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No business can sell anything with zero markup and not lose their shirt. Apple needs to pay for shipping, labor to assemble, engineering, test and validation, support and warranty (OEMs usually sell without warranty). Then the retailer needs to take their cut on that for rent, "free" shipping, credit card fees and fraud, theft, returns, labor, power bill.

Let's break this down.


1. OEM boxes are single pack processors with no warranty. OEM tray orders come in 1000 packs. The OEM price of a single processor in a cardboard box can be as much as $40 less (sometimes more) than retail packaging. At scale, OEMs get major kickbacks. Intel is known for offering major kickbacks to OEMs to secure their business. The $899 processor in the base Mac Pro may cost Apple a mere $200 each instead. $899 is the retail pricing for general consumers. An OEM single pack may cost you $750-800.

Retail 9900K costs around $488 right now. OEM may set you back $470 for one processor, no warranty. An OEM tray of 1,000 9900Ks may cost around $450 each, however, a major OEM like Dell, HP, Apple, MSI, et al. can negotiate this way down to $100 per processor, for example. No major OEM is paying the list price. Ever.

2. Labor to assemble. It's either a socketed CPU or soldered to the logic board. This isn't very difficult to do. Most of it is likely mechanized.

3. Engineering is a sunk cost. It doesn't go up or down. It's there to stay. Sheer number of moved units splits the costs up. Test and validation don't take hours like you think they do. And if the test and validation is as thorough as you believe they are, Apple wouldn't have so many issues with their hardware that popup so often.

4. Apple is an OEM. They have a warranty on their products that can be extended via Apple Care. Other major PC OEMs also have similar warranty layouts. Do you mean Intel and their OEM processors? You're right, except Intel places the warranty on the retailer or OEM you purchase through. In other words, if your Intel processor fails, it's on Apple to fix it, not Intel. And that's if your warranty period is still active.

5. Retailer rent? When did Apple begin franchising stores? Apple corporate takes care of that. How much do you think Apple spends on shipping? UPS and FedEx likely charge Apple a nominal shipping rate and they have one of the best logistics in the world. In the same way I can order something off of Amazon right now and have it by my door at 5 AM tomorrow morning. Amazon can only do this in a few areas. FedEx or UPS can do it nearly anywhere. You're blowing this up to be a high cost item when it isn't.

6. You bring up credit card fees, but which ones? Some are negotiable with the major systems, MasterCard and VISA, other fees are tacked on by institutions; BoA may charge you more for running a customer's card than JP Morgan Chase; Wells Fargo may charge more than both combined, etc. Some fees are required and non-negotiable, but these aren't pricey but they do add up. Then again, merchant accounts with either major credit system come in various setups. Apple could simply pay a bulk fee per month because they move so much and have so many transactions. Apple could pay $0.50/transaction and pay a flat fee of $50,000 a month.

Apple sold just over 1.5M computers per month in 2018 alone for a total of 18.2~ million computers for the entire year. I'm fairly confident Apple makes hand over fist and whatever fees you're proposing are negligible costs for the likes of Apple. This isn't someone's front yard lemonade stand. Do you think one of the world's wealthiest companies can't stomp around and propose what they think they should pay?


Amazon has, on a whole, gross margins of 40% and net profit of 5%. That means they need to mark up 35% just to break even.

Amazon is an e-tailer. They don't focus on a segmented line of products. Amazon sells other people's products. They also have their own line of products, but they're niche and if they're not their niche products, it's Amazon Basics, which no one really buys.

Amazon sells e-books. None of which they write. The only portion of their books segment they make significant profit on is likely their own imprints, of which they own about 10 IIRC. Kindles are sold at cost. Amazon web services are a whole other story, and it's fair to say it's a niche line since a fraction of the population is using them directly. Whereas they may use services that utilize Amazon's web services.

Amazon and Apple are not very similar companies. I fail to see why you're comparing the two. Had you compared Amazon to Costco, I'd have seen what you're trying to do, but alas I do not. Compare Apple to Dell, HP, Asus, Acer, Samsung Technologies, etc.

These are tech focused companies that create mass produced and mass used products and are known for their product lines. Dell is known for their laptops, their desktops, their servers, their professional IPS monitors, etc. The list goes on.

Amazon is a place known where you can buy batteries, order some pancake mix, organic treats for your dog or cat, toys for your kids and some Tide Pods to give to the neighbor's dumb children all in one order.


Edit: Were you comparing the two because they have similar profit and 12 month trailing numbers? I mean, that's fair, but their costs expenditure isn't the same at all once you look at their actual costs. Apple spent something like $15B on R&D last year. Amazon spent maybe $30B last year on R&D. Amazon spends a lot of money making sure customers are happy, including giving out gift cards because items came damaged or later. In the case of damage, they may tell a customer to hold onto it and send out a new one to make the customer happy. Regardless of whether or not they're a Prime customer. Apple isn't sending out new hardware because your box was beat up but your product is relatively fine. Arguably, Amazon likely incurs far more fraud than Apple does, and thus writes it off.

Amazon operates a lot of services, some of which cost a lot of money to run. Even if you compare them at a pure tech level, Amazon and Apple are leagues apart. One is a world class provider of cloud services, the other is a world class leader in hardware that excels beyond what the competition can come up with at the best of times.


To give you an idea of costs expenditure on cloud alone:

Apple has roughly 5 or 6 data centers, with one in the works right now and one following it. Globally, Amazon has close to 80 or did in 2015 according to a leaked document. Apple also colocates. Amazon doesn't.

It lists 38 buildings in Northern Virginia; eight in Seattle; eight in the San Francisco Bay Area; seven in northeastern Oregon; seven in Dublin, Ireland; three in Luxembourg; four in Germany; nine in China; 12 in Japan; six in Singapore; eight in Australia; and six in Brazil.

Go run a business yourself and see how many little things add up.

I do. We've taken multiple steps to lower our outgoing costs, especially power usage. In the last few years we've lowered our yearly electrical costs over two locations by about $60K a year. Credit card fees are not something we worry about (we don't process them nor do we ship a tangible product). We pay other large fees.
 
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Furthermore, there is healthy markup, and there is the Apple markup. Someone quoted Lenovo's pricing earlier in the thread, but Lenovo is one company. This isn't the first time NAND and RAM are cheap on the global market. Apple has always held a high price until they couldn't anymore due to complaints.

A 1 TB 960 Pro that uses MLC memory may cost $349 on Amazon, but if Apple used this product (they don't), they'd be buying it at a wholesale cost. At 18M+ computers alone in 2018, I'm sure Apple could negotiate a very, very cheap unit price.

To assume Lenovo is paying retail prices is absurd. In fact, you'd have to be completely stupid to presume they are. They charge $600 something for the EVO (TLC NAND) version because they can. Because they know no one or very few will attempt to swap it out themselves. Or they can solder it.

Lenovo is also just one company that overcharges for their subpar product. Sorry, but whatever quality Lenovo had disappeared years ago.
 
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To assume Lenovo is paying retail prices is absurd. In fact, you'd have to be completely stupid to presume they are. They charge $600 something for the EVO (TLC NAND) version because they can. Because they know no one or very few will attempt to swap it out themselves. Or they can solder it.

You're wrong about that. That's the price in a Lenovo corporate line desktop system that we have tons of. It has 2 completely standard M.2 slots that you can install or swap with absolutely no tools.

It's well known that PC makers sell the base desktop computer at virtually no profit, to the order of $10-20 each unit. For home systems, the crapware is where the profit is. Even today, they push Office and anti-virus in corporate models. The low-end market is highly commoditized and price sensitive. If you buy a base model HP, Lenovo or Dell and call tech support once, they've lost money.

PC makers instead get their profit by marking up high-end add-ons. Discrete GPUs, RAM upgrades, laptop screen upgrades, and in this case large capacity SSDs. Servers and workstations are also cash cows.

Apple doesn't do that. They instead have a more uniform margin on their whole line. That's why the base model seems to be a rip-off in comparison, but when you compare equal upgraded systems, the prices aren't that bad.
 
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You're wrong about that. That's the price in a Lenovo corporate line desktop system that we have tons of. It has 2 completely standard M.2 slots that you can install or swap with absolutely no tools.
The person was talking about a laptop...
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It's well known that PC makers sell the base desktop computer at virtually no profit, to the order of $10-20 each unit. For home systems, the crapware is where the profit is. Even today, they push Office and anti-virus in corporate models. The low-end market is highly commoditized and price sensitive.
Crapware? As in Norton being preinstalled? That's a small profit per unit sold that a software vendor gives to an OEM or it's through a paid partnership. Dell isn't going to get a chunk of a subscription fee when and if some klutz signs up.
 
The person was talking about a laptop...
[doublepost=1562725817][/doublepost]
Crapware? As in Norton being preinstalled? That's a small profit per unit sold that a software vendor gives to an OEM or it's through a paid partnership. Dell isn't going to get a chunk of a subscription fee when and if some klutz signs up.

No. Read the post. It was me and I pulled the price from a ThinkCentre. As I said we bought a bunch of them. Besides, they're all M.2 in the laptops anyway. Lenovo doesn't solder any drive, even in their convertibles.

What happens with crapware is Norton charges $59.99 or whatever to upgrade the 30 day trial and passes half to the manufacturer as commission. That means one Norton sale = 3 desktop sales. The PC maker doesn't get anything otherwise.

Same commission model on a ton of things. Satellite radio in your car? Netflix button on your smart TV? Those are all based upon this commission principle.

It's helpful to do some research on this topic because you're claiming things that are wrong.
 
PC makers instead get their profit by marking up high-end add-ons. Discrete GPUs, RAM upgrades, laptop screen upgrades, and in this case large capacity SSDs. Servers and workstations are also cash cows.
This is true to a certain extent, but these parts are purchased for cheap depending on the extent of purchase. People buying a prebuilt are less likely to buy one with a high end GPU, and often times it's not a high end GPU at all. I've seen gaming prebuilts with a 1050 being used in them. At this time a 2050 doesn't exist. Discrete GPUs are most likely to be sold with workstations. In the case of RAM or even laptop screens, these are mass produced at record rates to fullfill orders. If you recall, there was a power outage recently that caused a dip in NAND production.

It is well known and has been for roughly 20 years that screen producers, NAND and RAM producers have been playing the price fixing game and still are.
 
No. Read the post. It was me and I pulled the price from a ThinkCentre. As I said we bought a bunch of them. Besides, they're all M.2 in the laptops anyway.

Lenovo charges that much yet the same model PM961 can be bought off on online retailer for cheaper.

What happens with crapware is Norton charges $59.99 or whatever to upgrade the 30 day trial and passes half to the manufacturer as commission. That means one Norton sale = 3 desktop sales. The PC maker doesn't get anything otherwise.

Can I get a valid source for this and not hearsay?

Same commission model on a ton of things. Satellite radio in your car? Netflix button on your smart TV? Those are all based upon this commission principle.

It's helpful to do some research on this topic.

You mean the satellite service any person can negotiate from $60 for two years down to $5 for 2 years by threatening to cancel?

Netflix button on what? The remote? That hasn't been done in years on Smart TVs. It's now an app when you turn on the TV. Netflix and Samsung, for example, have had a partnership with each other for the last 11 years. Who knows what that entails. You can start your free month on a smart TV or smart hub (Roku) but who's really doing that? Most people will sign in using their account they use on their personal computer. Apple TV owners are the more likely people to pay for Netflix through their Apple TV. There was a huge thread about this recently.

It's helpful to do some research on this topic because you're claiming things that are wrong.
I'd love to see some of your sources. You're talking out of your ass for the most part.



1. Satellite radio:

Who is getting this mystery commission on $5 over 2 years?

2. In the case of Apple TV, Apple gets a commission cut off of the membership fees Netflix charges. Companies are prohibited from telling customers to sign up through other means. This is one reason Spotify was crying foul this year.


3. I want a source on this Norton commission per subscription claim you made up. Were you not aware Norton has free anti-virus as well? Were you also aware that McAfee, not Norton, is the commonly preinstalled anti-virus?
 
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I'd love to see some of your sources. You're talking out of your ass for the most part.

Again, you're wrong
https://www.computerworld.com/artic...ness-customers-decline--crapware--on-pcs.html
These preinstalled applications, search settings, trial editions of commercial software and icons to various technology services clutter a new Windows PC's hard drive and -- desktop users argue -- only benefit the computer maker, which is paid a commission when customers upgrade to the software's full version.

Netflix: https://www.sec.gov/Archives/edgar/data/1065280/000106528018000069/q4nflx201710k.htm
For the Domestic and International streaming segments, marketing expenses consist primarily of advertising expenses and certain payments made to our marketing partners, including consumer electronics manufacturers

XM: https://www.sec.gov/Archives/edgar/data/908937/000095012311014617/y88211e10vk.htm
We share with certain automakers a portion of the revenues we derive from subscribers using vehicles equipped to receive our service. We also reimburse various automakers for certain costs associated with the satellite radios installed in their vehicles, including in certain cases hardware costs, tooling expenses and promotional and advertising expenses.
 
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Right, and this would also include paying Apple a share of monthly membership fees of memberships purchasing through Apple.
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Doesn't change the agreements. I'm done arguing over dumb points and getting insulted by you.
It isn't my fault you decided to use a 12 year old article based on problems consumers had with Dell prior to that decision. If you don't like being pushed and shoved when you show a 12 year old, DATED article, on customer issues preceding the decision in 2007 then you shouldn't post it.

I'm sorry if your feelings are hurt.
 
There's no change in the Australian Store.
On the top end 27 inch iMac. 1TB is $480 AUD, 2TB is $1,120 AUD on top of the standard 2TB Fusion Drive. Not affordable for me as good as it would be.

Screen Shot 2019-07-10 at 1.54.54 pm.png
 
Listening to consumers. Good on you, Apple.

I'm glad Apple is starting to realize how inaccessible their upgrade pricing has been.

Lol you guys are all so silly.

This is not a response to low sales, its a purposeful cutting of prices to push even more sales before the highly rumored 16" later this year is released.

If you understand the business economics of product cycles, you will know that all types of specials and limited editions get launched a sales cycle before a brand new product is launched. They're trying to get as much profit for their invested dollar on the current macbook pro.

Apple is not stupid, low income Apple buyers will go for low end builds, the people who really need the higher end builds find ways to justify the premium pricing.
 
I got my iMac literally 30 days ago. Damn.

Well, as the advice always goes around here... buy it if you need it, otherwise wait. If you really need something, you're not too likely to get buyers remorse. If you're trying to time the market, well that's a fool's errand and the makings of both comedies and tragedies.
 
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Take it apart and read the chips, that's the most reliable method. Or look at a teardown, though there may be supply variations. A rough way is to compare the performance against contemporaneous SSDs. Apple seems to use a lot of Samsung, you can tell from the firmware versions, and the speeds match the PRO models.

There won't be performance differences between MLC and TLC SSDs.
MLC's main advantages are a longer life span and the fact that is allows for more write cycles than TLC memory.
Apple also buys a lot of SSD's from Toshiba and honesty I couldn't find a reliable source that stated they are MLC SSDs.
 
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Come on now. You shouldn’t compare Apple’s NVME flash storage with any of Samsung’s EVO drives. That’s silly.
Who do you think is providing the flash to Apple?

Even a basic nmve 970EVO is faster than the most people can make use of.
 
These prices, considering the quality of SSD aren’t only better than before, they are actually pretty good, and as others have pointed out, even a bit lower than some of their competitors.

Anyone who is still not happy with SSD pricing is being unrealistic.

The ram upgrade prices are still a bit high though...
 
Any word on what happens with pricing on the 2018 models? Will they get the same price drop too? Or a larger price drop?

I just took a quick look at B&H pricing, and at the moment there is no change on the 2018s. The 2018s are listed as being discounted (they have been on discount for over 6 months), but even with that "discount" the 2018s cost as much as the 2019s...and I know which one I'd rather have! Specifically I looked at the 2018 2.9, 32gb, 1tb vs the 2019 2.3 (8 core), 32gb, 1tb. The 2018 claims to have a $450 discount, but in reality it is only $50 less than the significantly faster and improved 2019 model.

I could be convinced to buy a 2018. Well maybe, possibly...I mean, practically speaking, it is more than capable of doing everything I need it to do. But at this point it seems like a second rate product, so I wouldn't be excited about it even if it was a killer deal. And keep in mind it is already 2 generations old, assuming the 16" model really is arriving soon, so they'll have to do a lot better than a $50 discount over the 2019!
 
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