PhoneArena Awards 2011: Most overpriced product
0. phoneArena 01 Dec 2011, 10:29 posted on
Ladies and gentlemen, it is time to announce the next category in the PhoneArena Awards of 2011. Today, a “prestigious” award will be presented to the most overpriced product of the year...
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1. networkdood (Posts: 6244; Member since: 31 Mar 2010)
I honestly thought it would be the IPHONE 4S 64GB model, but I can agree that tablets have been overpriced. Market corrections will fix that.
2. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Yeah, with Apple's profit margins being as public as they are I definitely expected it to be an iPhone...
18. iamcc (Posts: 1319; Member since: 07 Oct 2011)
I love how people thumbs me down because they hate the fact that Apple charges way more than they have to for their products. I didn't say the iPhone isn't WORTH what they're asking for but when you want to talk about "overpriced" and the company has a disgusting profit margin like they do I mean come the f**k on.
22. Commentator (Posts: 2292; Member since: 16 Aug 2011)
The margins are what they are, and if people want to pay that much for a phone, all power to them. Also, "come the f**k on" is a really lame way to end an argument.
23. iamcc (Posts: 1319; Member since: 07 Oct 2011)
There is no argument. Any company that has a profit margin that high clearly has overpriced products.
There are no two ways about it.
29. Commentator (Posts: 2292; Member since: 16 Aug 2011)
Prices are based on the value the customers see in the product/service, not necessarily what goes into it. Restaurants charge people ~2 dollars for ~2 cents of soda-syrup and carbonated water all the time. Sure, the beverage isn't worth nearly as much as the base materials, shipping-costs, and overhead, but people still pay for it. I wouldn't call it overpriced as long as I agree to pay the amount and am satisfied with the result.
32. iamcc (Posts: 1319; Member since: 07 Oct 2011)
I agree. The difference is we are talking about a $2 soda and a $600 cellphone.
The dictionary defines overpriced as:
"charging or charged at too high a price"
The word origin is:
"to price something excessively high"
Whether or not people see the value of paying that much, the reality is that Apple does not have to charge what they charge. That can be seen easily by two things:
1. Their profit margin.
2: The amount of money they have in the bank.
As I mentioned above, I am not saying the iPhone is not WORTH $600 or whatever it is. But when it comes down to it, it IS overpriced.
35. HTDGP (Posts: 6; Member since: 01 Dec 2011)
Its in a high growth industry. When you have a growth industry you will have high margins. By your logic everything is over priced and we all should be shopping at Wal-Mart.
36. Commentator (Posts: 2292; Member since: 16 Aug 2011)
You seem to be fine with the idea of making a profit, but not "excessive" profit. Where do you draw the line at how much profit is too much?
37. iamcc (Posts: 1319; Member since: 07 Oct 2011)
There is no such thing as too much profit, only over priced products.
40. ayephoner (Posts: 836; Member since: 09 Jun 2009)
high profit margin =/= overpriced.
i would argue the exact oposite. your goal as a business should be to maximize profit, so apple seems to be dead on with their pricing.
the after market value of iphones also points to appropriate pricing. iphones hold their value MUCH better than android phones.
you guys being butt hurt over apple's practices does not make what they are doing wrong.
43. iamcc (Posts: 1319; Member since: 07 Oct 2011)
I'm not butt hurt over anything...
As a business, sure, maximizing profits is the goal. The reason iPhones hold their value better (in my opinion) is largely due to the fact that a better one only comes out every 12-16 months.
On top of that, they don't make huge changes in each model. For instance, if I were to try to sell my Thunderbolt, I would be lucky to get $100.
Not because the Thunderbolt is a bad phone but because there are already dual core phones out, so the Thunderbolt is not the latest anymore.
A Ferrari is expensive because it is expensive to make. If Ferrari had a 70% profit margin it would be considered an over priced car. The same applies here.
You can argue all you want, but as a consumer any company that has a profit margin that high is an over priced product.
46. iamcc (Posts: 1319; Member since: 07 Oct 2011)
I also never said it was wrong. If I owned Apple I would do the same thing, but that doesn't change the fact that it's over priced.
80. ledbetterp3 (Posts: 466; Member since: 31 Aug 2011)
@Commentator your a lame way to end an argument.
58. DatabaseMX (Posts: 19; Member since: 27 May 2009)
But wait, there's more. Apple has something like $75 BILLION in cash reserves. Yet all their junk is made in China!
So, what ... with that sort of profit margins and cash reserves, Apple can't build their junk in the USA? WTF? Creating at least a few jobs?
Hey ... don't blame Obama for no jobs ... blame Steve Jobs!
74. HTDGP (Posts: 6; Member since: 01 Dec 2011)
This has nothing to do with Obama or Steve Jobs. This has to do with a post industrialized United States.
When was the last electronic product that was built on large scale in the United States? It's not that it's just cheaper. Chinese factories are building electronic products at a better quality, at a faster pace, and cheaper than any American factory could. In this globalized economy companies must find the better faster cheaper supplier. It isn't all about the cheaper. It's small minded people who think companies only do it because it's cheaper.
If you want to start your own company and use local manufacturing that is inefficient, produces higher defects, in a country that has high regulations, and that will make your sustainable competitive advantage non-existent compared to companies who went with China, be my guest. I guarantee you won't see any margins you will be proud of.
71. medicci37 (Posts: 591; Member since: 19 Nov 2011)
@iamcc I couldnt agree more! And @ Commentator its not that people want to overpay for a phone.unless they are idiots.As for the last part of your argument, Are you really that f**ckin Immatuire? Cant understand how some loser could spend so much time reading about technology,yet still be so supid. 1 big reason apple has done so well is because they appeal 2 the idiot factor!
77. ardent1 (Posts: 1991; Member since: 16 Apr 2011)
Another example of ignorance. iamcc's argument is specious. Something that is overpriced usually means (a) the customers feel ripped off or (b) the price is too high relative to annidentical or similar product. In none of these cases does the cost structure and its counterpart (i.e. the profit margin) come into play. Here are the facts -- according to one report, the 4S enjoys a 96% satisfaction rate meaning customers got a good deal. As for the second point, just go in any Verizon store and try to buy a RAZR without a contract and you might pay the SAME PRICE as the iPhone. The month to month price for the RAZR or 16 gb 4S is $650 from Verizon wireless store. Same price for comparable products. These are facts!
79. geedup (banned) (Posts: 74; Member since: 01 Dec 2011)
I have a feeling iamcc isn't interested in facts
8. remixfa (Posts: 13902; Member since: 19 Dec 2008)
im highly surprised the i4s with its insane 70% margin didnt make the list. I can definately agree with the overpiced tablet market though. The Kindle Fire should be correcting that shortly.
21. ayephoner (Posts: 836; Member since: 09 Jun 2009)
"the kind that consumers spend a heap of cash on only to realize later that it is not worth nowhere near as much."
---by this definition the iphone is actually underpriced compared to nearly every android phone (based on depreciation)
"what matters the most is how much (or how little) it offers for the price that a manufacturer or a carrier is asking for it."
---up for debate here, but certainly does not consider profit margin.
if the iphone were truly 'overpriced' it would not sell. all you fandroids need to take a step outside of your ihate paradigm.
25. networkdood (Posts: 6244; Member since: 31 Mar 2010)
Reality is that I can spend 249.99 for a ANDROID, high-end - with 48GB total storage....so, yeah, spending 150.00 extra to get the 64GB is overpriced - that is just a fact jack.
38. ayephoner (Posts: 836; Member since: 09 Jun 2009)
that is NOT 48GB built in storage. there IS a difference. i agree that they mark it up more than the actual cost, but that is not the guideline that is explained in the article.
again, if it were SO absurd, they wouldnt sell. but, they do. and they hold their value better.
39. remixfa (Posts: 13902; Member since: 19 Dec 2008)
actually, there isnt much difference, as built in memory is normally just a microSD card buried into the phone where you cant reach it.
41. ayephoner (Posts: 836; Member since: 09 Jun 2009)
actually there is, i know you read Michael's article on google's motivation to do away with SD cards.
while cost might not be different, the experience is. this could easily be conceived as value, as evidenced by iphone sales.
42. ayephoner (Posts: 836; Member since: 09 Jun 2009)
44. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Nobody is arguing that the iPhone doesn't have value that validates the price. But considering that 50-70% of that price is profit, you would be an IDIOT to argue it's not over priced.
53. ayephoner (Posts: 836; Member since: 09 Jun 2009)
so the price is valid, but the product is overpriced?
this is its self a contradiction, but even more so when considered in the context of PA's description of "overpriced". this award is theirs to define. under their parameters, profit margin does not matter.
why would post this much, with this much emotion unless you had some emotional tie to claiming the iphone is overpriced?
57. iamcc (Posts: 1319; Member since: 07 Oct 2011)
No emotional tie. Just bored.
I also like proving people wrong...
60. geedup (banned) (Posts: 74; Member since: 01 Dec 2011)
Well that's weird because you've been proven wrong here
61. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Just because people disagree with my opinion doesn't make me wrong, if you look at the definition of "overpriced" i'm correct...
63. geedup (banned) (Posts: 74; Member since: 01 Dec 2011)
You said the price is valid and you'd do the same and then said its over priced. That makes no sense.
67. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Okay. If I speak slowly for you, maybe that will help.
The iPhone has (non mechanical) value that validates the price. Check.
If I owned a company, I would do the same (I like money). Check.
Regardless of both of those things, any product that is produced at such a low cost and re sold for such a higher cost (by definition) is OVER PRICED.
Yes? Yes? Okay. Let's move on.
70. geedup (banned) (Posts: 74; Member since: 01 Dec 2011)
iPhone costs roughly the same to make as other phones and sells for about the same.
You can't even see how you're contradicting yourself. You've completely lost yourself in your own argument. You're showing you're arguing just to argue because you have no point.
78. remixfa (Posts: 13902; Member since: 19 Dec 2008)
the iphone4s costs much less to produce than an SGS2 yet sells for as much if not more depending on which "memory configuration" u get.
wow guys, way to troll this into an iphone/android match up over nothing. oh no, someone doesnt share the same opinion as the iphone's value that you do!! attaaaaack!! lol
73. ayephoner (Posts: 836; Member since: 09 Jun 2009)
to say its overpriced (priced too high) is to say that apple is charging in excess, that they've gone too far.
customers are satisfied, are getting exactly what they've paid for, the product is retaining its value and they are selling like crazy.
none of this has to do with profit margins JUST AS THE AUTHORS STATED IN THE ARTICLE.
45. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Using your logic, cigarettes are not over priced? When I was in Honduras it was around 75 cents for a pack of Marlboro lights. In America? $8.00-10.00.
Just because they sell doesn't mean jack s**t about whether or not it's over priced, it just means people like it enough to pay the (yes absurd) price.
54. ayephoner (Posts: 836; Member since: 09 Jun 2009)
personally, i do think they are overpriced, but i dont smoke and i think smoking is stupid.
as for the product and the market, they must not be overpriced if people keep buying them (yes, the exact same sentiment from before. it applies to anything that sells)
but, it is a bit of a stretch to draw this analogy. much of that $8-10 is taxes (they are only $5 here) and it is an actual addictive drug, one of the most addictive we know of.
75. wakingup (Posts: 51; Member since: 13 Aug 2011)
i just wanted to interject that in Canada, the playbook is now always 199.99 dollars, so I guess it should not be 3rd overpriced. Now, I understand that this is for the US but dont you thing the states will follow suite? (im not sure of it price in the states or elsewhere)
And before I read this, I totally agreed to networkdood, that apple products were over-priced. I have even always though they were over-rated too.
3. SlimSoulja86 (Posts: 642; Member since: 03 Nov 2011)
I totally disagree, I think iPhone should have won that, but hay...... Whatever iPhonearena says, ahm I meant PhoneArena.....
4. tacohunter (Posts: 408; Member since: 06 Nov 2011)
Where's the iPhone in this contest? They didn't won it? I guess another argument of overpriced product is gone.
5. jackhammeR (Posts: 1548; Member since: 17 Oct 2011)
Iphone was a clear winner...but wait! PA loves Iphone!
(180 $ total costs of production and it costed much much much more off contract)
9. tacohunter (Posts: 408; Member since: 06 Nov 2011)
Ah so every negatif thread based on apple You like and every thread based on positif things of apple you say PA loves iPhone to much.
This is exactly what you never ever may do. Follow your brand blindly. Only believe the good things ignore the rest. gj
6. balbal00 (Posts: 5; Member since: 27 Nov 2011)
Well, my opinion: 1st: Htc Jetstream
2nd iPhone 4s 64 gigs
3rd Motorola Atrix Webdock
7. AngusNG12345 (Posts: 37; Member since: 19 Jul 2011)
for those who think the iphone should have 'won', clearly a $700 on contract honeycomb tablet is way more overpriced...?
12. networkdood (Posts: 6244; Member since: 31 Mar 2010)
You got me there - especially, if they are purchased with the intent to use data on a cell network. At least my wife was smart enough to buy the ipad 1 at a reduced rate a while back - the WiFi only version.
Kids love it for movies, book, videos and games.
16. remixfa (Posts: 13902; Member since: 19 Dec 2008)
no, that tablet definately deserves to be on the list.. a long with a few others like the Gslate. But if we are just going with "overpriced", then the iphone needs to be up in the top 3. 70% profit margin is nuts. These are all "overpriced failures", so if that was the intent, then that should be in the award name.
26. mukrenol (Posts: 90; Member since: 03 Sep 2011)
the price of the jetstream will come down
but iphone will not
and most likely stay at high price range for a long long long long time
jetstream... eh... will come down within half a year
and playbook is now only $200
10. Hallucinator (Posts: 339; Member since: 24 May 2010)
While I agree that $400 for an on contract phone(64 gig iphone 4s) is ridiculous, there is no arguing that the Jetstream is the clear winner.
11. networkdood (Posts: 6244; Member since: 31 Mar 2010)
So, 399.99 for 64GB on an iphone 4S is not overpriced?? I agree tablets are overpriced - even the Ipads and tabs....
15. tacohunter (Posts: 408; Member since: 06 Nov 2011)
Is there a 64GB version of the new Galaxy Nexus?
49. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Well considering your post was like the first time the Nexus was mentioned on this article, I don't see how it has anything to do with the topic of discussion.
But you must know way more than me, i'll trust you.
50. tacohunter (Posts: 408; Member since: 06 Nov 2011)
I assume the nexus only got a 32GB or a 16GB option. Never read anywhere there was a 64GB. So Networkdood says the i4s 64 GB is overpriced? Now something like that makes you think are there other phones who got 64GB????
51. iamcc (Posts: 1319; Member since: 07 Oct 2011)
Him saying the 64GB is overpriced is based on the cost of memory, nothing to do with comparing phones.
Keep paying attention.
52. tacohunter (Posts: 408; Member since: 06 Nov 2011)
It's about 64GB general. :( it's my question. Now since you don't wanna answer. I did some research don't know if it's accurate enouph. Apparantly if you google 64GB phone you get only the iPhone. So based on this behind in tech the rest is compared with memory. And yes higher memory is more expensive. But the galaxy nexus is google's new phone. So I hoped since they got bigger screen and other things they pushed everything to the specs. But no 64GB option wich basically is dissapointed.
81. biophone (Posts: 1893; Member since: 15 Jun 2011)
Just get a SD card and you can get way more then 64 gb on a android
83. ayephoner (Posts: 836; Member since: 09 Jun 2009)
SD card storage and internal storage are not the same. internal storage has advantages, thus is worth more.
plus, the iphone not offering expandable memory allows the sanctity of their closed system to stay in tact. i know most fandroids hate it, but that closed system goes hand in hand with many of the things that make the iphone a great product.