Anyone here understand economics well enough to answer a question?
I saw a YouTube video that claimed Apple never puts IPhones on sale because their market share is so large. They'd lose money no matter what from a sale because the amount of customers they need to make up the difference doesn't exist. Essentially, if they have 60% of the market, they'd need 50% more to justify a sale. So they increase profits by raising up phone prices.
Ok, if that's true, isn't this a dead end? How far up can they keep jacking prices, before consumers finally become unable to afford them? If a new IPhone is 1,110 now, does it become 2,000 next year? 5,000?
How long until that becomes unsustainable?
What helps Apple get away with the ridiculous prices are the carriers who will sell their customers a $1,00.00 phone by making the price acceptable via monthly payments included as part of the regular monthly service charge.
So yes, they can keep increasing their prices for the time being, since swallowing a $1,500.00 phone price is more acceptable if it's "only" $42.00 more a month to your phone bill over a three year contract. If you don't like that, then $31.00 more a month over four years might appeal to you.
There will likely be a wall a some point though. Or they'll have to offer cheaper phones alongside the super-pricey ones, so the plebs can afford them.
Originally posted by Robtard
What helps Apple get away with the ridiculous prices are the carriers who will sell their customers a $1,00.00 phone by making the price acceptable via monthly payments included as part of the regular monthly service charge.So yes, they can keep increasing their prices for the time being, since swallowing a $1,500.00 phone price is more acceptable if it's "only" $42.00 more a month to your phone bill over a three year contract. If you don't like that, then $31.00 more a month over four years might appeal to you.
There will likely be a wall a some point though. Or they'll have to offer cheaper phones alongside the super-pricey ones, so the plebs can afford them.
This is why I always pay cash for my phones.
I look for an older model and have a prepaid phone plan.
I know a guy who pays $100 a month for his phone; which is crazy to me.
Originally posted by Klaw
This is why I always pay cash for my phones.I look for an older model and have a prepaid phone plan.
I know a guy who pays $100 a month for his phone; which is crazy to me.
It's not like an auto loan, where you're paying interest on the principal. The price of the phone is the price of the phone and it's just broken down across a few years. So paying the full amount upfront doesn't save you money. Though there might be some plans where they do charge interest, not sure. AFAIK, AT&T doesn't.
But yeah, $100.00 a month is not unheard of if he got a pricey phone and the cost is spread over a shorter timeline.