I think it extremely unlikely that Apple would bother to make an 8GB iPad mini (or an 8GB anything for much longer).
It's just too small, even for crap magazines and a few PDF's and games.
IMO it's far more likely that Apple will do what they typically do which is produce the mini in the same "size steps" as the regular iPad. They will be 16GB, 32GB, & 64GB, and the low end one (16GB), will certainly not be $300.
I agree with this. Application sizes for iPad Apps have ballooned because of the Retina display. 8Gb is just not enough, and the cost difference is relatively small $13.50 v $21. Apple wants us to have enough space to buy more Apps & Content.
Beyond being cheap, I can't see a reason for wanting this thing.
Tim Cook said something about people that buy brand X tablets for whatever reason, and how great they are when first open the box, but how the excitiment drops off quickly due to a lack of quality in terms of apps, build quality, user experience and ecosystem. These same people end up as iPad customers more often than not.
This is exactly what happened to the Kindle Fire, and the Nexus 7 will suffer the same fate.
I feel for you bro. Not everyone can afford the best.
Douchebags like you are what give apple fans a bad name. From the New york times, engadget, the verge, CNET, Washington post, Allthings D, Mashable, CNN, Fox, NBC the list goes on and on, have said this tablet is not only good but its very good. The opinion on this tablet is that it is an absolute steal at the price point. I have not read one review that does not recommend getting this tablet.
Most reviews also agree this makes Kindle fire look like a joke. I have an ipad 2 and a Mac pro. But I also have a galaxy nexus, and a Samsung Windows 7 desktop. My favorite product out of all 3 is without a doubt my ipad 2 followed by my nexus. I just love technology. Pathetic attitudes like that, are makes outsiders without apple products think were all douchbags that walk around smelling our own farts.
I plan on getting one, I can't pass up that price point with those amazing reviews. Take my money google. Im on board. Just like if the iphone 5 amazes me ill be dumping my nexus. I hate pathetic fanboys. Glad I'm not one.
Beyond being cheap, I can't see a reason for wanting this thing.
Tim Cook said something about people that buy brand X tablets for whatever reason, and how great they are when first open the box, but how the excitiment drops off quickly due to a lack of quality in terms of apps, build quality, user experience and ecosystem. These same people end up as iPad customers more often than not.
This is exactly what happened to the Kindle Fire, and the Nexus 7 will suffer the same fate.
I agree with this. Application sizes for iPad Apps have ballooned because of the Retina display. 8Gb is just not enough, and the cost difference is relatively small $13.50 v $21. Apple wants us to have enough space to buy more Apps & Content.
Apple wants us to have enough space to buy more apps and content?
How much space does the New iPad 16gb leave? maybe the ipod touch 8gb?
or the iphone 4 8GB?
They are equally as pathetic as the 8/16 provided by google/asus.
or worse, as Apple are looking at 100$-200$ to add 16gb - 32GB of memory...
I'd love to see your evidence for that - from a reliable source.
As it is, Apple doesn't report gross margin by product line AFAIK, so you can only guess. But given that their average GM is 40% and Apple's strategy doesn't include loss leaders, it's extremely unlikely that they're selling the iPod Touch at cost.
BTW, have you noticed the gross inconsistency in your position? On one hand, you argue that Apple is selling the iPod Touch ($229) at or near cost, but on the other hand, you argue that they could make a decent margin on a 7" iPad at $199 (and a healthy margin at $249). Considering that the iPad has a lot more materials, 4x the screen size, faster processor, and much larger battery, those two positions are contradictory. If they sell the iPad Mini at roughly the same cost as the iPod Touch ($249 vs $229), the margins will be much lower on the iPad Mini. If they sell the iPad Mini below the current price of the iPod Touch (i.e., $199), they would lose money - or, at the very least, not make anything.
1- It's as "reliable" a source as this thread is. There are 3rd party webpages that estimate the cost of materials- just like the one here for the Nexus. The numbers I got were from iFixit. Google and you'll get a handful of others in the same ballpark.
2- The touch isn't $229, its $199. And iFixit estimated the cost currently at $140ish (its almost 1am and I don't remember the exact number).
3- I was stating that it is close to cost based on what you mentioned (~20% GM before R&D, etc). My basis was that what you are saying about the nexus and it's costs are almost identical to the iPod touch and its costs for the past several years (although the last $140ish was over a year ago so has obviously gone down since).
4- A decent margin is relative. 20% isn't shabby for most manufacturers- just not Apple. But its been proven that Apple will lower margins on their cheaper items- i.e.- the touch. So I was simply stating they COULD release a $199 mini and still have a profit- I never said a "Decent margin". Just a profit. I still don't think they will- again- I AGREE WITH YOU IT WILL BE $249-$299. But they have had similar margins in the past, so it wouldn't be out of the realm of possibility is all I'm saying.
There's not a chance in he77 that Apple would price an iPad Mini at $199. That leaves no margin after the real costs are considered (see above) - and Apple is not interested in selling a device at cost.
I'd say the 7.85" iPad would start at $299
Sure it's $100 more than the Nexus 7..... but it's also an iPad...
The only reason the Kindle Fire may (or may not) have sold is because it was $300 less than the $500 iPad.
But you'd be crazy to spend $200 on a Kindle Fire or Nexus 7 if you could get an iPad Mini for only $100 more.
I wonder why "cost analyses" are always limited to "Parts + Manufacture"… OK, throw in "fuzzy" mention of the inevitable but unknown R&D costs… but why do they always stop there, as if there are no other associated costs of bringing a product to market, and maintaining its presence there? These are not insignificant factors weighing on potential profitability.
Here are a few that leap to mind, in no particular order:
- Packaging (if not included in the "manufacturing cost" total)
- Warehousing, Distribution and Fulfillment. (probably outsourced, but still represents a substantial cost for volumes numbering in the millions)
- Marketing & PR.
- Customer Support. (Never insignificant for large-volume "computer" products)
- Warranty & Service processing, fulfillment and defective-product replacement. (Consider a 5% replacement/repair rate to be the high side of normal)
- All of the personnel and administrative costs of supporting the above list...
Just these can easily add quite a few $ per unit to the costs, depending on volume sell through. They are more like R&D costs in that they are "fuzzy" and unknowable… but they shouldn't be discounted in articles like these. For the "total cost of doing business" around a product, surely you could add another estimated 10% to the base cost without being too far off the mark…?
I have my I/O version doesn't hurt to work for this giant everyone hates.
I like it. Love it? Meh.
Verdict on Nexus 7?
Replacement for my iPad or Any 9" plus tablet? : No Blazing fast, smooth running, good battery life?: Yes Good app selection?: Meh, as always in android,many apps aren't optimized or incompatible Screen quality is pretty good. Easiest OS to use compared to iOS? Not so much.( Based on GF's opinion) iPad killer? Not really, Kindle fire killer is more like it. So far jellybean is intuitive and isn't completely unpolished/terrible. The non orienting/ no landscape mode home screen (on the N7)is killing me (though a fix is in the works sans google)
Loving it so far, but would I completely fall in love? Meh. I like to have more screen real-estate from a larger tablet.
The 7" still feels a bit niche.
My verdict: Worth the $199 introduction price @8GB
Do you Apple fanboys really want to live in a world with no competition? Do you think that would spur Apple on to innovate and keep prices down? Would it hurt you to once in every 10 million venom filled posts to say that someone other than Apple is capable of producing something nice?
The Nexus 7 is getting great reviews and is priced extremely aggressively. There's no reason why it shouldn't do well.
You are missing the point. The majority of posts around here are made not by true Apple fanboys but by the Apple shareholders. Yes, they do want to live in a world with no competition, they don't really care if Apple innovate or not and they don't want to keep prices down. In fact they want Apple to raise prices as high as possible! Yes, Nexus 7 has great reviews and the thought that Nexus 7 might be profitable at 199$ scare them, because Apple might be forced to lower prices and make less profit. And while that is good for the consumer, it is bad for the greedy shareholders who posts here!
There's not a chance in he77 that Apple would price an iPad Mini at $199. That leaves no margin after the real costs are considered (see above) - and Apple is not interested in selling a device at cost.
Your costs are mostly, with the exception of shipping and packaging - and the former is not always free - sunk costs or costs to the rest of the company. R&D is definitely sunk. Advertising is bought in bulk, they just add the iPad mini to the advertising spend. You also added licensing which would apply to competitors of Apple but not Apple. Even to Google paying MS. Not Apple. Support costs the client if they get AppleCare. Etc.
I think it extremely unlikely that Apple would bother to make an 8GB iPad mini (or an 8GB anything for much longer).
It's just too small, even for crap magazines and a few PDF's and games.
IMO it's far more likely that Apple will do what they typically do which is produce the mini in the same "size steps" as the regular iPad. They will be 16GB, 32GB, & 64GB, and the low end one (16GB), will certainly not be $300.
Not necessarily as they had a 4G iPod touch for $199 and the idea was to use that to attract customers and curtail the competition. Apple are fully aware that they killed the competition with the lower end iPod touches.
No, it hasn't been debunked. See my posts where I demonstrate that this 'analysis' grossly underestimates the costs and overestimates Google's share of the revenue. You don't have any idea of whether Apple would make money at $200.
I'd love to see your evidence for that - from a reliable source.
As it is, Apple doesn't report gross margin by product line AFAIK, so you can only guess. But given that their average GM is 40% and Apple's strategy doesn't include loss leaders, it's extremely unlikely that they're selling the iPod Touch at cost.
BTW, have you noticed the gross inconsistency in your position? On one hand, you argue that Apple is selling the iPod Touch ($229) at or near cost, but on the other hand, you argue that they could make a decent margin on a 7" iPad at $199 (and a healthy margin at $249). Considering that the iPad has a lot more materials, 4x the screen size, faster processor, and much larger battery, those two positions are contradictory. If they sell the iPad Mini at roughly the same cost as the iPod Touch ($249 vs $229), the margins will be much lower on the iPad Mini. If they sell the iPad Mini below the current price of the iPod Touch (i.e., $199), they would lose money - or, at the very least, not make anything.
Notice how fast the costs of the iPod touch goes up and the big increment from the 8GB to the 32G with no 16G? Why not start at 16G? Because the point is to have crap memory so people go to the middle costing iPod. Memory doesnt cost Apple that much, the entry level iPod touch may be a loss leader, or have a small margin but the line has a healthy one. As I have mentioned before.
And since we dont know the average margins on all devices how can we know if they have a loss leader or not, particularly if we add all your "extras", which you want to do for the iPad mini but not for existing products? ( I'll look for iSuppli on the iPod touch in the next post if I can find it)
So, the average selling price of the iPod touch line is increased by the higher end models in the same line with useful memory. The ASP of the line is much higher than $199 - and somebody did work this out, I need to go look it up - because people were willing, or coerced by salesmen or the lack of useful memory, to buy the higher model when in the store. And thats where the margins are made. The overall margins of a line - the iPad line, the iPod touch line, the iPad mini line, are what counts. Not the margin on the cheapest models. And thats why you cant open them folks. And why the memory is glued.
Also, one particular point on screens. Non-retina screens would sell for nothing, the process they use cuts up larger chunks of screens into the size, you just change the cutter for the iPad mini. The costs of the retina screens are probably higher regardless of the size.
Lastly the iSuppli numbers are retails costs, not the costs a company which has invested billions in these very technologies would be paying.
You are missing the point. The majority of posts around here are made not by true Apple fanboys but by the Apple shareholders. Yes, they do want to live in a world with no competition, they don't really care if Apple innovate or not and they don't want to keep prices down. In fact they want Apple to raise prices as high as possible! Yes, Nexus 7 has great reviews and the thought that Nexus 7 might be profitable at 199$ scare them, because Apple might be forced to lower prices and make less profit. And while that is good for the consumer, it is bad for the greedy shareholders who posts here!
Yes, it is not a fanboy site but a investor site, at least originally. Hence the lack of concern about market share and the concern about margins. Apple is priced by the market to assume a drop in margins, I dont think the market is assuming that they will not continue to grow.
Your costs are mostly, with the exception of shipping and packaging - and the former is not always free - sunk costs or costs to the rest of the company. R&D is definitely sunk. Advertising is bought in bulk, they just add the iPad mini to the advertising spend. You also added licensing which would apply to competitors of Apple but not Apple. Even to Google paying MS. Not Apple. Support costs the client if they get AppleCare. Etc.
Think it through. When Google makes an Android device, they have to pay Microsoft a license fee - so that is a cost that must be included.
When Apple makes an iOS product, they use their own OS - which is included in the R&D numbers. As for support, there are warranty costs even if the customer gets AppleCare. The first 90 days is covered by warranty.
Not necessarily as they had a 4G iPod touch for $199 and the idea was to use that to attract customers and curtail the competition. Apple are fully aware that they killed the competition with the lower end iPod touches.
Firstly the iPod touch costs from $199.00 see: http://store.apple.com/us/browse/home/shop_ipod/family/ipod_touch
Notice how fast the costs of the iPod touch goes up and the big increment from the 8GB to the 32G with no 16G? Why not start at 16G? Because the point is to have crap memory so people go to the middle costing iPod. Memory doesnt cost Apple that much, the entry level iPod touch may be a loss leader, or have a small margin but the line has a healthy one. As I have mentioned before.
And since we dont know the average margins on all devices how can we know if they have a loss leader or not, particularly if we add all your "extras", which you want to do for the iPad mini but not for existing products? ( I'll look for iSuppli on the iPod touch in the next post if I can find it)
So, the average selling price of the iPod touch line is increased by the higher end models in the same line with useful memory. The ASP of the line is much higher than $199 - and somebody did work this out, I need to go look it up - because people were willing, or coerced by salesmen or the lack of useful memory, to buy the higher model when in the store. And thats where the margins are made. The overall margins of a line - the iPad line, the iPod touch line, the iPad mini line, are what counts. Not the margin on the cheapest models. And thats why you cant open them folks. And why the memory is glued.
Also, one particular point on screens. Non-retina screens would sell for nothing, the process they use cuts up larger chunks of screens into the size, you just change the cutter for the iPad mini. The costs of the retina screens are probably higher regardless of the size.
So you're simply guessing about Apple's costs. You could have saved a lot of typing by just stating that up front.
Lastly the iSuppli numbers are retails costs, not the costs a company which has invested billions in these very technologies would be paying.
Yes, it is not a fanboy site but a investor site, at least originally. Hence the lack of concern about market share and the concern about margins. Apple is priced by the market to assume a drop in margins, I dont think the market is assuming that they will not continue to grow.
Not true. iSuppli most certainly does not use retail prices. In fact, for many of these components, there ARE no retail prices - they are only available at wholesale from the manufacturer. iSuppli's estimates are based on what they think the manufacturer pays. They may not be as accurate for Apple as for other companies, but it is their estimate. Regardless, that point simply makes it even less useful to look at iSuppli numbers.
1- It's as "reliable" a source as this thread is. There are 3rd party webpages that estimate the cost of materials- just like the one here for the Nexus. The numbers I got were from iFixit. Google and you'll get a handful of others in the same ballpark.
2- The touch isn't $229, its $199. And iFixit estimated the cost currently at $140ish (its almost 1am and I don't remember the exact number).
3- I was stating that it is close to cost based on what you mentioned (~20% GM before R&D, etc). My basis was that what you are saying about the nexus and it's costs are almost identical to the iPod touch and its costs for the past several years (although the last $140ish was over a year ago so has obviously gone down since).
4- A decent margin is relative. 20% isn't shabby for most manufacturers- just not Apple. But its been proven that Apple will lower margins on their cheaper items- i.e.- the touch. So I was simply stating they COULD release a $199 mini and still have a profit- I never said a "Decent margin". Just a profit. I still don't think they will- again- I AGREE WITH YOU IT WILL BE $249-$299. But they have had similar margins in the past, so it wouldn't be out of the realm of possibility is all I'm saying.
You're still arguing contradictory points. On one hand, you're arguing that at least the base iPod Touch at $199 is sold at break even or very low margin. Then you argue that a 7-8" iPad Mini could be sold at $199 with some profit. Please explain how Apple could do that. If the iPod Touch is break even at $199 or very low margin, how do they sell a device with 4 times the screen size, much larger case, much larger battery, and much faster CPU for the same price and make a profit?
Very few manufacturing companies can survive on less than 20% margin. The general rule of thumb is that if a manufacturing margin is less than 30%, you have to think very hard about it or have a high volume/low overhead strategy to justify it.
But rather than generalizations, let's look at specifics. AMZN is not a manufacturing company in any real sense and manufactured products are only a small fraction of their revenues, so looking at their overall picture is going to underestimate their overheads (manufacturing adds overheads that don't have a major part in their current product lines - even if you outsource - things like quality, scrap, R&D etc). But in their most recent quarter, AMZN's overheads were 23% of revenues. So even if a new manufactured didn't have any costs for R&D, scrap, quality, support, etc, they'd need a gross margin of at least 23% just to break even. And since manufacturing DOES have added costs that don't appear in a pure distribution model (as represented by the 23% figure), they'd actually need greater than 23% gross margin just to break even on the product sale.
I'm thinking about selling my new iPad and getting the Nexus 7, looks pretty sweet and while I do like the new iPad, it's not really much better than my Galaxy Tab 8.9.
I'm thinking about selling my new iPad and getting the Nexus 7, looks pretty sweet and while I do like the new iPad, it's not really much better than my Galaxy Tab 8.9.
That's nice. I hope you're happy with your Nexus 7.
Comments
Quote:
Originally Posted by Gazoobee
I think it extremely unlikely that Apple would bother to make an 8GB iPad mini (or an 8GB anything for much longer).
It's just too small, even for crap magazines and a few PDF's and games.
IMO it's far more likely that Apple will do what they typically do which is produce the mini in the same "size steps" as the regular iPad. They will be 16GB, 32GB, & 64GB, and the low end one (16GB), will certainly not be $300.
I agree with this. Application sizes for iPad Apps have ballooned because of the Retina display. 8Gb is just not enough, and the cost difference is relatively small $13.50 v $21. Apple wants us to have enough space to buy more Apps & Content.
Quote:
Originally Posted by AdonisSMU
I will be getting my Nexus 7 next week.
What, time to update the JooJoo?
Quote:
Originally Posted by AdonisSMU
I will be getting my Nexus 7 next week.
I feel for you bro. Not everyone can afford the best.
Tim Cook said something about people that buy brand X tablets for whatever reason, and how great they are when first open the box, but how the excitiment drops off quickly due to a lack of quality in terms of apps, build quality, user experience and ecosystem. These same people end up as iPad customers more often than not.
This is exactly what happened to the Kindle Fire, and the Nexus 7 will suffer the same fate.
Quote:
Originally Posted by Macky the Macky
I feel for you bro. Not everyone can afford the best.
Douchebags like you are what give apple fans a bad name. From the New york times, engadget, the verge, CNET, Washington post, Allthings D, Mashable, CNN, Fox, NBC the list goes on and on, have said this tablet is not only good but its very good. The opinion on this tablet is that it is an absolute steal at the price point. I have not read one review that does not recommend getting this tablet.
Most reviews also agree this makes Kindle fire look like a joke. I have an ipad 2 and a Mac pro. But I also have a galaxy nexus, and a Samsung Windows 7 desktop. My favorite product out of all 3 is without a doubt my ipad 2 followed by my nexus. I just love technology. Pathetic attitudes like that, are makes outsiders without apple products think were all douchbags that walk around smelling our own farts.
I plan on getting one, I can't pass up that price point with those amazing reviews. Take my money google. Im on board. Just like if the iphone 5 amazes me ill be dumping my nexus. I hate pathetic fanboys. Glad I'm not one.
Quote:
Originally Posted by Technarchy
Beyond being cheap, I can't see a reason for wanting this thing.
Tim Cook said something about people that buy brand X tablets for whatever reason, and how great they are when first open the box, but how the excitiment drops off quickly due to a lack of quality in terms of apps, build quality, user experience and ecosystem. These same people end up as iPad customers more often than not.
This is exactly what happened to the Kindle Fire, and the Nexus 7 will suffer the same fate.
Have you read the reviews.
Here is a few.
http://www.theverge.com/2012/6/29/3125396/google-nexus-7-review
http://www.nytimes.com/2012/07/05/technology/personaltech/nexus-7-googles-new-tablet-seriously-challenges-the-ipad-state-of-the-art.html?pagewanted=all
From big time apple product users.
https://allthingsd.com/20120710/from-google-the-toughest-challenger-to-the-ipad/
http://venturebeat.com/2012/06/29/nexus-7/#s:dsc02161
Conclusion main reason to get this tablet is its high quality. Google, and Asus did a great job. Steve Job's ghost wont hunt you down if you admit it.
Quote:
Originally Posted by kevt
I agree with this. Application sizes for iPad Apps have ballooned because of the Retina display. 8Gb is just not enough, and the cost difference is relatively small $13.50 v $21. Apple wants us to have enough space to buy more Apps & Content.
Apple wants us to have enough space to buy more apps and content?
How much space does the New iPad 16gb leave? maybe the ipod touch 8gb?
or the iphone 4 8GB?
They are equally as pathetic as the 8/16 provided by google/asus.
or worse, as Apple are looking at 100$-200$ to add 16gb - 32GB of memory...
Cheapest iPod touch for $150
Cheapest iPad mini for $250
IPod shuffle being phased out and replaced by cheaper iPod nano.
So the difference between 8gb and 16gb is 6.50$
Apple why do you charge an extra 100$
Quote:
Originally Posted by jragosta
I'd love to see your evidence for that - from a reliable source.
As it is, Apple doesn't report gross margin by product line AFAIK, so you can only guess. But given that their average GM is 40% and Apple's strategy doesn't include loss leaders, it's extremely unlikely that they're selling the iPod Touch at cost.
BTW, have you noticed the gross inconsistency in your position? On one hand, you argue that Apple is selling the iPod Touch ($229) at or near cost, but on the other hand, you argue that they could make a decent margin on a 7" iPad at $199 (and a healthy margin at $249). Considering that the iPad has a lot more materials, 4x the screen size, faster processor, and much larger battery, those two positions are contradictory. If they sell the iPad Mini at roughly the same cost as the iPod Touch ($249 vs $229), the margins will be much lower on the iPad Mini. If they sell the iPad Mini below the current price of the iPod Touch (i.e., $199), they would lose money - or, at the very least, not make anything.
1- It's as "reliable" a source as this thread is. There are 3rd party webpages that estimate the cost of materials- just like the one here for the Nexus. The numbers I got were from iFixit. Google and you'll get a handful of others in the same ballpark.
2- The touch isn't $229, its $199. And iFixit estimated the cost currently at $140ish (its almost 1am and I don't remember the exact number).
3- I was stating that it is close to cost based on what you mentioned (~20% GM before R&D, etc). My basis was that what you are saying about the nexus and it's costs are almost identical to the iPod touch and its costs for the past several years (although the last $140ish was over a year ago so has obviously gone down since).
4- A decent margin is relative. 20% isn't shabby for most manufacturers- just not Apple. But its been proven that Apple will lower margins on their cheaper items- i.e.- the touch. So I was simply stating they COULD release a $199 mini and still have a profit- I never said a "Decent margin". Just a profit. I still don't think they will- again- I AGREE WITH YOU IT WILL BE $249-$299. But they have had similar margins in the past, so it wouldn't be out of the realm of possibility is all I'm saying.
I'd say the 7.85" iPad would start at $299
Sure it's $100 more than the Nexus 7..... but it's also an iPad...
The only reason the Kindle Fire may (or may not) have sold is because it was $300 less than the $500 iPad.
But you'd be crazy to spend $200 on a Kindle Fire or Nexus 7 if you could get an iPad Mini for only $100 more.
.
You'll notice that no one puts this thing in the same league as the iPad.
The two points that come up most are that android tablets sucks, but Nexus 7 sucks the leaast, but it's cheap so that's okay.
Sorry if I don't see that as high praise or an endorsement.
I wonder why "cost analyses" are always limited to "Parts + Manufacture"… OK, throw in "fuzzy" mention of the inevitable but unknown R&D costs… but why do they always stop there, as if there are no other associated costs of bringing a product to market, and maintaining its presence there? These are not insignificant factors weighing on potential profitability.
Here are a few that leap to mind, in no particular order:
- Packaging (if not included in the "manufacturing cost" total)
- Warehousing, Distribution and Fulfillment. (probably outsourced, but still represents a substantial cost for volumes numbering in the millions)
- Marketing & PR.
- Customer Support. (Never insignificant for large-volume "computer" products)
- Warranty & Service processing, fulfillment and defective-product replacement. (Consider a 5% replacement/repair rate to be the high side of normal)
- All of the personnel and administrative costs of supporting the above list...
Just these can easily add quite a few $ per unit to the costs, depending on volume sell through. They are more like R&D costs in that they are "fuzzy" and unknowable… but they shouldn't be discounted in articles like these. For the "total cost of doing business" around a product, surely you could add another estimated 10% to the base cost without being too far off the mark…?
Quote:
Originally Posted by Michael Scrip
I'd say the 7.85" iPad would start at $299
Sure it's $100 more than the Nexus 7..... but it's also an iPad...
The only reason the Kindle Fire may (or may not) have sold is because it was $300 less than the $500 iPad.
But you'd be crazy to spend $200 on a Kindle Fire or Nexus 7 if you could get an iPad Mini for only $100 more.
.
And a 7.85" 4:3 ratio display is about 30 square inches of screen real estate, vs. up to 22" square on the competing 7", 16:9/16:10 screens…
40% more screen real estate, in a smaller form factor iPad, only $100 more. That would certainly be a competition...
I like it. Love it? Meh.
Verdict on Nexus 7?
Replacement for my iPad or Any 9" plus tablet? : No
Blazing fast, smooth running, good battery life?: Yes
Good app selection?: Meh, as always in android,many apps aren't optimized or incompatible
Screen quality is pretty good.
Easiest OS to use compared to iOS? Not so much.( Based on GF's opinion)
iPad killer? Not really, Kindle fire killer is more like it.
So far jellybean is intuitive and isn't completely unpolished/terrible. The non orienting/ no landscape mode home screen (on the N7)is killing me (though a fix is in the works sans google)
Loving it so far, but would I completely fall in love? Meh. I like to have more screen real-estate from a larger tablet.
The 7" still feels a bit niche.
My verdict: Worth the $199 introduction price @8GB
Quote:
Originally Posted by kotatsu
Do you Apple fanboys really want to live in a world with no competition? Do you think that would spur Apple on to innovate and keep prices down? Would it hurt you to once in every 10 million venom filled posts to say that someone other than Apple is capable of producing something nice?
The Nexus 7 is getting great reviews and is priced extremely aggressively. There's no reason why it shouldn't do well.
You are missing the point. The majority of posts around here are made not by true Apple fanboys but by the Apple shareholders. Yes, they do want to live in a world with no competition, they don't really care if Apple innovate or not and they don't want to keep prices down. In fact they want Apple to raise prices as high as possible! Yes, Nexus 7 has great reviews and the thought that Nexus 7 might be profitable at 199$ scare them, because Apple might be forced to lower prices and make less profit. And while that is good for the consumer, it is bad for the greedy shareholders who posts here!
Your costs are mostly, with the exception of shipping and packaging - and the former is not always free - sunk costs or costs to the rest of the company. R&D is definitely sunk. Advertising is bought in bulk, they just add the iPad mini to the advertising spend. You also added licensing which would apply to competitors of Apple but not Apple. Even to Google paying MS. Not Apple. Support costs the client if they get AppleCare. Etc.
Not necessarily as they had a 4G iPod touch for $199 and the idea was to use that to attract customers and curtail the competition. Apple are fully aware that they killed the competition with the lower end iPod touches.
Firstly the iPod touch costs from $199.00 see:
http://store.apple.com/us/browse/home/shop_ipod/family/ipod_touch
Notice how fast the costs of the iPod touch goes up and the big increment from the 8GB to the 32G with no 16G? Why not start at 16G? Because the point is to have crap memory so people go to the middle costing iPod. Memory doesnt cost Apple that much, the entry level iPod touch may be a loss leader, or have a small margin but the line has a healthy one. As I have mentioned before.
And since we dont know the average margins on all devices how can we know if they have a loss leader or not, particularly if we add all your "extras", which you want to do for the iPad mini but not for existing products? ( I'll look for iSuppli on the iPod touch in the next post if I can find it)
So, the average selling price of the iPod touch line is increased by the higher end models in the same line with useful memory. The ASP of the line is much higher than $199 - and somebody did work this out, I need to go look it up - because people were willing, or coerced by salesmen or the lack of useful memory, to buy the higher model when in the store. And thats where the margins are made. The overall margins of a line - the iPad line, the iPod touch line, the iPad mini line, are what counts. Not the margin on the cheapest models. And thats why you cant open them folks. And why the memory is glued.
Also, one particular point on screens. Non-retina screens would sell for nothing, the process they use cuts up larger chunks of screens into the size, you just change the cutter for the iPad mini. The costs of the retina screens are probably higher regardless of the size.
Lastly the iSuppli numbers are retails costs, not the costs a company which has invested billions in these very technologies would be paying.
Yes, it is not a fanboy site but a investor site, at least originally. Hence the lack of concern about market share and the concern about margins. Apple is priced by the market to assume a drop in margins, I dont think the market is assuming that they will not continue to grow.
Think it through. When Google makes an Android device, they have to pay Microsoft a license fee - so that is a cost that must be included.
When Apple makes an iOS product, they use their own OS - which is included in the R&D numbers. As for support, there are warranty costs even if the customer gets AppleCare. The first 90 days is covered by warranty.
So you're simply guessing about Apple's costs. You could have saved a lot of typing by just stating that up front.
Not true. iSuppli most certainly does not use retail prices. In fact, for many of these components, there ARE no retail prices - they are only available at wholesale from the manufacturer. iSuppli's estimates are based on what they think the manufacturer pays. They may not be as accurate for Apple as for other companies, but it is their estimate. Regardless, that point simply makes it even less useful to look at iSuppli numbers.
You're still arguing contradictory points. On one hand, you're arguing that at least the base iPod Touch at $199 is sold at break even or very low margin. Then you argue that a 7-8" iPad Mini could be sold at $199 with some profit. Please explain how Apple could do that. If the iPod Touch is break even at $199 or very low margin, how do they sell a device with 4 times the screen size, much larger case, much larger battery, and much faster CPU for the same price and make a profit?
Very few manufacturing companies can survive on less than 20% margin. The general rule of thumb is that if a manufacturing margin is less than 30%, you have to think very hard about it or have a high volume/low overhead strategy to justify it.
But rather than generalizations, let's look at specifics. AMZN is not a manufacturing company in any real sense and manufactured products are only a small fraction of their revenues, so looking at their overall picture is going to underestimate their overheads (manufacturing adds overheads that don't have a major part in their current product lines - even if you outsource - things like quality, scrap, R&D etc). But in their most recent quarter, AMZN's overheads were 23% of revenues. So even if a new manufactured didn't have any costs for R&D, scrap, quality, support, etc, they'd need a gross margin of at least 23% just to break even. And since manufacturing DOES have added costs that don't appear in a pure distribution model (as represented by the 23% figure), they'd actually need greater than 23% gross margin just to break even on the product sale.
I'm thinking about selling my new iPad and getting the Nexus 7, looks pretty sweet and while I do like the new iPad, it's not really much better than my Galaxy Tab 8.9.
That's nice. I hope you're happy with your Nexus 7.