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< Esato Forum Index > Information > Esato News Articles > Apple with 70% margins for each iPhone 4S sold Bookmark topic

Possibly because Apples cost price versus recommended retail price is disproportionately large in comparison to any other manufacturer out there, which is even more evident since the new 4S does not even top the table in current specifications of top end flagship devices.

Apple are known for over charging for their products, which i think this article illustrates quite nicely. Thats all.

I would never buy an iPhone outright unless i had money to burn. Its far too well known your money does not fully go into R&D, Q&A, salaries etc, its pure fleecing of peoples hard earned cash which all companies who produce products are capable of, but Apple simply fleece the consumer without any thoughts of guilt clearly.
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Posted: 2011-10-11 23:49:39
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If they're coming up with great products...who cares. It's not like they're releasing an iPhone every 2-3 months.

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Posted: 2011-10-12 00:22:07
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@etaab no offense intended, but define "overcharging"? And who defines the "recommended retail price"? That's the first time I've ever heard of such a thing.

Does Lexus overcharge? What about Sony? Bowers & Wilkins? They cost way more than the "retail average".

What about salaries? I'm sure management always feels employees are overpaid.

Disproportionate? I think Samsung has more ridiculous pricing than Apple... considering their first 7" tablet (which was a sad attempt at a tablet) cost more than the iPad 1.

Remember that all Android manufacturers don't spend anything on OS development, only on custom skins which aren't even coded well. So all Apple iOS R&D is additional expense on Apple's part. And seeing as how the iPhone 4 and Galaxy S2 cost about the same (and the S2 screen isn't as high-res) I would say Apple charges pretty fair prices. Higher than most but not by much. With the exception of the Xperia ray, I haven't seen any flagship phone use metal in their frame, just glossed over plastic. If the case material doesn't matter to you, then don't buy it. It matters to me.

There were no 9-10" Android tablet in the $500 range... not until Apple released the iPad 2... I thought THAT was overpricing on all Android manufacturers... Prior to the Kindle Fire, the only sub $500 Android tablet you could get was some crappy Chinese iPad knockoff running Android and a resistive screen.

The whole point of Android being free was to reduce development costs for manufacturers (and to drive more ad traffic to Google)... so far, only seems to be giving flagship phones $100 less than everyone else, and they do it without copying the rounded corner design of Apple (which ironically is what I'm not fond of with the iPhone)... the rest are in the iPhone price range.

Let me repeat, I like Apple products but I don't own an iPhone. (tried it, didn't like it, went back to ) Much like how I like Rolex but I would never buy one. I don't think Rolex is overpriced, even though Casios tell much more accurate time.

Specifications don't tell the whole story...

A block of coal = 100% carbon
A 1 carat diamond = 100% carbon

Specs and numbers are so easy to fudge. I highly doubt the 100% carbon argument would work with a girl if you gave her a lump of coal and say "But it's a much bigger block of 100% carbon, better specs! It's heavier!"

I don't mean to offend anyone, but this is a free market... people vote with their money, and the ones with money have voted for the iPhone and Apple. I would get annoyed if Apple was the ONLY choice, but they're not. I'm happy with my Xperia, among all my friends w/ iPhones... Steve said "Think Different"... in a sea of iPhone users... I am.
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Posted: 2011-10-12 08:38:16
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I agree with you jplacson... companies set the price, consumers decide if thats the product they want and if thats the price they want to pay. no one is holding a gun to their head saying you must buy this at that price.

I rarely buy branded clothes because generally they only offer a name whereas I can buy similar items that do exactly the same at much less cost.

Although I have tried, as yet I have not found another phone that gives me everything I want and in the same way that the iphone does... so I'm prepared to pay that extra. (Mind you I haven't tried the new windows phone 7 - yet).

I honestly don't care what margin Apple make in as much as I don't care what margin any other company take for products that I buy as it has never been a consideration in any purchase.
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Posted: 2011-10-12 09:27:34
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Thats all pretty deep and you're very much right.

But the point im making is simple. Apples pricing structure is based mainly around brand identity. Apples products all sport that large Apple logo which has become very desirable to the consumer. That alone makes its stand out against every other phone out there. Apples products are seen as very high tech, cool and sexy. People will pay for a brand as Masseur said.

Apple simply price their phones to generate as much revenue from such people as possible. Which is morally wrong, but makes great business sense.
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Posted: 2011-10-12 13:03:17
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so you're saying that companies should factor in morality when determining selling price?

surely you can see thats nonesense in the business world? morality doesn't enter the equation.

price is set by market factors including competitor pricing and what people are willing to pay.

This is also evidenced by the fact that some tablet manufacturers reduced their prices after the Kindle Fire was announced.
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Posted: 2011-10-12 13:15:31
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And how much time, money, and talent does it take to build a brand?

If it was easy and cheap to do so... I think Samsung would have an easier time selling a million tablets.

It doesn't matter how good your product is, if you cant convince anyone to buy it, then it's useless.

A smartphone is a luxury (as much as you wanna try to justify 'needing' it, you won't physically die w/o it), not a necessity... It's a status symbol, much like a nice car, a good suit (which btw costs way less in material than an iPhone but is priced way higher)
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Posted: 2011-10-12 14:04:18
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IMO a very good reason not to buy this product.
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Posted: 2011-10-12 14:52:48
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Its not about the price but more to do with fashion and trends and the iPhone being the latest trend in the must have gadget so as long it retains a stronghold on this trend which I suspect will be for many years to come unless by some miracle Apple loses its appeal people will pay the premium price for this product and people forget that the iPhone is also a status symbol so would it have the desirability factor if it was selling for lets say budget smartphone prices?because then everyone would have one but even now almost everyone I know has a iPhone.
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Posted: 2011-10-12 18:33:41
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@ Masseur - do i think companies should consider morality when determining a price ? no, it should not even be a factor at all. But for me, companies setting a massive price tag like £699 for their product which is clearly not worth it to me screams they ARE considering the morality of it and totally disgregarding it. Im sure at some point Apple did consider whether setting the 4S 64gb variant with a £699 price tag was too much of a fleecing, but chose to go ahead with it anyway knowing their brand identity is strong enough to keep their hooked customers.. hooked ?

Im a business man myself, i never consider the morality in my pricing structure, but then i never have the intention of greedily fleecing my customers which would then in turn make it a factor for the informed customer.

@ jplacson - i dont think owning a smartphone is a status symbol or luxury over owning a normal dumb phone, since smartphones now are as cheap as some none smartphones.

I also disagree that it takes time and money to build a brand, of course it does but that does not mean they should so obviously fleece consumers as a reward for making a successful brand.

Its not only Apple, they're just the worst in the mobile phone scene. In other areas, its companies that make clothing like G-star, £100 for a shirt which cost around £3 to make. A pair of Reebok trainers, £150 to buy and cost £14 to make etc..

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Posted: 2011-10-13 23:19:13
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