Not another one of these threads FFS. My house cost £50,000 in materials, why should anyone pay £200,000 for it???
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iPad mini iPad Mini cost $188 to make!
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You get a better user experience, better warranty, better support, better product, Apple Stores all over the world that will help you with your issues, etc...
We do. That's why you see people on Yelp say restaurant X is a better deal than restaurant Y. I would say the industries are entirely different, though. When was the last time you could have made an iPad at home, but decided to go outside, and pay a little bit more so that you could enjoy the Apple Store ambience?
The ingredients matter here, because we want to know how these things get priced. Knowing this tells us just how much or how little companies are planning to make off of the devices themselves. We've discovered that Google and Amazon are apparently not planning to make anything off of them, while Apple is. So, as said before, it highlights the two different business models. I don't know which one will "win" out (they both seem to be doing pretty well), but it is interesting to see Apple come late to the game with an under-spec'd product in a crowded niche. This isn't something we have seen Apple do much before, and I wonder how they will fare.
Additionally, the price would increase in making a larger (deeper) casing for the larger battery to power the retina display. One thing is for sure, it would be a very different product (heavier, thicker) and much more expensive. People would of course still buy it by the boatload, but I know I wouldn't be able to afford it. SO I'm glad for the non-retina.
Making profits for R&D and ads and human resources, etc, are all important, no doubt.
But don't forget also that Apple is sitting on a bank of $90-100+ billion dollars.
But don't forget also that Apple is sitting on a bank of $90-100+ billion dollars.
Making profits for R&D and ads and human resources, etc, are all important, no doubt.
But don't forget also that Apple is sitting on a bank of $90-100+ billion dollars.
And they will need every bit of that $100 billion if they don't innovate and bring out new and innovative products. Apple post Jobs has been suffering from sequel-itis.
Those margins are for the base-model iPad mini. They make a lot more on 32GB and 64GB models for they freakin charge $100 for additional storage which costs them less than $20.
Exactly, well said. Also, they've got a brand to manage, with certain expectations and they can't all of a sudden start acting like a discount or commodity manufacturer - that would have brand perception consequences.
There is also a big concept (I've only taken a short course on it, some study this stuff in much more depth and know it very very well) people misunderstand called pricing. Do you want to sell 1M widgets at $1 or 1 widget at $1M - there is no right answer, it depends on your business model and profit strategy.
Apple does very well at doing things the way they do them - there are reasons they have made the decisions they have made, and I find it hysterical to see all these armchair business consultants questioning the decisions of the world's most valuable company. If I were Apple I'd think, "the audacity of these people!"
As smart as you think you are, a company actually requires income to continue running.
If you notice, all the low end tablets are sold at cost, in desperate attempts from companies trying to get a market share. They attempt to make this work by sticking ads and such into the OS.
If you'd rather take cheap with ads over a quality OS and device experience, be my guess. But don't spread your idiotic view of everything being at cost. Businesses need money to run, and Apple isn't going to just destroy all their profit because you're too broke to afford $329.
And Amazon is fortunate that Wall Street keeps treating them like a start-up and forgives them for making low to no profits quarter after quarter on margins slimmer than the edge of a piece of paper.
Apple, meanwhile, continues to set records quarter after quarter, but because The Street expects even more, screams "miss!" and the stock drops 10%.
I found this article in Slate an interesting read.
And Amazon is fortunate that Wall Street keeps treating them like a start-up and forgives them for making low to no profits quarter after quarter on margins slimmer than the edge of a piece of paper.
Apple, meanwhile, continues to set records quarter after quarter, but because The Street expects even more, screams "miss!" and the stock drops 10%.
I found this article in Slate an interesting read.
QFT!
Apple misses some lofty "expectations" by analysts and their stock drops. Amazon and, to a lesser extent, Google miss their numbers and Wall Streets yawns.
Apple's business model is to make their money off of the hardware. iTunes was always run under the premise that any money made was simply a bonus. The amount that Apple make's from iTunes is minuscule, only returning a profit after several years of existence (it always broke even however). The media companies drive hard bargains to make as much as possible, and Apple worked hard to make the media affordable. In the early 2000s, people were downloading music constantly from places like Audiogalaxy, etc. and the media companies were intent on recovering the money they lost. The fact that you can buy an Mp3 for $1 is a direct result of Apple's bargaining, else prices would be much more than that, frankly. There are plenty of business models and ways to make money. The unfortunate reality is that Apple cannot make both media and hardware dirt cheap. Amazon can because they make money through other avenues that they use to supplement the loss leaders in other product areas (such as EC2). It all comes down to perceived value, and I think for most of us-regardless of a desire for more specs/features/whatever-that value has been rather high.
As smart as you think you are, a company actually requires income to continue running.
If you notice, all the low end tablets are sold at cost, in desperate attempts from companies trying to get a market share. They attempt to make this work by sticking ads and such into the OS.
If you'd rather take cheap with ads over a quality OS and device experience, be my guess. But don't spread your idiotic view of everything being at cost. Businesses need money to run, and Apple isn't going to just destroy all their profit because you're too broke to afford $329.
My idiotic view... that some of the leading companies in our lifetime are taking! I don't remember saying that Apple ought to sell at cost. I do remember, though, saying that we are seeing two business models being tested here. I don't know how it is going to turn out, but my guess is that Apple's approach to the Mini (under-spec'd and over-priced) won't yield very impressive results.
Sold out stores will disagree with you. Because the reality here is that only the spec-obsessed nerds that frequent forums like this one care. For the average consumer, they want something easy to use and that they don't have to mess with. The Mini provides that at less cost than a full size iPad, hence the sales that we're seeing on it.
Apple sold out of the white Mini in 17 minutes. Apple stores ran out of stock within two hours on launch day, and saw lines larger than those for most product launches.
You're welcome to come back and eat crow once sales figures are announced though.
The funny this is, I don't care how much it cost to make. Because, I could not have made it, and enjoyed it, if I had to make it myself. And it would have cost me a hell of a lot more to make! Do people really not get this?
What a load of utter tosh. Let's see here, post Jobs we've had:
A retina-equipped iPad setting a new standard in tablets that we're only now seeing the competition even begin to catch up to (just in time for Apple to shift performance on again too).
An iPad Mini that defines a new product category for Apple and introduces a whole new form factor (possibly a hint as to future iPad design).
A completely new 15" Macbook Pro with Retina display that sits comfortably at the top of the laptop pile.
A completely new 13" Macbook Pro with Retina display that brings that same wonderful screen to something closer to the mass market (though both rMBP models are really signposts to the future as far as mass sales are concerned)
A totally new iMac which initial reactions suggest is going to be extremely popular.
And of course brand new iPhone, iPod Touch and iPod Nano design.
At least three of those were 'innovative' products in terms of moving the respective sectors on thanks to Retina displays. The rest may retain the same design language as their predecessors but in every case take it in really interesting directions and delivering devices that set new standards in one way or another.
I am so sick and tired of hearing this nonsense about Apple not being innovative. If you want a brand new product in a brand new market every year that is NEVER going to happen and Apple would be idiotic to even try. Apple under Jobs, in the 14 years between him taking over in July 1997 and resigning in August 2011 released two, just two, new products that would fit that definition:
1) the iPod
2) the iPhone
That's it. The rest of the line would be a 'sequel' to existing desktops, laptops, iPod's or the iPhone. So please, how's about we drop this (frankly distasteful) meme of 'Jobs would / wouldn't have done this!' and return to reality...
And Amazon is fortunate that Wall Street keeps treating them like a start-up and forgives them for making low to no profits quarter after quarter on margins slimmer than the edge of a piece of paper.
Apple, meanwhile, continues to set records quarter after quarter, but because The Street expects even more, screams "miss!" and the stock drops 10%.
I found this article in Slate an interesting read.
The other thing that is not mention is part of the reasons why the loses are so high is because Amazon invests their profits into R & D and cloud infrastructure.
In the bigger picture how many websites and services rely on Amazon's S3 and other services vs other companies. It is the things behind the scenes the normal consumer does not see nor care about that Amazon is building.
heh heh, I take that you are not a stock investor and cannot figure out the cost of developing a product. This is what Peter Oppenheimer said about Ipad mini margin in the earning conference call Q&A. In the Samsung San Jose Trial, court document showed that Apple made 23% -32% GROSS margin between Sept 11 and March 12. The base Ipad mini will be lucky to have 15-20% gross margin... When you play the role of product manager, it helps to know something about how much it cost to build a product. If you want to complain about Apple high gross margin, complaint about the Iphone one, not Ipad...
http://www.morningstar.com/earnings/earnings-call-transcript.aspx?t=AAPL
The iPad Mini has the full iPad experience and we priced it aggressively at $329, delivering incredible value to our customers. Its gross margin is significantly below the corporate average. So, in summary, we expect our gross margin to decline by about 400 basis points sequentially
http://elitedaily.com/elite/2012/apples-iphone-margins-hit-58-percent-double-ipads/
Although Apples iPad stole the show in the companys latest earnings report, its iPhone is the breadwinner. Between April 2010 and March 2012, Apple was able to secure gross margins of 49 percent to 58 percent on U.S. iPhone sales, according to Reuters, which obtained the data from court documents unsealed yesterday and filed in the U.S. District Court for the Northern District of California.
Apples iPad, on the other hand, generated gross margins of 23 percent to 32 percent between October 2010 and March 2012.
That's a lot of helpful information. Thanks!
I still don't see the iPad Mini as a "value," speaking from a consumer's perspective, but if this is the best they can do, then it's the best they can do. In the end, I consider the screen to be one of the most important elements, and without a retina screen (or at least something better than the N7), I don't see any point in buying the Mini. Maybe they spent too much on the case and too little on the screen then.
In the end, this is the downside of Apple's strategy. Getting profits out of hardware on the front end means they need to hit it out of the park every time, but for Amazon, they can afford a bad quarter or two with Kindle sales, because the Kindle app is everywhere (along with movies and everything else). I don't know which approach is better, but I think I'd bet on Amazon (maybe Google) going forward.
That's all refinement of existing products. I'm talking about an all-new product like when the iPhone was released and shook up the market. Gotta love how people confuse refinement with innovation.
Less screen, less attention to detail, less access to great applications, and a whole lot less fun. Sounds like the N7 to me.