In an amusing retaliation to Jony Ive’s opinion of Motorola’s Moto Maker, Motorola president described their company as a ‘different philosophy’ as well as directly attacking Apple’s product lineup, describing iPhone prices as ‘outrageous’ in a conversation with the BBC.
In the Ive profile by the New Yorker, the SVP of Design gave his scathing view of the Moto Maker system, which let customers choose any combination of colors and materials to customize their phones. Although Ive refused to call out Motorola by name, the intention is obvious.
In one of our conversations, Ive was scathing about a rival’s product, after asking me not to name it: “Their value proposition was ‘Make it whatever you want. You can choose whatever color you want.’ And I believe that’s abdicating your responsibility as a designer.” Cook told me, “Jony has better taste than anyone I ever met in my life,” and Ive might not demur.
In the report by the BBC, Motorola president Rick Osterloh says that they believe the ‘end user should be directly involved in the process of designing products’. He also directly attacked the pricing models of Motorola’s competitors.
“We do see a real dichotomy in this marketplace, where you’ve got people like Apple making so much money and charging such outrageous prices. We think that’s not the future,” he said.
“We believe the future is in offering similar experiences and great consumer choice at accessible prices.
“The mobile phone industry’s greatest failure is also its greatest opportunity: to make really good, affordable devices for people who don’t want to spend a lot of money.
It is bit ironic that Ive chose to criticize this particular feature of Motorola, given that the Apple Watch is the most customizable product Apple has made for a long time. Still, it’s probably not good either for Motorola to criticize Apple’s profit margins … when you remember that Apple made over 80% of industry profits last year. Their strategy is clearly working.
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Big Jony Ive fan, but super odd to make that shot in a Watch interview. Kinda baffling.
No, the laughable part is that right now on the AT&T web site, the outright pricing of the iPhone 6 is less expensive than the Moto.
You’d think the president of Motorola would know his retail pricing compared to his competition. No wonder why motorola is failing almost as fast as Samsung – he doesn’t even know the fundamentals of his premier product!
Hey, Moto:
Can’t mess with success! Last great design out of your studio was, what, the Razr? Time marches on!
Meanwhile, Motorola was LOSING MONEY, so it’s not that Apple’s charging outrageous prices, it’s because Motorola wasn’t charging enough to make a decent profit, hence why Mototola got sold off, TWICE. Once to Google for around $12 Billion and then again to Lenovo for around $3 Billion for a tidy $9 Billion LOSS. So, don’t listen to the idiot at Motorola because he’s proven he can’t run a profitable business and he just has a LOT of jealousy because he can’t sell that many phones at a LOSS. What a RETARD.
Before you go throwing around careless names, you should do some research. Motorola was sold to Lenovo for $3 Billion because Google kept all of Motorola’s patents. An accurate fair value analysis of Motorola without its patent portfolio puts its worth at around $3 Billion. Lenovo has since increased its profits by moving Moto products to china and increasing market share in the US. Please, before you go off on a little tantrum and use discriminatory terms, do some quick research. Apple is a great company, but so is Motorola.
Before using such strong words and taking matters to personal level, you should probably get your facts right. Google did not buy Motorola for its hardware division. In order to protect android from possible lawsuits (BB, Apple, Nokia), Google had to buy the patents from Motorola. And when it sold it to Lenovo, It most certainly didn’t lose 9B.
(Any 10 year old can use the swear in threads and posts without having any relevant knowledge whatsoever. Prove my point and answer me with more of your ignorant firepower)
And Moto is racing to the bottom in pricing and I wonder how will it help his company.
How much is Lenovo’s profit margins? Lenovo is still running their company at very slim profit margins.
Motorola doesn’t design as much of their product as Apple. That’s a FACT.
Most of these Android and PC mfg are almost like a Non-Profit company. Which ones are running at 10% of higher Net Profit to Gross Revenue? NONE. They are at around 6% or less Net Profit to Gross Revenue.
Apple simply knows how to manage their business with over 20% Net Profit to Gross Revenue.
Why buy a company without their patents? Don’t you think that was a dumb move? I wouldn’t buy a company without their patent collection.
And how is Google monetizing the Motorola patents when they give Android OS away for free? They tried to sue Apple, but lost that case.
@Zach Schofield, @subconcious guy,
The problem is Motorola’s patents are all SEP junk patents that can only licensed at FRAND rates as several recent court cases which Moto lost badly have demonstrated. Instead of managing to wring billions out of Microsoft in one case, the court reduced the appropriate license fee to a couple of million dollars and similar attempts to extort huge license fees out of Apple (2.25% of the total cost of the *entire* iPhone if you please just for a comms patent that Qualcomm had already paid Moto the license for) failed dismally.
No, Motorola’s patents are definitely NOT worth $9 billion and considering Motorola has been losing a Billion dollars every year or so, there’s a strong case for saying Lenovo overpaid for Moto’s hardware division as well.
Oh, Moto is just upset that Ive got all of the attention in the New Yorker and he mentioned that the round watch face for a smart watch isn’t that great of a design because when we look at data like contacts, etc. the round case design makes no sense. A square screen is what works, a round one doesn’t allow as much data on the screen. It’s plainly obvious that the round face doesn’t work for a smart watch. For a regular watch, great, but for a smart watch with a screen it doesn’t. Case closed… Move on….
Motorola have done more to innovate in the last few years than any other vendor, including Apple: 1. Moto Maker (is a good idea, better than overpriced cases that enlarge your ‘slim’ phone.) 2. Always on voice control (Moto X). 3. Clean intelligent build of Android (try it and see). 4. Great narrow bezel displays. (Started on the superb Razr.) 5. Moto 360 ;) 6. Smart apps that adapt phone to location, such as when you’re in the car. (Works very well.) But, no matter what other vendors do, Apple have got 50% of the planet by the dangly bits, and the rest have to shout and scream very loud to gain attention.
If what you say is true, then Motorola should own at least the Android phone market, but they don’t. I have lots of Apple products; however, Apple doesn’t have me or anyone else by the dangly bits. I can choose any cell phone that I want, but Apple gives me a seamless experience across devices for sharing data. I’m willing to pay for that. Cleary, Motorola knows the difference between selling phones at a profit versus selling phones to move product/gain marketshare because the RAZR owned the market for a time even though it was an extremely over priced feature phone. And if it wasn’t for the iPhone, I’m sure RAZR would still be the major player among feature phones. What this looks like to me is sour grapes. There is no way that investors, who want to see profits, would let Motorola sell their phones at cut-throat prices unless the only way to sell their phones was by selling them at cut-throat prices.
Hey, here is an idea. Why doesn’t Motorola come out with a phone with two screens, a curve screen, a phone with a fingerprint reader, or a phone with 3D display? Oh yeah, someone already did those things and they worked so well.
I was referring to the recent and very nice Android RAZR. Unique in that it used an Intel processor too!
Never heard of it.
“We believe the future…” Love it. Most people familiar with this market don’t believe the future will include Motorola. Time’s a ticking and losing money can only be sustained for so long.
It’s like an executive at McDonald’s saying that a premium steak house charges outrageous prices. Except you know, McDonald’s actually makes money.
He’s not wrong. Most companies in tech (or almost anywhere) operate on 10% margins. Apple’s are roughly four times those of the rest of the industry. FOUR TIMES!
It was understandable when they were a niche company on the brink of bankruptcy. I was with them 1000% on pricing in those days as it was worth paying more to keep the Apple spirit alive and they are the best designed products.
Best designed or not however, when you are selling multiple hundreds of millions of products a year at a 40% margin it’s fairly impossible not to see that as gouging. I don’t see how someone can spin it any other way.
Apple products are often expensive because they have to be, because of the materials used. But giving us all a 30% savings by charging only the profit the rest of the industry does would be a welcome change.
Just as what happened in the PC market, they all pushed prices lower to out sell their competition – removing the decent margins they once enjoyed. To cut costs, they’ve all turned to “off the shelf” parts to build their products; SoC, battery, operating system, services, etc. Then they even contract out someone to assemble all those parts. The only thing they “design” are superfluous; the case and some OS-add on features. They have nothing to differentiate their products.
In the mid-90’s, as PC prices dropped, Apple had to make the same moves and it almost killed the company. A lot of people aren’t aware that Apple used to build all their own computers and they used to design and develop a lot of the parts used. (And they built their own assembly plants.) As sales declined, and prices continued to drop, is was no longer cost effective to do anything of that, the only way they even keep up was to cut costs outsourcing manufacturing to China. And they had to turn to more “off the shelf” components.
Today Apple pretty much develops most of their products in-house. Everything from battery chemistry to LCD technology, to SoC design, to manufacturing processes, to software development. Those costs never shows up in BoM sheets.
The high profit margin is a result of a) doing nearly everything in house, e.g. design, engineering, marketing, sales, etc., and b) providing all the hardware, software, and services.
Apple also hired their own engineers to design their own processors instead of buying cheaper off the shelf processors. And then there is the investment in buying Anabit for the controller technology, the Fingerprint ID sensor company, which they also design the fingerprint sensors which Motorola DOESN’T have. Plus Apple has to pay for their own OS, OS Development tools, Application development as well as the investment in the Data Center for their own iCloud service, which Motorola doesn’t have. So Motorola doesn’t have the same “eco-system” that Apple has, nor do they actually design as much of the guts of their own product. Designing the case is about the extent of what Motorola does. Oh, WOW.
Considering Apple’s units sold volume, all the R&D costs you describe are still less expensive than buying off the shelf.
I can prove it:
FQ1/2015
Revenue: $74,599,000,000
COGS: -$44,858,000,000
R&D: -$ 1,895,000,000
GM $: $27,846,000,000
GM %: 37.33%
With the sole exception of Samsung (and we don’t know how much longer they will buck the Android trend) all Android manufacturers are struggling to breakeven (<10% GM).
No Android manufacturer has the cash flow to fund R&D on Apple's scale.
Bottom line is that developing your own technology can be less expensive and result in better products. In the case of Apple this is imminently true.
The other reason why Apple retains better profit margin is because they sell a lot of their products through the Apple Store(s) on-line and brick and mortar, so they don’t have to sell that product at the discounted pricing when they sell through the reseller/distributors. I don’t know what the % is between what’s sold direct and what’s sold through the distribution/reseller channel, but selling products through the Apple Stores at MSRP is more profitable than selling solely through the reseller channel at a discount.
Another way Apple’s retains higher profit margins is by selling AppleCare service contracts, most of their competitors don’t sell these types of extended service contracts. Another way Apple retains higher profit margins is they don’t go after the ultra low end market. These smartphones that are sold for under $400 simply don’t have enough profits in them, especially the <$200 phones. Apple simply doesn't have to dump as much product because they manage their inventories. If you look at Amazon, there are old Android phones that list for $200 but because they are old and outdated, they have to sell them at a loss for $30 to $50. How can they make any money from surplus inventory. Look at Samsung, they got caught with tens of millions of unsold S5's sitting in warehouses. Apple does a much better job at managing their inventory.
Apple could retain even higher profit margins if they simply spun off iTunes Music Store into a separate company that was completely off of Apple's books entirely because the iTunes Music store retains more like around 5% Net Profit to Gross Revenue, so iTunes is actually bringing down the rest of Apple's business, if you will.
You are delusional! What major PC manufacture has 10% margin.
HP – 25% last quarter and the average is around 20%.
Now it is true that apple’s gross profit margins are twice that figure, but mostly on the sales of subsidized iPhones. There is no doubt that Apple will have to swing those margins down a bit over time but it is hard to justify price drops when you can’t keep your phones in stock.
All that being said, I think Apple missed a golden opportunity this year to start the price walk down. They could have easily released the 6+ at the standard $200 subsidized price and brought the 6 down to the $99, allowing the 5s to be their free with contract phone. At this point they will have to do a mid year correction on prices to bring down the price or bump the specs to maintain interest and set up pricing for the iPhone 6s which should slip down in price.
Hard to question this level of success but with more and more carriers making the cost of subsidizing more obvious to consumers Apple would do well to minimize their price premium.
HP wasn’t at 25% Net Profit to Gross Revenue. They sold $111Billion and retained $5 Billion, how the F is that 20% Net Profit Margin to Gross Sales. STOP LOOKING AT GROSS PROFITS. GROSS PROFITS DOESN’T MEAN ANYTHING. It’s NET PROFITS. That’s what the company retains after they factor in SG&A, Taxes, R&D, etc.
If you took away HP’s Enterprise Software and Services Divisions and just looked at the PC division, the PC division doesn’t make any money. the reason why they combined the Printer Division with the PC division is because the toner cartridges made money and everything else lost money. Well see what happens when HP splits into two companies where they have the PC/Printer division as a separate P&L. I think that division is losing money, their Software and Services makes decent profits, their h/w business doesn’t.
Apple doesn’t need to drop their prices until they have a new product release, which is what Apple does. If you are selling a product at X price and you can’t keep up with demand, there is no incentive to drop your prices. That would be dumb. Apple will drop the 6/6+ prices when they release their replacement models in Sept. which is when they’ll shift everything down a notch.
If Apple could build them fast enough, Apple could do polycarb versions of the 6/6+ and sell for a lot less, but Apple’s problem is production capacity. The simply don’t have the ability to increase production levels any faster.
Having read about what Foxconn is doing, they are planning on implementing 30,000 2nd generation robots to hopefully increase production capacity up to 3x their current production capacity, but it’s a matter of getting components to meet what they can spit out. If they can do this, then it might help lower their costs as they would get cheaper pricing from the component mfg due to increased component purchases and then they might be able to start dropping pricing and still retain healthy profit margins.
The thing that Cook has to do is not erode the profit margins because the analysts and shareholders will apply a ton of pressure to maintain their current profit margins. Apple doesn’t want to have to lay people off, which is what most companies do when they are faced with having to increase profit margins. That’s what Intel, Cisco, HP, Dell, Microsoft, etc. etc. have done to increase profit margins. Layoffs. Apple is too busy hiring more people and building more R&D centers, Apple Stores, Call Centers, Data Centers, etc. etc. Apple’s growing in the number of employees. Plus, it helps them be able to throw more money into R&D for future projects, acquire more companies, etc.
You can actually calculate that apple, at 700$ average phone prize (because they also sell older phones), at an average of less than 200$ profit doesn’t even make 30%. Apple makes a lot of money because people are willing to buy their devices at these prizes. That’s why they prize them like this, they want to make as much money as they can, which is understandable since they are not APPLE, they are $AAPL, people don’t get that… Also they made 93% of the complete Smartphone profits in 2014Q4, but not because they have so high margins, but because the other vendors have so low margins. And that’s not because the others have better prizes (mostly), but because they have to do so many commercials… Samsung makes no money (basically) because they have to advertise their phones so heavily so that they sell, because a lot of other vendors’ phones are superior (not especially Apple’s, also HTC, Sony, …)
lol 10% margins for most tech companies? this needs a source. that can’t be right.
I just got my first Moto Smart phone, the Droid Turbo and it is Amazing. I have plenty of Apple products and love them, but Motorola is on the right track here, even my kids who have iPhones love my Droid Turbo (the battery charges in 15 minutes!). iPhones are too expensive and I believe this type of device is easily on par with the iPhone and provides me more choices as an end user.
Mmmm … I think it’s an ugly device.
Its not about feature comparison – Apple provides an experience that is different from competition. Its not just iPhone. Think about your Turbo Droid – what if it breaks or your specific issue is not solvable by Google search. Where would you take it? Apple has stores – its a piece of mind and commands premium – small details create a canvas. In a lot of ways Apple is a status symbol, its a brand. Building a brand in what became a commodity market is enormously difficult. Just look at their last quarter result – they operate on upward sloping demand curve defying common economic principles: the average iPhone price went up, but demand rose too! No one else has it in the industry. What it tells you is that when comes down to Apple products its not a decision oh I can buy something like that cheaper – its a decision to become an owner of the brand. Kudos for owning Apple products btw – they are awesome:)
Actually, you have less 3rd party products available for Android phones, you don’t have the FingerPrint ID reader, and you don’t have as many apps available, and you aren’t capable of running 64 Bit apps moving into the future, so when Android gets off their rear ends and starts to spit out 64 Bit apps, you’ll have to replace your phone. Apple’s already got pretty much all 64 Bit apps moving forward and they have a large portion of their user base using 64 Bit phones. In a couple of years Apple will have essentially 100% install base of 64 Bit model phones as they remove the 5C from the price list at the end of this year and then Apple just supports only 64 Bit while Android has to support 32 Bit phones for a long time. I honestly don’t know how fast 64 Bit apps will get on the market for Android. I have also had conversations with several app developers and they typically release iOS apps first, then Android. So they have more incentive to release iOS apps first because they sell more apps through the iOS channel than Android. Plus, you don’t get as many years of OS updates. Android only supports UP TO 2 years of OS updates on any new model phone as per their website, Apple typically gives you at least 4 years of OS updates from the release date of a new product. Just saying…….
“Still, it’s probably not good either for Motorola to criticize Apple’s profit margins … when you remember that Apple made over 80% of industry profits last year. Their strategy is clearly working.”
Do you consciously distort non-Apple people’s views and go OT, or is it more like a disease?
I mean man. Here you have this Motorola guy basically saying Apple are dicks, and the best thing you come up with, is “but teyh meik moar monies lul”. Daaaaamn. Capitalism is killing our souls :(
(I’m not as angry as my tone would suggest, it’s just that the “but they make money” argument is… aaah!)
(And this habit of the tech industry to make fun of something because they didn’t sell it first, is tiring.)
/runs
The Wall Street Journal has updated Osterloh’s status to “Jelly”
Apple sells hundreds of millions of iPhone’s and renders Rick Osterloh’s comment irrelevant.
I’d hardly consider the Apple Watch to be customizable. The only thing you can change is the wrist strap. It’s like saying the iPhone is customizable because you can buy a colorful case.
You can change a lot more than that, open your eyes.
I believe he was talking about customizing hardware. The Watch comes in 3 different finishes, that’s it. The only other thing you can change and customize is the wrist band.
The Moto phone, well you can customize the color, material, finish, for the battery cover, front panel, and who know what else.
The clock, home screen and colors are all customizable.
“It is bit ironic that Ive chose to criticize this particular feature of Motorola, given that the Apple Watch is the most customizable product Apple has made for a long time.”
You’re comparing Apple’s selection of aluminum, steel, and gold watches paired with a carefully curated selection of polymer, leather, and steel bracelets to Motorola’s offerings of cheap plastic phones molded in the customer’s choice of Crayola Crayon colors?
Cheap plastic? I’m holding my Moto X right now and all I see is metal, glass, and wood. Please enlighten me and tell me where the plastic is.
Hey Rick, is that the best you got?
“It is bit ironic that Ive chose to criticize this particular feature of Motorola, given that the Apple Watch is the most customizable product Apple has made for a long time.”
Not really “ironic” at all.
The available watch bands for the Apple Watch come in preset materials and colors.
Unlike the Motorola “Design Studio”, you can’t change the colors of the existing watch bands offered by Apple. You only have the choices that were already designed by Apple.
The same is true of the iPhone 6. You have three color choices: silver, gold, and space gray. You don’t have a choice to “customize” the iPhone 6 by mixing and matching the colors of your choice.
And the same is true of Moto Maker. You have 26 choices for the back of the Moto X: 17 colors, 4 woods, and 5 leathers. These were designed by Motorola and you can’t change them.
“Motorola president described … iPhone prices as ‘outrageous’ ”
He should be ecstatic that Apple charges ‘outrageous’ prices for the iPhone. If Apple were to charge prices competitive to Android devices, Motorola (not to mention the rest of the Android market) wouldn’t be able to sell ANY handsets.
My take is that Android manufacturers are quaking in their boots at the prospects that, tomorrow, Apple is going to announce an across the board $100 price reduction on iPhones.
Remember how much of a pain in the a** it was for Apple to reduce the price of the original iPhone when they realized they were making too much money? Customers who bought the phone at original price were pissed when they reduced the price. I mean – isn’t that the Apple curse?
“Uh, how do we piss off our customers?”
“Did you try discounting the price of the phone and giving them a free U2 album?”
“Great idea! That’ll really piss them off!”
The Moto X is about the same price as the iPhone 5c/5s. Their Nexus 6 is the same price as the iPhone 6 and 6 Plus.
Am I missing something here?
“It is bit ironic that Ive chose to criticize this particular feature of Motorola, given that the Apple Watch is the most customizable product Apple has made for a long time. ”
But Apple (Ive) ‘painstakingly selected’ what are your options!
Also, Henry Ford also gave you the full option to select your Ford T’s color… as far as you pick black!
They can be customizable and try to be cool and cheap all they want to be, but as long as it runs Android it will be a failure. Apparently people are willing to pay Apple’s supposed “outrageous prices”, even in China where everyone is supposed to be poor. Go figure!
Apple heydays are numbered for two reasons.
1. Market is reaching maturity and saturation.
2. Competition can do now what Apple does at better prices. it was not the case 1 or 2 years ago though.
Having recently ventur in Android land for the first time I felt like Apple products are indeed overpriced.
Still Apple has a small edge in quality and consolidated simpler experience but I am starting to ask if that is enough to justify paying double.
Pretty much all the relevant Apps are now on Android, a system that offers flexibility and incredible options for better price.
Just to think that with iPhone the only Watch to choose from is the Apple Watch makes me run faster to Android.
Spotify, Facebook Messenger, Google Maps, Evernote, Photoshop, Word, you name it, it can be done with Android Phones and Tablets.
I’m not familiar with Android, but does it have a competing ‘Find My iPhone’, Activation Lock, iMessage, Handover, TouchID, curated App Store, system integrated Facebook/Twitter, Accessibility features, OTA system updates on real ease date et cetera?
Android fans, who like to troll on this site, will argue with you all day long on matching up features. For every feature you mention on iPhone they will name 3 others that Android has or how Apple is playing catch-up with something Android had years ago. Its an old and misguided debate. As I mentioned in the reply above its not about features – its about brand recognition and experience. No Android maker including Samsung commands experience Apple provides. That begins with Apple store.
Im an Android user but I use apple computers and respect what apple brings to the table with ios. But I have extensive experience in both platforms.
1. Find my iphone = Android Device Manager
– ADM has a few features Find my iphone doesn’t
2. Activation Lock = Android Device Manager
– its built into the same app as #1
3. imessage = Google Hangouts
– Hangouts actually has an upper hand since its cross platform and can be used on Windows or Mac or Chrome Browser.
4. Handover = nothing but basic cloud functionality
– Googles apps and services are technically Android’s “Stock Apps” and all of their apps from Google docs, sheets, slides, gmail ect will all let you pickup where you left off, also Pushbullet is an extremely simple app to setup that is More powerful than handoff and continuity as its cross platform.
5. Touch ID = Trusted Devices/Location/Wifi
– An awesome feature on Android Lollipop, My LG G watch is connected to me Nexus 5 via bluetooth and I added it to my trusted devices list meaning if I am within a few feet of my phone I don’t have to enter in my lock pattern to unlock my phone because it knows my g watch is a trusted device it also lets you set trusted locations (such as your house) and trusted wifi networks, it also works on Chromebooks not just Android. Touch ID is cool but it still requires a passcode so anyone can bypass the scanner and just try to figure out the code.
6. Curated App Store = Yes
7. Twitter/Fb integration = Yes
8. Updates = Very different from ios.
-Android OEMs including google put most all their apps in the playstore so they can update them anytime without having to issue updates Every time. Also sometimes getting the latest update is not always a good thing as many people experience issues with ios 8 updates.
#8 is a little tricky honestly its not a definitive answer especially since OEMs provide their own version of Android which means the same update with affect every device differently depending on the OEM.
1. Not even close
2. You clearly have no understanding of why Apple is successful. Android can do all the apps, but without Apple logo it is commodity and an after thought
flagship android devices are just as pricey and most of the advertised features are useless gimmicks you are better off without.
That would be a perfectly fine strategy if it didn’t rely on android. Although I don’t necessarily blame them for that.
*LOL* Capitalist Motorola president Rick Osterloh is criticizing Apple’s taking advantage of free market forces as if investors don’t exist and as if he’s a Socialist.
If my memory serves me correctly, Motorola was charging $579 when the Moto X was first released. That’s only $70 less than iPhone 6. It’s only when it realises it cannot sell Motorola smartphone at such price did it began selling it for much less (they were moving like 25,000 phones a month at first).
At some point too much customization becomes dangerous, right myspace?
This would have been news in 1998 when Motorola was relevant
Let’s not forget when this Moto Maker thing first came out the tag line was something like “Designed by you in the USA”. They were basically making fun of Apple’s “Designed by Apple in California” tag line, presenting it as something pretensious. I’m sure Ive was none to pleased with that.
People that claim that Apple is overcharging is just some pathetic attempt to mislead people. Look at a simple supply/demand curve. If Apple can’t make their products fast enough and they are continually growing the number of units they build and sell, then they are priced to what the market will bear. That’s not overcharging. Over charging is when you put a product on the shelf and you can’t sell any because people won’t pay the price and you can’t keep your business profitable.
Actually, I would prove that Motorola are the ones that are overcharging since people aren’t lining up to buy their products that listed MSRP as Apple, and then UNDER CHARGING because they can’t run at a similar profit margin as Apple.
If Motorola charged the prices they need to charge to get equal profit margins as Apple, no one would buy their products . Motorola is overcharging from the standpoint that they aren’t selling as many units as Apple because people don’t see the perceived value in buying their products in similar quantities as Apple to pay what price they do charge. And undercharging because they can’t make similar profit margins as Apple. Motorola simply isn’t a well run company and this guy is being retarded about it.
If Apple dropped their pricing, they would have a FLOOD of people more than they already have and they simply couldn’t catch up to the demand unless they increased their production levels, which is something that’s not that easily done in a short period of time. Apple is already trying to increase production levels and it takes time to do that. Apple can only make a finite number of units a year as is. They increased production levels by 40+% from the previous year and they still took over 4 months to catch up to demand. Apple’s products are OBVIOUSLY priced to what the market will bear.
Would I love it if Apple dropped their prices? Yeah, but I would have to wait even longer to get one because of the increased demand and they can’t increase production levels as fast.
I’m waiting for all 4 major carriers to get rid of contracts. When consumers see a $650-$950 sticker price instead of the $200-$500 one they are use to seeing, Motorola will be the one laughing
When do you expect that will happen?
Tmobile already did, att and Sprint has been pushing financing plans
I kind of miss all of the different colors of the (Ive-designed) iMac, at least until they started to go off the rails with designs like “Blue Dalmatian” and “Flower Power.” ;-)
Perhaps he would be embarrassed by non-Ive-approved colors for products like the iPhone 5c?
And yet Apple seems to approve of user customization:
http://viptest.9to5mac.com/2014/07/21/apple-airing-cool-new-macbook-air-tv-ad-the-notebook-people-love/
Tell them Motorola! Big profits might be good for company but not for consumer! I am not a sheep! My $350 Oneplus One and $80 lg g watch are great! I am not going to pay $1200 for an iPhone 6+ and apple watch
Android camp usually forgets to mention why they can make some things cheaper than others. It is because a customer keeps paying the price after initial purchase with his/her privacy.
Google ecosystem keeps your user experience busy by hitting you with targeted adds, collected by your behavior using any Android device.
With Apple you really are free
I can ensure you that most Apple users use google as there search engine. I think an article was published way back that said google made more money off of Ios than Android.
So if you hate Google so much then why do you use there services on Ios? They still get your money and your info.
Apple also has targeted ads — https://developer.apple.com/iad/. You aren’t anymore ‘free’ on iOS than on any other platform. That’s why Tim took a lot of heat from his peers when he asserted that on others’ platforms, the user is the product. It’s only going to become more obvious once Apple Pay well and truly takes off.
I completely agree with Jony. You can let your customers design the Citroen Cactus. You wont´if you are Ferrari… That´s it. I gess there is the same gap between Moto and Apple…
Yah and moto phones are crap let them fix their phones.
Also it’s hilarious that Motorola is saying that Apple charges outrageous prices when the Nexus 6, made by Motorola, is $683 retail through AT&T. Higher priced than an iPhone 6.
But iPhone 6 isn’t the main competitor the Nexus 6, is it? The Nexus 6 is a phablet, just like the iPhone 6 Plus and the base model of that device retails for ~$650, which is pretty much useless since it’s got only 16GB of storage. The base model of the Nexus 6 has at least 32GB of capacity at around 33 bucks more.
I can understand that you’re an Apple fan — I am too or I wouldn’t be reading 9to5mac — but do try to make the appropriate comparison instead of comparing apples to lemons (see what I did there?).
The bit in Jony’s profile about the Toyota Echo have me giggles because I’d just seen someone driving one with an Apple sticker on the rear windshield. I wonder what that person would think knowing that the lead designer of a company he (or she) obviously admires thinks that his (or her) car’s ‘insipid.’