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- An iPhone should be $20,000
An iPhone should be $20,000
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There are a few conversations that feel like both people have a script.
They just happen the exact same way every time.
If you go into any random group of people and yell “MY NAME IS [YOUR NAME]”, someone will yell “YEAH?”.
If you sing “I’m sorry Miss Jackson”, someone will respond “OOOO!”.
If I tell someone what day my birthday is, they will quote Miss Congeniality at me.
By the way, if you’re a friend or family member who feels like you need to get me a gift (which you don’t), and you need some inspiration, I would highly recommend checking out newnouns.com. I write a weekly newsletter filled with cool things I like.
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An iPhone should be $20,000.
I was listening to NPR the other day, and they mentioned that it costs Apple about $500 to make an iPhone, which they then sell for about $1000.
Complaints about the high cost of an iPhone today have some validity. The original iPhone was $499 in 2007, and considering only inflation, that would be approximately $750 today.
I think there is an argument to be made that an iPhone today is not even remotely the same thing as the original, and is absolutely worth the higher price, but still.
With tariffs, they say it will cost Apple about $1200 to make an iPhone, and who knows how they will pass that down to us normal people.
Let’s assume for a minute that tariffs go through, and Apple is forced to raise the price of the iPhone 17 this fall to $3500.
Would you buy it?
I would like to take a brief pause to acknowledge that price increases do not affect all people equally, and a huge jump in the cost of something as vital to modern life as a smart phone would be disasterous for lower income folks. I know.
The funny thing about pricing is that we don’t actually know how much things should cost. It’s all about context.
A sale price means nothing without the original.
The stock price means nothing without the chart.
There are a few common pricing models.
Cost-plus pricing is a method where a business adds a fixed markup to its production cost or service delivery cost, and that is what it charges. So long as that markup seems reasonable, no one has a problem with this and generally assumes it is how pricing works for everything.
Value-based pricing is where the business charges based on the perceived value of the product. If a business can hire a consultant for $50,000 for one day who can increase the business's profit by $500,000, it would be a good investment. Even if most people would balk at a $50,000/day rate. The value is there.
There are a few things in life that I strongly believe we need to shift our perception of their pricing structure away from cost-plus and toward value-based pricing.
You should not sleep on a shit mattress.
I don’t care how much it cost them to make it. You spend 1/3 of your life on that mattress. It provides an immeasurable amount of value.
(The same is true of your desk chair. Don’t ruin your back.)
With that in mind, let’s talk about the iPhone.
The NPR conversation was clearly in a cost-plus mindset. The price to make it increases, and the price to buy it increases accordingly.
But I cannot think of a single thing more vital to modern life than a smartphone.
You need it for absolutely everything.
It’s the first thing you use in the morning and the last thing you use before bed.
You probably couldn’t have your job without it.
You might not have found your spouse without it.
And the average American picks up their phone around 150 times/day.
Over a typical 2 years of phone ownership, that’s 109,500 times you’re using that phone.
It’s a phone, a computer, a camera, an iPod, a GPS, a calendar, and a PlayStation.
Even if you simply added up the cost of the devices you don’t need because of your iPhone, it should cost a few thousand dollars.
Hell, a 24-month $20,000 car loan costs about $850/month.
I’m pretty sure most of America would pay $850/month if it were the only way to have a smartphone.
We’d find a way to make it work.
Because the value is so nauseatingly high.
Contrary to the point of the last few hundred words, I kind of hope the price of an iPhone goes through the roof so I can justify getting rid of it.
Maybe I’ll be Amish.
Treat yo self.
My wife made me run the derby half marathon the day after my birthday because I asked her to.
If you see me out there and I look happy, give me a wave.
If you see me out there and I am crying, please ignore me.
be good
z
