Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
The Almighty Buck Toys Businesses Technology Apple

Crazy Stevie's iPhone Prices are Insaaane! 357

theodp writes "Slate takes a look at the alarming lesson of the iPhone price cut and ponders the long-term effects of a Fire-Sale Nation mentality, especially when companies go all Crazy Eddie slashing prices on products like homes and cars that have active secondary markets. 'High-profile price-chopping tends to occur whenever companies freak out about the vicious combination of a slowing consumer economy and the prospect of getting stuck with big inventories of unsold goods. The tactic often works in the short term. The hype over insanely low prices functions as a form of free advertising, and the lower prices tend to attract buyers. Apple announced on Sept. 10 that it had sold its 1 millionth iPhone.'"
This discussion has been archived. No new comments can be posted.

Crazy Stevie's iPhone Prices are Insaaane!

Comments Filter:
  • by fyngyrz ( 762201 ) * on Saturday September 22, 2007 @09:06PM (#20715715) Homepage Journal

    It won't matter to me what his prices are. An incredibly short-sighted error, IMHO. I'm good for five of them (three kids and my SO.) But no connectivity, no buy.

    • by DurendalMac ( 736637 ) on Saturday September 22, 2007 @09:17PM (#20715763)
      From a business standpoint, it makes sense. AT&T and T-Mobile are the only GSM carriers in the US. Apple wants GSM because it's an international standard and they don't want multiple versions of the iPhone for different countries. AT&T has a larger customer base and more coverage than T-Mobile, so Apple went with them to maximize sales. AT&T does suck (as someone who's currently locked into their glitchy network), but looking at the numbers, it was the logical choice. to make.
      • by CastrTroy ( 595695 ) on Saturday September 22, 2007 @09:28PM (#20715827) Homepage
        Wouldn't selling it for use on any network generate more sales? If X is the number of users on AT&T and Y is the number of users on T-Mobile, then X + Y > X, unless of course, T-Mobile has less than 1 user. Would it be impossible for them to have a phone that works on all GSM networks. Oh, I forgot, they probably got really good kickbacks from AT&T for going exclusive.
        • by MoonBuggy ( 611105 ) on Saturday September 22, 2007 @09:35PM (#20715871) Journal
          I was actually going to make much the same post as yours. I just Googled it and Apple are indeed getting a substantial monthly payment from AT&T for iPhone users, so again from the standpoint of a business it does make sense to go exclusive (although this doesn't seem to benefit the consumer in any way I can imagine). As for a phone that works on all GSM networks (assuming you didn't mean that rhetorically), it is very much possible (needs to be quad-band if you want to use it anywhere in the world, due to different frequencies, but that's by no means unheard of) and the only network feature I know of that is entirely proprietary to the iPhone is visual voicemail.
        • Re: (Score:2, Insightful)

          by MBCook ( 132727 )

          Let's say you sell it for use on any network. For the sake of argument, let's pretend that it would magically work on GSM or CDMA so you could use it on Sprint/Verizon too.

          Firs thing is first, that's 4 times the compatibility testing (minimum). That is 4 carries that you have to make Visual Voicemail work on. That would be tough. Or you could let some customers have it and some not. Or you could just cut the feature which is probably what would happen.

          With four carriers (we'll just assume the big ones for

          • by MoonBuggy ( 611105 ) on Saturday September 22, 2007 @09:49PM (#20715947) Journal
            I would lean towards a fourth choice - leave the carriers out of it. You seem to be working on the assumption that Apple needs to have any kind of relationship with the networks, which I guess means that's the state of affairs in the US? As I said in my post above, the cash that AT&T are paying them makes a perfectly good business rationale for going exclusive, but from a consumer point of view I would've thought that just selling the phone as a standalone device in the Apple stores and allowing the customer to choose their provider (perhaps sans visual voicemail, I guess, but AFAIK all the other features are standard, meaning no software customisation or compatibility issues) would be perfectly acceptable as well as neatly avoiding the problems you outline.
            • by shmlco ( 594907 )
              Go MVNO and you still end up dealing with carriers, as you're going to pay a premium to run on their networks, potentially at non-competitive rates. Further, at least AT&T customers could upgrade prior to contract expiration. Go MVNO, and you can't sell a thing until people are ready to leave their existing carriers.

              Maybe if/when Apple and Google built their own IP6-based network...
            • but from a consumer point of view
              You seem to be seriously confused. Apple is a business. They don't care about the consumer point of view. They only care about the business point of view.
          • by blind biker ( 1066130 ) on Sunday September 23, 2007 @01:50AM (#20717049) Journal
            Well, I used to work at Nokia (I guess you've heard of them) and specifically in phone testing. In short, your post is BS from beginning to end; Nokia would make sure their phone worked with every damn operator. Whether it will be then locked in in the USA it didn't matter, because we knew it wouldn't be locked in in Europe and half of the rest of the world. And we were painfully aware of the fact that in every single country of the world we were competing, almost toe to toe, with the likes of Motorola, Samsung and Ericsson (later SonyEricsson).

            Yeah, testing takes time, but it's cost in time and money is nowhere so high that we'd simply NOT test and go exclusive with one (or $SMALLNUM) operator.

            Whether AT&T was the logical choice or not, I don't know, but it certainly wasn't for the reasons you cite!

            I can't believe the mods went for it, though?!
            • by dwater ( 72834 ) on Sunday September 23, 2007 @02:13AM (#20717127)
              I agree, and the more amazing thing, is that they are doing the same thing in other countries. I mean, I can understand doing something like that in the US with the crazy service provider situation there, but why do it in european countries too?

              Just sell the thing in Apple stores; put the visual voicemail thing on the internet as a service and allow people to pick their own plans.
      • by MBCook ( 132727 )

        It still wouldn't matter. If they went with T-Mobile, people would complain them. People complain about Sprint (I'm one) and Verizon is right up there. There are 4 big cell phone companies in the US, and I don't know of any of them having a decent reputation. My knowledge ranges from not great (T-Moblie, I haven't talked to many people about them) to annoying (Sprint: decent service, poor phones, poorer prices) to horrible (Verizon: poor phones, horrid software, and lock-downs that make Sprint look like a b

      • by Mr2001 ( 90979 ) on Saturday September 22, 2007 @09:32PM (#20715851) Homepage Journal
        By focusing solely on GSM, they're locking themselves out of most of the US cell phone market - over 120 million customers.

        Most cell phone manufacturers do make different versions for different countries. LG is perhaps best known around here for their Verizon phones (CDMA), but they also make GSM devices. Motorola makes both GSM and CDMA versions of the RAZR and many other models, as do Sanyo, Samsung, RIM, and Palm.
        • by dubbreak ( 623656 ) on Saturday September 22, 2007 @10:49PM (#20716269)

          By focusing solely on GSM, they're locking themselves out of most of the US cell phone market - over 120 million customers.

          Oh come on, you have to admit that is hyperbole. Yes, they may have somewhat limited themselves in the US market by being limited to a few carriers but I'm sure they did the research and the amount of lost sales because of that didn't out weigh the world market (the majority of the world uses GSM, the US is strangely skewed towards cdma).

          Most cell phone manufacturers do make different versions for different countries.. Motorola makes both GSM and CDMA versions of the RAZR and many other models, as do Sanyo, Samsung, RIM, and Palm.

          I was once told by someone in the industry never to buy a CDMA version of a phone that was originally designed as a GSM phone. The reasoning being that often the other version was an afterthought and not as thoroughly tested.

          Maybe at this point Apple is testing the market (worldwide) and will eventually approach the much smaller CDMA market if it seems financially viable. You can't really fault them for going for the bigger pot of fish first.
          • by desenz ( 687520 )
            Not to mention AT&T has the most customers in the US. Over 50 million if memory serves.
            • by Mr2001 ( 90979 )
              AT&T has about 64 million, which makes them the biggest, but not by much. Verizon has 62 million, and Sprint has 55 million.
          • Re: (Score:3, Insightful)

            by Mr2001 ( 90979 )

            Oh come on, you have to admit that is hyperbole. Yes, they may have somewhat limited themselves in the US market by being limited to a few carriers but I'm sure they did the research and the amount of lost sales because of that didn't out weigh the world market (the majority of the world uses GSM, the US is strangely skewed towards cdma).

            Well, no, it's not hyperbole. Like I said, there are over 120 million CDMA customers in the US, and if Apple doesn't release a CDMA iPhone, they probably aren't going to get many of those customers.

            But I agree that Apple probably took that into account. Perhaps they figured that developing the GSM version first would speed up their worldwide release, so they could sell enough units overseas to balance out the ones they aren't selling here.

            I was once told by someone in the industry never to buy a CDMA version of a phone that was originally designed as a GSM phone. The reasoning being that often the other version was an afterthought and not as thoroughly tested.

            I'm sure Apple would've put plenty of testing into the GSM version

        • The Palm Treo 600 came to Verizon at least a year [palminfocenter.com] after the first GSM version. Thus, the GSM Treo 600 was the only game in town for a year.

          If you're targeting a world wide market, it's just common sense to go for GSM first. CDMA can come later when you're established.

          • Re: (Score:3, Informative)

            by Mr2001 ( 90979 )

            If you're targeting a world wide market, it's just common sense to go for GSM first.
            Agreed... but it's also just common sense to include 3G, especially when your selling points include a full-featured browser and YouTube. Apple's initial strategy seems to be a compromise that isn't particularly tailored for the US or world markets.
      • Re: (Score:3, Informative)

        by wyldeone ( 785673 )

        Apple wants GSM because it's an international standard and they don't want multiple versions of the iPhone for different countries.
        That would appear to not really be true. According to USA Today [usatoday.com] (as well as the rumor mill around the time of the iPhone announcement) Apple approached Verizon (which uses CDMA) before AT&T, but was turned down.
        • Re: (Score:2, Insightful)

          by cthellis ( 733202 )
          It's not necessarily an overriding factor, but if Apple was edged out (Hah! Get it?) of Verizon in general, they may have simply solidified another gameplan. Who's to say that if they DID work out the deal with Verizon, they wouldn't have maintained CDMA exclusivity during their initial rollout and launch periods instead? It's not like CDMA doesnt EXIST elsewhere... It's just not as widespread.

          We certainly know they'll be spreading beyond GSM eventually... But I wouldn't expect anything before the "i
        • Isn't the next generation of GSM pretty much CDMA except the name?
          • Nope. The only thing UMTS and CDMA have in common are that at an air interface level, both use a Code Division Multiple Access multiplexing scheme, and that only applies to UMTS for versions R99 through Rev. 7: Rev 8 is OFDMA based.

            UMTS and CDMA don't even use similar, let alone compatible, implementations of the air interface.

      • Re: (Score:3, Informative)

        by hey! ( 33014 )

        Apple wants GSM because it's an international standard and they don't want multiple versions of the iPhone for different countries.

        I don't think that that true at all. Palm, after all, has come out various treo models in GSM and CDMA simultaneously, even tweaking features to suit the carrier. I don't know if it's just a matter of firmware, or plugging a different modules onto the system board, but carriers sell LOTS of phones.

        I think the key has to do with marketing, particularly positioning against the t

        • I think the key has to do with marketing, particularly positioning against the treos, which are highly capable PDAs, more capable than the locked iPhone in that category.

          But the application-unlocked iPhone is MORE capable. And I think that Apple deliberately made unlocking for 3rd party apps easy...

          -b.

          • by hey! ( 33014 )
            That only makes sense to early adopters. I don't think pragmatic or trailing adopters will factor that into a decision unless they are truly on the fence. Apple may plan to benefit from unauthorized unlocking, but not in terms of typical user perception of the phone.
    • It won't matter to me what his prices are. An incredibly short-sighted error, IMHO. I'm good for five of them (three kids and my SO.) But no connectivity, no buy.

      I unlocked mine using anySIM so I can use it with a local SIM in .pl and .uk when I go there. They're relatively easy to unlock, both for installation of third-party applications and for foreign SIMs. The new unlocking software doesn't require disassembling the phone or any electronic modifications.

      I think Apple deliberately made the iPhone "

      • Re: (Score:3, Insightful)

        by fyngyrz ( 762201 ) *

        I think Apple deliberately made the iPhone "easy" to make it as open as possible whilst still giving lip service to AT&T's locking and security requirements.

        Perhaps so. However, I am not going to do that; I am not interested in a fairly expensive phone without a warranty or technical support, which appears to be the current policy. Nor am I interested in one that may break with an upgrade, or which is unable to upgrade while the rest of the field is. I am even less interested in handing out such

  • Don't forget (Score:4, Informative)

    by 2.7182 ( 819680 ) on Saturday September 22, 2007 @09:11PM (#20715737)
    Crazy Eddie ended up in jail.
    • by HeavensBlade23 ( 946140 ) on Saturday September 22, 2007 @09:28PM (#20715835)
      He's not in jail, he's been on the cover of every Iron Maiden album ever made.
    • But only because the stupid Motie kept annoying the Masters by trying to stop the Cycles, when everyone knows that's impossible.
      • But only because the stupid Motie kept annoying the Masters by trying to stop the Cycles, when everyone knows that's impossible.

        And by the end of the second book the Moties had expanded beyond their home system so the cycles were finished (or at least delayed) so the Crazy Eddie probe (which initiated contact with humans) was the right thing to do after all.

  • Gimme A Break!!! (Score:4, Insightful)

    by Jane Q. Public ( 1010737 ) on Saturday September 22, 2007 @09:32PM (#20715857)
    Does anybody really think that Apple won't make money on it at $399? For Grid's sake, it's assembled overseas for slave wages. It only has a few parts (if you count the main board and display as one part each). I don't think they will hurt. And if they do -- that is, if they are dumping it on the market for a loss -- then they are prosecutable under antitrust laws.

    Please, let's see some real news, rather than trying to make problems up.
    • by Jah-Wren Ryel ( 80510 ) on Saturday September 22, 2007 @10:26PM (#20716143)

      Does anybody really think that Apple won't make money on it at $399?
      I completely agree.

      if they are dumping it on the market for a loss -- then they are prosecutable under antitrust laws.
      But now you are off in la-la land. There is nothing preventing a company from selling below cost. It's only when they are doing it to maintain monopoly of a market. And while its arguable that Apple's 90%+ hold of the mp3 player market is a monopoly, they don't have anything even close to a monopoly in the phone market.
      • It is not just illegal to "maintain a monopoly". It is also illegal to attempt to corner the market by dumping. Both are "monopolistic practices".
        • One does not have to be accused of trying to maintain a monopoly. "Dumping" at a loss is ILLEGAL because it is a "monopolistic practice". There are lots of examples. For just one, not many years back we saw certain computer memory manufacturers who were charged with "dumping"... even though none of those companies had a corner on the market. They WERE trying, though... which is the point.
          • Re: (Score:3, Insightful)

            There are lots of examples. For just one, not many years back we saw certain computer memory manufacturers who were charged with "dumping"... even though none of those companies had a corner on the market. They WERE trying, though... which is the point.

            If there are lots of examples, then you need to find another one. The memory dumping issue was NOT about monopoly, it was about unfair trade practices for imported goods. Micron, the only large-scale US memory manufacturer accused the koreans of dumping and the us state department supported Micron as a form of protectionism.

            Come up with a real example of a domestic case of a 'dumping' conviction that did not involve leveraging or maintaining a monopoly market and I'll gladly accede.

    • The cost to make is certainly below the selling price. Apple is rumored to have revenue sharing, a certain amount per month, though the rumors seem to be almost completely confirmed.
  • by drmerope ( 771119 ) on Saturday September 22, 2007 @09:35PM (#20715869)
    Its funny how much we've been conditioned to think that the price of things should go up not down. Think about it, all other things being equal, as we get smarter, more efficient with our production of goods prices should go down. Prices only go up because inflation is an even more powerful force than innovation in our economy.

    Second, the cost of everything has an fixed component and a quantity component. One reason an F22 fighter is so expensive is that relatively few are built. The same thing happened with the iPhone. At the beginning they weren't sure if they'd sell 1 or 1 million. They had to guess and price accordingly. Now that so many are sold, the fixed costs (like engineering) are paid-in.

    Meanwhile, they are competing with many other kinds of smart phones. Most of which were cheaper already. Doesn't anyone remember all the talk about how the iPhone was outrageously priced above competing smart phones?

    Yeah. So after their profit margin was clearly fat, they cut prices to be competitive and more than just fan-boy enthusiasm. We should be worried? This article is drawing ridiculous connections between the iPhone and the panic over the sub-prime mortgage market.
    • Its funny how much we've been conditioned to think that the price of things should go up not down. Think about it, all other things being equal, as we get smarter, more efficient with our production of goods prices should go down. Prices only go up because inflation is an even more powerful force than innovation in our economy.

      One can only "innovate" a gallon of milk so much. So, food prices generally rise with inflation. (IIRC, they're actually one of the prime measures of inflation.)

      Land is a fixed good -- the Earth isn't getting any bigger -- so land prices should also generally go up with inflation, plus more for the ever-increasing development. (An empty field has less value than either a working farm or a home.)

      Now, as for "manufactured goods", you've got a point. Except that, for any good that I might purchase, a fair

    • Think about it, all other things being equal, as we get smarter, more efficient with our production of goods prices should go down.

      The "all other things being equal" portion is not insignificant. The production efficiencies can be easily be dwarfed when the production is overseas and the value of the consuming currency is dropping like a stone.

    • Its funny how much we've been conditioned to think that the price of things should go up not down.
      Joking aside, I don't believe I've ever been conditioned to believe that prices should go up. I know that here (in Australia), prices dropping happens a lot 'round here due to our free yet reasonably well regulated market. Not only that, we've always (*gasp*) expected prices to drop for all the reasons you stated. Where were you brought up?
  • still overpriced (Score:5, Insightful)

    by m2943 ( 1140797 ) on Saturday September 22, 2007 @09:40PM (#20715899)
    I don't care how nice a screen it has, at $400 with a 2 year contract, a locked phone with no extensibility and EDGE-only speeds is still far from cheap. The best one can say is that it has gone from an insanely overpriced phone to merely an expensive fashion phone.

    iPhone doesn't start hitting "Crazy Eddie" pricing until it's below $100.
    • by Glytch ( 4881 ) on Saturday September 22, 2007 @10:24PM (#20716137)
      Agreed. The iPhone should be giveaway phone considering the restrictions, lock-ins and mandatory contracts that AT&T and Apple saddled it with.
    • Buy one and SIM-unlock it. It's not that hard -- there are several free software-only unlocks around already.
      • You run the risk of Apple bricking it.
        • You run the risk of Apple bricking it.

          Not if you don't update using iTunes. If it's not on ATT's network, how will Apple have access to it? Besides, deliberately bricking devices would be very bad PR for Apple as well as possibly being illegal (since unlocking a phone to operate it on a legal cell network has been ruled to be legal, and you buy the phone without a contract; only getting one during activation).

          -b.

    • by njfuzzy ( 734116 )
      If you only use it as a phone, it's really not the right device for you. My iPod is a great phone (far more useful for calling than my SLVR L7 was), a great iPod (for barely more than the nearly identical iPod touch), a media viewer (movies and my photo portfolio in my pocket, on a real screen), not to mention a little thing called the Internet (real email, real web browsing, and some handy applets).

      I would have paid $100 for a nice phone. Yes, there are free ones, but not everyone wants the ones that are f
      • by FyRE666 ( 263011 )
        Looks like someone's OD'd on the coolaid...

        If you only use it as a phone, it's really not the right device for you. My iPod is a great phone (far more useful for calling than my SLVR L7 was), a great iPod (for barely more than the nearly identical iPod touch), a media viewer (movies and my photo portfolio in my pocket, on a real screen), not to mention a little thing called the Internet (real email, real web browsing...
        ...real slow email, real slow web browsing? My Sony Ericcson W850i is a *very* good MP3
        • by njfuzzy ( 734116 )
          Here's a simpler point for you. I paid $600 for my phone, and after a few months with it, I really like it. It does what I want, how I want to do it. Is it perfect? No. Would I chose another device over it, having used it? No. Is it for everyone? No. It's worth what people will pay for it, and so far, a million people paid $400-$600 bucks for one. So clearly, it's worth $400.
          • by FyRE666 ( 263011 )

            I see, so despite your original questions, you didn't really want to know where people could get something that did the same (or in my case, a hell of a lot more) than your iphone for the same price (again in my case, a hell of a lot cheaper). You just posted to brag that you bought an iphone back when they were expensive, followed by some sort of online therapy session where you were trying to convince yourself you weren't fooled by "the shiney"...

            It's not that the iphone is really that bad; it's just not

      • Oh wait, where can I get a standards-compliant web browser with a 3.5" screen, and a fully-functional POP/IMAP email client, on a phone again?

        I can point you in the direction of dozens of phones that will run Opera Mobile, can do POP and IMAP mail, for far less than iPhone prices. Although granted, I do like the 3.5" screen. That being said, my nearly three years old Nokia N90 had a 416x352 pixel screen, so lets not go getting all hyped up by the fact that the iPhone has a screen with 4.8% more pixels 36 m

        • by njfuzzy ( 734116 )
          Oh, absolutely. My point is mostly that it's a narrow field, and a different kind of device from a "Phone"-- it's one of many things that the iPhone integrates. People saying $400 is too much to pay for a phone, when referring to the iPhone, are being silly. It's not just a phone, it's also a phone. You certainly don't find many devices with the iPhone's feature set in the $0-$100 after contract price range.
          • Deflation Indeed (Score:3, Informative)

            by meehawl ( 73285 )
            You certainly don't find many devices with the iPhone's feature set in the $0-$100 after contract price range.

            Really? No GPS, no tethering, no mem card, no IRda, no real bluetooth PAN, no MMS, no OTA pda syncing, no useful push email, no IM, no tactile feedback. I'm having trouble finding some features, can you point them out?
    • It now costs $100 more than an iPod Touch with the same features. If you didn't have an iPod or cell phone and wanted both, and if AT&T service was decent in your area, $400 would be a fairly good price.

      Personally, I'm fine with my $20 phone and the Nano that came free with my laptop.
  • Flation - In or De? (Score:2, Interesting)

    by sufijazz ( 889247 )
    After the rate cut that the Fed announced, fellow-liberal Jon Stewart asked Greenspan [ifilm.com] pointed questions of whether America is a free economy given the invisible hand of the Fed that favors "investment over work", these guys [dailyreckoning.com] have been wondering what kind of "flation" we will have to live with.

    The Fed chose to cut rates to prevent deflation. The Slate article seems to suggest that deflation has only been postponed and companies will be hit in the long term. But the price cuts are held often - think Thanksg
    • Investment = Work (Score:3, Insightful)

      by mosb1000 ( 710161 )
      The fed doesn't favor investment over work. What does that even mean? When a company invests in a new technology, that means more work. When a city invests in new infrastructure, it means more work. When farmers plant more crops, it means more work. Investment facilitates work. Without it, people wouldn't have jobs, and nothing would get done. The fed does not "favor investment over work", they favor investment because it leads to work.

      The fed works to mediate the economy so that people with money wi
      • The fed doesn't favor investment over work. What does that even mean?

        I think he meant investment over savings. That is, low banking interest rates drive money into more speculative investment markets.

        I don't think either is really true. The Fed tries to balance employment with low inflation. Employment keeps the masses buying crap and low inflation keeps the bond market, where the majority of wealth is parked, stable.

        • Re: (Score:3, Interesting)

          by mstone ( 8523 )
          Call it "investment over hoarding", and use "buying gold" as your basis for comparison.

          When people buy gold, they basically stick it under their mattress. They don't use it themselves, and no one else gets any benefit from it either. For all intents and purposes, that gold has been removed from the economy. It doesn't build new factories, buy new machines, or pay anyone's wages. It doesn't even do anything for the person who bought it. It just sits there while the owner waits for the price to go up so
  • nature of phones (Score:5, Insightful)

    by fermion ( 181285 ) on Saturday September 22, 2007 @09:42PM (#20715915) Homepage Journal
    When the iPhone first come out, one of the biggest complaints was that it was impossible to sell a phone in the market where most phones were free or near to free. Of course cell phones are not free, most people pay for them over time, usually paying $1.5k over a two year period. If one buys a phone with an upfont cost, this might add 20-30% to the price.

    Many pundits also complained that the iPhone could not compete with the smart phones. Of course, the iPhone is not competing with the smart phone, but merely assuming that some people might be willing to pay more for a phone upfront if it provided a value. Such a market was made clear by the Razr.

    Now pundits are saying that Apple is desperate and crazy because it lowers prices. It is true that Apple never has a sale, but this is a phone. Phones start expensive and then get cheap. It always happens. I don't have an iPhone. Being an early adopter was not worth the price. I was waiting for this price drop, and a relaxation to contract rules typical to ATT. The price drop is not like the price drop of a Mac or an iPod. With those devices, one is not contracted with a total costs that is at least $2K.

    • Now pundits are saying that Apple is desperate and crazy because it lowers prices

      No... pundits are saying that Apple is desperate and crazy because they aren't even close to making their target of 10 million phones in the first year. [macdailynews.com] If Apple gave us an unlocked phone with an SDK, they could easily make or exceed that goal. It's simple really: Apple decided to focus on a great profit instead of a great product, and ended up with neither.

      • by bnenning ( 58349 )
        they aren't even close to making their target of 10 million phones in the first year.

        Erm, their goal is to sell 10 million phones in 2008. It's technically true that they "aren't even close" to that, inasmuch as they have currently sold 0 phones in 2008.
    • by Junta ( 36770 )

      Of course cell phones are not free, most people pay for them over time, usually paying $1.5k over a two year period.

      Yes, so on this count, the iPhone is the worst of both worlds. It *requires* a two year plan (at least, to be legitimate within the Apple/AT&T vision and have cell service), *and* costs about the same as the unlocked phones (and before costed significantly more), and that's with requiring more expensive data plans. I wasn't surprised to see the iPhone price, but I was surprised to see them declare that there would be no contract-signing subsidizing of the cost, but you'll have to sign it anyway.

      It wo

  • by sharkey ( 16670 )
    I'll club a seal to make a better deal!
  • Autos (Score:5, Insightful)

    by UserChrisCanter4 ( 464072 ) * on Saturday September 22, 2007 @09:48PM (#20715943)
    The car example cited in this article (Toyota with $850 of incentives per car vs. US car manufacturers with $3K average) is a perfect example of why US automakers are so very, very screwed.

    No matter how much Consumer Reports et al. say the reliability has improved, and no matter how much the US makers craft intriguing and unique new offerings, their cars' value will continue to tank.

    Sure, all cars lose value the minute they're driven off the lot, and it's a substantial number. But go take a look at what happens to a Civic or Camry versus what happens to a Fusion/Taurus or Malibu. Go ahead, check it out. It's awful.

    I bought a new Scion tC last year. I was all primed to buy a used carwith ~35K miles; it makes sense to let someone else take the financial hit. Then I looked at the prices on used Scions, used Civics, etc. $17K cars were selling for $14K after three years. It made absolutely no sense to go buy a three year old car with a nearly-expired warranty and a possibly shady maintenance record when $3K got me a brand new one. On top of that, I was paying cash; the price difference is narrowed even more if you're financing, because the used car will almost certainly have a higher APR.

    Now contrast this with a Ford Focus or Chevy Cobalt or similar. Go look at the similar models, and marvel at how much more has bled off of the value; it's because the $17K Ford, depending on when you catch it, might be only $15K, and might have a 7% or a 0% APR. It's great in the short term, and if I was interested in a Focus I'd be all over it.

    Ultimately, if I was buying this car to drive it into the ground and toss it at 300K miles, it would be smarter to buy the Ford (assuming the reliability was the same, which isn't really the case with the Focus). Most people, myself included, don't do that. They get rid of the car in the 80K to 120K range, when it's starting to show some age but before it might potentially require major repairs. And many people look at how the US automakers have played their "SUPER LOW 72 MONTHS 0%! $3,000 CASH BACK" games and they walk across the street to the guys who might charge a bit more, but won't slash their prices next week. All things being equal, a Camry with the same MSRP as a Malibu or Fusion will resell for more at every step in its life, and it's because Toyota has shown that they're going to hand out approximately the same deal to everyone.

    I want to buy American, or at least be able to widen my prospects when looking at cars. I really do. If I were willing to drive cars into the dirt, I could probably do it, but I'm not comfortable with the risks near the end of the car's life. A $2,000 engine repair does make better financial sense than buying a new car, but not when your car won't start, and you have to get a rental for a week, and you're wondering if it will be okay for another year or will require a new transmission in four months. So, like most people, I sell mine before I think those problems will show. As long as the US automakers are willing to go "Crazy Eddie" and reap the short-term profits, though, they'll continue to lose out on long-term buyers like me. I sincerely hope other industries are willing to look at Ford, GM, and Chrysler's experience when they think that it's a good idea to slash their prices.
    • by sholden ( 12227 )
      The house example on the other hand is crap. Once you have price rises like: http://photos1.blogger.com/blogger/113/2109/1600/shillergraph.gif [blogger.com] there's only way to go, and once it starts you offload as fast as you can since last out loses most.

    • Re: (Score:2, Insightful)

      by ReadAholic ( 245150 )
      http://www.daveramsey.com/ [daveramsey.com]

      http://www.daveramsey.com/etc/cms/why_buy_a_used_car_5153.htmlc [daveramsey.com]

      http://www.daveramsey.com/etc/search/?strSearch=car+buying&sa.x=0&sa.y=0&sa=submit [daveramsey.com]

      If you MUST buy a New vehicle, always pay cash.
      Open a savings account or an interest paying checking account, (this is short term so you dont care about interest rates).
      Deposit the money you would have paid for the monthly payment in to this account and then ignore it until you are ready to buy.

      $400 x 12 months = $4800 x 4 year
      • If you MUST buy a New vehicle, always pay cash.

        If you MUST buy new, buy used anyway. You can get something nice and in decent shape for $5000-6000. Try that with a new car!

        -b.

      • Re: (Score:3, Informative)

        by Chapter80 ( 926879 )
        While paying cash often ends up being to your advantage, I disagree with the statement "Always pay cash" (for a new vehicle). The correct statement should read "Do the math, and choose the best alternative."

        Here are several scenarios where I, personally, have found it better to NOT Pay cash:

        • The car dealership actually took a credit card. I negotiated my best deal, and then pulled out my credit card, which pays me 1% back. I "charged" a $25K car (using two cash-back cards), and got $250 back from the
      • Re: (Score:3, Informative)

        by maeka ( 518272 )

        Cash. Always a great bargaining point.

        No, cash is a horrible bargaining point when buying from an auto dealer. They make money on the financing, and assume people will be financing through them (or at least allowing them to arrange the loans - where the bank gives them cash kickbacks or points.)
        You always want to finalize the price before you start talking financing (or lack-there-of) or trade-in. It is only when done in this order you will have a chance at working with unpadded numbers.

    • All things being equal, a Camry with the same MSRP as a Malibu or Fusion will resell for more at every step in its life, and it's because Toyota has shown that they're going to hand out approximately the same deal to everyone.

      Not really. The difference in prices is due to supply and demand, pure and simple. Demand is driven by such things as perceived quality and fuel efficiency. Overall, the imports beat the American cars in these aspects hands down (or at least, that's the perception). Given the way US
      • You're right on the supply and demand side, but I think you've misinterpreted what I mean by the "dealers changing the price." Promotional pricing is itself created by temporary shifts in supply and demand; I didn't say that in my post because it goes without saying.

        Say the Ford Fusion is selling slower than Ford hoped - obviously they'd slow production. In many situations, though, their union deals essentially "force" them to make cars. Ford pays the same labor costs whether or not their cars are rollin
  • So the "slow" sale of homes is partly a scam to make us think it's a good time to buy...
  • by jht ( 5006 ) on Saturday September 22, 2007 @10:33PM (#20716181) Homepage Journal
    The iPhone's price cut was surprising (way earlier than I expected), but that's the nature of the cellphone/personal electronics business. Always has been. A device comes out at a premium price, and then over the 6-12 months of the device's lifecycle the price drops drastically. By the time the new hotness replaces it not only has the price collapsed, but it's not even a lust object anymore. But we've been going through those cycles ever since the Walkman.

    What's masked it a little here in the US has been the subsidies that cellphone carriers pay to get lock-ins. And they increase the subsidies as the life of the gadget progresses (at least on paper), to reduce the perceived cost more. Remember, once upon a time the Motorola RAZR was the hottest phone on the market. And it cost around $400-$500, even with a contract. And that was just a phone! Now, of course, they're free with contracts, and have been for quite a while.

    Anyhow, I'd say the dependency of the domestic auto market on rebates is a much better bellwether for the state of the "Crazy Eddie Economy" (and I grew up in New York, so I remember those ads), along with the use of incentives in the housing market. Heck, supermarket coupons are part of it, too. When discounts are the norm without any real reason to do so (real costs are always dropping in the electronics business), prices have no real floor, and consumers have no incentive to pay the "real" price, because they know that it's going down. A lot.
  • by ebcdic ( 39948 ) on Saturday September 22, 2007 @10:42PM (#20716229)
    Apple knew there were a bunch of fanboys who would pay almost anything to get an iPhone early, so they gouged them for as much as they would pay. Once they'd all bought iPhones, it made sense to cut prices to attract a different market. It turned out that the fanboys were annoyed enough that Apple decided it was worth giving them partial refunds.

    So nothing surprising, just Apple doing whatever seemed likely to maximise profits. You don't like it? Tough luck. Those who live by the sword shall die by the sword.
  • Deflation (Score:5, Informative)

    by michaelmalak ( 91262 ) <michael@michaelmalak.com> on Saturday September 22, 2007 @10:47PM (#20716259) Homepage
    Is it too much to ask to name the phenomenon rather than describe it?

    And margin-shredding behavior tends to spawn more margin-shredding behavior
    That's called deflation. Deflation is 100x worse the inflation because during deflation the economy stops: nobody's working, nobody's buying, nobody's selling, and everybody's hoarding what little they can -- i.e., a Great Depression.
  • are being bought in China for eventual use on the Moon.
  • Anyone old enough to remember those Federated Electronic store commercials? Reminds me of Crazy Eddie.

    http://www.youtube.com/watch?v=RHNIRik7bUA [youtube.com]
  • I'm not sure that's a comfort or not but in either case it shows a huge gap between costs and prices. When Apple or anyone can happily give huge discounts and rebates and coupons then the price of the product has no relation to what it took to made.

    It's like when you buy a used car. You've all been sold the old story that your new car loses 30% of its value blah blah blah. Well I just looked at a 2005 Camry with 51K miles and it cost more than my NEW 2004 Camry, same model. In fact the dealer seemed to be q

Neutrinos have bad breadth.

Working...