know everything is simply a sum of their parts and nothing more.
- shortarabguy, on 10/12/2007, -0/+1I like the idea that Apple might be dropping the price, but be a little more careful with the title... When it says that it is "to drop by 50%," you give the impression that it has been decided and that there's some informant inside Apple feeding information...
I REALLY want to see the iPhone do well, and I don't honestly care about Apple or the insanity caused by the iPod( look at the hypocrite with the iPod nano, he also goes by "shortarabguy" on some forums...), but more than anything else, I want to see a cell phone with internet capabilities and the pragmatic possibility of it becoming a futuristic device fulfill its potential and become a staple of everyday life, like the car... or clothing. - superal1394, on 10/12/2007, -1/+2Apple wouldn't do it, they are Apple (This is coming from the proud owner of two iPods and a Macbook Pro so don't call me a hater). They would never undercut the Nano and Video like that, unless they roll out upgraded versions of those with the iPhone, making the iPhone 100 dollars more than the video would garuntee no one bought a regular iPod.
- pdawg90, on 10/12/2007, -1/+2Now if we can just get Cingular out of the way...
- Guard, on 10/11/2007, -0/+1What's left to add to the iPod?
I want crossfading between songs! - Midnightbrewer, on 10/12/2007, -1/+2"They would never undercut the Nano and Video like that, unless they roll out upgraded versions of those with the iPhone, making the iPhone 100 dollars more than the video would garuntee no one bought a regular iPod."
Actually, more like vice-versa. Right now, the iPhone is the biggest threat to the iPod not because it's got the new, shiny interface, but because Apple probably won't refresh the iPod line for at least six more months, to give the iPhone a chance to take off. There are a lot of iPod users who would prefer to see an updated version of the video iPod without the limitation of 8GB of flash memory and paying a cell phone provider tax for two years. Apple has gone a step too far this time; why would I want to risk breaking or losing my iPod and cell phone at the same time? It also limits my upgrade options as well. Thanks, but no thanks.
Worse still, I live in Asia, which means you have to extend all of those wait dates by another six months - I hope that doesn't mean the iPod update doesn't get delayed even more! All of the current Japanese cell phones already offer at least all of the features of the iPhone at a pittance of the price, in addition to 3G, 5 Megapixel cameras, and electronic wallet features (very useful at the store.) All this without the two-year tie-in. Apple's going to have to do some upgrading before they can hope to penetrate the market over here, especially when they're competing with the PS3 on price (the Japanese aren't buying those, either.) - kkcoolj, on 10/10/2007, -0/+1Don't forget about the iPhones in the Apple Clearance Store + the $25 AT&T Wireless Rebate = $324 Final Price on the 8GB iPhone.
Details: http://www.essistme.com/2007/09/05/price-drop-apple-iphone-final-price-274-including-sh/ - adragons, on 10/12/2007, -0/+1Ya...this is ridiculous. Every. Single. Company, sells their product for at least 200% of what it cost them to make. (At least initially). Pop/Soda costs mere cents to make and 10cents more for distribution, so why are you paying 100 cents for something worth 20 cents? Because they can make you.
- acebrickman, on 10/12/2007, -0/+1boo freakin hoo. Get a Zen if you can't afford/don't want to pay for an iPod
- streetstealth, on 10/12/2007, -0/+1A $350 unlocked iPhone?
Stop feeding me these impossible dreams! - offput, on 10/12/2007, -0/+1or huge profits for apple... either way really...
- myfanwy, on 10/12/2007, -0/+1learn to write a headline. this is downright misleading. apple analysts PREDICT prices will fall, possibly by 50%. buried.
there's enough lame apple rumours here without inventing them - kelly, on 10/12/2007, -1/+1Marked as inacurate.
- Spikito, on 10/12/2007, -1/+1i might be willing to pay 250 for one, but on way in hell id go over 300, i bought my slvr the week they came out, 11 months ago, im still happy with it, id also def have to play with one first. i think i paid 300 for my slvr on ebay, and i had never handled one till i got mine.
- TutorMe, on 10/12/2007, -0/+0Seeing how on the Apple website they call one of the iPhone's main features the "widescreen iPod," what's the possibillity of Apple discontinuing the iPod altogether?
- briansalo, on 10/12/2007, -1/+1Too bad Apple wont cut the price... The iPod is an extremely cheap device to manufacture compared to the retail price of it, but we still pay through the nose for them even when the price doesn't go down (as far as I know). I don't think they'll change their plan here anytime soon, even though it would help sell hundreds of thousands more.
- MAChaha, on 10/12/2007, -0/+0And its gone !
- Lodarage, on 10/12/2007, -1/+1I just logged in to mark this inaccurate.
- dunbur, on 10/10/2007, -0/+0It has happened just as iSupli predicted. Good analysts.
- 92fsInox, on 10/10/2007, -0/+0Great movie.
- TiCooper, on 10/12/2007, -2/+1The best thing about that story wasn't the story itself but the comment from some guy asking if Apple is part of some government program that spies on Americans. I've included it below because it's entertaining and/but makes no sense. I can just picture him in his basement surrounded by all the cell phones he's purchased, batteries removed so the government can't spy on him. He can't make or receive calls anymore... but at least big brother isn't surreptitiously turning on his phone and recording his conversations.
*************
Is Apple a part of government program–Total Surveillance Against Americans?
The government is able to turn your cell phone into a microphone even when it's off.
I’ll repeat it again:
Your Cell Phone Can Be Used to Eavesdrop on You - Even When Turned Off.
It also means that not only the government, but also your competition can steal your trade secrets (e.g. Intell from AMD).
With total corruption this is not a big deal. In the worst scenario – when they do not know who to bribe, your competition/enemies can hire a hacker.
The ONLY solution against legalized spying is REMOVING YOUR BATTERIES.
YOU CANNOT REMOVE YOUR BATTERIES IN iPHONE. It means that Apple helps the enemies of Americans ... (only a terrorist-moron can use open-for-spying-on-you iPhone; thus total Surveillance is against Americans who do not want the Police State, not terrorists).
Conclusion:
If you are not a worthy man/woman, and love any cool iBetaCrap – iPhone is for you.
P.S. Indeed, no surprise that they might drop the price on the no-way-to-turn-off-spy – iPhone for the expense of the government (see - taxpayers).
********
Also iSuppli states they didn't factor in R&D costs, the cost of the OSlicensee, the applications, cost of shipping, cost of support, the 1 year warranty cost graphic designers to design the buttons, sound engineers tocreatet thering toness/sound effects, QC testing, user acceptance testing, etc. All of these things cost money and in the end add up to a fairly large bill per unit. Apple obviously wants to recoup the cost of designing and building the product. Plus at the end of the day it's nice to make a profit for your hard work... not just break even. - iwod, on 10/12/2007, -1/+0To all digg users -
There is a burry button. USE IT
And please stop posting inaccurate headline / submission to digg - abid786, on 10/12/2007, -4/+3Nuhkka, you are going to be invited to my block list VERY soon.
- dogarms, on 10/12/2007, -2/+1@flag564 "......Oh I have a very nice position making lots of money and I run a small business on the side..... "
FORTY MILLION DEUTSCHMARKS BOB!! YOU'RE FIRED!! - inactive, on 10/12/2007, -2/+0The RAZR debuted at a cost way higher than $300 and now they're given them away free with contracts. I'm sure Apple gets a cut from the monthly fees and they don't even have to make all that much from the phone itself.
- nreynolds, on 10/12/2007, -3/+1Did they include the price of the software?
- MAChaha, on 10/12/2007, -4/+0Flag564, you are my new hero !
We all know the truth hurts.
And what a load of bull, the phone is not available for another 5-6 months and they already cut the price ?
Marked as inaccurate - Sonic84, on 10/12/2007, -5/+1it will probibly drop by half, when you sign up for the lifetime contract version.
- inactive, on 10/12/2007, -18/+5flag i admire you, and yeah ***** these stupid mac fanboys
- flag564, on 10/12/2007, -18/+5Now, zang, I could not possibly comment on nearly all the fanboy nonsense that appears on Digg. Most of the Apple stories I even bother with is the stuff that the fankids digg to the front page. And even then its just the obvious slanted stories or fluff pieces.
Oh I have a very nice position making lots of money and I run a small business on the side. - flag564, on 10/12/2007, -22/+6"Flag. Who's the astroturfer here?"
The guy who wrote the article.
" Who comments on nearly Every Single Apple Related Post with arbitrary rage and indignation?"
I point out the inconsistancies, double standards, propaganda, and flat out lies of Apple fanboys. It put a damper on their party but if they didn't engage in it, people wouldn't have to do it.
"What the hell do you do for a living that lets you spend what has to be easily six or seven hours a day monitoring Digg.com for threads to post into?"
I dont spend all day doing that. Stop being stupid.
" I used to think it was OCD, but now I'm starting to wonder if this is how you make a living (or try to)."
I do it for the love of humanity.
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