iPhone 6 Component Costs Estimated to Begin at $200, Samsung Supplying Some A8 Chips

[6836838]

Apple are a product company. Google just want your data.

 

[Deelron]

Some of you guys would still be waiting for Iphone 6 plus if it wasn't for Samsung supplying those processors...

What's your point, that I'd be still waiting for a decent touch screen phone if it wasn't for Apple releasing the first iPhone? Shocking right?

 

[6836838]

Yeah you guys need to relax with the R&D argument. Do you really think Apple spent $1.5 BILLION on R&D for iphone 6? Even if everything is factored in, R&D, packaging, shipping etc, don't kid yourself into thinking Apple isn't making HUGE margins...like over 50% on ALL models (not that there's anything wrong with that).

You are kidding yourself if you think it's 50%. All those retail stores come for free?

 

[Kariya]

Bottom line, Apple could sell these devices for a LOT less. But they know their customer base well... they'll buy and pay for just about anything with the Apple logo on it. (that's blunt truth folks)

Its not just Apple, Samsung and HTC price their flagships just as much. And those who price low are either selling at a loss, suffer in advertising and after-sales support, or sponsored by the Chinese govt.

 

[ghostface147]

Without physically opening up your phone, is there a way to tell whether you got a TSMC or Samsung chip?

 

[Euge]

There are plenty of options in the cell phone market that provide to the customer identical user experience. And or at least, functionality.

Functionality, yes. User experience, no. Those two things though related, are independent.

In fact I would argue most other mobile operating systems, Android in particular, are generally more capable and feature rich. However, the user experience is certainly not the same. Whether it's better or worse is a matter of personal opinion.

 

[apolloa]

Apple does earn slightly higher margins on higher-capacity iPhone 6 models, as the 128 GB of storage is estimated to cost $47 more than the base 16 GB storage while the device retails for $200 more.


I just love how you have attempted to brush aside $153 as a 'slightly higher margin'!

It's profiteering plain and simple, and the masses happily throw the money at Apple.

Anyway that's not a bad component cost, wonder if Apple is making is usual 30% on the iPhone 6?

 

[Keirasplace]

Apple does earn slightly higher margins on higher-capacity iPhone 6 models, as the 128 GB of storage is estimated to cost $47 more than the base 16 GB storage while the device retails for $200 more.


I just love how you have attempted to brush aside $153 as a 'slightly higher margin'!

It's profiteering plain and simple, and the masses happily throw the money at Apple.

Anyway that's not a bad component cost, wonder if Apple is making is usual 30% on the iPhone 6?

Profiteering is when you have NO OPTIONS so you are forced to pay the higher price. Since Androities always say Apple is such a small slice of the market, that can't be true can it?

If you are paying volountarily for Apple products despite them being the most expensive, I'm guessing you are getting something out of it... BTW, that's how capitalism work in a non monopolistic market.

 

[BeSweeet]

Arent you...letting them get away with it?

Clearly.

I was speaking in regard to their competitors. You'll rarely find people willing to shell out the full unsubsidized price for Samsung devices, for example.

 

[vmachiel]

... and this is why the 16GB will continue to sell, possibly lasting til the next generation 6 "S" or whatever it may be called.

The 16 GB is such a ripoff...

 

[Shabbis]

Too bad there isn't a way to guarantee one could purchase an A8 from TSMC. Why would anyone want to support one of Apple's biggest rivals, who probably just take the profits from manufacturing A8s and create anti-Apple ads.

 

[gnasher729]

I would really like to know how much R&D for something like this would cost. Easy to say "it only costs $200 to make one", but that's just the starting point of any product. R&D, manufacturing, tooling etc. Would be neat to know exactly the cost that goes into these.

There's also the whole cost of sales. Advertising. Building stores. Employing people in the stores. Service. Helping customers with their problems, often for free. Warranty repairs and product replacements. Theft or phones that are destroyed for some reason. And it goes on and on and on.

You are kidding yourself if you think it's 50%. All those retail stores come for free?

I suppose that the average bob would manage to set prices to drive even Apple into bankruptcy.

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Some of you guys would still be waiting for Iphone 6 plus if it wasn't for Samsung supplying those processors...

And none of you guys would have an Android touchscreen phone if Apple hadn't started it...

... giving Apple a roughly 69 percent gross profit margin on the devices.

Guys, seriously, you don't know what you are talking about. The difference between retail price and component cost isn't gross profit. Gross profit is the difference between retail price and _all_ cost, current and future, that Apple has because you bought that phone. Not just the difference between retail price and a bag full of components. (And gross profit is not the real profit; gross profit doesn't account for any cost that Apple has whether you buy that phone or not. Like R&D and everything else that doesn't depend on the number of phones sold).

 

[JGIGS]

It would be more interesting if the cost also included labour, R&D and even marketing though that expense is easier to control.

However $16 between the two devices say to me couldn't you have included the same camera tech in the 6+ in the 6? Also how much money did they really save not bumping ram up to a more future proof 2 GB.

 

[powerstrokin]

Yet I paid $800 (including tax) for the iPhone 6 Plus 16GB. Only Apple can get away with this.

No. This is how it works everywhere.

Do you know how cheap food really is for instance? Food is actually extremely cheap, but not to the end consumer. Take a look at grocery stores around where you live. Don't you wonder how they're able to have those nice buildings? One chain around here bought out another just to close them all down. Where's the money come from? It comes from selling food at MUCH higher costs than what they pay. That's business.

 

[crsh1976]

Too bad there isn't a way to guarantee one could purchase an A8 from TSMC. Why would anyone want to support one of Apple's biggest rivals, who probably just take the profits from manufacturing A8s and create anti-Apple ads.

That's a bit silly considering some iMacs and Macbook Air/Pros use Samsung screens and a whole lot of other chips and capacitors everywhere. And that's been going on for a lot longer than the smart phone war.

 

[lordofthereef]

and this does not even include the R&D that goes into those devices ....

By the end of the upgrade cycle, we are talking like five bucks per device lol. By the end of the product lifecycle (unless they do something strange like they did with the 5, which technically saw just one year of production) we are talking pennies.

 

[BeSweeet]

No. This is how it works everywhere.

Do you know how cheap food really is for instance? Food is actually extremely cheap, but not to the end consumer. Take a look at grocery stores around where you live. Don't you wonder how they're able to have those nice buildings? One chain around here bought out another just to close them all down. Where's the money come from? It comes from selling food at MUCH higher costs than what they pay. That's business.

No, really? I had no idea that that's how things worked!

What I meant, that I thought was obvious, was that you'll rarely see people paying upwards of $1,000 for a smartphone in the US that isn't by Apple. That was all.

 

[lordofthereef]

Too bad there isn't a way to guarantee one could purchase an A8 from TSMC. Why would anyone want to support one of Apple's biggest rivals, who probably just take the profits from manufacturing A8s and create anti-Apple ads.

Apple seems to be ok with supporting them by purchasing their components so they (Apple) can make more money in less time. Why should it be on the consumer's conscience?

 

[powerstrokin]

No, really? I had no idea that that's how things worked!

What I meant, that I thought was obvious, was that you'll rarely see people paying upwards of $1,000 for a smartphone in the US that isn't by Apple. That was all.

And my point is that people DO pay much much higher for everything they buy than what it really costs. Everything. You just don't see the difference much because no one tells you what that difference is. Other than iPhones.

Ignorance is bliss?

And on that note.. it means that none of this even matters. We need things, we want things. Who cares what it costs to make as long as we are willing to pay in the end.

This argument, and therefore this thread, is completely irrelevant.

 

[MDAS]

That said, over the sale of all phones, given that much of what is now was taken from research prior, I wouldn't imagine the cost to produce being more than an additional $15 or so.

Bottom line, Apple could sell these devices for a LOT less. But they know their customer base well... they'll buy and pay for just about anything with the Apple logo on it. (that's blunt truth folks)

Then why do the other flagships from Sony, Samsung etc all cost around the same price?

 

[subjonas]

Remember, all of these large corporations care for one thing and one thing only... money.

The rest is an illusion perpetuated by their own exclusive fan base.

Apple fans are convinced that Jobs and now Cook really care about them as people. And through that, want to provide their customers a personalized welcoming experience. The reality is, that's all imaginary. All they want is to turn huge profits, make their stock holders happy and keep their jobs for as long as possible.

*REALITY

Of course we can't believe we are any company's bottom line; we know our wallets will always be. But how they choose to get at our wallets is what we should be concerned with. Companies that give significance to customers are the ones we want to see outlast the ones that don't. And we can actually directly influence this by rewarding those companies with our business. Win-win. One of the advantages of capitalism.

That's another thing about a lot of posts I'm seeing here. It's like they aren't aware they are scrutinizing business and capitalism 101. Apple is a big company and needs a substancial profit margin to keep it going. Plus on top of that they are going to charge as much as they think people are willing to pay. That's capitalism for you. If you criticize them for that then that's just un-American.

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Not at all.

There are plenty of options in the cell phone market that provide to the customer identical user experience. And or at least, functionality.

Hell, an old Blackberry still makes phone calls, handles texts, emails, etc. with ease.

The attraction of an iPhone over a cheaper, easier to get Android device is that it is made by Apple.

The only counter argument would be investement in ecosystems. Assuming you've invested hundreds, or thousands into iOS applications. BUT, if thats the case, again, all that means is Apple has you locked in and as such can charge whatever they want.

The freedom for the consumer has never been more large, the choice made is made through emotional needs, not rational ones.

Are you serious??

 

[BeSweeet]

And my point is that people DO pay much much higher for everything they buy than what it really costs. Everything. You just don't see the difference much because no one tells you what that difference is. Other than iPhones.

Seems like a common sense point, really.

 

[Chupa Chupa]

Edit: R&D also probably does not cost very much compared to the component costs.

Sure, R&D is less than the sum of all components but it's more than the cost of many individual ones. As more units are sold though, yes, R&D cost per unit gets averaged down. But it's a big upfront cost.

 

[Fenez]

I wish people would stop using the term subsidy. AT&T isn't subsidizing my phone. I'm paying off the phone every month as part of my phone bill. Just because you don't pay the full cost of the phone up front doesn't mean its subsidized. I didn't pay the full amount for my new car when I bought it either. No one says car dealerships subsidize new car purchases.

I think the reason they call it a subsidy is because they market the phones at a reduced price.. Of course you know you are paying more than full price in the long run but most people tend to say." I'll get the new phone for $199 or $299 or what ever" that's why separating the bill from the phone purchase is a good idea.

 

[johncocktosen]

Remember, all of these large corporations care for one thing and one thing only... money.

The rest is an illusion perpetuated by their own exclusive fan base.

Apple fans are convinced that Jobs and now Cook really care about them as people. And through that, want to provide their customers a personalized welcoming experience. The reality is, that's all imaginary. All they want is to turn huge profits, make their stock holders happy and keep their jobs for as long as possible.

*REALITY

We like the phones. Not your doom and gloom tinfoil hat which makes you feel like you are smart because you see the matrix and no one else does. carry on....

btw we all care about money, not large corporations. Have a job? Why? Why not live in a van down by the river? Dont like the job? OK, open your own business. What? You have to make a profit? Ohhhhh nooooooo!!!

Kill yourself now.