What it costs Apple to make the 6S

[Charmonium]

you don't save money building pc's yourself

heathen!!! Unclean spirit!!! Satan be gone!!!

 

[Artdeco]

I don't mind the higher prices when I get the best customer service in the industry.

Bought a used 128GB iP6 on Swappa with a massive scratch down the middle of the screen, and it had a phone destroying case on it, it honestly looked like the guy threw it in a cement mixer for an hour or 2.

I took it to the Apple Store and they swapped me out for a skipping audio issue with a perfect refurb. I can't get that kind of service anywhere else. I have friends that took their laptops to a MS store or BB, and they just end up paying a massive repair bill and then buying a new laptop. No one provides the customer service Apple does.

 

[StrangerGuy]

I don't mind the higher prices when I get the best customer service in the industry.

Bought a used 128GB iP6 on Swappa with a massive scratch down the middle of the screen, and it had a phone destroying case on it, it honestly looked like the guy threw it in a cement mixer for an hour or 2.

I took it to the Apple Store and they swapped me out for a skipping audio issue with a perfect refurb. I can't get that kind of service anywhere else. I have friends that took their laptops to a MS store or BB, and they just end up paying a massive repair bill and then buying a new laptop. No one provides the customer service Apple does.

The 4 year old 4S is still going to be supported by iOS9, which instills buyer with good confidence that Apple is going to do the same thing down the road with their current iPhones. With Android you will never know how soon when you will put under the bus when it comes to software support.

 

[shortylickens]

 

[Charmonium]

That's not how it works when you have a functional monopoly. Obviously no one is going to call Apple a monopoly in the same way that Microsoft used to be, but the purpose of branding is to achieve a similar result. You want to be able to produce less and charge more. It essentially creates a steeper, more inelastic demand curve.

The trick with this sort of approach though is to make as many people as possible believe that there is no adequate substitute for your product. If people don't believe that, you get no advantage.

The difference between Apple and Samsung is that Apple is much better at convincing its users of this belief. Both spend comparable amounts in terms of advertising but Apple has figured out how to win that game whereas Samsung has not.

 

[lothar]

I don't mind the higher prices when I get the best customer service in the industry.

Bought a used 128GB iP6 on Swappa with a massive scratch down the middle of the screen, and it had a phone destroying case on it, it honestly looked like the guy threw it in a cement mixer for an hour or 2.

I took it to the Apple Store and they swapped me out for a skipping audio issue with a perfect refurb. I can't get that kind of service anywhere else. I have friends that took their laptops to a MS store or BB, and they just end up paying a massive repair bill and then buying a new laptop. No one provides the customer service Apple does.

Nexus devices bought from the US Google Play Store has that kind of support.
Your idea that no one provides the customer service that Apple does is absolutely false.

I know lots of companies that provide just as excellent customer service as Apple does.
Google, Costco, American Express, Logitech, etc... are excellent examples based on my personal experience. Hell, add Amazon to that list too.

The only thing that stands out in your story was that you had a skipping audio issue on an iPhone with a massive scratch/broken glass and Apple replaced it.
If you didn't have the skipping audio issues, would Apple have replaced your phone with the massive scratch/broken glass?

With Google, I didn't need such a requirement. I've replaced my cracked/broken Nexus 4 and Nexus 5 screens with perfect refubs without question. Whether one has an audio skipping issue or some other minor defect is irrelevant. My cracked/broken phone was replaced without me having to mention another side issue to go along with it.

Obviously, I don't expect companies like Samsung, LG, HTC, etc...to provide such a service since it's not in their best interest.
But to assume that only Apple does this is a bit short sighted.

 

[Commodus]

Two observations on cost-of-manufacturing estimates:

First, they're frequently off. Tim Cook actually tackled this in a fiscal results call recently, when there were questions about how much the Apple Watch cost to make. They're only best guesses -- there's no inside track, no unique insight that only the analysts can have. This is especially true when it's unique tech, like Force Touch.

The other bit? As was hinted more recently in the thread, a phone isn't just a bucket of parts... the notion that companies should price a phone just above the bare manufacturing cost is a bit ridiculous. Want to know why you have to jump through hoops to get that phone serviced under warranty? Why your phone manufacturer's profits are going down the tubes, calling the future of your device into doubt? It's because they listened too closely to people arguing that healthy profit margins don't matter. Within reason, charging a good-sized profit is what makes sure your favourite phone brand sticks around and delivers decent service.

(On Google: remember, phones are a small side business to its ridiculously profitable search ad business. It can afford to replace phones because the hit to its bottom line is virtually non-existent.)

 

[teejee]

Something isn't right about that, not at all. Samsung controls almost the entire production - Apple sources stuff. And Samsung uses a lot more plastic. How the hell does it cost more?

edit: also, the S6 Edge has an MSRP close to $700. It can be found cheaper, sure, which isn't as easy to do with Apple, but that's also because of how the market works. Android devices just don't hold value nearly as well (comparatively, and from the viewpoint of the general market), and sales are often and can be significant. Apple commands more and price drops aren't needed to move product.

Producing the components yourself does not lower the component cost. Internal production has same requirement of profitability as external production.
A very common misunderstanding.

 

[Charmonium]

Producing the components yourself does not lower the component cost. Internal production has same requirement of profitability as external production.
A very common misunderstanding.

That's true for accounting purposes but the fact of the matter is, that for the corporation as a whole, the costs are lower. It's a little like paying yourself to do a job rather than someone else. You still have the cost of materials and presumably your time is worth money, but even if you factor that in, you still come out ahead (assuming that you actually know what you're doing).

To put it a little differently, when Samsung buys from itself, it's keeping more money in-house than when it pays someone else for the same components.

Remember that Samsung and a lot of other leading vendors make a lot of these components as part of their other businesses. One of the advantages of being a huge conglomerate. So if you can ramp up demand for a particular product, that can lower your per unit cost. So you're really winning in 2 ways - by keeping more of the cash in your own businesses and lowering your unit production costs.

 

[Ns1]

Unless your competitor is superior and can make components cheaper than you due to better equipment/processes/whatever ^_^

 

[elitejp]

Nothing wrong with making a profit. Canon dslr cameras have a production cost of 1/5 the retail price. But what are you gonna do?

 

[QueBert]

Nexus devices bought from the US Google Play Store has that kind of support.
Your idea that no one provides the customer service that Apple does is absolutely false.

If my Nexus 4 had messed up to where it needed to be replace there are no Google stores I could have taken it to and gotten it swapped out. Mailing it in and waiting 2 weeks for a new phone, or giving Google a CC to hold $$$ while they advance ship me a new phone isn't close to the same. Logitech has super great replacement policies, but it can take weeks. Apple you walk in one of their hundreds of stores and walk out with a new phone, or your phone fixed. I can't think of a another electronic manufacture where I can do that. Logitech has the BEST customer service for a non physical company. Apple's customer service is absolutely unmatched for an technology company.

 

[Ns1]

"Loading device details.
Please wait."

:whiste:

 

[phexac]

If my Nexus 4 had messed up to where it needed to be replace there are no Google stores I could have taken it to and gotten it swapped out. Mailing it in and waiting 2 weeks for a new phone, or giving Google a CC to hold $$$ while they advance ship me a new phone isn't close to the same. Logitech has super great replacement policies, but it can take weeks. Apple you walk in one of their hundreds of stores and walk out with a new phone, or your phone fixed. I can't think of a another electronic manufacture where I can do that. Logitech has the BEST customer service for a non physical company. Apple's customer service is absolutely unmatched for an technology company.

Basically this.

And don't forget updates for life of the device. On the Android side, your software is

1. Loaded with crapware from manufacturer and phone company
2. Out of date when you buy it in most cases
3. Lucky to even get one update that's usually months late, and no updates beyond that

Sure Nexus phones eliminate some of those issues, but they also have non-flagship hardware (and for some reason consistently skimp on battery).

I like Android OS better than iOS on phones, but man, the hoops you have to jump though, and the crap you have to put up with compared to Apple is so damn frustrating at times. Just thinking about AT&T navigator that will always be on my phone and that has ZERO users in the world makes me basically want to get an iPhone for my next device. So much less stupidity to deal with.

Anyway, got off topic here, sort of. But to me, not having garbage on my phone and getting updates as soon as I come out for life of the device is part of customer service.

 

[Artdeco]

Nexus devices bought from the US Google Play Store has that kind of support.
Your idea that no one provides the customer service that Apple does is absolutely false.

I know lots of companies that provide just as excellent customer service as Apple does.
Google, Costco, American Express, Logitech, etc... are excellent examples based on my personal experience. Hell, add Amazon to that list too.

The only thing that stands out in your story was that you had a skipping audio issue on an iPhone with a massive scratch/broken glass and Apple replaced it.
If you didn't have the skipping audio issues, would Apple have replaced your phone with the massive scratch/broken glass?

With Google, I didn't need such a requirement. I've replaced my cracked/broken Nexus 4 and Nexus 5 screens with perfect refubs without question. Whether one has an audio skipping issue or some other minor defect is irrelevant. My cracked/broken phone was replaced without me having to mention another side issue to go along with it.

Obviously, I don't expect companies like Samsung, LG, HTC, etc...to provide such a service since it's not in their best interest.
But to assume that only Apple does this is a bit short sighted.

Yeah, I've done returns with all of those companies, including Nexus devices, which all flipping broke, BTW... Apple does a better job.

 

[teejee]

That's true for accounting purposes but the fact of the matter is, that for the corporation as a whole, the costs are lower. It's a little like paying yourself to do a job rather than someone else. You still have the cost of materials and presumably your time is worth money, but even if you factor that in, you still come out ahead (assuming that you actually know what you're doing).

To put it a little differently, when Samsung buys from itself, it's keeping more money in-house than when it pays someone else for the same components.

Remember that Samsung and a lot of other leading vendors make a lot of these components as part of their other businesses. One of the advantages of being a huge conglomerate. So if you can ramp up demand for a particular product, that can lower your per unit cost. So you're really winning in 2 ways - by keeping more of the cash in your own businesses and lowering your unit production costs.

I disagree.

The reason for having your own production is if it is a main part of your business strategy. E g like Intels chip production . And in Samsungs case it is a main part of their business to make components.
The comparison with work in your home does not make sense at all.

The important thing to understand is that a company's financial success is very often measured in profit margin. If you do more work yourself then the additional work must also have the same profit margin, otherwise you just increase revenue but decrease the profit margin. This not just accounting, it is reality.

 

[KeithP]

NOTE: This is only the parts costs but still enlightening./QUOTE]

Actually it is not. These types of estimates are widely regarded as inaccurate and are only used to generate click-bait.

-KeithP

 

[blairharrington]

I love my iPhone and most likely won't sway from going Android anytime soon, but what I paid for a refurbished iPhone 6 Plus 64GB ($767 with tax included) makes me really want to get something like a Moto X Pure in the future. $400 makes a lot more sense to me for a smartphone purchase.

The alternative is to hold onto my iPhone for a 3rd year to make it a more worthwhile purchase. However you know the iPhone 7 is going to be tempting.

 

[Harry_Wild]

Apple makes a huge profit margin on RAM upgrades. $15-$20 cost - $100 retail!

 

[Harry_Wild]

I don't think this graph apply to luxury goods! There is a premium built-in and supply never means demand usually! The luxury goods do not usually go on sale and is sold at list all the while it is current model. The iPhone is considered to be a luxury good like Louis Vutton or Hermes! goods.

 

[lothar]

Basically this.

And don't forget updates for life of the device. On the Android side, your software is

1. Loaded with crapware from manufacturer and phone company
2. Out of date when you buy it in most cases
3. Lucky to even get one update that's usually months late, and no updates beyond that

Sure Nexus phones eliminate some of those issues, but they also have non-flagship hardware (and for some reason consistently skimp on battery).

I like Android OS better than iOS on phones, but man, the hoops you have to jump though, and the crap you have to put up with compared to Apple is so damn frustrating at times. Just thinking about AT&T navigator that will always be on my phone and that has ZERO users in the world makes me basically want to get an iPhone for my next device. So much less stupidity to deal with.

Anyway, got off topic here, sort of. But to me, not having garbage on my phone and getting updates as soon as I come out for life of the device is part of customer service.

Nexus devices eliminate all of those issues that you pointed out.
If Google stopped producing their Nexus devices and there's no equivalent, I could see myself going to iOS since it has Google apps.

The Nexus 6 last year was a premium flagship device. It had better camera than flagship devices from HTC/Moto by far, and slightly worse than Sony/Samsung. I do agree with you on the skimping on battery, but in all other cases the Nexus is usually a premium devices that uses the best SoC on the market at the time of release.
SnapDragon S4 Pro, SnapDragon 800, SnapDragon 805...Nexus 4, Nexus 5, and Nexus 6 all had the best SoC's from Qualcomm at the time of release.

Then you should be happy with a Nexus device. I'm like you and won't accept poor substitutes which is why I've stayed with the Nexus family for the past 3 years.

 

[lothar]

Yeah, I've done returns with all of those companies, including Nexus devices, which all flipping broke, BTW... Apple does a better job.

If you didn't have the skipping audio issues, would Apple have replaced your phone with the massive scratch/broken glass? You didn't answer my question about that.

I guess my question is besides having a store close by that one can walk to on the same day to plead their case and get their problems resolved, what specifically does Apple do a better job in that Google or those other companies do not? I'm looking for specifics. Costco has a physical store presence so Apple is not the only one in that regard to solving problems and taking care of customers the same day.

Costco, Nordstrom, and L.L. Bean are the gold standard for stores with a physical presence. They will take anything back for any reason (Costco has electronics as an exception to the rule). “If the quality isn’t there, if the garment is falling apart, whatever it is, we’ll take it back”...“The return policy is that there is no return policy”...“You won't find one posted at the cash register or on your receipt. We're just going to stand behind our merchandise. The bottom line is that we work with the customer”...“No time limits and no receipts required”...“We are one of the few companies out there that lets the customer define what 'satisfaction' is”
These are various quotes from the executives and representatives of Costco, Nordstrom, and L.L. Bean.

Specific Examples that I've personally experienced
Discover: I see an item I bought 8 weeks ago is selling for a lower price, can I get a price adjustment? "Sure!!!" I stopped wasting time with Black Friday stuff(which has been crap the past 5 years) when I discovered I could do that.

American Express: The glass of the new phone I bought 2-3 months ago broke. "Just fill out this form and we'll reimburse your purchase." What do you want me to do with broken phone? "You can keep it."

Amazon: I bought a Chromecast that the website promised that 2 day shipping on before my trip, it came a day later because of some snowstorm which was not their fault. "I'm sorry that we didn't meet your expectations, we'll extend your prime membership for an additional 6 months." Not to mention the fact that they'll take almost anything back within the last 30 days for any reason as long as it's a "Prime" item.

Google: The Glass of phone cracked/broke. "No problem, we'll send you a phone in 2-3 business days with a prepaid shipping label for you to send your malfunctioning device. There will be a temporary hold on your credit card which will automatically be taken off when we receive your malfunctioning device." Many people received brand new phones and not refurbs. Check Slickdeals for confirmation. I know because I was one of them.