The Shrine

http://www.msnbc.msn.com/id/31170997/

I feel REALLY sorry for all the folks who paid $599 for this silly thing when it first came out...

When the iPhone first came out in summer of 2007, it was $599 for the 8G. Now it's $99.

Just goes to show how much of a markup it was. Funny that they are competing with $150 netbooks now.

New technology is expensive! Film at 11.

Kupek wrote:New technology is expensive! Film at 11.

Who says it's new technology? It's combining a bunch of existing technologies. Again, the price of that technology has not changed to be six times less than it has in the past two years. Hell, they went from $600 to $400 in about a month.

Apple does not think about launching anything without trying to maximize the profit margin. They are no different than Microsoft in that way of thinking. Apple just has better PR than Microsoft, so they can get away with more.

Oh my! A price reduction in the electronics market. We've never seen anything like this before. =P

SineSwiper wrote:

Kupek wrote:New technology is expensive! Film at 11.

Who says it's new technology? It's combining a bunch of existing technologies. Again, the price of that technology has not changed to be six times less than it has in the past two years. Hell, they went from $600 to $400 in about a month.

Apple does not think about launching anything without trying to maximize the profit margin. They are no different than Microsoft in that way of thinking. Apple just has better PR than Microsoft, so they can get away with more.

Companies try to maximize profit! Film at 11:30

The combination of existing technologies is a new technology. And it's worth keeping in mind that when it comes to the iPhone, and cell phones in general, the advertised prices are often the subsidized price.

Kupek wrote:The combination of existing technologies is a new technology. And it's worth keeping in mind that when it comes to the iPhone, and cell phones in general, the advertised prices are often the subsidized price.

So we're getting a deal on a $400 iPhone?

I didn't say that. I don't have one, so I don't think they're worth the money and hassle (switching phone companies). But if you're going to compare prices, make sure you're comparing the same kind of price - subsidized or not.

Define subsidy in this context.

I think it has to do with when you sign a contract with a cell phone company, they sell you a phone for a discounted price because they know they will get the money back through the life of the contract or in fees if you break the contract.

Well, the phone has always been bound to the contract. You can't buy the phone without buying AT&T service.

Right now, you can buy a Blackberry Storm for $49+service (or $439), or an Instinct for $19+service (or $415). Given the margin of around $400 for the "contract discount", that would mean that the iPhone was about $1000 when it came out. Now it's probably around $500. Fine, it's not 6:1, but it's still a considerable markup.

Technology has not changed much, so why the $500-600 markup?

Kupek wrote:I didn't say that. I don't have one, so I don't think they're worth the money and hassle (switching phone companies). But if you're going to compare prices, make sure you're comparing the same kind of price - subsidized or not.

Ok, let's look at this in a slightly different way. If you buy the iPhone whatever-top-of-the-line model for $400, that's the "unsubsidized" price, yes? If you get it for $50 from Whatever cellphone company with a 3-year plan with data, that's the "subsidized" price, correct? Just trying to establish definitions.

Let's assume you agree with those definitions. Is it really a "subsidized" price? If they sign you up to a plan that's at least $50 a month, is that really a subsidy? Or is it just buried in the price of the packaged deal where they company is still making a shitton of money ($20 for essentially little or no extra cost) off of the "rest" of the monthly fee as well.

All I'm saying is, there really is no such thing as a "subsidized" price when you consider the other required costs to get that price. Really, the "unsubsidized" price, or the price you would buy it at a la carte, is the actual market price of the device and what you should be using for comparative purposes. In any situation, comparing a packaged deal price for any cellphone is meaningless since many packages are different and you really have no basis of comparison (such as "the market" if you take the a la carte price).

Uh, you came to the same conclusion I did: make sure you're comparing apples to apples.

Kupek wrote:Uh, you came to the same conclusion I did: make sure you're comparing apples to apples.

What I was challenging was the use of the term "subsidy" when it comes to the prices as you stated in your original post. There is only one price we're looking at, the other is a packaged-deal bullshit price that isn't even to be considered. It ain't no subsidy and should never be thought of as one. That's what I was referring to in my original post and what I attempted (poorly, obviously) to point out in my last post.

We may end up be talking about the exact same thing and competely agree but you just can't use the term "subsidy" when referring to cellphones or cellphone rates. No company involved in any way in the scam that is the cellphone market even considers that an option. They don't need to, the addicted sheep will pay almost whatever. The very notion a subsidy is ever evident with respect to cells is purely marketing bullshit.

Sigh. It's a single, convenient word that gets across the fact that there's a difference between buying the device on your own and with help. The discussion you want to get into is different than the point of this thread, so I was confused why you brought it up.

Kupek wrote:Sigh. It's a single, convenient word that gets across the fact that there's a difference between buying the device on your own and with help. The discussion you want to get into is different than the point of this thread, so I was confused why you brought it up.

SineSwiper wrote:Define subsidy in this context.

Obviously I wasn't the only one confused by or felt it inappropriate to use the term "subsidy". If you use a loaded word for convenience, you're bound to get questions/challenged on it. In the end, it wasn't the correct term to use to make your point, even if it's one that others ultimately agreed with you on.

I know you're a busy man so I put the summarized version above. There's an elaboration on this point below if you or anyone else cares to read further.

There's no "with help" when it comes to cellphones. It's all packaged, marketed bullshit where they try to goose you even more than they already do. For example, about a year ago or so, I dug deeper into a "deal" Bell Canada was offering with its internet services where you get a free Xbox 360. They were essentially charging the equivalent of $720 for an Xbox Elite ($20 a month extra over 3 years) when it was selling for $500 in stores. Nice deal, huh? They are our biggest cellphone company up in Canada so guess where they learned that from?

Look again at the "deals" they offer in cells. I actually look them up on occassion for my wife, she wants to get one "just in case" and I use unfettered logic to dissuade her otherwise. I don't have a specific example, but if you go to their - or their competitors' "cheap" brands - you will find that they're overcharging for the rate plans in order to get a free phone (up here, we have 3 cell companies - Bell, Rogers, and Telus - that each owns a second, "no-frills" brand, which are Solo, Fido, and Koodo, respectively). So yeah, you can get the new Blackberry Storm for $50 or $100 but if you dig into it, you're actually paying an extra $20 a month on your plan over 3 years to do so over even that company's no-frills brand.....and you're getting a "free" phone over time with those brands! That's before we even start talking about the collusion created with the (sort-of) natural oligopoly, but that's a different discussion.

You have to eliminate the very idea of "subsidy" or "with help" when looking at the cell market. It simply doesn't exist on this continent.

This isn't an unsupported grudge against the cell companies that I have for no reason. It's a learned hatred over many, many years and they just keep adding fuel to the fire with their new "deals" they come up with every so often.

Zeus wrote:There's no "with help" when it comes to cellphones, either. It's all packaged, marketed bullshit.

There actually is. In order for what you're saying to be true, then my monthly bill would have to vary depending on the phone I pick. It doesn't, despite the varying value of the phones available to me. It's certainly not free, since I'm signing a contract to pay them a certain amount each month. But it's also not a one-sided situation; both me and the cell phone company benefit.

Kupek wrote:

Zeus wrote:There's no "with help" when it comes to cellphones, either. It's all packaged, marketed bullshit.

There actually is. In order for what you're saying to be true, then my monthly bill would have to vary depending on the phone I pick. It doesn't, despite the varying value of the phones available to me. It's certainly not free, since I'm signing a contract to pay them a certain amount each month. But it's also not a one-sided situation; both me and the cell phone company benefit.

*shakes head* Oh, Kup. I honestly expected a different POV from you.

I will leave you to your illusions and end this line of conversation now.

The existence of arrangements that are not worth my money does not preclude the existence of arrangements that are. I've owned two phones, never explicitly paid for either, and my rates have stayed the same for four years. I understand that the cost of the phone gets built into the contract, but not all of it. Covering part of the cost of the phone gives me an incentive to stay with Verizon.

Verizon keeps me as a customer by providing me with a phone, and I don't have to deal with the hassle of paying for a phone on my own and setting it up with Verizon. It's an arrangement that benefits both sides.

Also, if you want to end a line of conversation, then end it. Don't interject your opinion one last then then declare it ended.

Kupek wrote:Also, if you want to end a line of conversation, then end it. Don't interject your opinion one last then then declare it ended.

Observation, not opinion. Big difference

No difference at all. Calling the end to a discussion while at the same time interjecting your view (with a subtle insult) is, at best, disingenuous.

Sure....

Anyways, I'm amazed at how much of a response this got from you. I don't think I've seen you post this much in years :-)

The iPhone is expensive and overpriced when compared to other phones of its type. I'm not going to argue the point any more. Just know that it's fact.

Saying it makes it so!

Exactly!

At $99 and $199, it's not really overpriced. I've done the research and that's pretty normal. $600-$700, yes, but not $200.

Yeah it's actually very competitively priced for phones that have similar capabilities. Have you checked the prices on smart phones lately? Good God I made a mistake buying my last two phones.

I preordered a 3Gs. Can't wait for it to come. I've been using this slug Treo 755p for 2 years now, and I hate it.

Yeah. The iPhone was expensive at launch. It's priced very competitively now. The Pre is its first real competitor, I think, and it's $200.

Andrew, Killer Bee wrote:Yeah. The iPhone was expensive at launch. It's priced very competitively now. The Pre is its first real competitor, I think, and it's $200.

That's what I meant. I should have said "was overpriced".

Frankly, I think all of the smartphones are pretty overpriced, though. I mean, if I can get a netbook for $150, what's up with the $500-600 price tag for an unbound phone?

SineSwiper wrote:if I can get a netbook for $150

If you or someone you know is actually in the market for this....

DING!

yeah I saw that this morning. A little better than the one we got, and only 30 bucks more!

Just from my point of view; Something that costs a couple hours income per month that gives me constant (24/7) Internet, phone, notepad, the app store (which already gives me programs like Shazam where I can analyze a sample of a song and it will tell me what it is) organizer, music, video, e-book access on a high quality multi-touch capable screen that I can easily fit in my pocket is certainly much more than worth it to me. It may not be to some, for me there isn't a question; it has improved my quality of life and made my time usage more efficient in many ways.

SineSwiper wrote:

Andrew, Killer Bee wrote:Yeah. The iPhone was expensive at launch. It's priced very competitively now. The Pre is its first real competitor, I think, and it's $200.

That's what I meant. I should have said "was overpriced".

Frankly, I think all of the smartphones are pretty overpriced, though. I mean, if I can get a netbook for $150, what's up with the $500-600 price tag for an unbound phone?

Size, convenience, ability to use anywhere, etc

SineSwiper wrote:I mean, if I can get a netbook for $150, what's up with the $500-600 price tag for an unbound phone?

They're completely different products.

Not really. Laptops are getting smaller and less powerful, and phones are getting bigger and more powerful.

Does that whole "pocket" aspect really cost $500 extra?

I think netbooks, smartphones and even the Kindle are converging in the same direction, but they're still different.

Speaking of the Kindle, once that sucker falls low enough in price and I feel comfortable carrying around yet more electronics, I am definitely getting one. As it is, it's completely ridiculous in price and I've never even seen one personally, including the original. Hell. I haven't even heard of somebody having one.

A co-worker got one for his wife and he brought it in one day. It's very, very nice. It's comfortable to use and the screen is great. My only issue is the price. If it were somewhere under $200, I'd highly consider getting one and loading up my favorite books.

The problem comes in buying the books. From the Daily Show interview, if my memory serves, they still end up costing $10 most of the time. I have an easier time reading off an electronic screen in busy atmospheres so it would still be worth it if it was cheaper, but otherwise... Still $10? Ew. I imagine the book pricing might go down if the Kindle becomes more popular. But, yeah, I would start considering it at $150.

Shrinweck wrote:I have an easier time reading off an electronic screen in busy atmospheres so it would still be worth it if it was cheaper, but otherwise... Still $10? Ew.

But you will get the same utility (ie. value or use of the product) out of non-transferable, digital copies of media that you would over a physical copy. What's the problem?

It isn't a huge issue, which is why I'd still be willing to buy a Kindle if it got cheap enough. The only problem, albeit small, is it costs them far in the process of sending text through data rather than pages. I'm all for the author getting a fair share, I'm not saying it should be something crazy like $4, but I imagine it's still the publisher getting the lions share and now they have yet another way to cut costs.

Edit: Just saying that if they aren't willing to give the authors more money, I would appreciate them passing some of the savings down to me.

Judging from his prior statements, I assume Zeus is being sarcastic.

Once a Kindle becomes cheap and durable enough that I don't care about eating while reading one, or tossing around a backpack with one it in, I'd consider it.

I have an emotional attachment to books themselves, but books are still more convenient. If I get some of my lunch on a book, or if I accidentally step on a book, I can still read it.