Barclays: Nobody Wants to Buy a $1,000 iPhone

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Financial services company Barclays said that just 11 percent of its survey respondents would spend more than $1,000 on an iPhone, while only 18 percent of consumers who already own an iPhone are willing to spend more than that. Most folks only want to spend $582, or $48.50 per month on a 12-month device installment plan.

This could spell bad news for Apple. Reports have suggested its new iPhone 8 will cost $1,200 or even as much as $1,400. Here's why investors might not need to worry, though: Apple's most high-end iPhone 7 Plus, already on the market, costs more than $1,000 after taxes. Also, Apple is expected to offer two other devices, perhaps named the iPhone 7s and iPhone 7s Plus, alongside the iPhone 8. That would help it attract consumers who might not want to spend $1,000 or more on the most expensive iPhone.
 
The subsidies and monthly payments are what makes the iPhone successful. Most people don't consider how much the high end phones cost when the actual cost is hidden in their phone bills. They aren't actually buying a phone - they are just buying a subscription to a phone.

With my yearly plan my iPhone SE costs me now about what a landline cost when I just graduated from high school and I plan on keeping it for several years so the monthly cost will decline over time to about $12.75 per month. In fact I mostly bought mine just to use as a media players and camera since it's less bulky than they usual small digital cameras and just happens to allow phone calls as well.

I can't imagine many people running out and spending $1400 directly on the new iPhone but if it's hidden in their phone bills as a $10-$20 increase they probably will buy up tens of millions as always.
 
I dont get why they ended the 2 year contract thing, I was going to switch to cricket after my contract ends here in a month, but I recently got my phone wet so I'm not too sure if I'll get a new one or repair my old one. AT&T is nickle and diming me on my phone though, should be a simple fixed monthly cost like all my other bills
 
OldGator said:
The subsidies and monthly payments are what makes the iPhone successful. Most people don't consider how much the high end phones cost when the actual cost is hidden in their phone bills. They aren't actually buying a phone - they are just buying a subscription to a phone.

With my yearly plan my iPhone SE costs me now about what a landline cost when I just graduated from high school and I plan on keeping it for several years so the monthly cost will decline over time to about $12.75 per month. In fact I mostly bought mine just to use as a media players and camera since it's less bulky than they usual small digital cameras and just happens to allow phone calls as well.

I can't imagine many people running out and spending $1400 directly on the new iPhone but if it's hidden in their phone bills as a $10-$20 increase they probably will buy up tens of millions as always.
Click to expand...

I got my iPhone SE 64GB for $50 up front, the rest was subsidized by Sprint. my monthly bill is $50 + taxes, so $58 total.

Lord of Shadows said:
I dont get why they ended the 2 year contract thing, I was going to switch to cricket after my contract ends here in a month, but I recently got my phone wet so I'm not too sure if I'll get a new one or repair my old one. AT&T is nickle and diming me on my phone though, should be a simple fixed monthly cost like all my other bills
Click to expand...
Sprint did away with 2 year contracts for subsidized phones for awhile and then brought them back which allowed my to get my iPhone SE for cheap. Going month to month vs 2 year contract doesn't change my monthly fees, so I got the phone and a 2 year contract.
 
I don't want to... but I can and probably will... Apple loves me... SMH. XD
 
I don't get the people that don't buy the phone outright. Sometimes you get a decent deal but they are rarely good value.

Certainly here the sim only plans are much better value. Fun fact though, the whole carrier thing was a big contributor to Nokia's downfall. Internally they thought of the customers as the carriers, then with lots of early branching codelines creating carrier specific products it fucked them on dev and support costs and essentially stopped development.


I need a new phone and can't see me spending that much on the iPhone. I don't get why it would be that much, a better screen that is the same as other phones. Wireless charging I don't care about (and had on a palm years ago). Why am I going to pay 20+% more. Reminds me of retirees selling a house where they ask for $1m because that's what they need to sell it for.
 
I got away from the Apple tax when Steve Jobs returned to Apple and stopped licensing MacOS (although I used Apple products since that time but I never bought them new). That was my primary motivation for switching to Windows (I still have a Power Computing sticker on my car in protest).

I tried using Android and have owned a few Android phones but to me it's too fragmented and clunky. The phone ecosystem overall is just too proprietary and that's why I eventually settled on the SE.

That being said making monthly payments on a phone doesn't make any sense to me.
 
I could think of a few that prefer to sip their Koolaid that would....
 
nutzo said:
They don't want to spend $1000+ on a phone, yet they have no problem spending an extra $45/month for 2 years.

Guess math class really was tough. :rolleyes:
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Yup :) that's what I buy my phone outright and convinced my wife todo the same. You also look after it more as you know what you spent
 
Iratus said:
I don't get the people that don't buy the phone outright. Sometimes you get a decent deal but they are rarely good value.

Certainly here the sim only plans are much better value. Fun fact though, the whole carrier thing was a big contributor to Nokia's downfall. Internally they thought of the customers as the carriers, then with lots of early branching codelines creating carrier specific products it fucked them on dev and support costs and essentially stopped development.


I need a new phone and can't see me spending that much on the iPhone. I don't get why it would be that much, a better screen that is the same as other phones. Wireless charging I don't care about (and had on a palm years ago). Why am I going to pay 20+% more. Reminds me of retirees selling a house where they ask for $1m because that's what they need to sell it for.
Click to expand...


This^

On top of that I'm not willing to spend $600 on a damn phone. I look around and think to myself, "are these people out of their minds?". Phones are disposable electronics with relatively short lifespans. I send texts, make calls, check email, use GPS, and snap a few pictures. I could give less than a crap about having the newest "just because" or as a status symbol. In fact, for most people I consider it a negative status symbol. If you are constantly getting new phones needlessly the status it tells me is that you likely are a mix of these traits: vain, financially handicapped, or lacking in fiscal judgement. None of these are admirable personal qualities.

Outside of malfunction or this bull-crap non-replaceable battery designed obsolescence, I don't replace my phone until it needs to be replaced. I paid ~$120 for my Honor 5x almost 2 years ago and I have no intention of replacing it until I have to. A phone is a tool, and unless a new tool is substantively better in function, then it doesn't warrant fiscal expenditure for replacement.

Protip: to make your battery have a significantly longer lifespan, charge it to 80% instead of 100% and recharge at ~25%. This should approximately triple the usable lifespan of your battery. Of course if you are traveling or whatnot and need 100%, then charge it to full, but for normal use stick to the above guideline.
 
Lord of Shadows said:
I dont get why they ended the 2 year contract thing, I was going to switch to cricket after my contract ends here in a month, but I recently got my phone wet so I'm not too sure if I'll get a new one or repair my old one. AT&T is nickle and diming me on my phone though, should be a simple fixed monthly cost like all my other bills
Click to expand...

Honestly I think it was a good move. If you want to use an old phone without paying for a phone subsidy, you can. Remember, whether you paid for a phone or not, the monthly price was the same. Now it's less when you bring your own phone, your phone is paid off, or you buy the phone outright. Additionally, you can choose exactly how much you want to pay for a phone. No set tiers ($100, $200, $300) when you pay upfront to start a contract. The pricing is also upfront on the bill as to what you're paying for.
 
SparkedFire said:
It's interest free, doesn't seem like a bad deal to me.
Click to expand...

This... if something is offered at a monthly payment and interest free, you are actually costing yourself money by paying full price up front. I mean in general investing the extra $950 up front will only make you another $200 over 2 years, plus 3%/year inflation that actually decreases your effective monthly payment, but still.... buying up front if the monthly option is interest free and the same cost at the end isn't 'saving' you money.

Apply same logic to pushing excess money to pay off low-APR loans ASAP.

There's something to be said for feeling debt free, but it's usually not the smartest money move.
 
SparkedFire said:
It's interest free, doesn't seem like a bad deal to me.
Click to expand...
You can usually get a lower price buying unlocked phones from 3rd party markets then direct from the carriers which is what I do. I never ran the math based on interest free financing, probably something I should do and compare the savings vs. interest gains next time I need a new phone.
 
OldGator said:
The subsidies and monthly payments are what makes the iPhone successful. Most people don't consider how much the high end phones cost when the actual cost is hidden in their phone bills. They aren't actually buying a phone - they are just buying a subscription to a phone.

With my yearly plan my iPhone SE costs me now about what a landline cost when I just graduated from high school and I plan on keeping it for several years so the monthly cost will decline over time to about $12.75 per month. In fact I mostly bought mine just to use as a media players and camera since it's less bulky than they usual small digital cameras and just happens to allow phone calls as well.

I can't imagine many people running out and spending $1400 directly on the new iPhone but if it's hidden in their phone bills as a $10-$20 increase they probably will buy up tens of millions as always.
Click to expand...

Oh, *I* notice. I made the mistake of letting my sister get a newer phone on my plan, she also got one for my Mom. It's $90 a month for just two iPhone 7's. Never ever let the sheep loose in a store, as they also managed to run up 5 cases (yes five) on the payment plan, each case was $40-$70.

I almost took T-Mobile to task for it, as they did this in a Washington store (and I assume the sales rep make bonuses off accessories) and I live in Nevada. They put it on *my* credit without authorizing it with me. So if I ever want to move services, I'm on the hook for around $2k worth of Apple junk.

The note I placed on the account prior said they could add two phones, not a ton of accessories. I'm sure the store rep overlooked that, given their bonus, and the fact my sister was gullible enough to buy a ton of cases.
 
SparkedFire said:
It's interest free, doesn't seem like a bad deal to me.
Click to expand...

It's probably different, here we get 'free' phones but then the call plan is more expensive than it would be without the phone. The difference more than offsets the cost and that's the same carrier, if you go with a low cost carrier then the difference can be hundreds of dollars over two years.

Thanks for the person explaining NPV though.
 
Drakensoul said:
This... if something is offered at a monthly payment and interest free, you are actually costing yourself money by paying full price up front. I mean in general investing the extra $950 up front will only make you another $200 over 2 years, plus 3%/year inflation that actually decreases your effective monthly payment, but still.... buying up front if the monthly option is interest free and the same cost at the end isn't 'saving' you money.

Apply same logic to pushing excess money to pay off low-APR loans ASAP.

There's something to be said for feeling debt free, but it's usually not the smartest money move.
Click to expand...

That's assuming that the price of the phone never declines during its life. While there may not be interest directly on the phone chances are it has been factored into the higher cost of service/plan instead.
 
Pay for a phone? My iPhone SE was free from Telus as a customer since 2012. Actually, we received two phones, one for each account. And they gave us the same plan which was no longer offered. Loyalty has it's benefits.
 
Last year, Apple had no problem selling out of the gloss black iPhone 7. It cost more, was a fingerprint magnet, but they couldn't make them fast enough. My friend bought one and put it in an Otter Box. WTF?
Samsung's flagship phones aren't exactly cheap and they seem to sell just fine. Just think - 8-9 years ago, we had flip phones and no data plans to pay for (at least most people). Now, we have an extra bill per month and are essentially buying a new "computer" every few years.
 
Of course people don't want to spend $1000 for an iPhone, and sure when you set it up as a 12 month buying plan it looks pretty expensive, but chop that into a 24 month plan and you got something. Besides a vast majority are going to subsidize via their carrier. Hell I recently switched to Xfinity Mobile and got a massive upgrade in the S8+ phone, thing is with monthly cost for phone + fee of shared data (I do most of my stuff over wifi, and my wife kinda sorta) it ends up being about the same cost as the MetroPCS plan we were on, and it was an absolutely MASSIVE phone upgrade too versus what I had.
 
Most people not aware after the monthly insurance, various add-on's, cases and accessories they already spend well north of $1000 on their iPhone...
 
This is my year when I’m allowed to buy a new iPhone, and it will be the most expensive one they put out.

I hate how much they cost, but I also cannot resist the urge to upgrade from my iPhone 6, which is really starting to lag, due to insufficient memory.

I deliberately waited an extra year as soon as I found out about the OLED iPhone this year.
 
So 11% support apple just like 1% pays all the taxes and has all the money. Whats new here?
 
OldGator said:
The subsidies and monthly payments are what makes the iPhone successful. Most people don't consider how much the high end phones cost when the actual cost is hidden in their phone bills. They aren't actually buying a phone - they are just buying a subscription to a phone.

With my yearly plan my iPhone SE costs me now about what a landline cost when I just graduated from high school and I plan on keeping it for several years so the monthly cost will decline over time to about $12.75 per month. In fact I mostly bought mine just to use as a media players and camera since it's less bulky than they usual small digital cameras and just happens to allow phone calls as well.

I can't imagine many people running out and spending $1400 directly on the new iPhone but if it's hidden in their phone bills as a $10-$20 increase they probably will buy up tens of millions as always.
Click to expand...

Very true, but some people will, and as you said, hide it in monthly costs and even the poorest will get it just because. These same people will never get out of debit because of small monthly payments on $40k in CC debit. Not faulting Apple or anyone, but rather people to stupid to do basic money management.

Myself, I buy my phones outright, last one being the Google Pixel, and at around $900 for the phone, was without a doubt the most I have ever spent on one. I do get to deduct it for taxes however, but I do (if I wanted) get a free iPhone from work...I just really don't like the GUI, I think they are great phones over all however. With that said, my next phone will not be highend, I bought my parents the Moto G5 Plus, screen is great, build is super (for it's cost) though not as "solid" as the Pixel with it's machined metal body. Camera is probably 90% of what the Pixels is, battery life is great, you get a MicroSD slot (which you will not find on any/many flagship phones anymore), and it keeps the 3.5mm jack, something most flagships seem to be ditching and rumors are the next Pixel will as well. So it seems like flagship phones are offering less and less at higher and higher prices....Or I could get a Moto G5 Plus for $250 on sale....
 
It really helps with the iPhone if you use iTunes to move the icons around to secondary screens (it's a bit more tedious to use the GUI). My home screen is blank aside from the phone/camera/settings icons on the bottom - which is exactly how I have it set up on my Android phone.

The thing that irritates me to no end with Android is when an app is updated it freaking moves back from the SD card to the interior storage.
 
I thought the same thing.. that 1k and over is too much.. but that means i am underestimating apples pixie dust effect.
 
TordanGow said:
Outside of malfunction or this bull-crap non-replaceable battery designed obsolescence,

Protip: to make your battery have a significantly longer lifespan, charge it to 80% instead of 100% and recharge at ~25%. This should approximately triple the usable lifespan of your battery. Of course if you are traveling or whatnot and need 100%, then charge it to full, but for normal use stick to the above guideline.
Click to expand...

Which is one of the reasons I went with the older Note 4 instead of the Note 5 (also wanted the memory slot for more flash).
Couple months ago my battery started to degrade, and it was an easy $15 replacement, so good for another couple years.

No need to baby your battery when it only cost $15 every 2 years to replace it.
 
Drakensoul said:
This... if something is offered at a monthly payment and interest free, you are actually costing yourself money by paying full price up front. I mean in general investing the extra $950 up front will only make you another $200 over 2 years, plus 3%/year inflation that actually decreases your effective monthly payment, but still.... buying up front if the monthly option is interest free and the same cost at the end isn't 'saving' you money.

Apply same logic to pushing excess money to pay off low-APR loans ASAP.

There's something to be said for feeling debt free, but it's usually not the smartest money move.
Click to expand...


Just wait until the interest rates climb back to historical averages. These interest free deals will disappear, and people will be spending even more.
I shake my head when I hear people complaining that they can't afford to replace their broken phone since they are still paying on it.
That's because people are spending more than they can really afford, but hiding it with monthly payments.

Maybe I'm just old but I'd never buy something like a phone on credit. If you don't have the money then you really can't afford it.
Borrowing for a house, ok, for a car, ok if it's not too many years. Borrowing for toys, disposable electronics, vacations, etc, never.

I do agree with taking advantage of zero interest when it makes sense. I took out a 5 year loan on my current car because they had a zero percent finance deal, and I was able to finance the entire amount. Usually I'll take the rebate instead, but that wasn't offered when I bought the car. I've always paid off my cars early to save on the interest, but in this case I'll be going the full 5 years.


FYI: using a credit card is not the same as buying on credit if you pay it off every month.
Even better is using a credit card that has no fee, getting $$ back, and always paying it off each month so no interest. :D
 
nutzo said:
I do agree with taking advantage of zero interest when it makes sense. I took out a 5 year loan on my current car because they had a zero percent finance deal, and I was able to finance the entire amount. Usually I'll take the rebate instead, but that wasn't offered when I bought the car. I've always paid off my cars early to save on the interest, but in this case I'll be going the full 5 years.
Click to expand...

Just remember that you need to make your final payment on time, not even one day late, otherwise you pay back interest on the whole 5 years. I have a habit of paying everything a week early anyways just to avoid mistakes and so forth, and I assume you are "on the ball" as well, but just in case, it's something to be aware of.
 
Who the hell would spend that on an iphone when a galaxy cost half? That's rubbish
 
the prices just for a phone these days is ridiculous. In my book, $1,200 is meant for buying a full desktop computer, and $400 approx. for a smart phone. Apple is charging way too much for their phones. I love my Iphone5S, but I have to wait for the newer iphone price to drop. ugh. BTW, if the tablet are cheaper, why would the iphone cost that much more, its much smaller?
 
zomby said:
the prices just for a phone these days is ridiculous. In my book, $1,200 is meant for buying a full desktop computer, and $400 approx. for a smart phone. Apple is charging way too much for their phones. I love my Iphone5S, but I have to wait for the newer iphone price to drop. ugh. BTW, if the tablet are cheaper, why would the iphone cost that much more, its much smaller?
Click to expand...


I don't know the specifics about these devices, but generally it is more difficult to make things smaller than to make them bigger. Reach a certain threshold and the cost of shrinking everything down starts exceeding the costs of the larger screens, batteries, etc.

Also probably has something to do with demand. Phones are still in high demand, but tablet demand has dropped considerably. A lot of current low pricing likely has to do with excess inventory that needs to get sold.
 
"Most folks only want to spend $582, or $48.50 per month on a 12-month device installment plan."

Except all the samsung S7, S8, note, etc sales and all the iphone sales since inception, would seem to indicate that statement is not true.

There's what they want, and what they will. They will clearly chose from amongst a number of options multiple ways ofr paying for an $750+ phone (most popular size of iphone 7 is $750. same for the samsung S8, some of the smasung flagship models were even more expensive than that).
 
In polls like these you always get a certain segment of the population who will lie their face off because they don't want to tell someone conducting a poll that they will shell out that much money for a phone. I couldn't tell you what the percentage is, but when you look at Galaxy S8 and iPhone 7 sales you can tell fairly clearly that it isn't just the percentage in the polls buying the things. Like others have said, the folks who said "no" to the $1000 iPhone will bury it in payments and justify that they never spent $1000 outright so they never really lied. The same folks who say they got the phone for "free" but the cost of the phone is buried in their payment plan.
 
Ididar said:
In polls like these you always get a certain segment of the population who will lie their face off because they don't want to tell someone conducting a poll that they will shell out that much money for a phone. I couldn't tell you what the percentage is, but when you look at Galaxy S8 and iPhone 7 sales you can tell fairly clearly that it isn't just the percentage in the polls buying the things. Like others have said, the folks who said "no" to the $1000 iPhone will bury it in payments and justify that they never spent $1000 outright so they never really lied. The same folks who say they got the phone for "free" but the cost of the phone is buried in their payment plan.
Click to expand...

I can't recall ever paying more than $200 for a phone. All of my phones I've had since 1995 have been subsidized, so they were either free, $50, $100, or $200.
 
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