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Apple’s reason for not making a folding iPhone

# **Apple’s reason for not making a folding iPhone** **The biggest problem of the folding phone line lies in the strategy of keeping the price too high of the manufacturers, making it difficult to create a revolution like the iPhone .** A large screen on the front, accompanied by a bulky camera system on the back. Although continuously improved, the basic design of every phone generally adheres to that. To break those two basic rules, the next-generation smartphone design offers a device that can fit in the user’s pocket and unfold like a book with a large display screen when the user needs it. It’s a clear step forward in terms of phone form and function. Even so, folding phones have so far been simply out of reach for most users. ## The greed of giants The world’s richest technology companies, including Samsung, Microsoft and even Google, are competing fiercely with folding devices. However, despite the tremendous improvements in technology over the past four years, folding phones are still branded as luxury products. The main aspect hindering the popularity of folding phones has to be the price. In 2019, the first folding smartphone was introduced to the public with the Galaxy Fold with a selling price of about $ 2,000. So far, the price of this phone line has not shown any signs of going down. Galaxy Z Fold4 – Samsung’s latest product costs about 1,700-1,800 USD. Pixel Fold – Google’s first folding screen smartphone also has a similar price. There is no denying that folding phones are manufactured based on new and expensive technology. However, in fact, firms can still reduce selling prices and still have good profits. An analysis by Nikkei Asian Review shows that components on Samsung’s new Galaxy Z Fold 4 only cost about 670 USD, equivalent to 38% of the selling price. That means the potential gross profit margin of this product could be up to 62%, if the assembly costs from Samsung are subtracted. Meanwhile, research by Counterpoint Research shows that the iPhone 14 Pro Max, Apple’s most advanced product, has a component cost of $474. This means that the potential gross profit margin that Apple can earn is only about 58%. In other words, Samsung is making more money from folding phones than what a mainstream Apple smartphone can bring. Obviously, manufacturers can lower the price of folding phones to a more reasonable price by discounting a part of the profit margin on each product. ## Lessons from the iPhone Creating a niche and targeting a certain audience is nothing new in the business world. However, the nearly 16-year history of smartphones proves otherwise. New technology products need to be affordable to become mainstream. The first iPhone costs $499 for the 4GB storage version and $599 for the 8GB version. That’s a lot of money for a mobile phone in 2007. Realizing that this price is a barrier for general users to want to own an iPhone, Apple tried a new strategy with the second generation. iPhone 3G. Specifically, Apple has renegotiated its agreement with AT&T. Accordingly, users will be supported with a part of the up-front cost of the phone, while the carrier will compensate with a two-year contract with iPhone owners. This makes it possible for consumers to buy an iPhone 3G with 8GB of storage for just $199. The results of this pricing strategy exceeded expectations when from 2008-2015, Apple’s iPhone sales in the US increased by more than 1,100%, making it the best-selling smartphone in the country. The carrier subsidy has clearly made a big difference with the iPhone. For years, the iPhone has always struggled in Europe, simply because many carriers in this region do not accept this support. This has led to a huge jump in demand for Android phones in the region. Compared to a $680 iPhone, you can buy an Android phone for just under $200 in Europe. The relationship between Apple and carriers in the US lasted for about a decade and only ended in 2016, when Apple accepted to allow users to pay installments to buy phones. Finally, it wasn’t until 2017 that Apple introduced its first $1,000 phone. As can be seen, increasing the price of iPhone is a long process. Fortune writer Dave Smith thinks the same should apply to folding phones, if manufacturers want them to be as revolutionary as the iPhone has been. In addition, reducing the price of fully folding phones can be a huge boon to Google or Samsung, which are looking for ways to entice users to abandon Apple’s ecosystem. Besides, the world of Android phones also needs a big push. According to a research result recently released by Consumer Intelligence Research Partners (CIRP), the percentage of Android users switching to iPhone is at the highest level in the past 5 years. Given that Apple is still out of this market, the price drop on these interesting phones could be a good reason for users to continue using or even switch to the Android ecosystem.



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