back to article Quit drooling, fanbois - haven't you SEEN what the iPhone 6 costs?

Given that I'm writing this before the great unveil and you'll be reading it afterwards, there's much that could go wrong with my prognostications. Tim Cook could stand up this afternoon and announce the iBurger and claim that the days of Maccy D's are over. True, that's unlikely, but in an infinite universe everything will …

  1. Conrad Longmore

    OnePlus One

    I have a OnePlus One, it has specs pretty much as good as any of the flagship competition but it is priced at only £269 SIM-free, the competition costs around twice that. Presumably they make a profit out of that price. So I would say that.. yes.. margins for these sorts of device must be pretty sweet.

    1. MaXsEnDq

      Re: OnePlus One

      I am getting old, I want an simple FM radio for my commute. The FM works, the mobile signal doesn't. Most good phones seem to have got rid of them.

      1. sabroni Silver badge

        Re: OnePlus One

        Moto G has an fm radio, seems to work fine though I haven't used it in anger.

      2. Simon Harris Silver badge

        Re: OnePlus One - FM Radio...

        There's one on my Xperia SP.

      3. dogged

        Re: OnePlus One

        I think all of the Lumia's have an FM radio but you may have OS preferences which count them out.

        1. h4rm0ny

          Re: OnePlus One

          >>"I think all of the Lumia's have an FM radio but you may have OS preferences which count them out."

          I have the Lumia 820 and it does. Never used it though as it requires your headphones to the antenna and I use Bluetooth on the occasions I want hands-free.

          Is it common to require headphones for FM radio? Anyway, with that caveat, it seems to be standard on Lumias.

          1. Tanuki

            Re: OnePlus One

            The FM radio uses the headphone-wire as the antenna.

          2. LDS Silver badge

            Re: OnePlus One

            "Is it common to require headphones for FM radio? ", no, but it is common to require an antenna... those designed for cellular frequencies may be not good for FM ones.

          3. This post has been deleted by its author

          4. Charles 9 Silver badge

            Re: OnePlus One

            "Is it common to require headphones for FM radio? Anyway, with that caveat, it seems to be standard on Lumias."

            It's pretty standard fare for any tiny FM radio to use the headphone wires as an antenna. It's down to physics. To pick up a good FM radio signal, you need an antenna of a decent length. Cell phones are simply too small to provide that length. Back before cell phones, portable radios needed an extendable antenna for the same reason.

      4. IsJustabloke

        Re: OnePlus One

        My xperia z1 has one and it works very well indeed

        And yes, in my experience they all require the headset as an antenna although once the radio is going you can remove the headset but it does noticeably degrade signal quality as you would expect.

      5. Fiddler on the roof

        Re: OnePlus One

        HTC ONe m8 has one as well :)

      6. Zog_but_not_the_first Silver badge
        Boffin

        Re: OnePlus One

        The dirt cheap Nokia's have them, or you might consider the Sinclair Micromatic.

      7. Al Jones

        Re: OnePlus One

        The Nokia Lumia's have FM Radio.

      8. john devoy

        Re: OnePlus One

        my lumia has fm radio.

      9. Paul 135

        Re: OnePlus One

        All Sony and most Motorola phones have FM Radios.

      10. tesmith47

        Re: OnePlus One

        the motorola atrix 2 has fm radio, which was the exact reason i bought it, in fact i got 2 of them!!!!

      11. ravenviz

        Re: OnePlus One

        @MaXsEnDq

        Have you tried, er, a small FM radio? How about this one at 47 grams?

      12. Ian Watkinson

        Re: OnePlus One

        Sony Z2 has it, plus Stamina mode, which lets you turn off most things (except call text etc) and get 3 days s out of it.

    2. bpfh Silver badge

      Re: OnePlus One

      Of course they are making a profit? The new JesusPhone HD whatever is the same retail price as a bloody macbook!

      Given that there are more phones sold than laptops, even with Apple's generous margins, economies of scale should kick in and enable the phone to be sold at a decent retail price, of say, 200 quid and still allow apple to make 50 quid on top!

      As for their current phones, I looked at a top end 5S on my local phone operator's site, they are going for over 860 euros...

      Given that

      - a) The bill of materials of an iphone is about 120-150 dollars (dollars, not euros, not pounds, even if Apple, like Adobe think that there is a 1:1 exchange rate between these currencies)

      - b) The price difference between models of the same range is far more expensive than just the equivalent price of flash memory

      - c) A same sized ipad with a bigger screen and a 3G module is cheaper than the smaller iphone even though less of them are sold

      - d) A laptop with a 3G module can be cheaper than both points A and C and the maker still makes a profit,

      The only question that rests is how hard Apple is shafting it's fanbois...

      1. This post has been deleted by its author

      2. h4rm0ny

        Re: OnePlus One

        >>"The only question that rests is how hard Apple is shafting it's fanbois..."

        As a good capitalist, I have to shrug and say the market charges what the market will bear. The purchasers must be getting something for their money that they feel is worthwhile even if that is only cachet of owning one.

        1. BillG
          Meh

          Re: OnePlus One

          As a good capitalist, I have to shrug and say the market charges what the market will bear. The purchasers must be getting something for their money that they feel is worthwhile even if that is only cachet of owning one.

          True. In this case, the iDamnThings have a high vanity effect. This is why people that can barely afford rent buy iPhones. It's marketing at it's best - or worst.

        2. Kristian Walsh

          @h4m0ny, re Capitalism

          On US networks (T-Mo excepted, as they don't do subsidies), non-smartphone customers are subsidising customers who buy iPhones. That's hardly a free market, unless you subscribe to the Socialist Worker view of a "free market" as something that only exists to siphon money from the poor to the rich.

          1. I ain't Spartacus Gold badge

            Re: @h4m0ny, re Capitalism

            On US networks (T-Mo excepted, as they don't do subsidies), non-smartphone customers are subsidising customers who buy iPhones.

            I shouldn't have thought so. The data tariffs in the US are very high compared with Europe. And dumbphone customers don't pay for data. Plus the iPhone probably won't be avaiable on the minimum cost data tariff, that comes with a Moto G. It'll be on the top-dollar, bells-and-whistles and your blood and your firstborn tarriff.

            1. Al Jones

              Re: @I ain't Spartacus, re Capitalism

              "The data tariffs in the US are very high compared with Europe. "

              ALL Verizon and AT&T tariffs are very high compared with Europe, even Voice and Text tariffs, with no data. It is possible to get relatively cheap voice/SMS tariffs with MVNOs like PagePlus, but US consumers are so used to thinking that cell phone plans cost $70+ (plus taxes and fees) that they can't conceive of cheaper tarriffs, except for "family plans", which cost more, but are cheaper on a "per line basis".

              The thing that really gets me, though, is the PAYG credit that expires after 30 days. You can't just stick $10 of credit on a backup phone and have it available for emergencies.

          2. jzlondon

            Re: @h4m0ny, re Capitalism

            I doubt that's true - cross subsidy is difficult to do in a competitive market. If one network was subsidising expensive phones with cheap ones, other networks would be able to easily lower prices and attract those users.

            1. Kristian Walsh

              Re: @h4m0ny, re Capitalism

              @jzlondon: I doubt that's true - cross subsidy is difficult to do in a competitive market.

              In a competitive market, agreed. But the US mobile market is not competitive. There are large areas where the market is reduced to one carrier with the option of a second-tier operator if you stay in a metropolitan area, due to infrastructure deficits.

              T-Mobile are trying to pull those voice-only and low use customers away from AT&T and Verizon by dumping the "cheap handset, horrible monthly rate" model, but despite the 50% savings in bill costs, the network is hampered by not having the wide suburban and rural coverage of the big two networks.

            2. Andy Hards

              Re: @h4m0ny, re Capitalism

              Not if they are all doing it. Just take a look at the variety of phones on offer at all the big and small network operators in the UK at the moment. Not much between them in terms of price or product. Tesco is having a great run as they already have people visiting their stores two or three times a week and can afford much lower margins. They also don't tend to be the first shop to be trying to sell the latest shiny iToy. They wait until the price drops off and normal people become interested.

          3. chris 17 Bronze badge

            Re: @h4m0ny, re Capitalism

            the carriers will not be losing a single cent on sales of iphones.

            you need to breakdown the components of the monthly cost to see what you are paying for.

            You could argue they make less airtime profit on an iphone than they do a dumb phone and dumb phones are contributing more to the carriers underlying profits, but that is not subsidising a loss leader.

      3. tesmith47

        Re: OnePlus One

        ah yess but a good screwing is priceless!!! snark

      4. chris 17 Bronze badge

        Re: OnePlus One

        @bpfh, maybe an iphone is not for you, have you seen any of the competing phones? they often have similar features and are often much better value.

        anyone seen any carrier iphone6 pricing yet?

    3. Paul Shirley

      Re: OnePlus One

      "Presumably they make a profit out of that price"

      No and with no mass production yet to lower costs and all current 'sales' being promotional they may be making a loss on the few devices shipped so far.

      They're trying to build Apple style frothing fanbois attention while they wait for component costs to drop, hoping none notice the value for money eroding away as the phone ages. Obsolete before launch still seems the most likely outcome.

      Apple could get away with this sort of manipulation because they ship on time and ship at prices that always make them a hefty profit.

      1. bpfh Silver badge

        Re: OnePlus One

        I'm currently using a landfill android, a "Wiko" (local brand) Rainbow. 4 gb storage, quad core cpu, twin sim slots, 5 inch screen and up to at least 32 gb sd cards, no 4g though, at 139 euros list price , can be had at 119 in sales or online so about £100, and that covers the handset and import, and as (outside of sales periods) stores are forbidden to sell at a loss... so at 150% of the price of my cheapo handset with all the basics, you can tag on a lot of nice farkes and still not break the bank, so at the quoted price of 250 quid, and given the actual BOM, they may not be making a huge profit but it will be profitable... as long as they sell enough handsets. Come on, even the Google Nexus are being sold at almost cost price over here at 349 euros a set, so that's "only" about 290 quid...

        1. chris 17 Bronze badge
          Facepalm

          Re: OnePlus One

          i have a fiat 500, its got doors, wheels, seats is red & italian designed & manufactured. Its just as good as a Ferrari or Maserati but costs just a fraction of their cost. I can't think why anyone would spend any more on something that does essentially the same

          1. h4rm0ny

            Re: OnePlus One

            >>"i have a fiat 500, its got doors, wheels, seats is red & italian designed & manufactured. Its just as good as a Ferrari or Maserati but costs just a fraction of their cost. I can't think why anyone would spend any more on something that does essentially the same"

            The funny thing is that I suspect the above is meant to sound facetious and shoot down comparisons between the iPhone and its competitors. But it does the opposite. Why would you pay so much more for something that does essentially the same thing? Branding is the chief answer in your analogy.

            I have a Lumia 820. IIRC, it cost me about £200 SIM-free when I bought it a couple of years ago. It does everything I need and does it well - voice, txt, email, nutritional apps, MS Office, great browser and runs very quickly. Nice interface too. I'm not saying the iPhone isn't worthwhile - as I wrote elsewhere, the market decides what something should be priced at. But I am saying that the value-add most people get from it is less about capability and more about the cachet of owning one. Or for those with a high disposable income so that the cost becomes inconsequential, based on choice of OS. But those are the two primary groups as I see it - people who want it because it's trendy and people who have so much money that paying a couple of hundred more for small differences is not an issue.

      2. DrXym Silver badge

        Re: OnePlus One

        "They're trying to build Apple style frothing fanbois attention while they wait for component costs to drop, hoping none notice the value for money eroding away as the phone ages. Obsolete before launch still seems the most likely outcome."

        That's a pretty absurd strategy if it were true. New phones have perhaps 6 months to capitalize on their sales before they get displaced by new models or knocked down a peg on the price ladder.

        More likely is they CAN afford to sell the phones at this price and make a profit in the process.

    4. James Micallef Silver badge
      Thumb Up

      Re: OnePlus One

      I always prefer (where available) products that 'advertise' by word of mouth and allowing the quality of the product to speak for itself. Breakdowns of smartphones repeatedly show that the component cost is tiny compared to the retail cost, and when you're selling many millions, R&D and advertising costs per phone are also tiny, hence the fat margins.

      Also, for a different phone but this is the cost breakdown for fairphone:

      https://www.fairphone.com/2013/09/12/costbreakdown/

      That's for the initial run of 20 or 25k units, so it's easy to see that for a larger scale operation selling millions of units (and purchasing components in millions), the unit cost to them isn't going to be a lot more than €250, however much they spend in R&D and ads

  2. Yugguy

    0% finance over the contract term

    This is what I do - I'm paying my handset off over 2 years, 10 pounds a month, plus I pay 12 pounds a month for my SIM package, voice/data/txt - the £12 would be same for any handset. If I don't want to replace the handset in 6 months when my contract is up I can go onto SIM only.

    But this is why I have a nice little Samsung S3 Mini and not an i-whatever as the i-whatevers were all 40 or more pounds a month.

    1. Anonymous Coward
      Anonymous Coward

      Re: 0% finance over the contract term

      "But this is why I have a nice little Samsung S3 Mini and not an i-whatever as the i-whatevers were all 40 or more pounds a month."

      A disadvantage of the purchase model is that the sneeky buyer is much less likely to be able to benefit from over-commitment fire sales by the mobile retailers, or other unintended subsidy variations. So my full fat S3 costs me £17 a month all in (Carphone Warehouse/O2 offer), and I reckon the air-time and data allowances are worth about seven quid, meaning that by buying a phone on run-out was cheaper than buying a less capable handset outright.

      This isn't a "my phone's cheaper than your's" jibe, simple an observation that the construct of the subsidised market (including minimum commitments by networks and retailers) often creates opportunities that a more transparent hardware purchase market is less likely to offer. At any point in time there will be something good that somebody really needs to shift, and if you're flexible then there's bargains to be had.

      1. JC_

        Re: 0% finance over the contract term

        the subsidised market ... often creates opportunities that a more transparent hardware purchase market is less likely to offer. At any point in time there will be something good that somebody really needs to shift, and if you're flexible then there's bargains to be had.

        True, but only if the bargain happens to be available when your contract is up for renewal. In the UK it's no big deal to switch to PAYG to wait for a bargain between contracts, but in the US, is that a realistic option? It seems like everyone is locked into contracts (T-Mobile customers excepted) and if you have to pay the contract price, you might as well just get the most expensive phone.

        1. Anonymous Coward
          Anonymous Coward

          Re: 0% finance over the contract term

          "True, but only if the bargain happens to be available when your contract is up for renewal."

          That's only an issue where the buyer can't wait. The natural victims (or cash rich) probably can't wait, but I've always found my phones continue to function beyond the end of the contract, and sometimes it has been necessary to wait a couple of months for the right deal to come up (or indeed pay to exit the contract a month or two early - I've done both). Obviously the roll-on contract usually includes the "handset" charge, so you don't have that long to make your choice before the maths works against you, but over two or three months, chances are something's available on a blindingly good deal, and in practice it is usually an outgoing premium model rather than a pretender. So there's fewer deals on (say) an LG G3 than on a Sammy S4.

          But even that assumes that these deals are only sporadically available. I've found that if you're relaxed about what you get and from whom then there's usually something on offer. In the sales culture that pervades mobile phone retailing, somebody is always keen to offer deals to secure market share (eg run up to Christmas), or desperate to clear excess stock in the post Christmas slack period. Same applies for the invariable Spring sales offensives, or the slack water over the Summer holiday period. As with cars the market is also distorted by sales bonuses and campaign targets. At the moment the market is pretty quiet, but I can still find offers for an S4 on contract for an implied cost fifty quid cheaper than the best sim-free deal I can find.

          1. Yugguy

            Re: 0% finance over the contract term

            When my contract is up I'm quite likely to go onto SIM only and then down to the local electronics exchange shop and see what they've got in the window that looks in good condition.

  3. dogged

    O2 Refresh

    Sounds like this.

    Okay, the price of the handset is tucked away in tiny letters on the "Sign away your life!" page and interestingly, the total price you pay each month doesn't seem to vary (seems to be roughly £33 for everything with a decent data allowance) but you can still see exactly how much the handset costs and it's a lot.

    Not quite Expensys prices but pretty close.

    1. Down not across Silver badge

      Re: O2 Refresh

      With the O2 refresh you get few options on how much to pay upfront/per month. Since we're talking about credit agreement you would expect cheapest overall price to be with the largest upfront payment (and thus smallest credit). Oddly enough that is not the case. Difference can be quite staggering actually.

      1. Anonymous Coward
        Anonymous Coward

        Re: O2 Refresh

        O2 Refresh is a 0% APR credit agreement.

        Paying upfront won't save you any money.

        1. Down not across Silver badge

          Re: O2 Refresh

          Correct. However you would expect each upfront+monthly fees to add up to same (or at least similar) amount. This is not the case and the total to pay can vary greatly.

  4. Yves Kurisaki

    How is the iPhone any different from any other top-end mobile phone? They all pretty much cost the same if bought outright and the contracts are just as expensive if bought on a contract.

    1. Can't think of anything witty...
      Stop

      Not all the same...

      Well, just going from the prices announced the other day, an iPhone 6 (16GB) costs £539 in the UK (Inc. VAT).

      Looking on expansys (probably not the cheapest site) and you can find other high-end phones for quite a bit less.Granted, they have been out a little while, but i think that they are still current:

      Galaxy S5 (16GB) £425

      HTC One M8 (16GB) £450

      Lumia 930 (32GB) £430

      however you look at it, iPhones are really expensive. When most other companies are selling theirs for aorund £440 and Apple are selling theirs for nearer £540, you can really see the difference. If that extra £100 buys you something that you value, then good for you, but it seems pretty steep to me.

      1. Anonymous Coward
        Anonymous Coward

        Re: Not all the same...

        and given that the specs are more similar to a Galaxy S4 which is only £320!!!

      2. Sean Timarco Baggaley

        Re: Not all the same...

        So the OS and ecosystem don't matter at all, then? They're completely equal across all platforms? Really?

        Strange how the Snowden Files™ have caused such an uproar in the media, yet people are still happy to hand over their every personal detail to a company that has been doing much the same thing since it sold its first online ad.

        I wouldn't touch anything tainted by Google if they *paid me* to take one of their malware-infested pieces of overrated crap off their hands. Not only does Google not value my privacy, they've built an entire business empire on invading it. So, yes, I'm willing to pay a little bit more to avoid that. Apple might not be perfect, but they know good UX design, and they're not in the business of selling *me*.

      3. cambsukguy

        Re: Not all the same...

        And, if you don't require the huge pixel count of a Lumia 930 or some such, you can pick up a Lumia 1020 32GB for 275 quid.

        That is a lot less money and a lot more camera, whilst also being a great phone.

        With a £7/month 3 contract for reasonable call/text/data, the total 24 month cost equivalent is about £20/month.

        Much, much, much less than any new shiny.

        And the pictures will be better, by a long way.

        btw, the 1020 has a barometer, seemingly useless but present, in fact, to make GPS fixes even faster by knowing the approximate altitude (according to something I read anyway).

        Having one to actually show altitude is perverse when GPS is accurate and almost always available, especially when you really need to know your altitude. Besides, you are going to carry a Suunto or something if it is that important.

  5. Jad
    Alien

    Perfume and Drugs ... and iPhones?

    Products in economics that actually are considered to be better when you pay more money, therefore the price does not affect the supply/demand ratio ...

  6. Anonymous Coward
    Anonymous Coward

    they've managed to get us to pay premium prices

    more "them" (...) than "us"

    1. h4rm0ny

      Re: they've managed to get us to pay premium prices

      No mobile phone user is a market unto herself. Do not ask for whom the mobile rings, it rings for thee.

  7. DropBear Silver badge

    Well, various priced-stunningly-close-to-cost eastern phones have been trickling into western markets for a while now, many of them boasting hardware that is not appreciably behind anything traditional, brand-name mid- and high-range ones have to offer. I'm not sure die-hard Apple fans will be swayed by any of that, but it seems to me that a lot of people are really starting to wonder why they should pay "x" hundred Euro for a phone that can easily be had (sans the brand) for a quarter or third of that...

    1. Anonymous Coward
      Anonymous Coward

      Me too. I love my 6" chinese phone with dual sims, 13Mp camera, FM radio and spare battery that I almost never use. For around £100 it's a bargain. With PAYG and using wifi, I reckon the running costs are less than £20 per annum!

  8. jzlondon

    I have an iPhone which I paid full rate for with no contract. It worked out fractionally cheaper over two years, with the big advantage of no operator lock-in.

    But it's amazing how many iPhone owners express shock when they found out how much I paid, even though they paid the same amount themselves. Because the price they paid was hidden and they allowed themselves to be fooled.

    Price psychology is such an important part of this market.

    1. jzlondon

      And the reasons that Apple can continue to command a premium are varied, but not really about the hardware costs.

      It's a combination of non-geek design, iOS, and a smidge of the conspicuous consumption factor.

    2. Anonymous Coward
      Anonymous Coward

      I have an iPhone which I paid full rate for with no contract. It worked out fractionally cheaper over two years, with the big advantage of no operator lock-in.

      The lack of operator lock in made quite a substantial difference in my case as I travel, and it allowed me to use local SIMs instead of being exposed to roaming charges..

      I'll have to get an iPhone 6 because it's certain clients are going to buy them so we need a compatibility check, but I'll personally stick with the 5S - to me it is all getting stupidly big.

      1. jzlondon

        Travelling and operator lockin is the dealbreaker for me too - I'm writing this right now in Moscow using a cheap Megafon data SIM bought just for this two week business trip.

    3. Frank Bough

      When I signed up for my iPhone 4S with vodafone, I compared the price of handset + tariff to the all in one deal. All in one was cheaper by about £50 and also had a better data allowance.

  9. Scott Mckenzie

    Err...

    Isn't it pretty much exactly the same price the 5S was?

    The Reg 'we don't get invited to Apple events so we'll bash them at every opportunity' is really getting a bit fucking dull now. Have you considered growing up? As stated above, the products cost about the same as other 'comparable' items yet there aren't a plethora of articles baiting those.

    If you don't want it, or can't afford it, it's quite simple - don't buy it. However, based on the sales of them thus far and the pre-orders this no doubt will have, i'd wager few people are that bothered and will buy it if they want it.

    1. Buzzword

      Re: Err...

      Yes it's pretty much the same price. The iPhone 6 base model costs £539, the 5S cost £549 at launch. However, since other phones (like all electronics) are falling in cost, the iPhone should be too. You can pick up a very capable handset for under £150 these days: it's no longer clear that the iPhone is special enough to make up for the extra cost.

      The cost of the mobile networks is falling too: when I got my first mobe, I was paying something like £1 a minute for calls; today it's down to pennies or fractions thereof. As a result, the price of the handset becomes more noticeable.

      1. Frank Bough

        Re: Err...

        …but it IS falling in cost - you get more compute performance, a better camera, superior radio tech and a bigger screen for the same money.

      2. Sander van der Wal
        Holmes

        Re: Err...

        Why on earth would any manufacturer sell the bloody things cheaper if every device they can make sells at the higher price?

        The only reason most electronics gets cheaper very quickly is because almost nobody is willing to pay full price. There are always a few, though, so you start selling high to pocket that money.

        Apple is an a spot every electronics maker wants to be. Good for them.

    2. Tim Worstal

      Re: Err...

      A very small and gentle request that you do a quick rereading?

      The point wasn't so much about actual prices as how is purchasing behaviour going to change when those prices are more obvious? For we do see different behaviour ins subsidy and non-subsidy markets. So, as the subsidy ones become more like the non-subsidy ones then are we going to see general behaviour moving from one to t'other?

      By the way, far from wanting to bash Apple for their pricing policies I'm in awe of their ability in this field. Seriously, out here in finance and economics land, rather than tech-land, the ability of the company to maintain its margins is by far the most impressive thing it does. Every other businessman on the planet would kill to be able to do the same.

      1. Anonymous Coward
        Anonymous Coward

        Re: Err...

        "Every other businessman on the planet would kill to be able to do the same."

        Well then, they need to concentrate on creating a reason to pay extra in the first place, and then lock people in through non-portable content or similar barrier to market exit. When the earlier iPhones were being sold, they were generally distinguishably better than competing products, and there was a logic to paying the iPremium. After a couple or four years use, a modest number of purchased apps, and potentially a shed-load of music which is (for most users) difficult or impossible to port to Android, there's a huge cost or convenience barrier to moving away from iShiny, no matter what the Android offer is (within reason). With contender phones (eg S5) pitched at similar prices to Apple devices, buyers won't notice the pain of an iUpgrade that includes another iMargin (have I overdone the i-words yet?), and the whole cycle continues, with more music and app purchases locking buyers in.

        There's all the marketing, design, construction quality, distribution model that Apple offer, and these offer owners a rational justification for paying the iTax, but those aren't particularly good reasons to buy yet another of their phones. £400 of otherwise lost music is however a very big reason not to leap on the Android bus.

        1. Rich 30

          Re: Err...

          Just a quick thing about iTunes music on android phones.... You can just drag and drop the music files. There's no lock on them. Or maybe you might choose to upload them to GoogleMusic. Any music i download from iTunes gets automatically uploaded to my Google Music account.

          You are right about Apps though.

          1. Anonymous Coward
            Anonymous Coward

            Re: Err...

            "Any music i download from iTunes gets automatically uploaded to my Google Music account."

            I'd agree that the lock in in perceptual rather than real, but you've still got to do something extra to get the freedom. Em-masse, people don't behave like that, and iTunes works very well as a barrier to exit. Your average Apple user won't have, or won't use a Google Play Music account, and I suspect most of them wouldn't be very impressed with it if they tried. Indeed, as an Android user I gave up on Play Music because it seemed unable to recognise and retain all the ripped tracks on my PC - like everything "free", Play Music has its limits and its true cost.

          2. Tom 35 Silver badge

            Re: Err...

            Don't forget video. It didn't take too long for the DRM on music to go away, and I think they had an offer to upgrade any DRM music you had bought, but Video content is still DRMed to your iTunes / Apple device (and it's the same crap anyplace else to be fair).

        2. Paul 135

          Re: Err...

          "When the earlier iPhones were being sold, they were generally distinguishably better than competing products"

          Only if you lived in the US, paid their extortionate prices, and used the ibferior selection of US phones available. If you lived in Europe you were going along with the media hope in the Anglo sphere driven from the US (in other European countries where they don't speak English the brainwashing never took off to the same extent).

          1. Frank Bough

            Re: Err...

            Bullshit. Smartphones in Europe were blown away by the iPhone because it was a massively better product.

            1. h4rm0ny

              Re: Err...

              >>"Bullshit. Smartphones in Europe were blown away by the iPhone because it was a massively better product."

              Europe had access to the same phones as the US market, but the iPhone has far more success in the US market than in Europe. I am NOT saying the iPhone is a bad device. But to account for this discrepancy when the same phones are available in both markets you must look for other factors. And the contracts and the power of the telecoms in the USA, is the obvious candidate by far.

          2. Steve I

            Re: Err...

            Remind me again what these better phones were?

    3. tesmith47

      Re: Err...

      you are correct , there are a lot of succkers out there

  10. Arctic fox
    Windows

    I agree with the author.

    Yes, Apple make quality hardware. There is no question about that.* However, the subsidy model in the US where Apple has been able to offload virtually all its production/marketing risk onto the telcos who then offload it onto the punters in semi-hidden form, has been crucial to their dominance in the US market. This of course has a huge impact (because of the large amount of publicity/news stories this generates) in terms of enabling Cupertino to dominate the world marketing/news-stroking agenda in a way they otherwise would not have been able to. One would get the impression that the iPhones are ubiquitous all over planet earth, not so. There is (for example) no, repeat no country in Europe including the UK that comes any where near reflecting US conditions.** Any change to the sales/pricing model within the telco market in the US will present some very interesting challenges for Apple Corp.

    *Declaration: I have not owned anything manufactured by Apple in twenty years.

    ** Which explains why when faced with Samsung's success in the States Cupertino's reaction was hysterical judicial carpet-bombing - they are terrified of any serious market challenge on their home-turf, it is that important to them.

  11. i like crisps
    Thumb Down

    "...haven't you seen what the iPhone 6 costs?"

    Yup....about 40% more in this country than the US.....stop subsidising the yanks, thanks.

    1. Anonymous Coward
      Anonymous Coward

      Re: "...haven't you seen what the iPhone 6 costs?"

      Don't forget that most States have a sales tax (around 20%) that is added on at the checkout, and the price in the UK includes 20% VAT.

      So if you add 20% to the USA price and take 20% off ours (if you are VAT registered all the better!), then the pricing is not too dissimilar depending on exchange rate at time.

      1. Edwin
        WTF?

        Re: "...haven't you seen what the iPhone 6 costs?"

        Well, yes - the US price incl. VAT may be comparable to the UK price ex. VAT, but then you're not comparing apples to apples.

  12. Paw Bokenfohr

    At first, I'd thought this might be a sensible article.

    ...but then I got to the line "£10 a month to finance a Nokia, £15 a month to finance a Samsung and £20 for an iGabbler" and realised that this was just another AppleHate article, as I'm pretty sure that the author, if he can remember Nokia and Samsung properly, hadn't forgotten either Apple or iPhone by that point and substituted with "iGabbler" thus, proudly, showing the bias from which this article was written.

    1. Tim Worstal

      Re: At first, I'd thought this might be a sensible article.

      Shhh,

      I'm trying to win El Reg's unannounced competition for most synonyms of "Jesusmobe" used in an article. Free half of shandy at the Crimble booze up for the winner. So don't tell anyone....

    2. Anonymous Coward
      Anonymous Coward

      Re: At first, I'd thought this might be a sensible article.

      At first, I'd thought this might be a sensible article.

      ...but then I got to the line "£10 a month to finance a Nokia, £15 a month to finance a Samsung and £20 for an iGabbler" and realised that this was just another AppleHate article

      Nah, he's no Jasper Hamill :)

  13. Anonymous Coward
    Anonymous Coward

    I can't afford an iPhone

    But my employer can.

    Glad I'm not paying though.

  14. JDX Gold badge

    I'm writing this before the great unveil and you'll be reading it afterwards

    Great journalism then.

  15. Rich 30

    But it's cheaper....

    The new iPhone 6, is actually cheaper than the iPhone 5 cost.

    the iPhone 6 costs £539

    the iPhone 5s cost £549 (last week)

  16. JeffyPoooh Silver badge
    Pint

    Contracts and Contract Extensions cut both ways

    Some of us are lucky enough to be on grandfathered legacy contracts that are highly advantageous to us. Our monthly fee is significantly less than the present market price (about 40% less), and the included 12GB data allowance is over-the-top generous so we can use the phones as they're intended to be used (freely, no worries).

    So if we buy a brand new iPhone from our provider at a subsidized price (typically $300 off MRSP), then we have to agree to this fantastic deal for another two years (Duh, yeah!). The only downside seems to be that the new phone is locked to the network, but could be freed after a certain period for $50 fee.

    In such circumstances, if one is tempted by the new iPhone, then it seems logical to accept the subsidized price *and* lock-in the advantageous legacy contract for another two year extension (quick! before they change their minds).

    Furthermore, if one is able and willing to sell on the previous phone (not keep it around as a spare), the net upgrade cost to the most expensive brand new iPhone might actually be bordering on 'petty cash'.

    YMMV.

  17. I ain't Spartacus Gold badge

    This is what makes the tablet market interesting

    Notice how the tablet market has eased off, but the smartphone market not so much? OK there's more than one reason for that. Many people in the developing world have gone phone, smartphone, and never detoured via PC or laptop. They won't be going into tablet, and continuing the growth. At least not for a long while.

    Another reason is upgrade lifetime. You used to be forced to upgrade your PC when it stopped running anything you needed. But my iPad 3 can do almost anything that the iPad Air can do. Although the Air is lighter, and I want one. But discipline is so far holding. The upgrade from an original iPad was worth it for the better screen. I still see mine every-so-often in use by the person I sold it to for £50. So it would still have been working perfectly fine, had I kept it. The same seems to be true in Android land. The first generation of tablets were lacking in screen and power. Since the Android 4 ones, the rate of improvement stalled. So why not stick to what you've got?

    Phones do get damaged more often. But otherwise the upgrades don't seem to be going so fast any more. I'd suspect a Samsung Galaxy 2 is not that much worse than a G4. Or are we up to 5 now? However, seeing as the upgrade is "free" after 2 years, why not stay on the same contract and take it?

    The funny thing is, Samsung's tablets are almost half the price of its mobiles. And yet the most expensive bit is the screen, and the tablet one is 3 times the size of the phone one. Everything else is roughly the same parts, except the bigger battery. The iPad Air starts at £150 less than the iPhone. Even the one with the massively overpriced mobile chip is cheaper.

    When there was no competition it still made some sense. But you can have a really nice Lumia for £250, or a still quite nice one for £120. Or a Motorola G. I wonder if Google will bother with another Nexus phone now?

    1. DropBear Silver badge

      Re: This is what makes the tablet market interesting

      You do have a point. I have a Galaxy S2 and see no practical reason whatsoever to upgrade to anything newer (ok, except that the S2 doesn't have Bluetooth LE - but so far I have nothing that would hinge on the distinction). Seriously, there's nothing wrong with the performance - it's fluid enough for me, and the software "features" added since the S2 are of zero interest to me. Why upgrade any time soon...? It's working perfectly fine...

  18. Speltier
    Flame

    Same price no matter what

    One item the author seemed to gloss over in the American model, is that the "two year contract" price does include paying for the phone... but that when the contract is up, the monthly rate is exactly the same. Indeed, now you are paying for the phone again, the same phone you already have. For 200 more, you get a new phone and new contract (lock in for 2 years usually), but you pay the same every month so unless you want to change carriers, the shiny new iJesuPhone costs only 200, and maybe nothing if the previous iJesuPhone-1 is sold for 200 on the tat market.

    Of course, the tat market in the US is limited somewhat by carrier lock in. That Virgin phone won't even work on Sprint even though Sprint owns Virgin; never mind working on ATT or Verizon networks. And these are identically the same phone, just the back end database says they are pwned by particular carriers.... where are the Russky crackers when you need them to chop a database down to size?

    1. JJS
      Pirate

      Re: Same price no matter what

      This is very slowly beginning to change in the US market. AT&T charges between $15 and $25 less per month for the "device access charge" if you bring your own phone, pay full price, or use their Next credit program (also if you go month-to-month after a contract). Verizon has a similar discount but only on their credit program.

      The nice thing about these published discounts is you can exactly calculate how much you're paying for your subsidized phone at the end of your two year contract vs paying up front. The terrible thing is the price of these service plans with the BYO discount is still higher than just a couple years ago before all this data sharing nonsense and attempt at hiding the true cost of service.

    2. tesmith47

      Re: Same price no matter what

      if you go with gsm there are a lot of after market carriers that will accept any gsm sim card i use H20 (MVNO) on my used moto atrix2 smart phone ( $60) with a used sim card from cingular (a out of business carrier) and i for $40 at 4g speed (yeah i am a cheap bastard, the carriers worst night mare!!!!!)

  19. armster
    Flame

    What about all the other premium phones?

    So the S5 and the OneM8 are the top income earners (not top sellers) for Samsung and HTC, and they cost at least as much as an iPhone6. If the reduced subsidies impact Apple they will also reduce the profitability of the top tier Androids since they don't sell as many of their high-end high-markup phones.

    Then again there is the increased usability term that people may take into account. Apple will still support the 4S with iOS8, Google officially ends Android support 18 months after a device is Nexus updated, vendors often don't even do that much to keep their Androids usable.

  20. Earl Jones Of Potatoes

    uninvited

    no wonder apple never invites The Register for their events, What's the point in inviting trolls who hate apple so much, all of their headlines for today are about apple. bashing bashing bashing.

    Why don't you guys learn from Bill Ray's 2006 article. - http://goo.gl/BFeBDJ

    This site used to be funny but that was over 10 years ago. now it is a total joke.

  21. DougS Silver badge

    Apple Finance?

    If this becomes a problem, Apple could finance the purchases itself. Why not? They have essentially unlimited cash, have only a third of the purchase price tied up as their cost, and the ability to brick it if you stop making payments. Much simpler and cheaper than car companies having to send out repo men or banks having to go through foreclosure when one fails to make their mortgage payments.

    I'm actually surprised a bit they don't already do this, since there are many places where carrier subsidies have never existed. I suppose that with all the different laws that would affect them over the world they haven't seen it as worth the hassle yet.

  22. Persona non grata

    I agree in general with the article

    And I'd have to further ask what value you place on the years of free highly positive front pages and tv news articles delivered by the mainstream media?

    It's advertising you literally couldn't buy and it's been a huge boost for Apple. This also seems to have tailed off since Steve Jobs' death (the media loves a narrative to build their myths on) and if that continues in the same direction it also has to have an effect on those margins.

    Can Apple remain Apple without the myths built around them?

  23. jason 7 Silver badge

    I really don't know why it's so complicated.

    I have a Nexus 4 and a £7 a month tariff.

    400 mins, 2000 texts and 500MB of data. I reckon that would do for most here other than the 14 year old girls and Netflix addicts.

    1. Piro

      Re: I really don't know why it's so complicated.

      Well, of course. I'm on the same team, buy your own phone, get a cheap deal that suits you. It's the only way to fly.

      Then again I also bought my current and previous phones used off ebay, because I got more for my money.

  24. Moosealot

    I have an iPhone 4S that I bought outright for £499 when they first came out just under 3 years ago. It's still receiving software updates and will continue to do for the next year (it is supported by iOS 8). After that I will have had it for 4 years and it will still be worth about £50.

    The amortisation over the period that there is software support for it, therefore, is about £112/yr. Some are better than others, but some combinations of manufacturer and operator will release no software updates for Android phones at all.

  25. Vociferous

    it's a prestige product. It sells BECAUSE it's expensive.

    iPhones are like Louis Vuitton or Philippe Patek watches: you don't buy it because it's the best product, you buy it because it looks good and shows off your wealth.

    iPhones MUST be more expensive than other phones: it's their main selling point. Making them bigger so they're more visible also makes sense, as it improves the show-off factor. The one thing Apple must never do, is sell a cheap iPhone.

    The next step for Apple to cement its place in the exceedingly profitable prestige product niche would be to produce limited edition iPhones designed by famous artists (Damien Hirst, Banksy...), and/or made from exotic materials such as white gold.

  26. TechnicalBen Silver badge

    "The mobile operator then hopes to make back that subsidy over the life of the contract."

    Not in the UK anymore AFAIK. They now charge for the phone on a separate finance package (either interest free or with interest, but still assumed they get a discount so make money off it somehow).

    This is for a couple of reasons I guess. We buy, rent or finance. Everything else gets messy, or is less than honest on the details. The old way is also unsustainable as customers get wise, buy your phone for £50 on contract, then don't use it, or use another company (sim car or VOIP etc) to avoid the companies charges and it never makes it's money back.

  27. briesmith

    End of Contract In Sight - At Last?

    While the carriers provided bundled contracts where the mobile service was joined with a phone there was some argument for fixed term contracts. These contracts started off at a not unreasonable 12 months then crept up to 18 and now the norm is 24. If as TechnicalBen says these bundled contracts are fast disappearing then everything changes.

    Firstly, why buy your phone from a carrier? Other retailers have significantly more massive operations and should be able to offer better terms. I don't see how relatively tiny Carphone Warehouse, for example, can compete with Amazon or Best Buy and the like.

    Secondly, why have a contract at all? If all you have is the mobile service having bought your handset elsewhere - which is what wise shoppers have been doing for a long, long time - then surely there is no need for a contract and definitely no need for a 24 month agreement.

    But regularly observing items on eBay priced above what they can bought for in John Lewis's (other stores are available) I'm not sure that the rational consumer beloved of economist's - and price theorists - truly exists.

  28. T J

    You can pay for anything you want

    Apple never really came up with anything. You can get any gear you want - if you are prepared to pay for it. You always could.

    The iPod was a perfect example of Jobbie's marketing insan... genius. Take an mp3 player, moronise the interface (and call it 'funky'), then add an 80G surface-mount spinner. Isn't this wonderful? And it only costs you $800! Just don't drop it.

    The MacBook Air - we'll make it so thin that nobody can make a DVD-ROM drive for it... cos, you know, those things are like so dead, man. And they did die, true. About 5 years later. But then there's a little thing called heat-dissipation, but thats ok nobody cares about that. In the meantime, we are so sorry about your scorched testicles, Sir, but they were scorched by Steve so you really should be grateful. Give us $4500 for the new one with less Ball-Scorch....

    Decades ago, in the luggable era, Hewlett Packard (I *think*, it may have been somebody else) made a luggable that you could throw over a wall onto concrete. They built it for the military, and it was one of the first devices with 'drop-sensing' that would park the spinner, and all the internals were gel-packed. It cost $30k.

    Anything you want. Gimme yo dolla.

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