So, let's just down-play the design costs then, since we have no idea how sizable those figures actually are.
While we're at it, let's also play down the advertising, R&D, and the beta-testing costs as well.
How about you compare similar products by Apple to other companies and compare their manufacturing price to sale price and you'll have a reasonably fair comparison without having to know every detail. The simple fact is that Apple's profit margins are far far higher than anyone else in the industry. In part, this is because they have no direct hardware competitors for their OS. Now Apple wants to play "standards games" with companies like Adobe when Apple itself is guilty of pushing its own propriety standards all the time (Apple Lossless, Quicktime, Fairplay) and not playing nice with them either (e.g. not licensing Fairplay, which is ironic given its name)
FYI, the OS running on the iPad is significantly more refined, polished, and responsive than that of the iPhone/iPod Touch, in case you haven't noticed.
Well someone once said that you can polish a turd all you want, but it's still a turd. Some of us would rather have a full computer, not a "polished" iPod Touch. It's typical Apple hardware too. Leave out the camera and USB ports, card readers, etc. and then add them in over the next three years to screw over the early adopters and pretend they made improvements that they could have had since Day 1 and then drop support for the 1st generation model less than 3 years from now.
I have a Dell Mini 10V with more power, more space, more ram and it runs the full version of Snow Leopard and cost nearly half the price and Dell still made a profit on the hardware.
Though, China's economic practices are about as capitalistic as they come.
Yes, that's a good excuse for their abysmal record of human rights (have to love Tienanmen Square), huge numbers of yearly executions (probably for just speaking their minds) and Communist government (last time I checked, Communism was the enemy of the United States of America; but it's the Capitalists' friend. Yet I cannot buy a simple Cuban cigar from a tiny little island under the banner of evil Communists.... WTF!?
And it shows.
Yes, Chinese goods are SO much better quality. I remember back when products used to last years that now last months. Coincidence that they are now made in China???