Apple already has a second tier, and it's constantly ignored in all the discussions about how much more Apple devices cost than alternatives. The second tier is the resale market.
When I sold my 3-yr old iPhone, which cost around $700 new, I got well over $200 for it. The net cost was under $500. Android phones might be cheaper, but you can't really sell them when you're done with them because there's always newer Android phones that are also inexpensive.
The same effect happens with Apple's desktops and laptops...by not offering a bargain basement tier, they foster a thriving resale market that's reliable enough that you can factor it into the price when buying a new device. Apple is essentially charging for both the primary sale and the secondary sale up front. Once you account for that, a lot of the difference in price between them and their competition goes away.
In the 40 years that Apple has been in business, it's never gone after the low end market. The Apple // series was always more expensive than its contemporaries, as was the Mac and now the iPhone. There was a brief time that Apple had the lowest cost media players but that was because they cornered the market on the hard drives that they were using and then the flash market.
But why would they? They already capture 80%+ of the profit in the global cell phone market.
Apple already has a second tier, and it's constantly ignored in all the discussions about how much more Apple devices cost than alternatives. The second tier is the resale market.
When I sold my 3-yr old iPhone, which cost around $700 new, I got well over $200 for it. The net cost was under $500. Android phones might be cheaper, but you can't really sell them when you're done with them because there's always newer Android phones that are also inexpensive.
The same effect happens with Apple's desktops and laptops...by not offering a bargain basement tier, they foster a thriving resale market that's reliable enough that you can factor it into the price when buying a new device. Apple is essentially charging for both the primary sale and the secondary sale up front. Once you account for that, a lot of the difference in price between them and their competition goes away.
$500 is still more than twice as expensive as the average price of a new Android phone.
Which is exactly the point. $500 is very competitive with the cost of the Galaxy/Pixel -class phones.
At $200, the 1-2 generations behind used iPhone is very competitive with the slower, cheaper Android phones that you can buy new.
The phones you're comparing the iPhone to are second-tier phones. But, as I said in my original comment, second-tier iPhones are resale, not new.
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Most of the devices at that price tend to be underwhelming performance wise, so here's that.
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Thanks, that was another thought I'd had, but didn't mention.
The accellerated EOL impinges on this though.
In the 40 years that Apple has been in business, it's never gone after the low end market. The Apple // series was always more expensive than its contemporaries, as was the Mac and now the iPhone. There was a brief time that Apple had the lowest cost media players but that was because they cornered the market on the hard drives that they were using and then the flash market.
But why would they? They already capture 80%+ of the profit in the global cell phone market.
Apple's never owned an entire segment, as it did smartphones.
And, actually, it does have a tiered presence: iPad, iPhone, iPod, Shuffle. I'm not sure how many of those remain extant.
The goal would be staving off encroachment from below.
But the "tier" is just lower priced compared to other Apple products, not lower priced compared to competitors.
The average selling price of an Android phone is $202 (https://www.statista.com/statistics/309472/global-average-se...). That's still $150 less than the cheapest iPhone.
The average selling price of a tablet is still much less than the lowest cost iPad.
Apple doesn't sell iPods anymore except the iPod in name only iPod Touch.
Apple only has about 12% world wide market share in smart phones.
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