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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...

This is a discussion for a news. To read the whole news, click here

posted on 01 Dec 2011, 10:32 42

1. networkdood (Posts: 6330; 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.

posted on 01 Dec 2011, 10:34 19

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...

posted on 01 Dec 2011, 11:22 20

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.

posted on 01 Dec 2011, 11:53 6

22. Commentator (Posts: 3709; 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.

posted on 01 Dec 2011, 11:58 5

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.

posted on 01 Dec 2011, 12:08 7

29. Commentator (Posts: 3709; 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.

posted on 01 Dec 2011, 12:45 4

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.

posted on 01 Dec 2011, 13:06 1

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.

posted on 01 Dec 2011, 13:07 1

36. Commentator (Posts: 3709; 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?

posted on 01 Dec 2011, 13:21 3

37. iamcc (Posts: 1319; Member since: 07 Oct 2011)


There is no such thing as too much profit, only over priced products.

posted on 01 Dec 2011, 13:49 1

40. ayephoner (Posts: 850; 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.

posted on 01 Dec 2011, 13:55 1

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.

posted on 01 Dec 2011, 13:58 1

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.

posted on 01 Dec 2011, 22:50

80. ledbetterp3 (Posts: 467; Member since: 31 Aug 2011)


@Commentator your a lame way to end an argument.

posted on 01 Dec 2011, 15:59 4

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!

posted on 01 Dec 2011, 17:37 2

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.

posted on 01 Dec 2011, 16:55 1

71. medicci37 (Posts: 1289; 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!

posted on 01 Dec 2011, 16:58 1

72. medicci37 (Posts: 1289; Member since: 19 Nov 2011)


Sorry that should be "immature"

posted on 01 Dec 2011, 20:12

77. ardent1 (Posts: 2000; 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!

posted on 01 Dec 2011, 22:27

79. geedup (banned) (Posts: 74; Member since: 01 Dec 2011)


I have a feeling iamcc isn't interested in facts

posted on 01 Dec 2011, 11:00 9

8. remixfa (Posts: 14255; 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.

posted on 01 Dec 2011, 11:42 3

21. ayephoner (Posts: 850; 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.

posted on 01 Dec 2011, 12:01 1

25. networkdood (Posts: 6330; 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.

posted on 01 Dec 2011, 13:45

38. ayephoner (Posts: 850; 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.

jack.

posted on 01 Dec 2011, 13:48 3

39. remixfa (Posts: 14255; 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.

posted on 01 Dec 2011, 13:51 1

41. ayephoner (Posts: 850; 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.

posted on 01 Dec 2011, 13:53 3

42. ayephoner (Posts: 850; Member since: 09 Jun 2009)


http://www.phonearena.com/news/iPhone-4S-boasts-a-96-satisfaction-rate-among-owners_id24263

value.

posted on 01 Dec 2011, 13:56 1

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.

posted on 01 Dec 2011, 15:31 1

53. ayephoner (Posts: 850; 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?

posted on 01 Dec 2011, 15:58 1

57. iamcc (Posts: 1319; Member since: 07 Oct 2011)


No emotional tie. Just bored.

I also like proving people wrong...

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