Estimated costs of rumored product, based on analyzing specs of mockups created from alleged parts leaks and hearsay? Would anyone else like some sodium chloride in granulated form?
I still think we could see a $299 starting price point. $329 or $350 would be a lot harder sell unless it has the latest processor, front/rear cameras, retina, Siri. And nobody is expecting all that. An 8" iPad 2 staring at over $300, with Google coming out a few days later and announcing a 7" Nexus with twice the storage for $250 would be a tougher sell for Apple. Can they really charge $50-$70 more for the "ecosystem"?
Since rumours have been going back and forth between a $250 1024x768 non IPS entry model and a $329 IGZO HD model and we don't even know for sure if it has an aluminium or plastic housing, I think all price points and models are still on the table.
I really question the point of running articles like this one about the "build cost" (as if anyone but Apple really knows this), and the wisdom extrapolating from this totally dodgy estimate.
As far as I recall, no estimate of "build cost" of Apple's stuff, has ever come back with anything other than the suggestion that the device in question was being sold for about double it's cost. Since it's well known that Apple shoots for and usually get about a 30% margin, these cost calculations can only be completely wrong, yet they are trotted out each time as some kind of factual reporting. There is no way to reconcile what these guys tell us Apple's cost for the device is, to the profit levels that Apple itself is telling us they make.
I just flat out don't believe these "estimates." All indications are that they are just made up garbage and not worth talking about or even in fact, including in any back of the envelope calculations of retail price.
Other rumor sites have mentioned a $329 starting price for iPad mini. The trailing "29" sounded familiar because the 9.7" iPad models sell for $629, $729, and $829 with LTE. The LTE option is an extra $130. Fine.
But what if the holiday quarter iPad minis are all wi-fi + LTE? And what if the LTE option costs the same $130 for the mini? Well, if the $329 rumor is true, and if Apple ships only wi-fi + LTE iPad minis at first, then at some point in the future they could ship a wi-fi-only model for $329 - $130 = $199. That's how they could eventually hit the magic $199 price point with the basic iPad mini yet still keep the launch pricing higher than the low-end iPod touch.
That's a huge number of "if"s, to be sure. And Apple probably doesn't want to sell any iOS device at cost. And it may actually cost Apple $199 to make the low-end iPad mini. But plenty of customers buy the "best" iPad model with 64GB and LTE, with an enormous profit margin. Margins of the "better" and "best" models might keep the average margin up even if the "good" model is sold at break-even. Who knows?
Of course, the counter-argument against a $199 base iPad mini is Apple's history of never fighting the bottom-feeders. Apple's products are usually priced higher (except for Apple TV), and for the extra money you get the best industrial design, vastly longer usable lifespan, lower total cost of ownership (for the corporate IT types), interoperability across all of Apple's product lines, the world's best media infrastructure, and the best end-user experience. So maybe Apple can sell wi-fi-only iPad minis for $349+. And if they do, they can use the fact that a 7.85" diagonal screen has 25% more surface area than a 7.0" diagonal screen. Do the math.
That's assuming they would charge $100 more for each bmp in storage. This might be one area where what they've done in the past, what they typically do won't work. I don't use Android myself, but the Nexus tablet got great reviews and I know a few people who have it and like it a lot. There is competition in the sub 10" space. If I were Apple I'd rather take a hit on margins than lose a sale altogether. Unless they don't feel any threat from Amazon or Google. But if that was the case then why do a smaller iPad in the first place?
For the simple reason that there are people who want a smaller iPad. They don't want a tablet, they want an iPad. All the "got great reviews" doesn't mean people want to abandon the Apple/iTunes/AppStore ecosystem. A friend of mine actually bought an iPad 2 for his wife, she loved it, and wanted to carry it with her everywhere--in her purse. As a man, that was never a problem I ever considered.
I don't know what Apple's thinking is, since they haven't released it, announced any specs, or positioned it in the market yet. It's all speculation. I guess I view this entire thread as "fantasy iPadball". I'd rather talk about the real thing.
Other rumor sites have mentioned a $329 starting price for iPad mini. The trailing "29" sounded familiar because the 9.7" iPad models sell for $629, $729, and $829 with LTE. The LTE option is an extra $130. Fine.
But what if the holiday quarter iPad minis are all wi-fi + LTE? And what if the LTE option costs the same $130 for the mini? Well, if the $329 rumor is true, and if Apple ships only wi-fi + LTE iPad minis at first, then at some point in the future they could ship a wi-fi-only model for $329 - $130 = $199. That's how they could eventually hit the magic $199 price point with the basic iPad mini yet still keep the launch pricing higher than the low-end iPod touch.
That's a huge number of "if"s, to be sure. And Apple probably doesn't want to sell any iOS device at cost. And it may actually cost Apple $199 to make the low-end iPad mini. But plenty of customers buy the "best" iPad model with 64GB and LTE, with an enormous profit margin. Margins of the "better" and "best" models might keep the average margin up even if the "good" model is sold at break-even. Who knows?
Of course, the counter-argument against a $199 base iPad mini is Apple's history of never fighting the bottom-feeders. Apple's products are usually priced higher (except for Apple TV), and for the extra money you get the best industrial design, vastly longer usable lifespan, lower total cost of ownership (for the corporate IT types), interoperability across all of Apple's product lines, the world's best media infrastructure, and the best end-user experience. So maybe Apple can sell wi-fi-only iPad minis for $349+. And if they do, they can use the fact that a 7.85" diagonal screen has 25% more surface area than a 7.0" diagonal screen. Do the math.
9to5 Mac, where I saw the $329 price also had a $459 price which indicates a $130 cost for the cellular. It's an unusual starting price point we haven't often seen with Apple products it if's true. With 42% more display area than 7" 16:9 tablets and what I assume is essentially the same components as the new iPod Touch I think around $300 is very likely.for 16GB. I hope it's less — even though I shouldn't — but that seems like the best fit in between the rest of their products and what I think Apple is trying to do with this device.
The objective of these entry level devices is to sell the user an ecosystem -- and lock him in to future purchases.
Apple is trying to sell you an ecosystem but Google is selling ads and Amazon is selling, well... everything. Apple's ecosystem is a value added feature. The reason the other guys even make devices is to increase their effectiveness with customer lock in. Google and Amazon are free to put as many apps on iOS as they want so they actually benefit to some degree with every iDevice sold. Perhaps even more than with their own devices because people who would be attracted to a bargain tablet are not big spenders anyway where as iDevice buyers a more likely to be actual consumers.
Seems like the iPad mini is the new Verizon iPhone. I'll believe it when I see it. And I'm not talking about those alleged leaked cases from China.
From the iPhone keynote a few weeks ago, Apple's already aware of the hundreds of generic Android tablets that flooded the market and failed, so if there actually is an "iPad mini" being made, Apple's going to need to show how the new model is useful by itself and isn't just a scaled down iPad. Just like how the iPad isn't just a scaled up iPod.
Some people are forgetting about the iPad 2 still being sold at $399, which is the same price as the 64GB iPod touch. Even though they're the same price, they're totally different products. People who want a handheld, pocketable media player with lots of storage aren't going to buy a large tablet they'll have to lug around everywhere. And people looking for a tablet aren't going to buy an iPod with a tiny 4" screen. Again, if there's actually a smaller iPad, it might be sold alongside (or replace) the iPad 2.
When digital books take off we might even see a new paradigm take over. For instance, you could offer a college biology book that is sold as 2 separate units. One to study up to the mid-term and the other to study for the midterm to the final. You make the first half more expensive than the 2nd (because of standard dropout rate) and you make the full semester a little cheaper than buying each half separately.
It's shtty pricing tactics like those that turn otherwise honest people into pirates. It might have worked in the days of hard copy but it's not going to last long in the digital world.
The objective of these entry level devices is to sell the user an ecosystem -- and lock him in to future purchases.
Apple is trying to sell you an ecosystem but Google is selling ads and Amazon is selling, well... everything. Apple's ecosystem is a value added feature. The reason the other guys even make devices is to increase their effectiveness with customer lock in. Google and Amazon are free to put as many apps on iOS as they want so they actually benefit to some degree with every iDevice sold. Perhaps even more than with their own devices because people who would be attracted to a bargain tablet are not big spenders anyway where as iDevice buyers a more likely to be actual consumers.
I was thinking from a broader, more long-term perspective.
Google offers a web OS, a mobile OS, some apps, an app store, some content, some cloud services, and sells mobile devices directly. These are all focused on selling ads -- and I consider it the broader Google ecosystem.
Microsoft sells mainly OSes, Office, some content, some cloud services, some game/video hardware and content, and now some mobile devices. These are all focused on prolonging their dominance on the desktop -- and I consider this the broader Microsoft ecosystem. Microsoft has a separate ecosystem targeted at the backend database servers, etc... but this is really there to support/lock in users to their main ecosystem.
Amazon offers a mobile OS, some mobile devices, some digital content, some cloud services and reselling hard goods. These are all focused on everything in general, and nothing in particular -- and I consider it Amazon's ecosystem -- A Ponzi scheme to support Amazon's growth and continued existence.
Apple's ecosystem is known to us all and is focused on selling hardware at a profit.
Google, Microsoft, and Amazon sell apps and content through apple's ecosystem -- in effect supporting Apple's goals.
Each of Apple's competitors is attempting to establish an ecosystem that is competitive to Apple's -- in order to attract and lock in customers to their products and services.
The fact that these competitors are offering devices at a loss (or little or no profit) illustrates their need for you to accept their existing ecosystem with all their deficiencies, to buy them time to flesh out their ecosystems to gain control of their market.
I have no doubt that Google, Microsoft and Amazon will have some success at selling devices at cost! I am not sanguine that these efforts will provide long-term benefits.
What happens when an Android tablet buyer realizes that he has little (or lesser) choice for good (acceptable) tablet apps or content?
What happens when a Windows RT buyer realizes that he cannot run any of his Windows apps on the device and the supplied Office apps are marginally usable?
What happens when the Amazon tablet buyer realizes that he really has little choice for content and apps -- especially non-US buyers?
What happens when the buyer needs service or support for his tablet?
Maybe there is a little envy in the Samdroids (and the like) when they stand around watching (and deriding) the Apple fans waiting in line to buy the latest... at least the Apple customer has a place to go and stand in line (if he wants to).
It's shtty pricing tactics like those that turn otherwise honest people into pirates. It might have worked in the days of hard copy but it's not going to last long in the digital world.
I don't thin it's dishonest at all.If it costs, say, $5 million to produce each half and you can't just produce one half, and you sell, say, 2/3rd the number of copies of the 2nd half than the first you need to shore up those costs You have to increase the price over all which inflates the first half higher a little than it would otherwise be on it's own when accounting for unit sales or you have to jack up the price on the back end substantially.
Would you rather you get a 2GB or 4GB book instead of a 1GB or 2GB biology textbook and have it be nearly twice as much? What about a Calculus book that covers 3 semester long courses which is about 1.5 years for most students? Would you want to spend a lot more upfront and have it take up 3x as much space on your device or have it split up? Unless you're hell bent on going the distance with your maths and a higher capacity device I think most would want not have such a large up front expense.
People are wrong in referring to the iPad Mini as a 7" tablet. If people and media are not going to be accurate and refer to it as a 7.85" inch tablet, then it is more correct to call it an 8" tablet as opposed to a 7" tablet. I've noticed quite a few lazy media speaking of a 7" Apple tablet.
And a 4:3 7.85" tablet will have a far greater display area than those 7" 16:9 Android tablets. The two are not even comparable.
Estimated costs of rumored product, based on analyzing specs of mockups created from alleged parts leaks and hearsay? Would anyone else like some sodium chloride in granulated form?
I completely agree -- it is amazing how much spare time people have, and further amazing that they cannot fill it with something productive, like actual masturbation (vs the much less enjoyable mental kind), or World of Warcraft, or?!
Well I one believe Gruber will be eating crow on this one. His miniature pricing conveniently fits his theory, but what about MacBook Air and Pros. You certainly don't pay a premium for an 11" MBA. If the iPad Mini lands anywhere near $249, I'll be shocked. The only possibility is having a cheap 8gb model for education.
My guess:
iPad Mini
7" non-retina display
$299 for 16gb
$349 for 32gb
vs.
iPad Touch
4" retina display
$299 for 32gb
I am guessing Apple will price $299 or higher for the entry level model. However, I think it would be possible for Apple to deliver a product at $249. Assuming it costs $200 to manufacture, $49 would represent almost 25 percent margins. $299 comes closer to Apple's 30 percent plus margins. At the end of the day this is impossible to guess properly because we don't know what type of components Apple will deliver in the device. One rumor suggests $329. I could see that as well.
Comments
Estimated costs of rumored product, based on analyzing specs of mockups created from alleged parts leaks and hearsay? Would anyone else like some sodium chloride in granulated form?
Quote:
Originally Posted by Rogifan
I still think we could see a $299 starting price point. $329 or $350 would be a lot harder sell unless it has the latest processor, front/rear cameras, retina, Siri. And nobody is expecting all that. An 8" iPad 2 staring at over $300, with Google coming out a few days later and announcing a 7" Nexus with twice the storage for $250 would be a tougher sell for Apple. Can they really charge $50-$70 more for the "ecosystem"?
Since rumours have been going back and forth between a $250 1024x768 non IPS entry model and a $329 IGZO HD model and we don't even know for sure if it has an aluminium or plastic housing, I think all price points and models are still on the table.
I really question the point of running articles like this one about the "build cost" (as if anyone but Apple really knows this), and the wisdom extrapolating from this totally dodgy estimate.
As far as I recall, no estimate of "build cost" of Apple's stuff, has ever come back with anything other than the suggestion that the device in question was being sold for about double it's cost. Since it's well known that Apple shoots for and usually get about a 30% margin, these cost calculations can only be completely wrong, yet they are trotted out each time as some kind of factual reporting. There is no way to reconcile what these guys tell us Apple's cost for the device is, to the profit levels that Apple itself is telling us they make.
I just flat out don't believe these "estimates." All indications are that they are just made up garbage and not worth talking about or even in fact, including in any back of the envelope calculations of retail price.
Quote:
Originally Posted by oneaburns
Screw the iPad mini....Lions can spray something 7-10 feet behind them??? This is new information to me.
Cheesin
But what if the holiday quarter iPad minis are all wi-fi + LTE? And what if the LTE option costs the same $130 for the mini? Well, if the $329 rumor is true, and if Apple ships only wi-fi + LTE iPad minis at first, then at some point in the future they could ship a wi-fi-only model for $329 - $130 = $199. That's how they could eventually hit the magic $199 price point with the basic iPad mini yet still keep the launch pricing higher than the low-end iPod touch.
That's a huge number of "if"s, to be sure. And Apple probably doesn't want to sell any iOS device at cost. And it may actually cost Apple $199 to make the low-end iPad mini. But plenty of customers buy the "best" iPad model with 64GB and LTE, with an enormous profit margin. Margins of the "better" and "best" models might keep the average margin up even if the "good" model is sold at break-even. Who knows?
Of course, the counter-argument against a $199 base iPad mini is Apple's history of never fighting the bottom-feeders. Apple's products are usually priced higher (except for Apple TV), and for the extra money you get the best industrial design, vastly longer usable lifespan, lower total cost of ownership (for the corporate IT types), interoperability across all of Apple's product lines, the world's best media infrastructure, and the best end-user experience. So maybe Apple can sell wi-fi-only iPad minis for $349+. And if they do, they can use the fact that a 7.85" diagonal screen has 25% more surface area than a 7.0" diagonal screen. Do the math.
Quote:
Originally Posted by Rogifan
That's assuming they would charge $100 more for each bmp in storage. This might be one area where what they've done in the past, what they typically do won't work. I don't use Android myself, but the Nexus tablet got great reviews and I know a few people who have it and like it a lot. There is competition in the sub 10" space. If I were Apple I'd rather take a hit on margins than lose a sale altogether. Unless they don't feel any threat from Amazon or Google. But if that was the case then why do a smaller iPad in the first place?
For the simple reason that there are people who want a smaller iPad. They don't want a tablet, they want an iPad. All the "got great reviews" doesn't mean people want to abandon the Apple/iTunes/AppStore ecosystem. A friend of mine actually bought an iPad 2 for his wife, she loved it, and wanted to carry it with her everywhere--in her purse. As a man, that was never a problem I ever considered.
I don't know what Apple's thinking is, since they haven't released it, announced any specs, or positioned it in the market yet. It's all speculation. I guess I view this entire thread as "fantasy iPadball". I'd rather talk about the real thing.
Quote:
Originally Posted by oneaburns
Screw the iPad mini....Lions can spray something 7-10 feet behind them??? This is new information to me.
That's how lions (and tigers) mark their territories.
9to5 Mac, where I saw the $329 price also had a $459 price which indicates a $130 cost for the cellular. It's an unusual starting price point we haven't often seen with Apple products it if's true. With 42% more display area than 7" 16:9 tablets and what I assume is essentially the same components as the new iPod Touch I think around $300 is very likely.for 16GB. I hope it's less — even though I shouldn't — but that seems like the best fit in between the rest of their products and what I think Apple is trying to do with this device.
Quote:
Originally Posted by Dick Applebaum
The objective of these entry level devices is to sell the user an ecosystem -- and lock him in to future purchases.
Apple is trying to sell you an ecosystem but Google is selling ads and Amazon is selling, well... everything. Apple's ecosystem is a value added feature. The reason the other guys even make devices is to increase their effectiveness with customer lock in. Google and Amazon are free to put as many apps on iOS as they want so they actually benefit to some degree with every iDevice sold. Perhaps even more than with their own devices because people who would be attracted to a bargain tablet are not big spenders anyway where as iDevice buyers a more likely to be actual consumers.
Wouldn't you know, I was wondering the same thing!
Seems like the iPad mini is the new Verizon iPhone. I'll believe it when I see it. And I'm not talking about those alleged leaked cases from China.
From the iPhone keynote a few weeks ago, Apple's already aware of the hundreds of generic Android tablets that flooded the market and failed, so if there actually is an "iPad mini" being made, Apple's going to need to show how the new model is useful by itself and isn't just a scaled down iPad. Just like how the iPad isn't just a scaled up iPod.
Some people are forgetting about the iPad 2 still being sold at $399, which is the same price as the 64GB iPod touch. Even though they're the same price, they're totally different products. People who want a handheld, pocketable media player with lots of storage aren't going to buy a large tablet they'll have to lug around everywhere. And people looking for a tablet aren't going to buy an iPod with a tiny 4" screen. Again, if there's actually a smaller iPad, it might be sold alongside (or replace) the iPad 2.
Quote:
Originally Posted by SolipsismX
When digital books take off we might even see a new paradigm take over. For instance, you could offer a college biology book that is sold as 2 separate units. One to study up to the mid-term and the other to study for the midterm to the final. You make the first half more expensive than the 2nd (because of standard dropout rate) and you make the full semester a little cheaper than buying each half separately.
It's shtty pricing tactics like those that turn otherwise honest people into pirates. It might have worked in the days of hard copy but it's not going to last long in the digital world.
Quote:
Originally Posted by mstone
Quote:
Originally Posted by Dick Applebaum
The objective of these entry level devices is to sell the user an ecosystem -- and lock him in to future purchases.
Apple is trying to sell you an ecosystem but Google is selling ads and Amazon is selling, well... everything. Apple's ecosystem is a value added feature. The reason the other guys even make devices is to increase their effectiveness with customer lock in. Google and Amazon are free to put as many apps on iOS as they want so they actually benefit to some degree with every iDevice sold. Perhaps even more than with their own devices because people who would be attracted to a bargain tablet are not big spenders anyway where as iDevice buyers a more likely to be actual consumers.
I was thinking from a broader, more long-term perspective.
Google offers a web OS, a mobile OS, some apps, an app store, some content, some cloud services, and sells mobile devices directly. These are all focused on selling ads -- and I consider it the broader Google ecosystem.
Microsoft sells mainly OSes, Office, some content, some cloud services, some game/video hardware and content, and now some mobile devices. These are all focused on prolonging their dominance on the desktop -- and I consider this the broader Microsoft ecosystem. Microsoft has a separate ecosystem targeted at the backend database servers, etc... but this is really there to support/lock in users to their main ecosystem.
Amazon offers a mobile OS, some mobile devices, some digital content, some cloud services and reselling hard goods. These are all focused on everything in general, and nothing in particular -- and I consider it Amazon's ecosystem -- A Ponzi scheme to support Amazon's growth and continued existence.
Apple's ecosystem is known to us all and is focused on selling hardware at a profit.
Google, Microsoft, and Amazon sell apps and content through apple's ecosystem -- in effect supporting Apple's goals.
Each of Apple's competitors is attempting to establish an ecosystem that is competitive to Apple's -- in order to attract and lock in customers to their products and services.
The fact that these competitors are offering devices at a loss (or little or no profit) illustrates their need for you to accept their existing ecosystem with all their deficiencies, to buy them time to flesh out their ecosystems to gain control of their market.
I have no doubt that Google, Microsoft and Amazon will have some success at selling devices at cost! I am not sanguine that these efforts will provide long-term benefits.
What happens when an Android tablet buyer realizes that he has little (or lesser) choice for good (acceptable) tablet apps or content?
What happens when a Windows RT buyer realizes that he cannot run any of his Windows apps on the device and the supplied Office apps are marginally usable?
What happens when the Amazon tablet buyer realizes that he really has little choice for content and apps -- especially non-US buyers?
What happens when the buyer needs service or support for his tablet?
Maybe there is a little envy in the Samdroids (and the like) when they stand around watching (and deriding) the Apple fans waiting in line to buy the latest... at least the Apple customer has a place to go and stand in line (if he wants to).
I don't thin it's dishonest at all.If it costs, say, $5 million to produce each half and you can't just produce one half, and you sell, say, 2/3rd the number of copies of the 2nd half than the first you need to shore up those costs You have to increase the price over all which inflates the first half higher a little than it would otherwise be on it's own when accounting for unit sales or you have to jack up the price on the back end substantially.
Would you rather you get a 2GB or 4GB book instead of a 1GB or 2GB biology textbook and have it be nearly twice as much? What about a Calculus book that covers 3 semester long courses which is about 1.5 years for most students? Would you want to spend a lot more upfront and have it take up 3x as much space on your device or have it split up? Unless you're hell bent on going the distance with your maths and a higher capacity device I think most would want not have such a large up front expense.
People are wrong in referring to the iPad Mini as a 7" tablet. If people and media are not going to be accurate and refer to it as a 7.85" inch tablet, then it is more correct to call it an 8" tablet as opposed to a 7" tablet. I've noticed quite a few lazy media speaking of a 7" Apple tablet.
And a 4:3 7.85" tablet will have a far greater display area than those 7" 16:9 Android tablets. The two are not even comparable.
Originally Posted by Apple ][
And a 4:3 7.85" tablet will have a far greater display area than those 7" 16:9 Android tablets. The two are not even comparable.
Wanna bet.
Quote:
Originally Posted by Tallest Skil
Wanna bet.
Bet on what exactly?
That the iPad Mini has a much larger display area? I don't think that's what you meant, since that's simple math.
Do you mean bet on the two being comparable? I don't really see them as being similar at all, do you?
Quote:
Originally Posted by Suddenly Newton
Estimated costs of rumored product, based on analyzing specs of mockups created from alleged parts leaks and hearsay? Would anyone else like some sodium chloride in granulated form?
#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }I completely agree -- it is amazing how much spare time people have, and further amazing that they cannot fill it with something productive, like actual masturbation (vs the much less enjoyable mental kind), or World of Warcraft, or?!
#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Quote:
Originally Posted by satchmo
Well I one believe Gruber will be eating crow on this one. His miniature pricing conveniently fits his theory, but what about MacBook Air and Pros. You certainly don't pay a premium for an 11" MBA. If the iPad Mini lands anywhere near $249, I'll be shocked. The only possibility is having a cheap 8gb model for education.
My guess:
iPad Mini
7" non-retina display
$299 for 16gb
$349 for 32gb
vs.
iPad Touch
4" retina display
$299 for 32gb
I am guessing Apple will price $299 or higher for the entry level model. However, I think it would be possible for Apple to deliver a product at $249. Assuming it costs $200 to manufacture, $49 would represent almost 25 percent margins. $299 comes closer to Apple's 30 percent plus margins. At the end of the day this is impossible to guess properly because we don't know what type of components Apple will deliver in the device. One rumor suggests $329. I could see that as well.
Also I think Gruber's guess is from $249 to $299.