Nope! But the Chinese do it well, and do it cheap.
Savings from all that foreign manufacturing/outsourcing could be passed on to the consumer... from a more fiscally conscientious organization.
There is no reason why Steve should "pass on" his savings. Those go into his pocket, and the customer doesn't care. That is why Apple products sell so well.
if Apple can;t say something like the price is close to $100 under what they sell the phone its still a rip off, selling 9.5+ million phones at $100 made per phone would mean that any costs of design would be taken care of ove and over... so i still feel that it is outrageously priced (for sales they expect, if those sales were half or maybe even 2/3rds it would make more sense...)
The market (actual buyers) seems to say the price is fine. What's your argument that the price is a rip-off? Who else is selling a million of a single model of phone a month? It is not a basic need, if you feel the price is too high, you can choose not to buy it.
Quote:
i feel that Apple would make monay of the iphone if they sold it for a penny above the manufacturing cost... (not really, but if it was $25 then it would be at least 10m (ip4 should sell at least this much before thye make a new one) that would be 25 million dollars... not including app's (new costumer,think it was like 25% of ip4 users are new (that or around 75% of 3g/gs users are going to ip4)
i mean Apple is showing the world how much F***ing $ they have on hand, you can argue its not much in terms of costs for keeping a company going, but they keep making record profits... if the lowered the price of the ip4 lets say 25% (using that it costs aprox 300 for cheapest model) ($600 unsubsidized) the price would be $450... that is still a $150 profit margin per phone... if people had to pay $50 up front for the ip4 i bet a lot more people would buy it...
Thanks for telling us that you put so little effort into your argument that you can't be bothered to look at their balance sheet. Also, thanks for telling us that you take these bill of material estimates out of context and assume them to be something they are not. If you can't tell the difference between gross margin and net margin (a very basic concept to accounting), then maybe you shouldn't be talking as if you know what you are talking about.
You're suggesting they charge less? Let's have you run a business, let you make ~35-40% GROSS margin (which is not profit, for details read up corp finance) and I'll tell you to drop your selling price by 25%. THEN, you can tell Apple to do the same, or anyone else for that matter.
I'm amazed, truly am.
Amazing. Unless he owns a manufacturing company and lowers his gross margin to 10%, THEN he can tell Apple to do the same.
Apple writes off R&D costs every quarter in their SG&A. It's a separate line item in their SEC form.
What's that got to do with anything? There is still the cost, no matter how it's reported.
BTW, there are often 2 sets of books in a company. One set of books uses different depreciation methods for tax purposes, to make the profit lower and, therefore, lower taxes. But, there's a second set of books that use depreciation methods that are more favorable toward the stockholders and the quarterly reports. It shows a higher profit to look good to investors. It's all perfectly legal accounting.
If the answer to the above questions is "yes" then by definition you are one of the over 50 million people who agree Apple's iPhone margin is acceptable.
The same test applies to computers, cars, Harvard's tuition, BP's gasoline, etc.
I know you aren?t one to use the ban hammer, but this thread has already been jacked by asinine comments that are clearly written to troll. I implore you to consider the option.
OT: I come here to read your stuff. Keep up the great work.
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
Don't you ever get tired of being not just wrong but spectacularly wrong? Or are you just desperate for attention? If the latter, you're a rather sad person.
The market (actual buyers) seems to say the price is fine. What's your argument that the price is a rip-off? Who else is selling a million of a single model of phone a month? It is not a basic need, if you feel the price is too high, you can choose not to buy it.
I think it all comes from that "entitlement" mentality that's so prevalent these days. He has personally decided how much profit Apple is allowed to make and anything more is deemed a rip-off. You are absolutely right, if he feels the price is too high, he is free to choose not to buy it. To quote another post, 50+ million people have already decided that the price of the iPhone (past and present) is perfectly acceptable. Personally, I think $300 (with a 2 year contract) for the 32GB iPhone 4 is just fine. I voted with my purchase and my only regret was that there wasn't a 64GB version.
Apple's parts and mfg. costs are kept secret [as much as possible] because they provide Apple with an advantage-- similar to any other IP.
In the past, Apple has paid in advance, millions of dollars, to secure production of high demand parts: RAM SSD,. etc. They are taking a risk for the potential reward of a profit.
If apple were to publish their parts costs, production agreements, schedules... they would be providing competitors with valuable information that could be used against Apple.
As an Apple shareholder, I would be among the first to join a lawsuit against the corporate executives for releasing this information to my detriment!
I don't understand how a shareholder lawsuit would work, at least, I don't think it would work out to be any better than people shooting themselves in the foot. Shareholders would be suing their own company, and their own company will be using the company's resources (also owned by shareholders) to defend itself.
I don't understand how a shareholder lawsuit would work, at least, I don't think it would work out to be any better than people shooting themselves in the foot. Shareholders would be suing their own company, and their own company will be using the company's resources (also owned by shareholders) to defend itself.
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
.
As a shareholder, you can sue the execs for how they part their hair. That doesn't mean it would make it anywhere though. Also, you'd be suing other shareholders as the deep pockets group (someone's going to have to pay up: legal fees, assumed settlement). Why not just sell your shares? Do you think you'd have a hard time getting more than you paid originally?
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
I think it would have to be something a lot more serious than releasing specific part cost information for the company to not defend them. Keeping component costs secret is to Apple's advantage, but I'm not convinced that it's nearly to the same degree as keeping upcoming product designs and feature lists secret. It would probably hurt their suppliers far more than Apple, such a breach may be a matter of contract violation between companies and not much more, in my opinion.
if Apple can;t say something like the price is close to $100 under what they sell the phone its still a rip off, selling 9.5+ million phones at $100 made per phone would mean that any costs of design would be taken care of ove and over... so i still feel that it is outrageously priced (for sales they expect, if those sales were half or maybe even 2/3rds it would make more sense...)
i feel that Apple would make monay of the iphone if they sold it for a penny above the manufacturing cost... (not really, but if it was $25 then it would be at least 10m (ip4 should sell at least this much before thye make a new one) that would be 25 million dollars... not including app's (new costumer,think it was like 25% of ip4 users are new (that or around 75% of 3g/gs users are going to ip4)
i mean Apple is showing the world how much F***ing $ they have on hand, you can argue its not much in terms of costs for keeping a company going, but they keep making record profits... if the lowered the price of the ip4 lets say 25% (using that it costs aprox 300 for cheapest model) ($600 unsubsidized) the price would be $450... that is still a $150 profit margin per phone... if people had to pay $50 up front for the ip4 i bet a lot more people would buy it...
Quote:
Originally Posted by DaHarder
What's the big surprise...
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
Both of you need to read a little Business 101. COGS or BoM only set a floor for pricing. The market sets the actual price and if that price is less than your costs then you're quickly going out of business. In Apples case the market price is quite high. In fact, looking at the shortages they still have on iPads and iPhone4s, I could argue the prices are too LOW. But, since Apple doesn't do variable pricing they have to set prices at what they feel is right for the entire life of a product and then deal with the near term shortages.
Last time I checked the Droid X and the Droid Incredible are being sold by Verizon on a two year contract for $199-- just like the iPhone. And that two year contract will cost you pretty much exactly what the comparable plan on AT&T will cost you.
So given that the cost of ownership of the current marquee Android phones are the same as the current marquee iPhone, why are we even having a discussion about Apple's margins or rip-off pricing or greed or whatever? It's as if certain people have become so enamored with the idea of Apple's "premium pricing" that they are incapable of adjusting their responses to match reality and just keep hammering away at that idea even when it actually doesn't make any sense.
Same goes for the iPad-- most people were stunned at how aggressively Apple priced it at release, yet somehow we've drifted back to the idea that it's somehow too expensive-- even though there (still) isn't anything else like it on the market to serve as a basis of comparison. We seem to operating under the general theorem that if Apple makes it, it's overpriced-- regardless of what that price is or how it stacks up in the market.
None of which matters much, of course, since the buying public is perfectly capable of making their own estimates of relative cost and relative value, no matter how many times dreary internet pundits try to convince them that Apple, and Apple alone, should be giving away their gear at cost.
Comments
Nope! But the Chinese do it well, and do it cheap.
Savings from all that foreign manufacturing/outsourcing could be passed on to the consumer... from a more fiscally conscientious organization.
There is no reason why Steve should "pass on" his savings. Those go into his pocket, and the customer doesn't care. That is why Apple products sell so well.
if Apple can;t say something like the price is close to $100 under what they sell the phone its still a rip off, selling 9.5+ million phones at $100 made per phone would mean that any costs of design would be taken care of ove and over... so i still feel that it is outrageously priced (for sales they expect, if those sales were half or maybe even 2/3rds it would make more sense...)
The market (actual buyers) seems to say the price is fine. What's your argument that the price is a rip-off? Who else is selling a million of a single model of phone a month? It is not a basic need, if you feel the price is too high, you can choose not to buy it.
i feel that Apple would make monay of the iphone if they sold it for a penny above the manufacturing cost... (not really, but if it was $25 then it would be at least 10m (ip4 should sell at least this much before thye make a new one) that would be 25 million dollars... not including app's (new costumer,think it was like 25% of ip4 users are new (that or around 75% of 3g/gs users are going to ip4)
i mean Apple is showing the world how much F***ing $ they have on hand, you can argue its not much in terms of costs for keeping a company going, but they keep making record profits... if the lowered the price of the ip4 lets say 25% (using that it costs aprox 300 for cheapest model) ($600 unsubsidized) the price would be $450... that is still a $150 profit margin per phone... if people had to pay $50 up front for the ip4 i bet a lot more people would buy it...
Thanks for telling us that you put so little effort into your argument that you can't be bothered to look at their balance sheet. Also, thanks for telling us that you take these bill of material estimates out of context and assume them to be something they are not. If you can't tell the difference between gross margin and net margin (a very basic concept to accounting), then maybe you shouldn't be talking as if you know what you are talking about.
You're suggesting they charge less? Let's have you run a business, let you make ~35-40% GROSS margin (which is not profit, for details read up corp finance) and I'll tell you to drop your selling price by 25%. THEN, you can tell Apple to do the same, or anyone else for that matter.
I'm amazed, truly am.
Amazing. Unless he owns a manufacturing company and lowers his gross margin to 10%, THEN he can tell Apple to do the same.
Unless he STFU!!!!!!!
Apple writes off R&D costs every quarter in their SG&A. It's a separate line item in their SEC form.
What's that got to do with anything? There is still the cost, no matter how it's reported.
BTW, there are often 2 sets of books in a company. One set of books uses different depreciation methods for tax purposes, to make the profit lower and, therefore, lower taxes. But, there's a second set of books that use depreciation methods that are more favorable toward the stockholders and the quarterly reports. It shows a higher profit to look good to investors. It's all perfectly legal accounting.
What's the big surprise...
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
DaHarder... wow... ignorance is ... flabbergasting!
parts + manufacturing + supply channel costs + R&D + marketing + Retailing + etc.
You've only covered the "value of the actual hardware." What the heck does that mean?
2. Did you pay for it?
If the answer to the above questions is "yes" then by definition you are one of the over 50 million people who agree Apple's iPhone margin is acceptable.
The same test applies to computers, cars, Harvard's tuition, BP's gasoline, etc.
1)
I know you aren?t one to use the ban hammer, but this thread has already been jacked by asinine comments that are clearly written to troll. I implore you to consider the option.
OT: I come here to read your stuff. Keep up the great work.
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
Don't you ever get tired of being not just wrong but spectacularly wrong?
Don't you ever get tired of being not just wrong but spectacularly wrong?
Perhaps he's a Wall Street analyst. Or John C. Dvorak.
The market (actual buyers) seems to say the price is fine. What's your argument that the price is a rip-off? Who else is selling a million of a single model of phone a month? It is not a basic need, if you feel the price is too high, you can choose not to buy it.
I think it all comes from that "entitlement" mentality that's so prevalent these days. He has personally decided how much profit Apple is allowed to make and anything more is deemed a rip-off. You are absolutely right, if he feels the price is too high, he is free to choose not to buy it. To quote another post, 50+ million people have already decided that the price of the iPhone (past and present) is perfectly acceptable. Personally, I think $300 (with a 2 year contract) for the 32GB iPhone 4 is just fine. I voted with my purchase and my only regret was that there wasn't a 64GB version.
Apple's parts and mfg. costs are kept secret [as much as possible] because they provide Apple with an advantage-- similar to any other IP.
In the past, Apple has paid in advance, millions of dollars, to secure production of high demand parts: RAM SSD,. etc. They are taking a risk for the potential reward of a profit.
If apple were to publish their parts costs, production agreements, schedules... they would be providing competitors with valuable information that could be used against Apple.
As an Apple shareholder, I would be among the first to join a lawsuit against the corporate executives for releasing this information to my detriment!
I don't understand how a shareholder lawsuit would work, at least, I don't think it would work out to be any better than people shooting themselves in the foot. Shareholders would be suing their own company, and their own company will be using the company's resources (also owned by shareholders) to defend itself.
I don't understand how a shareholder lawsuit would work, at least, I don't think it would work out to be any better than people shooting themselves in the foot. Shareholders would be suing their own company, and their own company will be using the company's resources (also owned by shareholders) to defend itself.
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
.
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
.
As a shareholder, you can sue the execs for how they part their hair. That doesn't mean it would make it anywhere though. Also, you'd be suing other shareholders as the deep pockets group (someone's going to have to pay up: legal fees, assumed settlement). Why not just sell your shares? Do you think you'd have a hard time getting more than you paid originally?
In some cases, yes-- sue Apple to remove the executives before they do more damage.
In other cases, the suit is against the individual executives, on behalf of the shareholders-- in that case it would be improper for the executives or Apple to use Apple resources to defend them.
I think it would have to be something a lot more serious than releasing specific part cost information for the company to not defend them. Keeping component costs secret is to Apple's advantage, but I'm not convinced that it's nearly to the same degree as keeping upcoming product designs and feature lists secret. It would probably hurt their suppliers far more than Apple, such a breach may be a matter of contract violation between companies and not much more, in my opinion.
if Apple can;t say something like the price is close to $100 under what they sell the phone its still a rip off, selling 9.5+ million phones at $100 made per phone would mean that any costs of design would be taken care of ove and over... so i still feel that it is outrageously priced (for sales they expect, if those sales were half or maybe even 2/3rds it would make more sense...)
i feel that Apple would make monay of the iphone if they sold it for a penny above the manufacturing cost... (not really, but if it was $25 then it would be at least 10m (ip4 should sell at least this much before thye make a new one) that would be 25 million dollars... not including app's (new costumer,think it was like 25% of ip4 users are new (that or around 75% of 3g/gs users are going to ip4)
i mean Apple is showing the world how much F***ing $ they have on hand, you can argue its not much in terms of costs for keeping a company going, but they keep making record profits... if the lowered the price of the ip4 lets say 25% (using that it costs aprox 300 for cheapest model) ($600 unsubsidized) the price would be $450... that is still a $150 profit margin per phone... if people had to pay $50 up front for the ip4 i bet a lot more people would buy it...
What's the big surprise...
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
Both of you need to read a little Business 101. COGS or BoM only set a floor for pricing. The market sets the actual price and if that price is less than your costs then you're quickly going out of business. In Apples case the market price is quite high. In fact, looking at the shortages they still have on iPads and iPhone4s, I could argue the prices are too LOW. But, since Apple doesn't do variable pricing they have to set prices at what they feel is right for the entire life of a product and then deal with the near term shortages.
What's the big surprise...
How else do people think Apple keeps posting these (questionably) astronomical quarterly profits?
Hint: By charging 10 to 20 times more than the value of the actual hardware.
Also people buying their products might have something to do with it, regardless if you're correct about pricing.
Think before you post a comment please, thanks.
So given that the cost of ownership of the current marquee Android phones are the same as the current marquee iPhone, why are we even having a discussion about Apple's margins or rip-off pricing or greed or whatever? It's as if certain people have become so enamored with the idea of Apple's "premium pricing" that they are incapable of adjusting their responses to match reality and just keep hammering away at that idea even when it actually doesn't make any sense.
Same goes for the iPad-- most people were stunned at how aggressively Apple priced it at release, yet somehow we've drifted back to the idea that it's somehow too expensive-- even though there (still) isn't anything else like it on the market to serve as a basis of comparison. We seem to operating under the general theorem that if Apple makes it, it's overpriced-- regardless of what that price is or how it stacks up in the market.
None of which matters much, of course, since the buying public is perfectly capable of making their own estimates of relative cost and relative value, no matter how many times dreary internet pundits try to convince them that Apple, and Apple alone, should be giving away their gear at cost.
That's only because that all you're looking for... the adverse.
Closer observation would reveal that I comment/blog/post on numerous products/services, Apple included, both favorably and otherwise.
Have a nice night...
Citation please!
I have read many of your posts an several forums. I don't recall any that were other than anti-Apple or sarcasm.
Would you post links to 5 posts that are neutral or pro Apple. (Defending yourself for posting anti-Apple FUD is not neutral).
Otherwise, all we have to go on is to Click on your Alias and review your posts.
TIA
Dick