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February 5, 2007

The Phone Price will Not Go Down

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:
Joe Weingarten, Executive DirectorJoe Weingarten
Executive Director, Macintosh Reseller Association
Implications: Apple will not lower its price as time goes by, unless forced to by competitors. Even then it is doubtful. In another post they indicated that with time Apple would lower their price. I doubt it.

Analysis: Go to any Apple store or online and look at the price of an iPod. Is the price about the same as it was two years ago? For me it is. Well, no, it's not the same model. Now you have found the Apple model. Never lower a price, just change the color of the items and sell it as new and better with the same price. Or maybe upgrade the capacity and sell it at the same price, but never lower a price. This has become the Apple price model. While everyone lowers their price, Apple upgrades the equipment and keeps the price the same. Remember, think different.

Other Analyses of the Same Source Article:
Apple Will Lower Cost, a la iPod
February 2, 2007, Author: Melissa Mitchell, President, MGME Group
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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