Apple Using TSM to Justify 1000 Dollar Phone

[Arthur Hanson]

Apple and TSM are making a quantum leap over all other phones by having the latest memory, processor and functionality all in one package to justify the 1000 dollar phone barrier. This is not the phone for everyone, but for those with higher incomes this phone will be an investment in being able to do almost everything with just a phone and do it at an advanced level. Incorporating the latest memory, camera, processor, microphones, speakers all at state of the art level in a near bullet proof package will make the new IPhone a very efficient, complete package on a stable platform with literally a staggering number of uses and this will also drive an accessory market in health, entertainment, augmented reality, measurement and a whole host of endeavors that will make life not only more enjoyable and hassle free, but also more productive. The new iPhone will be an investment in work and living that pays dividends in the form of a more efficient, productive, wide ranging life. Apple with their entire platform is not selling a phone, but a better life and TSM is their key partner in making this happen.

Addition:

This phone could actually become a bargain if it becomes the foundation of personal medical devices and medical tracking, your auto interface, entertainment device, work station, stationary and mobile security device, universal interface for almost everything. With the cost of medical it could become a mobile appointment interface. The AR, high quality cameras and mike combined with serious computing power open whole new platforms that need a greater variety of functions that this platform could offer. To view it as even just a smart phone is a mistake.

 

[IanD]

Yes, a new shiny shiny expensive phone will definitely fix all the things wrong with your life and make you a better person...

 

[Arthur Hanson]

It's a powerful tool that's a gateway to a very powerful platform that offers numerous ways of being augmented by both software and hardware with new platforms being developed at an astonishing rate in how we relate to the world around us and our own bodies. For those that have the skills and motivation to adopt it, the power and versatility is almost limitless and expanding rapidly. For those that choose not to use it in this manner, it's a waste of money. Those that can't see the pnotential choose to be blind or ignorant. Apple is one of the best if not the best at developing intuitive, bug free systems compared to others, by keeping tight reign on the ecosystem and this is what you pay for. It's an individual choice to buy or not buy it and to use it's potential or not. It can either be a good choice or a bad one and only you can make that decision. Apple stores do have some of the best service and can be of help in that department as well as numerous reviews of the products, platforms and attachments that will come out. Like any tool or possession, if one is not going to use it's potential, don't buy it, but for those that really can use its potential,l it could be a raving bargain. Only an open mind can see.

I'm a minimalist and my wife and I have ZTE Promax phones we paid one hundred dollars for. But in the future it looks like we'll be making the switch to Apple products based on a strict ROI (return on investment) philosophy we adhere to.

 

[count]

Don't know if I'll buy it or not, since I'm pretty happy with my iPhone SE, but I'm interested to see if any of Apple's recent work in AR shows up in this device.

 

[Daniel Nenni]

I would buy an iPhone 8 Pro for $1k if it had a faster SoC and/or Modem. I do most of my work on my Iphone 6s or iPad Pro now so it would be worth it if there was added productivity. I also like the AR stuff that is coming out so it would need to be a nice AR platform.

[video=youtube_share;dD-KvMB2kJE]https://youtu.be/dD-KvMB2kJE[/video]

 

[Daniel Payne]

Arthur,

Have you ever touched or used a Google Pixel phone?

Some think that it's better than any iPhone. Consumers have so many choices today for a smart phone, so I use a Samsung Galaxy Note 4 phone yet I also own AAPL stock to hedge my bets.

Reasons Google Pixel is better than the iPhone - Business Insider

 

[Arthur Hanson]

Dan, no I haven't. I feel it's more about the platform and how diverse, intuitive and broad it is. A very key factor is how broad and deep is its adoption in the market place, for even the greatest platform if it doesn't have broad and deep adoption is useless. This is a constant race, that requires even incumbents to be on top of their game. Apple so far is the winner and has maintained that position for a number of years. Their efforts in the self driving area are key, for few have the will or resources to offer the complete package. Medical will be more important than self driving as it is becoming one of most peoples largest expenses and growing to the point it exceeds housing in all but the most expensive areas. Apple's partnership with Kaiser medical is key, for they are the largest assembler/accumulator of data in the medical field. Personally, I'm a minimalist and have a ZTE Promax that currently serves my needs. I see my needs might be changing radically in the next year and Apple so far looks like the winner for my next choice at this point in time. I only buy the technology I need at the time, since the shelf life of any tech is getting shorter and shorter. I have a lot of very expensive tech gear I bought for my business that is now near worthless, but it did more than pay for itself, before it became obsolete. I approach everything, especially technology from an ROI point of view. I see exchange programs taking hold as phones from early adopters, are exchanged and people who don't need top tear buy them as part of numerous cell phone plans, just like used cars.

 

[Daniel Payne]

Arthur,
The Android platform is bigger in size than iPhone, so you have to at least acknowledge that Apple is not the number one seller of smart phones in the world.

Apple does have higher profit margins, but Samsung sells more phones. In February 2016 the report from Gartner showed that Android had 81.7% market share, while Apple iOS had just a 17.9% share.

99.6 percent of new smartphones run Android or iOS - The Verge

 

[IanD]

Also this is a very US-centric view -- in many or most parts of the world medical costs are not such an obsession as they are in the US, and anyway existing high-end smartphones already do pretty much everything people want or need. It's like the PC market, once quad-core CPUs and enough RAM/SSD/HDD space became ubiquitous and cheap, nobody apart from a few geeks worries about PC specs any more so the need to upgrade to the latest and greatest has largely gone.

Once you can't see the pixels any more, having a higher resolution screen is pointless except for bragging rights -- this applies to HDTV as well as monitors and smartphones, so that reason for upgrading has gone. My five-year-old quad-core SSD PC is still doing what I need it to do and I have no plan to replace it any time soon, the same applies to my one-year-old One+3.

If someone *wants* the latest shiny iPhone (or Galaxy, or...) then nobody's stopping them throwing a pile of money at it; just don't confuse "want" with "need"...

 

[Arthur Hanson]

When looking at price, one has to consider resale and price decay. A lot of carriers basically have a resale program on refurbished or tested older phones. The true cost is the rate of decay. Even if the phone goes to zero in three years, which it won't, the cost is less than thirty a month. If the phone saves just an hour a month, it has paid for itself for most of us. If it helps improve our health even a negligible amount by being tied into the Apple medical platform, the phone is free. It's all about utilization, platform and increased functionality over the older iPhones and competition. This is not just about the phone, but the Apple ecosystem and the increase in functionality over even older iPhones. This is just basic economics.

 

[Daniel Nenni]

When looking at price, one has to consider resale and price decay. A lot of carriers basically have a resale program on refurbished or tested older phones. The true cost is the rate of decay. Even if the phone goes to zero in three years, which it won't, the cost is less than thirty a month. If the phone saves just an hour a month, it has paid for itself for most of us. If it helps improve our health even a negligible amount by being tied into the Apple medical platform, the phone is free. It's all about utilization, platform and increased functionality over the older iPhones and competition. This is not just about the phone, but the Apple ecosystem and the increase in functionality over even older iPhones. This is just basic economics.

It is interesting to note that when we switched to iPhones way back when my family took a vote. My older son and I voted Android but my wife and daughters voted Apple. The swing vote was my other son and his girlfriend had an iPhone so he crossed party lines. Looking back, having all of us on the same phone was the right decision, absolutely. Today we are empty nest and all of my family still uses Apple products except my older son who switched to Samsung after leaving the family plan.

Bottom line: The investment it takes to learn how to use these phones and tablets and stay current with the new OS and Apps is worth protecting with vendor loyalty. Especially as we get older. And if you amortize the phone over two-three years as we do and factor in the added productivity and enjoyment it really is easy to justify the cost of these devices.

I literally paid $1 (plus tax) for the iPhone 6s last Christmas replacing my families 5s phones. Hard to beat that. We used our iPad2s for 4 years before replacing them with iPad Pros. Entertainment, productivity, family, Apple products are worth every cent, absolutely.

Why Apple's iPhone 8 Will Be So Expensive

Following reports from Goldman Sachs, Nikkei, Fast Company and KGI Securities’ famed Apple AAPL +0.98% analyst Ming-Chi Kuo that Apple will start iPhone 8 pricing from $1,000 is more evidence to explain why. In short: no iPhone has ever been this expensive to build.

 

[Arthur Hanson]

IanD, The Apple platform is world wide and although medical costs are not as much a factor in the rest of the world now, they are increasing every where through increased age, population and utilization. The auto/transportation market is staggering in size and just getting into autonomous everything. This field is farther along than most realize for an aircraft drone can now take off and land at night on an aircraft carrier under less than ideal conditions, a hard feat for even a good pilot. Apple is all about not only the phone, but the PLATFORM. I will be switching to Apple everything in the near future due to economics and I pay keen attention to not only the upfront cost, but the TCO or total cost of ownership. Many don't realize how expensive the Microsoft platform is to own, I'm getting so sick of it when my friends and family running Apple have far fewer headaches and time wasted than I do. Apple cost a lot more, but the value of my time has gone up so dramatically the MS operating system is starting to cost me more money than it's worth. Android has to many flavors and this will come back to haunt it in the future. One thing Apple does have is the resources in people and money to build stable platforms that are critical in medical, autonomous transportation, robotics and several other areas and this is from someone who doesn't own a single Apple product, but will probably be switching within a year, just out of basic economics.

The success of the Siri speaker will be critical for Apple for this is becoming the critical gateway to the home and consumer with Amazon, Google and Alibaba all making a serious effort to own the home. This is the next battle front in the war of the ecosystems.

 

[Daniel Payne]

Arthur,

I currently use a MacBook Pro for my everyday computing device, then a Samsung Galaxy Note 4 smart phone, plus an iPad for mobile note taking, the three devices actually work quite well together because they all support:

• Google Drive
• Google Docs
• Google Calendar
• Google Contacts

I tend to use the free Google could-based apps because they are free, and mostly bug free, especially compared to anything Microsoft.

I did own a 2011 MacBook Pro 17", however Apple obsoleted that device and will no longer repair the hardware, even though they were forced by a class-action lawsuit to replace for free the defective GPU soldered to the motherboard issue which made the graphics flake out. Both my 15" and 17" MacBook Pros went in for the free repairs, however the repairs started to fail after Apple stopped all support, effectively turning the laptops into bricks.

Yes, hackers tend to aim at the Microsoft platform first because it is 20X larger than Apple computers.

I still run Windows 11 virtually on my new MacBook Pro through an app called Parallels, quite useful for keeping my business working with Quicken.

Good luck unifying on Apple and expect:

1. Higher prices
2. About the same productivity as Android or Windows
3. A learning curve for macOS or iOS
4. New and proprietary connectors with each new generation of Apple device, not compatible with all former connectors
5. Paying a 20% tax for AppleCare, just in case your device stops working
6. Zero documentation on how to use an iPad on a new iPad, first go to the Apple web site and do a search for iPad documentation, then download the PDF
7. Help raise the price of AAPL, I'm a shareholder, thank you
8. Learn bizarre but useful short cuts like Shift+Command+4 to make a screen shot. Uh, but why does Apple need to add the extra Command key at all?
9. For the new MacBook Pro the noisiest keyboard yet devised, especially compared to the ultra-quiet 2011 model
10. Shiny displays that show your reflection like a mirror, because they stopped making anti-glare (aka matte) displays in 2011
11. An iPhone with non-removable battery, because who would want to have a freshly charged spare battery?
12. A laptop with no upgrades allowed, by design: RAM, HDD or SSD.
13. Devices that emphasize beauty over features like the ability to customize the UI

 

[name99]

The above analyses are facile, as is the whining that "it costs too much".
For an INTELLIGENT analysis of what Apple is doing, read:
Daring Fireball: Speculation Regarding the Pricing of and Strategy Behind This Year’s New iPhones

It's not about trying to screw people over, it's about dealing with the reality that Apple can't ship the BEST technology at any given point on the mass market iPhones because the best technology at any given point often can be manufactured in 100s of millions of units in the year of entry.

As for the cost, well, $1000 (or $1200, or $1500) is less than the difference between an economy air ticket and a business air ticket, let alone a 1st class air ticket. But I don't see those expensive berths going empty. It's less than many people spend on alcohol or tobacco every year, not to mention clothes.
If you can't afford it, that's a shame, but be sensible! All that means is that NEXT year's model will have the technology trickled down --- you can wait one year or two can't you?

 

[name99]

Arthur,
Good luck unifying on Apple and expect:

1. Higher prices
2. About the same productivity as Android or Windows
3. A learning curve for macOS or iOS
4. New and proprietary connectors with each new generation of Apple device, not compatible with all former connectors
5. Paying a 20% tax for AppleCare, just in case your device stops working
6. Zero documentation on how to use an iPad on a new iPad, first go to the Apple web site and do a search for iPad documentation, then download the PDF
7. Help raise the price of AAPL, I'm a shareholder, thank you
8. Learn bizarre but useful short cuts like Shift+Command+4 to make a screen shot. Uh, but why does Apple need to add the extra Command key at all?
9. For the new MacBook Pro the noisiest keyboard yet devised, especially compared to the ultra-quiet 2011 model
10. Shiny displays that show your reflection like a mirror, because they stopped making anti-glare (aka matte) displays in 2011
11. An iPhone with non-removable battery, because who would want to have a freshly charged spare battery?
12. A laptop with no upgrades allowed, by design: RAM, HDD or SSD.
13. Devices that emphasize beauty over features like the ability to customize the UI

Daniel this is a silly post that is beneath you.
Most of the points you dispute are irrelevant to most users (like upgradability, or removable phone batteries ---seriously, 2017 and you STILL think this is a big deal!?).
Or they reflect personal choices that other people don't share --- you might think beautiful devices and an attractive UI are less important than being able to make your vendor supplied skin even more ugly, but plenty of people do not share that prioritization.

Others reveal astonishing ignorance about what Apple offers, for example
- no-one forces you to buy AppleCare. I don't. You get asked to pay the exact same "tax" if you buy from any other major vendor, either direct or, eg, through Best Buy.
- if you don't feel comfortable with setting up a new device, or moving data over, the Apple store is happy to help you
- it is utter nonsense to claim that "New and proprietary connectors with each new generation of Apple device". 30-pin lasted what, ten years or so on iPod and iPhone. Lighting has lasted what, at least five years and will probably continue for another five or more. Likewise USB-C is perfectly standard and will be on Apple devices for many years to come.

Most importantly, by insisting on viewing the world through the lens of ideas that were valid in the era of Windows 95, you're missing the big picture of what Apple is doing (and what other vendors will be doing in a few years as they catch up).
Obviously security is one aspect of this that is fairly well known --- Apple has understood, and designed against, threat models years before they became serious. This requires a willingness to accept that some "freedoms" have to be curtailed for the sake of an overall more reliable experience.

Still barely understood by competitors is that selling one device is no longer interesting or relevant. Apple does not sell devices, they sell a personal compute eco-system into which you plug whichever specific modules you want, from the watch and Airpods through phone and iPad to laptops and desktops. The fact that they all work together is not a nice additional feature, it is the whole damn point of the exercise. Note that MS, for example, promised something like Continuity some months ago --- but still doesn't have it working yet, and when it ships it likely will not be supported by 3rd party apps for years. Apple's implementation is built upon API concepts like Deep-Links and Activities that they have been pushing for years (and which are also utilized for many other OS-wide activities).

Even less appreciated is the switch from personal to ambient computing. Ambient computing is, to simplify, locked to the place not the person, locked to the home or the car. This is not JUST personal computing in new form factors because it requires a complete rethink of the security and permission model. How are capabilities shared between the purchaser of the device, the family, guests, random passers-by? And how is this done at the user interface level (no-one cares about the fact that, yes, you can apply five hundred different ACL properties to every object in the OS --- first no-one is interested in doing that, second that doesn't solve the problem --- the issue is "who is allowed to change the thermostat" [or look at the camera feed, or change TV channels], not who can read some file).

No-one has (publicly at least) shown anything even remotely relevant to solving this particular problem, all we have is a bunch of hacks that don't work very well for people (couples, families) trying to share different sorts of things like Amazon Prime subscription or iTunes music or photo stream, and their extensions like Nest's Family Mode accounts.
Does it matter? Hell yes! Look at the fsckup that is public WiFi because no-one EVER thought during the design process about ambient computing. So the ONLY model it supports is personal computing (individual "logs in" to network using a password) and we all have to put up with this nonsense, even when the network is supposed to be basically free like in libraries or hotels.

 

[John Grant (Nine Tiles)]

Arthur, the more the salesman goes on with the sales pitch, the more I think it's just snake oil and a better deal for him than for me. Basically I'm with IanD on this one.

 

[Arthur Hanson]

It's about your needs, if you don't need it, don't buy it is my motto. Right now I have a ZTE Promax for my wife and I that I paid one hundred dollars each for. For the time being they do the job. I see a major upgrade to both my service, phone, tablet and laptop within the year. The return for all will be covered by a difference in productivity and less downtime. ROIC is all I pay attention to, whether for business or pleasure, now buying gifts and surprises for my wife is a totally different philosophy, which is happy wife, happy life.

 

[IanD]

It's about your needs, if you don't need it, don't buy it is my motto. Right now I have a ZTE Promax for my wife and I that I paid one hundred dollars each for. For the time being they do the job. I see a major upgrade to both my service, phone, tablet and laptop within the year. The return for all will be covered by a difference in productivity and less downtime. ROIC is all I pay attention to, whether for business or pleasure, now buying gifts and surprises for my wife is a totally different philosophy, which is happy wife, happy life.

The basic question is -- do you want to be inside the Apple walled garden and use (and pay for) it for everything, or outside in the "free choice" world?

Nobody in one camp (e.g. Arthur) has any real chance of converting someone in the other camp (e.g. me) to switch over, because they see different things as being important. For example, if you've paid for a lot of downloaded music through iTunes you're never going to leave Apple and throw all that investment away -- me, I wouldn't let iTunes anywhere near my music library if you paid me, I'd rather organise and maintain it how I want to, not how Apple wants to, and still own it in future rather than just have an Apple license to play it.

Notice I used "want" not "need", because being honest a shiny new iPhone 8 (or Galaxy 8, or...) is something you desire, it's not like food or drink or a place to sleep. And if you want to spend a lot of money on that well that's fine, it's no different to many other things that people spend large sums of money on. But don't think it makes you in any way superior to people who make different choices for reasons they find more important, like not contributing to the ever-increasing amount of electronic waste driven largely by needless replacement of what are in effect electronic toys...

To some extent it's the same symptom as the "hi-fi fanatic" syndrome, where they're far more interested in the equipment (solid silver mains leads?) and how perfect it sounds than listening to music and enjoying it. If you've got a smartphone (or a PC, or a laptop) and it does what you want, use it and enjoy it until it no longer does what you want, then replace it -- which given the slowing rate of advance nowadays probably means every 3 years or so.

Of course this isn't what the manufacturers want you to do, they want to sell you a new shiny shiny gadget every year (or at most two) whether you need it or not...

 

[Arthur Hanson]

On my laptops, the Microsoft ecosystem has caused me more headaches than you can imagine. It is to the point, the machines are starting to cost me money and soon they will cost me far more money than switching to Apple laptops will cost.

 

[John Grant (Nine Tiles)]

If you've got a smartphone (or a PC, or a laptop) and it does what you want, use it and enjoy it until it no longer does what you want, then replace it

Or to put it another way, if it ain't broke don't fix it, and if it's a bit broken don't spend a lot of time and money replacing it with something else that's no less broken.

There was a time when one avoided software with a version number ending in .0 -- now it's all you can get.