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iPhone 15's Record High Production Costs Could Push Up iPhone 16 Prices
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I think this shows that iPhone prices are fair. 50% is just the components and then apple still need to develop everything, update the software of these devices for 5 years, take liability, sell and market, pay everyone.
I’m impressed at how much profit they make. That company is incredibly well run.
I’m impressed at how much profit they make. That company is incredibly well run.
You seem to think you know something.
I could also see the Vision Pro flop but pretending to know what will happen is annoying.
Oh yeah oh yeah. Had Tim Cook witnessed the absurdity and insanity of profit in mobile gaming industry (successful ones that is), he would charge 9x the current price on hardware so his company could have 900% profit margin while not raising the cost much and doesn’t pay the employee a cent more.
Wonder why he doesn‘t do that yet?
I was told Apple fan would accept any cost just to buy the latest and greatest.
(in case you didn’t get it, it’s sarcasm)
Wonder why he doesn‘t do that yet?
I was told Apple fan would accept any cost just to buy the latest and greatest.(in case you didn’t get it, it’s sarcasm)
Profit is not called the same as revenue for a reason. Those costs have already been deducted from revenue, hence becomes profit.
I'd be more than happy for software and hardware engineering cadence to slow down considerably if it means we get more mature, tested, reliable hardware and software at cheaper long term prices. I don't need an updated operating system every year or a new hardware platform upgrade for that matter.
This is getting old, but +1 for the gloves comment.
Meanwhile I am enjoying the same price of latest iPhone as last year iPhone amidst the increase of materials cost...
...and the not included in the article the non-materials cost which end up to less than 20% profit margin. Apple is doomed! Sell that shares.
Most of those countries have included value added taxes built in. Even if Apple sells an iPhone 15 Pro Max in the UK for 1199 GBP, Apple isn’t getting that. Most of these are European countries that have VAT taxes of 18-25% embedded in their prices. If you account for exchange rate instability and remove VAT, you’ll find those prices are pretty close to what Apple charges in the US. Exchange rates are especially volatile. If you look at today’s rates for the British pound, for instance, today that 1199 GBP is only $1457. If you remove the 20% VAT, you get a net of just about $1214, basically the same as what they charge in the US.
Let’s use another example of Japan. At today’s exchange rate, 189,800 JPY for the 15PM is $1222. Remove Japan’s 5% VAT tax and you get $1164, cheaper than in the US. If you do all the calculations, you’ll get some higher, some lower than US prices, but American companies will build in exchange rate protection since in the end, Apple has to report in US dollars. But one thing you’ll notice is that they all hover around Apple’s US prices give or take. You may be right that only 10% are sold at $1199, but all of them are pretty close to that figure once you take out the VAT.
Inflation. Independent analysis shows that the US dollar’s purchasing power has declined 23.9% in the last 2 1/2 years. Even if Apple isn’t raising its prices, its suppliers sure are.
I mean, if that were actually the case, Apple would’ve factored that in this year. They’ve probably got some good bulk pricing in effect through special deals. But maybe this was a test with the 15 Pro Max to see how many people won’t buy it if they remove a lower storage tier? I can see them doing this again in the future. Get rid of lower storage tiers and make it feel like you aren’t increasing the price over time by providing value in storage. You bring up the ASP for people who don’t need the storage and wouldn’t have gone for that much previously but want a new phone. Then you only effectively raise price on only a segment of your customers, smoothing out price sensitive sales over time. It’s actually really smart and you avoid most of the bad press.
And much much more. Salaries and benefits for the majority of Apple's 160,000+ employees that aren't involved in iPhone production, including company marketing, business development, tech support, IR&D, all costs involving Apple stores, rents, insurance, landscaping, attorney/legal costs, building maintenance and janitorial, local/state/federal taxes, utilities, and on and on with other overhead and indirect costs.
I don’t know if it qualifies as greed, per se, but I don’t think a unique Silicon Valley tech company like Apple (no matter how big), engaged in such a fierce, perpetual battle of out-innovating its competitors, should be paying AAPL shareholders “a salary” — just because they hold shares of Apple stock — in the form of cash dividends.
For doing no work, shareholders get a “pay check” that comes straight out of Apple Quarterly Profits every three months.
Dividends are fine for a stodgy insurance corporation or a Big Bank, but a tech company like Apple with such ferocious competitors constantly nipping at its heals?
Apple Inc should maintain its strong cash position but plow other profits into being a better, more influential, trendsetting, more far-reaching company, with better, more innovative hardware products, software and services. Best in class! (“Insanely Great!”)
And if Apple won’t do that instead of paying out shareholders dividends, I’d settle for Apple using those would-be dividends to pay its employees more — increasing employee retention as a positive side-effect.
In case you haven’t read about it, Apple’s been suffering a serious “brain drain” of talent exodus to Apple’s own fiercest competitors. (Particularly in its Silicon Engineering team — which some say is quite apparent in the new 3nm A17, a mere ≈10% faster than last year’s A16 Bionic in CPU performance. With this kind of performance, is this a “proof-of-concept” chip design or a genuine technological breakthrough?)
If being an employee of Apple (at any level) now feels only like a job and not being part of a Big Idea, a Vision for the future and a movement to change the world for the better (and being an important player in history), Apple can expect its loss of key talent to continue.
(I’m sensing Apple isn’t as fun and rewarding a place to work at anymore.)
Apple today is more Technocracy than atelier. Technology is much less of an art form at Apple now.
People always used to want to work at Apple for the company’s renown prestige and its unique influence in the world, but lately, it feels for too many Apple employees, like working for a cold, corporate monolith and a Wall Street ticker symbol.
With this sort of decay in morale and “purpose,” not even the “spaceship” campus and acclaimed cafeteria can save Apple from this continued loss of irreplaceable, gifted, talented employees who truly belong nowhere else but at Apple.
Apple’s “worst kept secret” in Silicon Valley was always that its engineers were not “fungible,” they were uniquely gifted and talented and irreplaceable.
I surmise that too many Apple employees don’t exactly feel like the “artists” they once felt like — and were made to feel like by executive leadership.
(Hope I’m wrong.)
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Titanium has never been cheap, but also Apple has to keep pace to get people to upgrade. Now you know why they invested in getting Intel modem team, hedge the long-term bet when they eventually cut out Qualcomm (at-least for chips and not royalties lol). Absorbing costs is natural but you can bet their roadmap hedges this.
Thanks for mentioning that. How many of those YT'ers who buy every color and every model, every year keep all those phones? I doubt any of them and once they finish their color comparison videos and post them on YT, they likely return all those phones.
I mean, Apple ram and storage upgrade prices have never made a lick of sense.
The SoC fab process will get cheaper and Apple should consider more modest camera upgrades along with possibly abandoning titanium, which was always a stupid move.
Why do we need to have titanium on the phone? Doesn’t add any value and doesn’t look any different than aluminium. Just a stupid move to mess with the ego of the mind and trick people into something is better (which it’s not).