Re:Apple iPhone X Demand Limited, Wall Street Analysts Say
by valuearb on Tuesday December 26, 2017 @12:46PM
(#16009687)
Edited for more accurate depreciation estimates.
No, it's the absolutely correct way to think about buying things. I didn't spend $1,000 to get a great phone to use this month, then throw it away next month. In business, you buy equipment, you typically account for it's cost over it's useful life, i.e. amortizing and depreciation. In your personal life, it's no different, you need the right framework to correctly evaluate these decisions.
And secondly, I didn't pay $400 extra over an iPhone 8. I'll own this phone at least two years. Historically an iPhone is worth roughly 30-50% (edit) of purchase price in two years. So my two years cost of owning an iPhone X is going to be (roughly) $300-500, and an iPhone 8 roughly $200-325, only a little more than a $200 average difference. A cheap Android phone only costs $200 but might only be worth $50 in two years, so it's only about $450 cheaper than my iPhone X.
Note that I'm ignoring service costs, because they should be the same no matter what phone I choose.
While this is the economically accurate way to view your actual costs, it can be used in a bad way to think is if you don't quantify your economic benefits. If there aren't any economic benefits, admit you are paying for the badge/prestige. And ask yourself if that's worth it.
In the case of the iPhone X, it's the fastest phone with the best screen, and best camera. Am I going to get $10 a month or so of benefits from them? I think so. Would it be worth $40 a month more? Probably not.
No, it's the absolutely correct way to think about buying things. I didn't spend $1,000 to get a great phone to use this month, then throw it away next month. In business, you buy equipment, you typically account for it's cost over it's useful life, i.e. amortizing and depreciation. In your personal life, it's no different, you need the right framework to correctly evaluate these decisions.
And secondly, I didn't pay $400 extra over an iPhone 8. I'll own this phone at least two years. Historically an iPhone is worth roughly 30-50% (edit) of purchase price in two years. So my two years cost of owning an iPhone X is going to be (roughly) $300-500, and an iPhone 8 roughly $200-325, only a little more than a $200 average difference. A cheap Android phone only costs $200 but might only be worth $50 in two years, so it's only about $450 cheaper than my iPhone X.
Note that I'm ignoring service costs, because they should be the same no matter what phone I choose.
While this is the economically accurate way to view your actual costs, it can be used in a bad way to think is if you don't quantify your economic benefits. If there aren't any economic benefits, admit you are paying for the badge/prestige. And ask yourself if that's worth it.
In the case of the iPhone X, it's the fastest phone with the best screen, and best camera. Am I going to get $10 a month or so of benefits from them? I think so. Would it be worth $40 a month more? Probably not.