iPhone overpriced? Judge for yourself

[JMG]

So you thought the iPhone's insanely high price tag is due to all the fancy technology inside? Not so, my friend. That touchscreen that everyone is popping tents over only costs $33.50, with the touchscreen controller adding a mere $1.15 to the price. In fact, Apple stands to make a healthy 50% profit on both versions of the iPhone sold, with the costs of the 4- and 8-gig models only running $245.83 and $280.83, respectively.

All that profit and we're still forced to sign our lives away to Cingular AT&T for 2 years for the privilege of buying this phone. If it's not being subsidized, why the hell are we still forced to sign a contract? Weak, very weak.

http://gizmodo.com/gadgets/cellphone...tax-229664.php

[paranoidxe]

Even if there was a $50 difference between the manufacturer cost and retail cost I still wouldn't buy it..none if the features warrant the price PERIOD.

[pohatu771]

You can't just subtract the hardware costs from the price to get a profit- you also have to add in the cost to pay people to design it, build it, support it, and sell it...

[Jesse Hollington]

Yes, 2.5 years of R&D is definitely going to add up.

Regardless, Apple is going to price this device for whatever the market will bear. One also has to assume that Cingular also had at least some say in the matter and they thought the price was reasonable as well.

People keep looking at this as either an iPod or a normal cell phone. At Smartphone prices, it's not particularly unreasonable, and I have paid far more than this in the past for devices with similar capabilities but a much uglier interface.

Of course, if you don't need a smartphone, then of course it's out of range.

[justblaize]

doesn't the iPod cost about $130 to make? Look at all the people that still bought it.

[JMG]

Originally Posted by pohatu771

You can't just subtract the hardware costs from the price to get a profit- you also have to add in the cost to pay people to design it, build it, support it, and sell it...

But how much of that cost per unit? That's the point.

[Jesse Hollington]

Well, that's going to be based on how many units they expect to sell, to be fair. I don't think even Apple is naively optimistic enough to expect the iPhone to sell to the same extend as the iPod, particularly when it's an initial U.S.-only release on a single carrier.

Further, the R&D costs that went into a device like this are naturally going to be higher than the costs for an iPod, which is more of an upgrade of existing technology.

[Mina]

Originally Posted by jhollington

I don't think even Apple is naively optimistic enough to expect the iPhone to sell to the same extend as the iPod

If you watched the whole keynote speech, which i expect most of you didnt becuase its very long, you would have seen that their tarket is 1% of the mobile market in the iphones first anual release. But when you compare that to the billion of mobiles sold every year, that makes 10 million units sold, pretty solid task if you ask me.

Mart.

[Willaim]

A Big Mac cost about $0.60 in materials and that bottle of water you paid $1.00 for only has about $0.000000000000001 of product cost in it. Heck an airline ticket can't cost more than $0.01 to make.

[Jesse Hollington]

Actually, I was at the Keynote In my opinion, 1% of the mobile market is very optimistic for it's price range and limited release.

The impression I got while sitting there was that Apple was looking to capture 1% of the mobile phone market in general by the end of 2008, and not just with the iPhone itself (or at least this iteration of it). I'm skeptical that they're going to get 10,000,000 units with the product as it is today, and it's more likely that they have something else up their sleeve as well, likely in the slightly lower-end space (iPhone Nano?).