But more to the point, the market is going to need some way to internalize business models here. Fundamentally, Apple's only guaranteed source of revenue right now for any given phone is the price of the phone itself. Maybe users get some apps too, maybe they get services, but at this stage in lifecycle of the devices a lot of people are happy with the apps they have and paid updates are infrequent, and it's an important point that the iPhone doesn't depend on subscriptions nor is Apple dependent on selling you. So the sticker price must to some extent encompass most of the life cycle of the phone, including 5-6+ years worth of OS updates (iOS 12 supports the iPhone 5S, released in 2014).
How much is it worth to have a cutting edge device where retail embodies 100% of the required costs, and the manufacturers financial incentives are reasonably well aligned with that of the owner? Can the market actually handle this vs devices where many of the costs are hidden/externalized? It's going to be an interesting question over the next few years. There has been a certain amount of pushback on the XS/XS Max pricing, but at the same time a lot of people at least claim to care about incentive alignment. It's hard to say exactly how that will play out if Apple finds upfront pricing is too hard for many to swallow even if per-month or similar personal info selling would be.
As someone who used to like getting the latest and greatest by Apple their current prices baffle me. Or perhaps I'm the oddball that doesn't use my phone enough to warrant spending that much money.
As a price-conscious Corolla purchaser, I don't really care if Bugatti's latest highest-end car costs $2 or $3 million dollars. It's not what I'm buying.
Example (that I serendipitously learned about recently): free (!!!) workshops in Apple stores that you can learn advanced techniques for things like video editing on iPad, among other things.
I’m pretty sure those were around before the iPhone, certainly when the 4S was new.
Total expenditure is less than $100/month for 4 good spec iPhones that run our personal and business lives entirely is a damn good deal.
SIM contracts are approx $90 + broadband is $70 a month as a comparison.
Pricing adjusted to USD from GBP
Yes. Margins are low on low cost phones. It's a pretty common decision for OEMs. No reason to make the phones that make no profit.
In the U.S., financing through Apple is 0% and gets you free AppleCare for the life of the loan.
Put the cash you would have spent on AppleCare and the phone in the bank, and buying an iPhone actually makes you money.
- Get a new iPhone every year
- AppleCare+ coverage included
- Low payments from $37.41/month
- Works with your carrier
> The full cost of your iPhone and selected AppleCare+ coverage is spread out over 24 months with 0% interest.
:-)
Every single bit of tech inside the phone were more expensive, partly so because of rising wages in tech industry. Which I suppose most people on HN are benefiting from.
In what world is $800 an affordable price point?