And some people argue that Americans are not really as dumb as the tests of educational achievement shows, nor is there any good reason to ship jobs overseas because the workforce is too dumb to do the jobs required.
Just read the crap comments on this site and other sites and you begin to realize that the vast majority of Americans truly are inferior to rest of the world.
"APPLE IS OVERCHARGING. MONEY-GRUBBING FOOLS. SEE HOW YOU LIKE IT, ISHEEP."
? Also, to the two posts above, check my signature. Thanks for the catch! ?
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
tI doesn't include assembly cost either so the marginal cost is higher than $168.
The one problem I do have with Apple's pricing though, is the extra $100 for another 16 GB of memory.
Every other manufacturer does this too. None of them will stop until one of them does and .. that won't happen because no one wants to give up that 'free' super huge profit from a simple capacity bump.
Parts are just one percentage of the cost for a company to get its product into your hands. How many hundreds of millions (if not billions) of dollars were invested to create and test new manufacturing processes for this phone? How about paying thousands of employees over the course of 2 years to design and engineer it? R&D required to shrink and optimize every single chip and component inside the phone? Assembly costs? Marketing? Shipping? Distribution? Logistics? I have no doubt Apple is making a healthy profit margin. But that margin is partly because they're the most efficient in the business, and will end up selling hundreds of millions of these phones. They're masters of the supply chain. They prebuy massive amounts of components. heir margins doesn't mean you're getting less for your money than with any other phone- it just means that Apple is better at running its business. Quite the opposite. The S3 is in the same price range. I've handled it quite a bit, in terms of build quality, its from another universe. Pentile screen, super cheap, flimsy, thin plastic. There's nothing high end about the materials or quality, yet it sells for the same. I very much doubt anyone could build the same phone that Apple just build, and not charge more.
That is why they call it 'Bill of Materials" not overall expenses.
I'll never understand how mid-grade and premium gas is always 10c and 20c more than regular. 3.69-3.79-3.89. Back in the old days: .79-.89-.99. Go figure.
That's because there is really no such thing as 'mid-grade'. Mid-grade is a blend of 50% regular and 50% premium. The math works today as it did 'back in the old days'. Regular $ + Premium $ / 2 = mid-grade $.
It's more than fair, but one thing ALL OEMs are guilty of are the $100 markups between 16-32-64-whatever. I'll never understand that.
I remember being surprise to discover that car rental companies made most of their money from reselling rental cars after they had been used for a year (leveraging initial bulk purchase discounts from the manufacturer) together with their "optional" insurance. Not, as most people think, from the actual rental fee.
I remember being surprise to discover that reseller catalogs make most of their money from the advertising space they sell in their catalogs and not via a markup on the negotiated item prices.
Well... (drum roll please).
Apple's main business (at least in the mobile sector) is reselling Flash RAM.
Looks to me like almost all of Apple's margin in the mobile sector is in the difference between the price they buy and sell Flash RAM. It would significantly hurt Apple if we bought less Flash RAM and added it later from some other source (so no external or internally socketed Flash RAM capability any time soon in these devices).
What an amazing business model. All this to support a Flash RAM reselling business (BTW... I just ordered my maxed out iPhone 5 and cannot get it soon enough :-) ).
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
I know, right? It's ludicrous that they do it and even more so that we allow it.
"APPLE IS OVERCHARGING. MONEY-GRUBBING FOOLS. SEE HOW YOU LIKE IT, ISHEEP."
? Also, to the two posts above, check my signature. Thanks for the catch! ?
Quote:
Originally Posted by NapyBlue
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
Quote:
Originally Posted by Tallest Skil
I know, right? It's ludicrous that they do it and even more so that we allow it.
TS, you're going to confuse him. This will end badly (cringe at impending train wreck).
Ordered mine today in the UK @ £529 which is $858 which is the dearest of the current batch of smartphones.. However you have got to hand it to Apple as people like us buy the things. No wonder the directors are awarding themselves $50 million + here there and everywhere.
Why did I buy it? its easy to use and it just works with my other apple hardware.
But I can't understand the mindset of people with no financial interest in the company going "Great, Apple have a massive profit margin so its going to cost a fortune to buy the device, thats the icing on the cake" . The blind devotion seems to come from the days that Apple was the underdog, but in the end Apple won but ironically turned into that 1984 advert.
And some people argue that Americans are not really as dumb as the tests of educational achievement shows, nor is there any good reason to ship jobs overseas because the workforce is too dumb to do the jobs required.
Just read the crap comments on this site and other sites and you begin to realize that the vast majority of Americans truly are inferior to rest of the world.
Just read the condescending remarks on this and other sites anytime the word "American" is used, and you'll realize the world is full of assholes.
I'm sure Apple (and other manufacturers) love to see people posting how it's "MORE than fair!11!" while they're handing over a cool $500 to add to the Apple cash pile. How is it fair again? Years of R&D? Years? Seriously? If you consider that every new model of the iPhone is an incremental change, building on the R&D of the previous generation, you'll realize that there about a YEAR of incremental R&D (maybe less than a year), building upon the previous generation's hardware and software.
So let's see.. if everyone is buying 16GB (some people are paying more, for the larger capacity), that's $500x50 million phones is $25 BILLION. For a year of research. That's assuming they won't sell more. With that kind of cash this thing should also enable time travel.
Apple's stuff is cool and all, but they are laughing to the (overseas tax haven) bank with your money.
I can't debate with someone who has no idea what they are talking about.
I am sorry. I'm not trying to sound like a dick,
If you think all it takes is one year to build iPhone you're delusional.
Apple is working on at least 2 to 3 generations of iPhones right now and they always have been. They're planning products for five, ten, fifteen years into the future and if you don't think they are again you are delusional. That's how multi billion dollar corporations work.
Apple is making good money off their products. And I'm happy as all hell they are. Little thing called stock. They make money, I make money.
These BOM figures are always all over the placed. iSuppli had the iPhone 4S BOM at $188 vs the $132.50 that UBM TechInsights found. And it's not that the iSuppli figure was for the iPhone 4S at launch and the UBM TechInsights' figure is for the current iPhone 4S cost, because the iPhone 4 figure they use is for the 16GB model which is no longer offered so the chart is based on cost at launch.
I'm sure Apple (and other manufacturers) love to see people posting how it's "MORE than fair!11!" while they're handing over a cool $500 to add to the Apple cash pile. How is it fair again? Years of R&D? Years? Seriously? If you consider that every new model of the iPhone is an incremental change, building on the R&D of the previous generation, you'll realize that there about a YEAR of incremental R&D (maybe less than a year), building upon the previous generation's hardware and software.
Even if this was right, and I highly doubt it, you aren't considering the massive amount of licensing fees that Apple has to pay on top of those hardware costs. That can easily be another $200 a unit. Plus the packing, the accessories and their costs, shipping to the customers/stores and so on. Not to mention running their stores (one to one an apple care membership fees don't do it by a long shot)
Apple is not making $500 a unit in profit on these phones.
Ordered mine today in the UK @ £529 which is $858 which is the dearest of the current batch of smartphones.. However you have got to hand it to Apple as people like us buy the things. No wonder the directors are awarding themselves $50 million + here there and everywhere.
Why did I buy it? its easy to use and it just works with my other apple hardware.
But I can't understand the mindset of people with no financial interest in the company going "Great, Apple have a massive profit margin so its going to cost a fortune to buy the device, thats the icing on the cake" . The blind devotion seems to come from the days that Apple was the underdog, but in the end Apple won but ironically turned into that 1984 advert.
I know what you mean, but like someone said above, Apple is also making money by being efficient—in the supply chain, in the number of models they (don't) sell, in managing their own retail business, in running their own content ecosystem, and in the post-PC realm, by massively colonizing the entirely new economy of portable computing.
Because what they are doing is so new and, not coincidentally, so customer-driven, they are still perceived as the underdog, fighting mediocrity, by millions of fans. We are hoping this new business model will conquer the world, at least in terms of mindshare, and erase some of the worst aspects of the consumer exploitation in America's captalist past. But you have to add one crucial proviso to have all this work out ethically:
We are expecting that they're going to use their cash pile for some really big moves in the future that will change the world even more than they have already. Something on the scale of revolutionizing education, for example, or global communications.
It seemed the original article is stating what they think are the costs of the parts for the phone. That is what "checkthis" is referring to. Personally I think Apple leverages their size/strength/buying power for these parts more than what the author of this article (and others like it) are led to believe. It is not a stretch to think total parts costs per iphone is under $100. And if that is true and they are making more profit on it - good for them.
Interesting that they think the A6 cost 2x as much as the A4. Besides having not seen it I wonder what their rationale is for that. Because it's faster? Because of the 32nm lithography? Because it's rumoured to be based off of Cortex-A15?
And why is Touchscreen/Coverglass a single category. Besides these being different they show an increase in price despite the touchscreen now being part of the display.
There are plenty of other oddities but I'll stick with that for now.
PS: I have no problem with speculative analysis but they should at least present their reasoning as to how they came to these conclusions.
$168 is marginal cost. Doesn't include investment and other development costs.
I know what you're getting at, but that's not the correct term.
The correct term is calling it was it is: the bill of materials cost.
If it included the labor cost, you could call the sum the "direct cost", and the profit would be the "gross profit".
The "marginal cost" would be more apt if you were asking, "what does it cost to manufacture one additional iPhone?" Which is different than the direct cost, as labor is not always a direct cost; if you can squeeze a certain number into the capacity, it really didn't cost you any more labor, as you're paying the same number of hours.
Comments
Quote:
Originally Posted by waldobushman
$168 is marginal cost. Doesn't include investment and other development costs.
tI doesn't include assembly cost either so the marginal cost is higher than $168.
The one problem I do have with Apple's pricing though, is the extra $100 for another 16 GB of memory.
And some people argue that Americans are not really as dumb as the tests of educational achievement shows, nor is there any good reason to ship jobs overseas because the workforce is too dumb to do the jobs required.
Just read the crap comments on this site and other sites and you begin to realize that the vast majority of Americans truly are inferior to rest of the world.
Quote:
Originally Posted by Tallest Skil
"APPLE IS OVERCHARGING. MONEY-GRUBBING FOOLS. SEE HOW YOU LIKE IT, ISHEEP."
? Also, to the two posts above, check my signature. Thanks for the catch! ?
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
Quote:
Originally Posted by tjwal
tI doesn't include assembly cost either so the marginal cost is higher than $168.
The one problem I do have with Apple's pricing though, is the extra $100 for another 16 GB of memory.
Every other manufacturer does this too. None of them will stop until one of them does and .. that won't happen because no one wants to give up that 'free' super huge profit from a simple capacity bump.
Quote:
Originally Posted by Slurpy
Parts are just one percentage of the cost for a company to get its product into your hands. How many hundreds of millions (if not billions) of dollars were invested to create and test new manufacturing processes for this phone? How about paying thousands of employees over the course of 2 years to design and engineer it? R&D required to shrink and optimize every single chip and component inside the phone? Assembly costs? Marketing? Shipping? Distribution? Logistics? I have no doubt Apple is making a healthy profit margin. But that margin is partly because they're the most efficient in the business, and will end up selling hundreds of millions of these phones. They're masters of the supply chain. They prebuy massive amounts of components. heir margins doesn't mean you're getting less for your money than with any other phone- it just means that Apple is better at running its business. Quite the opposite. The S3 is in the same price range. I've handled it quite a bit, in terms of build quality, its from another universe. Pentile screen, super cheap, flimsy, thin plastic. There's nothing high end about the materials or quality, yet it sells for the same. I very much doubt anyone could build the same phone that Apple just build, and not charge more.
That is why they call it 'Bill of Materials" not overall expenses.
Quote:
Originally Posted by ColorClassic
I'll never understand how mid-grade and premium gas is always 10c and 20c more than regular. 3.69-3.79-3.89. Back in the old days: .79-.89-.99. Go figure.
That's because there is really no such thing as 'mid-grade'. Mid-grade is a blend of 50% regular and 50% premium. The math works today as it did 'back in the old days'. Regular $ + Premium $ / 2 = mid-grade $.
Quote:
Originally Posted by thataveragejoe
It's more than fair, but one thing ALL OEMs are guilty of are the $100 markups between 16-32-64-whatever. I'll never understand that.
I remember being surprise to discover that car rental companies made most of their money from reselling rental cars after they had been used for a year (leveraging initial bulk purchase discounts from the manufacturer) together with their "optional" insurance. Not, as most people think, from the actual rental fee.
I remember being surprise to discover that reseller catalogs make most of their money from the advertising space they sell in their catalogs and not via a markup on the negotiated item prices.
Well... (drum roll please).
Apple's main business (at least in the mobile sector) is reselling Flash RAM.
Looks to me like almost all of Apple's margin in the mobile sector is in the difference between the price they buy and sell Flash RAM. It would significantly hurt Apple if we bought less Flash RAM and added it later from some other source (so no external or internally socketed Flash RAM capability any time soon in these devices).
What an amazing business model. All this to support a Flash RAM reselling business (BTW... I just ordered my maxed out iPhone 5 and cannot get it soon enough :-) ).
Originally Posted by NapyBlue
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
I know, right? It's ludicrous that they do it and even more so that we allow it.
Quote:
Originally Posted by Tallest Skil
"APPLE IS OVERCHARGING. MONEY-GRUBBING FOOLS. SEE HOW YOU LIKE IT, ISHEEP."
? Also, to the two posts above, check my signature. Thanks for the catch! ?
Quote:
Originally Posted by NapyBlue
So why do Apple haters find it necessary to waste time posting on a clearly Apple site? No matter what you say you are not going to change the minds of the people on this site.
By the way, I'm sure you will never take a prescription medication since they charge so much for such a little pill.
Quote:
Originally Posted by Tallest Skil
I know, right? It's ludicrous that they do it and even more so that we allow it.
TS, you're going to confuse him. This will end badly (cringe at impending train wreck).
Ordered mine today in the UK @ £529 which is $858 which is the dearest of the current batch of smartphones.. However you have got to hand it to Apple as people like us buy the things. No wonder the directors are awarding themselves $50 million + here there and everywhere.
Why did I buy it? its easy to use and it just works with my other apple hardware.
But I can't understand the mindset of people with no financial interest in the company going "Great, Apple have a massive profit margin so its going to cost a fortune to buy the device, thats the icing on the cake" . The blind devotion seems to come from the days that Apple was the underdog, but in the end Apple won but ironically turned into that 1984 advert.
Just read the condescending remarks on this and other sites anytime the word "American" is used, and you'll realize the world is full of assholes.
The blatant hypocrisy boggles my mind.
I can't debate with someone who has no idea what they are talking about.
I am sorry. I'm not trying to sound like a dick,
If you think all it takes is one year to build iPhone you're delusional.
Apple is working on at least 2 to 3 generations of iPhones right now and they always have been. They're planning products for five, ten, fifteen years into the future and if you don't think they are again you are delusional. That's how multi billion dollar corporations work.
Apple is making good money off their products. And I'm happy as all hell they are. Little thing called stock. They make money, I make money.
These BOM figures are always all over the placed. iSuppli had the iPhone 4S BOM at $188 vs the $132.50 that UBM TechInsights found. And it's not that the iSuppli figure was for the iPhone 4S at launch and the UBM TechInsights' figure is for the current iPhone 4S cost, because the iPhone 4 figure they use is for the 16GB model which is no longer offered so the chart is based on cost at launch.
Even if this was right, and I highly doubt it, you aren't considering the massive amount of licensing fees that Apple has to pay on top of those hardware costs. That can easily be another $200 a unit. Plus the packing, the accessories and their costs, shipping to the customers/stores and so on. Not to mention running their stores (one to one an apple care membership fees don't do it by a long shot)
Apple is not making $500 a unit in profit on these phones.
People ranting about RnD - Apples is a miniscule part of its spend.
I know what you mean, but like someone said above, Apple is also making money by being efficient—in the supply chain, in the number of models they (don't) sell, in managing their own retail business, in running their own content ecosystem, and in the post-PC realm, by massively colonizing the entirely new economy of portable computing.
Because what they are doing is so new and, not coincidentally, so customer-driven, they are still perceived as the underdog, fighting mediocrity, by millions of fans. We are hoping this new business model will conquer the world, at least in terms of mindshare, and erase some of the worst aspects of the consumer exploitation in America's captalist past. But you have to add one crucial proviso to have all this work out ethically:
We are expecting that they're going to use their cash pile for some really big moves in the future that will change the world even more than they have already. Something on the scale of revolutionizing education, for example, or global communications.
It seemed the original article is stating what they think are the costs of the parts for the phone. That is what "checkthis" is referring to. Personally I think Apple leverages their size/strength/buying power for these parts more than what the author of this article (and others like it) are led to believe. It is not a stretch to think total parts costs per iphone is under $100. And if that is true and they are making more profit on it - good for them.
Nope.
And why is Touchscreen/Coverglass a single category. Besides these being different they show an increase in price despite the touchscreen now being part of the display.
There are plenty of other oddities but I'll stick with that for now.
PS: I have no problem with speculative analysis but they should at least present their reasoning as to how they came to these conclusions.
Quote:
Originally Posted by waldobushman
$168 is marginal cost. Doesn't include investment and other development costs.
I know what you're getting at, but that's not the correct term.
The correct term is calling it was it is: the bill of materials cost.
If it included the labor cost, you could call the sum the "direct cost", and the profit would be the "gross profit".
The "marginal cost" would be more apt if you were asking, "what does it cost to manufacture one additional iPhone?" Which is different than the direct cost, as labor is not always a direct cost; if you can squeeze a certain number into the capacity, it really didn't cost you any more labor, as you're paying the same number of hours.
Anyways. Yeah.