Apple’s £999 iPhone X is ‘enormously UNDERPRICED’, says Warren Buffet

[The_Tron]

This guy has no idea how many wallets hate him...

 

Apple’s £999 iPhone X is ‘enormously UNDERPRICED’, says Warren Buffet

 

In a new interview, the World's third richest man said Apple could easily get away with charging a lot more for its indispensable gadget, which Buffet values more than his private jet.

Warren Buffet owns around $56billion (£43billion) in Apple shares

Quote

I have a plane that costs me a lot, a million dollars a year or something of the sort. If I used the iPhone -- I use an iPad a lot -- if I used the iPhone like all my friends do, I would rather give up the plane," Warren Buffet told CNBC's Becky Quick.

He continued: "now it's got competition so you can't push the price, but in terms of its utility to people and what they get for a thousand dollars...you can have a dinner party that would cost that, and here this is, and what it does for you, it's incredible.

 

Well, we have good news Mr. Buffet – Apple could well ratchet up the cost of its newiPhone XS as it releases a separate budget device for everyone who doesn't want to drop a grand on a smartphone.

The trillion-dollar company will unveil its trio of new smartphones on September 12.

 

Apple had the four best-selling phones in the world at the start of this year, with the iPhone X at the top of the heap, according to analysts

Buffet, whose net worth is an estimated $86.7billion (£67.2billion), is the second-largest stockholder in the tech giant through his holding company Berkshire Hathaway, which also owns stakes in Heinz, Coca-Cola and American Express.

Therefore it's no wonder he wants Apple to charge more for its best-selling product.

 

Source: https://www.thesun.co.uk/tech/7161650/apple-iphone-underpriced-warren-buffet/

[Amazonsucks]

Senility is kicking in big time.

[Godlygamer23]

If the iPhone X is underpriced, then other phones are too. But that's not really relevant. It depends on your perspective. Just like people were maybe willing to pay a premium for power windows when they were first invented, some smartphone functionality would also be at a premium. But things become an expectation. If a car didn't have power windows today, people would be upset and wonder why. And the same goes for smartphone functionality, including the iPhone X.

[HanZie82]

Someone who really doesnt know how 'normal' is anymore.

And this isnt just senility @Amazonsucks This ia also complete retardation of the mind.

[Shreyas1]

I wouldn't call it " underpriced ", but Apple could get away with charging more.

[Alexzz_]

Sure they could get away with asking more, however then they would most likely sell less. Its simple economics.

[Enderman]

That's like saying "a car is worth a lot more than it is because of its utility but there's competition so you can't push the price"

Well yeah obviously if a car existed 500 years ago it would be priceless, unfortunately that's not how the world works.

[Amazonsucks]

8 minutes ago, Shreyas1 said:

I wouldn't call it " underpriced ", but Apple could get away with charging more.

Yeah because consumers are ignorant and listen to the marketing propaganda of someone with a huge stake in the company.

[Sauron]

How did he become so rich while being so stupid?

[Shreyas1]

2 minutes ago, Amazonsucks said:

Yeah because consumers are ignorant and listen to the marketing propaganda of someone with a huge stake in the company.

So its a self fulfilling prophecy then  

[Commodus]

I think The Sun is purposefully misinterpreting what Buffett actually said (a Rupert Murdoch-owned news outlet twisting the truth?  You don't say!).

 

Buffett is not actually calling for Apple to raise the price of the iPhone.  He's just arguing that the sheer utility of it makes it more valuable than the price would suggest, and that people would probably pay more if they had to.  And in that respect, he's right.  This also applies to other smartphones, of course.

 

The irony is that everyone's raging against this while largely ignoring reports that Apple will not only have a lower-cost notched iPhone with an LCD, but might charge less for the base iPhone XS in the process (say, $899).

[GoodBytes]

You guys don't understand.

You see a product as: cost to manufacture + R&D + marketing + operation cost + some profit margin percentage = total price.

This is accurate for most things. However, in the case of Apple, that is not how Apple operates.

 

Apple goes (and Samsung with its premium smartphones): "How much are people willing to pay for this product?" It doesn't matter if it the costs of everything is 5$ or 900$, if people sees that the target audience is willing to spend 30,000$ US on it, even if it cost 5$ to manufacture because they see immense value, than 30,000$ it is.

 

What Warren Buffet is saying, is that the iPhone X is a luxury/fashionable item, like a Rolex, or Omega watch, or a MontBlanc pen. It caters to the rich/ultra rich and people who likes to make other make people think they are rich (superficial people). And so these people can spend a lot more on a phone. Basically, he is saying that, Apple can make (based on his analysis) even more money by increasing the price of the iPhone X, as the reduction of people that could no longer afford it will not outweigh the added revenue from the higher profit margin, allowing Apple to make even more money than currently, despite the lower sales number.

 

[Amazonsucks]

9 minutes ago, GoodBytes said:

You guys don't understand.

You see a product as: cost to manufacture + R&D + marketing + operation cost + some profit margin percentage = total price.

This accurate for most things. However, in the case of Apple, that is not how Apple operates.

 

Apple goes (and Samsung with it's premium smartphones): "How much are people willing to pay for this product?" It doesn't matter if it the costs of everything is 5$ or 900$, if people sees that the target audience is willing to spend 30,000$ US on it, even if it cost 5$ to manufacture because they see immense value, than 30,000$ it is.

 

What Warren Buffet is saying, is that the iPhone X is a luxury item, like a Rolex, or Omega watch, or a MontBlanc pen. It caters to the rich and people who like think they are rich (superficial people). And so these people can spend a lot more on a phone. Basically, he is saying that Apple can make even more money by increasing the price of the iPhone X, as the reduction of people that could no longer afford it will not outweigh the added revenue from the higher profit margin.

 

As someone who wears an Omega Seamaster Professional, i can tell you that slave made phones are nothing like Swiss watches...

 

The fact that Foxconn phones are lumped in with them in some peoples' minds is funny and sad at the same time.

 

Buying a watch that has already lasted me 18 years and shows no sign of degrading any time soon seems more like a good value purchase than a superficial one as well. I doubt most people keep an iphone for more than 2 years.

[GoodBytes]

1 minute ago, Amazonsucks said:

As someone who wears an Omega Seamaster Professional, i can tell you that slave made phones are nothing like Swiss watches...

 

The fact that Foxconn phones are lumped in with them in some peoples' minds is funny and sad at the same time.

It doesn't matter. Apple marketing is good at hiding that fact, and adding value to soethi8ng that doesn't have much value. Boosting the justification of the high price of its product. And I can assure you that most people buying their product don't care (or don't care enough) about that fact.

[Amazonsucks]

13 minutes ago, Sauron said:

How did he become so rich while being so stupid?

How do so many other relatively average or stupid people do it? By breaking the rules that everyone else follows. AKA being corrupt.

 

 

[Froody129]

I see where he's coming from. You pay what you do for a car (a lot) because it's a very useful thing to have. A phone is literally access to the entire world in your pocket, which is crazy if you think that "smartphones" only really became a thing about a decade ago. He's saying that for the utility you get it's very cheap.

 

He's using his jet as an example because it costs a lot but he could live without it quite easily, a phone not so. The only problem is that you can buy a Chinese phone for $100 that will have the same basic utility as the iPhone X...

[Amazonsucks]

2 minutes ago, GoodBytes said:

It doesn't matter. Apple marketing is good at hiding that fact, and adding value to soethi8ng that doesn't have much value. Boosting the justification of the high price of its product. And I can assure you that most people buying their product don't care (or don't care enough) about that fact.

Oh i totally agree. Thats the secret to their success: preying on the ignorance of their customers who then become lobotomized rabid fanboys.

[GoldenLag]

well the ammount of stuff in a package you can get for less than 400$ is insane.

 

just look at the Nokia 6.1 plus. a notch, a touchdisplay, microSD card, headphone jack, a couple of cameras, a fingerprintreader.

 

 

yes its a lot of "stuff", but thinking it has a lot of worth doesnt change the market. 

[Sauron]

10 minutes ago, Froody129 said:

I see where he's coming from. You pay what you do for a car (a lot) because it's a very useful thing to have. A phone is literally access to the entire world in your pocket, which is crazy if you think that "smartphones" only really became a thing about a decade ago. He's saying that for the utility you get it's very cheap.

That doesn't make any sense though, a car is expensive to buy because it's expensive to produce... and as you said, what about the other phones that bring the same utility for a lot less money?

[S w a t s o n]

28 minutes ago, GoodBytes said:

What Warren Buffet is saying, is that the iPhone X is a luxury/fashionable item, like a Rolex, or Omega watch, or a MontBlanc pen. It caters to the rich/ultra rich and people who likes to make other make people think they are rich (superficial people). And so these people can spend a lot more on a phone. Basically, he is saying that, Apple can make (based on his analysis) even more money by increasing the price of the iPhone X, as the reduction of people that could no longer afford it will not outweigh the added revenue from the higher profit margin, allowing Apple to make even more money than currently, despite the lower sales number.

 

That's not what he is saying at all, he's saying the utility and effective addiction to smartphones including iPhones means thats people would not be able to live without one and would pay more if forced to. In that regard it's underpriced, except that he admits there is competition.

Quote

"I have a plane that costs me a lot, a million dollars a year or something of the sort. If I used the iPhone -- I use an iPad a lot -- if I used the iPhone like all my friends do, I would rather give up the plane," Warren Buffet told CNBC's Becky Quick.

Quote

He continued: "now it's got competition so you can't push the price, but in terms of its utility to people and what they get for a thousand dollars...you can have a dinner party that would cost that, and here this is, and what it does for you, it's incredible."

I'm sure warren buffet of all people realizes that apple is not a luxury brand, by definition when you are the most popular phone model on earth and millions upon millions are sold each year to the masses, you are NOT a luxury product. I'm also pretty sure that if Apple did decide to start charging 10k a phone the margins would not outweigh the massive drop in sales, but he is not saying Apple should do that because he is aware of the competition.

 

 

[Froody129]

15 minutes ago, Sauron said:

That doesn't make any sense though, a car is expensive to buy because it's expensive to produce... and as you said, what about the other phones that bring the same utility for a lot less money?

Apple has always made huge profit margins selling not the hardware but the experience. Many luxury cars are sold at much higher profit margins than the lower-priced cousins because people are willing to pay for the end experience even if that cost is not justified purely in the production cost to the company. What Buffet means is that the iPhone is very cheap relative to its utility, and if there wasn't as much cheap competition they could very reasonably expect to sell their phone at a much higher price than they do. As said above the statement is being way overhyped so it doesn't really matter that much anyway

[Clanscorpia]

Y'all really need to chill with the shit you guys say about Apple users. Its getting annoying and one of the reasons the general population makes fun of people who are tech oriented. Not everyone who owns an iPhone is a fanboy and its really annoying seeing half the posts in ANY thread referencing Apple talking about people being fanboys. It contributes absolutely nothing to the conversation and just serves for more reason for people to hate on the tech community.

 

Also to everyone calling Buffet stupid. This made has made billions on billions of dollars from investing. If this man says something about business, you should listen.

[S w a t s o n]

2 minutes ago, Clanscorpia said:

Its getting annoying and one of the reasons the general population makes fun of people who are tech oriented.

And we make fun of the normies, it all comes full circle

[Clanscorpia]

Just now, S w a t s o n said:

And we make fun of the normies, it all comes full circle

Id rather be liked by the majority of the population and hated by a small percent then the latter. 

[PocketNerd]

I can understand his argument, but I think he's looking a little too closely at one device.

Smartphones, as a driver of the economy, provide VASTLY more value than what the average person pays for them. Now of course that value varies on the user, but much like the internet, can anyone here actually see the world being no different if Cellphones/Smartphones never existed in the first place?