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View Full Version : The Cost of Producing the New Nanos


MacBytes
Sep 20, 2006, 10:26 PM
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Category: Apple Hardware
Link: The Cost of Producing the New Nanos (http://www.macbytes.com/link.php?sid=20060920232616)
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Posted on MacBytes.com (http://www.macbytes.com)
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spicyapple
Sep 20, 2006, 10:30 PM
The move to the aluminum enclosure probably will save Apple in the long run from customer scratch complaints, as well as bundling the felt carrying case with the 1G nanos.

scott523
Sep 20, 2006, 10:30 PM
This shows how big Apple's margin on the new nanos are despite the decent quality they're made. :eek:
The fact that Apple is trying to hide the identity of their suppliers is kinda pointless since someone will eventually teardown the iPods.

dontmatter
Sep 21, 2006, 12:52 AM
Yep, this is what a monoply does. Little innovation, cost cutting, and increasing margins. If you've got competition, 10 bucks or a few more hours of design could make the difference between somebody buying yours and buying someone elses. If you don't have competition, your gonna sell about the same even if your product isn't as good or as cheap as it could be, and your margins will easily make up for any lack of product moved.

stoid
Sep 21, 2006, 01:07 AM
This shows how big Apple's margin on the new nanos are despite the decent quality they're made. :eek:

Good thing Apple get all of it's design and engineering work, as well as it's entire marketing division for free. Otherwise that would cut into their margin. Oh, and I should also mention that unlike other companies, Apple products never fail and so Apple loses none of their profit replacing faulty components. :rolleyes:

Despite all this however, I'm sure that Apple still makes a fairly obscene profit on the iPod. All that means is that if the Zune is more than a hardware version of Vista (vaporware), Apple has room to slash prices to compete with Microsoft as proven by the XBox is willing to flush a billion dollars down the toilet to muscle their way into a market.

balamw
Sep 21, 2006, 01:17 AM
This shows how big Apple's margin on the new nanos are despite the decent quality they're made. :eek:
The fact that Apple is trying to hide the identity of their suppliers is kinda pointless since someone will eventually teardown the iPods.
FWIW many of the components inside are Apple branded and only have Apple part numbers now...

Follow the link to the ars article: http://forums.macrumors.com/showthread.php?t=235926

B

sushi
Sep 21, 2006, 01:33 AM
Good thing Apple get all of it's design and engineering work, as well as it's entire marketing division for free. Otherwise that would cut into their margin. Oh, and I should also mention that unlike other companies, Apple products never fail and so Apple loses none of their profit replacing faulty components. :rolleyes:
While I am sure that Apple makes a good profit on the iPod, as you stated, there are many other cost considerations that were not taken into account.

Hardware is only one point.

Development, prototyping, marketing, testing, shipping, etc. all cut into the profits.

Based on SJ's comments, I believe that they have cut costs considerably on the packaging between the first and second generation Nanos. Something like a space saving of 52% which is substantial.

generik
Sep 21, 2006, 04:08 AM
While I am sure that Apple makes a good profit on the iPod, as you stated, there are many other cost considerations that were not taken into account.

Hardware is only one point.

Development, prototyping, marketing, testing, shipping, etc. all cut into the profits.

Based on SJ's comments, I believe that they have cut costs considerably on the packaging between the first and second generation Nanos. Something like a space saving of 52% which is substantial.

There, fixed that for you. With regards to the others especially "prototyping" and "testing", just take a look at their RSS Macbooks or even their premier MBPs, I am pretty sure that doesn't apply to Apple :rolleyes:

SeanMcg
Sep 21, 2006, 12:18 PM
Of course they're going to try to milk all they can out of it. Anybody who's ever believed that Apple was a charitable corporation needs to take off the rose-colored glasses, contacts, and all other magenta-tinted ocular distortions. They got throught the "lean" years before Steve's return thanks in no small part to all the profit from the Apple ][ .

Having said that, the new margins allow them to make a better profit from early adopters. Then, if Zune or something else actually happens to gather some marketing momentum, they have room to drop the price, maintaining a decent profit and marketshare.

madmaxmedia
Sep 21, 2006, 01:35 PM
They make a good profit (as befits the iPod's success), but it's probably not obscene. The new Nano's are priced at a premium to most other players, but not obnoxiously so.

Apple doesn't have a monopoly on music players. There are plenty of good alternatives out there. Most people still buy CD's and rip to their computers, and most music files are in mp3 format, so there's not that much lock in IMO.