Apple's iPhone 4S to Achieve Healthy Profit Margins Despite Minor Updates
October 6, 2011 10:09 AM
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UBM TechInsights releases approximate cost of the iPhone 4S
iPhone 4S' inability to please some customers or investors
at this point, analysts predict that Apple will maintain profit margins with the few updates the 4S holds, and have even released an estimated cost of the newest mobile addition.
Technical analysis company UBM TechInsights has conducted an in-depth analysis of its database of "teardowns and trends" to release an estimated cost of the iPhone 4S, and expect that Apple can continue to carry healthy profit margins comparable to prior iPhone releases.
UBM TechInsights' report discussed the changes applied to the
such as the A5 processor, saying that they're nothing groundbreaking, but just necessary updates to stay in line with competitors.
"Just as we saw a modest technology bump from the iPhone 3G to the
, Apple is adopting the same model of iterative improvement and incrementalism as they gear up for the iPhone 5 platform," said David Carey, UBM TechInsights Vice President of Technical Intelligence. "By continuing down the hardware evolution path, more powerful and useful software such as natural voice recognition, highly-rendered gameplay, wireless video mirroring, and complex image processing all become possible. The software experience -- enabled by 'good-enough' hardware -- is arguably what customers care about most in the end."
Changes such as the iPhone 4S' compatibility across GSM and CDMA networks allowed for lowered design times and production costs because two versions of the phone did not have to be made.
UBM TechInsights also saw Apple's decision to stay away from LTE as notable.
"Apple is making a rather large statement on their
confidence in LTE
by focusing a lot of their presentation on the comparable rates of transfer of HSPA+ to LTE," said Carey. "LTE implementation has brought about concerns of power consumption, but I believe in Apple's case, the decision to shy away from LTE comes from its slow adoption. For example, AT&T, the iPhone's original carrier, has yet to introduce 4G networks to their customers."
Taking all of the above into consideration, including past trends and iPhone teardowns, UBM TechInsights estimates that the iPhone 4S' bill of materials will come to $203, where some new additions like the A5 processor will cost about $26 and the retina display will cost about $31.
UBM TechInsights [PDF]
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A comedy act
10/8/2011 9:28:28 AM
I heard two comedians debating over which one is better approach: Keep the sales box the same, change the product inside, or keep the product unchanged and change the box every six months or so. Then there is the 3rd "Kim Jong-il" method, keep both the same and just clone it every 30 years.
Traditionally mobile phone manufacturers were good at keeping the insides the same and changing the outside design, and it was important to create "this model is better than the previous-effect" by making it more difficult to use and with lot of useless specs. But like borrowing money from the future, stretching users ability figure everything out came to an end. Now Google is trying to do it with Android and has a good start on it, but with over 10 different OS versions and hundreds of different models, who knows how long it will last.
Lot of jokes came out of the box exercise, but in the end what Apple is doing is offering a new iPhone for 3GS owners without pissing off the iP4 customers with 24 month contracts. You are still welcome to buy it if you really need the power, but otherwise just move the iPhone two inches closer to get the bigger screen that everybody now seems to want.
"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
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