$219 for parts ... lucky for Apple that R&D, marketing and manufacturing cost nothing!
Oh, its better than that. Apple's gets free utilities in a donated building. The Postal Service give the company free postage. FedEx and UPS make all deliveries free of charge. All the employees work for the sheer joy of it and take no salary or wages. Even Apple's lobbyists legal teams donate their services. What this really gets down to is that Apple's only expense is component parts for its products.
Apple paid in full up front, nearly a third of a billion dollars, for something that they would receive no immediate return on, and potentially no return at all.
With your house, you can live in it straight away, you probably bought it on a mortgage, and every month you live in it is a month of rent you aren't paying elsewhere. Since Apple bought PA it has been all cost, no return, and no savings - they have still been paying for other peoples designs in the meantime.
It's like renting a place out, paying up front in full for a new house that you can't live in for 3 years, and which may prove to be a house of cards that is uninhabitable when you try to move in.
OK, use that example. To make it more believable, imagine that the protagonist buys a plot of land and builds his house there over 3 years, paying cash.
The point is the same, that the suggested method of accounting yields no useful information. Use any example that floats your boat.
This is like those people who complain about the alleged profit margins the pharmaceutical companies make on a prescription drug. Sure, the pills themselves cost little to make; the 1st one, however, costs over $1 billion.
...With your house, you can live in it straight away, you probably bought it on a mortgage, and every month you live in it is a month of rent you aren't paying elsewhere.
You make it sound like having a mortgage is so much better than renting, when it's really a 15 or 30 year ball and chain around your neck of hidden and never ending costs, taxes and insurance, disasters and maintenance that offsets the supposed savings over renting.
All for what? No equity for the next 20 or 30 years, no mobility and a decreasing property value. Good luck trying to sell or get credit so you can move closer to that new job.
I understand how the free market works, I also understand, like Henry Ford did, that in a robust economy, money circulates from consumer to business to consumer and business again, round and round. The faster it goes, the better it is for everyone.
Yes and this frankly is what Apple is up to with iPad. IPad is a computing platform that meets the needs of many people at a substantially lower cost that previous hardware from Apple. In effect Apple is putting money into the pockets of people with limited computing needs.
Quote:
Last time I checked, Apple had 30 or so BILLION dollars in cash, what is that money doing?
It is doing lots of things. It gives them extreme leverage for one. It allows them to pay cash up front for components, sometimes $500 Million at a time. It allows them to buy companies right and left as needed. Similarly it allows them to invest in other companies like ARM and imagination to keep them interested in supporting Apples needs. It allows for a bit of charity. Some of it needs to be held in reserve for legal reasons like the Nokia actions. Some of that money is going directly into the future with the new Apple campuses and data centers being built. Finally I'm sure I missed somethings but you get the idea.
In any event 30 billion sounds like a lot. The reality is that it is for an individual but not so much for a corporation. Especially when a state of the art semiconductor plant might cost 5 billion. The big question is this; adjusted for inflation how does that comare to what Ford had in the heyday of it's existance?
Quote:
Is it contributing to the jobs the economy needs which Apple depends upon?
Again I don't know if you are simply out of touch or have other problems but Apple has invested massively in the US in the last few years. They are building a massive new datacenter and a new campus in California. They are searching for new employees right and left with I suspect many of those becoming permanent employees. They purchased one whole company (PA Semi) before it went bankrupt.
So honestly I don't know where your statement comes from. I'd be the first to admit that few of those jobs involve manufacturing but then they have to compete with everybody else. The imporant thing to realize though is that they are creating jobs over seas which believe it or not is a good thing. We really do live in a global economy and it is important that people be able to take part in that economy throughout the world. Even then Apple has been on a highering binge in the US so again I don't understand your whine.
I can't believe the stupid thoughts I read on these postings. This is like saying the total cost of printing a magazine can be boiled down to the paper and ink cost to print it. Or break down the cost of a bicycle into its component parts and that's the total cost to make, sell, and deliver.
The component parts of any device make up only a portion of the cost. There is research and development, patents, shipping, retailing (inventory and sales, etc). People have to get paid who design, engineer, market and sell these devices and all that has to be built into the PRICE. This ignorant third grade view of GREED is really tired and boring. Get a life. Or better yet, get an education.
Hey Tecky ... if you want to claim to be a realist, you've got to try harder. I'll explain it to you like you're a 5 year old because, judging from your postings, that may be close to the truth.
In the free enterprise system that we live in only the marketplace as a whole can determine the value of a product or service, and since Apple is the ONLY entity that knows the whole cost of researching, designing and manufacturing .... not to mention delivering, promoting and associated warranty costs .... they are the only ones who can determine the greed factor (your words, not mine) of any product. The validation of any products initial price will be set by the marketplace .... they will either buy it, or not.
For any individual, especially you, to think that they know how much a product or service should sell for to the rest of the marketplace is arrogance at it's worst or stupidity at it's best. I suspect you may well be in both categories.
Lastly, to use your line of thinking, when you consider the cost of a blank media disc to be less than 1.00 (bulk pricing) ... MSFT must be extremely greedy to sell Windows7 on a $1.00 disc for hundreds of $$$$.
We really do live in a global economy and it is important that people be able to take part in that economy throughout the world. Even then Apple has been on a highering binge in the US
Look, I understand there's a lot more to it than component cost, I get the recoup of research and development, marketing and so on, but as a consumer, it is too much for too little at the current time. I'm hoping for something more advantageous for me, in pricing or compelling content, before running to buy.
Now, let's be honest:
Anyone disagreeing with Apple's pricing is a pinko.
Anyone defending Apple's pricing has no idea what they're talking about.
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.
This is self-evident.
The reason (hopefully also self-evident) for my comment, is to make light of the nonsense interpretation that this tally of parts costs is equal to what it costs Apple to develop, make and market the iPad.
You make it sound like having a mortgage is so much better than renting, when it's really a 15 or 30 year ball and chain around your neck of hidden and never ending costs, taxes and insurance, disasters and maintenance that offsets the supposed savings over renting.
All for what? No equity for the next 20 or 30 years, no mobility and a decreasing property value. Good luck trying to sell or get credit so you can move closer to that new job.
As with most everything else in life, to buy or rent must be made in the context of each individuals personal situation and since I don't know your situation it would be inappropriate and arrogant of me to take my situation and attempt to apply it to you.
I can tell you, however, that I have been a long time renter and waited until I was 60 years old before buying (now 68) .... still carrying a mortgage but my net asset base has increased by over 200K even in today's real estate market. It turned out to be one of the best financial decisions I ever made ... wish I had done it sooner.
The reason for most people not buying, I suspect, is likely to be the same as it was for me .... not making it the top priority in my financial decisions. That is the toughest decision to commit to but IMHO it it the most important one. ...just my 2c worth ...
This cost estimate does not include everything. That is just parts and assembly of the hardware.
You have to add to that cost lots of things before the product gets to market.
- The operating system software
- All the Apps included
- Shipping (multiple times)
- Warehousing
- Retail store operation costs
- Research and Development costs
- Accounting costs
- Labor costs of every employee that has anything to do with handling, creating, marketing, or selling the device
- Advertising expenses required to sell the product
- A portion of plant and equipment expenses (including buildings and utilities)
- Taxes, tariffs, and duty fees
- Costs of offering warrenties
Apple is operating on very thin margins at $499 I don't think we will see it much lower. We may see some discounting on the models with more features.
Some people do not understand all the costs of running a business and all of those costs have to be added to the parts cost to come up with the real cost of a product.
Does this surprise you? If it does, you have no idea what goes into the design, patent, and engineering evolution of electronics. I think it would be safe to say this took 5 years to come to market and much of it had to do with the speed, size and cost to manufacture the chip technology. On top of that, the multi-touch screen technology, not to mention the battery technology made the iPad almost impossible to make 2 and 3 years ago. There were so many steppingstones that needed to be laid down before the iPad could come to market and still more before its release. The primary difference between an old IBM Think Pad and the iPad, ultimately, will be content delivery and a whole new factor in software development and all of that is coming together will will be coming together in the next 12 months and longer.
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.
You two spend way too much time talking about this subject. Also most forums do not have the ability to block an IP address and even if that did that wouldn't work very well seeing anyone can clone their IP and most use dynamic IP addressing.
why all the fuss, its just the mac / apple premium.
I have a question, does putting "mac", "apple", "stevej" or for the sake of argument "tech" in your user name suppose to validate the fact that you an actual apple user and not just a regular old troll?
Comments
$219 for parts ... lucky for Apple that R&D, marketing and manufacturing cost nothing!
Oh, its better than that. Apple's gets free utilities in a donated building. The Postal Service give the company free postage. FedEx and UPS make all deliveries free of charge. All the employees work for the sheer joy of it and take no salary or wages. Even Apple's lobbyists legal teams donate their services. What this really gets down to is that Apple's only expense is component parts for its products.
They aren't really the same thing at all.
Apple paid in full up front, nearly a third of a billion dollars, for something that they would receive no immediate return on, and potentially no return at all.
With your house, you can live in it straight away, you probably bought it on a mortgage, and every month you live in it is a month of rent you aren't paying elsewhere. Since Apple bought PA it has been all cost, no return, and no savings - they have still been paying for other peoples designs in the meantime.
It's like renting a place out, paying up front in full for a new house that you can't live in for 3 years, and which may prove to be a house of cards that is uninhabitable when you try to move in.
OK, use that example. To make it more believable, imagine that the protagonist buys a plot of land and builds his house there over 3 years, paying cash.
The point is the same, that the suggested method of accounting yields no useful information. Use any example that floats your boat.
...With your house, you can live in it straight away, you probably bought it on a mortgage, and every month you live in it is a month of rent you aren't paying elsewhere.
You make it sound like having a mortgage is so much better than renting, when it's really a 15 or 30 year ball and chain around your neck of hidden and never ending costs, taxes and insurance, disasters and maintenance that offsets the supposed savings over renting.
All for what? No equity for the next 20 or 30 years, no mobility and a decreasing property value. Good luck trying to sell or get credit so you can move closer to that new job.
What do you think that they should charge/assign/account just for:
Great post! I hadn't thought about those things...
I understand how the free market works, I also understand, like Henry Ford did, that in a robust economy, money circulates from consumer to business to consumer and business again, round and round. The faster it goes, the better it is for everyone.
Yes and this frankly is what Apple is up to with iPad. IPad is a computing platform that meets the needs of many people at a substantially lower cost that previous hardware from Apple. In effect Apple is putting money into the pockets of people with limited computing needs.
Last time I checked, Apple had 30 or so BILLION dollars in cash, what is that money doing?
It is doing lots of things. It gives them extreme leverage for one. It allows them to pay cash up front for components, sometimes $500 Million at a time. It allows them to buy companies right and left as needed. Similarly it allows them to invest in other companies like ARM and imagination to keep them interested in supporting Apples needs. It allows for a bit of charity. Some of it needs to be held in reserve for legal reasons like the Nokia actions. Some of that money is going directly into the future with the new Apple campuses and data centers being built. Finally I'm sure I missed somethings but you get the idea.
In any event 30 billion sounds like a lot. The reality is that it is for an individual but not so much for a corporation. Especially when a state of the art semiconductor plant might cost 5 billion. The big question is this; adjusted for inflation how does that comare to what Ford had in the heyday of it's existance?
Is it contributing to the jobs the economy needs which Apple depends upon?
Again I don't know if you are simply out of touch or have other problems but Apple has invested massively in the US in the last few years. They are building a massive new datacenter and a new campus in California. They are searching for new employees right and left with I suspect many of those becoming permanent employees. They purchased one whole company (PA Semi) before it went bankrupt.
So honestly I don't know where your statement comes from. I'd be the first to admit that few of those jobs involve manufacturing but then they have to compete with everybody else. The imporant thing to realize though is that they are creating jobs over seas which believe it or not is a good thing. We really do live in a global economy and it is important that people be able to take part in that economy throughout the world. Even then Apple has been on a highering binge in the US so again I don't understand your whine.
Dave
Is that greed or what?
Expect it at $399 by July 1st.
I can't believe the stupid thoughts I read on these postings. This is like saying the total cost of printing a magazine can be boiled down to the paper and ink cost to print it. Or break down the cost of a bicycle into its component parts and that's the total cost to make, sell, and deliver.
The component parts of any device make up only a portion of the cost. There is research and development, patents, shipping, retailing (inventory and sales, etc). People have to get paid who design, engineer, market and sell these devices and all that has to be built into the PRICE. This ignorant third grade view of GREED is really tired and boring. Get a life. Or better yet, get an education.
NO troll- just a realist.
And what are you?
Hey Tecky ... if you want to claim to be a realist, you've got to try harder. I'll explain it to you like you're a 5 year old because, judging from your postings, that may be close to the truth.
In the free enterprise system that we live in only the marketplace as a whole can determine the value of a product or service, and since Apple is the ONLY entity that knows the whole cost of researching, designing and manufacturing .... not to mention delivering, promoting and associated warranty costs .... they are the only ones who can determine the greed factor (your words, not mine) of any product. The validation of any products initial price will be set by the marketplace .... they will either buy it, or not.
For any individual, especially you, to think that they know how much a product or service should sell for to the rest of the marketplace is arrogance at it's worst or stupidity at it's best. I suspect you may well be in both categories.
Lastly, to use your line of thinking, when you consider the cost of a blank media disc to be less than 1.00 (bulk pricing) ... MSFT must be extremely greedy to sell Windows7 on a $1.00 disc for hundreds of $$$$.
User CP (toward upper left of forum window » Edit Ignore List (lefthand column)
Thanks for the tip. Only wish there was a was to totally delete the offender. Owe you one.
We really do live in a global economy and it is important that people be able to take part in that economy throughout the world. Even then Apple has been on a highering binge in the US
Well then that's all good then.
Look, I understand there's a lot more to it than component cost, I get the recoup of research and development, marketing and so on, but as a consumer, it is too much for too little at the current time. I'm hoping for something more advantageous for me, in pricing or compelling content, before running to buy.
Now, let's be honest:
Anyone disagreeing with Apple's pricing is a pinko.
Anyone defending Apple's pricing has no idea what they're talking about.
There.
Is that greed or what?
Expect it at $399 by July 1st.
hello Tekstud,
what about these costs?
1. cost before manufacturing: research & development, design, financing
2. cost during manufacturing: financing, quality control, safety, maintenance, selling cost, logistics, distribution networks, information
3. cost during consumption and usage: maintenance, information, complaints handling, invoicing, software upgrading
4. cost after consumption and usage: waste management, re-cycling
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.
This is self-evident.
The reason (hopefully also self-evident) for my comment, is to make light of the nonsense interpretation that this tally of parts costs is equal to what it costs Apple to develop, make and market the iPad.
You make it sound like having a mortgage is so much better than renting, when it's really a 15 or 30 year ball and chain around your neck of hidden and never ending costs, taxes and insurance, disasters and maintenance that offsets the supposed savings over renting.
All for what? No equity for the next 20 or 30 years, no mobility and a decreasing property value. Good luck trying to sell or get credit so you can move closer to that new job.
As with most everything else in life, to buy or rent must be made in the context of each individuals personal situation and since I don't know your situation it would be inappropriate and arrogant of me to take my situation and attempt to apply it to you.
I can tell you, however, that I have been a long time renter and waited until I was 60 years old before buying (now 68) .... still carrying a mortgage but my net asset base has increased by over 200K even in today's real estate market. It turned out to be one of the best financial decisions I ever made ... wish I had done it sooner.
The reason for most people not buying, I suspect, is likely to be the same as it was for me .... not making it the top priority in my financial decisions. That is the toughest decision to commit to but IMHO it it the most important one. ...just my 2c worth ...
Is that greed or what?
Expect it at $399 by July 1st.
NO way.
This cost estimate does not include everything. That is just parts and assembly of the hardware.
You have to add to that cost lots of things before the product gets to market.
- The operating system software
- All the Apps included
- Shipping (multiple times)
- Warehousing
- Retail store operation costs
- Research and Development costs
- Accounting costs
- Labor costs of every employee that has anything to do with handling, creating, marketing, or selling the device
- Advertising expenses required to sell the product
- A portion of plant and equipment expenses (including buildings and utilities)
- Taxes, tariffs, and duty fees
- Costs of offering warrenties
Apple is operating on very thin margins at $499 I don't think we will see it much lower. We may see some discounting on the models with more features.
Some people do not understand all the costs of running a business and all of those costs have to be added to the parts cost to come up with the real cost of a product.
and took 3 years to come up with?
Does this surprise you? If it does, you have no idea what goes into the design, patent, and engineering evolution of electronics. I think it would be safe to say this took 5 years to come to market and much of it had to do with the speed, size and cost to manufacture the chip technology. On top of that, the multi-touch screen technology, not to mention the battery technology made the iPad almost impossible to make 2 and 3 years ago. There were so many steppingstones that needed to be laid down before the iPad could come to market and still more before its release. The primary difference between an old IBM Think Pad and the iPad, ultimately, will be content delivery and a whole new factor in software development and all of that is coming together will will be coming together in the next 12 months and longer.
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.
You two spend way too much time talking about this subject. Also most forums do not have the ability to block an IP address and even if that did that wouldn't work very well seeing anyone can clone their IP and most use dynamic IP addressing.
why all the fuss, its just the mac / apple premium.
I have a question, does putting "mac", "apple", "stevej" or for the sake of argument "tech" in your user name suppose to validate the fact that you an actual apple user and not just a regular old troll?
btw IIgs is the first apple I purchased.