Because whether a product costs Apple $5 or $500 to research and build, if customers are only willing to pay $100 for it - that's what it will sell for or it won't exist.
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Apple Event Live Updates: MacBook Pro and AirPods 3 Announced! [Event Over]
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Because whether a product costs Apple $5 or $500 to research and build, if customers are only willing to pay $100 for it - that's what it will sell for or it won't exist.
Precisely. If it costs $500 for R&D and customers only pay $100, it won’t exist. Now if it was $5, thats $95 profit without taking into account materials, etc.
R&D costs along with others are a big factor.
How much do you think Apple has spent on junk like Apple TV Plus or News Plus versus how much they're earning on it?
They’re trying to drink out of the spotify/Netflix cup. Operates at a loss but raises value. or it’s a long term investment/big picture stuff. We’ve seen this elsewhere too. The ps5 was sold at a loss until recently but sony is more interested in game sales, exclusives etc. Those are the main cash cows vs revenue from hardware sales
So you admit that Apple is willing to take a loss on a product. Just as I said - R&D costs, bill of materials, etc., all that is irrelevant - the price is decided by what customers are willing to pay.
You have to think big picture and not consider each part in isolation. Take imessage/facetime. In isolation, it looks like a pure loss maintaining those servers for free. Step back a bit and you realize these things keep people locked into the ecosystem. That generates more hardware sales and all of a sudden, imessage indirectly leads to more profit than if it didnt exist. The R&D, cost of materials, etc for imessage start to make more sense.
Consider all the products that's been discontinued. the airport extreme, ipod classics, microsoft zunes, etc. The R&D costs needed to keep innovating these product lines simply don't make sense since there's not enough market demand to turn a profit. Like you said, why spend $500 on R&D to sell these things for $100 to 3 people a year on a long term basis. A wireless router and "dumb" mp3 players also don't lock anyone into the ecosystem or push them to buy other apple stuff/services either
the ipod touch is still there without being changed since there's barely any R&D. they're just stuffing leftovers (e.g. A10) into the same old design year after year. Costs are lower so the lower $199 price point still turns a profit and this thing still exists. They also likely serve as a gateway drug to get younger folks into the iOS ecosystem so they can later spend $1000 on loot chests in some pay to win garbage.
tldr; they'll temporarily take the loss if they think they can turn a profit later. If not, and R&D/other costs > what people pay, then out it goes.