They are posting 2 weeks back order which means they are delivering everyday. Just today they announced that you can order online and pickup in the store the very next day. If people wait until two weeks before Christmas to order then perhaps they will be taking the risk they won't get it in time. If you want one, best to order early. They are not out of stock. They run out everyday. Big difference.
Well you can order everyday, but how many are there? It's still the same question, how many units can AAPL produce everyday. I'm sure they'd solve this problem in a few months but right now they need to get a lot more units out before the end of this holiday season so people don't defect to other tablets, and that's the concern.
Not what Tallest Skil meant by "Nope". Selling price of $329 is indeed a 43% profit margin on $188 - but that's the highest profit estimate, not the lowest, since it doesn't take into account R&D, shipping costs, etc. The article title should read "Teardown reveals iPad mini yields at most 43% gross margin for Apple", difference emphasized.
By saying Apple makes at least a 43% gross margin, AI may be assuming that more expensive models have a higher margin. Nevertheless AI may have lost the meaning of "gross margin" and "estimate" according to others here.
iSuppli only lists the cost of the bucket of parts. They don't understand the R&D, they don't know what the QC is like at those plants (how many get rejected). What's the failure rate on the aluminum enclosures, for instance (both the milling and the assembly)? What are Apple's costs related to marketing and distribution? I ordered mine with free shipping, how much does that cost?
Gross profit margin is simply what it costs to build and the sale price, no other factors are considered.
They are posting 2 weeks back order which means they are delivering everyday. Just today they announced that you can order online and pickup in the store the very next day. If people wait until two weeks before Christmas to order then perhaps they will be taking the risk they won't get it in time. If you want one, best to order early. They are not out of stock. They run out everyday. Big difference.
Well you can order everyday, but how many are there? It's still the same question, how many units can AAPL produce everyday. I'm sure they'd solve this problem in a few months but right now they need to get a lot more units out before the end of this holiday season so people don't defect to other tablets, and that's the concern.
2 weeks = 14 days in case the math is too difficult to understand. Or second option, don't pass out before 10 PM and order next day pick up in store. Those are your two options. If you don't understand that then perhaps you should consider buying a different manufacturer's tablet. Then at least you will be among your peers.
Close. If starting BOM is $188, then subtract that from $329 & you get a difference of $142. $142 is approximately 43.16% of $329. That's a decent starting gross margin.
That's not a gross margin. Similarly, the person who claimed that R&D costs are included in COGS is also wrong.
Once again (it seems like I have to do this every time iSuppli releases new numbers because no one seems to be able to remember how it works):
Revenue - selling price of product
COGS - Cost of goods sold (total cost of manufacturing the product. This typically includes all variable costs as well as costs directly related to manufacturing). This number is typically directly proportional to the number sold.
Gross margin - Revenue minus COGS
Overheads - costs that are not directly tied to manufacture of the product. These are typically fixed and do not depend on the number sold.
Net income - Gross margin minus overheads.
COGS includes:
Raw materials (this is the only thing iSuppli considered)
Labor and benefits
Outsourcing costs
QC cost
Shipping
Packaging
Manufacturing overheads
Cost of carrying inventory
Warranty costs (normally. They can be considered an overhead in some circumstances).
Overheads includes:
Selling cost (other than costs directly tied to the product such as seller rebates and/or commissions which can optionally be included in COGS if the company wishes)
Corporate overhead
Legal
R&D (could only be considered in COGS under very unusual circumstances that rarely occur)
Marketing costs
Most building costs (although under some circumstances, manufacturing space can be included in COGS)
There are a very few costs where the company has some flexibility - like some of the selling costs. A more common one is tech support costs. Most companies consider those to be an overhead, but they can be considered in COGS if desired.
They didn't put in, like $12 to build it? Dudes! Glad to see move away from polishing to anodized. I'd rather not have something shiny & know it didn't cause an explosion during manufacturing.
The biggest problem right now is not the margin. It's actually the rumor 'low yield rate' of the iPad mini.
It seems like even without long lines buying, the mini ran out of stock quickly. That means not a lot have been produced. If they continue to be out of stock for the next month, a lot of people will have lost their patience and just go and buy other tablets for holiday gifts.
I AM SO WORRIED BY THIS!!!
In other news, I notice you can arrange next-day pickup at apple stores.
2 weeks = 14 days in case the math is too difficult to understand. Or second option, don't pass out before 10 PM and order next day pick up in store. Those are your two options. If you don't understand that then perhaps you should consider buying a different manufacturer's tablet. Then at least you will be among your peers.
If you don't understand the issue here you should consider not commenting on it. Nobody is question the '2 options' you're talking about. The question is how many are they producing a day, which your comment never even tried to answer. In case you don't notice, a lot of retail stores are out of both iPhone5 and iPad mini right now, and in case of iPhone5, have been like that for quite a long time.
The reason why Apple priced the Mini so high isn't because they're greedy or because they're trying to maintain high margins.
It's because they flat out won't be able to make enough of the damn things between now and Christmas to come anywhere close to satisfying demand. If they'd priced the Mini at $299 or even $199 they'd sell just as many units as they're gonna sell at $329. So why sell it for less?
Look for either a price drop or a big spec bump to hit sometime around March, 2013 - or possibly both a spec bump and a price drop, if they can flush all the gremlins out of their supply chain and manufacturing process.
I'm betting the iPad will also see a price drop sometime next summer, in the run up to back to school shopping. Apple will probably start to launch its new models sometime in the September - November timeframe from here on out, to best capitalize on the big holiday shopping season.
Comments
Quote:
Originally Posted by Shameer Mulji
yes you're correct. made a big mistake.
Uhm... that's not the only "mistake"
If it weren't, then I would have to believe that in that BOM there are also the following "items"
Packaging
Cable
Power Adapter
Marketing / Advertising
Shipping
Corporate Salaries
Mortgages (1 Infinite Loop is "owned by Apple including land)
Capital Expenditures
Commercial Leasing expenditures (What? those Apple Stores pay no rent??)
Employee Salaries (unless Apple Store employees work for iDevices)
But that's okay. Keep thinking that 43% "margin" really is a heck of a lot. *rolls eyes*
Quote:
Originally Posted by mstone
They are posting 2 weeks back order which means they are delivering everyday. Just today they announced that you can order online and pickup in the store the very next day. If people wait until two weeks before Christmas to order then perhaps they will be taking the risk they won't get it in time. If you want one, best to order early. They are not out of stock. They run out everyday. Big difference.
Well you can order everyday, but how many are there? It's still the same question, how many units can AAPL produce everyday. I'm sure they'd solve this problem in a few months but right now they need to get a lot more units out before the end of this holiday season so people don't defect to other tablets, and that's the concern.
Quote:
Originally Posted by Mike Barriault
Not what Tallest Skil meant by "Nope". Selling price of $329 is indeed a 43% profit margin on $188 - but that's the highest profit estimate, not the lowest, since it doesn't take into account R&D, shipping costs, etc. The article title should read "Teardown reveals iPad mini yields at most 43% gross margin for Apple", difference emphasized.
By saying Apple makes at least a 43% gross margin, AI may be assuming that more expensive models have a higher margin. Nevertheless AI may have lost the meaning of "gross margin" and "estimate" according to others here.
Gross profit margin is simply what it costs to build and the sale price, no other factors are considered.
Quote:
Originally Posted by sflocal
Uhm... that's not the only "mistake"
If it weren't, then I would have to believe that in that BOM there are also the following "items"
Packaging
Cable
Power Adapter
Marketing / Advertising
Shipping
Corporate Salaries
Mortgages (1 Infinite Loop is "owned by Apple including land)
Capital Expenditures
Commercial Leasing expenditures (What? those Apple Stores pay no rent??)
Employee Salaries (unless Apple Store employees work for iDevices)
But that's okay. Keep thinking that 43% "margin" really is a heck of a lot. *rolls eyes*
Are you seriously even trying? Haven't you read my last post?
You are trying to explain this to a "daharder", it's no good.
He just comes here to "dump" his opinion on us, not to have an healthy and/or useful discussion.
Quote:
Originally Posted by drobforever
Quote:
Originally Posted by mstone
They are posting 2 weeks back order which means they are delivering everyday. Just today they announced that you can order online and pickup in the store the very next day. If people wait until two weeks before Christmas to order then perhaps they will be taking the risk they won't get it in time. If you want one, best to order early. They are not out of stock. They run out everyday. Big difference.
Well you can order everyday, but how many are there? It's still the same question, how many units can AAPL produce everyday. I'm sure they'd solve this problem in a few months but right now they need to get a lot more units out before the end of this holiday season so people don't defect to other tablets, and that's the concern.
2 weeks = 14 days in case the math is too difficult to understand. Or second option, don't pass out before 10 PM and order next day pick up in store. Those are your two options. If you don't understand that then perhaps you should consider buying a different manufacturer's tablet. Then at least you will be among your peers.
That's not a gross margin. Similarly, the person who claimed that R&D costs are included in COGS is also wrong.
Once again (it seems like I have to do this every time iSuppli releases new numbers because no one seems to be able to remember how it works):
Revenue - selling price of product
COGS - Cost of goods sold (total cost of manufacturing the product. This typically includes all variable costs as well as costs directly related to manufacturing). This number is typically directly proportional to the number sold.
Gross margin - Revenue minus COGS
Overheads - costs that are not directly tied to manufacture of the product. These are typically fixed and do not depend on the number sold.
Net income - Gross margin minus overheads.
COGS includes:
Raw materials (this is the only thing iSuppli considered)
Labor and benefits
Outsourcing costs
QC cost
Shipping
Packaging
Manufacturing overheads
Cost of carrying inventory
Warranty costs (normally. They can be considered an overhead in some circumstances).
Overheads includes:
Selling cost (other than costs directly tied to the product such as seller rebates and/or commissions which can optionally be included in COGS if the company wishes)
Corporate overhead
Legal
R&D (could only be considered in COGS under very unusual circumstances that rarely occur)
Marketing costs
Most building costs (although under some circumstances, manufacturing space can be included in COGS)
There are a very few costs where the company has some flexibility - like some of the selling costs. A more common one is tech support costs. Most companies consider those to be an overhead, but they can be considered in COGS if desired.
I AM SO WORRIED BY THIS!!!
In other news, I notice you can arrange next-day pickup at apple stores.
Quote:
Originally Posted by mstone
2 weeks = 14 days in case the math is too difficult to understand. Or second option, don't pass out before 10 PM and order next day pick up in store. Those are your two options. If you don't understand that then perhaps you should consider buying a different manufacturer's tablet. Then at least you will be among your peers.
If you don't understand the issue here you should consider not commenting on it. Nobody is question the '2 options' you're talking about. The question is how many are they producing a day, which your comment never even tried to answer. In case you don't notice, a lot of retail stores are out of both iPhone5 and iPad mini right now, and in case of iPhone5, have been like that for quite a long time.
Don;t be fooled, Apple is paying a cheaper price for its parts than ifixit or regular wholesale price suggest.
Volume=Discount!
I assume that is factored into the BOM cost.
Quote:
Originally Posted by Macky the Macky
voting... do it early and often.
that helps explain some 2008 election results
The reason why Apple priced the Mini so high isn't because they're greedy or because they're trying to maintain high margins.
It's because they flat out won't be able to make enough of the damn things between now and Christmas to come anywhere close to satisfying demand. If they'd priced the Mini at $299 or even $199 they'd sell just as many units as they're gonna sell at $329. So why sell it for less?
Look for either a price drop or a big spec bump to hit sometime around March, 2013 - or possibly both a spec bump and a price drop, if they can flush all the gremlins out of their supply chain and manufacturing process.
I'm betting the iPad will also see a price drop sometime next summer, in the run up to back to school shopping. Apple will probably start to launch its new models sometime in the September - November timeframe from here on out, to best capitalize on the big holiday shopping season.
Quote:
Originally Posted by SeaNorse
If the sales numbers are below expectations Monday this would give some wiggle room to lower the price. Holiday sale time soon.
They are not going to lower the price when they can't keep up with demands... sales number are bottleneck but supply issues
Quote:
Originally Posted by Shameer Mulji
(BOM / Selling price) x 100
wow, fail
The most important part of the device is what iSupply can't calculate, the part that distinguishes an iOS device from others the most:
software and ecosystem
one is before all what you are saiying and the other is after