'Let's rock' and apple's reduced margins
September 11, 2008 5:04AM
Future Apple Hardware
edited January 2014
Could anything announced on sep 9 actually affect Apple's margins, as forecast? or is that thing yet to come?
Reply 1 of 2
September 11, 2008 5:36AM
This was Gruber's take on it:
I strongly suspect these new prices for the Touch are the margin-reducing “product transition” Apple alluded to in its quarterly finance call in July.
Reply 2 of 2
September 11, 2008 11:50AM
The new Touch is interesting but I'm not convinced the margins on the device are all that much different than the old one. In fact they might even be better. Now obviously gross take is a different story.
The iFixit posts with pics highlighted a device that was resdesigned in my mind to be as economical as possible to produce. Some notable things:
There is only one flash device. This means we are either stuck at what ever the current process technology allows for a device or Apple has to buy flash as multi chip modules. So this doesn't look good for high capacity Touches.
The main board is extreme small and it looks like it has far fewer parts than the old. This means lots of boards per panel and fewer parts soldered on = cheap!
It looks like more effort went into design for assembly. The Touch ought to assemble real fast.
Take all this together and I'd have to say that Touch is cheap to build so likely still has stiff margins but not the same profit in dollars. There might be an exception in the 32 GB variant as it uses newer flash tech but we will never know what Apple pays for that flash. I wouldn't be surprised if the lowend model is being sold to Apple for $75 or less.