Since when did Apple make products in response to other people's statistics?
I think you underestimate Apple.
You probably thought Steve wasn't just keeping a secret when he said that Apple would never get into the music business, or phones, or tablets....
Have you ever tried a 7" tablet? I have. At one time, I thought Apple should come out with a 7" tablet. We had a lot of discussions here about that. Ireland was always for a 10" device, and I wanted a 7" one. That's public record. So I'm not against it, in theory. But when I saw some smaller tablets before Apple came out with theirs, you know, stuff from Archos et al, I wasn't happy with them.
When the iPad was announced, I wasn't sure it would be as useful at that size, as I didn't think people would carry them with them, and that it wouldn't get used that much because of that. actually, that was one of the arguments I had been using. But when I went to the Apple store with my daughter and a friend of hers, my opinion changed. People didn't want to give them up to other people to look at. When we did get at one, we saw that it was a major step. At that point, I realized that smaller models weren't going to be nearly as good.
A 7" model isn't really that big. You have to hold it and use it to appreciate that. And with phones getting bigger all the time, the differentiation is getting smaller. A 7" tablet seems TINY to me now. Everything is squeezed. And the 16:9 shape is awkward at best. It's great for 16:9 video, but little else. Even reading is awkward, which is why the Kindle itself isn't that shape. Read reviews of 16:9 tablets and you'll see that all of them are awkward.
I get a bunch of magazines on my iPad now. They're great to read. A page is smaller than a real paper version, but it's sharp enough and big enough. But if I turn the tablet sideways, to see a two page spread, then you can rarely read anything other than heads and subs. You have to turn back to read text. Well, the 7" Fire is the size of just a bit less than half of my screen. Almost exactly the same length as the width on the iPad, and that's just too small.
So some people will find this to be just dandy, but others will be disappointed.
R&D is a fixed cost, yes, but it must be apportioned to the number of devices sold. The fewer sold, the more the R&D cost hangs over. You have no idea if this has anything to do with the Playbook, even though there is a rumor about it. The Playbook is a design owned by RIM. I doubt it would allow its manufacturer to use the design as a basis for a competing company. It looks somewhat like a Playbook as the Samsung Tabs look like an iPad. That doesn't mean that the Tab is an iPad in disguise.
Manufacturing costs will be what they are, and it's likely that it is around $180 per. But whether you like it or not, packaging costs are at least a couple of bucks per. It still costs to ship them from China to N. america and elsewhere. Then there are advertising expenses, sales expenses, support and warrantee service that must be added in. And then there is the rest of what we know as operating margins. That means the cost of the people working at Amazon, the price of lighting in the offices and warehouses, insurance, taxes, and of course, paperclips. In other words, the product must share a certain percentage of keeping the company operating.
Only after all of that is accounted for do we get an after taxes net margin, otherwise known as profit. It's easy to understand why they could be losing $50 on each sale.
Touche to your point about the rumor (despite the fact that we're on a rumor site discussing an analyst's guess with no supporting numbers). RIM can't sell the Playbook, so they might well sell the design. Even if not, both the Fire and Playbook are outsourced designs using less-than-cutting-edge technology. We could both guess at what that might cost, but I'm pretty sure it's a drop in the bucket for Amazon (which had $7.5 billion in operating expenses last quarter alone).
The same could be said for the other operating expenses you cite. Aside from warranty service, it's possible that each incremental Fire could add little incremental expense to Amazon's sea of expenses.
Bottom line is that we don't know how much Amazon *could* be losing on each sale, because aside from a rough guess at manufacturing costs we don't know expenses and we don't know how many they will actually sell. We're all guessing.
Partly. I had read the first one earlier. It almost completely agrees with what I said, so thanks for that. As far as the second one goes, well there a matter of dispute about that. I have two links here, one comes off the other that say the opposite.
You can read the statement about feature phones here:
If an analyst says anything that can in any way be seen as detrimental to Apple, every syllable he speaks must be dissected for hidden meanings until his statements are parsed into oblivion.
But if an analyst says something that may be seen as advantageous to Apple, it must not be questioned in any way at all, no matter how specious or ridiculous it may be.
A lot of people in the industry are saying that Amazon will be losing money on every sale of this device, not just one. This comes in below every estimate of price that was made assuming a profit on sales of the device itself. In fact, it was thought they would need to go with an older single core SoC. But they went with an older dual core instead, for a few bucks more. They went, surprisingly, with an IPS screen, which costs more (good for them, even the Xoom uses a cheaper screen!).
I don't see what the problem is for some of you people. Either Amazon's concept works, or it doesn't.
Their gross margin wasn't 3.37%. their net margin (profit) was.
<...>
So say that I bought 50 books at $8. At a five percent profit, that would be about $20 profit for them. But, they still incur all the costs for their web site for free books. So how does that lower the margin? It raises the cost for all books, so perhaps they made $16 profit on me so far.
<...>
So that's for books, movies and music. But their profit round the company was 3.37% as we see, so that holds true for anything they sell.
<...>
Gross was around 24%. Net of 3.37% would include operating expenses, so the "costs for their web site for free books" would have no impact in your example because that is already part of operating expenses.
3.37% does not "hold true for anything they sell", that is the average across the board. Different products have different expenses and different margins. It's highly unlikely that selling additional eBooks or media would only net 3.37% net margin because there is little incremental expense to Amazon.
Partly. I had read the first one earlier. It almost completely agrees with what I said, so thanks for that. As far as the second one goes, well there a matter of dispute about that. I have two links here, one comes off the other that say the opposite.
You can read the statement about feature phones here:
Most of the comments made about apps refers to paid apps, as your linked article does, rather than apps in general. It would make sense that iOS users have more paid apps since many of the most popular paid ones on iOS are free on Android. Different revenue model. For that reason don't focus too much on the paid aspect since the two aren't really comparable. What's free on Android is often available only for a fee on iOS.
Unless you have a computer available, and are among the minority of computers users that have iTunes installed, the iPad arrives as a brick.
No, over their WiFi. I don't know how it was done, but I just typed in my Apple password, and they took care of it with the tablet in front of me on the table. It just took a few minutes. All of these tablets use computers do do their set-up, even Android devices. What's the difference if it's their computer servers, or yours locally?
And local backup is far safer in so many ways than doing it on theirs. We see how many times a year that Google's services are broken into, and Microsoft's as well. Or when they lose customers data. Apple will now give us a choice of local or theirs, or we can do both. That's much better.
It doesn't matter how many people want this. Very few of them would have bought an iPad anyway. It turns out that a lot of people who have bought Kindles have iPads as well, but that won't be the case with this.
I've been using my iPads for the last year, and I've discovered that for the price I paid, the iPad is actually complete overkill - web, mail, movies is all I use. Very occasionally, I'll play a game. I would be very surprised if I was the only one to hold that point of view.
You seem to have taken my statement and reframed my argument.
You may be right. It may be that an offhand comment from one analyst without any substantiating data may be all we need to be convinced that one of the richest men in the world is entirely stupid.
Let me know when the company you've built buys Amazon from him. I mean, gosh, if he's so clearly stupid it shouldn't take much, no?
That was a totally stupid post on your part, and you know it. When you have no answer, you feel you must reply stupidly. Fine. If it makes you feel better. All of these people are always right. They never, ever, make mistakes. All of their products always become major successes.
Happy?
I've been trying to respond to you seriously. Is it worth the effort?
There's no evidence that consumers are buying 7" tablets.
As I've said several times before in other threads, no one's buying them because no one's selling a good one (not talking about ones primarily e-readers here). I understand and agree with points you've made that 7" isn't great for reading, but that just means it's the wrong tool for the job. What about people who don't intend to use it as a reader? The first company that markets a good 7" tablet at an attractive price will make a profit.
And since Apple has the larger size market sewn up it makes great sense to focus on anything but one that's within 3 inches of an iPad, since the focus from here on in from all manufacturers will be ties to content, commerce and data mining, as Amazon, like Apple, is doing, rather than whether it will allow the user to treat it more like their main computer.
Touche to your point about the rumor (despite the fact that we're on a rumor site discussing an analyst's guess with no supporting numbers). RIM can't sell the Playbook, so they might well sell the design. Even if not, both the Fire and Playbook are outsourced designs using less-than-cutting-edge technology. We could both guess at what that might cost, but I'm pretty sure it's a drop in the bucket for Amazon (which had $7.5 billion in operating expenses last quarter alone).
The same could be said for the other operating expenses you cite. Aside from warranty service, it's possible that each incremental Fire could add little incremental expense to Amazon's sea of expenses.
Bottom line is that we don't know how much Amazon *could* be losing on each sale, because aside from a rough guess at manufacturing costs we don't know expenses and we don't know how many they will actually sell. We're all guessing.
Well, don't even make a statement about RIM selling their design. There's really no point to that, unless you personally have some info that you know.
All of these costs are real, and they add up. The more Amazon sells the higher they become. They aren't fixed, except for previous costs such as the R&D, though that continues for the next product release, and the startup costs for this particular device.
It doesn't matter what other expenses Amazon has, as this relates to one particular product line. Companies look at each product to determine whether it will be continued or not. If Amazon finds that sales and profits, after some period of time they have allocated for this product, and associated product sales, are doing well enough, or are building up to the point where they will be, then all may be fine.
But if that's not the case, then they have to decide it this is germane to the future of the company, or whether it's a sideline they can do without. If it's germane, they they will keep trying by changing the mix. If not, then it's gone.
I don't find these numbers to be out of line from my experience in manufacturing electronics, maybe, from your experience in that, you do.
Gross was around 24%. Net of 3.37% would include operating expenses, so the "costs for their web site for free books" would have no impact in your example because that is already part of operating expenses.
3.37% does not "hold true for anything they sell", that is the average across the board. Different products have different expenses and different margins. It's highly unlikely that selling additional eBooks or media would only net 3.37% net margin because there is little incremental expense to Amazon.
Cost of running the store is part of the cost of selling the products. When we talk about books, music and video, we are talking about a 30% cut that Amazon, and pretty much everyone else gets. Out of that, comes the expenses of running the store, working on the software for the store, transaction fees, payments for bandwidth, advertising, etc. According to figures published many times over the years, a 3-5% profit on the entire sale price of the downloadable goods are assumed to be correct.
Of course, 3.37% is not the profit for each sale. I assumed you understood it meant that it was the overall percentage of profit. I didn't think I'd have to be so explicit, as I did say that it was their profit for last year.
And now you're making things up. You don't know what expenses they have, obviously. And the profits are what they are. Don't try and make something up that doesn't exist. That 3-5% profit on downloadable content is exactly that, and it doesn't change. Indeed, the more popular Amazon's downloads become, the higher their expenses become, as they have to buy more servers, more room to put them, more electricity, more air-conditioning, more people to run and maintain them, etc. Its interesting that Apple with many times the music sales is making the same percentage as Amazon is thought to be making. As long as you sell a minimum amount, you run up to those numbers, but not, apparently, higher.
Most of the comments made about apps refers to paid apps, as your linked article does, rather than apps in general. It would make sense that iOS users have more paid apps since many of the most popular paid ones on iOS are free on Android. Different revenue model. For that reason don't focus too much on the paid aspect since the two aren't really comparable. What's free on Android is often available only for a fee on iOS.
You trust your links, and I trust mine. It was more than just paid vs non paid. It was usage overall.
I've been using my iPads for the last year, and I've discovered that for the price I paid, the iPad is actually complete overkill - web, mail, movies is all I use. Very occasionally, I'll play a game. I would be very surprised if I was the only one to hold that point of view.
You seem to have taken my statement and reframed my argument.
No. I know what you said. I was trying to show why I didn't think it would happen.
You're not correct in your definition. If you want to be a stickler about it - as you often seem to want to be - Gross Margin is Revenue minus Cost of Goods Sold (also called Cost of Sales or CGS).
Direct costs do not necessarily have a one-for-one mapping with CGS (e.g., Depreciation can be included in the latter), so it's at best a loose approximation.
I was also using a loose approximation (since component costs include the labor and other costs in the value-added chain), so get off your high horse.
It would help if you'd stop making yourself look like a blithering idiot.
You looked something up on Google. That's a lot different from actually using business financials every day. "Direct Cost" is the same thing as COGS in a case where you're outsourcing production - or so close as to not matter. Even if you're doing it yourself, it is usually the same thing.
Depreciation is typically a below-the-line cost, and NOT part of COGS.
And the fact that component costs include the supplier's labor is irrelevant.
Please do yourself a favor and take a course in basic economics before you embarrass yourself further.
Comments
Since when did Apple make products in response to other people's statistics?
I think you underestimate Apple.
You probably thought Steve wasn't just keeping a secret when he said that Apple would never get into the music business, or phones, or tablets....
Have you ever tried a 7" tablet? I have. At one time, I thought Apple should come out with a 7" tablet. We had a lot of discussions here about that. Ireland was always for a 10" device, and I wanted a 7" one. That's public record. So I'm not against it, in theory. But when I saw some smaller tablets before Apple came out with theirs, you know, stuff from Archos et al, I wasn't happy with them.
When the iPad was announced, I wasn't sure it would be as useful at that size, as I didn't think people would carry them with them, and that it wouldn't get used that much because of that. actually, that was one of the arguments I had been using. But when I went to the Apple store with my daughter and a friend of hers, my opinion changed. People didn't want to give them up to other people to look at. When we did get at one, we saw that it was a major step. At that point, I realized that smaller models weren't going to be nearly as good.
A 7" model isn't really that big. You have to hold it and use it to appreciate that. And with phones getting bigger all the time, the differentiation is getting smaller. A 7" tablet seems TINY to me now. Everything is squeezed. And the 16:9 shape is awkward at best. It's great for 16:9 video, but little else. Even reading is awkward, which is why the Kindle itself isn't that shape. Read reviews of 16:9 tablets and you'll see that all of them are awkward.
I get a bunch of magazines on my iPad now. They're great to read. A page is smaller than a real paper version, but it's sharp enough and big enough. But if I turn the tablet sideways, to see a two page spread, then you can rarely read anything other than heads and subs. You have to turn back to read text. Well, the 7" Fire is the size of just a bit less than half of my screen. Almost exactly the same length as the width on the iPad, and that's just too small.
So some people will find this to be just dandy, but others will be disappointed.
R&D is a fixed cost, yes, but it must be apportioned to the number of devices sold. The fewer sold, the more the R&D cost hangs over. You have no idea if this has anything to do with the Playbook, even though there is a rumor about it. The Playbook is a design owned by RIM. I doubt it would allow its manufacturer to use the design as a basis for a competing company. It looks somewhat like a Playbook as the Samsung Tabs look like an iPad. That doesn't mean that the Tab is an iPad in disguise.
Manufacturing costs will be what they are, and it's likely that it is around $180 per. But whether you like it or not, packaging costs are at least a couple of bucks per. It still costs to ship them from China to N. america and elsewhere. Then there are advertising expenses, sales expenses, support and warrantee service that must be added in. And then there is the rest of what we know as operating margins. That means the cost of the people working at Amazon, the price of lighting in the offices and warehouses, insurance, taxes, and of course, paperclips. In other words, the product must share a certain percentage of keeping the company operating.
Only after all of that is accounted for do we get an after taxes net margin, otherwise known as profit. It's easy to understand why they could be losing $50 on each sale.
Touche to your point about the rumor (despite the fact that we're on a rumor site discussing an analyst's guess with no supporting numbers). RIM can't sell the Playbook, so they might well sell the design. Even if not, both the Fire and Playbook are outsourced designs using less-than-cutting-edge technology. We could both guess at what that might cost, but I'm pretty sure it's a drop in the bucket for Amazon (which had $7.5 billion in operating expenses last quarter alone).
The same could be said for the other operating expenses you cite. Aside from warranty service, it's possible that each incremental Fire could add little incremental expense to Amazon's sea of expenses.
Bottom line is that we don't know how much Amazon *could* be losing on each sale, because aside from a rough guess at manufacturing costs we don't know expenses and we don't know how many they will actually sell. We're all guessing.
You and I read different articles apparently. . .
http://blog.nielsen.com/nielsenwire/...rtphone-users/
http://blog.nielsen.com/nielsenwire/...and-apple-ios/
Partly. I had read the first one earlier. It almost completely agrees with what I said, so thanks for that. As far as the second one goes, well there a matter of dispute about that. I have two links here, one comes off the other that say the opposite.
You can read the statement about feature phones here:
http://news.yahoo.com/why-android-doomed-211100059.html
And he's linked to here, which you can get to from that first link, but I thought I'd post it.
http://www.asymco.com/2011/09/21/the...t-utilization/
AppleInsider Forum Rule #48:
If an analyst says anything that can in any way be seen as detrimental to Apple, every syllable he speaks must be dissected for hidden meanings until his statements are parsed into oblivion.
But if an analyst says something that may be seen as advantageous to Apple, it must not be questioned in any way at all, no matter how specious or ridiculous it may be.
A lot of people in the industry are saying that Amazon will be losing money on every sale of this device, not just one. This comes in below every estimate of price that was made assuming a profit on sales of the device itself. In fact, it was thought they would need to go with an older single core SoC. But they went with an older dual core instead, for a few bucks more. They went, surprisingly, with an IPS screen, which costs more (good for them, even the Xoom uses a cheaper screen!).
I don't see what the problem is for some of you people. Either Amazon's concept works, or it doesn't.
Their gross margin wasn't 3.37%. their net margin (profit) was.
<...>
So say that I bought 50 books at $8. At a five percent profit, that would be about $20 profit for them. But, they still incur all the costs for their web site for free books. So how does that lower the margin? It raises the cost for all books, so perhaps they made $16 profit on me so far.
<...>
So that's for books, movies and music. But their profit round the company was 3.37% as we see, so that holds true for anything they sell.
<...>
Gross was around 24%. Net of 3.37% would include operating expenses, so the "costs for their web site for free books" would have no impact in your example because that is already part of operating expenses.
3.37% does not "hold true for anything they sell", that is the average across the board. Different products have different expenses and different margins. It's highly unlikely that selling additional eBooks or media would only net 3.37% net margin because there is little incremental expense to Amazon.
Partly. I had read the first one earlier. It almost completely agrees with what I said, so thanks for that. As far as the second one goes, well there a matter of dispute about that. I have two links here, one comes off the other that say the opposite.
You can read the statement about feature phones here:
http://news.yahoo.com/why-android-doomed-211100059.html
And he's linked to here, which you can get to from that first link, but I thought I'd post it.
http://www.asymco.com/2011/09/21/the...t-utilization/
Most of the comments made about apps refers to paid apps, as your linked article does, rather than apps in general. It would make sense that iOS users have more paid apps since many of the most popular paid ones on iOS are free on Android. Different revenue model. For that reason don't focus too much on the paid aspect since the two aren't really comparable. What's free on Android is often available only for a fee on iOS.
...with a computer.
I got mine via FedEx.
Not everyone shops at the Apple store.
Unless you have a computer available, and are among the minority of computers users that have iTunes installed, the iPad arrives as a brick.
No, over their WiFi. I don't know how it was done, but I just typed in my Apple password, and they took care of it with the tablet in front of me on the table. It just took a few minutes. All of these tablets use computers do do their set-up, even Android devices. What's the difference if it's their computer servers, or yours locally?
And local backup is far safer in so many ways than doing it on theirs. We see how many times a year that Google's services are broken into, and Microsoft's as well. Or when they lose customers data. Apple will now give us a choice of local or theirs, or we can do both. That's much better.
It doesn't matter how many people want this. Very few of them would have bought an iPad anyway. It turns out that a lot of people who have bought Kindles have iPads as well, but that won't be the case with this.
I've been using my iPads for the last year, and I've discovered that for the price I paid, the iPad is actually complete overkill - web, mail, movies is all I use. Very occasionally, I'll play a game. I would be very surprised if I was the only one to hold that point of view.
You seem to have taken my statement and reframed my argument.
You may be right. It may be that an offhand comment from one analyst without any substantiating data may be all we need to be convinced that one of the richest men in the world is entirely stupid.
Let me know when the company you've built buys Amazon from him. I mean, gosh, if he's so clearly stupid it shouldn't take much, no?
That was a totally stupid post on your part, and you know it. When you have no answer, you feel you must reply stupidly. Fine. If it makes you feel better. All of these people are always right. They never, ever, make mistakes. All of their products always become major successes.
Happy?
I've been trying to respond to you seriously. Is it worth the effort?
There's no evidence that consumers are buying 7" tablets.
As I've said several times before in other threads, no one's buying them because no one's selling a good one (not talking about ones primarily e-readers here). I understand and agree with points you've made that 7" isn't great for reading, but that just means it's the wrong tool for the job. What about people who don't intend to use it as a reader? The first company that markets a good 7" tablet at an attractive price will make a profit.
And since Apple has the larger size market sewn up it makes great sense to focus on anything but one that's within 3 inches of an iPad, since the focus from here on in from all manufacturers will be ties to content, commerce and data mining, as Amazon, like Apple, is doing, rather than whether it will allow the user to treat it more like their main computer.
Apple could buy a few billion $ of these and dump them...
That is illegal.
Touche to your point about the rumor (despite the fact that we're on a rumor site discussing an analyst's guess with no supporting numbers). RIM can't sell the Playbook, so they might well sell the design. Even if not, both the Fire and Playbook are outsourced designs using less-than-cutting-edge technology. We could both guess at what that might cost, but I'm pretty sure it's a drop in the bucket for Amazon (which had $7.5 billion in operating expenses last quarter alone).
The same could be said for the other operating expenses you cite. Aside from warranty service, it's possible that each incremental Fire could add little incremental expense to Amazon's sea of expenses.
Bottom line is that we don't know how much Amazon *could* be losing on each sale, because aside from a rough guess at manufacturing costs we don't know expenses and we don't know how many they will actually sell. We're all guessing.
Well, don't even make a statement about RIM selling their design. There's really no point to that, unless you personally have some info that you know.
All of these costs are real, and they add up. The more Amazon sells the higher they become. They aren't fixed, except for previous costs such as the R&D, though that continues for the next product release, and the startup costs for this particular device.
It doesn't matter what other expenses Amazon has, as this relates to one particular product line. Companies look at each product to determine whether it will be continued or not. If Amazon finds that sales and profits, after some period of time they have allocated for this product, and associated product sales, are doing well enough, or are building up to the point where they will be, then all may be fine.
But if that's not the case, then they have to decide it this is germane to the future of the company, or whether it's a sideline they can do without. If it's germane, they they will keep trying by changing the mix. If not, then it's gone.
I don't find these numbers to be out of line from my experience in manufacturing electronics, maybe, from your experience in that, you do.
Gross was around 24%. Net of 3.37% would include operating expenses, so the "costs for their web site for free books" would have no impact in your example because that is already part of operating expenses.
3.37% does not "hold true for anything they sell", that is the average across the board. Different products have different expenses and different margins. It's highly unlikely that selling additional eBooks or media would only net 3.37% net margin because there is little incremental expense to Amazon.
Cost of running the store is part of the cost of selling the products. When we talk about books, music and video, we are talking about a 30% cut that Amazon, and pretty much everyone else gets. Out of that, comes the expenses of running the store, working on the software for the store, transaction fees, payments for bandwidth, advertising, etc. According to figures published many times over the years, a 3-5% profit on the entire sale price of the downloadable goods are assumed to be correct.
Of course, 3.37% is not the profit for each sale. I assumed you understood it meant that it was the overall percentage of profit. I didn't think I'd have to be so explicit, as I did say that it was their profit for last year.
And now you're making things up. You don't know what expenses they have, obviously. And the profits are what they are. Don't try and make something up that doesn't exist. That 3-5% profit on downloadable content is exactly that, and it doesn't change. Indeed, the more popular Amazon's downloads become, the higher their expenses become, as they have to buy more servers, more room to put them, more electricity, more air-conditioning, more people to run and maintain them, etc. Its interesting that Apple with many times the music sales is making the same percentage as Amazon is thought to be making. As long as you sell a minimum amount, you run up to those numbers, but not, apparently, higher.
Do you have a point?
You haven't read anything by the AI trollzzzs before have you?
Most of the comments made about apps refers to paid apps, as your linked article does, rather than apps in general. It would make sense that iOS users have more paid apps since many of the most popular paid ones on iOS are free on Android. Different revenue model. For that reason don't focus too much on the paid aspect since the two aren't really comparable. What's free on Android is often available only for a fee on iOS.
You trust your links, and I trust mine. It was more than just paid vs non paid. It was usage overall.
I've been using my iPads for the last year, and I've discovered that for the price I paid, the iPad is actually complete overkill - web, mail, movies is all I use. Very occasionally, I'll play a game. I would be very surprised if I was the only one to hold that point of view.
You seem to have taken my statement and reframed my argument.
No. I know what you said. I was trying to show why I didn't think it would happen.
You trust your links, and I trust mine. It was more than just paid vs non paid. It was usage overall.
Agreed, there was other info in there besides the paid apps comparison. The links were appreciated.
You're not correct in your definition. If you want to be a stickler about it - as you often seem to want to be - Gross Margin is Revenue minus Cost of Goods Sold (also called Cost of Sales or CGS).
Direct costs do not necessarily have a one-for-one mapping with CGS (e.g., Depreciation can be included in the latter), so it's at best a loose approximation.
I was also using a loose approximation (since component costs include the labor and other costs in the value-added chain), so get off your high horse.
It would help if you'd stop making yourself look like a blithering idiot.
You looked something up on Google. That's a lot different from actually using business financials every day. "Direct Cost" is the same thing as COGS in a case where you're outsourcing production - or so close as to not matter. Even if you're doing it yourself, it is usually the same thing.
Depreciation is typically a below-the-line cost, and NOT part of COGS.
And the fact that component costs include the supplier's labor is irrelevant.
Please do yourself a favor and take a course in basic economics before you embarrass yourself further.