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Profitablity of iPod

post #1 of 7
Thread Starter 
Does anyone have any numbers on the success of the iPod? I can't imagine Apple went in on it imagining that it would make a lot of money. Those little hard drives cost $350 apiece, and they're selling the iPods for $400!

I know Apple claims they've been selling fast but "under expectations." Very well and good Apple. Tell me more. How many iPods have been sold? I remember the original iMacs broke records with their sales.
Maybe Apple will tell its shareholders. That's it. I'll ask for one share of Apple stock for Chrismast.
post #2 of 7
1.) there was a huge thread in future hardware where SDW2001 and myself argued for pages and pages about this.
2.) the genereal concensus of logical people with half a brain is that cost could be anywhere from 250-319 for Apple. More likely somewhere in the middle to higher end of that.
3.) the drive costs $350-$399 RETAIL. not cost or what apple gets its. this was a big arguement over in the other thread and no one really agreed on what the cost for Apple of the drive could be. Some people...cough SDW2001...cough.. think that Toshiba has larger than 50% margins on the drive, actually he said a lot larger. so if you think the drive costs less than 200 to make and they are selling it to Apple for absolutely no profit for some reason then you can go along with SDW2001's logic.

conclusion. no one knows yet
post #3 of 7
I'm sure this has been included in the discussion in the other thread, but if Apple's selling the iPod to developers for $319, I'm sure they're not selling it at cost.

This would lead me to believe that the cost of production is $300, maximum and most likely around $270 +/-.
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post #4 of 7
if this is indeed the case, should I hold my break for a price break!?!

maybe not.

"Seems expensive.
seems. well this SEEMS to be a waste of time. That 600 knicker in any shop you're lucky enough to find one in and you're complainin about 569??? Tighter than a ducks butt you are"

Yeah the (CANADIAN) educational price on the ipod is $569 as opposed to $599 retail. You could probably figure out some figures from that based on other apple educational pricing models.

C.pres
The brain conceives of mathematical space in terms of numbers and dimensions ... The hand masters matter through the crafts, and with the help of tools and machinery.
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The brain conceives of mathematical space in terms of numbers and dimensions ... The hand masters matter through the crafts, and with the help of tools and machinery.
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post #5 of 7
[quote]Originally posted by Xool:
<strong>I'm sure this has been included in the discussion in the other thread, but if Apple's selling the iPod to developers for $319, I'm sure they're not selling it at cost.

This would lead me to believe that the cost of production is $300, maximum and most likely around $270 +/-.</strong><hr></blockquote>

Apple claims the developer pricing is near cost if not cost. so anwhere from 300-? 319 is probably cost.
post #6 of 7
Well, from a purely economical standpoint, the more Apple sells, the cheaper they can make them for.

Most electronic device manufacturing like hard drives and computer chips are decreasing cost industries (meaning the raw materials are dirt cheap and you are really paying for fixed costs--namely the machines that make the parts out of the raw materials). The more iPods that Apple sells, the more hard drives Toshiba makes, the cheaper everything gets. Both the iPod and it's hard drive are very new. They will both get much cheaper within the next 6 months.

However, Apple may continue selling them near $400 if they continue to sell adequately and increase the profit margin instead. It is likely that unless Toshiba reduces the retail cost of the drive, we will never know if/when this happens unless Apple (or Toshiba) tells us what the margin is.

Of course, even if the production of the devices gets far cheaper even next month, both companies will be paying the R&D bills for some time to come, delaying any price break to consumers for months.

Of course, I could be wrong.

-Ender
If you find yourself sided with the majority, it is time to change your thinking.

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If you find yourself sided with the majority, it is time to change your thinking.

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post #7 of 7
Mmmm.
Economies of Scale...
J.C. Corbin, Apple Certified Technical Coordinator
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J.C. Corbin, Apple Certified Technical Coordinator
Member, Apple Consultants Network
www.ro3.com
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