Firstly, i believe everyone should understand that iPhone is in the same product line as of iPod and not a different product. You can even say a new product in the iPod line as it has iPod built-in.
So, when you have different iPod models at different prices (every model having a unique feature in it)... same goes with the iPhone. When you say, Apple should have priced it at $300 or $350.... sure they will sell more units but what about iPod video sales which sells at or around $300 or $350.
Yeah, so my point is if it would have been a phone without an iPod they would have sold it at the other pocket-pc phones range. And lastly, as everyone said Businesses are there to make profit... thats true and you have to take into consideration of your business model/portfolio.

Aren't they afraid this is going to cut into their ipod sales? At any rate, it is not very appealing to me. I am sure that there will be much more interesting products available when I am ready to renew my Verizon contract this summer.

Ok, so imagine that you are manufacturing a certain product which costs you $250 to make.
Would you rather sell it at $300 to 3,000 people or sell it at $500 to just 1,000 people?
Do your math ...

You know, there's this thing called "Price elasticity of demand" (see http://en.wikipedia.org/...ce_elasticity_of_demand) but I don't think a lot of people know about it ...

Oh, no argument there. That wasn't my point though. I was simply commenting on how much of the blog content seems to indicate disgust at the idea of Apple trying to make a profit. The more profit, the more evil. It's an ignorant perception of business and profit in general. "How" they get maximized profit is up to them obviously.

Amazing how people get upset about how much profit Apple will (possibly) make on this. Like they're some kind of social program and not supposed to make a profit. They're a BUSINESS. Businesses exist to make a profit. Period. I'm happy they're making a profit. Profit means growth and jobs and usually brings others up with them (suppliers, retailers, etc.) Good for everyone. I hope it brings record profits for them. Maybe that'll get the competition off their asses and actually trying to innovate for once.

I'm getting really sick of watching everyone copy each other and pounding their chests in pride. It's dull and boring. I hope we see more innovation and cooler gadgets. The more they try to top each other, the better the products and cheaper the prices.

Why can't a business be happy with a simple 1% profit? Take the cost for the hardware, add in the overhead (you know, salary, external supplies, and other costs) and mark up the product to where you make just 1% profit.

Then market that product to a wider audience, and you end up making more money in the long run! Apple, Intel, and Microsoft are so greedy that their greed will be the demise of their destruction!

I'd be happy with making 1 cent profit on any product I would release (after gross cost of course). Since I don't have any capital to really follow through with my Dream, I have to share with the world the Truth, so that all of you realize how greedy and corrupt these companies really are.

1%??? You'd have an argument if you said anything between 5-20%.

On such a high priced item, I think 53% is crazy. I think a 10-20% markup giving them a $30-60 profit per unit would be pretty reasonable and still keep it close to $300. Sell it in volume and they still make a killing off it.

But apple always has high margins - why do you think all their stuff is so expensive?

Exactly. To be fair to Apple though, check out their most recent line of Macs and Macbooks. The prices on those things are darn competitive.

are u stupid devinelogic? u talk like u actually know anything about the business world. yet u seem to know nothing. do u have any idea how big apple is? can u spend years in revolutionary devolpement making the iphone and put up the start up capital to produce them all? so if it costs u $300 to make it u say they should sell it for $303. ahahaha. how can prifits like that pay the worker's wages that work for apple? they have families that they support too. and apples has always made cutting edge products. if they tried "surviving" aka: sinking like a brick in the water. on 1% profite that company would go bankrupt SO fast. 1% doesnt exactly satisfy stock holders either.

u really do have no idea how business works do u?

maby a 50% is a little exessive but not really considering the product. and u cant group it in the same range as an ipod. they would be competeing against themselves for their own sales.

Dubious report at best. How can they assess cost for components which have no precedent in the market? There are quite a few new components and assembly processes involved for which the costs are not known (specifically). This is a wild guess. And so what? Businesses exist to make PROFIT. Anyone that thinks others aren't interested in making profit is just stupid.

Typical. "Apple" and "over-priced" have been synonymous for a long time. Although, lately, their computers have been very reasonably priced.

I guess this is a little bit of a surprise after all.

So, let me get this straight... we're actually trusting iSuppli's numbers when they actually haven't a clue as to the components in the iPhone?

And why is it that this thing is being reported as overpriced, when there are more costs involved in the creation and manufacturing of the iPhone than just hardware procurement and assembling costs? You know, like the paying the engineers who made it, the programmers who wrote its interface, the graphic designers who installed its GUI, the shipping costs, the marketing costs, and so on?

"Hefty profit" my ass, Betanews.

Please. Don't cry because your precious Apple got some bad press.

Everything iSuppli analyzes has development and marketing costs. Their analysis is purely about cost per unit (materials) and profit per unit (sales). They did the same thing for the PS3, the Wii, and the Xbox 360. I didn't see you whining on those stories.

How about this; the reason I didn't bother posting on those stories is because, gasp, THEY AREN'T ON THE FRONT PAGE AND ARE THEREFORE NOT RELEVANT AT THIS TIME. Imagine that: comments might retain relevancy only within a specific period of time!

My issue isn't really with iSuppli, though I still think it's quite ridiculous how they can supposedly present the cost of an iPhone when they have absolutely no idea what components are in the thing. My issue is with how their breakdowns are commonly reported, as if the hardware cost is the final cost. Just look at Betanews' writeup: they claim the thing has a 50% profit margin, simply by subtracting iSuppli's estimated hardware cost from the retail cost of each version of the phone. Does that not strike you as, at the least, slightly irresponsible?

I believe you're the one whining.

Agreed. The article does not take into considerating indirect costs (marketing, packaging, shipping, retail overhead, support, parts and repair preparation, licensing and federal registration fees, etc. etc. etc. etc etc.) Anyone who works in that industry would know these figures are out of thin air.

How about this; the reason I didn't bother posting on those stories is because, gasp, THEY AREN'T ON THE FRONT PAGE AND ARE THEREFORE NOT RELEVANT AT THIS TIME. Imagine that: comments might retain relevancy only within a specific period of time!

lol You're brilliant. Of course they're not on the front page today. They were though, less than two months ago I believe.

I believe the point I was trying to make was that people aren't brainless. Everyone knows there's more costs than the materials. But that's not what these reports are for. They are only concerned with the hardware. For some reason, it looks like you think you're the first person to realize this.

Try some breathing exercises. Go out for a walk. Enjoy nature for a while. I think it will be good for you.

"For some reason, it looks like you think you're the first person to realize this."

Based on your replies, I am. Do you even understand the point I'm trying to make? I doubt it, because you're just brushing me off without actually addressing what I'm saying. Here, I'll repeat myself:

It is incorrect for Betanews to claim that Apple makes a 50% profit margin on the iPhone, as the site is making that claim based solely on the estimated cost of manufacturing the hardware.

Do you understand now?

I understand much better than you do. I'm telling you that everyone already knows what you're trying to tell them. Of course those numbers aren't the final profit. But they are the profit per unit sold. And that's all the iSuppli reports are ever supposed to be.

...do you understand now?

If everyone already knows what I'm saying, then why is Betanews reporting it as if they didn't?

I am definitely leaning towards an Apple notebook, once I discovered a $59 program that can run any Windows app by using software to convert or translate the .dll's. I was astounded that no one really talks about this program.

I saw a demo of Office 2003 being installed and it was flawless.

You don't need a Windows license and you are way safer from trojans and virii with a Mac. I'm there.

Care to name this iProgram? =p

Maybe they could lose those offensive and ridiculous PC vs Mac commercials now they have tons of money? Surely all those highly fashionable, nerdy - yet edgy Mac drones have bought everything they have on offer at this stage?

Those ads are in line with Apple's marketing strategy: hate campaign.

If you know about those ads, then those ads have worked! Remember, the purpose of ads is to grow awareness of a brand. Doesn't matter whether you like it or hate it, both are memorable!

What's the matter? You don't like the Apple cult zombies? Come on... at least they're entertaining. =p

I bet HTC and the like are kinda annoyed by the iPhones massive publicity. Everyones treating it like its a revolutionary idea, but PDA-phones have been around for years, have all if not even more features than the iPhone does and costs less :P

By the time this gets to market, the price will drop. It has to; it's uncompetitive as is...

I don't believe it has to be competitive...ie., affordable.

This is a market for status seekers, who would spend to have.

Farmer Joe, who uses a cell phone won't have an interest.

College kids will want it, high school kids will want it, "gangsta" wannabbes/rappers/drug dealers will want it, women will want it, men who need to over compensate will want it...etc

But, as Apple's***ory goes (and as reflected in the article), in their market and their products they place a high margin that equates to double the cost of a comparably equipped PC.

Where PC makers make $10-50$ on a system, Apple makes $1000-$1500. The same will go for their new phone. Their existing consumer base will buy these items regardless of overpricing.

"Apple makes $1000-$1500." Apple runs a high margin business but not that high. Many of their products aren't even that expensive. The typical margin is probably closer to $300-400 which would still be very good for a computer. The only systems which Apple sells which would have margins in the thousands would be their Mac Pros and the Xserve systems. While they are highly profitable products the sales volume of those items are very small in comparison to the iPods and iMacs.

The question you should be asking is not whether people will want it but will they be willing and able to purchase the iPhone at those prices. A lot of people want a BMW but that most of those people are either unable or unwilling to pay the marginal cost over an average car.

The other problem I see is their choice of partnering with Cingular(soon to be ATT Wireless). For a lot of people I know that is simply a deal breaker. Cingular has a lot of issues with customer service in recent years. Some people live in areas that have poor or non-existent coverage. Others may have service plans that Cingular simply can't come close to matching and are reluctant to pay the premium for years.

I doubt it will be a flop like the Rockr E1 was but unless the cost comes down it is unlikely to be a overnight success.

Hmmm thats NOT considering what kind of cut AT&T/Cingular takes from the pot. Exclusive deals come with a big price tag.$$$$$$$

Assuming they can sell then.

I'm sure it will flop, it's a bad phone, and a bad music player...

Just like a crap TV/VCR Combo, People are better spending their money one seperate devices..

HAHAHAHAHAHAHAHAHAH NOT!

HAHAHAHAHAHAHAHAHAH NOT! NOT!

Latz, SB

You're joking, right?

I agree that mixing the two is a bad idea - I certainly prefer them to be separate devices.

Not having seen it yet, I can't comment on how it is as a phone and I assume its basically an ipod when it comes to music. So I think it could work well - I just know I wouldn't have any interest in it.

While I'm not confident the phone will flop, I don't believe it will be the ultra-popular device that all the hype is saying it will be.

I think it will sell just as well as any smartphone when it comes out. ...maybe less because of its price.

It won't flop, because people will buy into the hype... I refuse to buy it, as I think it will be useless. Every dweeb out there has a phone and mp3 player already.

I am looking for a phone, mp3 player, camera, access to email, and a free prostate exam.