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Why the iPhone is no PS3, but should try to be more like it

DealBreaker.com writes:

"One of our first thoughts when the iPhone was announced was, "Have U.S. gadget makers learned nothing from the PS3?" You would think companies would get a hint (hint: the average American consumer gets priced out of the gadget market at around $500), or at least avoid Sony's PS3 price point blunder for karma reasons.

Then we heard that Apple ominously copied the PS3's stellar price point strategy with a $499 iPhone and a $599 model with a bigger hard drive, all before signing your soul over to AT&T. That's it, Steve Jobs jumped the shark, or had some vestigial impulse left over from when he was charging $4,000 for high-end PowerBooks and not considered the iJesus of tech. Remember, Apple was copying the same price poinit strategy that in one product generation singularly relinquished dominance of the home console market.

One teenie difference that sets Apple apart from Sony in this case is that Apple is unloading the iPhone at double production cost. The more expensive iPhone costs $266 to make, with 13 components spread across 9 manufacturers. Samsung provides 3 chips and accounts for 31% of component costs.

The PS3 is a different story with an initial production cost between $800-$850 depending on the hard drive. That means that Sony takes at least a $250 hit per unit..."

Please read on.

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MK_Red3815d ago

Wow, I didn't know iPhone costs $250. In other words they're stealing from people by that $600 price.

Adamalicious3815d ago

Yes - because research and development, manufacturing and shipping are free. All you have to do is buy the right parts and viola, iPhone. :)

ITR3815d ago

No it's called making a profit.
Profit margin is something that Apple and Nintendo tend to really understand.

People also need to realized the $260 bucks doesn't cover the R&D on the phone/software development/marketing/building /packaging/shipping/and tech support for that phone.

PS3n3603815d ago (Edited 3815d ago )

Apple is a rip off. I bought a macbook pro for my wife since her friends have them and i didnt want to saddle her with a turd when she went out to play with them, but I coulda got the same guts in a HP shell for less than half the price. Apple is all hype. At least Sony is not raping the consumer at the price point they chose. I must say apple makes really nice stuff but they charge way too much for it.

Marona3815d ago

That didn't stop them with the different iPod's coming out.

Like a shadow I am3815d ago (Edited 3815d ago )

When iPod came out, there was nothing like it. It was the first miniature digital music player. It was one-of-a-kind and had no competition. iPod was a real monopoly in the portable MP3 market. As the monopoly in the portable MP3 market, Apple could price it however it wanted.

For a time, if you wanted a portable music player, then you bought an iPod because there was no alternative. And so people bought it. Without alternatives and competition, Apple could use the time to build up market shares before any other company could enter the market and gain a foothold.

iPhone is a different story. iPhone came into a market that's already crowded with multifunction cellphones, portable consoles and PDAs. Yet Apple entered the market with its premium pricing. Fanboys rushed out to get it because it's "Apple". But it's not gonna go anyway in the long run because we already have so many alternatives.

SlappyMcTaint3815d ago

You have no freaking clue do you?? The iPod was introduced into an already crowded market of basic mp3 players. Apple made a better, more realized product and the rest was history. Same with the iPhone -it's getting released into a crowded market, but puts together all those things in an easier to use, way more refined package.

Next time actually learn about what you are commenting about instead of regurgitating FUD, you lemming.

bootsielon3815d ago

I doubt Sony is still taking a $250 hit with each PS3 as they used to at launch, while Xbox 360 is earning almost $100 on each 360 at a smaller price point. You got to be a moron to still believe that.

kornbeaner3815d ago

Thats right Sony is not taking that big of a hit but they are still taking a hit of at least $175 per console sold.

Regardless of what the actual number is they are still taking a hit while apple is making almost 2/3 of a profit for each Iphone they sell.

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