I'm not aware that I have ever suggested that they should not. So, I continue to be completely baffled as to why people are being so defensive about Apple's profit margins. This simply supports my original point that the primary purpose of the corporate structure (whether it's Apple, Google, Microsoft or Ford Motor Company) is to enhance shareholder value... profits. The Econ 101 supply & demand lesson is that pricing strategies typically follow charging what the market will bear. And Apple, like Ferrari and certain high end retailers, seemingly has a greater interest in margins than volumes. Amazon, for instance, has quite the opposite approach.
Again, you're pretending that this is almost all profit, when it isn't. So, it's fine to say that you don't mind that it's almost all profit, when it isn't almost all profit.
I was a partner in a professional audio manufacturing concern. I designed products. When you look at parts cost, you are only looking at a small portion of the costs, often one of the smallest parts. Most products are priced at between 2.5 and 3.5 times the parts cost. That's just to get good, but not exceptional, margins.
We've had these discussions over the years here.
There are so many costs involved in running a company, that they can easily be twice the cost of the parts that go into a product. So we charge that much more to break even, and make a profit. If Apple pays $100 for that NAND, not the $18 some of these moronic companies state, and charge $300, that's about right for a good 20% profit margin. How often have Samsung's mobile devices been said to resemble toy quality? Many times. Google makes no profit on the Nexus, and Amazon takes a loss.
So Apple gets compared to these companies, and vast profits are assumed in some places, but it's not true. So when Anandtech reviews these products and notes that Apple's storage subsystem is much faster than that of any Android or Win Phone device, and has a greater memory bandwidth, with faster NAND, and a drive controller, which these other devices don't use, as they use the simple, and slower interface that USB memory sticks use, you can see that Apple has a more expensive system in place, and it shows in the performance.
So when these companies take Apple's products apart and comment on the parts, esp. the parts with exclusive Apple numbers, they just show their ignorance. Unfortunately, as usual, Apple refuses to take part in the games they play, so some people, such as yourself, believe what you read from them, thinking that they must be totally objective and knowledgable, when they are neither.
No offense intended, Mel, but if Apple is indeed, as you claim, paying nearly 500% more for RAM in its mobile devices than is being estimated by various sources, then where exactly is the company's iPhone profit margin coming from? Unless certain Apple employees lied under oath during the court proceedings against Samsung, Apple earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012.
"So while Apple may be making a bit more profit on their NAND, it's not that much more."
You seem to be saying that the premium charged for installed RAM is not a major contributor to the company's profits - not the 25% contributor that Marshall estimates and certainly not the 40% that Munster estimates. OK, so how much of a contributor, if any, do you think that premium represents? And can you provide any objective or reasonably substantiated data which would support your estimate or conclusion? Other than what I read from various sources, I really don't know. But I'd be anxious to learn that what is being estimated really is wide of the mark - truly, I would. So if true, then either Apple is making/saving a mint from other components buys and/or labor costs, reporting gross margins that are not accurate (engaging in fraud) or the company has some major, high ROI sideline businesses that we don't know about.
My own guess, based on the reality of what is going on: I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy. Otherwise there would be no real reason to seal off devices or make RAM hard/impossible to get to. If you were just making chump-change off it, why bother over a few cents/GB? Is there anything wrong/criminal/immoral/unethical about doing that? No! Why are people being so defensive about it? I don't know. Maybe Ralph Nader used to be a member here and he ruffled some feathers or something.
Merry Christmas, folks.
You mistake gross margins for profit. Don't do that. Their profit on these phones is closer to 20%, which is certainly good, but not up to industrial standards, such as Cisco routers, with a 60% gross margin, and a 35% profit. Or Microsoft's gross margins of 78% and 27% profit, which would have been even higher if it were not for the huge losses from the XBox and Bing operations, plus the losing Surface and Win Phone areas.
So Apple makes a good profit. One that is envied by other companies whose sales are predicated in making cheaper products over all, but their profits aren't THAT high, even for the iPhone.
Again, you're pretending that this is almost all profit, when it isn't. So, it's fine to say that you don't mind that it's almost all profit, when it isn't almost all profit.
Absolutely no where did I say or suggest that Apple's pricing on ANYTHING constituted "almost all profit." Mel, you're now creating strawmen and forming their (your) arguments as mine. If that is your (mis)interpretation of what I believe or have said here, then I am led to believe that with this error in judgment, you may also be making errors in estimating what Apple does or does not pay for this, that or the other thing.
What exactly has been said by me (not some alternate, make-believe version of me) that you are disputing?
Do you dispute this?
The Econ 101 supply & demand lesson is that pricing strategies typically follow charging what the market will bear.
Do you dispute this?
Apple, like Ferrari and certain high end retailers, seemingly has a greater interest in margins than volumes. Amazon, for instance, has quite the opposite approach.
Do you dispute this?
I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy.
In reporting earnings and especially during the court trial, are you saying that Apple and its employees committed perjury when they detailed profit margins under oath???
I'll say again: believe me, I really mean no offense toward you. But whether you have worked in the computer industry for a day or a decade, what objective evidence have you provided that suggests that you really know what Apple pays for components any more than the people at IHS or ISI Group??? You said that you don't care what anyone else says... apparently you know more than they do and your estimates are closer to the mark than Gene Munster's or Brian Marshall's estimates. I'm sorry, but despite your claims of industry experience, I have no real reason to believe that you know any more, and possibly not as much, about Apple's component costs as the analysts. That's not a poke at you - it's just that short of some objective, verifiable data being delivered by you, I have no reason to believe you over them. Why would I? I hope you understand that. And that you've attempted to inaccurately twist my words and beliefs... ya know, that doesn't help either. Demonstrating that one has an agenda tends to make people a bit suspicious.
Mel, may I ask you something of a personal nature? I am a strong believer in capitalism and market based pricing. To me, the word "profits" is not a dirty word. From my time in banking to the restructuring-focused work I do now for manufacturing based companies, the pursuit of profits (whether through increased pricing or mitigation of costs/losses/expenses) has been my career mission. You seem to be going to great lengths here to downplay Apple's (already publicly stated) profit margins. Why is that? Do you think that profits are something that one should be ashamed of? Do you feel that if it's shown that Apple does indeed have a "healthy profit margin" on RAM and other components, it's a suggestion that they are gouging their customers? Is that it? I really am a bit confused about this level of defensiveness.
As a consumer, I purchase what works best for me at the lowest price possible. But as a shareholder or owner of an asset, I support profit enhancement, as long as it does not jeopardize longer term growth. How I could be any clearer about my (actual) beliefs, I do not know.
You mistake gross margins for profit. Don't do that. Their profit on these phones is closer to 20%, which is certainly good, but not up to industrial standards, such as Cisco routers, with a 60% gross margin, and a 35% profit. Or Microsoft's gross margins of 78% and 27% profit, which would have been even higher if it were not for the huge losses from the XBox and Bing operations, plus the losing Surface and Win Phone areas.
So Apple makes a good profit. One that is envied by other companies whose sales are predicated in making cheaper products over all, but their profits aren't THAT high, even for the iPhone.
I appreciate that, Mel. But I think I proved that I had a pretty decent handle on the difference between gross and net when the nice people at the Darden School of Business handed me my MBA a couple decades ago (my, how time flies). As a matter of fact, when I sold my first steer at auction and my dad handed me the net profits, and I had been shopping for a new 10-speed bike based on the gross, that cemented it as well as anything.
Absolutely no where did I say or suggest that Apple's pricing on ANYTHING constituted "almost all profit." Mel, you're now creating strawmen and forming their (your) arguments as mine. If that is your (mis)interpretation of what I believe or have said here, then I am led to believe that with this error in judgment, you may also be making errors in estimating what Apple does or does not pay for this, that or the other thing.
What exactly has been said by me (not some alternate, make-believe version of me) that you are disputing?
Do you dispute this? The Econ 101 supply & demand lesson is that pricing strategies typically follow charging what the market will bear.
Do you dispute this? Apple, like Ferrari and certain high end retailers, seemingly has a greater interest in margins than volumes. Amazon, for instance, has quite the opposite approach.
Do you dispute this? I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy.
In reporting earnings and especially during the court trial, are you saying that Apple and its employees committed perjury when they detailed profit margins under oath???
I'll say again: believe me, I really mean no offense toward you. But whether you have worked in the computer industry for a day or a decade, what objective evidence have you provided that suggests that you really know what Apple pays for components any more than the people at IHS or ISI Group??? You said that you don't care what anyone else says... apparently you know more than they do and your estimates are closer to the mark than Gene Munster's or Brian Marshall's estimates. I'm sorry, but despite your claims of industry experience, I have no real reason to believe that you know any more, and possibly not as much, about Apple's component costs as the analysts. That's not a poke at you - it's just that short of some objective, verifiable data being delivered by you, I have no reason to believe you over them. Why would I? I hope you understand that. And that you've attempted to inaccurately twist my words and beliefs... ya know, that doesn't help either. Demonstrating that one has an agenda tends to make people a bit suspicious.
Mel, may I ask you something of a personal nature? I am a strong believer in capitalism and market based pricing. To me, the word "profits" is not a dirty word. From my time in banking to the restructuring-focused work I do now for manufacturing based companies, the pursuit of profits (whether through increased pricing or mitigation of costs/losses/expenses) has been my career mission. You seem to be going to great lengths here to downplay Apple's (already publicly stated) profit margins. Why is that? Do you think that profits are something that one should be ashamed of? Do you feel that if it's shown that Apple does indeed have a "healthy profit margin" on RAM and other components, it's a suggestion that they are gouging their customers? Is that it? I really am a bit confused about this level of defensiveness.
As a consumer, I purchase what works best for me at the lowest price possible. But as a shareholder or owner of an asset, I support profit enhancement, as long as it does not jeopardize longer term growth. How I could be any clearer about my (actual) beliefs, I do not know.
You misunderstand what you said. You are claiming that Apple paid $18 for memory, and is charging $300. That means that you saying that they are charging so much for that memory, that they are making almost all profit from that memory, and we were talking about their memory pricing, and then you brought up their gross margins on the phone. I'm not making anything up, just talking about what YOU said.
I'm saying that the $18 number is wrong, and that from my knowledge of what they use, and what that costs, they are paying around $100 for it, and that charging $300 is perfectly normal. If you can prove otherwise, then I will agree that I've been wrong. But iSupply's numbers do not constitute proof.
Do I believe that companies charge what the market will bear? Not all companies practice that pricing strategy. Not in the way you seem to think. That is, charge the highest price they believe people will pay, regardless of costs. In luxury markets, where goods and pricing have little relation to each other, then definitely that is what is done. But in most other areas, it's not so simple. If Apple followed that idea in its entirety, they might charge over $1,000 for the basic iPhone, even with the same cost structure. Clearly, that's not being done. Apple's pricing relates to its costs. Can they charge enough to make a good profit? Sure they can. And they do. Is that profit excessive? No, it's not. Is it out of line with other successful companies? No, again, it's not. When Rim was doing well, their gross margins were over 60%. Was that too high? No. I don't see the point you're trying to make here, as Apple doesn't charge luxury pricing. Do they look at what they think customers will be willing to pay for a product, and make a product that will fit within that pricing model? I would imagine they do. Do they then double the price and make ridiculous margins as manufacturers of some luxury goods do? No, they don't.
I certainly don't agree with your comparison of Apple to Ferrari. If you want to make that comparison, you should make it to the Vertu Line Nokia put out, with its mid range phone electronics in nice, but not great, cases selling for $3,000 to over $6,000. That was a luxury phone line, with very high profits, and very low sales. That can be compared to Ferrari. Apple sells well over 100 million phones a year, saying they chase profits instead of sales is absurd!
I already told you what their markup is, approximately. And yes, it is healthy, just like everyone else's markup who isn't selling their product for no profit or is willing to take a loss. You can bet that Samsung makes a healthy markup on their own memory going into their own phones, even if their phones are accused of being cheaply made.
I'm not saying that Apple is misreporting anything. I'm only saying that these other companies are using generic numbers for generic parts. I'm not the only one to accuse them of that. Apple, and other large producers buy parts in large quantities, but every manufacturer of note makes sure that their procurement process is secret. None of these companies have Ny idea what is paid for any of these parts by any company whose products they disassemble. They are just guessing, based on so e generic numbers they know about some generic parts. Apple could be paying more, or less than their numbers, but they don't know that.
When I read the reviews by a respected site, such as Anandtech, and they talk about this, it's not hard to make an educated guess as to what's actually happening here, despite what iSupply, and others, say just from a dissembled device sitting on the table. Perhaps those companies should buy the test equipment, and hire the engineers to test these device's performance themselves before they quote numbers they don't know anything about. These, remember, are marketing companies. They have no particular expertise in these matters. Know how people are always putting analyst's down as not knowing anything? Well, those are the same people making these statements about parts pricing.
I suppose it doesn't really matter who you want to believe. It doesn't really matter to me either I suppose. I'm just using the results of testing done by a very well known, and respected site to help refute the notion that Apple is using NAND that cheap, and the same as other phones, whose performance in that area have been shown to be markedly inferior.
You can find out what high performance NAND costs yourself, if you want to, and looking at high performance memory cards is an easy way to see how much a manufacturer charges for it in a real product. If you are the kind of person who likes to think that everyone is being ripped off by every manufacturer who makes a good product that costs more, even if you like their profits from an investor's standpoint, then I can't change that.
My agenda is only to point out that these companies know little more than what they want to project. Again, these are marketing companies. They are also in the business of selling reports to companies. In other words they are small versions of Gardner and IDC. And we see how often they get things right, almost never. So no, I'm not impressed with what they do. But if you want to believe them, then it's obvious that I'm not going to change your mind.
I have not said a single word that downplays Apple's profit margins. I have thousands of Apple shares, and I hope they do as well as possible. On the other hand, you are saying, that while you think it's ok, Apple is charging (much?) more than others for NAND. I'm saying that they are not. This seems to be the only real part of our dispute here.
A 64GB compact Flash card from Lexar, Sandisk and others can cost $300 for the fastest speeds.
Quote:
Originally Posted by Jag_Warrior
And can you provide any objective or reasonably substantiated data which would support your estimate or conclusion? Other than what I read from various sources, I really don't know.
My own guess, based on the reality of what is going on: I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy.
For the record, I am not Brian Marshall posting under a screen name. I am also not Gene Munster. So no, in fact (and not fantasy), I did not claim any such thing regarding $18 for RAM. Credit was given to both of Munster and Marshall, and to Bloomberg, for the original figures referenced early on in my posts. So I've felt no need to claim that Apple spends any specific figure for RAM or anything else. When I say, I don't know, that is exactly what I mean. Only someone attempting to be intentionally dense would not get that by now. Seriously! What I have said, and do believe, is that Apple likely does make a healthy profit - and I do agree with both Munster and Marshall (though I don't know which, if either, is closer to the mark) on this point. Further, the only person who has repeatedly referenced this $300 figure is some guy named Mel Gross, who has demonstrated a curious habit of claiming that anything referenced in a post becomes the words and beliefs of the original poster. Unfortunately, because of his demonstrated lack of comprehensive abilities and tendency to claim that people have said or believe things that they have not and do not, he has little credibility in my view on this particular topic.
As I have now stated on more than a few occasions, I, personally, am not privy to the prices that Apple pays for components. And despite his "years of experience" doing whatever (could be assembling HeathKits, for all I know), there is still no evidence that this Mel Gross person is doing anything but making up fictional numbers and claiming them to be more accurate than those provided by analysts. And even though I was born at night... it was not last night. So I would not be prone to take the word of some anonymous poster on a chat site over those of reputable, though not infallible, analysts. They certainly could be wide of the mark. But unlike him, their numbers do have to play into the aggregate, while his do not seem to add up. According to this individual (I guess when I was impersonating Brian Marshall), I allegedly estimated that installed RAM sales contributed roughly 25% to the company's profits for the referenced quarter, and when I was impersonating Gene Munster, I put the contribution at roughly 40%. And I suppose when I was testifying in court, I put Apple's gross margins at 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012. I am clearly a busy and very talented character, capable of being many faces to many people. I once parallel parked a train. My 2 cents is worth 37 dollars and change. I am... the most interesting man in the world. I don't always drink beer. But when I do, I drink Budweiser. Stay thirsty, my friends.
In any following replies, I'll be curious to know what else I have said (that I didn't really say) and what else I believe (that I don't really believe).
Comments
Again, you're pretending that this is almost all profit, when it isn't. So, it's fine to say that you don't mind that it's almost all profit, when it isn't almost all profit.
I was a partner in a professional audio manufacturing concern. I designed products. When you look at parts cost, you are only looking at a small portion of the costs, often one of the smallest parts. Most products are priced at between 2.5 and 3.5 times the parts cost. That's just to get good, but not exceptional, margins.
We've had these discussions over the years here.
There are so many costs involved in running a company, that they can easily be twice the cost of the parts that go into a product. So we charge that much more to break even, and make a profit. If Apple pays $100 for that NAND, not the $18 some of these moronic companies state, and charge $300, that's about right for a good 20% profit margin. How often have Samsung's mobile devices been said to resemble toy quality? Many times. Google makes no profit on the Nexus, and Amazon takes a loss.
So Apple gets compared to these companies, and vast profits are assumed in some places, but it's not true. So when Anandtech reviews these products and notes that Apple's storage subsystem is much faster than that of any Android or Win Phone device, and has a greater memory bandwidth, with faster NAND, and a drive controller, which these other devices don't use, as they use the simple, and slower interface that USB memory sticks use, you can see that Apple has a more expensive system in place, and it shows in the performance.
So when these companies take Apple's products apart and comment on the parts, esp. the parts with exclusive Apple numbers, they just show their ignorance. Unfortunately, as usual, Apple refuses to take part in the games they play, so some people, such as yourself, believe what you read from them, thinking that they must be totally objective and knowledgable, when they are neither.
You mistake gross margins for profit. Don't do that. Their profit on these phones is closer to 20%, which is certainly good, but not up to industrial standards, such as Cisco routers, with a 60% gross margin, and a 35% profit. Or Microsoft's gross margins of 78% and 27% profit, which would have been even higher if it were not for the huge losses from the XBox and Bing operations, plus the losing Surface and Win Phone areas.
So Apple makes a good profit. One that is envied by other companies whose sales are predicated in making cheaper products over all, but their profits aren't THAT high, even for the iPhone.
Again, you're pretending that this is almost all profit, when it isn't. So, it's fine to say that you don't mind that it's almost all profit, when it isn't almost all profit.
Absolutely no where did I say or suggest that Apple's pricing on ANYTHING constituted "almost all profit." Mel, you're now creating strawmen and forming their (your) arguments as mine. If that is your (mis)interpretation of what I believe or have said here, then I am led to believe that with this error in judgment, you may also be making errors in estimating what Apple does or does not pay for this, that or the other thing.
What exactly has been said by me (not some alternate, make-believe version of me) that you are disputing?
Do you dispute this?
The Econ 101 supply & demand lesson is that pricing strategies typically follow charging what the market will bear.
Do you dispute this?
Apple, like Ferrari and certain high end retailers, seemingly has a greater interest in margins than volumes. Amazon, for instance, has quite the opposite approach.
Do you dispute this?
I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy.
In reporting earnings and especially during the court trial, are you saying that Apple and its employees committed perjury when they detailed profit margins under oath???
I'll say again: believe me, I really mean no offense toward you. But whether you have worked in the computer industry for a day or a decade, what objective evidence have you provided that suggests that you really know what Apple pays for components any more than the people at IHS or ISI Group??? You said that you don't care what anyone else says... apparently you know more than they do and your estimates are closer to the mark than Gene Munster's or Brian Marshall's estimates. I'm sorry, but despite your claims of industry experience, I have no real reason to believe that you know any more, and possibly not as much, about Apple's component costs as the analysts. That's not a poke at you - it's just that short of some objective, verifiable data being delivered by you, I have no reason to believe you over them. Why would I? I hope you understand that. And that you've attempted to inaccurately twist my words and beliefs... ya know, that doesn't help either. Demonstrating that one has an agenda tends to make people a bit suspicious.
Mel, may I ask you something of a personal nature? I am a strong believer in capitalism and market based pricing. To me, the word "profits" is not a dirty word. From my time in banking to the restructuring-focused work I do now for manufacturing based companies, the pursuit of profits (whether through increased pricing or mitigation of costs/losses/expenses) has been my career mission. You seem to be going to great lengths here to downplay Apple's (already publicly stated) profit margins. Why is that? Do you think that profits are something that one should be ashamed of? Do you feel that if it's shown that Apple does indeed have a "healthy profit margin" on RAM and other components, it's a suggestion that they are gouging their customers? Is that it? I really am a bit confused about this level of defensiveness.
As a consumer, I purchase what works best for me at the lowest price possible. But as a shareholder or owner of an asset, I support profit enhancement, as long as it does not jeopardize longer term growth. How I could be any clearer about my (actual) beliefs, I do not know.
You mistake gross margins for profit. Don't do that. Their profit on these phones is closer to 20%, which is certainly good, but not up to industrial standards, such as Cisco routers, with a 60% gross margin, and a 35% profit. Or Microsoft's gross margins of 78% and 27% profit, which would have been even higher if it were not for the huge losses from the XBox and Bing operations, plus the losing Surface and Win Phone areas.
So Apple makes a good profit. One that is envied by other companies whose sales are predicated in making cheaper products over all, but their profits aren't THAT high, even for the iPhone.
I appreciate that, Mel. But I think I proved that I had a pretty decent handle on the difference between gross and net when the nice people at the Darden School of Business handed me my MBA a couple decades ago (my, how time flies). As a matter of fact, when I sold my first steer at auction and my dad handed me the net profits, and I had been shopping for a new 10-speed bike based on the gross, that cemented it as well as anything.
You misunderstand what you said. You are claiming that Apple paid $18 for memory, and is charging $300. That means that you saying that they are charging so much for that memory, that they are making almost all profit from that memory, and we were talking about their memory pricing, and then you brought up their gross margins on the phone. I'm not making anything up, just talking about what YOU said.
I'm saying that the $18 number is wrong, and that from my knowledge of what they use, and what that costs, they are paying around $100 for it, and that charging $300 is perfectly normal. If you can prove otherwise, then I will agree that I've been wrong. But iSupply's numbers do not constitute proof.
Do I believe that companies charge what the market will bear? Not all companies practice that pricing strategy. Not in the way you seem to think. That is, charge the highest price they believe people will pay, regardless of costs. In luxury markets, where goods and pricing have little relation to each other, then definitely that is what is done. But in most other areas, it's not so simple. If Apple followed that idea in its entirety, they might charge over $1,000 for the basic iPhone, even with the same cost structure. Clearly, that's not being done. Apple's pricing relates to its costs. Can they charge enough to make a good profit? Sure they can. And they do. Is that profit excessive? No, it's not. Is it out of line with other successful companies? No, again, it's not. When Rim was doing well, their gross margins were over 60%. Was that too high? No. I don't see the point you're trying to make here, as Apple doesn't charge luxury pricing. Do they look at what they think customers will be willing to pay for a product, and make a product that will fit within that pricing model? I would imagine they do. Do they then double the price and make ridiculous margins as manufacturers of some luxury goods do? No, they don't.
I certainly don't agree with your comparison of Apple to Ferrari. If you want to make that comparison, you should make it to the Vertu Line Nokia put out, with its mid range phone electronics in nice, but not great, cases selling for $3,000 to over $6,000. That was a luxury phone line, with very high profits, and very low sales. That can be compared to Ferrari. Apple sells well over 100 million phones a year, saying they chase profits instead of sales is absurd!
I already told you what their markup is, approximately. And yes, it is healthy, just like everyone else's markup who isn't selling their product for no profit or is willing to take a loss. You can bet that Samsung makes a healthy markup on their own memory going into their own phones, even if their phones are accused of being cheaply made.
I'm not saying that Apple is misreporting anything. I'm only saying that these other companies are using generic numbers for generic parts. I'm not the only one to accuse them of that. Apple, and other large producers buy parts in large quantities, but every manufacturer of note makes sure that their procurement process is secret. None of these companies have Ny idea what is paid for any of these parts by any company whose products they disassemble. They are just guessing, based on so e generic numbers they know about some generic parts. Apple could be paying more, or less than their numbers, but they don't know that.
When I read the reviews by a respected site, such as Anandtech, and they talk about this, it's not hard to make an educated guess as to what's actually happening here, despite what iSupply, and others, say just from a dissembled device sitting on the table. Perhaps those companies should buy the test equipment, and hire the engineers to test these device's performance themselves before they quote numbers they don't know anything about. These, remember, are marketing companies. They have no particular expertise in these matters. Know how people are always putting analyst's down as not knowing anything? Well, those are the same people making these statements about parts pricing.
I suppose it doesn't really matter who you want to believe. It doesn't really matter to me either I suppose. I'm just using the results of testing done by a very well known, and respected site to help refute the notion that Apple is using NAND that cheap, and the same as other phones, whose performance in that area have been shown to be markedly inferior.
You can find out what high performance NAND costs yourself, if you want to, and looking at high performance memory cards is an easy way to see how much a manufacturer charges for it in a real product. If you are the kind of person who likes to think that everyone is being ripped off by every manufacturer who makes a good product that costs more, even if you like their profits from an investor's standpoint, then I can't change that.
My agenda is only to point out that these companies know little more than what they want to project. Again, these are marketing companies. They are also in the business of selling reports to companies. In other words they are small versions of Gardner and IDC. And we see how often they get things right, almost never. So no, I'm not impressed with what they do. But if you want to believe them, then it's obvious that I'm not going to change your mind.
I have not said a single word that downplays Apple's profit margins. I have thousands of Apple shares, and I hope they do as well as possible. On the other hand, you are saying, that while you think it's ok, Apple is charging (much?) more than others for NAND. I'm saying that they are not. This seems to be the only real part of our dispute here.
A 64GB compact Flash card from Lexar, Sandisk and others can cost $300 for the fastest speeds.
And can you provide any objective or reasonably substantiated data which would support your estimate or conclusion? Other than what I read from various sources, I really don't know.
My own guess, based on the reality of what is going on: I figure that whatever Apple's exact percentage markup is on RAM, it likely is quite healthy.
For the record, I am not Brian Marshall posting under a screen name. I am also not Gene Munster. So no, in fact (and not fantasy), I did not claim any such thing regarding $18 for RAM. Credit was given to both of Munster and Marshall, and to Bloomberg, for the original figures referenced early on in my posts. So I've felt no need to claim that Apple spends any specific figure for RAM or anything else. When I say, I don't know, that is exactly what I mean. Only someone attempting to be intentionally dense would not get that by now. Seriously! What I have said, and do believe, is that Apple likely does make a healthy profit - and I do agree with both Munster and Marshall (though I don't know which, if either, is closer to the mark) on this point. Further, the only person who has repeatedly referenced this $300 figure is some guy named Mel Gross, who has demonstrated a curious habit of claiming that anything referenced in a post becomes the words and beliefs of the original poster. Unfortunately, because of his demonstrated lack of comprehensive abilities and tendency to claim that people have said or believe things that they have not and do not, he has little credibility in my view on this particular topic.
As I have now stated on more than a few occasions, I, personally, am not privy to the prices that Apple pays for components. And despite his "years of experience" doing whatever (could be assembling HeathKits, for all I know), there is still no evidence that this Mel Gross person is doing anything but making up fictional numbers and claiming them to be more accurate than those provided by analysts. And even though I was born at night... it was not last night. So I would not be prone to take the word of some anonymous poster on a chat site over those of reputable, though not infallible, analysts. They certainly could be wide of the mark. But unlike him, their numbers do have to play into the aggregate, while his do not seem to add up. According to this individual (I guess when I was impersonating Brian Marshall), I allegedly estimated that installed RAM sales contributed roughly 25% to the company's profits for the referenced quarter, and when I was impersonating Gene Munster, I put the contribution at roughly 40%. And I suppose when I was testifying in court, I put Apple's gross margins at 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012. I am clearly a busy and very talented character, capable of being many faces to many people. I once parallel parked a train. My 2 cents is worth 37 dollars and change. I am... the most interesting man in the world. I don't always drink beer. But when I do, I drink Budweiser. Stay thirsty, my friends.
In any following replies, I'll be curious to know what else I have said (that I didn't really say) and what else I believe (that I don't really believe).