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SwedishRider
Rider on the Storm
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join:2006-01-11
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reply to haroldo

Re: [iPhone] Do you think the iPhone is a good "value"

I remember when Jeff Bezos said there are basically two kinds of successful companies: those that work hard to make you pay the most, and those that work hard to make you pay the least, and that either strategy can work.

Apple has earned its premium price based on its past innovation. But it is clear now by way of sales numbers that the average consumer is falling out of love with iOS and turning to alternate platforms. Apple needs to innovate again to earn its premium price. If not... it will soon look way too expensive when compared with alternate market choices (Galaxy S3/4 at the top of that list at the moment). And I would bet the carriers are getting tired of the high iPhone subsidies vs their less expensive counterparts.

For me... I parted ways with Apple when they EOL'd my 4ish year old MacBook, abandoning MobileMe for iCloud, which my machine was unable to run. What was I told? "Sorry, you'll need a new machine to access those services." I'm not interested in a walled garden where I'll need to keep buying premium-priced machines to continue to access content and services I've already paid or am currently paying for. That, the high price, and the lack of customization/innovation are what make me most leary of iPhone 5. I'm still undecided... but I'm starting to lean away from Apple...



skeechan
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Jeff Bezos should be more concerned about the kind of companies that lose a crapload of money.

Meanwhile iPhone sales appear to be doing just fine and despite all the whining had yet another record quarter, despite it being only 13 weeks instead of the usual 14.



haroldo

join:2004-01-16
united state
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reply to SwedishRider

Bezos is partially right. A successful company is one that gets every customer to pay as much as they want ... to buy your products. Every airline seat sells for a different amount...on the same flight.
If you price too low, you lose revenue as you leave ones on the table". I
f you price too high, you lose customers and sales.
Let each pay as much as they want and you win!



skeechan
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Bezos is not telling the truth. Bezos' statement should say there are two kinds of companies...those that create their own products and those that sell other people's products. Those that create and sell their own set the price for them. Those that don't have to compete with others that are selling the same item. We see this duality with the Kindle Fire...it's not the cheapest tablet around. Amazon prices it for profit maximization (where marginal cost equals marginal revenue), not at the absolute cheapest they can sell it for. Meanwhile their resale stuff is damn cheap...not because they love selling cheap stuff but because if they don't, it won't sell.

The truth is if Amazon could get away with charging more, Bezos would absolutely be doing it. But he can't. So it is like tripping and falling on your face then saying, "I meant to do that."



SwedishRider
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reply to skeechan

said by skeechan:

Meanwhile iPhone sales appear to be doing just fine and despite all the whining had yet another record quarter, despite it being only 13 weeks instead of the usual 14.

That misses the bigger picture. It's not about a great quarter, it's about how well they will do in the coming quarters... aka growth. Their prospects for growth are dimming as their product line stagnates and others innovate. I read somewhere that the iPhone is no longer the prized phone to own in China, which is having a profound effect on growth prospects overseas.

They're not going bankrupt, but they are not growing nearly as fast as they have over the recent past. Their product pipline (or lack thereof) will determine if they can turn that around, or if they've hit their market saturation point. Looking at market share, it's clear Android handsets are pulling away from the pack.

Apple needs to demonstrate that they still can innovate post-Jobs... and they simply have yet to do so.


Alcohol
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reply to skeechan

said by skeechan:

Jeff Bezos should be more concerned about the kind of companies that lose a crapload of money.

Meanwhile iPhone sales appear to be doing just fine and despite all the whining had yet another record quarter, despite it being only 13 weeks instead of the usual 14.

Profits for amazon are reinvested into the company. It's a long term strategy and it's working out nicely for amazon.
--
I found the key to success but somebody changed the lock.


skeechan
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3 edits

You don't reinvest profit. Profit is the retained earnings; it is what is left AFTER spending including reinvestment (along with payouts of dividends). When you post a loss, there is no profit. Expenses and charges exceeded revenues.

Meanwhile massive losses aren't a long term strategy, just ask Pets.com.



skeechan
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reply to SwedishRider

Growth has been in the insane double digits for eons. Expecting 50% year over year over year over year, is exponential growth and no company sustains it, especially as these extraordinarily high levels. But that doesn't mean that growth doesn't continue at an insane rate as it is still doing at Apple.

No one else is innovating, the market is stagnant in terms of actual innovation. They're taking the same products and making small tweaks...little bigger screen, little faster processor; nothing revolutionary.

Meanwhile Apple sold a record number of handsets, more than Samsung did in the US and they make higher margins on each.



SwedishRider
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Well, we shall see I suppose. Personally, I think Apple is at the begninings of a long, slow decline in the post-Jobs era. But as always... time will tell.



skeechan
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This last quarter they sold nearly 50 million iPhones with 30% y/y growth. They did another 20 something million iPads for nearly 50% y/y growth. As that slows they're still going to get a lot of altitude before they see declines in sales numbers, if they ever see declines in sales numbers.

If there is ever a decline, it would start with hundreds of billions in the bank and hundreds of millions of unit sales per year. If there ever is a decline, you are right, it would take a long time...a VERY long time.

They would have to pull a metro to F this all up or someone else invent a phone that gives awesome BJs. A 5" screen and NFC ain't gonna do it.



haroldo

join:2004-01-16
united state
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1 edit
reply to skeechan

said by skeechan:

.... Amazon prices it for profit maximization (where marginal cost equals marginal revenue)...

Not sure where you got your info, but they don't make any money on the Fire, they are pushing it to drive content and build their customer base. They know that once you have the Fire, you'll buy ebooks, music, etc. from them...it's almost a loss leader, but it's anything but a profit maximizer.
The newer version ekes out the smallest of profit margins »www.usatoday.com/story/tech/2012···1684863/
Marginal cost equals marginal revenue??? (Not sure what your getting at) That doesn't lead to maximization of anything.