[Parthasarathig]

Originally Posted by IronH4WK

you're forgetting the core ingredient in their memory - apples! hence the pumped up price

Last i checked, the hard drives were made by toshiba and samsung.
One more intriguing fact. The iPod touch costs a fraction of the iPhone yet it has everything the iPhone has except the antenna. So apple charges us 50,000 extra for the antenna in comparison to a 32gb iPod.

[AWD]

iPhone5 now seling in India for ~50k.Period.

[Gandhi]

Originally Posted by Parthasarathig

Last i checked, the hard drives were made by toshiba and samsung.
One more intriguing fact. The iPod touch costs a fraction of the iPhone yet it has everything the iPhone has except the antenna. So apple charges us 50,000 extra for the antenna in comparison to a 32gb iPod.

Selling prices are never obtained from the production price of a product. Selling prices are always derived from the market's affordability for that particular product.

According to this article, Apple spends about 207 USD to 238 USD to produce an iPhone. Still apple charges 100 USD for additional storage. The fact that there is no way to increase the storage capacity of iPhone later on, market is ready to pay extra to get that additional storage.

[ajay_satpute]

Originally Posted by AWD

iPhone5 now seling in India for ~50k.Period.

Who is selling iPhone5 in India @ 50k? I checked Apple India website and it still says 'Coming soon'. I checked Reliance iStore and they don't know anything.

[YashD]

Originally Posted by ajay_satpute

Who is selling iPhone5 in India @ 50k? I checked Apple India website and it still says 'Coming soon'. I checked Reliance iStore and they don't know anything.

Ebay says 57.5k and that price could be of someone from the grey market. Iphone is launching in End-Oct or early November

[amitk26]

Originally Posted by Gandhi

Selling prices are never obtained from the production price of a product. Selling prices are always derived from the market's affordability for that particular product.

Correct ,

As Management accounting books say, In terms of product pricing

Price = Cost + Profit --- (1)

is not same as

Cost = Price - Proft --- (2)

and it is not same as

profit = Price - Cost. ---(3)

In
(1) The driving factor is price which is fixed upfront and costs and profit needs to be worked towards it example of such pricing is Tata Nano.

(2) is what does not exisits any longer untill you are a monopoly and market suits you basically you want to fix cost and work towards price and profits to suit you.
Mandis in India with MSP fixed work on this kind of model.

(3) is the model which all sucessful business work towards, that is fix a profit guideline and tweak the market conditions and operations so that you can extract the price you want and squeez the suppliers to reduce costs.

In case of Apple business model they create a high entry barrier and market conditions to extract price , In case of google the profit is not from devices but from services which must see a large number of users so dismantling entry barriers and democraticing the handset ecosystem is the strategy.

Originally Posted by Gandhi

According to this article, Apple spends about 207 USD to 238 USD to produce an iPhone. Still apple charges 100 USD for additional storage. The fact that there is no way to increase the storage capacity of iPhone later on, market is ready to pay extra to get that additional storage.

Correct bills of material cost is irrelevent for pricing , Price is what consumer wants to pay.

Originally Posted by Parthasarathig

So apple charges us 50,000 extra for the antenna in comparison to a 32gb iPod.

It is not just antenna there is a baseband chipset and hosts of costs associated with it , In fact that is costliest item in BOM costs.

Though in US Courts Apple tried to trivialize that value of baseband patents ( standard essential) stating it is far lower then user experience patents. The fact is iPhone can not be built from iPod with out those .

Germany , UK and Japanese judiciary had different opinion and lets see how US courts react in case of LTE case which is next on horizon.

[Parthasarathig]

Originally Posted by amitk26

It is not just antenna there is a baseband chipset and hosts of costs associated with it , In fact that is costliest item in BOM costs.
The fact is iPhone can not be built from iPod with out those .
.

Amit sir what is this BOM?

And if the antenna and baseband combination costs so much, it is ridiculous. As if other manufacturers arent using the same basebands chipsets for their mobile phones.

Even a rs 5000 phone which has 3g also would be using the same baseband chipset I suppose? Im sure the chipsets were designed by scientists to become affordable with time.

30,000rs per antenna per phone is a heavy price to pay.

[amitk26]

Originally Posted by Parthasarathig

Amit sir what is this BOM?
30,000rs per antenna per phone is a heavy price to pay.

Bills of material == BOM and please don't call me Sir.

Anyway I think you did not pay attention to first part of the response that is bills of material cost is irrelevent for pricing.

Price is what customer is willing to pay and it depends on how you make him willing to pay by way of brand / image building.

It is not a technical question at all though recent court cases and subsequent rants by fanboys ( from both camps ) make it look like that price is due to costs involved or some sort of genius applying his mind it is not actually the case for any manufacturer for any product.

Today in value chain chipset vendors are earning very less compared to others and that's why there is lot of consolidation in industry but surely from consumer's point of view the value of iPhone is way above iPod due to integration of same chipset.

If it was just technical issue I am sure creating just the DOI writeup for a 3G or 4G patent is far more difficult job then any UX idea so qualcomm , Infinion ( now Intel) , Broadcomm , ST-Erricson and Samsung ( for LTE) should earn more but they do not.

[AWD]

Originally Posted by ajay_satpute

Who is selling iPhone5 in India @ 50k?

Search ebay listings, one was for ~55k, apply 10% coupon & get for ~50k.

[chevelle]

Early iphone 5 adopters, please be careful about chipping issues, light leakage and wifi issues.

A few links to help you with that

http://modmyi.com/content/8871-white...ge-issues.html

http://modmyi.com/content/8867-wi-fi...e-5-users.html

http://www.gsmarena.com/certain_blac...-news-4844.php

http://blog.gsmarena.com/was-apple-a...uality-issues/


http://9to5mac.com/2012/09/25/apple-...ntelligence%29


And the most funny comment by Apple's Marketing SVP - " Any aluminum product may scratch or chip with use, exposing its natural silver color. That is normal."

This is funny how a phone out of box may have scratch or chip and it is normal.

It is good i decided to wait to upgrade my iphone 4 to iphone 5.

[YashD]

I agree, its better to wait. Currently, Apple just wants to clear the bookings. Later the price will also come down (India) and will not have any defect or something too.

[arup.misra]

I have somebody getting me an iphone 5 (factory unlocked) in Oct end. Quite a lot of issues have surfaced. Some resolved some aren't.

Should I wait for a while for issues with ios 6 to be resolved? Any idea if i5 is backward compatible?

[Nicky]

Originally Posted by arup.misra

I have somebody getting me an iphone 5 (factory unlocked) in Oct end. Quite a lot of issues have surfaced. Some resolved some aren't.

Should I wait for a while for issues with ios 6 to be resolved? Any idea if i5 is backward compatible?

I think you should get one but in white color. this will atleast save you from chipping in black color.
other problems are really not so big.
in any case, Iphone5 will not be backward compatible for sure.

[msdivy]

Originally Posted by amitk26

In case of Apple business model they create a high entry barrier and market conditions to extract price

Apple's model is to create a closed ecosystem and make it attractive for their customers to stay within that ecosystem.

In case of google the profit is not from devices but from services which must see a large number of users so dismantling entry barriers and democraticing the handset ecosystem is the strategy.

Google is not Apple and they cannot maintain a closed ecosystem and retain customers. Hence different model.

Also, Google is hampered by the royalty they have to pay to multiple companies for using the other companies technology. Hence a similarly spec-ed Android will cost more than iPhone. But TCO of iPhone is higher than Android. Hence Apple takes 75% of smartphone profit with just ~10% market share.

Originally Posted by Gandhi

Selling prices are never obtained from the production price of a product. Selling prices are always derived from the market's affordability for that particular product.

There are different ways of fixing market price. One such is production cost + overheads + profit. Wikipedia lists around 22 pricing strategies.

[amitk26]

Originally Posted by msdivy

Apple's model is to create a closed ecosystem and make it attractive for their customers to stay within that ecosystem.

In classic Porters five forces analysis methodology creating a lock-in for customer is an entry barrier for comptetion and that is why I used the word entry barrier.

Originally Posted by msdivy

Google is not Apple and they cannot maintain a closed ecosystem and retain customers. Hence different model.

Google's revanue source is the services and server side business and not handset so while Android is in Apache V2 License which incidentally has a patent grant clause the Google Service API license is different and not open source.

Google services are pretty much closed ecosystem and create a customer lock-in ( just see on this thread how people badly want maps). So Googles attempt is always to create entry barrier on the server side.
In fact of the 25000 test cases of Google CTS for Android are meant for this purpose.

Originally Posted by msdivy

Also, Google is hampered by the royalty they have to pay to multiple companies for using the other companies technology.

Google actually does not pay any royalty because google is not productizing Android. As Apache V2 has license grant clause it states that Google or other users will not assert their patents on users of codebase but it is silent on any 3ed party indimity.

However Microsoft is able to extract notional royalty ( claimed to be 5$ in popular media ) from HTC and other large OEM for some 50 unspecified patents in Linux Kernel.

AFAIK In case of bigger OEM of the two the royalty amount is notional because no actual exchange of money happens but it ensures that the OEM does not dump WP and continue to invest in it and that is why you continue to see a Windows based mobile phones from a very large manufacturer ahead of MS official partner, I can not put name of the big mobile company in clear as I am posting this from work place

Actally speaking MS has never cited what these patent(s) are and these royalty agreements with Novel and HTC and unnamed phone-maker here are more to create some sort of precedence for future.

To counter this move Linux community created GPL v3 and one of the new clause is that if a licencee of GPLv3 buys indimity from any 3ed party they have to pass it to community as well. As of today Linux Kernel is dual licensed ( GPL V2 and GPL v3 ) and Android is using V2 but as the code base exclusivly under GPL V3 grows it will be more interesting.