Originally Posted by ElectroTech
I agree. Just recently, we saw the cost of components and manufacturing for the iPad 2. It was around $281 or something wasn't it? So this analyst figures Apple will make $8 on each one and pay their sales team too?
EVEN IF iSupply's estimate of $281 for parts is correct, that doesn't mean that Apple makes $18 by selling them at $299.
The component cost is only part of the total manufacturing cost. You have to add in:
- Manufacturing overhead (facilities, lighting, electricity, insurance, etc)
- Labor overhead costs (taxes and, in China, dormitories)
- Quality inspection
- Tech support costs
- And more
As a very rough guess, if the component cost is $281, I would venture that the total manufacturing cost would be in the $350-375 range.
And that's only the direct manufacturing costs. Add in R&D, marketing, and selling costs before Apple makes a profit.
Now, of course, many (if not most) of the components are probably less expensive today than they were when that estimate was done, so it's probably not a very useful estimate, anyway.