Economics disagrees with you to some extent. If they sell 50M tablets at an average of about $600 each, then they have $30B in tablet revenue. If we assume that the average tablet with ALL costs included come out to $400, then we're talking $10B in profit.
If they lowered the price to $550, they would sell some amount of extra tablets; lets say 52M tablets. Economies of scale might mean that that extra 4% in tablets sold knocks of a percent from their costs, $8B in total profit.
Lets chop off another $50, now maybe 54M tablets sold = ~$5.8B in profit.
I don't think $4.2B in lost profit is what turns them from a $500B company into a $200B company.
In any case, I assume that they've set prices based on supply and demand curves, just like nearly every other major company on Earth
Chopping off that $50 or $100 or more would likely mean sacrifices to iPad quality, at which point you can forget about selling 50+ million tablets.
Case in point: There are already plenty of tablets at the pricepoints you are hoping for. How are they selling?
Or another angle. MMI seems quite content to sell phones and tablets at a loss. They'll only survive because Google is buying them for strategic purposes, their business model is otherwise not sustainable. How many tablets do you suppose Google will let them sell at a loss before they have to pull the plug? 50+ million?
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Economics disagrees with you to some extent. If they sell 50M tablets at an average of about $600 each, then they have $30B in tablet revenue. If we assume that the average tablet with ALL costs included come out to $400, then we're talking $10B in profit.
If they lowered the price to $550, they would sell some amount of extra tablets; lets say 52M tablets. Economies of scale might mean that that extra 4% in tablets sold knocks of a percent from their costs, $8B in total profit.
Lets chop off another $50, now maybe 54M tablets sold = ~$5.8B in profit.
I don't think $4.2B in lost profit is what turns them from a $500B company into a $200B company.
In any case, I assume that they've set prices based on supply and demand curves, just like nearly every other major company on Earth
Chopping off that $50 or $100 or more would likely mean sacrifices to iPad quality, at which point you can forget about selling 50+ million tablets.
Case in point: There are already plenty of tablets at the pricepoints you are hoping for. How are they selling?
Or another angle. MMI seems quite content to sell phones and tablets at a loss. They'll only survive because Google is buying them for strategic purposes, their business model is otherwise not sustainable. How many tablets do you suppose Google will let them sell at a loss before they have to pull the plug? 50+ million?