According to a previous iSuppli breakdown for the 3GS it's about $20 in components, but that of course excludes many things. I've seen 3G add ons for networks be more than $150 and I've paid $300 for a 3G USB card so it doesn't seem excessive for the market though I'm sure Apple is making a healthy profit.
What I'm curious about with the 3G model are the chips they'll use. They say unlocked but only mention AT&T. It wouldn't be the first time they've not specified a function on their spec sheet to keep it simple. Maybe it does have the 1700MHz band for T-Mobile USA but they won't publicly state it (or enable it) until after the contract ends.
Surely it has at least 7.2Mbps HSDPA, but what about 2.9Mbps HSUPA for upstream. I think that is the next stop for 3GSM mobiles. CAn we infer that the chips we find in the iPad will likely be used in the next iPhone?
My bet was on the Qualcomm Gobi series because of all the speculation on Qualcomm and Verizon. The chipset is software programmable for EVDO and HSDPA and include AGPS but we will have to wait till April when IFixit has a teardown.
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.
The 32GB models are the worst value for money. Avoid these.
More reasonable price would be:
Base: $499 -> $569 -> $699
3G: $579 -> $649 -> $779
However I suspect that Apple just wants to push people to spend more on the 64GB, and is using the 32GB as a model to gain interest and then upsell to the 64GB.
Another meaningless study. It fails to factor in manufacturing [which probably is little because of slave labor], marketing, shipping, warranty, support, and development costs.
Further, Apple's gross profit margin, which usually is in the low thirty percent range, is meaningless until development and initial marketing costs are paid.
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.
The 32GB models are the worst value for money. Avoid these.
More reasonable price would be:
Base: $499 -> $559 -> $699
3G: $579 -> $649 -> $779
However I suspect that Apple just wants to push people to spend more on the 64GB, and is using the 32GB as a model to gain interest and then upsell to the 64GB.
Come on- the iPhone dropped $200 in 2.5 months after release and that was a truly revolutionary product. You think this will sell more than that did? Have lines around the block full of people clammoring to buy it? Think again.
According to a previous iSuppli breakdown for the 3GS it's about $20 in components, but that of course excludes many things. I've seen 3G add ons for networks be more than $150 and I've paid $300 for a 3G USB card so it doesn't seem excessive for the market though I'm sure Apple is making a healthy profit.
What I'm curious about with the 3G model are the chips they'll use. They say unlocked but only mention AT&T. It wouldn't be the first time they've not specified a function on their spec sheet to keep it simple. Maybe it does have the 1700MHz band for T-Mobile USA but they won't publicly state it (or enable it) until after the contract ends.
Surely it has at least 7.2Mbps HSDPA, but what about 2.9Mbps HSUPA for upstream. I think that is the next stop for 3GSM mobiles. CAn we infer that the chips we find in the iPad will likely be used in the next iPhone?
So, assuming they sell 5 million of these things, that's $56 of outgoings per unit right there before you even think about the ongoing costs for running the place for the last couple of years.
There's no way that the costs are accounted for using this method.
You must be a very left leaning Democrate. The economy works when people have money and the desire to spend it. It does not work when a large portion of the population expects to get something for free or as you imply handouts.
Now that's just a bout the dumbest thing I've read in a long time. Stupidity is not a saving grace, and neither is ignorance.
$219 for parts ... lucky for Apple that R&D, marketing and manufacturing cost nothing!
This was an analysis by market research firm iSuppli. They have no visibility into Apple's internal costs are. They can only accurately guess on the component costs, and maybe make guesstimate on assembly. That's why they only report the BOM cost.
No one outside of Apple knows what those other costs are.
So, assuming they sell 5 million of these things, that's $56 of outgoings per unit right there before you even think about the ongoing costs for running the place for the last couple of years.
To be fair the PA Semi cost will amortise across 100 million iPhones and iPod touches and iPads over the next two years. $400m running costs (incl. PA Semi purchase costs and operational costs until 2012) would cut the cost of PA Semi IP in these devices to $4 a device. In financial terms Apple has already accounted for the purchase, so it's actually just running costs.
Of course, on top of that you have the licensing costs for included hardware IP, which could run to another $5 a chip. Then there is manufacturing - a small 45nm chip probably costs at least $10 to make and package - iSupply said $17 in total, lets go with that.
And probably a good hundred million enhancing iPhone OS into iPad OS, including developer tools, drivers, new UI designs and implementation, etc.
There's no way that the costs are accounted for using this method.
No, it's dumb, just a simple reminder that R&D costs big money. It's fair and accurate to say that the A4 chip has cost $300m already, when you factor in the cost of purchasing PA Semi, the ARM and graphics licensing (PowerVR? Didn't also buy a chunk of those guys up also?) as well as the simple overheads for staffing the operation and the costs involved in fabbing the products at low volumes during the testing phases etc.
Chances are the costs for most of the above are already accounted for in previous years books, but that doesn't mean it doesn't count towards the costs when pricing a shipping product this year.
To be fair the PA Semi cost will amortise across 100 million iPhones and iPod touches and iPads over the next two years. $400m running costs (incl. PA Semi purchase costs and operational costs until 2012) would cut the cost of PA Semi IP in these devices to $4 a device. In financial terms Apple has already accounted for the purchase, so it's actually just running costs.
Of course, on top of that you have the licensing costs for included hardware IP, which could run to another $5 a chip. Then there is manufacturing - a small 45nm chip probably costs at least $10 to make and package - iSupply said $17 in total, lets go with that.
And probably a good hundred million enhancing iPhone OS into iPad OS, including developer tools, drivers, new UI designs and implementation, etc.
And marketing!
Further to what I just said +1 what this guy said
Also, remember it's largely up front. They may get to the $5 a unit price when the unit has been out enough time, but for now it's all spent, with no sales to show. What if they had spent all the money on PA and produced a chip that was no better than the latest Samsung OEM part, but at a higher cost? That's the risk they made at the time, just because it might be paying off shouldn't mean they can't profit from it.
I think the term troll was coined to describe him. Seriously, what's the point of deleting his account if they are just going to let him continue his antics under a new name where newer posters can't see his long term trollish behaviour. They should change the Title of his account to red stating Troll instead of Registered User.
Actually, they need to block his IP address because he probably posts from a variety of fake e-mail addresses... or just block whatever part of the Internet backbone he's on.
He'd probably be dead within a week without the ability to continually draw negative attention to himself.
Generally, selling prices trend towards the marginal cost of production.
Maybe a commodity product but generally that is not a healthy sign for business. Look at Detroit of the computer memory business and convince me that is a good thing for those businesses.
Generally businesses need to grow to stay around. In part that means innovation and new products that expand the marketplace. Hence iPad.
Quote:
Just one example of why comparing the component costs to the sale price is an exercise in enlightenment.
Nope it is an exercise in stupidity if you are not aware of and understand what is being accounted for. Do you really think Apple could have come up with iPhone and the whole iPod lineup without without hefty markups on it's Macs and other hardware and software? How else would they have paid the engineers wages and the management staff in R&D.
Frankly your mentality is very destructive to the economy as a whole. Mainly because it underplays the importance of investing in the future while at the same time trying to offer up this idea that profits are bad. The reality is profits feed the R&D machines that give us things like new Airplanes, new and improved computers and a host of other conviences of modern life.
I'm not saying that every development of modern life is good. The music industry is one example of a development that probably had some negative social impact. Not so much because of the quality of todays commercial music but rather because common folk no longer make music.
What is enlightening is that the capitalist system actually works when there is a potential fir profit.
If someone hasn't said it then I'll say it. This is just for parts. Let's remember that Apple has to pay people to make them, then pay for shipping, and then pay for marketing them. Their margins will be more like 33%.
Actually, they need to block his IP address because he probably posts from a variety of fake e-mail addresses... or just block whatever part of the Internet backbone he's on.
So I surmise that you have little knowledge of how any of this stuff works?
Comments
According to a previous iSuppli breakdown for the 3GS it's about $20 in components, but that of course excludes many things. I've seen 3G add ons for networks be more than $150 and I've paid $300 for a 3G USB card so it doesn't seem excessive for the market though I'm sure Apple is making a healthy profit.What I'm curious about with the 3G model are the chips they'll use. They say unlocked but only mention AT&T. It wouldn't be the first time they've not specified a function on their spec sheet to keep it simple. Maybe it does have the 1700MHz band for T-Mobile USA but they won't publicly state it (or enable it) until after the contract ends.
Surely it has at least 7.2Mbps HSDPA, but what about 2.9Mbps HSUPA for upstream. I think that is the next stop for 3GSM mobiles. CAn we infer that the chips we find in the iPad will likely be used in the next iPhone?
My bet was on the Qualcomm Gobi series because of all the speculation on Qualcomm and Verizon. The chipset is software programmable for EVDO and HSDPA and include AGPS but we will have to wait till April when IFixit has a teardown.
Is that greed or what?
Expect it at $399 by July 1st.
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.
The 32GB models are the worst value for money. Avoid these.
More reasonable price would be:
Base: $499 -> $569 -> $699
3G: $579 -> $649 -> $779
However I suspect that Apple just wants to push people to spend more on the 64GB, and is using the 32GB as a model to gain interest and then upsell to the 64GB.
Further, Apple's gross profit margin, which usually is in the low thirty percent range, is meaningless until development and initial marketing costs are paid.
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.
The 32GB models are the worst value for money. Avoid these.
More reasonable price would be:
Base: $499 -> $559 -> $699
3G: $579 -> $649 -> $779
However I suspect that Apple just wants to push people to spend more on the 64GB, and is using the 32GB as a model to gain interest and then upsell to the 64GB.
Come on- the iPhone dropped $200 in 2.5 months after release and that was a truly revolutionary product. You think this will sell more than that did? Have lines around the block full of people clammoring to buy it? Think again.
According to a previous iSuppli breakdown for the 3GS it's about $20 in components, but that of course excludes many things. I've seen 3G add ons for networks be more than $150 and I've paid $300 for a 3G USB card so it doesn't seem excessive for the market though I'm sure Apple is making a healthy profit.What I'm curious about with the 3G model are the chips they'll use. They say unlocked but only mention AT&T. It wouldn't be the first time they've not specified a function on their spec sheet to keep it simple. Maybe it does have the 1700MHz band for T-Mobile USA but they won't publicly state it (or enable it) until after the contract ends.
Surely it has at least 7.2Mbps HSDPA, but what about 2.9Mbps HSUPA for upstream. I think that is the next stop for 3GSM mobiles. CAn we infer that the chips we find in the iPad will likely be used in the next iPhone?
Let's not forget any license fees
How much was PA Semi? About $280m?
So, assuming they sell 5 million of these things, that's $56 of outgoings per unit right there before you even think about the ongoing costs for running the place for the last couple of years.
There's no way that the costs are accounted for using this method.
You must be a very left leaning Democrate. The economy works when people have money and the desire to spend it. It does not work when a large portion of the population expects to get something for free or as you imply handouts.
Now that's just a bout the dumbest thing I've read in a long time. Stupidity is not a saving grace, and neither is ignorance.
$219 for parts ... lucky for Apple that R&D, marketing and manufacturing cost nothing!
This was an analysis by market research firm iSuppli. They have no visibility into Apple's internal costs are. They can only accurately guess on the component costs, and maybe make guesstimate on assembly. That's why they only report the BOM cost.
No one outside of Apple knows what those other costs are.
How much was PA Semi? About $280m?
So, assuming they sell 5 million of these things, that's $56 of outgoings per unit right there before you even think about the ongoing costs for running the place for the last couple of years.
To be fair the PA Semi cost will amortise across 100 million iPhones and iPod touches and iPads over the next two years. $400m running costs (incl. PA Semi purchase costs and operational costs until 2012) would cut the cost of PA Semi IP in these devices to $4 a device. In financial terms Apple has already accounted for the purchase, so it's actually just running costs.
Of course, on top of that you have the licensing costs for included hardware IP, which could run to another $5 a chip. Then there is manufacturing - a small 45nm chip probably costs at least $10 to make and package - iSupply said $17 in total, lets go with that.
And probably a good hundred million enhancing iPhone OS into iPad OS, including developer tools, drivers, new UI designs and implementation, etc.
And marketing!
There's no way that the costs are accounted for using this method.
No, it's dumb, just a simple reminder that R&D costs big money. It's fair and accurate to say that the A4 chip has cost $300m already, when you factor in the cost of purchasing PA Semi, the ARM and graphics licensing (PowerVR? Didn't also buy a chunk of those guys up also?) as well as the simple overheads for staffing the operation and the costs involved in fabbing the products at low volumes during the testing phases etc.
Chances are the costs for most of the above are already accounted for in previous years books, but that doesn't mean it doesn't count towards the costs when pricing a shipping product this year.
Just one example of why comparing the component costs to the sale price is an exercise in ignorance.
Here's another...
To be fair the PA Semi cost will amortise across 100 million iPhones and iPod touches and iPads over the next two years. $400m running costs (incl. PA Semi purchase costs and operational costs until 2012) would cut the cost of PA Semi IP in these devices to $4 a device. In financial terms Apple has already accounted for the purchase, so it's actually just running costs.
Of course, on top of that you have the licensing costs for included hardware IP, which could run to another $5 a chip. Then there is manufacturing - a small 45nm chip probably costs at least $10 to make and package - iSupply said $17 in total, lets go with that.
And probably a good hundred million enhancing iPhone OS into iPad OS, including developer tools, drivers, new UI designs and implementation, etc.
And marketing!
Further to what I just said +1 what this guy said
Also, remember it's largely up front. They may get to the $5 a unit price when the unit has been out enough time, but for now it's all spent, with no sales to show. What if they had spent all the money on PA and produced a chip that was no better than the latest Samsung OEM part, but at a higher cost? That's the risk they made at the time, just because it might be paying off shouldn't mean they can't profit from it.
I think the term troll was coined to describe him. Seriously, what's the point of deleting his account if they are just going to let him continue his antics under a new name where newer posters can't see his long term trollish behaviour. They should change the Title of his account to red stating Troll instead of Registered User.
Actually, they need to block his IP address because he probably posts from a variety of fake e-mail addresses... or just block whatever part of the Internet backbone he's on.
He'd probably be dead within a week without the ability to continually draw negative attention to himself.
Here's another...
The best reply EVER!
Generally, selling prices trend towards the marginal cost of production.
Maybe a commodity product but generally that is not a healthy sign for business. Look at Detroit of the computer memory business and convince me that is a good thing for those businesses.
Generally businesses need to grow to stay around. In part that means innovation and new products that expand the marketplace. Hence iPad.
Just one example of why comparing the component costs to the sale price is an exercise in enlightenment.
Nope it is an exercise in stupidity if you are not aware of and understand what is being accounted for. Do you really think Apple could have come up with iPhone and the whole iPod lineup without without hefty markups on it's Macs and other hardware and software? How else would they have paid the engineers wages and the management staff in R&D.
Frankly your mentality is very destructive to the economy as a whole. Mainly because it underplays the importance of investing in the future while at the same time trying to offer up this idea that profits are bad. The reality is profits feed the R&D machines that give us things like new Airplanes, new and improved computers and a host of other conviences of modern life.
I'm not saying that every development of modern life is good. The music industry is one example of a development that probably had some negative social impact. Not so much because of the quality of todays commercial music but rather because common folk no longer make music.
What is enlightening is that the capitalist system actually works when there is a potential fir profit.
Dave
It's fair and accurate to say that the A4 chip has cost $300m already, when you factor in...
That would be like saying that your first dinner in a new house cost $250,000.00, when you factor in the cost of buying the house...
It is not a method which yields useful information.
Actually, they need to block his IP address because he probably posts from a variety of fake e-mail addresses... or just block whatever part of the Internet backbone he's on.
So I surmise that you have little knowledge of how any of this stuff works?