Why Not A Low Cost iPhone?

[ig33k]

Apple won't build a cheap iPhone, because they don't need to. Their many markets are the west european countries and America, obviously. In countries like the this you get to see everyone having an iPhone and why is that? Because they can afford to buy an iPhone. In my country for example which is an east european one, the iPhones are even more expensive than the ones in America, UK or France(and in general all the other UE countries), besides here the economy isn't so great so a lot of people tend to buy cheaper android phones. My point is that it wouldn't be profitable for Apple to make a cheap iPhone because they would compete for markets where android and other platforms are very popular, selling extremely cheap products so they know that their chances are very low to make a great profit from there. Let's take for example India or China. In India Google has already started the Android One project which will offer better phones supported by Google for even a lower price. In China the best selling company is Xiaomi. They offer so called quality and products VERY similar in terms of design to iPhones and iPads for half the price, so, yeah the average consumer in these countries will go for one of these devices as they don't realise the real differences between the phones, they can use an iPhone for the same things so why should they pay more?? So, Apple aims for the countries and the markets where they know that their products are 'appreciated' and where the people can buy them without having to starve for two month, in general the countries with a stable economy.


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[A895]

All highend smartphone makers have huge margins(except one plus). The iPhone 6 costs $228.07 to build, and the Samsung Galaxy S5 costs $215.44.

Awesome interactive chart shows the cost of building every iPhone and Galaxy phone
http://bgr.com/2014/12/05/iphone-6-vs-galaxy-s5-price/


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Yeah, but Samsung makes low cost devices, that's the difference.

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[A895]

They do have a low cost iPhone. You can get the 5 and 5S and 5C for either free or next to nothing.

They aren't really free or subsidized across the world.

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[A895]

Apple won't build a cheap iPhone, because they don't need to. Their many markets are the west european countries and America, obviously. In countries like the this you get to see everyone having an iPhone and why is that? Because they can afford to buy an iPhone. In my country for example which is an east european one, the iPhones are even more expensive than the ones in America, UK or France(and in general all the other UE countries), besides here the economy isn't so great so a lot of people tend to buy cheaper android phones. My point is that it wouldn't be profitable for Apple to make a cheap iPhone because they would compete for markets where android and other platforms are very popular, selling extremely cheap products so they know that their chances are very low to make a great profit from there. Let's take for example India or China. In India Google has already started the Android One project which will offer better phones supported by Google for even a lower price. In China the best selling company is Xiaomi. They offer so called quality and products VERY similar in terms of design to iPhones and iPads for half the price, so, yeah the average consumer in these countries will go for one of these devices as they don't realise the real differences between the phones, they can use an iPhone for the same things so why should they pay more?? So, Apple aims for the countries and the markets where they know that their products are 'appreciated' and where the people can buy them without having to starve for two month, in general the countries with a stable economy.


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I addressed this already. It isn't about immediate profit, making a cheap iPhone for $150 and selling it for $300, and sell 50 million of those can mean long term growth into developing markets. It isn't the most profitable but the smartphone market for high end isn't as lucrative as it used to be. And low end is where the next big growth for smartphone makers will come from.

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[iEd]

I addressed this already. It isn't about immediate profit, making a cheap iPhone for $150 and selling it for $300, and sell 50 million of those can mean long term growth into developing markets. It isn't the most profitable but the smartphone market for high end isn't as lucrative as it used to be. And low end is where the next big growth for smartphone makers will come from.

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I don't understand. The high end smartphone market isn't as lucrative as it used to be?
Apple is on the verge of being a trillion dollar company and the bulk of their profits are from iPhone.
A $300 smartphone isn't low cost to me. A $49.00 prepaid Kyocera with Android French Toast or whatever is low cost.



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[Smply_Rcklss]

I feel as if ppl are against this idea BC it boils down to a brand & status symbol. If apple made a low end device "iPhone", the ppl who buy Iphones for a status symbol, wouldn't feel per say high class anymore BC their company is charting into the low end market. I see no problem w the idea. Samsung, LG, HTC & even Motorola have done it. It worked out great w Motorola w the moto G & E. It turned profit for them, apple isn't in need of any turn arounds any time soon but who would complain about a couple extra digits in the bank account ? I sure as hell wouldn't. Samsung, to me lost profit BC they make the same device & call it something different & release 50 phones a year.

 

[eyesopen1111]

Well, as a new iPhone owner, I think the high-end focus is a good thing. High prices allow Apple to include top notch components in every model. These components make the devices future-proof and are a big reason why even older iPhones and other iDevices can use the upgraded iOS versions. Lower end iDevices would have to have lower specs.

The lower price iPhones are already out there as used iPhones. As current owners, the healthy resale market is what gives our phones a high resale value. Why should we be in a hurry to give that up?


iPhone 6+ / iOS 8.1.1 / T-Mobile USA

 

[jclisenby]

They aren't really free or subsidized across the world.

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Yes, but Apple's focus isn't on just sales. The company has a legacy and passion of creating beautiful and functional products that just work. To create these type of products, they have to focus on high end material and design. Apple is not willing to compromise on form and function to get a cheap phone for third world countries. Also, they tried the cheap phone route last year with the 5c. It was a failed experiment and Apple went back to their core of quality products with this years releases.

 

[Smply_Rcklss]

Ummm?Motorola worked out so well for Google that they couldn't make a profit and sold Motorola off to the Chinese (Lenovo). Not saying anything against the Motorola G, or whatever, just that it wasn't a profitable strategy

Regardless the phones where a hit, they made lenovo a pretty good profit. Google sold Motorola a little before the moto x (2013) I believe, correct me if I'm mistaken.

 

[Smply_Rcklss]

The sale to Lenovo wasn't final until Oct 30, 2014.

I assumed I was wrong on the final sale. So the moto x, g & e series didn't make a profit for Lenovo ?

 

[iEd]

I assumed I was wrong on the final sale. So the moto x, g & e series didn't make a profit for Lenovo ?

I don't think Motorola under Google was profitable.
If the Lenovo wasn't final until October 2014. I would think Moto sales would not affect Lenovo's profits. Moto in general was a bust. One phone can't save them.
Lenovo said in a article dated November 2014 that they will turn Moto around in 18 months.


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[Fit24]

Apple is very successful despite not having a "low cost" iPhone. Maybe they've already explored the possibility and decided against making a "low cost" iPhone.

 

[A895]

It is not only about profit, it is about getting the next billion customers with smartphones.

All I seen so far is people complaining about the brand devaluation, and saying Apple makes enough money.

It is also about how to get new customers as well and not just old ones.

I still not have seen legitimate reasons why they shouldn't do it.

 

[iEd]

I don't know if they shouldn't do it. It just seems unlikely.
I don't understand the next billion customers. What is that?
A company any company does what they do and prices there products accordingly.
Some think a iPhone is overpriced. Some think it's right in line with modern mobile tech.
Would it be cost effective to build and produce a low cost phone? I would think only Apple knows the answer to that regardless of their revenue.
Is it worth the manpower to do it when you have long lead times on the phone that people are lining up for and waiting 2 months to get in some situations.
They reportedly delayed the "IPad Pro" to have all hands on deck for iPhone 6 production.
It just seems that it doesn't fit into their scheme presently.
Again low cost to me isn't $300 off contract.
With all these carrier deals like Jump, Next,Easy Pay, IPhone for life etc.The iPhone we have now are getting into more hands for someone that doesn't want to buy full price upfront.



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[LockOnTech]

It is not only about profit, it is about getting the next billion customers with smartphones.

All I seen so far is people complaining about the brand devaluation, and saying Apple makes enough money.

It is also about how to get new customers as well and not just old ones.

I still not have seen legitimate reasons why they shouldn't do it.

Humans, they complain over the most ludicrous topics; sometimes even topics they barely comprehend. I could complain that there are to many personal computers that runs windows, microsoft does not need all them (sarcasm).


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[anon(4698833)]

Why degrade the brand with a "cheap" device? People don't want to admit it, but Apple products are all luxury market products...there's nothing in the Apple lineup that couldn't realistically be replaced by a cheaper, low end device and still maintain most of the functionality your common consumer demands...so we face a company that builds WANTS instead of NEEDS.

A cheap iPhone degrades the brand into being something the lower tier spectrum of consumers can afford...which removes some of the appeal...some of the luster. Porsche doesn't make economy cars because they're not in the market to do such...they've been around for the better part of a century, and they conduct their business in a defined market segment. You will never see a Porsche based Honda Civic rival because Porsche doesn't care what Honda Civic consumers want in a vehicle. The same can be applied to Apple, who also conduct business in a targeted segment, and don't even bother with the low tier smart phone market, where Google's Android makes most of it's money by slapping the OS on entry tier devices...creating an overwhelming general market share dominance, but no real focus of any one product that can legitimately compete (in numbers) with iPhones sales/shipments.

Let's face it, as easy as it would be to do...if Apple really wanted to dabble in that arena, they'd have done it by now. Truthfully, I've always felt Apple could achieve more monumental market success by figuring out an entry level "Mac" device...Mac Mini is decent, but still not really "cheap". Imagine the kind of adoption rate they'd consume if they released a $200 Mac type product that eliminates both the need for a Mac Mini, Apple TV and competes with your USB based inputs from Google and Amazon, but actually offers the consumer a true OS based in the OS X world.

I think it'd change Apple like the iPhone did, and with the slow death of the PC due to more and more capable tablets and phones, what better time than to try and link this up to something that isn't dying anytime soon...like say, an Apple television set?

That's just my opinion though...

 

[A895]

Why degrade the brand with a "cheap" device? People don't want to admit it, but Apple products are all luxury market products...there's nothing in the Apple lineup that couldn't realistically be replaced by a cheaper, low end device and still maintain most of the functionality your common consumer demands...so we face a company that builds WANTS instead of NEEDS.

A cheap iPhone degrades the brand into being something the lower tier spectrum of consumers can afford...which removes some of the appeal...some of the luster. Porsche doesn't make economy cars because they're not in the market to do such...they've been around for the better part of a century, and they conduct their business in a defined market segment. You will never see a Porsche based Honda Civic rival because Porsche doesn't care what Honda Civic consumers want in a vehicle. The same can be applied to Apple, who also conduct business in a targeted segment, and don't even bother with the low tier smart phone market, where Google's Android makes most of it's money by slapping the OS on entry tier devices...creating an overwhelming general market share dominance, but no real focus of any one product that can legitimately compete (in numbers) with iPhones sales/shipments.

Let's face it, as easy as it would be to do...if Apple really wanted to dabble in that arena, they'd have done it by now. Truthfully, I've always felt Apple could achieve more monumental market success by figuring out an entry level "Mac" device...Mac Mini is decent, but still not really "cheap". Imagine the kind of adoption rate they'd consume if they released a $200 Mac type product that eliminates both the need for a Mac Mini, Apple TV and competes with your USB based inputs from Google and Amazon, but actually offers the consumer a true OS based in the OS X world.

I think it'd change Apple like the iPhone did, and with the slow death of the PC due to more and more capable tablets and phones, what better time than to try and link this up to something that isn't dying anytime soon...like say, an Apple television set?

That's just my opinion though...

Considering that a cheaper iPhone will have zilch to do with the more premium ones how does it cheapen the brand? Apple and iPhone aren't luxury brands, that is a fickle perception. They just aren't. If I want real luxury devices I would go Vertu or Porsche Design, not an iPhone that most people around already have.

Unless the brand value affects your device in some way, I see no way how brand is even part of the argument.

The only reason Apple created a spot and stayed in it. But it hurts then in the long run, Apple has been losing smartphone maketshare for a while now, and while it hanst affected their money flow, who is to say it eventually won't be affected?

And while no real Android smartphone sells like the iPhone (the S5 and Note line come close), it is often forgotten Android is made up of dozens of different manufacturers all fighting for consumer attention.

That is competition, no one else makes iPhones, Apple does not have to fight someone anywhere on anything related to their hardware.

Low cost devices not only gain marketshare it makes other manufacturers lose ground to. Would a company not want to see its devices in more hands?

 

[Septembersrain]

I do think lowering down the price on the c line would give them some foothold. That's what everyone had been expecting after learning about the c line initially anyways.

 

[sting7k]

I addressed this already. It isn't about immediate profit, making a cheap iPhone for $150 and selling it for $300, and sell 50 million of those can mean long term growth into developing markets. It isn't the most profitable but the smartphone market for high end isn't as lucrative as it used to be. And low end is where the next big growth for smartphone makers will come from.

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That wouldn't work for Apple because it does not fit their business model. That strategy works for Google because Google makes their money by selling ads on their online services. Apple makes their money by selling hardware. If they sell cheap hardware with little to no profit that doesn't do them any good at all. Apple does not have the online services business to back up that kind of model. The people who bought that cheap hardware won't be giving Apple any money down the road. Android users continue to pay for their phones by giving Google data which Google then uses to sell ads.

It has nothing to do with Apple wanting the iPhone to be a status symbol or only wanting to sell to the high end market. That's just how Apple has chosen to run their business and make money.

 

[docd62]

It's very simple why they don't do this. It's the cost of service and support. Apple in my opinion has some of the best service and support out there. If they put millions is cheap phones out there how do you support these. And iPhone cost roughly 2-3 hundred + bucks to build and sells for 6-9 hundred. They would have to build a phone for 50-100 bucks to put the same profit margin but most likely even cheaper as cheap phone break easier. When you figure in the r&d and payroll and other cost of doing business there is no wiggle room to offer and support and take away support from the guy who has a 900 dollar phone. Then you add the price of developing software for it as the specs would be so low it couldn't run the standard iOS on it.

There is nothing logical reason to go after this market just to have more phones out there. There is no profit out there for apple and it would only cost them money and hurt there loyal customers.


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