Originally posted by steve666
Your prices are all wrong, dude. Apple doesnt pay anywhere near what you're quoting, and Apple doesnt pay a dime to include iWork.
The price for the cpu is a bit high. Maybe $40 cheaper, going by Intel's mass pricing schedules.
The rest is also too high, it's true.
But they don't get iWork for free. By law, one division of a company must charge another fair market value for a part or service. So, whatever Apple charges a company or distributer must be charged for the software. The computer division "buys" the part from the software division.
None of that includes the other costs I mentioned which MUST be added in.
Also, distributers get the product for less than Apple sells it for at their own facilities. The distributers then sell them at a higher price to the stores.
That difference must also be accounted for. Apple might sell the $599 product to the distrib for $450, who then sells it to CompUsa for $525. That's approximate, of course. I'm not privy to Apple's numbers, but it's about right.
So, as Apple sells almost 50% of their product through their own organization, those prices must then be averaged with the list that Apple sells it at to arrive at the true wholesale price.
It's complex, because Apple must make a profit on that wholesale price as well, though a much smaller one.
Don't forget that the price also takes into account the costs of the rest of the company as well. It must pay for a certain percentage of the employees, rent, electricity costs, etc. Also insurance, medical plans, advertising. In short all of the expenses that a company has. Including, we don't want to forget, warrantee costs.
So, the cost of the parts is only a piece of the costs associated in building the product.
And speaking of building the product, Apple has to pay the companies who actually do build the products.
Take two aspirins, and call me in the morning.
It's important to have a good CFO.