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

[mr moose]

2 hours ago, Amazonsucks said:

He could be like a lot of other super rich and just be unscrupulous... just because someone can do a thing doesnt mean they always will. Some people have a moral code.

huh?

[Amazonsucks]

4 minutes ago, mr moose said:

huh?

There are a lot of ways to make money that involve screwing people over or being unethical. Some people opt not to engage in them.

[mr moose]

4 minutes ago, Amazonsucks said:

There are a lot of ways to make money that involve screwing people over or being unethical. Some people opt not to engage in them.

that's nice,  not too sure what it has to do with what I said or what I was responding to but o.k.

[Amazonsucks]

Just now, mr moose said:

that's nice,  not too sure what it has to do with what I said or what I was responding to but o.k.

You were commenting on why he is super rich

[mr moose]

2 minutes ago, Amazonsucks said:

You were commenting on why he is super rich

and?

[Amazonsucks]

15 minutes ago, mr moose said:

and?

The way one gets rich is often overlooked. "Making a living" is not some morally neutral thing, even though it is often treated as such(provided whatever the person in question is doing is legal). Its either beneficial or detrimental to others, and sometimes people who do unethical but legal things can make a lot of money doing them.

 

Hence, its not necessarily just that soneone understands economics or what people will pay. It can also be that they simply dont care about the ethics of what they do. Sometimes you dont need to be a genius to get rich, just lacking in moral fiber. 

[mr moose]

Just now, Amazonsucks said:

The way one gets rich is often overlooked. "Making a living" is not some morally neutral thing, even though it is often treated as such(provided whatever the person in question is doing is legal). Its either beneficial or detrimental to others, and sometimes people who do unethical but legal things can make a lot of money doing them.

 

Hence, its not necessarily just that soneone understands economics or what people will pay. It can also be that they simply dont care about the ethics of what they do. Sometimes you dont need to be a genius to get rich, just lacking in moral fiber. 

The person I was responding to was heavily insinuating that Warren Buffet was ignorant or stupid.  I was merely pointing out that he is not ignorant at all and is rich because he knows what he is saying and who will pay what price (this is fairly self evident if you following his career).  How moral or ethical he is is irrelevant to that. 

 

I agree, you can get rich being ethical and you can get rich by continually throwing people under a bus and stooging your clients.  Seeing as I have no idea how moral he is I will avoid making such accusations, suffice to say he has pledged to give away 99% of his wealth through the Gates foundation (if that means anything to anyone).

[kilgore_T]

dollar just don't have the buying power it used to have

[Lathlaer]

3 hours ago, mr moose said:

I was merely pointing out that he is not ignorant at all and is rich because he knows what he is saying and who will pay what price (this is fairly self evident if you following his career)

Yeah, it's funny how some people call him stupid or senile in this thread but they probably couldn't hold a conversation with him about the topic. 

 

He was interested in stock exchange since before his puberty hit. His whole life is investing. The mental acuity and instinct are unmatched and there is a reason he is called one of the most successful and influential investors of our time.

 

He could probably whip out a simple graph and try to explain why he thinks Apple could get away with charging, say, $200 for the phone and no one here would be able to counter it with anything but "I wouldn't buy it cause it's too expensive".

 

Or he might be wrong about the subject, that also happens.

 

Either way calling him stupid or suggesting that he somehow got from delivering newspapers in his teens to being the 3rd wealthiest person in the world by some kind of accident calls for some enormously inflated ego.

[D13H4RD]

5 minutes ago, Lathlaer said:

Yeah, it's funny how some people call him stupid or senile in this thread but they probably couldn't hold a conversation with him about the topic. 

 

He was interested in stock exchange since before his puberty hit. His whole life is investing. The mental acuity and instinct are unmatched and there is a reason he is called one of the most successful and influential investors of our time.

Remember that Buffet is talking from the viewpoint of a well-known stock investor. He has held shares in several major companies and where a lot of his net worth comes from. 

 

Warren isn't dumb, stupid or senile in that sense. It's just that he's saying it from the viewpoint of a major investor/shareholder and what's in it for people like him in the context of returns.

 

His viewpoint drastically differs from that of the consumer, who perceives value differently. There are people who will pay $1000 for a phone but that's not a huge number. The higher up you go, the less demand you get because then you're pricing it outside what many would perceive to be delivering ample value.

 

My dad also does stock trading and talking with him about the stock market isn't easy if you know very little about it. 

[mr moose]

1 minute ago, D13H4RD2L1V3 said:

Remember that Buffet is talking from the viewpoint of a well-known stock investor. He has held shares in several major companies and where a lot of his net worth comes from. 

 

Warren isn't dumb, stupid or senile in that sense. It's just that he's saying it from the viewpoint of a major investor/shareholder and what's in it for people like him in the context of returns.

 

His viewpoint drastically differs from that of the consumer, who perceives value differently. There are people who will pay $1000 for a phone but that's not a huge number. The higher up you go, the less demand you get because then you're pricing it outside what many would perceive to be delivering ample value. 

He also knows what people will pay, not individuals, but the market as a whole.  His understanding of markets is well and truly up there when you consider some of his calls.  Making money investing, especially in the 90's when the .com bubble meant that everyone thought it was gold falling from the sky,  except buffet, he knew only some would survive and he knew not to invest in any of them, in fact until apple I don't think he has invested in technology instead opting for markets he can gauge the consumer on. 

[D13H4RD]

3 minutes ago, mr moose said:

His understanding of markets is well and truly up there when you consider some of his calls.  Making money investing, especially in the 90's when the .com bubble meant that everyone thought it was gold falling from the sky,  except buffet, he knew only some would survive and he knew not to invest in any of them, in fact until apple I don't think he has invested in technology instead opting for markets he can gauge the consumer on. 

I think there's a good recent example of that. 

 

Crypto. A lot of people went crazy for it, except Buffet because he knew it was a classic bubble and that it would deflate eventually. A lot of people thought he was senile and crazy and behind the times.

 

And guess what happened when Bitcoin fell to late-2017 levels from its huge peak. 

[mr moose]

3 minutes ago, D13H4RD2L1V3 said:

I think there's a good recent example of that. 

 

Crypto. A lot of people went crazy for it, except Buffet because he knew it was a classic bubble and that it would deflate eventually. A lot of people thought he was senile and crazy and behind the times.

 

And guess what happened. 

Shhhh...   Don't mention Crypto and investors talking ill of it,  you'll bring out all the pseudo economists and their hatred for anything that might shatter their delusions about decentralized currencies.

[D13H4RD]

3 minutes ago, mr moose said:

Shhhh...   Don't mention Crypto and investors talking ill of it,  you'll bring out all the pseudo economists and their hatred for anything that might shatter their delusions about decentralized currencies.

Haha. But yeah. 

 

Buffet may well be senile, out of touch or wrong about a lot of things not related to the economy. 

 

But when it comes to economics, the stock market and such, he has an extremely keen eye on those and probably knows much more than many of us. There's a reason why he was interested in the market when he was really young and why he still does it to this day. 

[mr moose]

Just now, D13H4RD2L1V3 said:

Haha. But yeah. 

 

Buffet may well be senile, out of touch or wrong about a lot of things. 

 

But when it comes to economics, the stock market and such, he has an extremely keen eye on those and probably knows much more than many of us 

I know there are a few here that work in the financial sector, probably the odd number who actually own shares and some maybe even with recognized qualifications, but I would still bet he knows more about the economy than all of us regulars put together.

[D13H4RD]

23 minutes ago, mr moose said:

I know there are a few here that work in the financial sector, probably the odd number who actually own shares and some maybe even with recognized qualifications, but I would still bet he knows more about the economy than all of us regulars put together.

Pretty much. 

 

There ought to be a reason why he's #3 in terms of net worth 

[ZacoAttaco]

I think he usually says he won't invest in an industry that isn't in his 'Circle of Competence', so if he dabbles in Apple stocks he clearly has enough information on them to make comments like these.

[Tech Enthusiast]

To be fair, there really are a lot of things that are RELATIVELY cheap compared to other stuff that has much less of a use.

I kinda see the underlying point he tries to make. 

 

Look at games. Some indie games are like 15 bucks and you get 200+ hours of fun out of them. 

Yet people try to get it cheaper and complain about the price. Then they turn around and order a cinema ticket plus a drink for the same money and don't even think about it.

 

I also don't mind a 1.000 Price tag on my Phones. I use them daily and I depend on them. Meanwhile, I paid 1300 for a feature of my car that I used once in the past 3 months. Yet I see myself trying to find a better value phone, but I did not stop and try to negotiate the price of that car feature. ;-)

[Trik'Stari]

20 hours 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 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.

 

What about wanting to get that product into as many hands as possible, where those users are beholden to you and your walled garden of an app store where you choose what gets sold and you get a cut of everything?

 

I've no doubt that that is on Apples mind at all times.

[bcredeur97]

everything is underpriced when you own a sizable amount of said company and want big profits to roll in so you can make more $

[abazigal]

31 minutes ago, Trik'Stari said:

What about wanting to get that product into as many hands as possible, where those users are beholden to you and your walled garden of an app store where you choose what gets sold and you get a cut of everything?

 

I've no doubt that that is on Apples mind at all times.

Apple's profits come primarily from hardware. It's not so simple as to say "let's cut the price so we can sell more units", when doing so runs the risk of compromising their brand name and overall profitability. 

 

I think that with regards to Apple's business model, there is little question that Apple's current approach makes the most sense. Apple seems to have more or less reached market saturation with regards to sales of iPhones, which means that the next best move is to further monetise your existing user base. In short, Apple is as much a prisoner of their success, in that in order to maintain their profitability, there is really only one strategy which makes sense. 

 

Apple seems to be doing just that, between more expensive iPhones, services (AppleCare, apple music, iCloud, iTunes content, apps), accessories (AirPods, Apple Watch, Apple TV, homepod, airpower, cases etc). Everything is centred around building an ecosystem around the iPhone, and monetising every aspect of it. 

 

And Apple is likely able to get away with this because they have aggregated the best customers, who have proven willing to spend on Apple products and services. So yeah, more expensive iPhones absolutely make every bit of sense from a business perspective. 

[Commodus]

11 minutes ago, abazigal said:

Apple's profits come primarily from hardware. It's not so simple as to say "let's cut the price so we can sell more units", when doing so runs the risk of compromising their brand name and overall profitability. 

 

I think that with regards to Apple's business model, there is little question that Apple's current approach makes the most sense. Apple seems to have more or less reached market saturation with regards to sales of iPhones, which means that the next best move is to further monetise your existing user base. In short, Apple is as much a prisoner of their success, in that in order to maintain their profitability, there is really only one strategy which makes sense. 

 

Apple seems to be doing just that, between more expensive iPhones, services (AppleCare, apple music, iCloud, iTunes content, apps), accessories (AirPods, Apple Watch, Apple TV, homepod, airpower, cases etc). Everything is centred around building an ecosystem around the iPhone, and monetising every aspect of it. 

 

And Apple is likely able to get away with this because they have aggregated the best customers, who have proven willing to spend on Apple products and services. So yeah, more expensive iPhones absolutely make every bit of sense from a business perspective. 

So many people forget that Apple's modern success stems precisely from its refusal to play the "just cut prices, you'll get more customers!" game.  Not that it never lowers prices, but when it does, it's strategic and doesn't compromise the company's image.  Even the iPod shuffle was a cut above other tiny MP3 players.

 

(The new batch of iPhones are likely to represent one of those rare downward price movements.)

 

I always find it funny when people moan that Apple's products are too expensive, and then wonder why their favorite Android phone or Windows PC manufacturer is struggling to turn a profit.  Maybe, just maybe, it's because Apple realizes that you need profit to continue growing as a business where many of its rivals are racing to kill themselves as quickly as possible in hopes of gaining half a point of market share.

[abazigal]

1 hour ago, Commodus said:

So many people forget that Apple's modern success stems precisely from its refusal to play the "just cut prices, you'll get more customers!" game.  Not that it never lowers prices, but when it does, it's strategic and doesn't compromise the company's image.  Even the iPod shuffle was a cut above other tiny MP3 players.

 

(The new batch of iPhones are likely to represent one of those rare downward price movements.)

 

I always find it funny when people moan that Apple's products are too expensive, and then wonder why their favorite Android phone or Windows PC manufacturer is struggling to turn a profit.  Maybe, just maybe, it's because Apple realizes that you need profit to continue growing as a business where many of its rivals are racing to kill themselves as quickly as possible in hopes of gaining half a point of market share.

Almost as if on cue. 

 

https://appleinsider.com/articles/18/09/04/development-costs-prohibitively-high-for-7nm-chips-for-everybody-but-apple-and-tsmc

[Mooshi]

By that logic, a can opener is worth millions given the utility and how cheap they are. How did this guy get rich again..?

[The_Tron]

My first thread to a hundred replies.  Feels good.