What is the markup on unsubsidized phones?

Discussion in 'Android General Discussions' started by scottfree, Mar 2, 2011.

  1. scottfree

    scottfree Member

    Joined:
    Feb 26, 2011
    Messages:
    32
    Likes Received:
    0
    Trophy Points:
    6
    Ratings:
    +0
    I was just wondering what the markup is on unsubsidized phones? From what I understand is that the contract price is the real price of the phone. When you buy off contract you are just paying for the tax break they wouldn't get. Does anyone know more about this subject ? I have googled as well

    sent from stock dx
     
  2. harrellj

    harrellj Active Member

    Joined:
    Jul 25, 2010
    Messages:
    1,058
    Likes Received:
    2
    Trophy Points:
    38
    Ratings:
    +2
    I don't know exact numbers, but the difference in price between on and off contract has nothing to do with tax breaks. Off-contract price is the price of the phone, the MSRP.

    Subsidizing a phone has 2 purposes. 1) Locking someone into a contract is guaranteed income. 2) People are.less inclined to pay $800 USD for a phone, but are more likely to pay for the same phone when it is $250.

    Yeah, yeah.. I'm on my phone. So?
     
  3. scottfree

    scottfree Member

    Joined:
    Feb 26, 2011
    Messages:
    32
    Likes Received:
    0
    Trophy Points:
    6
    Ratings:
    +0
  4. scottfree

    scottfree Member

    Joined:
    Feb 26, 2011
    Messages:
    32
    Likes Received:
    0
    Trophy Points:
    6
    Ratings:
    +0
  5. scottfree

    scottfree Member

    Joined:
    Feb 26, 2011
    Messages:
    32
    Likes Received:
    0
    Trophy Points:
    6
    Ratings:
    +0
  6. kodiak799

    kodiak799 Gold Member

    Joined:
    Feb 20, 2010
    Messages:
    6,008
    Likes Received:
    775
    Trophy Points:
    258
    Ratings:
    +942
    Margins on the IPhone have been estimated at 30-35%. Yeah, cost is $187-$200, but that doesn't include marketing, R&D and distribution.

    Consider most phone are sold on contract for $200 or so, but that includes @ $250 in subsidy. So $450 is roughly the price of the phone, and so @1/3 is profit making the total cost to Apple about $300.

    Mark-up for retail is a different story, because now you have a 3rd party like Best Buy who has to tack-on a profit to the top. So Apple makes $150, but then BB is going to add another $150-$200 on top.
     
  7. scottfree

    scottfree Member

    Joined:
    Feb 26, 2011
    Messages:
    32
    Likes Received:
    0
    Trophy Points:
    6
    Ratings:
    +0
    Ya I was thinking add about $100 maybe for marketing and shipping etc. Could we buy the same parts and get ahold of a schematic and build the same phone ourselves?

    sent from stock dx
     
  8. takeshi

    takeshi Silver Member

    Joined:
    Nov 29, 2009
    Messages:
    4,581
    Likes Received:
    0
    Trophy Points:
    151
    Ratings:
    +0
    Even if you could buy the parts you wouldn't get them for the same price that the manufacturers pay. You're buying a single part where the OEM's are buying many, many more.
     
Search tags for this page

cell phone markup

,
cell phone price markup
,
cellphone markup
,
mark up on cell phones
,

markup on cell phones

,
unsubsidized cell phone
,
what is a unsubsidized phone
,
what is the mark up on cell phones
,

what is the markup on cell phones

,
what is the markup on cell phones?