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February 2, 2007

Apple Will Lower Cost, a la iPod

Analysis of: Apple to rake in 50% margin on iPhone | www.telecoms.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Melissa Mitchell
President, MGME Group
Implications: 1. All apple products are expensive compared to their counterparts.
2. Apple lovers do not care.
3. Apple prices go down with more usage and then again with less popularity.

Analysis: Now that I feel a bit goofy for shelling out $500 for an iPod G1 (stop laughing; it and my 5 year old apple are doing fine and have yet to crash) I have noticed a trend. Buy it if you are rich and love new gadgets. For all others it's best to wait for the hoopla to end. Wait for the product to become tweaked, for new fun stuff to be added, new software to be added, etc.

The iPhone is cute, but if memory serves, it didn't work perfectly. And if she won't behave for Steve, she will probably stick her tongue out at little old me. If you have Cingular at home and you want a new toy (will they let some unlocked ones on the market??? hmm) fine. In two years there will be a new phone that is better, more functional and cheaper and the profit margin will be lower as well as the costs to Apple. Dear Steve, can I have your procurement contract? You are paying way too much!

Other Analyses of the Same Source Article:
The Phone Price will Not Go Down
February 5, 2007, Author: Joe Weingarten, Executive Director, Macintosh Reseller Association
Hardware Margins Overlook the Real Profit Opportunity of iPhone
January 29, 2007, Author: Zeke Margolis, Senior Account Manager, Key Code Media, Inc
This is the Normal Target for Apple
January 23, 2007, Author: Joe Weingarten, Executive Director, Macintosh Reseller Association
High Margin Needed for Distribution
January 22, 2007, Author: Gregg Kail, MBA, Reseller Manager, AT&T Corp

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