PhoneArena Awards 2011: Most overpriced product

PhoneArena Awards 2011: Most overpriced product
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 – the kind that consumers spend a heap of cash on only to realize later that it is not worth nowhere near as much.

But before we start, let us make it clear that we take into account the price, at which the product in mind was launched, and not the price, at which it can be bought today. Also, third-party stores, such as Amazon and eBay, do not count. But most importantly, for a product to be a true winner in today's category, it does not necessarily need to bear a four-digit price tag. Instead, 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.

And by the way, do not forget that we have given five other awards already, so in case if you have missed them, feel free to check them out.



And the award goes to: HTC Jetstream

The HTC Jetstream joined AT&T's lineup in September and pushed the limits of how expensive a tablet can get thanks to its $700 on-contract price tag. Yes, you read that correctly – even though you had to spend a whopping $700 on the darn thing, you still had to carry the ball and chain attached to your leg for the next two years. Of course, you were given the option to skip the whole commitment part, but in that case, the price of the tablet went all the way up to $850.

Sure, the HTC Jetstream offers both decent hardware and LTE connectivity, but let us not forget that AT&T's LTE network was still under development at the time of the tablet's launch. Besides, even though it has a 1.5GHz dual-core processor under its hood, its performance isn't quite flawless, as it became evident in our HTC Jetstream review. In reality, the tablet did not have what it takes to justify its $700 launch price when a Samsung GALAXY Tab 10.1 with LTE from Verizon was $70 cheaper at the time, yet could do pretty much the same tricks. Fortunately, the HTC Jetstream can now be bought at $100 less, which brings its price to $600 and $750 with and without contract respectively.


First runner-up: Motorola ATRIX 4G Laptop Dock

The Motorola ATRIX 4G introduced a very neat concept to the market – when you pair it with its Laptop Dock, the smartphone transforms into a portable computer with 11.6 inches of display real estate. Cool, isn't it? However, the Laptop Dock is an accessory that does not come included with the device. And do you know how much it was being offered for when it was unveiled? Well, here are the exact figures: $300 when purchased bundled with the ATRIX 4G or $500 when bought separately. And that was really expensive for a screen with a keyboard and a pair of USB ports, considering that a decent netbook could be purchased for the same amount of cash. Besides, the Laptop Dock could be used with no other smartphone but the ATRIX 4G. Fortunately, the newer versions of the accessory come cheaper and are compatible with a broader spectrum of Motorola smartphones.


Second runner-up: BlackBerry PlayBook

At first, $500 might seem like a reasonable price for a tablet, especially when it comes from a trusted manufacturer. However, when you consider that the BlackBerry PlayBook was released with half-baked software and that it required to be paired with a BlackBerry smartphone in order to access BlackBerry services, the tablet simply was not worth getting and received quite a lot of criticism after its debut.

Sure, RIM has released quite a number of software patches and improvements since the PlayBook got launched, but the initial experience that the tablet delivered left BlackBerry fans pretty underwhelmed. The BlackBerry PlayBook is currently available for $199 with 16 gigs of on-board storage.

Well, ladies and gentlemen, from our point of view, these were the most overpriced products of 2011. However, the PhoneArena Awards of 2011 are not over yet, so stay tuned, as the next one will be given no later than tomorrow!

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80 Comments

1. networkdood

Posts: 6330; Member since: Mar 31, 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: Oct 07, 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: Oct 07, 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: 3723; Member since: Aug 16, 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: Oct 07, 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: 3723; Member since: Aug 16, 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: Oct 07, 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: Dec 01, 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: 3723; Member since: Aug 16, 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: Oct 07, 2011

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

40. ayephoner

Posts: 858; Member since: Jun 09, 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: Oct 07, 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: Oct 07, 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: 467; Member since: Aug 31, 2011

@Commentator your a lame way to end an argument.

58. DatabaseMX

Posts: 19; Member since: May 27, 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: Dec 01, 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: 1361; Member since: Nov 19, 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!

72. medicci37

Posts: 1361; Member since: Nov 19, 2011

Sorry that should be "immature"

77. ardent1

Posts: 2000; Member since: Apr 16, 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

Posts: 74; Member since: Dec 01, 2011

I have a feeling iamcc isn't interested in facts

8. remixfa

Posts: 14605; Member since: Dec 19, 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: 858; Member since: Jun 09, 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: 6330; Member since: Mar 31, 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: 858; Member since: Jun 09, 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.

39. remixfa

Posts: 14605; Member since: Dec 19, 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: 858; Member since: Jun 09, 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: 858; Member since: Jun 09, 2009

44. iamcc

Posts: 1319; Member since: Oct 07, 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: 858; Member since: Jun 09, 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: Oct 07, 2011

No emotional tie. Just bored. I also like proving people wrong...

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