iPhone Price Racketeering

[Hugo_ZA]

Ok, so what is the deal with the iPhone pricing? Yes, its a great phone and I want to buy one, but to my shock I found massive discrepancies in Vodacom's pricing of the phone. Bellow are the prices that I was quoted on the weekend:

Incredible Connection Sandton: R6395
Incredible Connection Cresta: R6395
iStore Clearwater Mall: R6359
Vodashop Sandton: R7500
Vodashop Cresta: R8500

All of the above, with the exception of the iStore, are Vodacom outlets, yet I got three different prices. So my question is:

How can one outlet (of the same group) sell the iPhone for R6395 and still turn a profit, whilst another outlet (of the same group) wants to sell it for R8500? That's a R2105 difference in price for the exact same product!

My feeling is that Vodashop outlets are exploiting the popularity of the phone and think they can get away with charging outrageous prices (blatant racketeering) for the iPhone. They truly are doing nothing short of ripping people off.

 

[vodacom3g]

Ok, so what is the deal with the iPhone pricing? Yes, its a great phone and I want to buy one, but to my shock I found massive discrepancies in Vodacom's pricing of the phone. Bellow are the prices that I was quoted on the weekend:

Incredible Connection Sandton: R6395
Incredible Connection Cresta: R6395
iStore Clearwater Mall: R6359
Vodashop Sandton: R7500
Vodashop Cresta: R8500

All of the above, with the exception of the iStore, are Vodacom outlets, yet I got three different prices. So my question is:

How can one outlet (of the same group) sell the iPhone for R6395 and still turn a profit, whilst another outlet (of the same group) wants to sell it for R8500? That's a R2105 difference in price for the exact same product!

My feeling is that Vodashop outlets are exploiting the popularity of the phone and think they can get away with charging outrageous prices (blatant racketeering) for the iPhone. They truly are doing nothing short of ripping people off.

I'll forward this to the channel guys, thanks.

 

[SoTrue]

So you rather prefer price fixing? No-one allowed specials from time to time? No freedom of choice?

 

[Ebo]

I agree - thats why there is competition, hopefully people will shop around and buy from Inc Connection instead of Vodacom, eventually Vodacom will lower their price because they aren't selling any...

FWIW, Dion Wired had for R6389 a few weeks back...

 

[Hugo_ZA]

So you rather prefer price fixing? No-one allowed specials from time to time? No freedom of choice?

No, i don't prefer price fixing. What I do prefer is honest business practice, and I feel that Vodashop (ie Cresta) is milking the market and what's more people don't realize that they are being ripped off.

And yes, specials are great but IT IS NOT a special when you are charging the consumer R2000 more for a product than another store in your group.

 

[Sackboy]

So you rather prefer price fixing? No-one allowed specials from time to time? No freedom of choice?

These are not special prices. I love price differences and bargains, but when it's a huge difference, we have to ask why?
Realise as well that the distribution channel of the iPhone is very small and exclusive, so again, how come the big discrepancy?

 

[JK8]

Just to make sure, are they all the same in terms of memory? ie all the prices for 8GB/16GB?

 

[Hugo_ZA]

I agree - thats why there is competition, hopefully people will shop around and buy from Inc Connection instead of Vodacom, eventually Vodacom will lower their price because they aren't selling any...

FWIW, Dion Wired had for R6389 a few weeks back...

I just got off the phone with Dion Wired and they are still selling it for R6389. What was interesting about the call to them was the fact that the lady I spoke to cautioned me about the Bluetooth and GPS functions of the iPhone, as the bluetooth apparently only works with the Apple BT headset, and the GPS doesn't work (as advertised) because it uses Google Maps.

Just to make sure, are they all the same in terms of memory? ie all the prices for 8GB/16GB?

Yes, the prices as I stated at the start of the thread are all for the Iphone 3g 8gb black.

 

[Gothan]

Yes there is limitations to the iphone, apple licensing does not allow any gps app that allows real time tracking, and the if the phone has not been jailbroken (an no new phone is), then the bluetooth only works on headsets. But with a jailbroken phone, they are busy developing (well one of them, from what I have read there are numerous projects) bluetooth connectivity to other phones and devices, its called smoothtooth, and it works like a charm.

But if you work extensively with bluetooth and/or gps, I would not advise the iphone

 

[SoTrue]

These are not special prices. I love price differences and bargains, but when it's a huge difference, we have to ask why?
Realise as well that the distribution channel of the iPhone is very small and exclusive, so again, how come the big discrepancy?

I still don't know why it matters to you. Just go and buy the cheapest.

 

[Sackboy]

I still don't know why it matters to you. Just go and buy the cheapest.

See OP.

 

[Rhuey46]

Price War

Well, I know in Hong Kong they brought the Nokia 5800 in at a higher price (then, which Nokia specified) and all the consumers complained and caused an uproar, they then decided to bring the price down because of this.

I think we should start doing this locally and make ourselves heard, and a first big target would be the price of Netbooks!

This gives me an idea for a website / blog - anyone with me?

 

[rumormonger]

I still don't know why it matters to you. Just go and buy the cheapest.

The fact of the matter is Vodacom is taking advantage of gullible customers because they advertise the phone for a certain price and then when you get there they make up all kinds of stories why the price is higher.

 

[kayvee]

The fact of the matter is Vodacom is taking advantage of gullible customers because they advertise the phone for a certain price and then when you get there they make up all kinds of stories why the price is higher.

It's been going on ever since there was trading system on this planet, and no doubt will continue to do so from here on in.

Moral of the story - do your homework, know your prices and consumer rights. It's also a lot easier to be informed in this day and age of the interwebz thingie.

 

[Hugo_ZA]

The fact of the matter is Vodacom is taking advantage of gullible customers because they advertise the phone for a certain price and then when you get there they make up all kinds of stories why the price is higher.

True, and another concern is that not a single person at Vodacom once advised me of the Bluetooth and GPS issues (I was aware of these issues at any rate, but they didn't know), as the lady at Dion Wired did.

Granted that the iPhone has issues and is expensive. I have been a Mac user for ten years this year, and the brand has been very fragile in South Africa to say the very least, and Vodacom's erroneous advertisement of the iPhone features coupled with their inflated prices (R8500 @ 8GB) and terrible after sales service isn't doing the brand (Apple) and favors.

Anyone know if this issue has this issue been raised with the Consumer Watchdog?

 

[Gothan]

Well the vodacom shop at the lakeside mall in centurion, actually has a contract that you sign, stating the bluetooth limitation and gps.

But then again if you do not educate yourself, you will never know all the answers

 

[kayvee]

There are lots of "issues" with the iPhone which are inherently built in by Apple. Agreed, do your homework, and decide whether the coolness factor is worth what they ask.


...cos when the honeymoon's over, you have to live with it!

 

[Gothan]

Definitely, read up on the phones you are looking for, and then see what you like. I love my iphone, specifically because I treat it like a mini pc, I can putty into it, and change file permissions as well as configs, and then you get shazam for the iphone, and your world changes. But having said that, I don't really use bluetooth and have a garmin in the car, so I never used the gps.

But someone else will have different requirements, so the phone would not be for them. But its all completely off topic. I agree with you vodacom is ripping people off

 

[JK8]

The fact of the matter is Vodacom is taking advantage of gullible customers because they advertise the phone for a certain price and then when you get there they make up all kinds of stories why the price is higher.

Maybe not entirely.

Vshops are all privately owned and these are retail prices of the phone.
Im not sure what the T&C of the franchise is, but with other franchises like Pick n Pay they are in charge of the selling prices, unless theirs a special across all stores.

So like the other poster stated go buy the cheapest!

 

[Hugo_ZA]

Maybe not entirely.

Vshops are all privately owned and these are retail prices of the phone.
Im not sure what the T&C of the franchise is, but with other franchises like Pick n Pay they are in charge of the selling prices, unless theirs a special across all stores.

So like the other poster stated go buy the cheapest!

Ok so lets say that the Vodashop is in charge of pricing. They purchase the iPhone for X from VSP. The Vodacom stand in Incredible Connection also purchases the phone for X from VSP.

Incredible then adds their profit margin, Y, resulting in the retail price (X+Y=R6395). Surely they are not selling the phone at no profit...

Vodashop on the other hand follows the same formula (X+Y=R), yet they decide that the profit margin will be in excess of R2000 compared to that of Incredible.

This leads to the title of this thread including the word "Racketeering", as they willfully decide to rip people off for the sake of turning a higher profit. Yes, everyone is in business to make money, but at what cost?

(all formulas and purchasing channels stated above are purely speculative and do not reflect the actual process in place at either Vodashop, Incredible Connection, or VSP)