[Q] Why smartphones are so expensive? - General Questions and Answers

What is the difference between iPod Touch and iPhone? A $5 GSM/CDMA chip? Why $400 price difference?
Large screen Android tablets can be had for $200. Why unlocked phones are $600-800?
Sorry if it's been discussed, my search didn't find a good topic on the subject.

Wow, no answers! Noone else is interested in this question?
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Which?
They're expensive because of convenience, demand. people want it they gotta pay....
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They are so expensive, because people buy them anyways.
Manufactors and carriers are all after our money, why should they lower the price.
Besides that some devices also have to pay back the research that went into developing them.

Don't have any idea why unlocked phones are costlier but it you compare tablet and phone, size does matter. Smaller, faster and costier.

go overseas and see the prices some can have more then a hundred dollars difference even if they are the same devices

The price triples at the 3rd world countries. I wonder why.

Yeah, you're lucky for not live in a country like Brazil, there a smartphone like S2 or Iphone4 costs around 1000,00 US$ bucks...

well maybe unlucking phone is expensive because its not really designated in any other area than the original area, but the publisher wants to publicly sale it to other region. that can be the cause too

Development is expensive.

You buy a brand, this is why most of the time you pay double.. buy another phone with the same specs but with a non popular brand and you will pay less...
Not to mention that you are talking about Apple...

All your reasoning would apply for everything else electronic- TVs, MP3 or Blue Ray players, etc. Yet they all keep coming down in prices. But not the phones.

Yea, good question I was wondering the same.
It really is a gigantic gap between say an Iphone and Ipod touch in terms of price, yet the hardware has very little difference.
Seems like a marketing thing, as most users will want all the goodies packed together in a small package + a phone in one device.
It's a conspiracy i tell yea

You should see it like this. When you buy a phone, you pay for the development, the construction, the shipping, the people who check it, the people who made the software. add that up with an expensive casing (like HTC has.) and the euro's (or dollars) fly onto the price tag. With Apple, I don't know, they just rip your wallet.
Smartphones are still upcomming, with new technology added every time a new device is being developed.
Why is SSD more expensive than a normal HDD, because it's a new technology. DVD drives used to be really expensive aswell, look at them now they aren't so expensive anymore.
Anything that's new has a price, and it's your choice if you want to pay for it or not.
I hope this helps.

It's not that unbranded phones are more expensive, the price just isn't subsidised by the network operators.
Network operators sell you the handset at a loss, but tie you into a contract to recoup their initial cost. Customer inertia means there's a good chance you'll stay with them.

well they give you much more ie. i have an ace and i can do everything what i usually do on my pc... except gaming ofc.

Unlocked phones are not only expensive because of the demand. When you buy one on contract, you are going to end up paying over $1000 over the 2 year contract anyways. That's why they discount smartphones so much on contract, they know they will get paid back from the contract.
Sent from my HD2

I'm guessing prices don't come down on phones because carriers subsidize prices. Manufacturers know that and therefore prices will stay rather high. Having said that, development on new phone technology is going at a fast rate right now so manufacturers also are recouping those costs.

Althestrasz said:
You should see it like this. When you buy a phone, you pay for the development, the construction, the shipping, the people who check it, the people who made the software. add that up with an expensive casing (like HTC has.) and the euro's (or dollars) fly onto the price tag. With Apple, I don't know, they just rip your wallet.
Smartphones are still upcomming, with new technology added every time a new device is being developed.
Why is SSD more expensive than a normal HDD, because it's a new technology. DVD drives used to be really expensive aswell, look at them now they aren't so expensive anymore.
Anything that's new has a price, and it's your choice if you want to pay for it or not.
I hope this helps.
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Everything else also has to be developed, designed, engineered, assembled, shipped and retailed. In fact, iPod was developed before iPhone and they mostly made of the same parts.
Also, if you look at pricing for prepaid phones, I don't think that carriers subsidize that much. Mostly they hike their prices to force us in their contracts.
A week or so ago I saw a link on one of the "deal tracking" sites, an HTC tablet was offered for the same price with no contract or service as the "discounted" price from Sprint.

theyre expensives due to all research and work of the engineers...and of course to obtain more money from all of us...you want the finest and latest technology from theirs...you have to pay whatever their wants...

Related

Xperia X1a vs Fuze

Looks like the Xperia X1a is dropping in the U.s. at at least Best Buy for now. I have read good reviews on both devices. Has anyone seen a good head to head comparison of these two devices? It looks like they are in the same league. Thanks
I think it comes down to $299 (+2yr contract) for the Fuze, or $799 (+service you were going to pay for anyway) for a WVGA screen and headphone jack. All other pros/cons seem to vary from one reviewer to another.
The Xperia is metal construction. The Fuze is mostly plastic and high gloss black ( print magnet) The keys are spread out nice on the Xperia, bunched up on the Fuze due to the smaller size. There is a slight tilt on the Xperia and the slide is straight out on the Fuze. I know there are a lot of software differences but just wanted to state the obvious physical differences I compared.
If the Xperia sold for $600 it would be the best deal for a PDA Phone in a long while. $865 from a Sony Style store is just a lot of jack in this economy. ( tax inc )
I have looked at the FUZE and the Touch Pro at Sprint. Something has kept me from buyin either one of them. Yeah I sold the X1a a day later for about the same as what I paid for it. Sonystyle wants 15% restock fee ( ouch )
fhsieh said:
I think it comes down to $299 (+2yr contract) for the Fuze, or $799 (+service you were going to pay for anyway) for a WVGA screen and headphone jack. All other pros/cons seem to vary from one reviewer to another.
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not necessarily , because you can get the fuze for $299 on 2 year contract, unlock it for free, sell it for ~$500 and then use that money to buy the xperia, making it only 2-300 more expensive. still more than it should be, but not as bad as people are making it seem..
omaralt said:
not necessarily , because you can get the fuze for $299 on 2 year contract, unlock it for free, sell it for ~$500 and then use that money to buy the xperia, making it only 2-300 more expensive. still more than it should be, but not as bad as people are making it seem..
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Okay you two are on par, but compare it this way.
No-commitment price = $500
RETAIL PRICE = $849.99
Xprea X1a RETAIL PRICE = $800
It's a hell of a deal. Notice why I put two prices. Because you can only get the $500 deal if you're a customer of AT&T. If you're comparing the retail prices, I suggest you compare the retail prices. Not retail vs no-commitment. The $500 price is retail for AT&T customers only.
i mean, come on, anybody can get a brand new fuze for $500 + tax. If your not an at&t customer, i'm sure you know somebody whos an at&t customer, ask him/her to go buy one for you, no committment. the people who get screwed are our nice neighbors to the north (canadians). none of their gsm carriers have picked up this phone, and i hear the fuze is selling for north of $600 up there..
omaralt said:
i mean, come on, anybody can get a brand new fuze for $500 + tax. If your not an at&t customer, i'm sure you know somebody whos an at&t customer, ask him/her to go buy one for you, no committment. the people who get screwed are our nice neighbors to the north (canadians). none of their gsm carriers have picked up this phone, and i hear the fuze is selling for north of $600 up there..
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True. But I was comparing the real retail price. Not how cheap you can get it for. I mean I bet someone could get it for free if they stole it. Or $100 if they worked for Sony or whatever. You know what I meant.
My reasons: PHAIL = bad; WIN = good
NO G-SENSOR! PHAIL!
Embedded screen! PHAIL!
Screen res. WIN!/PHAIL! (depending on pov. To install apps - fail; beauty - win)
TF3D and Panels! WIN!
No tv-out! PHAIL!
Metal casing. WIN!
Roomy buttons. WIN!
Price. UBER PHAIL! (I ain't paying that much for a device. IDK if you people like buying every phone for $1000+ as some of you have.)
Sony camera. WIN!
Kraize said:
True. But I was comparing the real retail price. Not how cheap you can get it for. I mean I bet someone could get it for free if they stole it. Or $100 if they worked for Sony or whatever. You know what I meant.
My reasons: PHAIL = bad; WIN = good
NO G-SENSOR! PHAIL!
Embedded screen! PHAIL!
Screen res. WIN!/PHAIL! (depending on pov. To install apps - fail; beauty - win)
TF3D and Panels! WIN!
No tv-out! PHAIL!
Metal casing. WIN!
Roomy buttons. WIN!
Price. UBER PHAIL! (I ain't paying that much for a device. IDK if you people like buying every phone for $1000+ as some of you have.)
Sony camera. WIN!
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Click to collapse
But I'd guess most in the US eying on an xperia are already with att, or at least considering it. After all, xperia has the att 3g band, not tmo.
As a side note, I think x1 wins in terms of form factor and battery life as well. But even if the two were the same price, I would have gotten a touch pro. I am very, VERY happy with its keyboard.
What's with this "No commitment price"? I went to Fry's Electronics (big box store like Best Buy), and bought the phone for $475+tax (This was Saturday). While my wife drove, I called up AT&T and asked them for the unlock code. They asked for the IMEA number, I gave them that... and they gave me the unlock code. Phone was up and working on the T-Mobile system before we got home 10 minutes later.
Sure, I don't have 3G... but I like my $15/month unlimited data plan with tethering and free Hotspot calling. AT&T wants $60 for that plan. At 156K/s vs 500k/s... that's just not worth it! (And no, I don't think most people could get the plan I have with T-Mobile... had an account with them since they were called VoiceStream...)
All that being said - I owned an X1i for 5 days. It was hands down the faster phone (all that AT&T garbage probably slows the Fuze down... I'll flash it after I figure out what I really want to do with it). But the screen just didn't do it for me. The Fuze screen is flush with the face of the phone and I think that is a clear win over the X1 (think about how beat up that screen is going to look after a few months). The keyboards are 6 of 1, 1/2 dozen of the other in use. I could use both keyboards just fine. The X1i seemed to have this issue, however, where the software keyboard would launch any time input was required ... even if the keyboard was out. Very annoying. The Fuze let's me choose.
The X1 never locked up on me, and I did a ton of installs and had lots of apps open. The Fuze has locked up almost daily for me. Again, I think it is the AT&T bloatware, but I'm not sure.
So my review is also a little mixed. In the end I made a deal with my wife that if I didn't like the Fuze after a month or so, I'd give it to her and get the X1a (since I figure the price will have dropped by then).
Right now, at a price of $475 vs $799.99 it isn't a contest. When neither phone is a clear winner in any category I would say let value decide - and the Fuze is clearly the better value right now.
@Ghallo
Really I have no idea. Yes, it's true that you can get it for $500 anywhere. But if you call AT&T cs. They'll tell you that retail pricing is for those that don't have Aee Tee & Tee and no-commitment (retail for customers) is the no-contract price for Aee Tee & Tee customers.

Authorized Retailer Pricing?

Ok so I always get my phone from Bestbuy or directly from Verizon based on online deals or specials going on when contract is up. Since when was Bestbuy pricing 700$ out of contract compared to $569 of VZ? They always when I checked with is every few months very similar in price. Now I have $300 buyback from previous upgrade done few months ago but considering locking in a second line to 4g Unlimited plan before it is too late.
So just curious did the Retail price 3rd party can sell agreement with Verizon change I was under impression to be Authorized reseller unless you were running a valid promotion, special you had to be in similar price range to Verizon?
I wouldn't be complaining normally but to have to cough up $700 for a retail price over Verizon cost of already high $569 seems way out of wack. I know the phones are 4g and high end but man didn't realize 3rd party places that were once better options now don't even try to compete with Big Reds pricing.
Forgive me if there was some post detailing Bestbuy cost going up or possible changes to why Verizon offers lower cost then retailers selling same phones on their behalf.
If you raise enough hell, best buy will match the VZW price. You just have to prove that the corporate store is charging 569 outright.
BBY will price match VZW... Best buy inflates their retail pricing to negate customers from buying it wo a contract(that's where they make their $$)
They will price match the online price or CS price cause they are not the same not a huge difference I just want to know which price to fight for? Is this generally something they are going to be pricks about I mean I have bought the phone I am going to bring back for the Buy Back Credit and purchased Black Tie Protection I can't imagine they would be to stuborn. I just want equal price and have no problem paying 569-599 at all obviously would be minus 300 GC I would get from the Buyback program.
If you were to come into my store and ask for a price match (I work at best buy), and you planned on getting blacktie and buyback, we would match without question. Other stores may be different, but the margin would be made up with those two components.
Sorry I should of been more clear on the phone I am going to trade in I had Blacktie and Buyback. This phone is to lock in 4g plan before July 7th so I would get Blacktie but no Buyback this time and previous phone is 3ish month old Fascinate. I have 2 Pc's, 2 HDTV and like 5 previous phones and everything has been with Blacktie.
I just want to know if I would be better of having proof cause I have no idea what a storefront of Verizons here has for anything showing retail price, but if I have to go out of my way to prove it. Due to BB not matching "online" prices I will cause I sure am not paying extra 125$ for same phone lol.
Really thank you all for advice so far I usually get great people when I work with Best Buy and after all Zagg shields the mobile department has put on my rounds of bad Thunderbolts they know my acount before they even pull me up as to what I have for phones ect. I just know it was like pulling teeth to get them to replace my non-fuctional Incredible after 2 seperate repairs to get a new device and had to talk to store manager before I got it done without a 3rd repair shipment.
Just bring it in the retail pricing from the online (I work at BBY Mobile PT as well) and Id match it
find the kid who hates his job at best buy and he'll price match it without talking to a manager. i work at best buy and do it all the time.
hackabusa said:
If you were to come into my store and ask for a price match (I work at best buy), and you planned on getting blacktie and buyback, we would match without question. Other stores may be different, but the margin would be made up with those two components.
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Word to the wise. Don't anyone ever get black tie. Its a scam.
I would generally agree to that last post but in my case because Best Buy has the lemon policy on repairing or attempting to fix issues. I went from Incredible that went 2.2 update came out dropped a packet and caused horrible call quality an hardware / software issues. Got me a $600 equal retail value Giftcard that put me into my Thunderbolt. Generally speaking insurance is never needed but I get it to be safe on my high end phones.
Also had to speak with a manager but the Buyback process and getting into the Charge was a painless experience and they gave it to me for $599 cause they know how much business I do there. Thanks for all the help.

[Q] Tablet Prices

Is it me or are the standard tablet prices way too high?
Just checked the pricing for Sony Tablet S (Wi-Fi only) £399/$499 (16GB) and £499/$599 (32GB) with the 3G version roughly 100 more.
Not blaming Sony for this as all companies seem to be inflated.
If all companies were to take a look at the recent HP Touchpad saga, can they not see the potential if the prices were lower? (Maybe not to that extent, but you catch my drift hopefully).
As consumers, if we were to all agree worldwide that we were not going to pay these prices for something we believe should be at least a couple of £/$100 cheaper. Wouldn't companies have to eventually reduce prices due the poor sales?
P.s. TO MODS - If this belongs in Q & A apologies.
I think that the tablet market is still preadolescence. I believe that this will be the case for at least one or two more years then we can expect the tablet market to become more competitive on high quality tablets.
Hell yeah. But these companies have to make a profit or at least break even on the hardware.
I got a Streak 7 for $150. Loved it. I'm looking to find a Xoom or Transformer now.
Its all about searching for deals I guess.
@MeInGatineau - The Touchpad industry being young in it's life cycle is true, but as it stands there is enough competition to drive prices down. Companies will only do this if we refuse to buy at the inflated prices.
@vetvito - The companies do not "need to" make profit/break even on hardware so early, they "want to". The combination of software sales, economies of scale and cheaper components etc. in the long run should make them more than enough profit.
Have a Nook cost 200 bucks
A Asus EE tablet 380.00
A Samsung 10.1 paid 480.00
and a 32 gig Touchpad Paid 230.00 for it.
Cost is driven more by hype and perception than by academic business models.
All the above are 100-300.00 more in the stores if you buy "off the shelf"retail.
Always NEVER do that unless you are rich.
Typically the way electronics work is : They R/D a design and get it to manufacture , once there, they figure the baseline amount needed to be sold @ a given price in order to break even (recoup all costs for the project) Then , after they pass that mark costs begin to decline.... unless it is a hot seller then they exploit the hype of the market for the extra profit benefit it brings for as long as it lasts.
Apple is better at keeping the hype up than most other people in the market today, which explains why they have a following, you get less and pay more for it, and think it is a deal. NOW! that's great marketing !!!
If you really want to know more on this and markets and how they work just look at the Intel chip market.
Yes tablets are expensive at the moment but I don't think this immediately points to greedy manufacturers with big profit margins. Developing the tablets are quite costly and they are probably just covering their costs. Once they gain experience and pick up, I'm sure scales of economy kick and and products will become cheaper. Exactly how the laptop market has gone.
Competition will always drive prices down but no manufacturer is going to sell the tablet at a loss unless they are able to re-coop that money from elsewhere. E.g. Amazon sell the Kindle at a loss as they make money on the ebooks. Carriers sell mobile phones at a loss as they make money on the tariffs and carrier services used.
HP were selling the TouchPad for a loss. They could do this because the alternative was probably a greater loss.
Just Me said:
@vetvito - The companies do not "need to" make profit/break even on hardware so early, they "want to". The combination of software sales, economies of scale and cheaper components etc. in the long run should make them more than enough profit.
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I don't see how software sales would make profit for a tablet manufacturer? Most tablet manufacturers opportunities for profit are with the tablet sales and official accessories for that tablet.
I would argue that manufacturers do need to make profit/break even as quickly as possible. Manufacturers cannot afford to have long drawn out periods for products to break even. They do not know how they will sell, what competition will do or any of the other million factors that affect economy.
This isn't to say pricing them high will get them to break even as quickly as possible. Because if they are too high then they will not get enough sales.
@oka1 - That is my partly my point. There are deals to be had if you shop around, but why are the prices not discounted in the first place. The person/company that you bought from, would have bought from 1-2 people before you and it is likely that they all made money from each item.
I also have a Touchpad but the 16GB version, which I paid £127. Above the insane price of £89, but now that I have it, I realise I might have paid £200, but the £350+ price tag was ridiculous imo.
Also, I get your R&D point to an extent, but then why bring out a newer model with only slightly better features in 6 to 12 months and price it at the same price, as the original. Surely the the R&D cost wouldn't have increased significantly for the new product
@Techno79 - I'm not in the industry, but I can't really see the development cost being high enough to justify such a high selling price. I know it's not as straight forward as this but, tablets are generally just big smart phones, some with less features (e.g. Wi-Fi only).
In comparison the laptops that you mention are probably more costly to build, but are cheaper and have a lot more functions.
My point is, I don't believe they have to sell them for as much as they do and if, as a society, simplified, we all turned around and said drop the price by a couple of 100 and we'll all buy one, they would.
My software sales point was more at certain companies that get a % of sales revenue for apps sold, but true it's probably not the case for all.
Don't get me wrong, I'm not saying that companies don't need to survive, I'm just saying, they should give a little back to the consumer that buy their products and help them make the vast amounts of profit they do.
In reality, as long as people are giving up their money as easy as they do, companies will sell at a premium.
hi
hi. this is just a test message
Yeah, it's too bad that companies want to make a profit.
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hp tablets
i just heard they were getting rid of these for like $99 bucks for 16gb
not a bad deal, can anyone confirm?
dutchman22 said:
i just heard they were getting rid of these for like $99 bucks for 16gb
not a bad deal, can anyone confirm?
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They sold millions in 2 days for that price and now they are sold out. I got mine off some guy who bought one and marked up 75 bucks
Just Me said:
@oka1
@Techno79 - I'm not in the industry, but I can't really see the development cost being high enough to justify such a high selling price. I know it's not as straight forward as this but, tablets are generally just big smart phones, some with less features (e.g. Wi-Fi only).
In comparison the laptops that you mention are probably more costly to build, but are cheaper and have a lot more functions.
My point is, I don't believe they have to sell them for as much as they do and if, as a society, simplified, we all turned around and said drop the price by a couple of 100 and we'll all buy one, they would.
My software sales point was more at certain companies that get a % of sales revenue for apps sold, but true it's probably not the case for all.
Don't get me wrong, I'm not saying that companies don't need to survive, I'm just saying, they should give a little back to the consumer that buy their products and help them make the vast amounts of profit they do.
In reality, as long as people are giving up their money as easy as they do, companies will sell at a premium.
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If you breakdown the different parts of a tablet's cost then you'll have something like this:
Hardware costs
Retail mark up
Taxes
Manufacturing/production costs
Manufacturer's Profit
Manufacturer's profit first has to cover the huge costs of R&D, marketing and service/maintenance. These combined costs run up in the millions and will take a lot of sales before they break even. I would guess that they'd need to sell 100s of thousands before they get to break even point. So, until they reach those sales figures, I do believe they are justified in selling a high selling price. Obviously, I'm not saying I like high costs but I do think the current Android tablet price points are somewhat justified.
Tablets may be larger versions of mobile phones, but like I said before, mobile phones can be sold at a loss as they offset the loss against consumers signing up to 12/18/24 month carrier plans and using additional cost services with that carrier. Take a look at SIM free mobile phone costs if you really want to compare like for like. Top end mobile phones can cost nearly £500.
Also, some of R&D can be reused from previous generation of devices. Manufacturers are probably on their 100th generation of laptops where as Android tablets are at the most on their 3rd or 4th generation and thus still very new. I think for this reason, laptops are probably cheaper to produce.
Competition also drives prices down a lot and there is obviously more competition with laptops than there is with tablets. When laptops were fairly new, they would cost well over £1000 for a decent model which is far more than the tablets at the moment. It's only in the last few years that laptops have been fairly cheap. I'm sure tablets will get to that point a lot quicker but I doubt we'll see that before end of 2011.
Also, not all tablets will be a super seller. Some tablets will flop and never cover their R&D and marketing costs. It's down to profits from other tablets that cover these costs.
I'm all for lower tablet costs but from manufacturers perspective, I don't see anything wrong with the current price points of Android tablets given how new Android tablets are and the level of competition in the market. It's guaranteed that costs will eventually come down.
Very valid points. I fully understand that everything you said is pretty much true, but there are many counter arguments to your points, so I'll agree to disagree overall.
But going back to what should have probably been the first line in the thread and not the last (I can see why the thread went the way it did, instead of the way I wanted):
"As consumers, if we were to all agree worldwide that we were not going to pay these prices for something we believe should be at least a couple of £/$100 cheaper. Wouldn't companies have to eventually reduce prices due the poor sales?"
Would this work? Or would the tablet market slowly die out?
Just Me said:
Very valid points. I fully understand that everything you said is pretty much true, but there are many counter arguments to your points, so I'll agree to disagree overall.
But going back to what should have probably been the first line in the thread and not the last (I can see why the thread went the way it did, instead of the way I wanted):
"As consumers, if we were to all agree worldwide that we were not going to pay these prices for something we believe should be at least a couple of £/$100 cheaper. Wouldn't companies have to eventually reduce prices due the poor sales?"
Would this work? Or would the tablet market slowly die out?
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Click to collapse
I personally don't think this would work. There are many consumers who are extremely well off and are happy to pay the high price for early adoption. How would someone be able to co-ordinate such a consumer boycott. I think the current natural system works. If a manufacturer releases a product at too higher price, then less consumers will purchase it. As time goes on, and the product gets cheaper, more consumers are likely to jump on board to buy. However, if the product remains too high a price for the duration of the products life, then this will be seen with low total sales and low profit margins for the manufacturer (possibly even a loss). The manufacturer "should" learn their lesson and make the next product at a better price point.
If manufacturers can make more profit from selling 100k products at a high price than selling 1M products at a low price then they need some other incentive to sell at low price point.
Hypothetically speaking, if we could agree between all consumers to not buy the tablets at their high price to force manufacturers to release them at a low price then the profit margins could be so low that manufacturers give up on tablets as they realise they can get more profit from netbook/laptop and other consumer devices. So yes, I do think a global boycott for the high initial early adoption cost could kill the tablet market.
Practically, in here, yes they are. But comparatively with other devices/gadgets, the current tablet market is decently-priced.
Just like everything else the prices will drop after all the early adopters jump. There will be more choices and lower price points.

Xiaomi phone can't be legit

So, as someone living and working in China, I've been super excited following up on the Xiaomi Phone. When they released the price as 2000 RMB (about $310 USD), I knew it had to be fake, or there was some serious funny business. The numbers just don't add up.
Engadget recently had a review of the Xiaomi phone and had it benchmarking near the Galaxy S 2 in several tests, so I think it makes sense to compare these two:
SGS 2 Advantages: Super AMOLED screen; 4.3 inch screen (vs 4 inch); forward facing camera; 1080p video recording (vs 720p); onboard storage (16 GB vs 4 GB); slightly smaller footprint.
Xiaomi Advantages: Price; processor speed (1.5 Ghz vs 1.2); battery (1930 mAh vs 1650); GLONASS and GPS tracking; highly customizable UI out of the box.
In China, the SGS2 retails for about 4300 RMB (about $670 USD). So how does a phone which is in the SGS2's ballpark retail for less than half the price?
It gets even more peculiar. Here are some questions Xiaomi hasn't cleared up(or at least I haven't seen their responses yet):
1) Xiaomi uses a Qualcomm processor and a LCD screen from Sharp (Japanese import). So they can't be using local parts to save costs, how are they able to offer the phone at only $310?
2) Local competitors like Huawei and ZTE who have much more experience in manufacturing (and much more leverage with suppliers) have yet to produce a phone remotely like this. Also, their closest local competition in terms of specs is something like the Huawei Honor, a single core phone that retails for about $400. Yet Xiaomi, which has never produced hardware before is getting better deals than these guys on components? Samsung also does component development in-house, but Xiaomi is getting better pricing than Samsung?
3) Xiaomi was originally a software developer. How did they pull a piece of impressive hardware like this out of nowhere?
4) Why retail for $310? They could sell it for $500 and it would still be way cheaper than an SGS2. Hell, I paid more than 2000 RMB for the crappy 2 year old Nokia I'm still using over here.
My Chinese is OK so I've been trying to read more on the Xiaomi forums, but I haven't really gotten any new information, other than there's something like 300,000 preorders already. I figure there's got to be some serious funny business going on. Probably:
a) ridiculous free loans and/or development assistance from the government to built up national prestige; or
b) copying another phone's internals verbatim; or
c) fake components of some kind
It looked really smooth in the Engadget video, so I'm inclined to be believe it's option A. Good for consumers I guess, but probably lousy if you're a Chinese taxpayer. Any ideas on why the price is so low?
Smaller companies tend to do these kind of things.
However I'm interested as well.
I believe that it's one part 'a' and another that generally huawei and zte have primarily been marketed for export (to SE Asia, India, EU) but the government is really trying to subsidize local start ups to fight imports (like HTC, Sony, etc...) and get Chinese to spend their money on Chinese things. But if a Chinese phone were 3000 RMB and a Korean or Japanese phone was also 3000 RMB, no one would get the Chinese phone for obvious reasons.
so basically you just made up a thread without any evidence and full of speculation accusing Xiaomi not being legit.
india are making ARM Cortex 9 phones with 4 GB for only $35
if they can do it, so can china
lol
Mmmhmm .
I don't why people have so much comments , no offence though .
Forever living in my Galaxy Ace using XDA App
I support you , and do your know meizu'M9 or MX?
hehe
it is good for everyone. thank you!
AllGamer said:
india are making ARM Cortex 9 phones with 4 GB for only $35
if they can do it, so can china
lol
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Seriously?
cdesai said:
Seriously?
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yes, there is a post with the pictures and spec here in the forum
aprox 5 days old
it's made for the india school system
Hi it's my first post and I have no exact figures to support this other than a simple comparison to another industry.
I remember hearing from someone that the mark up on mobile phones (this was a while ago) was a few hundred percent. Remember that it doesn't cost 800 dollars to make a phone and the people that usually make it in third world manufacturing companies or places with poor working conditions only get paid a few dollars an hour to make your 800 dollar phones.
our
My comparison industry is optometry. The following information comes from someone I know who is an optometrist:
"Frames like Gucci and Prada cost $3 per frame to make. In the stores you pay $500 dollars to buy them. That is an insane mark up. However they can't retail it cheaper because of an agreement in place to prevent the devaluation of the brand."
I am sure the same thing happens in the cell phone industry.
Just thought that this might put the legitimacy of the phone in perspective.
Thanks for your time.
andao79 said:
So, as someone living and working in China, I've been super excited following up on the Xiaomi Phone. When they released the price as 2000 RMB (about $310 USD), I knew it had to be fake, or there was some serious funny business. The numbers just don't add up.
Engadget recently had a review of the Xiaomi phone and had it benchmarking near the Galaxy S 2 in several tests, so I think it makes sense to compare these two:
SGS 2 Advantages: Super AMOLED screen; 4.3 inch screen (vs 4 inch); forward facing camera; 1080p video recording (vs 720p); onboard storage (16 GB vs 4 GB); slightly smaller footprint.
Xiaomi Advantages: Price; processor speed (1.5 Ghz vs 1.2); battery (1930 mAh vs 1650); GLONASS and GPS tracking; highly customizable UI out of the box.
In China, the SGS2 retails for about 4300 RMB (about $670 USD). So how does a phone which is in the SGS2's ballpark retail for less than half the price?
It gets even more peculiar. Here are some questions Xiaomi hasn't cleared up(or at least I haven't seen their responses yet):
1) Xiaomi uses a Qualcomm processor and a LCD screen from Sharp (Japanese import). So they can't be using local parts to save costs, how are they able to offer the phone at only $310?
2) Local competitors like Huawei and ZTE who have much more experience in manufacturing (and much more leverage with suppliers) have yet to produce a phone remotely like this. Also, their closest local competition in terms of specs is something like the Huawei Honor, a single core phone that retails for about $400. Yet Xiaomi, which has never produced hardware before is getting better deals than these guys on components? Samsung also does component development in-house, but Xiaomi is getting better pricing than Samsung?
3) Xiaomi was originally a software developer. How did they pull a piece of impressive hardware like this out of nowhere?
4) Why retail for $310? They could sell it for $500 and it would still be way cheaper than an SGS2. Hell, I paid more than 2000 RMB for the crappy 2 year old Nokia I'm still using over here.
My Chinese is OK so I've been trying to read more on the Xiaomi forums, but I haven't really gotten any new information, other than there's something like 300,000 preorders already. I figure there's got to be some serious funny business going on. Probably:
a) ridiculous free loans and/or development assistance from the government to built up national prestige; or
b) copying another phone's internals verbatim; or
c) fake components of some kind
It looked really smooth in the Engadget video, so I'm inclined to be believe it's option A. Good for consumers I guess, but probably lousy if you're a Chinese taxpayer. Any ideas on why the price is so low?
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I'd get the M9 or M9x ( or something.. Quad Core? HELLOOOOO )
I don't see why someone would get a device ONLY for Miui, most phones out there have a build of MIUI.
You really think that $600 phone costs $600 to make?
The markup on electrical goods from brand names can be over 200%
My point is not really related to the idea of a markup, I KNOW all cell phones have a dramatic markup, and I read not long ago an iPhone 4 costs about $180 to make, while they retail for something like $600 out of contract.
I'm more interested in a) How did this company come out of nowhere with this sort of hardware? and b) They don't NEED to sell it for 2000 RMB for it to be a hit. They could have sold it for $400-450 and it would have still been a hell of a lot cheaper than a Galaxy S 2.
That, coupled with the fact that the big guns in China (Meizu, Huawei, ZTE) are not even in the same ballpark with specs or price, is really weird.
If i can demo one and it works well, i'll definitely pick one up, but there must be some serious funny business behind the scenes.
Why must there be funny business?
Well, you can build a cheap phone if you want.
The question is: can you sell it cheap?
Operating costs, brand advertisement etc. They have no problem there, they just build a phone having no ad space on western media.They can do it, they are smart enough.Plus: we enthusiasts are their advertisement plan, we buy it for cheap, all our friends will buy it.
It's a win win scenario.My 2 eurocents.
andao79 said:
My point is not really related to the idea of a markup, I KNOW all cell phones have a dramatic markup, and I read not long ago an iPhone 4 costs about $180 to make, while they retail for something like $600 out of contract.
I'm more interested in a) How did this company come out of nowhere with this sort of hardware? and b) They don't NEED to sell it for 2000 RMB for it to be a hit. They could have sold it for $400-450 and it would have still been a hell of a lot cheaper than a Galaxy S 2.
That, coupled with the fact that the big guns in China (Meizu, Huawei, ZTE) are not even in the same ballpark with specs or price, is really weird.
If i can demo one and it works well, i'll definitely pick one up, but there must be some serious funny business behind the scenes.
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The issue is risk. Do you risk spending $300 on a new unknown brand or do you spend $450 on a noname brand when you can get a well known brand for $600?
There is obviously going to be a greater curve of buyers the lower the price you go and finding the balance is where your marketers need mettle. I think the current price is going to be very good to get users into buying the phone. Obviously, if they can become the new HTC, their markup is going to increase hugely.
My concern is going to be: at ~$300, what is the customer service going to be like? HTC's is mediocre here in the UK, but if Vodafone, Orange et al resell this phone, it's going to be VERY attractive to us as the carriers are held responsible until end of warranty.
russ18uk said:
The issue is risk. Do you risk spending $300 on a new unknown brand or do you spend $450 on a noname brand when you can get a well known brand for $600?
There is obviously going to be a greater curve of buyers the lower the price you go and finding the balance is where your marketers need mettle. I think the current price is going to be very good to get users into buying the phone. Obviously, if they can become the new HTC, their markup is going to increase hugely.
My concern is going to be: at ~$300, what is the customer service going to be like? HTC's is mediocre here in the UK, but if Vodafone, Orange et al resell this phone, it's going to be VERY attractive to us as the carriers are held responsible until end of warranty.
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Just to clarify, the retailer is responsible until you have had a reasonable amount of use out of it irrespective of warranty
The law doesn't care about warranties, they're in the best case an agreement that the device will be repaired without the need to take legal action, and in the worst case used to illegally convince consumers they have no rights.
Take my Sensation, afaik it has a 12month warranty.
Say the screen dies after 18 months, I'll be demanding O2 repair or replace it otherwise I'll be contacting trading standards as being a phone provided on a 24 month contract I should be able to expect it to last at least 24 months and more especially considering the price when new.
I love being a consumer in the UK
Xiaomo said:
I support you , and do your know meizu'M9 or MX?
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Click to collapse
yes~ Meizu much better than xiaomi
kerwin_pig said:
yes~ Meizu much better than xiaomi
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WHY DID YOU DIG UP OLD THREADS
Sent from my Nexus 4 using xda premium

Selling phones at cost price?

Guys, i bought a LeTV x600. Excited about this phone and the new (yet big) company in the phone world, i went to watch their presentation. It looks they are selling this phone, other models too, at cost price! https://www.youtube.com/watch?v=6WHNbrYGWQM&feature=youtu.be&t=6395
Their idea is to sell at cost price and make profit from their streamming service (they are the chinese netflix) used from the phones of course. Chinese companies are already releasing flagship phones for half the price. Some are really great. But this could be a paradigm shift in the way of doing business. I mean most companies have to get profit from phones, they don't have "other" services in order to make up for selling the phones at cost price. Operators already do something similar to this, the phone is for free, but they obligate you to use their network for 1 or 2 years. We can buy this phone with no obligation to use their streamming service.
I'm no business expert, Apple and Samsung will always be Apple and Samsung, but i think this could really hurt the small/medium players. This is not a "cheap" badly made phone just for the purpose of watching stuff. Just watch the reviews about it.
Think HP selling printers at low price, hopping to get the real (and absurdly high) profit from ink.
What do you think about this?
On a sidenote, the LeTV ROM have some nasty/lame bugs and they are being a bit slow to fix them. IMHO, nowadays most phones are released inmmaturely. Sure, smartphones are more complex than older phones, but still companies could spend a bit more time doing QA on them. They understimate the work and time to have a really mature software. But time runs fast nowadays. Having great specs on a phone is not enough. I think on this case, if LeTV doesn't change their attitude, they can say bye bye to their great idea. Because customers are impatient and don't forgive much.

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