Tag: marketing

Posted on

iPhone 5c: C is for Cheaper

I believe the iPhone 5s is a good phone. The iPhone 5c? Ummm let’s just say the iPhone 5s provides the better value and that’s where Apple’s emphasis is on. The mid-tier and low/free-tier phones are there only to provide coverage. But here are the numbers as to why I think Apple came out with the iPhone 5c.

Below is the pricing before the iPhone 5s arrived,  the pricing if Apple had’t released the iPhone 5c, and the current pricing.

  Subsidized Selling Price Unsubsidized Selling Price iSuppli Est. Cost Gross Margin Gross Margin % Gross Margin % Change
IPhone 5 64GB 399 849 238 611 71.97%
IPhone 5 32GB 299 749 217 532 71.03%
IPhone 5 16GB 199 649 207 442 68.10%
iPhone 4S 16GB 99 549 196 353 64.30%
IPhone 4 8GB FREE
iPhone 5S 64GB 399 849 218.3 630.7 74.29% 2.32%
IPhone 5S 32GB 299 749 208.1 540.9 72.22% 1.19%
IPhone 5S 16GB 199 649 198.7 450.3 69.38% 1.28%
IPhone 5 16GB 99 549 207 342 62.30% -2.00%
iPhone 4S 8GB FREE
iPhone 5S 64GB 399 849 218.3 630.7 74.29% 2.32%
IPhone 5S 32GB 299 749 208.1 540.9 72.22% 1.19%
IPhone 5S 16GB 199 649 198.7 450.3 69.38% 1.28%
iPhone 5C 32GB 199 649 182.85 466.15 71.83%
iPhone 5C 16GB 99 549 173.45 375.55 68.41% 4.11%
iPhone 4S 8GB FREE

If Apple hadn’t released the iPhone 5c, they would have taken a 2% reduction in the gross margin of their mid-tier phone. But instead with the 16GB iPhone 5c they were able to pull off a 4.11% increase. Or 6.11% if compared against the alternate scenario. I don’t know about you, but I think 4% is pretty good! Notice that they were also able get modest increases in their top-tier phone gross margins.

This increase is mainly due to savings in the casing. That’s why the iPhone 5c and iPhone 5 are practically the same except for the casing. Apple bumped down their previous top-tier phone as they normally do but this time changed the casing. Plus, given the similarities between the iPhone 5s and iPhone 5 casings, there are production line benefits for the top-tier phone.

People were disappointed by the price of the iPhone 5c. It certainly wasn’t cheaper for them (or me). But it certainly was cheaper for Apple. To manufacture.

 

Posted on

Apple Pricing

The 128GB iPad is now available on the Apple Store. And don’t you say “640K 64GB ought to be enough for anybody.” In any case, that’s not what I want to talk about.

ipad128gbpricing

Much has been said about the 128GB iPad but what’s interesting is Apple’s pricing. Every additional $100 get you twice as much memory as the previous model.

This pricing applies not just to iPads but also iPhone and iPods. Some would say you pay more for less with Apple products. But if we just look at the pricing between the models, you pay less for more. Is that good pricing strategy? Yes, it is!

Posted on

Apple iPad mini: Make Mine Mini

As expected Apple announced the iPad mini. They also announced the new iPad Gen 4 earlier than expected. This is primarily due to the rapid advance of the competition. Going forward, we can expect such shorter cycles not just from Apple but from its competitors.

But back to the mini. Mini it is. It’s, at first glance, the iPad 2 cut down to size. It’s smaller, thinner, and lighter. The rear camera is better at 5 megapixels. So is the front camera at 1.2 megapixels. But everything else remain the same: processor, memory, networking, even the resolution of 1024×768 (more on this later).

By creating the mini, Apple covers the market for a less expensive table. But even then, it’s positioned at the pricier end signifying that it is and still a premium tablet. It is more expensive than the Google Nexus 7 and the Amazon Kindle Fire. This is probably intentionally for the prestige and the bottom line.

On the next cycle, when a new iPad (Gen. 5) will be announced, the iPad 2 will be retired, the Gen. 3 will drop in price and take it’s place. During that cycle (or on the next depending on the LCD panel supply chain), the new iPad mini possibly would have a Retina display.

And by keeping the display at 1024×768 , Apple takes advantage of existing iPad Gen 2 apps. In the future, an iPad mini with Retina display will take advantage of existing iPad Gen 3/4 Retina apps. It avoided (and will avoid) further fragmentation of it’s iOS lineup.

Something that simple demonstrates why Apple is a great company.

Posted on

Jabee

Jeanne likes Jollibee. Whenever he sees the Jollibee statue or sign, she would say “Jabee”. This evening as we were driving off from a kiddy party at Shakey’s, she said “Jabee”. At first, I thought she was confusing Shakey’s with Jollibee. But true enough there was a Jollibee sign and she saw it way before, and faster than, we did.

I wonder why kids like Jollibee. Must be that rotund face and big eyes. But as a marketing tool, it sure works!

Posted on

Cole Haan Everywhere

I was reading a magazine when I saw this ad for a Cole Haan shoe. The shoe was pretty nifty-looking so I checked the Cole Haan website. That was a week or two ago. Now, I’m seeing Cole Haan ads on some of the websites I go to. It’s just a small illustration of how an integrated marketing system works. You can just imagine ads in trimedia resulting in a visit to a product’s website which is then recorded and triggers ads related to the product when you surf, use email, or chat. And it could also be the other way around, you could surf, email, or chat, and mention a product and it triggers ads shown or spam sent to you. Now who has such a scope? One company comes to mind right away: Google.