kitler53 said:
SamuelRSmith said:
While I often argue that the success of such products (particularly in our current economic environment) is down to the distortion effect on prices thanks to inflation, a major component of the iPhone's (and other smart phones') success is the contract model. If you were to explain to people that they're dropping $600-$700 on a phone, most would certainly reconsider. When that price is hidden away in a monthly bill over the next two years, however, the situation completely changes.
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yeah but if i were to get a none iphone all i save is maybe $100 bucks on the initial purchase 'cause all the androids and window 7 phones come with the same contractual obligation. The big difference to apple is they forced the carriers arms into giving up a portion of that contract cost to apple while other manufacturers are just getting income on the initial purchase.
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Apple doesn't actually get fees from the contract anymore, and they haven't for quite some time. But they do get a bigger subsidy than other phone markers. The iPhone is so in demand that a carrier without the iPhone is a carrier that's bleeding subscriptions to the competition, so Apple can extract a $400 subsidy from carriers while other phone makers get $200. Combine that with the scale and efficiency of only building a few phone models and it allows Apple to pocket gigantic profits.
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