What does it cost to drive a car? The price of the car. Then, the ongoing costs of insurance, maintenance, gasoline, taxes and licensing, car washes and vacuums, repairs, etc., all need to be added to the price to determine a total cost. iPhones work that way, too.
When you hear someone say, “I’d like to have an iPhone but they cost too much” then it’s obvious they don’t understand the difference between price and cost. An iPhone has a price tag. A Samsung Galaxy-whatever has a price tag. Costs are different.
For example, let’s say you buy an iPhone Xs Max for $1,449. The maxed out Max. That’s the price. Not the cost. Samsung’s Galaxy Note 9 with 512GB storage– the max– is priced at $1,249. About $200 less than iPhone.
The Galaxy is less expensive. The price is lower. What about costs?
Let’s assume that software for both devices are the same and an owner keeps each smartphone for a couple of years before selling it. In most cases, iPhones are worth far more used than anything Samsung makes. That’s the resale value that makes Apple gear worth more than competing products.
A one year old Samsung Galaxy Note 8 on Gazelle goes for $469 retail. An iPhone X sells for as much as $799, a difference of $330. When new, the Note was about $100 less than an iPhone. Which of the two is the value phone a year later?
All things being equal, the iPhone costs less than a comparable Samsung model despite the latter’s lower original price tag thanks to the inherent higher resale value for Apple’s products.
Are not personal privacy and security valuable?
They may not be worth a monetary amount on the surface, but both combine to give smartphone users a sense of value; sans the price tag. Samsung’s smartphones run various versions of Android OS. Rob Thubron:
Almost 90 percent of free apps on the Google Play store share data with Alphabet.
In simpler terms, Google gives away software for free in exchange to taking user information for their own profits.
Big firms then use the data for a variety of purposes, such as credit scoring and for targeting political messages, but its main use is often ad targeting. Not surprising, given that revenue from online advertising is now over $59 billion per year.
Most of that advertising and tracking revenue is soaked up by Google, and while the company does not take money from a users pocket directly, targeted advertising does exactly that, which then increases the cost of owning and using an Android-based smartphone.
Price is not cost. Price is up front. Costs often are hidden in the details and difficult to track, but inevitably lead to more money being spent on something that seems to cost less, when actually it is just priced less.