i agree with you mate but somehow all the other companies make it throught and sell in europe and usa at the same price (ok dell doesn't make it actually too :P)
i agree with you mate but somehow all the other companies make it throught and sell in europe and usa at the same price (ok dell doesn't make it actually too :P)
this" apple tax" start the flame
Without using the hyperbolic term, I haven't seen any proof of Apple charging more in their end simply because of it's outside the US. There are some cost differences for keyboard, power outlets, packagings and fees for getting electronics approved for use, but I've never seen that discussed and I'd imagine that such differences are minor overall.
From a business standpoint it simply doesn't make sense to do determine a net profit for Europe than the US. I'd even
expect the net profit for Macs outside the US may be slightly less in areas to help boost adoption.
I can't speak for other companies as a whole, you know if you buy a current MBP in the US or elsewhere it will have the same internals. I know some companies use different model numbers so they alter the HW as needed fix their profitf for that region/country. I think ATI or Nvidia once did this with GPUs for Windows v. Macs where both cards cost the same but the Mac version was less powerful to adjust for the lower sales volume.
Personally, I believe it costs Apple less to make the $599 Mac mini than iSuppli estimates.
K
Me too, I don't believe the iSuppli cost estimates are correct.
A few checks:
- $46 for a 120Gb drive??? Even I, buying only one, would think this is a bad deal. I can buy an external 2.5" 320Gb WD drive for $65! That includes the enclosure and this is a retail price! So, come on, if Apple had to pay $46 for a bare 120Gb drive, while buying 100,000+ units, they would have fired their procurement negotiator a long time ago! I would think Apple pays no more than 1/2 that price.
- Same thing for the 1Gb of RAM at $10. I can buy 4Gb for $20 to $25 if I look for a good deal, so Apple must pay much less than that.
- The cost shown for the processor doesn't seem right either. I know it is a portable processor, but the 2Ghz model is plain vanilla these days...
- $65 for the graphics chip? Just the chip bought by the millions? I don't believe it!
All those costs might have been true 2 years ago! But today, they look more like the price the average Joe would have to pay for the parts to build a custom machine (not that he could possibly assemble a Mac mini, though, I am just talking about component prices).
The only thing that I find surprisingly low in iSuppli estimates are the Manufacturing Costs, $10.94! If this is true, it's really scary for the employees who build the Mac mini...
But overall, I am convinced that the margin Apple makes on the Mac mini is much better than announced by iSuppli!
EDIT: I see that other posters agree with me already on some posts I missed...
How exactly are they building it wrong because they choose to build to a small, low-power machine with notebook-grade parts? That is there choice, just as it?s any other PC OEMs choice to use the HW they choose
I wonder why Apple chose to use notebook components, especially the hard disk. It's not like Mac mini needs to be that small. Make it a bit larger, like Time Capsule and AEBS are and use cheaper desktop components to bring the price down and/or increase margin.
??? Hitachi Travelstar 160GB SATA1 2.5"ers retail for $44.99, Seagate Momentus 7200rpm SATAII 160GB 2.5"ers retail at $54.99.
Are the rest of these supposedly volume wholesale price estimates as ridiculously overestimated?
A valid point.
If Suppli's estimates are on the mark, however, Apple's product margin for Mac Minis really is on the low side within the computer industry. People who don't understand terminology like "gross margin" or how these numbers work should study a basic Introduction to Accounting text. Also, remember that the $599.99 listed retail price includes a cut for the retailer, whether that be Best Buy or Apple Stores. You have to treat the retailing function as a separate business from manufacturing, whether the retailer is part of Apple or is a third party.
Me too, I don't believe the iSuppli cost estimates are correct.
A few checks:
- $46 for a 120Gb drive??? Even I, buying only one, would think this is a bad deal. I can buy an external 2.5" 320Gb WD drive for $65! That includes the enclosure and this is a retail price! So, come on, if Apple had to pay $46 for a bare 120Gb drive, while buying 100,000+ units, they would have fired their procurement negotiator a long time ago! I would think Apple pays no more than 1/2 that price.
- Same thing for the 1Gb of RAM at $10. I can buy 4Gb for $20 to $25 if I look for a good deal, so Apple must pay much less than that.
- The cost shown for the processor doesn't seem right either. I know it is a portable processor, but the 2Ghz model is plain vanilla these days...
- $65 for the graphics chip? Just the chip bought by the millions? I don't believe it!
All those costs might have been true 2 years ago! But today, they look more like the price the average Joe would have to pay for the parts to build a custom machine (not that he could possibly assemble a Mac mini, though, I am just talking about component prices).
The only thing that I find surprisingly low in iSuppli estimates are the Manufacturing Costs, $10.94! If this is true, it's really scary for the employees who build the Mac mini...
But overall, I am convinced that the margin Apple makes on the Mac mini is much better than announced by iSuppli!
EDIT: I see that other posters agree with me already on some posts I missed...
apple uses parts with magic pixie dust, which is why it's more expensive
I wonder why Apple chose to use notebook components, especially the hard disk. It's not like Mac mini needs to be that small. Make it a bit larger, like Time Capsule and AEBS are and use cheaper desktop components to bring the price down and/or increase margin.
R&D costs are lower since they use those drivers in their notebooks, bulk purhasesnof more notebook-grade components, shorter lifetime of use forcing switchers to upgrade sooner. There is a lot we an speculate about the reasoning, but unique aspect of the Mac Mini is how long Apple let it sit without an update. So long that it was assumed many times over that Apple would be droping the line. It seems that people they tend to be interested in the Mac Mini may be gping for the form factor over anything else. While the HDD wouldn't last me a week I do know people with 40GB drives that are from being filled. Whatever Apple's reasoning their focus for the Mini is not designed for any of us.
The reason that you always see bias is because of your perspective which is that of an individual end customer with unique requirements.
Many people who admire Apple and say in these forums that "it can do no wrong", say that from either the perspective of an investor (in Apple stock) or of a student of business.
The reason I see bias is because there is bias.
When someone says for 2 years that the iPhone doesn't need or want MMS, video, or cut and paste and then champions it only because Apple then provides it, how else do you make a deduction and what do you call it? When posters defend Apple's ommission of firewire on a MAcBook and it gets added back on and won't admit Apple made a mistake- what do you call that? The same thing for matte screens. Remember - they were supposed to be nevermore according to the fanboys because Apple wasn't giving them. The comes the 17"- and it gets matte. And watch the others will also get matte(I'd bet) because it is far superior (glare does suck) regardless of fanboys assertion that noobody wants matte. They only say what Apple currently provides is what you need. Meanwhile netbooks sales are through the roof yet fanboys were saying, whenever I mentioned it, that a small formed device between 7-11" was no good - the MBA was all we needed. Then the rumours leaked and they all embrace it. It is a very sad train of thought actually.
"Razor-thin" component margins of over $200 on a $600 product? Thats around 30% depending on how accurate the cost assessment is. 25-30%? That's NOT EVEN CLOSE to "razor-thin" --- That is a far larger margin than most PC manufacturers who have margins in the 10-15% range!
Apple make about 70-80% profit in the UK, about 40% profit in the US (before marketing, distribution etc). Dell on the other hand make 6.5% (net) profit, HP 5%.
Congratulations. You win the inane post of the week award.
Why are you comparing Apple's GROSS margins to Dell and HP's NET margins?
Furthermore, where do you come up with the 70-80% figure? Apple publishes these figures - as required by law. Their worldwide gross margin is 35% and their net is around 15%.
Of course, margins like those are simply an indication that their product is perceived as being worth more than cheap, generic junk. Maybe this is why:
I get really tired of people complaining about margins. First, if you want to talk about margins, why aren't you comparing Apple to Microsoft - at 80% gross margin and 35% operating margin? Second, margin is irrelevant to the consumer. If you think a product is worth $xxx, you buy it. If you think it's not worth $xxx, you don't. No one is forcing you to buy the product. The company is then responsible for pricing its product in such a way as to maximize shareholder return.
The Mac Mini increased by £100+ here in the UK, which stopped me buying one...
It's $822 in the UK and $628.95 in the US (both prices including tax) - paying 30% more to buy in the UK hardly seems justified.
This international price comparison argument is recurrent and quite misplaced
First: you must compare prices before tax. The price differential due to taxes is none of Apple business. In addition, you may have included sales tax, but what about custom duties? Do you even know what they are?
Second: The final retail price includes distribution costs, and those are certainly less in the US given that Apple volumes are higher in the US, and generally speaking the distribution system is more efficient and less costly there.
Third: Apple does not change their prices everyday, while you are certainly using today's exchange rate in your calculations. In the case of Apple, they must protect themselves from currency variations, so they exchange rate they are using is not the same as yours.
Finally, an argument that actually overrides the previous ones: we live in a market economy. The price Apple decides to charge in each country is their own marketing decision, not your desire. They can charge whatever price the market will bear according their sales objectives in that country. There is no law that forces Apple, or any vendor, to sell the same goods at the same equivalent prices to everybody, worldwide! On the basis of what principle would Apple have such constraints?
There always seems top be this false belief that the retail price of something should be solely based on costs. Not! Rather, the price is optimized based on how much money a vendor can and expects to make. If they price too low, they don't make money, if they price too high, they don't make money either!
And if you were in the market to buy a Mac mini, if you find a price differential that you can exploit, by all means, take advantage of it! Buy the computer in the US and have it shipped. Or decide not to buy at all! You will be doing the market economy a favor!
It is because the consumer ultimately votes with their wallet and buy what they want and where they want, that the market eventually finds prices for everything (everything that is not regulated). This IS the market economy!
Fan boy is a stupid term because its used so broadly. A fanboy is someone who stands up and claps when steve jobs enters a room. A fanboy is someone who waits 8 yrs to play high end games because he won;t touch msft ever. a FANBOY NO MATTER WHAT YOU SAY HATES BILL GATES AND MSFT.
a fanboy is loyal will also say apple is wrong <<very rare > when apple is wrong.
a fanboy loves stve jobs and wants him healed .
I AM A FAN BOY and proud of it .
I agree. I use "fanboy" very sparingly and less frequently and it is usually preceeded by being called a troll (now that's a real silly term unless we were in Middle Earth). I really now prefer the term Applebot- he/she can really no longer think for themselves- it's all Apple doctrine or nothing.
Congratulations. You win the inane post of the week award.
Why are you comparing Apple's GROSS margins to Dell and HP's NET margins?
Furthermore, where do you come up with the 70-80% figure? Apple publishes these figures - as required by law. Their worldwide gross margin is 35% and their net is around 15%.
Of course, margins like those are simply an indication that their product is perceived as being worth more than cheap, generic junk. Maybe this is why:
I get really tired of people complaining about margins. First, if you want to talk about margins, why aren't you comparing Apple to Microsoft - at 80% gross margin and 35% operating margin? Second, margin is irrelevant to the consumer. If you think a product is worth $xxx, you buy it. If you think it's not worth $xxx, you don't. No one is forcing you to buy the product. The company is then responsible for pricing its product in such a way as to maximize shareholder return.
"Razor-thin" component margins of over $200 on a $600 product? Thats around 30% depending on how accurate the cost assessment is. 25-30%? That's NOT EVEN CLOSE to "razor-thin" --- That is a far larger margin than most PC manufacturers who have margins in the 10-15% range!
That's funny - I thought the same thing but didn't want to stir up the pot.
R&D costs are lower since they use those drivers in their notebooks, bulk purhasesnof more notebook-grade components, shorter lifetime of use forcing switchers to upgrade sooner.
R&D for what? Selecting which hard disk to use? And Apple uses 3.5" SATA for iMac, Mac Pro, and xServe in more than sufficient enough quantity for bulk pricing. As for the durability of 2.5" SATA, they share the same density as the 3.5". 2.5" disks have worse reputation only because they are used on notebooks which are frequently moved from one place to another, often while they are spinning. Besides, many servers use 2.5" disks now.
Comments
VAT ≠ Apple Tax
Import Tax ≠ Apple Tax
Exchange Rate ≠ Apple Tax
i agree with you mate but somehow all the other companies make it throught and sell in europe and usa at the same price
this" apple tax" start the flame
The Hitachi 120GByte 2.5-inch-format HDD comes in at an estimated price of $46
??? Hitachi Travelstar 160GB SATA1 2.5"ers retail for $44.99, Seagate Momentus 7200rpm SATAII 160GB 2.5"ers retail at $54.99.
Are the rest of these supposedly volume wholesale price estimates as ridiculously overestimated?
i agree with you mate but somehow all the other companies make it throught and sell in europe and usa at the same price
this" apple tax" start the flame
Without using the hyperbolic term, I haven't seen any proof of Apple charging more in their end simply because of it's outside the US. There are some cost differences for keyboard, power outlets, packagings and fees for getting electronics approved for use, but I've never seen that discussed and I'd imagine that such differences are minor overall.
From a business standpoint it simply doesn't make sense to do determine a net profit for Europe than the US. I'd even
expect the net profit for Macs outside the US may be slightly less in areas to help boost adoption.
I can't speak for other companies as a whole, you know if you buy a current MBP in the US or elsewhere it will have the same internals. I know some companies use different model numbers so they alter the HW as needed fix their profitf for that region/country. I think ATI or Nvidia once did this with GPUs for Windows v. Macs where both cards cost the same but the Mac version was less powerful to adjust for the lower sales volume.
Personally, I believe it costs Apple less to make the $599 Mac mini than iSuppli estimates.
K
Me too, I don't believe the iSuppli cost estimates are correct.
A few checks:
- $46 for a 120Gb drive??? Even I, buying only one, would think this is a bad deal. I can buy an external 2.5" 320Gb WD drive for $65! That includes the enclosure and this is a retail price! So, come on, if Apple had to pay $46 for a bare 120Gb drive, while buying 100,000+ units, they would have fired their procurement negotiator a long time ago! I would think Apple pays no more than 1/2 that price.
- Same thing for the 1Gb of RAM at $10. I can buy 4Gb for $20 to $25 if I look for a good deal, so Apple must pay much less than that.
- The cost shown for the processor doesn't seem right either. I know it is a portable processor, but the 2Ghz model is plain vanilla these days...
- $65 for the graphics chip? Just the chip bought by the millions? I don't believe it!
All those costs might have been true 2 years ago! But today, they look more like the price the average Joe would have to pay for the parts to build a custom machine (not that he could possibly assemble a Mac mini, though, I am just talking about component prices).
The only thing that I find surprisingly low in iSuppli estimates are the Manufacturing Costs, $10.94! If this is true, it's really scary for the employees who build the Mac mini...
But overall, I am convinced that the margin Apple makes on the Mac mini is much better than announced by iSuppli!
EDIT: I see that other posters agree with me already on some posts I missed...
How exactly are they building it wrong because they choose to build to a small, low-power machine with notebook-grade parts? That is there choice, just as it?s any other PC OEMs choice to use the HW they choose
I wonder why Apple chose to use notebook components, especially the hard disk. It's not like Mac mini needs to be that small. Make it a bit larger, like Time Capsule and AEBS are and use cheaper desktop components to bring the price down and/or increase margin.
??? Hitachi Travelstar 160GB SATA1 2.5"ers retail for $44.99, Seagate Momentus 7200rpm SATAII 160GB 2.5"ers retail at $54.99.
Are the rest of these supposedly volume wholesale price estimates as ridiculously overestimated?
A valid point.
If Suppli's estimates are on the mark, however, Apple's product margin for Mac Minis really is on the low side within the computer industry. People who don't understand terminology like "gross margin" or how these numbers work should study a basic Introduction to Accounting text. Also, remember that the $599.99 listed retail price includes a cut for the retailer, whether that be Best Buy or Apple Stores. You have to treat the retailing function as a separate business from manufacturing, whether the retailer is part of Apple or is a third party.
Me too, I don't believe the iSuppli cost estimates are correct.
A few checks:
- $46 for a 120Gb drive??? Even I, buying only one, would think this is a bad deal. I can buy an external 2.5" 320Gb WD drive for $65! That includes the enclosure and this is a retail price! So, come on, if Apple had to pay $46 for a bare 120Gb drive, while buying 100,000+ units, they would have fired their procurement negotiator a long time ago! I would think Apple pays no more than 1/2 that price.
- Same thing for the 1Gb of RAM at $10. I can buy 4Gb for $20 to $25 if I look for a good deal, so Apple must pay much less than that.
- The cost shown for the processor doesn't seem right either. I know it is a portable processor, but the 2Ghz model is plain vanilla these days...
- $65 for the graphics chip? Just the chip bought by the millions? I don't believe it!
All those costs might have been true 2 years ago! But today, they look more like the price the average Joe would have to pay for the parts to build a custom machine (not that he could possibly assemble a Mac mini, though, I am just talking about component prices).
The only thing that I find surprisingly low in iSuppli estimates are the Manufacturing Costs, $10.94! If this is true, it's really scary for the employees who build the Mac mini...
But overall, I am convinced that the margin Apple makes on the Mac mini is much better than announced by iSuppli!
EDIT: I see that other posters agree with me already on some posts I missed...
apple uses parts with magic pixie dust, which is why it's more expensive
I wonder why Apple chose to use notebook components, especially the hard disk. It's not like Mac mini needs to be that small. Make it a bit larger, like Time Capsule and AEBS are and use cheaper desktop components to bring the price down and/or increase margin.
R&D costs are lower since they use those drivers in their notebooks, bulk purhasesnof more notebook-grade components, shorter lifetime of use forcing switchers to upgrade sooner. There is a lot we an speculate about the reasoning, but unique aspect of the Mac Mini is how long Apple let it sit without an update. So long that it was assumed many times over that Apple would be droping the line. It seems that people they tend to be interested in the Mac Mini may be gping for the form factor over anything else. While the HDD wouldn't last me a week I do know people with 40GB drives that are from being filled. Whatever Apple's reasoning their focus for the Mini is not designed for any of us.
The reason that you always see bias is because of your perspective which is that of an individual end customer with unique requirements.
Many people who admire Apple and say in these forums that "it can do no wrong", say that from either the perspective of an investor (in Apple stock) or of a student of business.
The reason I see bias is because there is bias.
When someone says for 2 years that the iPhone doesn't need or want MMS, video, or cut and paste and then champions it only because Apple then provides it, how else do you make a deduction and what do you call it? When posters defend Apple's ommission of firewire on a MAcBook and it gets added back on and won't admit Apple made a mistake- what do you call that? The same thing for matte screens. Remember - they were supposed to be nevermore according to the fanboys because Apple wasn't giving them. The comes the 17"- and it gets matte. And watch the others will also get matte(I'd bet) because it is far superior (glare does suck) regardless of fanboys assertion that noobody wants matte. They only say what Apple currently provides is what you need. Meanwhile netbooks sales are through the roof yet fanboys were saying, whenever I mentioned it, that a small formed device between 7-11" was no good - the MBA was all we needed. Then the rumours leaked and they all embrace it. It is a very sad train of thought actually.
The term is real and alive.
Apple make about 70-80% profit in the UK, about 40% profit in the US (before marketing, distribution etc). Dell on the other hand make 6.5% (net) profit, HP 5%.
Congratulations. You win the inane post of the week award.
Why are you comparing Apple's GROSS margins to Dell and HP's NET margins?
Furthermore, where do you come up with the 70-80% figure? Apple publishes these figures - as required by law. Their worldwide gross margin is 35% and their net is around 15%.
Of course, margins like those are simply an indication that their product is perceived as being worth more than cheap, generic junk. Maybe this is why:
http://www.macsurfer.com/redir.php?u=418206
I get really tired of people complaining about margins. First, if you want to talk about margins, why aren't you comparing Apple to Microsoft - at 80% gross margin and 35% operating margin? Second, margin is irrelevant to the consumer. If you think a product is worth $xxx, you buy it. If you think it's not worth $xxx, you don't. No one is forcing you to buy the product. The company is then responsible for pricing its product in such a way as to maximize shareholder return.
The Mac Mini increased by £100+ here in the UK, which stopped me buying one...
It's $822 in the UK and $628.95 in the US (both prices including tax) - paying 30% more to buy in the UK hardly seems justified.
This international price comparison argument is recurrent and quite misplaced
First: you must compare prices before tax. The price differential due to taxes is none of Apple business. In addition, you may have included sales tax, but what about custom duties? Do you even know what they are?
Second: The final retail price includes distribution costs, and those are certainly less in the US given that Apple volumes are higher in the US, and generally speaking the distribution system is more efficient and less costly there.
Third: Apple does not change their prices everyday, while you are certainly using today's exchange rate in your calculations. In the case of Apple, they must protect themselves from currency variations, so they exchange rate they are using is not the same as yours.
Finally, an argument that actually overrides the previous ones: we live in a market economy. The price Apple decides to charge in each country is their own marketing decision, not your desire. They can charge whatever price the market will bear according their sales objectives in that country. There is no law that forces Apple, or any vendor, to sell the same goods at the same equivalent prices to everybody, worldwide! On the basis of what principle would Apple have such constraints?
There always seems top be this false belief that the retail price of something should be solely based on costs. Not! Rather, the price is optimized based on how much money a vendor can and expects to make. If they price too low, they don't make money, if they price too high, they don't make money either!
And if you were in the market to buy a Mac mini, if you find a price differential that you can exploit, by all means, take advantage of it! Buy the computer in the US and have it shipped. Or decide not to buy at all! You will be doing the market economy a favor!
It is because the consumer ultimately votes with their wallet and buy what they want and where they want, that the market eventually finds prices for everything (everything that is not regulated). This IS the market economy!
Fan boy is a stupid term because its used so broadly. A fanboy is someone who stands up and claps when steve jobs enters a room. A fanboy is someone who waits 8 yrs to play high end games because he won;t touch msft ever. a FANBOY NO MATTER WHAT YOU SAY HATES BILL GATES AND MSFT.
a fanboy is loyal will also say apple is wrong <<very rare > when apple is wrong.
a fanboy loves stve jobs and wants him healed .
I AM A FAN BOY and proud of it .
I agree. I use "fanboy" very sparingly and less frequently and it is usually preceeded by being called a troll (now that's a real silly term unless we were in Middle Earth). I really now prefer the term Applebot- he/she can really no longer think for themselves- it's all Apple doctrine or nothing.
Congratulations. You win the inane post of the week award.
Why are you comparing Apple's GROSS margins to Dell and HP's NET margins?
Furthermore, where do you come up with the 70-80% figure? Apple publishes these figures - as required by law. Their worldwide gross margin is 35% and their net is around 15%.
Of course, margins like those are simply an indication that their product is perceived as being worth more than cheap, generic junk. Maybe this is why:
http://www.macsurfer.com/redir.php?u=418206
I get really tired of people complaining about margins. First, if you want to talk about margins, why aren't you comparing Apple to Microsoft - at 80% gross margin and 35% operating margin? Second, margin is irrelevant to the consumer. If you think a product is worth $xxx, you buy it. If you think it's not worth $xxx, you don't. No one is forcing you to buy the product. The company is then responsible for pricing its product in such a way as to maximize shareholder return.
Well said!
"Razor-thin" component margins of over $200 on a $600 product? Thats around 30% depending on how accurate the cost assessment is. 25-30%? That's NOT EVEN CLOSE to "razor-thin" --- That is a far larger margin than most PC manufacturers who have margins in the 10-15% range!
That's funny - I thought the same thing but didn't want to stir up the pot.
Because a PC is composed of only a CPU and GPU and because all Intel and Nvidia components are exactly the same in price and performance.
Your kidding right ?
9
R&D costs are lower since they use those drivers in their notebooks, bulk purhasesnof more notebook-grade components, shorter lifetime of use forcing switchers to upgrade sooner.
R&D for what? Selecting which hard disk to use? And Apple uses 3.5" SATA for iMac, Mac Pro, and xServe in more than sufficient enough quantity for bulk pricing. As for the durability of 2.5" SATA, they share the same density as the 3.5". 2.5" disks have worse reputation only because they are used on notebooks which are frequently moved from one place to another, often while they are spinning. Besides, many servers use 2.5" disks now.
Your kidding right ?
My emoticons reveal sarcasm.
apple uses parts with magic pixie dust, which is why it's more expensive
hush hush
the elves want quiet
My emoticons reveal sarcasm.
Iam so stupid to miss that, I was gonna blast it but then i think, hey something is odd here in la la land .