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Pre-order day is here (though half the media is confused and seems to think it's going on sale today, talking about the lack of lineups, etc).

 

Gold edition sold out in China.

 

All other models are backordered at least a month, many to june.

 

http://www.macrumors.com/2015/04/10/apple-watch-sold-out-launch-day/

 

Apple seemed to be pretty bullish on the Watch, so I doubt it sold out because they had only made a small amount. I think they probably had a pretty good stockpile.

 

Not bad for a version 1.0 pre-order day.

 

You can't get the iPhone 6 without releasing the first iPhone in 2007. It'll be interesting to see what the Watch will become over the years, and how it'll help strengthen the iPhone ecosystem, helping the company's main flywheel (and no doubt adding some very nice margins, especially on the Steel model and the bands).

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I like this comment seen on an Apple news site:

 

Do we really have to play this game every time there's a new Apple product?

 

"It won't sell."

 

… product sells out in hours …

 

"Apple are deliberately holding supply back."

 

… sales figures show they sold a metric crapton …

 

"It's only the loyal fanboys that bought them."

 

… next quarter shows sales growth …

 

"We've reached saturation point."

 

… continued sales growth …

 

… repeat for the next X years …

 

*sigh*

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I was discussing this the other day, I just cannot understand how they keep margins so high. Of course, its their customers that allow them to do so but I really cannot figure out why. Same goes for Samsung Galaxy high end phones/tablet lines.

 

How can people continue spending sums that almost equal their monthly salary just on a phone??

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How can people continue spending sums that almost equal their monthly salary just on a phone??

 

What do you mean "just a phone"?

 

It's not because it's called a "phone" that it's actually a phone. It's a network-connected pocket supercomputer with an intuitive interface. Basically the kind of stuff that Asimov dreamed of.

 

Even Apple's most expensive iPhone is a bargain. People have their whole lives on these things, they check them tens of times a day. It replaces cameras, video cameras, calculators, computers (email, browsing, messaging, games, etc), does fitness stuff, calendars, all kinds of apps, GPS directions, alarm clocks, etc. It keeps you in touch with your friends, your family, work. It's peace of mind when traveling or in case of emergency. Etc etc etc.

 

You get so much value out of an iPhone... I'm sure that a lot of people would give up their cars before their phones. A decade or two ago you could have sold one for millions to the billionaire crowd, and the average person would have had to buy thousands of dollars of bulky equipment to reproduce just part of the functionality at none of the convenience (you certainly could never carry it all with you everywhere you go and stay constantly connected to the net).

 

If price is what you pay and value is what you get, most smartphones are a great bargain, and for just a little bit more money (which is amortized in monthly payments anyway), you can get the best one, with software that is unique to it. A lot of people seem to find that worth it. Absolute numbers matter too: The best cars vs merely good cars are tens of thousands of dollars apart, but the best phones vs merely good ones are maybe a hundred or two apart. That's not much over the couple years that people keep their phones when you think about how much use they get out of them.

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How can people continue spending sums that almost equal their monthly salary just on a phone??

 

What do you mean "just a phone"?

 

It's not because it's called a "phone" that it's actually a phone. It's a network-connected pocket supercomputer.

 

Even Apple's most expensive iPhone is a bargain. People have their whole lives on these things, they check them tens of times a day. It replaces cameras, video cameras, calculators, computers (email, browsing, messaging, games, etc), does fitness stuff, calendars, all kinds of apps, GPS directions, alarm clocks, etc. It keeps you in touch with your friends, your family, work. It's peace of mind when traveling or in case of emergency. Etc etc etc.

 

You get so much value out of an iPhone... I'm sure that a lot of people would give up their cars before their phones. A decade or two ago you could have sold one for millions to the billionaire crowd, and the average person would have had to buy thousands of dollars of bulky equipment to reproduce just part of the functionality at none of the convenience (you certainly could never carry it all with you everywhere you go and stay constantly connected to the net).

 

If price is what you pay and value is what you get, most smartphones are a great bargain, and for just a little bit more money (which is amortized in monthly payments anyway), you can get the best one, with software that is unique to it. A lot of people seem to find that worth it.

 

The iPhone 4 worth of computing power cost $3.5m in 1994.  I purchased an iPhone in 2008, it had identical specs to the giant tower computer I took to college in 1999 (400 Mhz, 8GB storage, 128meg ram).  This was mind blowing to me.  I could hold in my hand and use anywhere with cell service a computer that just a few years back was a giant beige box with a huge monitor that had a mess of wires connecting it to slower internet.

 

The iPhone as a computer is a great value, same with an iPad.  My parents are the perfect iPad use case.  They have iPads and see zero need to ever own a laptop again.  They have those little keyboards attached to type longer emails, but that's it.  For many the iPhone is all they need.  My wife almost exclusively uses her phone.  Of computer usage time per month I'd say 3% is on the laptop to do bills and 97% is on her phone.  I don't believe she's the exception, I believe this is becoming the rule.

 

As consumers we lose sight of where we came from.  The computer I'm typing this on has 16GB of RAM.  My first computer had 4megs and I thought I was in heaven. 

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Exactly, Nate, and the gigaflops are the least interesting part of it. For $3.5m in 1994 you would have had a dos prompt on a 320x pixel screen. The software, the interface, the net connection, the cameras and other integrated sensors add a tremendous amount of utility and value.

 

As consumers we lose sight of where we came from.  The computer I'm typing this on has 16GB of RAM.  My first computer had 4megs and I thought I was in heaven.

 

I remember when I upgraded to 8 megs of RAM to better play Doom and Comanche. I often had to delete games to make room on my 200 megs hard drive, loading them back from stacks of floppies when I wanted to play again.

 

Techies confuse the price of the components and the value of a finished product (which is an ironic mistake to make for people who call themselves value investors). If you're a business, the goal is to capture some of that extra value that you create when you put it all together (hardware-software-services). Many companies can't do that.

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Apple sells overpriced products for snobs. I will never buy a single one of them.

 

You're thinking of Vertu (inferior product but very exclusive and all about appearances).

 

Anything that is owned by 40% of US smartphone users can't exactly be called exclusive... Snobs and hipsters probably have HTC or Nexus phones. As for overpriced, well, they don't seem to have a problem selling them, so lowering prices wouldn't exactly be a smart move. Anyway, thanks for showing us your level of understanding of the situation.

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I like this comment seen on an Apple news site:

 

Do we really have to play this game every time there's a new Apple product?

 

"It won't sell."

 

… product sells out in hours …

 

"Apple are deliberately holding supply back."

 

… sales figures show they sold a metric crapton …

 

"It's only the loyal fanboys that bought them."

 

… next quarter shows sales growth …

 

"We've reached saturation point."

 

… continued sales growth …

 

… repeat for the next X years …

 

*sigh*

 

+1

yes this seems like a pattern. I don't mind it though. Keeps the stock in decent territory. I might just sell mine if it becomes too expensive too soon.

 

I would love to see the Apple Edition watch numbers. Hope they made at least a  million of these  ;). Too bad that we might have to wait 3+ months for that.

 

 

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I was discussing this the other day, I just cannot understand how they keep margins so high. Of course, its their customers that allow them to do so but I really cannot figure out why. Same goes for Samsung Galaxy high end phones/tablet lines.

 

How can people continue spending sums that almost equal their monthly salary just on a phone??

 

The average smartphone user spent more than 3 hours per day on their phone in 2013 - this number is rising at a very fast clip (let's say 4 hours per day today). If an iPhone lasts 2 years, then you are paying ~25 cents per hour of active usage, including a lot of very high value usage (finding your way around if you're lost, looking up important data on the fly, constant access to your schedule and potentially all of your personal files). By "downgrading" to a device which one desires less (buying an iPhone signifies it's your top choice as it's the most expensive option) you may be able to shave ~10 cents per hour off of your device costs.

 

http://www.analysysmason.com/About-Us/News/Insight/consumers-smartphone-usage-May2014-RDMV0/

 

How much do you pay per hour of usage for your car? Probably in excess of $5/hr. By downgrading to a rusty old box you could save more than $4/hr. That's a 40X return on frugality over downgrading from an iPhone.

A movie at the theater in the US now costs more than $5/hr. People could save $4/hr by neglecting the theater and renting from redbox.

 

An iPhone is one of the single cheapest things most people own in terms of actual utility delivered. I would say if you are a moderate smartphone user and don't purchase a top flight smartphone you are irrational: you can almost certainly save money elsewhere while giving up less utility.

 

I was musing for a couple of years that Apple should raise the price of the iPhone given their industry positioning and the growing utility of the iPhone. They did with the 6+ and it's been a raving success.

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I was musing for a couple of years that Apple should raise the price of the iPhone given their industry positioning and the growing utility of the iPhone. They did with the 6+ and it's been a raving success.

 

They did doubly so, with the new memory tiers. Almost nobody will go for the 16gb when you can get 64b for $100 more (the 16 to 32gb upgrade was a harder upsell, and if they had made the minimum 32gb, that would've been saner in a way, but would've made many people not upgrade, so it's a tradeoff).

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I was musing for a couple of years that Apple should raise the price of the iPhone given their industry positioning and the growing utility of the iPhone. They did with the 6+ and it's been a raving success.

 

They did doubly so, with the new memory tiers. Almost nobody will go for the 16gb when you can get 64b for $100 more (the 16 to 32gb upgrade was a harder upsell, and if they had made the minimum 32gb, that would've been saner in a way, but would've made many people not upgrade, so it's a tradeoff).

 

 

Yes quite a racket, $100 for 48GB of flash memory when you can buy a 128GB memory stick for less than half of that, and now they've got people paying between $349 - $17000 for an iPhone accessory!  I don't think there is another company on Earth that could get away with that.  I love it.

 

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I was musing for a couple of years that Apple should raise the price of the iPhone given their industry positioning and the growing utility of the iPhone. They did with the 6+ and it's been a raving success.

 

They did doubly so, with the new memory tiers. Almost nobody will go for the 16gb when you can get 64b for $100 more (the 16 to 32gb upgrade was a harder upsell, and if they had made the minimum 32gb, that would've been saner in a way, but would've made many people not upgrade, so it's a tradeoff).

 

 

Yes quite a racket, $100 for 48GB of flash memory when you can buy a 128GB memory stick for less than half of that, and now they've got people paying between $349 - $17000 for an iPhone accessory!  I don't think there is another company on Earth that could get away with that.  I love it.

 

Yes, this goes back to what I was saying before. People shouldn't confuse the price of the components with the value of the product. A 64gb iPhone is more than $100 more valuable than a 16gb iPhone for sure, so why only charge the cost of the component when you are differentiated (someone else can't sell a 64gb iPhone for just $20 more than a 16gb iPhone..) and can capture more of the actual value?

 

Another cool thing I saw on Twitter, how the Watch tables open up when employees use their devices:

 

CCQCvDEWMAAHXh-.jpg:large

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How can people continue spending sums that almost equal their monthly salary just on a phone??

 

 

It's not because it's called a "phone" that it's actually a phone. It's a network-connected pocket supercomputer with an intuitive interface. Basically the kind of stuff that Asimov dreamed of.

 

 

 

It's so true

 

I value my time highly, and I hate debugging and integrating technology, including all my families connected devices.

I understand that people think Apple products are over priced. I certainly don't feel like a snob. The premium I pay

Apple to make my life easy and seamless is worth every penny. I spend so little time getting things to work now, as

opposed to my Microsoft/linksys , etc, etc, days.

 

Apple just makes my life simple.

 

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iPhone is far from a supercomputer. Mine is less than 2 yrs old, keeps refreshing tabs whenever you go on another, regularly shuts down the browser when the task gets intensive, and already has a very erratic battery. Will probably switch to a Nexus.

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iPhone is far from a supercomputer. Mine is less than 2 yrs old, keeps refreshing tabs whenever you go on another, regularly shuts down the browser when the task gets intensive, and already has a very erratic battery. Will probably switch to a Nexus.

 

Context matters. Obviously I didn't mean a 2015-era supercomputer. But compared to the tech from just a few years ago, it is. Try running a modern OS and browser on a supercomputer from the 90s...

 

Good luck with your Nexus.

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