Smartphones are getting more expensive but are they really overpriced?

It's fine if you don't believe anything I say, but it just takes one google search to prove everything you say is false and really don't understand business at this level. You may get away running a fruits and vegetables shop, but running a multi-billion dollar company is a different story.

The fact you assume I support this business model further proves my point that stating facts will not change your mind.

Anyone selling a midrange device for nearly 800 bucks and calling it a flagship.

How is that any different than what anyone else is doing on some level?

Apple sells a midrange phone for 3 times what it cost them to make and can cost as much as 5 times.

When you make a phone, if you use other people's components, you do have to pay them for them.

So thst $400 phone that they sell for $800, close if not more than half of what's left goes to someone else.

Apple is the only company thst makes huge profit margins on devices.

I don't know what the total cost is to make millions of phones. What I do know is the manufacturers in general don't make a huge profit on sales.

Samsung as an example, 90% of the parts in their phone is 1st party. That means their costs to make a phone is generally higher than Apple.

Samsung jas to pay their own employees, they have to tool their own factories, they have to make the components. Their R&D budget for 1 year dwarfs what Apple spends over at least 5 years for the same.

Apple profit margins on iPhone encompasses more than just the physical phone itself.

Charging double the cost of how much the product costs to make is actually good value. Apple sells for 3x or more, which is greed.

Rethink the numbers.

Let me ask you, if you made a product thst cost you maybe $100 to make, are you only gonna sell it for $200? How you gonna pay for manufacturing? Employees? Sick and vacation pay? Insurance?

You looking at it wrong.

One advantage Samsung has overhyped Apple is they make lots of products an thus other divisions can absorb some loses and balance things out. Companies like Apple qho misty have their eggs in one basket can't. If Apple was to lose 25% of their sales in a year, they would be bleeding pretty bad. Samsung lost 25% of its sells in 2023, and they onmy have a small cut to bandage.

Did I single anyone out? Why so defensive about these greedy corporations clearly caring more about revenue than innovation? There's a reason antitrust is illegal, which is why these companies are getting dragged through courts all over the world now. Stop defending things that only serves to move your wealth onto their bank accounts.

"I was going to get rid of my S22 Ultra recently, actually to sell and then "downgrade" to a Pixel 7a or similar. Downgrade as in get a new phone that's not quite flagship, but incrementally better all the same whilst being cheaper"

If by "incrementally better" you mean the camera & that's it, then you might be correct. Might.

Where are these numbers from? Maybe you are referring to total revenue?

In terms of phones, Apple had $200B in iPhone sales in 2023 (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/faab4555-c69b-438a-aaf7-e09305f87ca3.pdf, page 25), Samsung did about $80bn in 2023 (https://images.samsung.com/is/content/samsung/assets/global/ir/docs/2023_con_quarter04_all.pdf, page 78), and I'm not even going to check Google's.

Apple's iPhone 15 family seems to cost 50% of the full price just to produce (https://asia.nikkei.com/techAsia/Tech-tensions-and-costlier-iPhones#) - so there's a c.$500 to cover all other expenses such as R&D, Marketing, etc.

On the same page of the Samsung's report you can see that the DX division does sub 10% operating profit margin.

So yeah, probably not making anywhere close to 3-400 bucks per device, not even Apple's (really) expensive flagships.

Don't get me wrong, these companies are not saints and we do have a challenge in the face of powerful tech companies although it's probably not an issue with their profitability. Facts suggest that the story around midrange models printing money is safe to say incorrect.

It is quite easy to find the numbers if you'd taken 30 seconds to Google annual revenues for these companies. You deciding to only consider some of the revenue is, uh, a choice? Not sure what the relevance is, though. Regarding references to estimated production costs. Those are extreme guesstimates. Not unlikely to be inflated as the numbers are not coming from neither the producers or buyers. If a company buys tens of billions worth of components, they do not pay "industry prices".

I'm reading too many comments talking about how governments should regulate how much a company charges or how much profit they should make. As a Cuban-born US citizen, this type of talk makes me cringe like f**k. I see too many 20-something college kids wearing Che Guevara t-shirts and talking s**t about bringing down "The Man". Let me tell you something from personal experience - that's the last mofo (and those like him) you want on your side.

Plain and simple, if you don't want to spend $1,000 on a smartphone, DON'T!!! If you're the type that would rather have last year's flagship for 1/2 the price - by all means, have at it. I think it's the fiscally responsible move. But do NOT ever suggest that any government or organization knows what's best for the economic situation in your region.

Yes, because they still don't have the capabilities of a true camera, camcorder, high end computer as it stands.

Whilst I don't think Apple are the only problem, I think it's good that the US, EU, UK and others are starting to clamp down on anti-competitive behaviour in the smartphone market. I think it needs to happen in other areas though, like football league rights etc

I don't know if your blind or just wanna pick a fight. All I said was, orms selling phones at a very high cost vs what it costs to make is just business as usual.

But my question was simple. If a company thst makes something that costs them $400 to make? How much do YOU feel they need to sell it for in order to pay for ehats inside, buy the materials and pay someone or buy the machine to make.

A businessman. I don't charge absorbent prices for the service I offer. But when I have to buy material I charge 3 times my cost. Why? Because 1st I need to replace the money I spent to buy it. 2nd I need to be able to buy it again and 3rd I need to be able to make something off of it too.

But I'm not selling something in the millions. However the more I would need to sell, the more it costs me and thus the more I need to make.

What I said doesn't excuse any Corp for being greedy. I simply stated a fact that you said selling someone at 2 or 3 times what it costs to make is always a bad thing and it isn't.

And most oems especially Chinese ones, only sell a phone slightly above their cost. But their stuff is cheap. Most of it is gonna remain in China. They don't need to pay fees to send it to 200 plus other countries and sell it on someone else's store shelves.

When it comes to midrange devices, because those devices will sell in higher volume, it also means they will cost more to make. In fact the overhead to make so many is more expensive then making flagship.

I can guarantee, that cost for Samsung as an example to manufacture and distribute the A series phone is far mire then what it costs them to do thre Galaxy S now.

Much of the reason you are paying more now is 1 some parts do cost more. Carriers don't subsidize any of the cost and they allow you to put it on a bill and lay over time interest-free. All of that comes at a cost.

The reason you were wrong, is because with the only accepting being Apple, all Android oems including Samsung, actually make a much lower profit margi. This has been proven for years where numbers have already been ran that shows Apple makes a considerable margin above what it costs them to make a phone.

A phone that may cost them $250-400 to make and they sell for $500-800 sounds like a pretty fair margin because kne they pay the bills, the oem will be left with maybe $100. That doesnt sound very greedy. But when an oem like Apple has an ASP, that is consistently above 50% of theor cost, that surely is greedy and they give nothing for it.