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November 03, 2017

Comments

Jim Glue

Is this the difference in the value of the US dollar at play? Or is Samsung overcharging their American customers?

E.Casais

@Jim Glue

I think this is mostly market dynamics (or the lack thereof).

1) The US market is warped because the vast majority of people there do not buy their devices unlocked from a retailer or Internet shop, but from a telecom operator. As a result, the price discovery enabled by a competitive retail market does not take place, which allows distortions (especially overpricing).

2) Apple and Samsung are both imports, in Europe as well as in Australia, with no national champion (like Ericsson, Alcatel, Siemens, Nokia in bygone times) able to stifle outsiders.

I doubt USD exchange rates play a major role. After all, whether it is Apple or Samsung, all those devices are imported from Asia. If at all, one would have to look at the evolution Yuan vs. Won.

Jim Glue

Hi E,

The US market being dominated by telecom's doesn't give us any information as to why there is parity in the price of Samsung Note 8 and the iPhone X compared to other parts of the world.

Samsung sets the retail price, as does Apple. Ignoring "sales", I would think the same would be true everywhere else in the world.

Apple does call out the strength of the US dollar as a negative factor for it's performance...which is why I wondered if that were the major difference.

If it's "normal" for Samsung Note 8 to be sold elsewhere for a LOT less (comparatively)...I wonder why? One might think tarrifs and the like would come into play...but I imagine Samsung as the same VAT requirements in Europe for either product.

I wouldn't put it past Apple to just "charge more to get more"...but if they did, wouldn't the US be where Apple would charge the most? (again, thinking that any tarrif's/taxes like the VAT in Europe (and India/Brazil's tarrifs) would apply equally to Samsung and Apple).

Is it Samsung that is charging more for the US?

E.Casais

@Jim Glue

"The US market being dominated by telecom's doesn't give us any information as to why there is parity in the price"

Phones bought from operators are costlier and US operators provide few, if any, incentives for BYOD to a price plan (economically, there were even disincentives to BYOD in the USA till recently). Because of this, price-elasticity of devices sold is low -- and retail outlets have no real advantage in reducing prices (they do not attract that many more customers anyway). Furthermore, operators' offering might have hidden constraints that entail lower prices.

Thus, Samsung might be overcharging compared to Apple in the USA, and able to because of the lack of competition for sales of devices to end-customers.

However, I suspect that the prices you quoted for iPhone X are not entirely realistic. Are you talking USD 999 for a 64GB iPhone X _unlocked_? T-Mobile advertises the 256 GB at USD 1149, but a fully unlocked 256 GB seems to cost substantially more elsewhere (I found it for about USD 1500 on Amazon, for instance).

When it comes to the prices of Note 8 vs. iPhone X, it is important to compare with commensurate parameters. At this point, there is preponderance of evidence that Note 8 and iPhone X are in two different price (and technical) classes.

Jim Glue

My prices can be found on www.apple.com - they are the prices quoted by Tim Cook at the unveiling.

Jim Glue

Hi GoodTimes,

I have the same response to Apple's "good specs" as I do to Android's. "Does it matter to me"? Some will, some won't. Apple has had the speed lead for some time, but if your Android phone doesn't feel slow to you....what does it matter if an iPhone wins a benchmark comparison?

Or if the Pixel 2 is a bit better in low light performance than an iPhone....is the iPhone now worthless?

Most Android fans don't even have anything like the fastest Android phone or the best Android camera. It's like hearing how fast a Ferrari is compared to a Bugati when you drive a Ford Festiva.

What I'm looking forward to are the apps that take advantage of all that speed so that you can see and feel the difference. We see it in the AI/ML built into the photos for one thing. I don't play the kind of games that tax the cpu/gpu....but I'm hoping some very interesting AR apps come along that will delightfully use all that power.

Apple has had the buttery smooth OS that even the head of Android Central acknowledges....and had it long before these top chips (from Apple or Qualcomm). That matters more to me. It's the one fly in the ointment in my current set of cheap Android products. Sometimes they just get bogged down for "no" reason

E.Casais

@Jim Glue,

When ordering an iPhone X on Apple WWW site, one must select an operator.

The prices are thus for operator-specific offerings, and are therefore not directly comparable to unlocked phones -- which constitute the proper gauge to evaluate unbiased price levels.

I strongly suspect that unlocked iPhone X in the USA cost significantly more than the USD 999/1149 advertised by T-Mobile & co.

Jim Glue

If you buy an iPhone from Apple it is not locked. Of course, it doesn't work if you don't have it attached to a network, so you are selecting the initial network.

E.Casais

@Jim Glue

If one is forced to select a network to buy a device, then the price is not comparable with those unlocked devices you can buy _without_ binding it to an operator.

To put it in another way: let us say that during a visit to the USA I want to buy an iPhone X _without_ binding it to any operator, before returning to another country and bringing the device with me to use there. I neither need nor want to have anything to do with Verizon, T-Mobile, etc.

Pretty much anywhere in the world this is trivial. Go to CarPhoneWarehouse, MobileZone, Worten, etc, pick the device unlocked, no need for a SIM or a telecom contract, pay, done.

This does not seem possible on the WWW site of Apple. So where else and at what price?

Jim Glue

The reason you aren't seeing the specific "unlocked" version is that Apple doesn't put them on sale right away. When Apple does offer the unlocked version, they charge the same price.

US carriers can offer a "lower than retail price" if they want too...and they often have incentives to get people to buy phones (not just Apple iPhones).

There just is no "extra price" for an unlocked iPhone...not from Apple

E.Casais

@Jim Glue

So when Apple eventually puts an unlocked iPhone X on sale, the natural reduction in prices (slower with Apple products, but still effective) will have already taken hold.

Hence, the only valid comparison point we have now is what we can find now in sites like Amazon, where an unlocked US iPhone X 256 GB goes for about USD 1500.

Summa summarum: as a few comments here show (reviews, display, processor, etc), and as the observation of prices in various countries (Europe, Australia) confirm, the iPhone X is in a different class altogether than the Samsung Note 8. This is reflected in substantial price differences. The market in the USA has always been anomalous (stranglehold of operators, retail policy of Apple), so price differentials on locked phones/phones bound to an operator are not reliably indicative of the actual product categories.

Let us see whether other manufacturers dare follow Apple in this new super-premium category.

Jim Glue

All I can speak too is what both companies say the price of their products are in the US. In my experience, Samsung CAN'T hold on to their retail price very long after introduction. Apple sells it's phones year around without a discount...except very small discounts during the back-to-school and Black Friday shopping seasons.

Deals carriers offer are coming out of the Carrier's pockets, not Apple's.

So yeah...I have no problem believing that for most of a phone's year long life cycle, the new iPhone is more expensive than the new Samsung.

I'm just quite surprised it's such a big difference over seas than in the US.

Huber

@Jim Glue: "I'm just quite surprised it's such a big difference over seas than in the US."

This is the reason that the iPhone X did not even receive a lukewarm reaction from the Apple fans I know over here in Europe. They all say €1300 is ridiculous.


Falling prices are bad for the vendor, but good for the customers. You can e.g. get the LG G6 for €380 meanwhile. LG may not like this, but the buyer usually does.

Garfunkel

https://www.cnet.com/news/iphone-x-galaxy-note-8-att/

I went to buy an iPhone X. AT&T told me Galaxy Note 8 is better

Commentary: An AT&T salesman tells me it's quite obvious why Samsung's large phone is better than Apple's future of the smartphone.

"Look," he said. "Here's the big difference. It's the screen. Samsung has been making TVs forever, yeah? So they've perfected it. This new iPhone, it's the first time they've ever done an OLED screen."

Garfunkel

https://www.macobserver.com/news/iphone-x-wait-2-3-weeks/
iPhone X Wait Times Drop to 2-3 Weeks

Sales down?
Production Up?

Tester

@Garfunkel:

"Commentary: An AT&T salesman tells me it's quite obvious why Samsung's large phone is better than Apple's future of the smartphone."


Even though I'm not an Apple fan I have to say that I question that salesman's qualification - and quite seriously.

@Goodtimes:

I see a new Apple shill has arrived...

"About the iOS security. Read the FTs take on that..."

The reports about Apple's security are widely exaggerated. Android isn't really that bad considering that it requires the user's explicit intervention to get some malware onto the phone.
On the other hand: Look at the steep price that warm feeling of security comes with: It's not YOU who decides what your phone may do but Apple. Thank you, but no, thank you. I stick with a device that's under MY control.

E.Casais

@Jim Glue

"In my experience, Samsung CAN'T hold on to their retail price very long after introduction."

All right, I quickly checked the evolution of the prices for the Samsung Note 8 64GB and the Apple iPhone X 64GB since their introduction (prices in CHF).

Note 8

2017-08-24 949.05
2017-11-19 939.00

iPhone X

2017-09-14 1199.00
2017-11-19 1169.00

Notice that there have been peaks and throughs as well -- there has not been a monotonous decline in prices for either products.

Actually, the price of the Note 8 _increased_ after its launch, and very briefly reached a peak of 998.90, and very briefly falling to 899.10, but mostly hovering at around 959.00.

The price for iPhone X hovered at its initial price during the entire pre-order period, and fell to its current price upon official availability -- but went very briefly as low as 1149.00 during the pre-order period and to 1079.10 after official availability.

The Swiss market seems to be more dynamic than expected (and it is one of those "Apple countries"!) -- you have to grab the opportunities for nice deals when they briefly pop up.

The period examined is short, but the conclusion is that the price differential is inherent, not an artefact of high prices for Samsung devices comparable to, but eroding much faster than Apple ones.

Once again, the actual price of the iPhone X in the USA cannot be elicited from the offers on the Apple or operators' WWW sites.

Those offers bind the phone to a telecom contract, and hence part of the device cost is hidden behind whatever price plan is attached to the iPhone X. This peculiarity of the US market has been in place for ever.

Tomi T Ahonen

Hi everybody

FYI on Apple Watch and other smart watches and the wearables sector. A fascinating observation by a true mobilista (and friend) Antoine RJ Wright over at Medium.com where he is talking of his experiment to go mobile-less with the Apple Watch 3, his 3rd smart watch and second Apple branded one. Not long read, very worthwhile

https://medium.com/@arjwright/without-the-glass-slab-3b33d31a543a

It hit me that a valid option 'for the affluent' in their near-future digital worlds is either to remain with the 'all-in-one' device ie mobile, which then is by necessity a compromise; or to go into a 'multiple digital devices' lifestyle, which could be centered around the watch (abandoning mobile completely from daily use, and mobile becomes 'just another optional secondary digital device' like a tablet, PC, digital camera, or any other such device).

I think we all knew that this is at least a plausible alternate path vs carrying one or two mobile phones (if two, makes sense to then somewhat optimize those, like one with phablet screen, the other with small screen or whatever). What ARJ's article showcases (at least to me as a revellation) is the type of choices that then forces the consumer to make - if he/she doesn't HAVE the camera with him/her daily, how will that impact photo generation? Will activities of frequent writing (Twitter, Facebook, Whatsapp etc) be significantly reduced (from arguably a silly level of usage by some, haha).

Worth a read and may ignite some smart discussion.

Tomi Ahonen :-)

Jim Glue

Hi E,

They are already doing Buy One, Get One free offers on the Note 8 here in the states.

Jim Glue

On the Apple Watch...

For me it is definitely a companion to my iPhone. Kind of like having a remote control. When driving, the turns come up on my wrist. When walking/running I can control the music/podcasts from my wrist. At home if I get a call and my phone is sitting on my desk and I am in my kitchen, I can answer the call on my wrist (the use case that inspired me to buy an Apple Watch in the first place).

Notifications on my wrist allow a more discreet check when in meetings at work.

It's also a watch. I know...silly...but I hadn't worn a watch in decades.

Activity tracking...including sleep tracking which I find very useful.

I don't use the AW like it's a phone...or a personal computer. I don't run apps on it that aren't essentially extensions of apps from my phone. I don't watch movies etc. I could listen to music and podcasts...but frankly, I still wan't my phone with me so I just operate the music controls on my watch.

It's nice. It's a luxury. It is not a necessity. For now. Still looking forward to medical uses.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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