iPhone 5 Costs $199 in Parts; Sells for $649 Off-contract

[Z1NONLY]

Supply and demand.

Supply and demand.

Supply and freaking demand.

 

[sepayne21]

my only beef with this is the memory. when it costs less than $11 to put in a 32 gig vs a 16 gig, and they charge you $100. not ok!

 

[audi911]

iSheep

 

[psykhe]

I do not find the changed docking connector really "greedy", it was pretty old by now. Non-Apple phones had more changes there than in the last 5 years than the iPhone, so you cannot really blame Apple for updating it.

Charging $30 for a simple adapter is something else, though.

 

[bigdog44]

How can you count marketing and R&D as real costs when in reality, as Apple does it (incrementally), they are negligible on a cost per unit basis. What you are really paying for is the super highend corporate managerial contracts.

 

[rosen380]

If you have an expensive dock or accessory and get a new iPhone, so long as you took care of it [and maybe kept the box] you can probably get back 50-75% of the current new price of the item on eBay, so it's not quite like throwing away your $150 dock, since it's probably still worth $75-100.

--
As far as the actual profit margins; quarterly data from their financial reports:
06/2012 25.2%
03/2012 29.7%
12/2011 28.2%
09/2011 23.3%
06/2011 25.6%
03/2011 24.3%
12/2010 22.5%
09/2010 21.0%
06/2010 20.7%
03/2010 22.8%
12/2009 21.5%
09/2009 21.2%
06/2009 18.8%
03/2009 17.8%
12/2008 19.0%

First-- if they were really making a couple hundred percent, these numbers would be much higher.
second-- I suspect the increases over the last few years are that they have generally stuck to a pricing model [ie +$100 for each jump in memory], even though the costs have declined.

Though, given what people pay for an iPhone 5 on eBay right now, I think there is a fair argument that they are selling their stuff too cheap!

 

[fulle]

I don't think this has very much to do with supply and demand. It's more of a control method to make sure that users lock into contracts with the carriers. If the off contract price is this inflated, and there's little to no discount with service costs when using an off contract phone vs a subsidized one, then it pretty much pushes everyone into purchasing carrier subsidized contract tied phones.

The government doesn't give a damn, and instead has just made efforts to tax the unsubsidized price on the smartphones. Quite a few states have made that change recently. It's my opinion that some kind of policy change is needed to make this practice illegal, but... what can we do? The government is run by the rich for the rich.

 

[Z1NONLY]

I don't think this has very much to do with supply and demand. It's more of a control method to make sure that users lock into contracts with the carriers. If the off contract price is this inflated, and there's little to no discount with service costs when using an off contract phone vs a subsidized one, then it pretty much pushes everyone into purchasing carrier subsidized contract tied phones.[/quote]

Still just supply and demand. They could tue a discounted price to purchase of an an underwater basket-weaving club for all I care. It doesn't matter.

It's their product they get to ask what they want and you get to make a choice with your money.

Don't like the terms they offer?....DON"T SPEND YOUR MONEY.

The government doesn't give a damn, and instead has just made efforts to tax the unsubsidized price on the smartphones. Quite a few states have made that change recently. It's my opinion that some kind of policy change is needed to make this practice illegal, but... what can we do? The government is run by the rich for the rich.

What practice? Charging what a company want to charge for a product they make? That should be illegal?

Again, no one is holding a gun to your head to buy. You have the choice to buy or not buy and they very well have a right to set the price wherever they choose.

They could charge a million freaking dollars per phone. It's their damn product.

 

[baconeater]

[citation][nom]audi911[/nom]iSheep[/citation]

Ahh I love when someone comes up with a well articulated, evidence based, unbiased, and intellectual argument!

 

[jakson0100]

Currently iPhone 5 on the second hand market is very hot because of high demand. According to Movaluate analysis, AT&T iPhone 5 16G Black is the most popular among other variants which is about $800.Read iPhone 5 Sales Behavior on the Second-Hand Market here
I hope the factory unlocked iPhone will be available soon to stabilize the second hand market.

 

[Guest]

This is a little late but I submit it for posting anyway. Why all of the bitching about Apple's prices? You refused to purchase an Apple product citing greed in their pricing, yet some of you are probably driving vehicles out there well over priced and under performing in terms of quality. "I drive a Benz but hell with those expensive Apple products, you say". For goodness sake folks! Get a life! If you don't like a product or its manufacturer because of its price then simply don't buy it. Better yet, go and "redistribute" your wealth to those that lack it.