[NewsPoster]

Like many people I am still coming to grips with the reality of Apple's product announcements yesterday after months of rumors (some accurate, some not) leading up to the official unveiling of iPhone 5s and iPhone 5c. While Apple's pricing for the iPhone 5c caught many by surprise (it is not a 'cheap' or a 'budget' iPhone), its pricing of the iPhone 5s is worth scrutinizing too. Although Apple's pricing for the iPhone 5c and iPhone 5s varies from market to market, it is interesting to note than in Australia, an iPhone 5s 64GB will retail for $30 more than a MacBook Air with 128GB.

Yes, you read that correctly. Apple will be selling the new 64GB iPhone 5s in Australia for AU $1,129 off-contract, while at the same time, it is also selling its 128GB 11-inch MacBook Air in Australia for AU $1,099. Given Apple's pricing structure, the only circumstance I would consider getting the new iPhone 5s is if it were subsidized on a two-year plan. However, I don't like entering into contracts with telcos and prefer to buy my phones outright and recycle them through eBay whenever I choose to upgrade.

As a yardstick, Google is currently running out the 16GB Nexus 4 in Australia for AU $299 - it was originally just AU $399 to begin with. By comparison, the 16GB iPhone 5c has been listed as starting from AU $739, while the 16GB iPhone 5s has been listed at AU $869 (like the Nexus 4, these prices are inclusive of Australia's national 10% Goods and Services Tax). When you starting comparing the iPhone 5c, or even the iPhone 5s against the Nexus 4 from a 'bang for your buck' perspective, the Nexus 4 looks like a bargain. Ironically, Apple's own MacBook Air also starts to look like a bargain too.

Time will of course tell if Apple has priced its iPhones correctly, in Australia as well as its numerous other markets around the globe. You could point to the iPhone 4S, which is now the entry-level iPhone as an alternative. However, even though it is now three generations old, Apple is selling the single 8GB model off-contract for a whopping AU $529 - or AU $230 more than the just-turning-12-months-old Google Nexus 4 (with its 4.7-inch 720p display, quad-core processor, and double the storage capacity).

I don't know about you, but I would sooner spend my money on the MacBook Air than the iPhone 5s. It may offer a desktop-class 64-bit A7 processor, but is it really worth a desktop-class price?

By Sanjiv Sathiah

The view presented here are those of the author alone

How does the value equation stack up for you?

[pairof9s]

Can't really carry a MacBook Air in your pocket down the street, or answer a call from a friend while driving, or take a quick photo at the concert....functionality has a price. Still your point is well taken...the non-contract price on any smartphone (have you seen the Galaxy S4 or HTC One price?) is outlandish. To me, I see it as collusion w/ telcos to insure you buy into a contract to get the phone.

[Jeronimo2000]

This is one of the most pointless comparisons ever.

[Spheric Harlot]

^ agreed. Gotta get some weird angle that nobody else has thought of, no matter how pointless it may be.
How many cheeseburgers could you buy from that money? Or salad dinners?
Would you rather live for two or three months, than buy an iPhone?
Let's write an article!

@Pairof9s: You think getting the power of a ca.-2005 laptop in a couple hundred grams in your pocket, with a 24-hour battery life, is easily done cheaply?

[JackWebb]

A good way to analyze this would be to see what the profit margins are on both products. If the profit margin is higher on the iPhone and it sells well, then the price is maintained by that demand. The abstraction of cost by paying it through a contract certainly adds to the ability to charge more. I practically need both products. I will spring for a new MacBook as I think I'm getting a better value while settling for an older iPhone.

[MacScientist]

One of? This is near the top of my pointless fan post list.

[Inkling]

Some might want to move in the direction I'm moving:

1. A budget cell phone that's just for calls. Cost: free to about $50 without a contract.

2. A used iPhone to run apps, listen to podcasts, take pictures etc. Since it isn't used as a phone, it doesn't need to be unlocked.

Get a pre-pay plan and you can get your cell minutes down to under $10 a month. Use a free VOIP app to make calls that are likely to be long.

There are better ways to spend money than on a pricey toy that needs replacing every two years.

[pairof9s]

Originally Posted by Spheric Harlot 

@Pairof9s: You think getting the power of a ca.-2005 laptop in a couple hundred grams in your pocket, with a 24-hour battery life, is easily done cheaply?

That could be stated about any new technology...was it easy to create a flat, LED HDTV? Was it easy create a laptop computer that matched a desktop computer, display & periphs? All technology evolves then becomes a commodity which is reflected in price reduction. You'd think after 5 years, the price of smartphones would reflect that too, like HDTVs and laptops.

I'm not stupid...I understand this is the law of supply & demand, for which smartphones are in high demand. Still the price seems too high in comparison.

[Spheric Harlot]

The price of smartphones *does* reflect that.

You can get smartphones that use technology from 2009 for next to nothing.

The point of things like the iPhone 5S is that they work at the technological limits given the price point — the opposite of what you're talking about.

[lvavila]

Nobody said buying an iPhone off-contract is a mainstream need. There are contracts you can buy into for 2 years and now 1 year. So back to your question, can I buy a Macbook Air for $299 (Same as an iPhone 5s/32gb)? Good thing I already have an Air and Retina. Time to upgrade my iPhone4s.

[psdenno]

The next big meaningless debate could be "Should I buy a car or a bicycle?"?
They both get you where you want to go and each has its own advantages and disadvantages. Cost differential is ginormous. What to do, what to do. time to move on.

[coffeetime]

It depends on what you need.... not want! It sounds like the author has extra $1200 in his pocket and can't make a choice. If you already have a functional MacBook and iPhone, keep the money. If one of your equipments is very old and it slow down your work flow, then spend money on upgrading that equipment.

[pairof9s]

Originally Posted by Spheric Harlot 

The price of smartphones *does* reflect that.
You can get smartphones that use technology from 2009 for next to nothing.
The point of things like the iPhone 5S is that they work at the technological limits given the price point — the opposite of what you're talking about.

Actually that's not the case when comparing it to those other technologies. New HDTVs with better technology & performance than their 2009 counterparts sell for 1/2 the price those did at their release. Laptops with obsolete technology by today's standards sold for higher prices a decade ago than new models today.

[andi*pandi]

No one is astounded over the price of the 5C in Australia compared to elsewhere?

[Spheric Harlot]

Originally Posted by pairof9s 

Actually that's not the case when comparing it to those other technologies. New HDTVs with better technology & performance than their 2009 counterparts sell for 1/2 the price those did at their release.

I put "2009" in there just to have a year to make a point.

You can surely get phones with "better technology & performance than their 2009 counterparts" for 1/2 the price than those did at their release, as well. I can't be arsed to check just because you refuse to acknowledge a point.

Laptops with obsolete technology by today's standards sold for higher prices a decade ago than new models today.

Compare a 15" G4 PowerBook with a retina 15" of today. The stock higher-end 15" model released in October 2005 sold for $1999. The 17" Powerbook released in October 2005 sold for $2,500.

Inflation-adjusted, that's pretty much on par the 15" retina, which goes for $2,200/2,800.

[Sanjiv Sathiah]

I would like to point out that, despite what some people have said, this an Apples with Apples comparison... . The point of it, for those that missed it, is that both the IPhone 5s and 5c are grossly overpriced (off-contract) in my view.

[Spheric Harlot]

Is there any way I can tell NewsPoster to ignore articles by a specific author?

[Sanjiv Sathiah]

@spherical harlot. So you don't want cheaper iPhones? Because that is what a lot of investors and analysts are calling for. Not to mention customers, because making them happy is what Apple is supposedly aiming to deliver?

[Sanjiv Sathiah]

@spherical harlot. I also love the way you keep coming back to post on my articles. The more comments you post, the more people keep clicking on it to see what all the fuss is about, so feel free to keep bagging me from behind the cover of anonymity.

[Laminar]

Originally Posted by Sanjiv Sathiah 

I would like to point out that, despite what some people have said, this an Apples with Apples comparison... .

That's some solid writing right there, it's clear why you get the big bucks.

Originally Posted by Sanjiv Sathiah 

@spherical harlot. I also love the way you keep coming back to post on my articles. The more comments you post, the more people keep clicking on it to see what all the fuss is about, so feel free to keep bagging me from behind the cover of anonymity.

So you're confirming that what you write is just linkbait? Cool. Also, great job and using the multi-quote feature and spelling his name right both times.

[Spheric Harlot]

Originally Posted by Sanjiv Sathiah 

@spherical harlot. So you don't want cheaper iPhones? Because that is what a lot of investors and analysts are calling for. Not to mention customers, because making them happy is what Apple is supposedly aiming to deliver?

Investors and analysts are, by and large, morons. Investors who insist that Apple should follow a strategy that is reliably LOSING MONEY for everybody else on the market, doubly so: investors should be interested in Apple making the most money they can, not in second-guessing Apple's choices on how to do so.

If there were a single example of a manufacturer actually making real money off cheaper smartphones, then it might be a valid suggestion for Apple to go after that market.

As of right now, the only companies making any money off the smartphone market are Apple (by a WIDE margin), and Samsung (though their profits dwindle when you factor in promotion budgets), and the latter is not making its profits off the low-end stuff.

So Apple is by far the most successful contestant in the world, and yet you have "investors" clamoring for Apple to employ strategies used by their competitors? This boggles the mind.

[Spheric Harlot]

Originally Posted by Sanjiv Sathiah 

@spherical harlot. I also love the way you keep coming back to post on my articles. The more comments you post, the more people keep clicking on it to see what all the fuss is about, so feel free to keep bagging me from behind the cover of anonymity.

I've been a member here probably since you were in pre-school.

I'm hardly "anonymous".

I'm a sucker for stupid shit on the internets, I admit.

[pairof9s]

Originally Posted by Spheric Harlot 

I put "2009" in there just to have a year to make a point.
You can surely get phones with "better technology & performance than their 2009 counterparts" for 1/2 the price than those did at their release, as well. I can't be arsed to check just because you refuse to acknowledge a point.

That's my point...you're not making one! I'm not trying to compare a 32" to a 60" or some lesser model. I'm saying that a comparable high end today sells for less than the high end of 2009, but with better technology & performance. Same can be said for cameras, car & home stereos, etc. Can you get your head around that?! (And by all means, go check the prices if it's not too much bother.)

Originally Posted by Spheric Harlot 

Compare a 15" G4 PowerBook with a retina 15" of today. The stock higher-end 15" model released in October 2005 sold for $1999. The 17" Powerbook released in October 2005 sold for $2,500. Inflation-adjusted, that's pretty much on par the 15" retina, which goes for $2,200/2,800.

My comparison is by no means limited to Apple just like this discussion of smartphones is not limited to Apple. I can research (but like you, why?) plenty of examples of comparable PC laptops that are now much less than their counterparts a decade ago.

For certain, Apple is the one leading this high price parade...and like the PCs, it will find itself in corner with such a policy, no matter how they spin their advantages. Once the public perceives all things are equal but price, you know where they're going.

[Spheric Harlot]

Originally Posted by pairof9s 

That's my point...you're not making one! I'm not trying to compare a 32" to a 60" or some lesser model. I'm saying that a comparable high end today sells for less than the high end of 2009, but with better technology & performance. Same can be said for cameras, car & home stereos, etc. Can you get your head around that?! (And by all means, go check the prices if it's not too much bother.)

Samsung is pricing those devices to inflate their sales numbers to the maximum possible. Nobody else is making money off smartphones, and Samsung isn't making much.

Apple itself offers top-tier technology from two years ago for a little over half of what it used to cost.

Stereo equipment is a rather bad example, since the areas that actually see technological advances are priced accordingly, and are in no way cheaper than they used to be (in fact, commoditization of the market has made the high end rather more expensive than it used to be, while the mid-range dropped out entirely for the most part). But consumer (not high-end) CD player technology hasn't substantially changed over the past twenty years. It's unsurprising that a CD player in 2009 cost a fraction of what one cost in 1992.

Originally Posted by pairof9s 

My comparison is by no means limited to Apple just like this discussion of smartphones is not limited to Apple. I can research (but like you, why?) plenty of examples of comparable PC laptops that are now much less than their counterparts a decade ago.

Yes, but the reason that this is pointless is this:

Apple could easily offer an i3 laptop for 600€. But once you've built a machine to Apple's mechanical and manufacturing spec, the internals don't make that much of a price difference. So in order to remain competitive, Apple would have to offer the machine at a price comparable to the other lower-specced offerings on the market. But since the chips themselves are only a small part of what Apple does, they would have to take a significant hit in margins in order to compete in a market segment that is making FAR less money than the market segment Apple is currently in — which is, and always has been, the high end.

So they build a unibody, machined-aluminum, SSD-based i5 MacBook Air for 900€. They sell enough, and make much more money than they would if they moved downmarket.

Exactly the same holds true for their smartphones.

And since they're the ONLY ones laughing all the way to the bank, I'm not sure what point you're making.

[herojig]

Silly comparison, but I hear you about prices outside the US. In Nepal, it would be the same. As an owner of a new MBA, I'd say get one of those as it's the best laptop being built, inmo. For phones, I stopped using apple after the 4, as it's just cheaper to get a new Samsung that has more memory, features, and pizazz, inmo. Syncing to Apple machines to Samsung phones can be challenging, but iSyncr and/or Syncmate takes care of that just fine.

[graxspoo]

Apple's phones are overpriced. They can demand the premium because they are seen as delivering a superior product. In some ways this is an accurate assessment, especially if you're a non-techy and don't want to have to spend time tweaking your phone to suit your needs. On the other hand, Apple seems to be slouching into a sort of "expensive for the sake of snob appeal" elitism. Gold iPhone? What's next, diamond studded?