Flagship iPhone prices have jumped 66% since 2009, but Tim Cook says people are happy...

[midian182]

In brief: Even when adjusting for inflation, the prices of today's high-end iPhones are much higher than they were over a decade ago—by 66%, in the case of the most expensive model. But CEO Tim Cook thinks that's okay because people are willing to pay more to "get the best."

Insider notes that when the iPhone 3G and 3GS launched in 2009, the latter model with its maximum storage and no contract cost $699, or $962 when adjusting for inflation. That's a lot less than the top-specced iPhone 14 Pro Max, which, when bought with 1TB of storage, costs $1,600, or 66% more than the iPhone 3GS.

The publication writes that prices have been on the rise for years; Apple has often been accused of increasing the cost of its products at a higher rate than inflation. The iPhone X's $1,149 launch price would make it around $1,376 today, though one exception was the iPhone 12 Pro Max, which sold for $1,399—$100 less than the iPhone 11 Pro Max.

Paying $1,000 or more for a product is a significant outlay, but Cook believes consumers are willing to spend this much because phones have become "so integral into people's lives." When asked if handsets' increasing average sales price over the last few years is sustainable, the CEO said, "I think people are willing to really stretch to get the best they can afford in that category."

Cook was answering questions related to Apple's recent quarterly earnings report, one of its worst in years. iPhone revenue was down to $65.8 billion in Q4 compared to $71.6 billion during the same period a year earlier. Overall, the three-month period ending December 31, 2022, saw the largest dip since 2016, and it was the first year-to-year sales drop Apple experienced since 2019.

Apple is unlikely to be worried about its latest financial report. Cupertino is still the largest company in the world in terms of market capitalization, which is currently $2.444 trillion after hitting $3 trillion last year. And at a time when most of the tech industry is cutting staff numbers as the economy falters, Apple is one of the few to have avoided making layoffs—Tim Cook even took a 40% pay cut at his own request.

Masthead: Ryan Tir

Permalink to story.

https://www.techspot.com/news/97503-flagship-iphone-prices-have-jumped-66-since-2009.html

 

[Hexic]

*laughs in innovation*

 

[toooooot]

He is not wrong. They all raised prices drastically and yet they stayed in business. People keep buying these very expensive devices. Although, people keep devices for longer which is also reasonable since batteries and updates allow it.

 

[NicktheWVAHick]

No they aren’t, Timmy. That’s why your quarterly sales have tanked. My iPhone 8 is perfectly good, just like my 2006 SUV with 210K miles. Don’t get me wrong, the iPhone is a solid product, just maybe a little too solid for this consumer.

 

[WhiteLeaff]

No, and your product has serious technical flaws and no significant innovation or improvement in recent years.

The same goes for other high-end smartphones, the only relevant innovation has been the foldable devices but this comes with a price and is not that interesting from a practical point of view.

 

[Plutoisaplanet]

No they aren’t, Timmy. That’s why your quarterly sales have tanked. My iPhone 8 is perfectly good, just like my 2006 SUV with 210K miles. Don’t get me wrong, the iPhone is a solid product, just maybe a little too solid for this consumer.

For comparison, the iPhone 8 was sold starting at $700. When software updates are discontinued and if you like it so much, I'd recommend the iPhone SE which is sold starting at $430. I was on the 6S until last year and did the same (though I paid $480 for the increased storage).

 

[wiyosaya]

Corporate Hubris has sunk other companies, Mr. Cook. Watch out, Mr. Cook lest Apple encounters the same fate. People feel they are being gouged everywhere these days, and the tech sector, given sales of AMD's AM5 CPUs, NVidia's 4000 series, and the latest, no less, your own iPhone sales are prime examples of people no longer willing to jump onto the latest marketing bandwagon and pay outrageous prices for tech - especially tech - like yours - that offers nothing new and is not a needed improvement over prior generations of iCrap. Keep thinking that way, though, the rest of us will be happy to laugh at you while your ego, and your company, deflate like a popped balloon.

 

[Avro Arrow]

I don't know who Tim Cook is talking about but it's clear that he's out of touch with reality. I paid less than $300 brand-new for my Motorola Moto G Power from Costco and it's fantastic. It has a 5Ah battery that takes forever to drain but only about an hour to charge from 25%.

Tim Cook is just trying to justify the price-gouging that Apple is guilty of and it really doesn't matter because, like Jensen Huang, he has a plethora of people who will pay literally ANYTHING for products with his brand logo on them.

 

[Hexic]

The same goes for other high-end smartphones, the only relevant innovation has been the foldable devices but this comes with a price and is not that interesting from a practical point of view.

Not necessarily - depends on your use-case.

What I do, I don't have an office - and this phone can be my desktop when I'm remote/in-transit anywhere. With close MS / other integrations, this phone is a functional monster.

Others create desktop setups from their Fold (

) that work incredibly well for those such as consultants, who are traveling all of the time.

 

[Lew Zealand]

There's loads of choice, don't want a 1TB phone with top specs for $1600?

Buy something else!

There are cars sold for over $1 million, WTF should anyone care?

Buy something else!

 

[p51d007]

Granted, the "original" iphone didn't have the features that today's phones have, but, that still doesn't justify
a 66% increase over inflation. It just makes stockholders happy.

I remember in 2014 when the first OnePlus phone came along. 801 chip, pretty good specs, excellent price.
As each model came along, the "color & style" increased, along with the price so that today, the OnePlus phones aren't the bargain they once were. You'd be better off paying a few bucks more for a true flagship.
I think that was Oppo's design from the start. Outside of the Asian market, no one had any idea who Oppo was.
Created a "startup", use viral marketing, gimmicks etc and create a feeding frenzie, limit production etc.
Now, "globally" everyone knows who/what Oppo is.

 

[ZedRM]

This is one of the reasons Tim Cook needs to go. That pathetically greedy lowlife has no interest in anything other than his pocketbook.

 

[tancabean]

This is a silly comparison. Consumers aren’t entitled to inflation adjusted pricing for the “best” of anything. You don’t need to buy the top tier product. There are much cheaper alternatives today that are vastly superior to the best phones from 2009.

 

[Salty Maud]

If only Apple stopped pretending to be best and actually made an effort to be the best. This pretentious communication from Apple has been consistent for so long the problem is people actually started believing it while they are really only doing the bare minimum to stay relevant. And I'm a current iPhone user. Fairly content with my phone, but not very excited for the price I paid for it.

 

[RaXelliX]

So in Tim's mind since phones have become so integral they should cost more?

Odd how that does not seem to be the case with most other tech that generally gets smaller and cheaper the more widespread it is.

 

[Endymio]

This is one of the reasons Tim Cook needs to go. That pathetically greedy lowlife has no interest in anything other than his pocketbook.

Lazy thinking. When you purchase a phone, you want the best possible price. Tim Cook -- and all companies in general -- want the exact same deal.

So in Tim's mind since phones have become so integral they should cost more?

iPhones cost exactly today what they did then - 1/4 more than they cost to produce. Apple's net margin from 2009-2012 ranged from 20% to 27%. It's 24% today.

Honestly, this article is just a blatant gaslighting attempt. When the 3G was released, it was Apple's entire lineup. Today, the Apple 14 is four separate phones. It makes more sense to compare pricing on the 3GS to the baseline 14 as it does the 14 Pro Max.

 

[ZedRM]

Lazy thinking. When you purchase a phone, you want the best possible price. Tim Cook -- and all companies in general -- want the exact same deal.

No iPhone BOM adds up to $1600. They barely cross $250. It's one thing to want to make a profit, it's another to shamelessly gouge the public. This greed is all on Tim Cook.

You were saying?

 

[Endymio]

No iPhone BOM adds up to $1600.

Oops! The materials that go into an iPhone are just the tip of the iceberg. There's designn and engineering, assembly, shipping and packaging materials, software development and maintenance, sales and marketing, legal costs, liability exposure, and a thousand other things.

Luckily, Apple is -- like all publicly traded companies -- required to disclose the sum total of all these costs. At present, it's 75% of their total revenue, meaning the average iPhone is marked up about 25%. The budget models somewhat less, the flagships somewhat more.

 

[ZedRM]

There's design and engineering

Ongoing R&D is factored over time, company wide(meaning over all product ranges). Not significant. But for the sake of argument, let's add $45.

assembly, shipping and packaging materials

Add $45.

software development and maintenance

Ongoing cost factored over time and covered by sales of software on the Apple store, but for the sake of argument, add another $45.

sales and marketing, legal costs, liability exposure, and a thousand other things.

All things that other companies have to do and all but one of them DON'T change $1600 for a device.

Luckily, Apple is -- like all publicly traded companies -- required to disclose the sum total of all these costs. At present, it's 75% of their total revenue, meaning the average iPhone is marked up about 25%.

Ok clever chops, dig into the SEC and shareholder statements and shows us all the break down, making sure to properly collate by region, model number and company unit.

So far you've added $135 for a grand total of $385 per unit on the flagship model.

 

[Endymio]

Ongoing R&D is factored over time, company wide(meaning over all product ranges). Not significant. But for the sake of argument, let's add $45.

In other words, you're going to invent random numbers. Why not use the real ones? Apple's costs are publicly disclosed, and, as required by law, audited by an independent third-party agency. Do you believe in a worldwide conspiracy to deceive you?

All things that other companies have to do and all but one of them DON'T change $1600 for a device.

Oops! What about Samsung?

Samsung hits a new record with the most expensive smartphone: $2,000

 

[neeyik]

@ZedRM and @Endymio - enough of this argument, thank you. Take it to private messages if you must.