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That's just not how that works, how much consumers will pay is a binding constraint. Apple isn't subsiding their phone with developer fees and distributing their below marginal cost. Apple is almost certainly charging well above its marginal costs and is already charging the revenue maximising price, it's not willingly leaving money on the table.

Not entirely how you've made formed this connection but respectively it sounds like you've confused several things here.



They are obviously not charging the maximum price because they’ve raised the price significantly when the iPhone X came out and suffered no harm. Apple sets prices based on a 30% raw profit margin and ignores the market except as it constrains their raw material and manufacturing costs. They use that 30% to pay there other costs, such as iOS development and R&D and investing in manufacturing partners.


The iPhone X, like all models, is a different model than all the others; the maximum price for one model is not going to be the maximum price for another.

> Apple sets prices based on a 30% raw profit margin and ignores the market except as it constrains their raw material and manufacturing costs.

Literally impossible ahead of time, as some of their costs are fixed rather than marginal. If you spend, as they did last year, ~$34.5bn on R&D, and you make a thing that costs $1000 to make and then you price it at $1300, but the market looks at what it is and what it costs and says "nah" so only 1 million people buy it that year, then what you're actually making isn't a 30% profit, it is a loss >110x your revenue.

We don't know exactly how much R&D was spent on the AVP, nor the exact sales, but the market reaction to the price is something you should have in mind. No matter what its unit economics were, Apple probably made a loss overall.




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