Reducing Trade-in Value = Reducing Iphone Value (Real Cost of an Iphone)

Has the Core Group Taken too big of a bite in the Apple by reducing Trade-In values?

Has the value of the iPhone decreased with the new Trade-In Program???

The Apple iPhone, born and bread in the mists of the most praised peace of tech land by every nerd, computer geek or tech junkie in the entire world!  Most of you reading this will know of or have heard of Silicon Valley in California.  The place where the most creative ideas were spawned to bring us every Apple product that was invented!! It is the place where the first iPhone was given its chance to change the world and provide a new meaning to the world of mobile technology.

From the time of the first iPhone, the iPhone was seen as an icon, a figure unlike no other.  Steve jobs himself had created this image in our minds that there is no other phone like the "Apple iPhone" and thus no matter how many phones his competitors had come out with on a monthly basis, Steve stuck to only giving us one phone a year.. Which if you think about it.. psychologically would make each and every one of us only anticipate the Launch of The Next iPhone.

Proof of this can be seen in the people around us every single day. How many people do you know or have you heard of that have in the past upgraded from the iPhone 4 to the 4s? or from the 5 to the 5s? Most of you who have, would know that buying the "S" Version of the iPhone could be compared to upgrading the ram or buying a new mother board for your old desktop PC... But at what price??? Many of us ask the question, is it really worth buying the upgraded version?? But so many people still stand in hour long ques and rush out to get the next big thing...which in this case looks the same as our current phone but comes at the cost of a completely new one!

The Ideology of creating the ultimate premium product has been etched not only into our minds but has been etched into the entire existence of the Apple Company as a whole. Another example of this would be to compare the Apple notebook range to that of the other companies that supply notebooks that run on windows, with that being said these other companies offer notebooks that are so much higher spec'd than many of the apple notebooks that many of the people of today buy.....but still many peoples first choice is the apple notebook regardless of what any other specifications other notebooks have. In No way do i intend to demean or downgrade Apple in any way, I mean i for one am a big Apple Enthusiast, But with all this being said it helps to lead to my point which i am slowly getting to.

Every new Apple product that is launched that comes to South Africa comes at a price , and a mighty hefty one id say.. The latest iPhone that was just launched on Friday,24 October 2014, is now retailing for R9800 or more.. and thats just the cheapest price currently around!! YES. R9800 For a Cellphone in a Country where the minimum wage is  roughly only R2000* a month!! like i said Premium product..People are working themselves like crazy for a mere R2000 and we find ourselves purchasing a product to the value of ten thousand without a blink.... and  Indeed Apple has created  a device that when compared to most others surpasses them without even trying but are we really getting value for what we are paying for? (Please for those of you sitting with your premium android devices looking smirk theres a surprise in for you too about your devices.. LoL)

A recent costing by takedown.com shows what it really costs to make an iPhone 5s, iPhone 6 and iPhone 6 Plus

By rough calculation the estimating the rand to R11 to the dollar, it roughly costs R2497 for the iPhone 6 and R2667.50 for the iPhone 6 plus which is Significantly higher than the cost to produce the previous generation of iPhones... and yes now your thinking why am i paying so much for something that doesn't cost as much? But thats not the point.. thats how business works.. if I have something and create value out of it ...annnnd  if i make you want it I can charge you as much as I want why? and well firstly its my product and i can sell it at any price i want really.. right? Yes!!! because the demand and the want is there and no matter how many competitors come out with higher spec'd phones it doesn't matter because their brand in your mind.. will always be the best brand on the market.. you know it.. i know it..and more importantly to them.. they know it.

and now to my point...

Over the years apple has sold their new devices at excessively high prices right? Much of which the average working man cannot afford and as a result he turns to the second hand market for well a second hand iPhone.

The Second hand industry of mobile technology can be said to be just as big as purchasing a brand new phone from apple or your local retailer..

Over the years, since the launch of the first iPhone, unlike other mobile phone manufacturers, the iPhone has kept its high value year in and out. If we go back to just a year back we could still find the iphone 3g selling second hand for R1500 .. We must keep in mind this phone came out in 2008.. R1500 for a phone that at the time was 5 years old seemed pretty pricey. Taking a look at the more recent second hand markets , before the announcement of the iPhone Trade-In program , the iPhone 5s's were going for more than R6500 some even R7500 second hand.

After the Initial announcement of the iPhone Trade-In  program of getting R5000 for your second hand iphone 5s, the prices in the second hand market began to drop. As per the announcement by Core Group on Friday 24th October 2014 that the trade in value of the iPhone 5s being reduced to R4400, the second hand market had received another blow with many selling their second hand iPhones now at around R4000. This is interesting to see as in previous times it would generally take a whole year or more to see an iPhone depreciate by between R500 and R1500 on the second hand market..

If we take a closer look at it , by Firstly introducing a Trade-In value Core Group had created a value to which a second hand iPhone was actually worth and then by reducing this value they had inturn actually decreased the value of the current iPhones by more than 12%- 25%.

Did Apple or Core-Group more likely anticipate this? why is this important? The reason for this is that majority of people who use your product today are more likely to buy another of your products tommorow.. right? thus controlling the marketed and increasing future sales...

Is this behavior of mimicking other trade in programs by competitors worth decreasing the value of a brand we all think so highly of? and now with the release of two iPhones at once what does this mean for the future of the iPhone? Many people want iPhones because of their high quality status and if this is removed where does it leave apple??

I believe the question that we are all asking is .. what would steve have done?

Well these are just my thoughts.. I Still think apple is Awesome!!  :)

Let us know what you think .....Leave your comments below.