Why Apple Gets It and Sony Doesn't

So today Apple announced that they will be lowering the price of the iPhone from $599 to $399 - a $200 drop. And the iPhone has only been out for 2 months and was selling reasonably well. They also discontinued their lower 4GB model because it wasn't selling as well (can someone say 20 GB PS3?).

Meanwhile, Sony dropped the price on the 60 GB8 months after launch and showno signs of dropping it again anytime soon.

My point? Even though the iPhone was selling well, Apple still dropped the price because they heard the complaints from many that 599 was too much for a phone. They listened. Sony on the otherhand continues to try to justify why 599 is a good price for a gaming system. They are not listening.

I love my PS3 and Warhawk but they would do themselves a ton of good by just lowering the price to 399 and biting the bullet now. Remember, not only are they trying to sell game systems but they are also trying to win a format war. More PS3's on the market mean more Blu-ray movies sold and a higherpossible install base for blu-ray movies, which would kill HD-DVD.

It's simple - Lower-Priced PS3=no profit on PS3 near-term but a win for blu-ray and a higher install base for 3rd party game programmers. A Blu-ray win=more profit from royalties and a monopoly on HD movie market. It's a lose now win later philosophy.

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

Sony should learn from Apple.

$600 for a system = reasonable

$600 for a phone= completely insane.

$600 for a system = reasonable

$600 for a phone= completely insane.

Abicus7

Couldn't have said it better

wow 599 for a phone never in my life would i buy one.

Very good point. I have a 20 gig PS3. I think its an awesome system but i dont play it much. They do need to lower the price IMO because they dont have a large user base right now. Companys are not going to spend the time making exclusives for the ps3 without a large user base. Lowering the price=a larger user base. A good example of this is EA sports with madden 08, they spent more time with the 360 version than they did the ps3 version. I own both, so it doesnt matter to me which games get put on on which system, but i would like to see more good exclusive games coming to the PS3. And i think lowering the price would help this cause out ALOT.

So today Apple announced that they will be lowering the price of the iPhone from $599 to $399 - a $200 drop. And the iPhone has only been out for 2 months and was selling reasonably well. They also discontinued their lower 4GB model because it wasn't selling as well (can someone say 20 GB PS3?).

Meanwhile, Sony dropped the price on the 60 GB8 months after launch and showno signs of dropping it again anytime soon.

My point? Even though the iPhone was selling well, Apple still dropped the price because they heard the complaints from many that 599 was too much for a phone. They listened. Sony on the otherhand continues to try to justify why 599 is a good price for a gaming system. They are not listening.

I love my PS3 and Warhawk but they would do themselves a ton of good by just lowering the price to 399 and biting the bullet now. Remember, not only are they trying to sell game systems but they are also trying to win a format war. More PS3's on the market mean more Blu-ray movies sold and a higherpossible install base for blu-ray movies, which would kill HD-DVD.

It's simple - Lower-Priced PS3=no profit on PS3 near-term but a win for blu-ray and a higher install base for 3rd party game programmers. A Blu-ray win=more profit from royalties and a monopoly on HD movie market. It's a lose now win later philosophy.

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

Sony should learn from Apple.

klashawnd

how u gonna compare a console to a phone, you know how much more money it costs to produce 1 PS3 vs 1 Iphone please your rediculous maybe you should go buy some logic at the store for 600$

$600 for a system = reasonable

$600 for a phone= completely insane.

Abicus7

There's your answer right there

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

klashawnd

Well considering it costs Apple roughly $200 to produce an iphone, it's not that big a deal. Sony probably spends like 400-600 per PS3.

the iphone did not get a price drop, check your resourse.......... btw the new i pod looks just like the i phone, go to apples web site to check it out. So man people would be upset if apple did a price drop already!-DeStijl-

Uhh yeah they did lower the price. Check your resourse.

the iphone did not get a price drop, check your resourse.......... btw the new i pod looks just like the i phone, go to apples web site to check it out. So man people would be upset if apple did a price drop already!-DeStijl-

Check YOUR resourse buddy. Front page on google news is iphone gets 200 dollar price drop. Oops, your owned.:twisted:

$600 for a system = reasonable

$600 for a phone= completely insane.

Abicus7

im going to go ahead a place my foot in my mouth.. the i phone is now 399 and im pi$$3d because i got jewed out of 200 dollers!!-DeStijl-

Racist?

Apple knew that they were going to sell the iPhone at $399 soon after the release.They just opened with $599 because they knew it would sell.

Sony has to price the PS3 high or else they lose too much money. Sony is in an unfortunate place now.Do they try to sell the 4 million PS3s at $600 each? Or drop to $400 dollars and sell 6 million. They make the same amount off of sales in both cases, but actually profit more in the first case because they only had to produce 4 million PS3s. (those numbers are completely arbitrary, but hopefully make a valid point).

[QUOTE="klashawnd"]

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

DaAzNJRiCh

Well considering it costs Apple roughly $200 to produce an iphone, it's not that big a deal. Sony probably spends like 400-600 per PS3.

Around 800$ I've heard; something like $843ish, not quite sure right now though..

$600 for a system = reasonable

$600 for a phone= completely insane.

Abicus7

[QUOTE="Abicus7"]

$600 for a system = reasonable

$600 for a phone= completely insane.

sandjar

Couldn't have said it better

Well while you make an interesting comparision to the iphone, the situations of the two companies are entirely different. First of all the parts used to make the iphone, probably didn't cost as much to begin with. Yes it has all sorts of features, but really if you look at them, they are all fairly standard i.e wifi, bluetooth, a camera so hence apple was probably making a profit on the phone to begin with, wheras sony was not on the ps3. Furthermore the iphone, being partnered exclusively with AT&T was probably either pressured by the company to lower the price, i.e get more people to buy it, or the price cut of the phone was a subsidization of the cost by AT&T to get more people to buy again, and obviously makes AT&T money in the long run. Sony, on the other hand has had no outside forces subsidize the cost at least, and the cost to make a ps3 at least initially, was much greater than the cost to make an iphone, resulting in a near $300 loss on each ps3 inititially sold. With the cost of parts going down in price, sony was starting to make a small profit of about $25 on each ps3, but then decided to lower the price in order to " pass on the savings to consumers". Finally, there was an investor report on sony that was quite interesting. It said that sony doesn't necessarily want ps2 sales, at least at the moment to stop as the sales are making large profits while the more ps3s sold, the bigger the loss. Essentially, they want the ps3 to become an upgrade for any current and new ps2 owner to buy in a year or so. So essentially they are taking a risky "tight walk" with their decisions as they don't want it to over massively sell, hence driving them into bankruptcy, but they don't want to lose too much ground to MS and nintendo. At least at the point they are now, they are doing quite well and I think we will see a big price drop, essentially when either MGS 4 or something comes out, or when the ps2 absolutely stops selling. Both of which are far away. Shaqneel

nice wall. about the part of apple being pressured to lower it...

1. It was selling fine.

2. I think Cingular was probably taking orders from Apple (not that they would have any), rather than the other way around. Cingular knows that Apple brought them a lot of new service plans.

iphone was HIGLHY OVERPRICED!!PS3 isn't (it's high priced, but it's the correct price)rogerjak

Well said and I agree. TC it sounds like ur being a troll becuz u cant buy a ps3. Have u heard of Blu-ray??

I'd rather use the $600 for the Ps3, not a stupid cell phone, not even $200-300, will I buy an iPhone.

If the iPod can't impress me, then how can the iPhone?

$600 for a system = reasonable

$600 for a phone= completely insane.

Abicus7

$600 is not reasonable..for a system.

[QUOTE="Abicus7"]

$600 for a system = reasonable

$600 for a phone= completely insane.

OfficialBed

This is the real truth on the matter except there is something you forgot.

To buy the phone for the price you had to sign something like a 5 to 10 year contract with AT&T. And the monthly fees weren't cheap either, there was a report out that showed that the cost of a ipnone each year was somthing like $1,500.00 to over $2,000.00 in extra fees.

So the TC needs to check things a little more before starting a thread.

sony is talking about lowering the price this holiday season to 499 for the 80gb. Its not official yet though

I'd rather use the $600 for the Ps3, not a stupid cell phone, not even $200-300, will I buy an iPhone.

If the iPod can't impress me, then how can the iPhone?

T-Zone

The iphone is so much more than an i pod.. My favorite feature is having a full internet browser in my pocket. i thought it was worth the money for 600. now that its 400 the sales are going to sky rocket and all of you who are bashing the iphone will probably have one and wonder what took you so long to get it!

So today Apple announced that they will be lowering the price of the iPhone from $599 to $399 - a $200 drop. And the iPhone has only been out for 2 months and was selling reasonably well. They also discontinued their lower 4GB model because it wasn't selling as well (can someone say 20 GB PS3?).

Meanwhile, Sony dropped the price on the 60 GB8 months after launch and showno signs of dropping it again anytime soon.

My point? Even though the iPhone was selling well, Apple still dropped the price because they heard the complaints from many that 599 was too much for a phone. They listened. Sony on the otherhand continues to try to justify why 599 is a good price for a gaming system. They are not listening.

I love my PS3 and Warhawk but they would do themselves a ton of good by just lowering the price to 399 and biting the bullet now. Remember, not only are they trying to sell game systems but they are also trying to win a format war. More PS3's on the market mean more Blu-ray movies sold and a higherpossible install base for blu-ray movies, which would kill HD-DVD.

It's simple - Lower-Priced PS3=no profit on PS3 near-term but a win for blu-ray and a higher install base for 3rd party game programmers. A Blu-ray win=more profit from royalties and a monopoly on HD movie market. It's a lose now win later philosophy.

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

Sony should learn from Apple.

klashawnd

This has got to be one of the silliest posts I've seen in a while.

One's a cell phone. One's a gaming console.

It would be akin to me walking into a BMW dealership and saying, "Listen. I think you should give me your 750Li sedan that retails for $87,000 for $40,000 because my local ShopRite just gave me 50% off apples."

:roll:

im afraid you just dont get it. sony has been losing money for every unit sold since launch(about $200 at launch). apple on the other, knew there would be a HIGH demand for their product so they released itoutragously overpriced.

1. apple iPhone was way overpriced.the PS3 was not...expensive yes...but overpriced for what it is/does...no.

2. they're coming out with a new iPhone already and a new iTouch so of course the older (and already outdated) model is getting a price drop. the fact they did it so soon isn't a good thing...that shows they're just trying to get rid of and have already moved on from the iPhone.

3. one is a phone (not that good a phone either) with some cool features. the other does damn near everything entertainment wise.

[QUOTE="OfficialBed"][QUOTE="Abicus7"]

$600 for a system = reasonable

$600 for a phone= completely insane.

jimm895

This is the real truth on the matter except there is something you forgot.

To buy the phone for the price you had to sign something like a 5 to 10 year contract with AT&T. And the monthly fees weren't cheap either, there was a report out that showed that the cost of a ipnone each year was somthing like $1,500.00 to over $2,000.00 in extra fees.

So the TC needs to check things a little more before starting a thread.

exactly. thats also true. it was 600 dollars on an outrageous contract term. i also believe the lowest plan was something like 100 dollars a month.

Now, come again with that outrageously stupid compariosn TC

Apples to oranges, dude.

It's business. Sony literally can not afford to sell the PS3 for less than they are selling it.

A PS3 costs more to make than they sell it for.

An iPhone doesn't.

Next, Sony is not the prime benefactor for Blu-ray. Blu-ray is owned and controlled by a ton of different companies.

I see what you're trying to say, I just don't think this is a good example whatsoever.

So today Apple announcedPHon that they will be lowering the price of the iPhone from $599 to $399 - a $200 drop. And the iPhone has only been out for 2 months and was selling reasonably well. They also discontinued their lower 4GB model because it wasn't selling as well (can someone say 20 GB PS3?).

Meanwhile, Sony dropped the price on the 60 GB8 months after launch and showno signs of dropping it again anytime soon.

My point? Even though the iPhone was selling well, Apple still dropped the price because they heard the complaints from many that 599 was too much for a phone. They listened. Sony on the otherhand continues to try to justify why 599 is a good price for a gaming system. They are not listening.

I love my PS3 and Warhawk but they would do themselves a ton of good by just lowering the price to 399 and biting the bullet now. Remember, not only are they trying to sell game systems but they are also trying to win a format war. More PS3's on the market mean more Blu-ray movies sold and a higherpossible install base for blu-ray movies, which would kill HD-DVD.

It's simple - Lower-Priced PS3=no profit on PS3 near-term but a win for blu-ray and a higher install base for 3rd party game programmers. A Blu-ray win=more profit from royalties and a monopoly on HD movie market. It's a lose now win later philosophy.

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

Sony should learn from Apple.

klashawnd

Phones go through faster cost reduction. Just check out any phone and see how long it lasts at any given price.. they fluxuate soo much.. you cant make this comparison.. besides its 2 different things.

Oh, and while we're on the subject of Apple and their business tactics, does anyone still have a G4 iPod that works?

Every single person I know that had an iPod from that era has had it malfunction on them. Right after the warranty expired. When you bring it to Apple to ask them to have it fixed, they say "just buy a new one, it's so cheap".

I like Apple, but they are no better than any other company on the "greasy business tactics" end of things. They play the hipster to Microsoft's power suit because they have to, it's the only way they can take a chunk out of MS: image. In reality, Steve Jobs wants your money just as much as Bill Gates.

I love my iPod, I like the design of Apple computers (but I hate OSX), but Apple isn't your friend any more than any other electronics company. Their customer service is incredible though, that I will definitely give them.

Here's your large price drop reason.

China is already making a knock-off iPhone that is BETTER than Apple and they sell it for tons less.

i have an i phone which i paid $70 for, yea thats right 70 . an nothing the phone dose justifies a 600 price tag. the ps3 on the other hand has many high deff features, tyhat justify a 600 price tag, it dosnt just play games, it dose other things, and has other things built into it, that makes the system well over 1000, yet we only pay 500.

heres my i phone for proof

[QUOTE="klashawnd"]

Apple knows they will make their money back off of ringtones and song downloads. They are willing to bite the bullet now for more profit growth later.

DaAzNJRiCh

Well considering it costs Apple roughly $200 to produce an iphone, it's not that big a deal. Sony probably spends like 400-600 per PS3.

No, its like 800 something dollars to make a PS3...we got a bargain from the start...

do you really think there is $600 worth of technology in an IPhone?

of course not, its pure mark up price by apple

the ps3 on the other hand when it launched had technology that was $1000, probably more, at the time

and besides from the media and calling funtions, the average consumer isnt going to use the iphone to its fullest

do you really think there is $600 worth of technology in an IPhone?

of course not, its pure mark up price by apple

the ps3 on the other hand when it launched had technology that was $1000, probably more, at the time

and besides from the media and calling funtions, the average consumer isnt going to use the iphone to its fullest

Absynthetic