Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.

goodcow

macrumors 6502a
Aug 4, 2007
745
994
$130 extra for a cellular capable model is really ridiculous. For the iPad Mini that represents a 43% price bump (299 to 429).

The cellular enabled models should be $50 to $100 more, not $130, and it would help with adoption rates.
 

Razeus

macrumors 603
Jul 11, 2008
5,348
2,030
I guess that's excluded the costs of innovation & research etc. etc...

What innovation and research. It's the same device since the first iPad. Only thing change is it's speed, and the CPU costs seem to stay the same every year. Still, the cellular versions are WAYYY overpriced. Don't get me started on the extra $100 every time I want to double my capacity for something that costs them $15.
 

Dan--

macrumors regular
Jul 30, 2008
237
23
Coca-Cola is just sugar, flavoring and water.

It costs about 5 cents in materials to make a 2-liter. They sell it for between $1 and $2.

That's a 1,000-2,000% markup. Where are the articles on this? :rolleyes:

C'mon, you have to factor in R&D and the cost of innovation too though!
 

KPOM

macrumors P6
Oct 23, 2010
18,020
7,863
There is one company out there who sells tablets for cost. They are Amazon. Take one look at their balance sheet. In 17 years they have never paid a dividend, and their retained earnings at 9/30/13 is $1.950 billion. Apple earned more than $7 billion last quarter. If anyone has a reality distortion field around him, it's Jeff Bezos.

Amazon sells good products. According to DisplayMate, the screen on the Kindle Fire HDX is even better than the iPad Air's. However, their business model leaves a lot to be desired. The Street keeps pricing them as if they are about to rake it in, any day now. But they haven't ever done so.
 

dol4n

macrumors member
Sep 8, 2012
81
0
Oh yeah exactly, just like they are still charging for OS X and iWork, even for customers that have the previous versions of these. They never show any goodwill and give anything for free for customer appreciation. :rolleyes:

OS X has nothing to do with iPad. Two different things.
 

Jaro65

macrumors 68040
Mar 27, 2009
3,822
926
Seattle, WA
Go a bake a cake. Take a look at how much the material costs and then the time you put into it from the idea to the cake done. Now, try to sale cakes and create a web site and an strategy.

Yes, they are making a profit but it is not beyond 3% to 5% per unit at the most! Actually it may be even 1.5%

Are you just pulling these numbers out of thin air? Don't you know how much free cash flow Apple generates on quarterly basis? The last quarter's corporate profit margin was 37%....
 

Gasu E.

macrumors 603
Mar 20, 2004
5,029
3,145
Not far from Boston, MA.
Then they should reduce the price by 13%.

In the end they would still earn more anyways!

Time for apple to show some good-will after everything they have put us through the last 24 months.

It's competition that will drive the price down; not Apple's desire to be nice to you. Sorry.
 

Rogifan

macrumors Penryn
Nov 14, 2011
24,084
31,015
Has anyone ever been able to confirm how accurate these estimates are?

----------

Then they should reduce the price by 13%.

In the end they would still earn more anyways!

Time for apple to show some good-will after everything they have put us through the last 24 months.

Just curious what Apple has put you through in the last 24 months. :confused:
 

Artofilm

macrumors 6502a
Oct 12, 2005
579
41
I wish they wouldn't post articles about these costs on here. People don't seem to grasp the idea that these are raw material costs. These prices don't include assembly, innovation, research, software development and marketing.

If you really feel that Apple is ripping you off, feel free to order all the separate materials and put it together yourself.
 

ericinboston

macrumors 68010
Jan 13, 2008
2,004
476
45% margin. Impressive.

Although we all know Apple enjoys high margins on their products, the $274 isn't the entire picture (and I'm no fanboy). Other costs include:

R&D
Assembly
Advertising
Shipping of the units all over the place

So let's say those 3 things add up to an additional $75 worth of costs, that would be about $350...and Apple sells it for $500 for roughly a $150 profit or still 43% margin.

I think Apple makes far more margin on their crazily priced accessories...adapters that cost at most $3 to get into their store sell for $29...their mice and keyboards are sky-high outrageous...and I bet their $29 iPhone/iPod cases cost at most $5....$29 USB cables probably cost them $2.
 

jacobj

macrumors 65816
Apr 22, 2003
1,124
87
Jersey
Then they should reduce the price by 13%.

In the end they would still earn more anyways!

Time for apple to show some good-will after everything they have put us through the last 24 months.

Why? So thy take the extra margin home this year. What happens if next year they switch to a bleeding edge tech that cuts their margins to less than the ipad4 model? Do they raise the price? Can you imagine the moaning? It's not like Apple bleeds consumers dry to the benefit of money grabbing shareholders. They generally, willingly let their margins fluctuate on individual products so that they keep overall margins healthy. Only Apple knows the plans for its entire product roadmap and the margins it is likely to take overall. This isolationist view is ridiculous.
 

sputnikv

macrumors 6502a
Oct 3, 2009
506
3,184
people will always see the difference in price between cost of components and the final sale price without considering that assembly, packaging, shipping, storing and distributing are all costs. consider the marketing and r&d in addition that the harware completely subsidizes the software and its development as well
 

lewisd25

macrumors 6502a
Jul 6, 2007
851
591
Then they should reduce the price by 13%.

In the end they would still earn more anyways!

Time for apple to show some good-will after everything they have put us through the last 24 months.

What did they put us through? Before I join you on the victim bandwagon, I'd like to know how I've been victimized.
 

Marc-SP

Guest
Oct 7, 2013
165
0
Apple could have doubled the space and still kept higher margins than last time.

16gb for $500 is ridiculous for 2013.

It is NOT ridiculous for Apple as far as people keeps buying it by the milions. Actually it's genius they can get away with it.
 

Razeus

macrumors 603
Jul 11, 2008
5,348
2,030
Right. Engineering, including continuing development of iOS, is free. :rolleyes:

Development of iOS? Sure it's added a few features and giving some overly colorful gloss, but come one. I figure $250 for parts & labor, $100 for R&D and overhead, and the rest is profit between Apple and the retailers.
 

HenryDJP

Suspended
Nov 25, 2012
5,084
843
United States
OS X has nothing to do with iPad. Two different things.

Exactly, because OS X just isn't the operating system for the iPad. They must be using Windows 8...

I was making a point because it was said (By You) that Apple doesn't give back to their customers, they even do that with the iPad as I noticed you kept quiet about iWork on the iPad being free...
 

cardfan

macrumors 601
Mar 23, 2012
4,192
5,268
It is NOT ridiculous for Apple as far as people keeps buying it by the milions. Actually it's genius they can get away with it.

No arguments there. I wouldn't lower the price either if I didn't have to. From a shareholder standpoint, this is great.

But I'm not going to admire it from a consumer standpoint. I want value. Apple wants margin. These two things conflict. I still want the product though. How much I want that product determines who wins the conflict. Apple's been winning. At the very least, I can soften the blow buying refurb, through third party, or getting a carrier to subsidize part of the cost.
 

ValSalva

macrumors 68040
Jun 26, 2009
3,783
259
Burpelson AFB
This should make Wall Street happy. But it probably won't :rolleyes:

This has got to be the last year of the $499 16GB iPad. But it probably won't be.
 

Marc-SP

Guest
Oct 7, 2013
165
0
Considering that it has the same exact specs as the iPad Air, and yet is a miniaturized version—yes, yes I am. How often do you see a tiny laptop that has the same power as a full-sized laptop but is actually cheaper? Making things smaller while keeping them powerful costs a lot.

I was one of the early people on the forums saying the new Mini Retina would be $399 and the old one would drop to $299. First of all $329 was a weird price. But second of all, something had to give. It's just not possible to have your cake and eat it too. Apple doesn't subsidize these devices like Google by selling your personal info to advertisers or Amazon by putting ads everywhere and taking a loss on each device sold. And it's way faster than those devices. That's worth paying more for.


The only thing in the mini that is miniaturized, so to speak, is the screen. SoC, memory, etc, are the same size.
The battery is just smaller capacity, not "miniaturized".
The case is manufactured with the same technology. It just needs less aluminium and less manufacturing time.

Apple has higher profit margins than other companies (aside from Google and Amazon and their subsidized products). Nothing wrong with that. They are free to put the price they want. People is free to choose if they are willing to pay or not, and I cannot say they make a mistake wathever they choose. :)
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.