Is it just me or is the whole iPhone hysteria getting too much? I’m really getting sick of arm chair quarterbacks coming up with numerous reasons why the iPhone is destined to fail, while anyone who says anything good about it is branded an Apple fanatic. It’s one of those “damned if you do and damned if you don’t” kind of situations. Personally, I think that there is a danger in justifying many of the silly remarks people are throwing about with a response but some are just so stupid I just can’t help myself.
Take the nonsense from iSuppli that Apple are going to make 50% profit on the iPhone. How can you possibly make an accurate estimate of what a device might cost when it’s not even finished, you’ve never even held it in you’re hand and you have absolutely no idea what is inside it from an electronics point of view. But iSuppli claim that they have accurately predicted the true cost of the iPhone based on the demo Apple gave at the macworld keynote. It’s complete rubbish. They have no idea what could be inside the iPhone.
According to eWeek
“The company said it was working off of its own component estimates, based on similar teardowns of competing phones, laptops and other devices.”
So they are assuming everything in the iPhone is the same as parts from other devices? The touchscreen technology Apple is using is completely new. Most current touchscreens can only recognise one input at a time, but iSuppli don’t seem to feel this is important enough. Not only that but their costings don’t include any provision for marketing or shipping. They are clearly trying to get some free press by sensationally piggybacking on the huge amount of press surrounding the launch of the iPhone. They are doing themselves and their clients a huge disservice by so blatantly and shamelessly capitalising on the iPhone hype without any concrete evidence at all to back up their claims.
But where this gets completely ridiculous is where the technology press picks up on this and rather than call them on it, they just run with it to even more insane conclusions. Numerous publications are now predicting that Apple’s 499 and 599 price will significantly drop the price after the phone’s launch, with some predicting it will happen before the launch as a reuse to other manufacturers. So, fast forward to June and the iPhone launches at the price that Apple originally said it would and people are holding off purchases because we were told the price would drop. (Obviously Apple will EVENTUALLY lower the price of the iPhone, but I suspect it won’t be for quite some time.)
Another thing that’s equally frustrating to read is all the hype over the fact that the iPod screen is 1.5:1 rather than 16:9. Some people are getting seriously agitated because Steve Jobs used the word “widescreen” and that they are somehow lying because the screen is not 16:9. But the term “widescreen” has been used numerous times to denote any screen that is greater than the 4:3 aspect of standard screens. Most “widescreen” notebooks have an aspect ratio of 16:10 but no one gets upset about that. Many movies have a ratio of 2.35 to one. Perhaps Apple should have used that ratio to satisfy the film buffs? This really is getting ridiculous.
I do hope Apple announces something new soon, because the longer the iPhone story runs in the technology press, the crazier the hysteria is going to get. You can see now why Apple generally doesn’t pre announce products.
[Updated to correct mistake about price drops being predicted before launch. Also added more links]
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iSuppli can make a rough preliminary estimate because it’s their job, they have contacts in the industry, cost modeling tools and the requisite experience. Did you read the press release? They’re trying to figure out the cost of the materials, excluding indirect expenses (advertising costs, etc.), to estimate the gross margin (gross profit divided by sales). Of course, operating and net margins will be lower. iSuppli never said that Apple will slash the price before June, they said there should be plenty room for future price cuts.
Are they assuming everything in the iPhone is the same as parts from other devices, I don’t know, but sensors, NAND flash, batteries, camera lenses or handheld processors used by Apple are not made by elves in a hollow tree. The cost of the multi-touch display remains the biggest question.
Yes I did read the press release. They clearly state that it is different from their typical tear down, so you could hardly say guessing what something costs is their job. I don’t doubt thqat they are reputable but that doesn’t make this ok. They shouldn’t be doing this until they have a iPhone they can examine. Again, they have no idea what is inside the iPhone, which is a brand new device from Apple.
“I don’t know, but sensors, NAND flash, batteries, camera lenses or handheld processors used by Apple are not made by elves in a hollow tree.”
How do they know which parts Apple are using?
There is a wide variety of components from different manufacturers at different price points. how do they know what the iPhone uses when it’s the first cell phone from Apple?
from their press release…
“iSuppli’s teardowns involve the actual physical dissection of electronic equipment in order to make first- hand observations of equipment content and design. With the Apple iPhone not expected to ship until mid 2007—and thus a teardown not possible until that time iSuppli has made a preliminary estimate of costs based on available information. ”
Then why didn’t they wait until they could know for sure – which is the point I was making.
I will give you that I mis wrote about the price drops befor launch rather thaan after, but some people are predicting it and I have amended the article to clarify this.