Feeling Ripped Off? ... You Should!

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art

New Member
Bronze
Jun 29, 2007
88
0
0
#1
iPhone could deliver a profit margin of more than 55 percent

after hardware and manufacturing costs,
In comparison, iSuppli said,

Average gross profit margins range from 20 percent to 30 percent

for advanced phones from cell phone rivals such as Nokia, Motorola Inc. and Samsung
Electronics Co Ltd.

Try blaming that on AT&T.

source:
http://www.foxnews.com/story/0,2933,287901,00.html
 

DRabbit

New Member
Bronze
Jul 2, 2007
383
0
0
#2
and what's your point?

I don't feel ripped off... Just because the PARTS may cost a certain amount that doesn't account for the years of research and development, the marketing, the new tech support employees, etc. that have been required for Apple to bring us this device.

Not to mention, companies are ALLOWED to make a profit off the items they sell. Were you aware that a CD only costs anywhere from like $.25 to $1.00 to manufacture and package? Or how about a DVD?... like $.50 to $1.50. I bet you pay a lot more than that at the store.

Get a life.
 

noahlh

New Member
Jul 5, 2007
4
0
0
#3
If we're paying for it, then Apple deserves to earn the profit. Nobody forced anyone to spend $600 on a phone...
 

jbaraga

Member
Bronze
Jun 26, 2007
270
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16
Pittsburgh, PA
www.baraga.me
#4
But how many other mobile devices have been marketed as heavily as the iPhone? I saw that article before, and IIRC it only takes into account the fixed costs for manufacturing the device itself. There's a lot more to it than that.
 

Platinum

New Member
Bronze
Jun 27, 2007
198
0
0
#5
Everything you buy in the world has a profit margin. A pair of Nike shoes costs about $2 to make in some foreign country and sells for $100+ normally.

You forget that Apple spent over 3 years developing the iPhone and spent a ton of money on Research and Dev costs.
 

robhon

New Member
Silver
Mar 17, 2007
620
0
0
#6
Yeah, and you're totally missing so many other aspects of the pricing question.

1) Products are not priced on margins. They are priced on VALUE to the customer. If something has a higher value it has a higher price irrespective of the costs.

2) Apple very obviously put HUGE money into the development of this product. They are still very long from seeing any ROI for the iPhone. They'll get it but they got some development costs to recoup out of this thing. Probably FAR more than any other mobile phone that's ever been put on the market before.

If the price of the iPhone bothers you, go buy Apple stock! Then you get the best of both. You get a great product, and then when the stock price goes up because they did such an incredible job, you win there too! Buy $600 of AAPL and I bet you'll pay for your iPhone before the term of your ATT contract is up.
 

robhon

New Member
Silver
Mar 17, 2007
620
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0
#7
Everything you buy in the world has a profit margin. A pair of Nike shoes costs about $2 to make in some foreign country and sells for $100+ normally.

You forget that Apple spent over 3 years developing the iPhone and spent a ton of money on Research and Dev costs.
Actually NIKE shoes cost a little more than that but not a ton more. (I've been to their factories.)
 

seabreeze

New Member
Jul 1, 2007
14
0
0
#8
iPhone could deliver a profit margin of more than 55 percent

after hardware and manufacturing costs,
In comparison, iSuppli said,

Average gross profit margins range from 20 percent to 30 percent

for advanced phones from cell phone rivals such as Nokia, Motorola Inc. and Samsung
Electronics Co Ltd.

Try blaming that on AT&T.

source:
http://www.foxnews.com/story/0,2933,287901,00.html
Sorry I don't feel ripped off either...... I actually returned my iPhone as it had a volume issue, and as soon as they fix the initial bugs I will go straight and buy one. I don't think it's expensive as the R&D onn this phone must have cost them a bundle! Also if you lived in Europe and the rest of the world, you would realize that phones are only subsidized in the US! Everywhere else they cost a fortune. My last phone cost me $883 it was an i-mate that ran windows and was junk! I gave it away after two months of use......So again, I don't think I have been ripped off at all! Show me anything out there that comes close to the iPhone? Even with the volume issue it had, I only returned it because I did not want to get stuck with a 2 year phone contract unless the phone features worked perfectly.....
 

bcaslis

Member
Bronze
Jun 26, 2007
144
0
16
Oregon
#9
Why do threads like this start off trying to provoke something? There is no set amount of markup that is "fair". It's only a rip-off if Apple didn't deliver the promised functionality. I think they have and they deserve their price. If you don't like it, don't buy it.

What you think the "markup" is on software? A lot, and there's a lot of great software in the iPhone.
 

Marksman

New Member
Bronze
Jun 4, 2007
335
0
0
#10
Yeah but all those other cell phoens suck. Maybe if they made more profit they would have more money to spend on R&D and they could make some decent software.

I don't feel ripped off at all.

I like how people throw around these figures without any understanding what they mean.

Maybe if the other guys made better phones they could make a higher gross margin too.
 

robhon

New Member
Silver
Mar 17, 2007
620
0
0
#11
Another thing to note is that they are talking about "Gross Margin." That is selling price minus manufacturing, shipping, etc. Out of that 55% GM Apple has to market, distribute, sell, fix, return, continue to develop, pay insurance, legal, accounting, management, ad nauseum...

The amount of money Steve puts in his pocket is still $1/year. I think he's banking on the stock going up. ;)
 

hutchensgd

New Member
Bronze
Jul 2, 2007
75
0
0
#12
You certainly would not be too pleased with the profit margins that my company makes on it's products either. And silly me, I thought making as much money possible was the whole idea of businesss.




Yeah, and you're totally missing so many other aspects of the pricing question.

1) Products are not priced on margins. They are priced on VALUE to the customer. If something has a higher value it has a higher price irrespective of the costs.

2) Apple very obviously put HUGE money into the development of this product. They are still very long from seeing any ROI for the iPhone. They'll get it but they got some development costs to recoup out of this thing. Probably FAR more than any other mobile phone that's ever been put on the market before.

If the price of the iPhone bothers you, go buy Apple stock! Then you get the best of both. You get a great product, and then when the stock price goes up because they did such an incredible job, you win there too! Buy $600 of AAPL and I bet you'll pay for your iPhone before the term of your ATT contract is up.
 

Marksman

New Member
Bronze
Jun 4, 2007
335
0
0
#13
You certainly would not be too pleased with the profit margins that my company makes on it's products either. And silly me, I thought making as much money possible was the whole idea of businesss.
It amuses me to no end that the same people that run around and claim the iPhone is a toy and can't be used for businesss don't know the first thing about businesss. It is weird.
 

hutchensgd

New Member
Bronze
Jul 2, 2007
75
0
0
#14
About 50% of the people in line last Friday were businesss people who understood the power that this new tool provided. I have not been let down at all. Not even a minor concern!


It amuses me to no end that the same people that run around and claim the iPhone is a toy and can't be used for businesss don't know the first thing about businesss. It is weird.
 

Marksman

New Member
Bronze
Jun 4, 2007
335
0
0
#15
About 50% of the people in line last Friday were businesss people who understood the power that this new tool provided. I have not been let down at all. Not even a minor concern!
Yeah I met a lot of nice people in line as well. And most of the ones I talked with had their own businessses or planned to use their iPhones as part of their work.
 

robhon

New Member
Silver
Mar 17, 2007
620
0
0
#16
You certainly would not be too pleased with the profit margins that my company makes on it's products either. And silly me, I thought making as much money possible was the whole idea of businesss.
Absolutely. The whole point of being in businesss is to make money creating products that are valuable to customers. Price too high you have no customers. Price too low and you make no money. The name of the game is to find that magic place in the middle where you make the most money creating the most value for customers. I think Apple did their homework very well and price at the right spot.
 

Zachary Vex

New Member
Bronze
Jun 30, 2007
60
0
0
Minneapolis
#17
The profit incentive is the only reason we even HAVE fun technological toys to play with. If profit was made illegal, what would we do? Stay in bed? Well, actually, maybe that wouldn't be such a bad thing...
 

Lazarus

Member
Bronze
Jun 6, 2007
380
1
16
Miami
#19
the point is "PRINCIPALS" just got we are stupid enough to pay $600, shouldn't give them the right to charge us that. plus they shouldn't even be able to call these 8 & 4GB if the OS alone almost takes up 1 of those GB. I feel your frustration but where were you when I asked everyone to boy-cot this thing lol
 

hutchensgd

New Member
Bronze
Jul 2, 2007
75
0
0
#20
To your point, with 500,000 I-phones
sold @ $550, this is 1/4 Billion! Yes, I
would say they did well!




Absolutely. The whole point of being in businesss is to make money creating products that are valuable to customers. Price too high you have no customers. Price too low and you make no money. The name of the game is to find that magic place in the middle where you make the most money creating the most value for customers. I think Apple did their homework very well and price at the right spot.