Personal Finance Lessons from the iPhone 5 Release

OMG! OMG! APPLE HAS A NEW PHONE! iPHONE 5! WOOO!

Chill out people. It is just a phone.

People Waste Money on Hype

I got a new phone a few months back. It was pretty cool. I didn’t flip out and spend upwards $400 plus a new contract to get it. My phone cost $200 and I bought it at a time when I needed it. I didn’t care about having the coolest, newest thing.

If you look at what I call “iPeople,” you find a lot of people willing to spend a lot more money on something because they have the impression it is cooler or works better than alternatives. While it might be familiar and hipster, it really doesn’t work much differently than other phones that cost a lot less.

Apple personal computers are made at a factory operated by Hon Hai (traded publicly as Foxconn, a Chinese company contracted to make electronics by a handful of companies around the world. Notable customers include Apple, Hewlett Packard, and Dell.

Yes, you read that right. The same company that makes your Apple computer makes HP and Dell computers, often with the exact same parts, in the exact same factory.

So what is everyone spending an extra $1000 per computer on? Why would you spend more on an iPhone when Motorola Mobility and Samsung Electronics hire the same factory to build Android phones?

It is about hype. It is about feeling cool. It hardly about the computer or phone itself.

Does That Mean You Shouldn’t Buy One?

Just because the phones and computers are very similar in hardware and configuration, does that mean you shouldn’t buy one? No. Of course not. You can spend your money however you want.

When you do it, though, consider value. Is it worth the extra cost to own an Apple PC over Windows? If you do a ton of video or graphic editing, it might be. If you don’t probably not.

If you get it just because it is cool, that might be okay. But if it is because you are insecure and you are using an electronic device to define your self-worth, you might be better spending the extra $1000 on therapy than a laptop.

To me, not worth it. I would rather just find the best phone for my needs when I need a new phone. This time around, it was the Droid 4 by Motorola. It has done everything I need and could possibly want. I have been thrilled with it. (It had the same cost to me as the lowest end iPhone 5)

Are You an iPerson?

How do you justify the extra cost for a Mac computer or a new iPhone on release day? What makes it work it? Where do you get value?

If you are not an iPerson, what are your reasons for avoiding Apple? Please share your thoughts in the comments.

Image by Roberto MO / flickr

16 thoughts on “Personal Finance Lessons from the iPhone 5 Release”

  1. I’m definitely an Apple person. However, I think there are two types – the psychotic, rabid fans who will buy anything no matter what it costs, and the normal fans who buy what they need and can afford.

    I own two Macs and will never ever buy another PC. The OS is more intuitive and stable than Windows, and I have had zero problems and spent zero time working on my computers. That is essential for me; just because I know how to repair computers doesn’t mean I want to. And because I make a living doing web/graphic design, the software is much better for Mac for my purposes. Plus (the best part for me), when the computer is 4-5 years old and I want a newer one, I can sell it for about half what I paid. No PC holds value like that.

    I won’t be getting the iPhone 5 until the end of the year when I can upgrade, but I do plan to. Again, I like to sell my old phones while they’re still worth something, and I also want to take advantage of the faster processor. Because of the business tasks I complete on my phone, speed is essential for me. For most people, though, the 5 isn’t THAT amazing compared to the 4S.

    1. For your graphic design work, Mac definitely has the edge. I am a finance guy, though, so all a Mac does is hold me back from what I need to get done.

      I have had zero problems with my current computer, and the only problem I had with my old PC (a Dell) was a CD drive that went out after two years. Dell sent me a new one for free and it was an easy process, so I wasn’t too upset.

      Before that, I had two HPs. Honestly, those did cause a lot of headache and I will never get one again. But my Dell and Alienware experiences have been perfect.

  2. I use a Mac laptop and an iPod but I guess i wouldn’t consider myself an iPerson – like Andrea said, I’m just a normal consumer who likes products that actually work. I had a terrible experience with a PC laptop in college and so the two I’ve bought since then have been Macs and they work great for me. I have to provide my own computer for work so I’m on it many, many hours per day and I don’t like being held up by crashing software and ill-designed hardware.

    I don’t care about phones though, so I’m not planning to get an iPhone when I upgrade to a smartphone.

    (BTW I bought an iPod nano in 2005 and it was working fine through this year, when the product was recalled and Apple sent me a brand new nano of the current model. This is a device I use for at least 7 hours per day and who knows how many years this new one will last. That is some awesome value and I don’t know if a non-Apple product would have provided me with so much utility and customer service.)

    1. Interesting to hear that your employer makes you provide your own computer. Are you a full time employee or a freelancer? Just curious.

      I have heard many horror stories about specific computers, but I hear them about Apples as well as PCs. Just remember that your Mac needs virus scanners and backups as well. You never know what is going to happen.

      1. I’m a grad student, so it’s department/lab-specific whether or not they provide computers for individual use. In my lab we all bring our own laptops; my husband was provided a desktop but still uses that plus his personal laptop.

    1. I agree. For people that need serious heavy lifting for graphic and video editing, a Mac is the way to go. Otherwise, seems like a waste of money.

  3. I’m not an iPerson, really, but I’m not an Andriod fangirl either. I like smart phones. They’re good. Period. I like to renew mine when it’s time. Not beore.

  4. I am definitely not an iPerson, though I tried. I have a Mac sitting here just next to my PC, and I used it for a couple of years, because I had a friend who told me it was the most wonderful thing since sliced bread. I HAD to keep a PC because of some business software that’s not available for the Mac, and over time, I found myself using the Mac less and less frequently in favor of the PC, until I rarely even turn the Mac on any more. Lesson learned. I know they are supposed to be so “intuitive,” so I can only conclude: I have no intuition!

    My phone is a Samsung SII purchased without a contract (replacing a very old G1). This phone is good enough to replace my computer for many uses, and I found that my old month-to-month contract was so much less expensive that I would easily recoup the extra money paid out for the phone in no time. I am satisfied with those choices and I expect this phone to become very old before I consider replacing it, just like my G1 was.

    I do have an old circle-controlled iPod, which I hate, but it does work most of the time (turns itself off often and without warning, even when the lock button is on.) Definitely not worth replacing since my phone has Google Music installed.

    1. I have the old school iPod as well, but that is my only Apple gadget. It is interesting to hear a perspective from someone who got an Apple and didn’t like it. That seems to be a rare story, but I bet the Apple dislike crowd is a lot less vocal than the fans.

      Thanks for sharing!

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