Why Not A Low Cost iPhone?

A895

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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.

Apple can make money any way they can and have been smaller margins isn't going hurt them. They can still make money on hardware.
 

anon(4698833)

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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?

You clearly don't understand what the phrase "degrade the brand" means. The brand is the whole, not any particular piece. When the brand represents luxury tier products in 100% of their product spectrum, introducing a low cost phone strays outside of that spectrum, and cheapens the brand. This isn't a tough concept to grasp.
 

anon(4698833)

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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.

I disagree...I think Apple does take tremendous steps to ensure their products are a premium experience and the market focus does not include the low tier income spectrum. Lots of companies that follow the same pattern of business, and succeed because of they strive to maintain such.
 

BreakingKayfabe

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I'm surprised nobody has really mentioned the services that Apple gives you to go along with your purchase. iCloud, iWork apps, very low costing iCloud storage space, etc. Not to mention how buying their different products gives you easy integration.

Why should Apple make a low cost phone to penetrate into those markets and give them all those services without having paid a price like the rest of us? Doing that would probably move their profits by a hair and nothing more. We're their target consumer.
 

HAWK

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Why Apple does this I'm not sure. But I'll agree with Sean in his points as they seem valid to me


Sent from my iPhone using Tapatalk
 

A895

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You clearly don't understand what the phrase "degrade the brand" means. The brand is the whole, not any particular piece. When the brand represents luxury tier products in 100% of their product spectrum, introducing a low cost phone strays outside of that spectrum, and cheapens the brand. This isn't a tough concept to grasp.
Again luxury is your perception, it isn't real luxury.
 

A895

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Smaller margins will hurt them. Look at their stock price compared to when they announce quarterly profits with and without a decreased profit margin. When their profit margin takes a dip, their stock price and market cap takes a hit.

And another problem with creating a super low cost iPhone is still brand perception. I know you don't really believe that this is a thing, but if Apple were to create a $100 (or even $300) iPhone for the third world market, those phone would be sh*t just like $100 Android phones. Maybe they could get more market share. But if those third world customers move up to the middle class and can afford a "real" iPhone, they won't want one. For a couple of reasons I can think of. One, they won't want to buy another phone from the same brand as their cheap iPhone because the cheap iPhone was sh*t. Why would they want to stick with that brand? Two, they would want a different brand to show off their new middle class status. They won't want the same phone their still poor friends and family have. And if Apple were to drastically cut their profit margins to sell a "good" iPhone to the third world at a much lower price point, see paragraph 1.

Maybe you think it would be worthwhile for them in the long run. Maybe so, maybe not. But I'm going to put more trust in Tim Cook and the rest of the Apple executive team and board and that they are selecting the best path for Apple, than I am in some anonymous person posting on a forum. And as for now the market and investors also agrees with Tim Cook's approach.
How does Apple making low cost phones mean they will suck?
 

A895

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I'm surprised nobody has really mentioned the services that Apple gives you to go along with your purchase. iCloud, iWork apps, very low costing iCloud storage space, etc. Not to mention how buying their different products gives you easy integration.

Why should Apple make a low cost phone to penetrate into those markets and give them all those services without having paid a price like the rest of us? Doing that would probably move their profits by a hair and nothing more. We're their target consumer.
We don't know for sure how they could do it, but that isn't a valid reason not to do it. Spreading your brand into more markets shouldn't be a detriment if the company itself is very profitable.
 

BreakingKayfabe

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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.

Have you ever been to a sporting event? Where do all the fights happen? In the cheaper seats which primarily low-income people buy. Don't you feel that that cheapens the area of that stadium even more? Go sit in the pavilion (bleacher section) of Dodger stadium and see how you like it there with all the drunk cholos. If you're able to afford a ticket to sit field level in the yellow seats, you're going to buy that ticket.
 

BreakingKayfabe

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We don't know for sure how they could do it, but that isn't a valid reason not to do it. Spreading your brand into more markets shouldn't be a detriment if the company itself is very profitable.

I agree with that. However you're wanting Apple to make a sacrifice in hardware to make a phone low-cost for that segment of consumers. There is indeed a perception and level of quality Apple would like to maintain and be known for. They get hammered now for the products they make. As soon as they make a phone with cheaper materials, no matter if it's just for a certain segment of consumers, they'll be bulldozed by people saying they sold out to make extra profit.
 

A895

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Have you ever been to a sporting event? Where do all the fights happen? In the cheaper seats which primarily low-income people buy. Don't you feel that that cheapens the area of that stadium even more? Go sit in the pavilion (bleacher section) of Dodger stadium and see how you like it there with all the drunk cholos. If you're able to afford a ticket to sit field level in the yellow seats, you're going to buy that ticket.

Wow, that is a way to look down on people.
 

BreakingKayfabe

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Wow, that is a way to look down on people.

I tend to look down at men in their 20's and 30's that get all liquored up at sporting events and get into brawls.

I would look down at a company who all of a sudden would go in reverse to please a small percentage of people.
 

Smply_Rcklss

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Have you ever been to a sporting event? Where do all the fights happen? In the cheaper seats which primarily low-income people buy. Don't you feel that that cheapens the area of that stadium even more? Go sit in the pavilion (bleacher section) of Dodger stadium and see how you like it there with all the drunk cholos. If you're able to afford a ticket to sit field level in the yellow seats, you're going to buy that ticket.

I guess that is a good way too put it.
 

A895

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I tend to look down at men in their 20's and 30's that get all liquored up at sporting events and get into brawls.

I would look down at a company who all of a sudden would go in reverse to please a small percentage of people.
How is billions of people a small percentage?
 

A895

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Because with current tech it's not possible to make a low-cost smartphone that doesn't suck. It will suck in at least some regards because compromises have to be made to keep the cost low. A worse camera whether that's megapixels or auto-focus ability or whatever. Or a slower CPU/GPU so that animations lag. Take away LTE and just live with slow speeds because those markets don't have LTE anyway. A lower resolution screen that is viewable from fewer angles or in sunlight. Drop the all metal and glass construction. There are myriad compromises that would have to be made. I've yet to see a review of a low cost Windows or Android phone that doesn't say something like "it's ok for its price point but makes sacrifices x, y, and z". Those sacrifices would make the phone suck.

Any low cost phone makes sacrifices does not mean it will suck.
 

anon(4698833)

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You take these responses personally, which is hilarious to me.

Explain to me how these products are NOT luxury products...

I guess taking a luxury condo tower and turning the bottom 5 floors into low income housing would be a totally understandable move to you based on your logic. LOL!

I'm still kind of shocked that you, for some reason, feel that every company strives to control every section of every market related to their chosen product. Kind of seems weird given the success of other luxury product companies out there who do the EXACT same thing as Apple, and experience similar success.
 

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