Google Pixel has higher markup compared to iPhone

[mrjayviper]

does anyone think Google have a higher markup on the Pixels compared to the iPhones considering they don't have the overhead/expense of running hundreds of physical stores?

 

[Almeuit]

Re: Google Pixel has the highest markup of any phone?

I don't believe so. If I am not mistaken companies like LG don't have overhead in the essence of store fronts like Apple yet they charged up just as much.

 

[mrjayviper]

Re: Google Pixel has the highest markup of any phone?

but if you look at prices, Pixels mirror iPhones and yet don't have the overhead of physical stores

 

[Almeuit]

Re: Google Pixel has the highest markup of any phone?

but if you look at prices, Pixels mirror iPhones and yet don't have the overhead of physical stores

That is my point. The stores aren't the reason for higher priced iPhones. LG doesn't have overhead physical stores so -- Why are they just like the Pixel? .

 

[SlappyMcgee]

Re: Google Pixel has the highest markup of any phone?

but if you look at prices, Pixels mirror iPhones and yet don't have the overhead of physical stores

I bet Google's request to HTC to not brand the device with any HTC logos probably cost them a pretty penny.

 

[Steven Robinson2]

Re: Google Pixel has the highest markup of any phone?

There is a lot to factor in when it comes to markups and you can't get it without insider knowledge. I would probably say that the iPhone has a higher markup. Apple can demand better pricing from their suppliers.

Do not forget about the luxury phone market. I am sure they have everyone beat as it relates to markups

 

[billykac]

Re: Google Pixel has the highest markup of any phone?

There is a lot to factor in when it comes to markups and you can't get it without insider knowledge. I would probably say that the iPhone has a higher markup. Apple can demand better pricing from their suppliers.

Do not forget about the luxury phone market. I am sure they have everyone beat as it relates to markups

^^This^^

There is a lot involved in determining markup, but if I am not mistaken, you'd be hard pressed to find any product that comes close to the markup of Apple products - across the board. For instance, Apple enjoys huge economies of scale when buying parts in such high numbers driven by the fact that they only build a couple of models a year - no need to provision for a wide product line. This puts them in an incredible position of power when negotiating part pricing. And that's just one aspect of the overall picture.

In round numbers, I believe that Apple has just over 10% of the international market but they garner about 90% of phone profits.

I am not an expert on this topic by any means, and will leave that to more informed people on this forum. But I'd say iPhone markup would be pretty hard to beat.

 

[mrjayviper]

Re: Google Pixel has the highest markup of any phone?

But I'd say iPhone markup would be pretty hard to beat.

but you're only considering the bill of materials. You haven't factored in the expense of local distribution (in my country, all Pixel (even sold from play.google.com.country-domain-here are coming from overseas) + the expense of a physical store.

 

[billykac]

Re: Google Pixel has the highest markup of any phone?

but you're only considering the bill of materials. You haven't factored in the expense of local distribution (in my country, all Pixel (even sold from play.google.com.country-domain-here are coming from overseas) + the expense of a physical store.

True.

 

[Steven Robinson2]

Re: Google Pixel has the highest markup of any phone?

True.

Most phones have to travel internationally and the physical stores sell more than just iPhones. I would still say that iPhone's mark up is bigger but that doesn't mean the Pixel it too high for an Android phone. It could probably beat the iPhone in time but I would be surprised if it did it right out of the gate. This is all speculation but I do enjoy the discussion.

 

[mrjayviper]

Re: Google Pixel has the highest markup of any phone?

Most phones have to travel internationally

travel from China to Apple-owned distribution centers in most cases.

the physical stores sell more than just iPhones

no one is stopping Google to sell their other devices and accessories in their own stores if they have one

 

[Sher the love]

The overhead from their stores does not effect the "cost" of the iPhone. "cost" meaning the inventory accounting cost. Does Apple adjust their price based on a total company profit goal? Sure.

However, by the way your question is worded, using "mark up" it seems you mean profit margin. With your reasoning, increased overhead would would decrease the profit margin without an increase in price, which means Google would in fact have a higher profit margin (even though the Apple store overhead wouldn't get allocated to the cost of the iPhone) . Google would not have to "mark up" their phones higher than than Apple if they have less costs.

Additionally, Apple stores are probably better for Apple's bottom like since they better control the supply chain, can front load the Apple Store supply of iPhones during release, and cut out other stores being middle men.

Hopefully that made sense.

 

[vzwuser76]

does anyone think Google have a higher markup on the Pixels compared to the iPhones considering they don't have the overhead/expense of running hundreds of physical stores?

A couple reasons I'd disagree with that. First, iPhones sell in the 10s of millions. Theyre going to be getting materials for far less than Google could. It's much the same as how Walmart can sell for so much less than local stores, even some other department stores. They have soany stores and sell in such volume that they get preferred pricing. And you can bet that with Tim Cook at the helm they're getting the best prices possible.

As for stores, if all they sold were iPhones, that would be one thing. But considering most are selling iPhones, iPads, accessories, Macbooks, etc, the cost of the overhead would he spread across all devices. And I'd bet that having a store in a city also increases sales to customers in the area because they don't have to deal with sending devices in or telephone support for issues, they can be taken care of same day, so it would actually increase sales.