How many HP, Acer, Lenovo etc. stores are there? AFAIK .... none .. zero ... nada.
Apple is one of the few computer/tech companies that are dedicated to selling their own brand only via a brick and mortar type operation. Do you not see an expense factor here that the rest of the industry largely avoids by just wholesaling their product to many retailers?
Last I heard, the mApple sores are operating at a profit.
Do you imagine that they operate at a net loss? If not, then what is the "expense factor" you mention?
If an item is overpriced, the market responds very quickly.
The item sells in fewer numbers, and the upshot is reduced profits.
If Apple repeatedly over-priced its products, wouldn't the effect would be lower profits for Apple?
This does not seem to be the case.
Perhaps the market is happy to pay higher prices for Apple products, because the market believes Apple products have greater value?
C.
The take-away point is, nobody buys an "overpriced" product, by definition -- unless they have no other alternative. Since Apple isn't in any markets where consumers have no other choices, if they are willing to pay more for an Apple product than a similar, less expensive product from someone else, it's because Apple's product carries a perception of value added.
You seem to have missed the point entirely. The iSore is a net money maker, not a net expense.
Correct!
And then some.
The Apple Stores are some of the most profitable retail establishments in the world.
From 2007: On the 5th Avenue Apple Cube store.
Quote:
And not just the architecture. Saks, whose flagship is down the street, generates sales of $362 per square foot a year. Best Buy stores turn $930 - tops for electronics retailers - while Tiffany & Co. takes in $2,666. Audrey Hepburn liked Tiffany's for breakfast. But at $4,032, Apple is eating everyone's lunch.
One take away I have from iSuppli's numbers are that the BOM to create the iPad is not as cost prohibitive as some analysts had originally believed. And before you lecture me on the subject I work and have worked for manufacturing organizations so I understand the additional SG&A and R&D costs associated with bringing this product to market and selling it.
However, if this segment proves to be a hot seller the BOM leaves room for additional companies such as Amazon, Dell, etc to create their own large format smartphones sans phone capability. I hesitate to call the iPad a tablet since it has not yet demonstrated handwriting capability which is the very definition of the word tablet, a surface upon which to write. I'd envision these products coming to market with say 70-80% of the functionality of the iPad using a MS mobile or Goolge Chrome OS at much lower price points. While the members of this forum would likely not be interested in such a product, there are numbers of consumers who might.
It will be very interesting to watch how the iPad sells since it is an example of a scaled up consumer electronic device with an established application and media infrastructure. Rather than a scaled down version of a personal computer into tablet form which has largely failed in the market.
That is truly astounding. Back when I did a lot of work with retailers, $200/ft. was about average for mall stores.
From another perspective, Apple is also a huge draw for foot traffic that other stores want to be placed around them, thus giving them anchor store pull with mall owners. Tiffanys can say claim massive per sq. foot sales but they don't have much draw. This means Apple can negotiate cheaper rent because mall owners can demand higher rent from stores proximal to Apple.
Well for each extra $30 of components try to involve all these form above. It's called an "Added Value" pro brainwashed "so we can buy shit we don't need" consumers.
And $130 for 3G capability! Are they paying some of that to the network provider? Again this should be a lot less of an additional cost.
Keep in mind that it's a non-contract device. You can add and drop 3G service at will, rather than having to pay an ETF.
Any other device you might have in mind probably has a contract and probably costs more. The 3G service is pretty inexpensive too, Verizon's netbook & mobile broadband plans are $40 for 250MB, 5GB is $60.
If you still think the iPad 3G service is expensive, that's fine, but you need to keep it in perspective of the market.
So you think the rights of a single corporation should trump the rights of a free press? Keep in mind that no trade secret figures are being exposed here, they're all extrapolated and estimated.
I don't think you understand that these are estimates, it's even in the title of the article. The figures don't come from inside Apple. If they were displaying Apple's component costs with information from Apple, then that would be a problem. If you didn't notice, Apple hasn't sued, despite this going on for many years. As it should be.
So far, everyone opposes my opinion. If not for the web, this data would not be so easy to spread around. And what purpose does it serve? All I can say, it is morally wrong. As for the iPad, it is over priced for my needs. Regardless of price, I have no use for it. A netbook would be a better investment for me.
Case closed. I could receive one for free, and would simply turn around and find it a new home. I have a cousin who is 83, and struggles with her PC. iPad would be perfect, since it requires next to zero maintenance. Then again, no Flash. So she could not send e-cards. iPad, for me, is a joke.
I'm sure Steve thinks I am a joke. He will prove me wrong by selling them like hot cakes.
You seem to have missed the point entirely. The iSore is a net money maker, not a net expense.
In any business dictionary I can find .... on any of the P & L statements from my accountants is there any mention of "net expense" ..... anywhere .... please define .... this I gotta see! Are you, perhaps, thinking of "operating loss"?
So far, everyone opposes my opinion. If not for the web, this data would not be so easy to spread around. And what purpose does it serve? All I can say, it is morally wrong.
By whose set of morals, and why? And what would the web really do to figure into that?
I'll take your Radio Shack example, I don't need inside information to have a good idea of what Radio Shack paid for a $0.99 pack of five resistors. It can't be even as much as a nickel, all packaged and ready to sell. I don't need to have worked for Radio Shack to make a reasonably qualified estimate. It would be very different if you took internal information and posted it, posting insider information is not protected in the same way.
Do you really think an externally made estimate really be immoral to redistribute? It's not using proprietary information. I would agree if it were proprietary information internal to the company, I get it. But it's not. I'm not sure if you can see that distinction.
Well Jeff, we will have to agree, to disagree. Years ago, I was a sole proprietor, in the packaging and shipping business. What I paid a vendor for their shipping services was no ones business. Some people came unglued when they realized I was charging extra for postage stamps.
Radio Shack stores bought from company owned warehouses at the time. We were buying products from Radio Shack, who in term got them from who knows where. One item that stays in my mind, was a book for the Tandy Color Computer. Sold @ $14.95. Cost to us: 72 cents.
I feel as though this data is not meant to be informative. For me, this is yet another example of how Apple makes a pretty decent profit on hardware, and further explains why they are a 50 billion dollar company.
Some people talk of the Apple Tax. This data only adds fuel to the fire. I personally feel some of these margins are high. If I didn't know these "alleged" margins, I might see things differently.
Well Jeff, we will have to agree, to disagree. Years ago, I was a sole proprietor, in the packaging and shipping business. What I paid a vendor for their shipping services was no ones business. Some people came unglued when they realized I was charging extra for postage stamps.
Radio Shack stores bought from company owned warehouses at the time. We were buying products from Radio Shack, who in term got them from who knows where. One item that stays in my mind, was a book for the Tandy Color Computer. Sold @ $14.95. Cost to us: 72 cents.
I feel as though this data is not meant to be informative. For me, this is yet another example of how Apple makes a pretty decent profit on hardware, and further explains why they are a 50 billion dollar company.
Some people talk of the Apple Tax. This data only adds fuel to the fire. I personally feel some of these margins are high. If I didn't know these "alleged" margins, I might see things differently.
Enough said. Have no use for the iPad. Period.
That's fine. For what it's worth, I have my own business, your point of view isn't totally alien. People don't have any right to my internal information, but there is no use getting angry with someone that thinks they can guess that information.
It's not worth worrying about people that are afraid you're making money on a transaction. That just shows they don't know anything, and there's only so much time and energy in the day. If they don't see any added value in the product or service, then it's better for you and me if they go bother someone else instead.
How Apple got to have $30B in liquid assets is by making 10% net profit for several years on end.
I personally haven't made up my mind on whether I'll get an iPad or not, but it really doesn't have anything to do with this thread or the article that spawned it.
From another perspective, Apple is also a huge draw for foot traffic that other stores want to be placed around them, thus giving them anchor store pull with mall owners. Tiffanys can say claim massive per sq. foot sales but they don't have much draw. This means Apple can negotiate cheaper rent because mall owners can demand higher rent from stores proximal to Apple.
Yep. They are absolutely a destination store, and not a parasite. That's unusual for inline stores of that size.
You seem to know some things about retail leasing. Have you been involved in that? I used to negotiate leases for tenants, from department stores to food court tenants, with lots of restaurants in the mix.
In any business dictionary I can find .... on any of the P & L statements from my accountants is there any mention of "net expense" ..... anywhere .... please define .... this I gotta see! Are you, perhaps, thinking of "operating loss"?
You seem to know some things about retail leasing. Have you been involved in that? I used to negotiate leases for tenants, from department stores to food court tenants, with lots of restaurants in the mix.
Thanks. Not specifically, but I do have plenty of business experience. While I couldn't do what you do, the general principle seems obvious.
Comments
How many HP, Acer, Lenovo etc. stores are there? AFAIK .... none .. zero ... nada.
Apple is one of the few computer/tech companies that are dedicated to selling their own brand only via a brick and mortar type operation. Do you not see an expense factor here that the rest of the industry largely avoids by just wholesaling their product to many retailers?
Last I heard, the mApple sores are operating at a profit.
Do you imagine that they operate at a net loss? If not, then what is the "expense factor" you mention?
I am going to report this post as being off-topic.
Last I heard, the mApple sores are operating at a profit.
Do you imagine that they operate at a net loss? If not, then what is the "expense factor" you mention?
Don't you think it costs money to operate a store.... genius? That would be expense .
If an item is overpriced, the market responds very quickly.
The item sells in fewer numbers, and the upshot is reduced profits.
If Apple repeatedly over-priced its products, wouldn't the effect would be lower profits for Apple?
This does not seem to be the case.
Perhaps the market is happy to pay higher prices for Apple products, because the market believes Apple products have greater value?
C.
The take-away point is, nobody buys an "overpriced" product, by definition -- unless they have no other alternative. Since Apple isn't in any markets where consumers have no other choices, if they are willing to pay more for an Apple product than a similar, less expensive product from someone else, it's because Apple's product carries a perception of value added.
Don't you think it costs money to operate a store.... genius? That would be expense .
You seem to have missed the point entirely. The iSore is a net money maker, not a net expense.
You seem to have missed the point entirely. The iSore is a net money maker, not a net expense.
Correct!
And then some.
The Apple Stores are some of the most profitable retail establishments in the world.
From 2007: On the 5th Avenue Apple Cube store.
And not just the architecture. Saks, whose flagship is down the street, generates sales of $362 per square foot a year. Best Buy stores turn $930 - tops for electronics retailers - while Tiffany & Co. takes in $2,666. Audrey Hepburn liked Tiffany's for breakfast. But at $4,032, Apple is eating everyone's lunch.
C.
However, if this segment proves to be a hot seller the BOM leaves room for additional companies such as Amazon, Dell, etc to create their own large format smartphones sans phone capability. I hesitate to call the iPad a tablet since it has not yet demonstrated handwriting capability which is the very definition of the word tablet, a surface upon which to write. I'd envision these products coming to market with say 70-80% of the functionality of the iPad using a MS mobile or Goolge Chrome OS at much lower price points. While the members of this forum would likely not be interested in such a product, there are numbers of consumers who might.
It will be very interesting to watch how the iPad sells since it is an example of a scaled up consumer electronic device with an established application and media infrastructure. Rather than a scaled down version of a personal computer into tablet form which has largely failed in the market.
But at $4,032, Apple is eating everyone's lunch.
C.
That is truly astounding. Back when I did a lot of work with retailers, $200/ft. was about average for mall stores.
That is truly astounding. Back when I did a lot of work with retailers, $200/ft. was about average for mall stores.
From another perspective, Apple is also a huge draw for foot traffic that other stores want to be placed around them, thus giving them anchor store pull with mall owners. Tiffanys can say claim massive per sq. foot sales but they don't have much draw. This means Apple can negotiate cheaper rent because mall owners can demand higher rent from stores proximal to Apple.
If it sells at $499, it'll stay at $499.
However charging $599 for an extra $30 of components is a bit rich. $559 would be better.
And $130 for 3G capability! Are they paying some of that to the network provider? Again this should be a lot less of an additional cost.
Ok, again, as Onhka the Teacher said:
What do you think that they should charge/assign/account just for:
* Research & Development
* Packaging
* Advertising/Promotion
* Sales & Marketing
* Distribution/Shipping
* Accounting
* Legal
* On-line/In-Store Support
* OS
* Apps
* iTunes App/iBook Book Store
* Third-Party Licenses
* Liability Insurance
* Fixed Overheads, e.g., equipment depreciations/property taxes/salaries
* Keeping Green
* CHINA speedy little hands
Well for each extra $30 of components try to involve all these form above. It's called an "Added Value" pro brainwashed "so we can buy shit we don't need" consumers.
And $130 for 3G capability! Are they paying some of that to the network provider? Again this should be a lot less of an additional cost.
Keep in mind that it's a non-contract device. You can add and drop 3G service at will, rather than having to pay an ETF.
Any other device you might have in mind probably has a contract and probably costs more. The 3G service is pretty inexpensive too, Verizon's netbook & mobile broadband plans are $40 for 250MB, 5GB is $60.
If you still think the iPad 3G service is expensive, that's fine, but you need to keep it in perspective of the market.
So you think the rights of a single corporation should trump the rights of a free press? Keep in mind that no trade secret figures are being exposed here, they're all extrapolated and estimated.
I don't think you understand that these are estimates, it's even in the title of the article. The figures don't come from inside Apple. If they were displaying Apple's component costs with information from Apple, then that would be a problem. If you didn't notice, Apple hasn't sued, despite this going on for many years. As it should be.
So far, everyone opposes my opinion. If not for the web, this data would not be so easy to spread around. And what purpose does it serve? All I can say, it is morally wrong. As for the iPad, it is over priced for my needs. Regardless of price, I have no use for it. A netbook would be a better investment for me.
Case closed. I could receive one for free, and would simply turn around and find it a new home. I have a cousin who is 83, and struggles with her PC. iPad would be perfect, since it requires next to zero maintenance. Then again, no Flash. So she could not send e-cards. iPad, for me, is a joke.
I'm sure Steve thinks I am a joke. He will prove me wrong by selling them like hot cakes.
You seem to have missed the point entirely. The iSore is a net money maker, not a net expense.
In any business dictionary I can find .... on any of the P & L statements from my accountants is there any mention of "net expense" ..... anywhere .... please define .... this I gotta see! Are you, perhaps, thinking of "operating loss"?
So far, everyone opposes my opinion. If not for the web, this data would not be so easy to spread around. And what purpose does it serve? All I can say, it is morally wrong.
By whose set of morals, and why? And what would the web really do to figure into that?
I'll take your Radio Shack example, I don't need inside information to have a good idea of what Radio Shack paid for a $0.99 pack of five resistors. It can't be even as much as a nickel, all packaged and ready to sell. I don't need to have worked for Radio Shack to make a reasonably qualified estimate. It would be very different if you took internal information and posted it, posting insider information is not protected in the same way.
Do you really think an externally made estimate really be immoral to redistribute? It's not using proprietary information. I would agree if it were proprietary information internal to the company, I get it. But it's not. I'm not sure if you can see that distinction.
Radio Shack stores bought from company owned warehouses at the time. We were buying products from Radio Shack, who in term got them from who knows where. One item that stays in my mind, was a book for the Tandy Color Computer. Sold @ $14.95. Cost to us: 72 cents.
I feel as though this data is not meant to be informative. For me, this is yet another example of how Apple makes a pretty decent profit on hardware, and further explains why they are a 50 billion dollar company.
Some people talk of the Apple Tax. This data only adds fuel to the fire. I personally feel some of these margins are high. If I didn't know these "alleged" margins, I might see things differently.
Enough said. Have no use for the iPad. Period.
Well Jeff, we will have to agree, to disagree. Years ago, I was a sole proprietor, in the packaging and shipping business. What I paid a vendor for their shipping services was no ones business. Some people came unglued when they realized I was charging extra for postage stamps.
Radio Shack stores bought from company owned warehouses at the time. We were buying products from Radio Shack, who in term got them from who knows where. One item that stays in my mind, was a book for the Tandy Color Computer. Sold @ $14.95. Cost to us: 72 cents.
I feel as though this data is not meant to be informative. For me, this is yet another example of how Apple makes a pretty decent profit on hardware, and further explains why they are a 50 billion dollar company.
Some people talk of the Apple Tax. This data only adds fuel to the fire. I personally feel some of these margins are high. If I didn't know these "alleged" margins, I might see things differently.
Enough said. Have no use for the iPad. Period.
That's fine. For what it's worth, I have my own business, your point of view isn't totally alien. People don't have any right to my internal information, but there is no use getting angry with someone that thinks they can guess that information.
It's not worth worrying about people that are afraid you're making money on a transaction. That just shows they don't know anything, and there's only so much time and energy in the day. If they don't see any added value in the product or service, then it's better for you and me if they go bother someone else instead.
How Apple got to have $30B in liquid assets is by making 10% net profit for several years on end.
I personally haven't made up my mind on whether I'll get an iPad or not, but it really doesn't have anything to do with this thread or the article that spawned it.
From another perspective, Apple is also a huge draw for foot traffic that other stores want to be placed around them, thus giving them anchor store pull with mall owners. Tiffanys can say claim massive per sq. foot sales but they don't have much draw. This means Apple can negotiate cheaper rent because mall owners can demand higher rent from stores proximal to Apple.
Yep. They are absolutely a destination store, and not a parasite. That's unusual for inline stores of that size.
You seem to know some things about retail leasing. Have you been involved in that? I used to negotiate leases for tenants, from department stores to food court tenants, with lots of restaurants in the mix.
In any business dictionary I can find .... on any of the P & L statements from my accountants is there any mention of "net expense" ..... anywhere .... please define .... this I gotta see! Are you, perhaps, thinking of "operating loss"?
I have no desire to define words with you.
Consider yourself to have won the point.
You seem to know some things about retail leasing. Have you been involved in that? I used to negotiate leases for tenants, from department stores to food court tenants, with lots of restaurants in the mix.
Thanks. Not specifically, but I do have plenty of business experience. While I couldn't do what you do, the general principle seems obvious.
Enough said. Have no use for the iPad. Period.
Would you have a use if the 'Pad had some more functionality?