You don't want to know how much the Marketing costs.....
The campaign for the iPhone 6, for example, cost Apple a meagre 850 million dollars. The one for the S6 was somewhere around 600 million.
Now guess who has to pay for that...
Not to mention, do you have any idea how much money is paid in patent fees to other companies for every device? Of your 700 quid phone, 400 quid goes to about 60 different companies for the use of about 600 patents. 200 alone are Microsoft's.
Then there's development costs. Loads of prototypes, trial and error.... And phones don't drop out of the sky, the developers, engineers, designers, r&d staff and everyone else involved has to get paid, too.
Then there's psychology. They tested this in the USA. Give people the option between two identical phones, one for 300 quid and one for 700 quid, and 93% will buy the 700 quid one.
Why? Image. They think a pricy phone makes them appear(and feel) more rich and accomplished. And because of that, they feel a cheaper phone is of a lower quality.
People are incredibly gullible and susceptible when it comes to outside appearances. They'd rather waste 400 quid so they can boast to everyone about how their phone was so very expensive. It makes them feel better.
How many times have we heard this argument: "You're just hating on Apple because you're too poor to buy an iPhone".
And that's why we pay ridiculous amounts for a smartphone: because that's what the masses want to pay.
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