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Comment by Joeri | Hacker News Reader

The iphone X is very overpriced when viewed as a utility object, because it doesn’t provide 4x the utility of a $250 phone. But it is very reasonable when viewed as a fashion accessory. A $1000 phone to go inside a $2000 purse is not crazy at all.

People keep looking at apple as a tech company and struggling to understand them, but if you view them as a luxury/fashion company who happens to specialize in technology they make a lot of sense. Nobody complains ferraris are overpriced for the mileage they get and the amount of trunk space, because utility is not the point of a ferrari.

I expect the iphone X to sell really well, to the crowd that buys luxury. The question is whether that is a big enough market to sustain the volume.

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It doesn't necessarily need to be a fashion accessory to justify that price. You're not just getting aesthetics for the money, you're getting performance, battery life, display quality, etc. I'm using my phone a lot on a daily basis, so it's worth paying a bit more to get the best available. There's nothing functionally different about a $2000 purse.

Besides, comparing iPhones to purses is basically the same sort of cringe-y argument some Android users have been making for a long time. "iPhones are for basic white girls". What's next, are we going to say the iPhone is the Pumpkin Spice Latte of smartphones?

A purse can last a lifetime, if not lost or stolen. An iPhone will be unusable within 5 years no matter what.

>An iPhone will be unusable within 5 years no matter what.

your comment makes a lot more sense if you substitute "50 years". This is what a 50 year old LV suitcase looks like:

https://i.pinimg.com/236x/1d/cf/2e/1dcf2e4b6dc46d851095f477b...

This is what a 2012 iPhone looks like:

https://en.m.wikipedia.org/wiki/IPhone_5

they're about equally useable today (2017/early 2018). After 50 years, though, the iPhone would be a joke. (unusable.) I think the iPhone 5 isn't even close to "unusable" after 5 years.

quite the pedantic answer. lets interpret "within 5 years" as < 6 years (give or take):

Now pick an IPhone 4 and good luck with installing/updating anything in ios 7.

The millions of people using iPhone 4's and the price of same on used market show they're far from "unusable."

For a non-durable consumer good, the difference between 5 and 8 years (i.e. 1.6x useable lifetime) is hardly "pedantic".

Would you say there isn't much difference between a 15 and 24 year mortgage in terms of length of commitment?

A phone might be the second largest personal investment many lower-income people make in any object, and it matters at what point it becomes literally unusable.

They are unusable or will be very soon.

Old applications refuse to start, the vendor blocks the old version or retired the remote API. New applications don't support older phones, they can't be installed.

Batteries die. Screens are broken. Spare parts stop being available after a while.

A phone has a life expectancy around 5 years, top.

I don't dispute anything you've said. We'e just going to have to different definitions of 'unusable, no matter what'.

No, in the context of real luxury goods, that's still not significant: Compared to a thirty-year-old purse, a seventy-year-old watch, or a three-hundred-year-old piece of jewellery, there is no difference between a five- or an eight-year lifespan of a phone: They're both "flimsy shit; here today, gone tomorrow" in that perspective.

Also, a phone will hardly ever be _the_ "second largest personal investment many lower-income people make in any object" -- given how ephemeral the phone's service life is, if those people live past thirty or so, it'll have to be one of several successive such investments. Which is precisely the point: If phones weren't such flimsy pieces of crap, it might be. (Oops, sorry, seems I'm full-on channelling Pirsig here...)

But no, BTW, actually I don't see all that much of a difference between a 15-yr mortgage and a 24-yr one. If you get to live your Biblically allotted three-score-and-ten (or more), then they're both "a substantial chunk" of your life. Depending on how a lot of other shit goes -- do you win the lottery, get cancer, have one kid or six...? -- one could be better, or the other. The difference in runtime isn't all that significant.

Same thing, only in reverse, with your phone lifetimes: Five years isn't all that different from eight, in that both are rather equally IN-significant chunks of your life.

> A purse can last a lifetime,

People who spend more than $2k on a purse rarely use it for more than a season, sometimes just for a night.

My last tinder dates would disagree with that, but they're just normal middle class women.

The amount of people renewing luxury bags as fast as you say is very tiny.

Ok, it depends where you live I guess. In some countries only the super rich can afford $2k bags and in this case they don't use them for long. I very much doubt your tinder date will keep using it for a lifetime though.

The bag already outlasted her last iPhone. It will surely last a few more.

I come from a small city in France, it's not uncommon to see poor children [of struggling parents receiving social benefits] having iPhones or $500 shoes. That's in the order of a month rent.

I am in London now. Women could live in a dumpster with flatmates and save enough to buy a new bag every month.

People have different priorities I guess. Note that $2k is on the high side. You can get luxury brands for much less than that.

And a paperweight will last hundreds if not thousands of years!

This isn’t really relevant. An iPhone is a computer. It does a lot of things, and the technology is improving rapidly. A purse is basically just a type of bag. They don’t store more and more stuff every year.

On the contrary, luxury items are very often associated with « lifetime » usage. A pair of luxury shoes will last 20 years if taken care of properly, a swiss mechanical watch can be repaired 50 years after it’s been bought and transmitted from generation to generation. A jewelry is transmitted from mother to daughter, etc etc.

You can’t pretend something to be a luxury item if it’s completely obsolete after a few years. Luxury isn’t purely marketing or aesthetic.

I hope you aren't claiming there is anything from a utility perspective that would make the iPhone X a rational purchase, aside from the appearance of wealth which can be utility depending on which business you're in. otherwise there is simply none, let's please cut the bullshit here. well all in all, the premium is purely for the fashion/wealth thing

Recently bought one myself, and it’s the best phone I’ve ever had. I have zero interest in having a status symbol, but for a nicer screen, camera etc. it’s worth the premium over the other models for me.

You should be a bit more open-minded and realise that it’s not the case that everyone who makes a different assessment of value from you is merely status-seeking.

Imagine your annual income is $200k, and you expect your iPhone X to last 2 years. Imagine you're very busy with work and parenting, and it's very valuable to you to be able to take high quality pictures of your baby and share them with family and friends. A smartphone is the most convenient way to do that. A smartphone that costs ~$1000 takes much better pictures, and faster shutter response, than a smartphone that costs $250.

Is the iPhone X worth an extra $375 per year for the person described above? Of course.

Does it need to provide 4x the utility to be worth 4x the price? No. The marginal utility just needs to be cost-effective, vs. the other ways to 'buy' utility with the same amount of money.

What's the marginal utility over a 500$ Galaxy S8?

Let's assume the cameras (hardware and software) are equally good. If the person I described already uses iOS (and has done for the last few years), then I expect they'd find switching to Samsung-flavoured Android would cause at least a few hours of inconvenience up-front to get most things they need set up, and then little annoyances here and there for a long period afterwards.

At least that was my experience switching my primary mobile device from iOS to Android. And I'd have the same amount of inconvenience if I were to switch from Android to iOS.

Some people value their time highly, and don't find it enjoyable to find solutions to technical or usability problems. So switching to/from iOS has significant disutility.

Sure, so you pay for having locked yourself into a particular ecosystem. Even then, the relative utility of an X over an 8 is not utility.

An iPhone X doesn't provide a better user experience to my hypothetical user than an iPhone 8?

Nope. For some reason a myth of the iPhone's superiority persists -- perhaps mainly among iPhone owners? -- but according to most reputable reviews I've read over the years (and a few people I know who have owned both), that hasn't been true any more for about half a decade now.

"Does it need to provide 4x the utility to be worth 4x the price? No."

Exactly! This fallacy of comparing ratios rather than differences in price is extremely common, totally unjustified, and causes people lots of harm from bad spending decisions in both directions. $100 extra is $100 extra whether attached to a small purchase or a big one.

The correct comparison is (as you say) between the benefit/cost of the extra spending and the benefit/cost of other marginal purchases you would consider. Comparing to the benefit/cost of the "base" purchase (the basic smartphone in this case), which may be very high because that purchase is not marginal for you, is just wrong.

Watching TV last night, I saw three ads for phones. One for the $1k iPhone, the other two for competitors, each of which in the fine print listed starting prices of $949.

There's a market. Don't hate Apple because it went there first.

The Note 8 was released a few months ahead of the iPhone X for $930 too.

Sustain the volume at what level? All indications are that Apple makes less profit on the iPhone X than the other phones. Apple would be quite happy if someone bought any iPhone that they sell from the 6s to the 8s Plus 256GB. I'm purposefully excluding the SE. I think that probably has a lower profit margin.

And how is it overpriced? There is no such thing as an overpriced item in a free market as long as the quantity that Apple can make in a given time period matches the quantity people are willing to buy.

>There is no such thing as an overpriced item in a free market as long as the quantity that Apple can make in a given time period matches the quantity people are willing to buy.

That's the market perspective, but there's a value perspective as well. For example, my kid loves blind bags (no more youtube I think...) These companies want to sell him $0.05 plastic dolls for $5 and they prey on his gambling response to do so. These things are not worth anywhere near $5 except from the perspective that commercials can make my kid want them.

In the aggregate, "the value perspective", is how many people value the product enough to pay Apple's asking price. If the value perspective isn't enough to sell the number of phones Apple can make, then Apple would lower the price.

Or increase ad spend and arrange for PR-managed celebtrity sponsorships as “social proof.” Or repackage most of the tech in a new version with some allegedly extra premium feature, like a useable battery life. Or release some other products and rely on a halo effect.

The point being that perceptions of practical utility, Veblen value, and other price-defining factors are all malleable and brand-dependent, and essentially about social psychology, not some mythical “objective” market value.

The market value is not "mythical" and it is "objective". Everything you stated - advertising,Veblen value, and other "malleable" attributes are things that increase its value in the eyes of the target market.

Just because you may not find a value in a pair of $200 Jordan's doesn't mean that it's not the value that the market has placed on them. How the company influenced that value is irrelevant. The fact that someone spent $200 on a pair of shoes when they weren't under duress to do so, by definition means they valued those Jordan's at $200.

That's the market perspective, but there's a value perspective as well.

Entire libraries have been written about and many, many careers have been based upon the notion of "the value of something." It's actually a very, very complex idea. The minuscule mass-energy of the electrons and photons oscillating in various wires and fiber optic cables to bring these words to you have virtually zero market value as individual particles. However, the same quantity of mass-energy could just as well be worth $1000 or $10000 as a different arrangement of mass-energy forming a digital transfer of money. (Not blockchain, as that's a bit heavyweight, but one of many different forms of value transfer.)

"Why are things worth what they're worth?" is the same order of complexity as "Why do things fall?" Your layman's dismissal of value is something like a medieval peasant dismissing the question of why an apple falls from a tree as an idiot's question. It's not. It's Issac Newton's question. If you ask such a question and you look underneath the surface, there's an entire world of complexity unto itself there.

>"Why are things worth what they're worth?" is the same order of complexity as "Why do things fall?" Your layman's dismissal of value is something like a medieval peasant dismissing the question of why an apple falls from a tree as an idiot's question.

I don't think anything you just said is relevant to what I said here. All that I said is that there is a notion of value which is not simply "what the market will bear". Value means different things to different people at different times. As you said; it's complex.

There are items with inherent value, like gold. It's value is inherent because of how we use it (electronics, jewelry), but that doesn't change the fact that there is real value in gold. That's not the same as someone wanting to make a fashion statement, and I think your electron comparison is so simplistic and absurd as to not be useful in any way. Yes, everything in the universe is comprised of the fundamental building blocks of matter. Great insight here, how about we discuss this in a practical way?

There are items with inherent value, like gold. It's value is inherent because of how we use it (electronics, jewelry), but that doesn't change the fact that there is real value in gold.

Context. There are contexts where even gold has greatly reduced value. If you're on a sinking ditched airplane in rough seas, are you really going to try and stash that 1kg bar of gold bullion on your person? In that context, it arguably has quite a bit of negative value. I'd account the "getting you dead" property as conferring negative value.

In the same context, liter of salt water is worthless. In a different context, it would be worth many times what the gold would be worth.

1kg of gold is 1/10th the size of a coke can and is worth around $40k.

If you want to save something in a life threatening situation, that's a fairly reasonable choice.

If you want to save something in a life threatening situation, that's a fairly reasonable choice.

I wasn't talking about a life threatening situation. I was talking about a "life threatened by not being able to float well enough to breathe" situation combined with a "life threatened by not getting out of a sinking thing fast enough" situation.

Also if you think it's a reasonable choice, and the next person thinks it's a crazy choice, that supports my point instead of contradicting it. (And yes, I planned that out!)

I was merely illustrating that gold has high value and high density.

The hypothetical "1kg gold bar" would be the size of a highlighter more or less. https://en.wikipedia.org/wiki/Highlighter

Bothering to retrieve something so dense and heavy during a chaotic situation where being buoyant enough is a life or death issue -- it's worth a lot of money, but is it worth your life? If you're a very confident, strong swimmer, then maybe that's a rational choice. If you're certain that there's going to be rescue in just a few minutes, then maybe that's a rational choice. If the time and effort it takes to retrieve the thing isn't going to cost you your life by losing you a place dry and out of freezing water, then maybe that's a rational choice. What if all of those above knobs are cranked over to the most unfavorable position?

This is precisely my point: The value of something is highly contextual. The context might well be different for each individual at different times.

There are items with inherent value, like gold. It's value is inherent because

Besides electronics, historically the only reasons gold has been valuable was that there was limited quantity and people could trade it for needed goods and services and that people could make jewelry from it. But if tomorrow a large gold deposit was found doubling the amount of supply or people stopped accepting gold in exchange for goods, it wouldn't be as valuable. The price of gold doesnt reflect its utilitarian value.

This is not limited to Apple. Top phone prices including Galaxy, Pixel etc have been steadily creeping upwards yearly starting from $500 and are now at $800-1000. Next year it could well be $1200 and in 3 years $1500.

Has the fundamental tech in the phones dramatically increased to justify this, not really.

The same applies to ultrabooks with low performance heavily throttled dual core chips, going from $700-800 to now $1500 plus. This applies to macbooks, dell xps, surface, hp and even lower cost alternatives like Asus.

There is a trend of sorts and it may well be rising income disparities means those at the top are not price sensitive and will pay $500 or $1500 with little qualms, and marketers are responding to the market.

>>> it doesn’t provide 4x the utility of a $250 phone

That is not correct. Try taking a photo of a text document with a $250 phone, the text is not readable because the camera and the software is terrible. A better phone would allow you to not have a dedicated scanner.

Motorola G Plus[0] is 184$ with a 12Mp back camera. You won’t catch a cat jumping in pixel perfect beauty, but that’s plenty enough to scan a text document.

Same for your mail, maps, browsing, messaging, light gaming. It won’t be blazingly fast under the latest OS, but will do any important task with decent performance.

[0] https://www.amazon.com/gp/aw/d/B01N6NTIRH/ref=mp_s_a_1_3?ie=...

The number of pixels has zero relevance to the quality of a photo.

The world is filled with cheap phones that will make a blurry picture if there isn't perfect lighting or if you move by a single millimeter when you press the button.

Of course. I found it interesting that scanning a document is the exact best case scenario: exposure can be adjusted with the flash, and the document hopefully doesn’t move (I had the previous Motorola G, hand shaking would need to be pretty bad to make it blur when using the flash)

On the contrary I take it as an example of bad case scenario. Texts and annotations can be very small, a tad of blurriness and it's unreadable. The blurriness might not be apparent on the phone screen but it's very noticeable on a computer or TV.

I speak from experience with a cheap phone, having to take 6 photos not moving by a iota hoping one will be good enough. Same shit next month when I will have to take a newer proof of address.

I got a G5 plus for my brother earlier this year, and after using it a little bit i felt kinda ripped off with my iphone 7+.. all that money and the motorola does everything just fine!

A $250 phone is plenty able to take a legible photo of an A4 text document.

I know of no phone that can replace a dedicated scanner, though. I regularly use my phone for quick scans, but even the iPhone X can't scan an A4 document at 300dpi. Even if it could, I wouldn't be able to hold it steady enough to do so.

I use a Nexus 5X. Refurbished for $180 ($270 new) on amazon right now. The picture quality is excellent and for something basic like taking readable pictures of text documents it's perfectly fine. In fact it's pre-pre-descessor was perfectly fine for that task. I was using it extensively for just that purpose.

These expensive phones are luxury devices with almost no added utility. A few milliseconds of delay can make a big difference in how a device feels, and be expensive to get rid off, but they don't fundamentally alter what you can do with the device.

I remember looking at that phone last year, the cheapest was 350 euro and all the sellers were out of stock.

There was a luxury Nokia studded with gems -Vertu. I don't think it did all that well. So it's not only about fashion. There has to be something else which creates desire and demand.

It is not a fashion statement. When was the last time you saw a phone without a case, that makes it indistinguishable from the rest?

It is just an object of desire.

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