Apple Display Tech, Entry-Level iPhones – TMO Daily Observations 2019-07-22

Charlotte Henry and John Martellaro join host Kelly Guimont to talk about display technology in Apple devices, and an “entry level” iPhone.

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3 thoughts on “Apple Display Tech, Entry-Level iPhones – TMO Daily Observations 2019-07-22

  • I just read the announcement from Huawei

    And I instantly remember this podcast. Yes I know I want privacy. But at what point is that “privacy” worth $600 dollar?

    The Honor 9X, is ~$180 in USD, and that is VAT inc. I US Retail terms it would be closer to $149.
    The 9x Pro, is close to US Retail $249.

    Even if I am willing to paid double, that is half the cost goes to pure Apple profits, $499. Except the equivalent of iPhone, the XR, starts at $749.

  • Right there near the end of the podcast was finally the key point, something I have been saying for quite a long time. Value Proposition.

    I think there are lots of moving parts. And It is hard to describe everything.

    Price – Pricing is relative. Or Comparison by nature is relative. If all the phone on the market were $599, Android Flagship were $899, I doubt Apple would have any hard time selling $1099 iPhone.

    The problem is you have Samsung, which is a highly integrated company from Battery, Phone Assembly, Camera Lens, most of the parts in Samsung were manufactured by Samsung, even down to the Chemicals used to made those components. Samsung has a distinct advantage of Scale and efficiency. And then you have Huawei, which is the largest Telecom equipment manufacture, and other Chinese company like Oppo, VIVo Xiaomi which really doesn’t need to earn much money. Those Chinese company not only have vast access to capital, they have lower operation cost, and are used to laser thin margins. Apple, Huawei, Samsung, BBK ( Oppo, ViVo, One Plus ), Xiaomi combined to over 60% of market in 2018. For 2019 that will likely be 70%. i.e Apple’s competitor is driving down price like crazy, which makes thing even worst, what used to be a 30% premium paid for Apple, are now close to 50% premium.
    People are starting to ask the question, where is the Value Proposition?

    Then there is the question of Margin. Apple in the pre iPhone era, have always been operating around ~10% Net Margin. Somewhere along the line in 2009 and 2010 they started to aim for that 20% Net Margin. Which basically means higher price iPhone. The entry level iPhone now is iPhone 7 at $449. That is likely going to be discontinued this year with iPhone 8 starting at $479. Pushing up Average selling price again.

    I do think the one possibilities is Apple offering 36 / 48 months iPhone Subscription, something to go with your Apple Card. You are allowed to upgrade your phone 12 months prior to your Subscription ends. And Subscription will include AppleCare+, This way a $1099 iPhone Max Spread over 48 Months, along with $9.99/month AppleCare + will only cost around $33/ month.

  • held onto my 4S ( I think it was) until the 5SE because the ridiculously large ones don’t fit my lifestyle

    as long as the 5SE keeps working and supports my Series 4 watch I’m happy

    I’ve paid for those others for my daughters, but …

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